TaxTMI 
TaxTMI 
TaxTMI 
2022 (7) TMI 608
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....anel Counsel, a/w Mr. Akshay Shinde, 'B' Panel Advocate Ms. Neha Bhide, "B" Panel Counsel a/w Mr. P.P. Kakade, Government Pleader for the respondents-State in all Writ Petitions. Judgment (Per R.D. DHANUKA, J.) :- The Division Bench of this Court at Mumbai by its order dated 14th October 2019 passed in this appeal found it difficult to reconcile the conflicting views of this Court in Ansul Impex Pvt. Ltd. Vs. State of Maharashtra and as such formulated three questions for consideration by Larger Bench. Accordingly Larger Bench is constituted pursuant to the Administrative Order passed by the learned Chief Justice. 2. The Division Bench has referred the following questions of law to the full bench :- (a) Whether the State of Maharashtra has legislative competence to enact the Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2017 and the Maharashtra Tax Laws (Amendment and Validation) Act, 2019 to amend the provisions of the Maharashtra Value Added Tax Act, 2002 to incorporate mandatory pre-deposit for filing appeals against the assessment orders pertaining to all the goods after 16th September 2016 that is post 101 Constitutional Amendment Act, 2016 ? (b) Whether E....
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....on of tax on sales and purchase of certain goods in the State of Maharashtra. The said Act was amended from time to time. Section 2(12) of the MVAT Act, 2002 defines "goods'' as all kinds of movable property not being the properties mentioned in the said sub-section such as newspaper, actionable claims, money, stock, share etc. Section 2(24) defines 'Sale' as sale of goods within the State for cash or deferred payment or other valuable consideration excluding the categories listed therein. The incidence of tax is provided in Section 3 and certain goods on which tax was not leviable were referred to under Section 5 of the said Act. Section 26 deals with appeals under the MVAT Act, 2002. 5. By the Constitution (One Hundred and First Amendment) Act, 2016, the Central Government introduced Goods and Services Tax (GST) w.e.f. 1 July 2017 subsuming various central indirect taxes and levies as they relate to the supply of goods and services. Article 246 (A) regarding GST came to be inserted in the Constitution of India which enables the Union and States to legislate in respect of the GST. Article 269-A deals with levy and collection of GST in the course of inter-state trade or commerce. ....
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.... explanation w.e.f. 15th April 2017. It is the case of State of Maharashtra that the said explanation was inserted for the purpose of removal of doubts, in view of the Judgment of Nagpur Bench of this Court in the case of Anshul Impex Private Ltd. (supra). 11. On 9th July 2019, the Maharashtra Tax Laws (Levy, Amendment and Validation) Act 2019 came to be enacted which was published in the Government Gazette on 9th July 2019. The said Ordinance was replaced by the enactment of the State Legislature inserting various provisions including the said explanation to Section 26 (6C) of the MVAT Act, 2002. 12. Writ Petition No.2883 of 2018 along with various connected petitions were on board before this Court for seeking various reliefs. The petitioners sought relief by relying upon the Judgment of Nagpur Bench of this Court in case of Anshul Impex Private Limited (supra). The learned counsel for the parties addressed this Court in the lead matter i.e. Writ Petition No. 2883 of 2018 filed by the M/s United Projects Ltd Vs. State of Maharashtra. 13. On 14th October 2019, a Division bench of this Court, after adverting to the Judgment of the Nagpur Bench in case of Anshul Impex Private Lim....
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.... in first place may have been unconditional. Similarly, it is permissible to bring about change in such conditions and make it subject to such a set of conditions that are totally different than the original set of conditions. It is submitted that it is not a procedural right but a substantive right. 18. The learned Advocate General invited our attention to the Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2017 and stated that the said provision ex facie demonstrates that the right of appeal in issue has been made conditional by an express provision of the Statute, which confers such a right. However, it is subsequently made clear that on or after the commencement of the Act, the right of appeal can be exercised subject to compliance with the conditions imposed by the amendment in issue. He submits that the expression "shall be filed'' also indicates an express intention of the Legislature to make the right of appeal in issue subject to express conditions contained in the amendment. The term "shall be filed'' is enough explicit clear such an appeal cannot be filed on or after the commencement of the Act unless, conditions prescribed thereby are fully complied with by ....
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....to the revenue as well as the assessee clearly granting a justifiable time balance between their respective rights and liability. 23. It is submitted that with the filing of the appeal after complying with the condition to deposit 10%, the assessee gets an unconditional statutory stay for the recovery of the balance amount in issue in appeal. It is not required to deposit balance 90% of the recovery amount in issue. He submits that prior to the said amendment, there was unlimited discretion with the appellate authority and the Tribunal to impose any amount as deposit to be made before entertaining the appeals. The said discretion is substituted by a condition to either deposit 10% amount or 15 crores ceiling bringing standardization with respect to every appellant. 24. It is submitted that by virtue of such standardization brought in by way of the said amendment, valuable time and energy of the appellate authorities and this Court is saved and the same can be utilized for beneficial purposes. Filing of frivolous appeals is curtailed to a considerable extent which have been clogging the board and increasing the pendency in these Courts. 25. It is submitted that the revenue is als....
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.... by necessary intendment. 29. Learned Advocate General placed reliance on the Judgment of Supreme Court in case of Gangadhar Palo Versus Revenue Divisional Officer and Another, (2011) 4 SCC 602 and in particular paragraphs Nos 3 and 5 to 8. He submitted that since the Special Leave Petition filed by the State of Maharashtra against the Judgment of Nagpur Bench of this Court in case of Anshul Impex Pvt. Ltd (supra) was dismissed in limine, the Judgment of the Nagpur Bench has not merged with the order passed by the Supreme Court rejecting the Special Leave Petition in limine and thus can be reviewed by this Court. It is submitted by the learned Advocate General that the impugned amendment at the best is retroactive and not retrospective. It does not show that deposit of 10% is mandatory in respect of all the orders passed before the date of such amendment brought into effect for filing appeal. 30. Learned Advocate General placed reliance on the Judgment of Supreme Court in case of M/s.Tecnimont Pvt. Ltd Vs. State of Punjab and Others in Civil Appeal No.7358 of 2019 decided on 18th September, 2019 particularly on paragraph Nos.4 and 17. He submits that after considering various Jud....
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.... apply irrespective of the year of assessment and would depend on the date of the order. The date of the order has to be after the date of amendment. If the date is after the date of amendment then the condition is retroactive. He submits that the explanation is added by the State Government by ordinance irrespective of the date of commencement of the original proceedings. 36. In his alternate argument, he submits that, the explanation inserted by the State Government is clarificatory in nature and takes away the effect of Judgment of Nagpur Bench of this Court in case of Anshul Impex Pvt. Ltd (supra). He submits that the State Government has not overruled the Judgment of Nagpur Bench in case of Anshul Impex Pvt. Ltd (supra) by effecting amendment to the provisions of the MVAT Act, 2002. 37. Learned Advocate General placed reliance on the Judgment of the Supreme Court in case of State of Himachal Pradesh Versus Narain Singh [(2009) 13 SCC 165] in particular paragraphs No. 14, 21,22,23, 26 and 32. He submits that the State Government has not transgressed any constitutional limitation while inserting the amendment in the MVAT Act, 2002. The Supreme Court has held in the said Judgme....
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....the Supreme Court in case of Associated Builders Versus Delhi Development Authority, (2015) 3 SCC 49. He submits that similarly State Government by the impugned amendment has done away with the interpretation of the Nagpur Bench of this Court in case of Anshul Impex Private Ltd (supra) about commencement of lis or the date of order. 41. The learned Advocate General placed reliance on the Judgment of this court in case of Noopura Vishwajit Kulkarni Vs. State of Maharashtra, 2019 SCC OnLine Bom 1252 and in particular paragraphs No. 4, 26, 29 and 30. He submits that though the Legislature cannot by way of an enactment declare a decision of the Court as erroneous or nullity, but it can amend the statute or the provision so as to make it applicable from the past. The Legislature via amendment has the power to rectify a defect in law noticed in the enactment and even highlighted in the decision of the Court. He submits that there is plenary power to bring the statute in conformity with the legislative intent and to correct the flow pointed out by the Court to have a curative and neutralizing effect. He submits that the State Government did not have any intention to overrule the decision....
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....te General tenders a compilation of provisions in support of his submission that State Government can legislate on various items prescribed under entry No.54. 45. Learned Advocate General relied upon Article 246(A) of the Constitution of India and would submit that Legislative of every State has power to make Laws notwithstanding anything contained in Article 246 or 254 in respect of goods and services Tax. By the said Article 246(A) legislative competence is granted to Center as well as State on Goods and Service Tax Act. He submits that accordingly two Acts i.e. Central Goods and Service Tax Act and Maharashtra Goods and Services Tax Act were enacted simultaneously by the Central Government and State Government respectively. 46. The learned Advocate General invited our attention to Article 366 (12) and would submit that the definition of goods includes all material, commodities and articles. Section 14 of the said Constitutional amendment inserted Article 12(A), 26A and 26B. Section 19 of the amending Act makes transitional provisions which clearly provides that notwithstanding anything in that Act, any provision of any law relating to tax on goods and services or both in force....
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....16, new composite and binding tax called Goods and Service Tax has been introduced as defined in Article 366(12-A) of the Constitution of India, whereby concurrent powers have been given to the Parliament and State Legislatures to levy tax on the supply of goods and services. He relied upon the statement of objects and reasons of the 101st Constitutional Amendments and would submit that, the Goods and Service Tax is altogether a new tax which is different from the taxes levied earlier by the Union and the States. He relied upon the judgment of the Hon'ble Supreme Court in a case of Union of India Vs. Mohit Minerals Pvt. Ltd. reported in (2019 (2) SCC 599 and also referred to the judgment of the Kerala High Court in a case of Sheen Golden Jewels (India) Ltd. Vs. State Tax Officer reported in (2019) 62 GSTR 207 : 2019 SCC Online Ker. 973. He submits that the said judgment of Kerala High Court is distinguishable on facts. 52. The learned senior counsel placed reliance on the Rajya Sabha Select Committee report on the said constitutional amendment Act and would submit that the said report also clearly lays down that the purpose of introducing Article 246A. It was to introduce GST regi....
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....ertain taxes, such as Central Excise Duty and Service Tax, whereas the State was empowered to levy Sales Tax, Entry Tax, Entertainment Tax, amongst others. 56. It is submitted that, now there is no entry in any of the three lists of Schedule - VII of the Constitution to cover GST. It also does not fall within any of the erstwhile entries of Schedule - VII, as in force prior to the said Constitutional amendment. The GST is totally different which gives a simultaneous power to the Central and State Governments to levy and collect tax on "supply". Supply is the new taxable event, as opposed to the taxable events. He submits that, mere fact that the word "supply" is wide enough to cover manufacture, service and sale for the purpose of levy and assessment of GST, does not mean that the legislative competence of the State Legislature would continue to have the power to amend the erstwhile MVAT under Article 246-A, which otherwise related only to sale or purchase of goods. 57. Learned senior counsel for the petitioner placed reliance on Article 367 of the Constitution of India and would submit that the said Article incorporates the provisions of the General Clauses Act, 1897 and makes t....
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....on in the provisions of the MVAT Act, 2002 by the State Government amounts to judicial encroachment in the garb of clarification, it seeks to put forth an alternative view to the interpretation given by the Nagpur Bench of this Court in a case of Anshul Impex (supra). He submits that, said explanation is a device to overcome a binding judgment of this Court without removing the basis in the provisions of substantive law, which has been construed by the Nagpur Bench and held to be limited in its application. There is no amendment to sub section (6A) to (6C) of Section 26, nor is sub section (6) of Section 26 is deleted or amended. 62. It is submitted that, the legislative overruling is permissible only to the extent of curing any defect which may have been pointed out in a decision of the judiciary. However, if the decision of the Court is not based on any defect in the provision but is based on legal interpretation and judicial precedents, there would remain no scope for any legislative overruling. The learned senior counsel placed reliance on the judgment of the Supreme Court in a case of Shri Prithvi Cotton Mills Vs. Broach Borough Municipality reported in 1969 (15) ITR 136 (SC)....
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.... whereas this Court in a case of Anshul Impex (supra) has held that, the substantive provision introduced by the 2017 amendment does not apply to cases where the proceedings or lis commenced prior thereto. It is submitted that the explanation inserted by the State Government cannot be given a retrospective operation so as to take away or impair an existing right or create a new obligation or impose a new liability otherwise than as regards matters of procedure as is observed in Govind Das Vs. ITO, (1976) 1 SCC 906 and upheld in CIT Vs. Vatika Township Pvt. Ltd reported in (2015) 1 SCC 1. 67. It is submitted that, there is nothing in sub sections (6A) to (6C) expressly or by implication to apply to Assessment Years prior to 15th April 2017. The explanation seeks to impose a new condition which does not exist and continues not to exist in sub-section (6A) to (6C) to Section 26 of the MVAT Act, 2002. He submits that, Section 7 of the 2019 Amendment Act, under the heading "Validation and Saving" also does not help overcome the judgment in a case of Anshul Impex (supra) as there is no change by the 2019 Amending Act in sub-sections (6A) to (6C) to Section 26 of the MVAT Act, 2002 and t....
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.... pre-deposit has been retained. Thus, Section 26(6) will continue to govern appeals filed against assessment order for the period prior to 15th April, 2017. 71. It is submitted by the learned senior counsel for the petitioner that, the decision of the Nagpur Bench of this Court in a case of Anshul Impex (supra) cannot be said to be per incuriam. There is no substance in the submission of the learned Advocate General that the Division Bench of this Court in the said judgment had failed to notice binding precedents of this Court and other Courts. He submits that, this Court in a case of Anshul Impex (supra) has considered amendment carried out under the Central Excise/Customs Act and had also considered one of the decision on the point in paragraph 18 of the judgment. 72. It is submitted that merely because this Court has distinguished the said decision in a case of Anshul Impex (supra) and has held that the amendments to the Excise Act stands on different footing does not mean that the decision in a case of Anshul Impex (supra) is per incuriam. He submits that, the judgment of this Court relied upon by the learned Advocate General is not applicable because despite taking note of t....
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....ent order was passed after amendment on 31st October, 2017. 76. Learned senior counsel for the petitioner distinguished the judgment of this Court in a case of Nimbus Communications Ltd. Vs. Commissioner of Service Tax in Central Appeal No. 161 of 2016 delivered on 25th July, 2016 by submitting that this Court has considered the judgment of the Allahabad High Court in a case of Ganesh Yadav Vs. Union of India (supra). He submits that, in the said judgment in case of Ganesh Yadav Vs. Union of India (supra), the Allahabad High Court misconstrued the judgment in a case of Hoosein Kasam Dada (supra). In the said judgment retrospective effect was given to the amended provisions. He submits that since this Court in a case of Nimbus Communications Ltd. Vs. Commissioner of Service Tax (supra) has followed the principles laid down by the Allahabad High Court in case of Ganesh Yadav (supra), judgment of this Court in a case of Nimbus Communications Ltd. (supra) is thus per incuriam. He submits that, on the contrary Nagpur Bench of this Court in a case of Anshul Impex (supra) has referred to the judgment of the Supreme Court in a case of Hoosein Kasam Dada (supra). He submits that, in a case....
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....oni, the learned Advocate General in the rejoinder argument submits that right of appeal can be taken away by carrying out amendment. Right to file appeal is made conditional and is not taken away. The Court has to consider the justifiability of the conditions to strike balance and equity. The conditions imposed by the State Government after the amendment are not onerous to make right of appeal illusory or unavailable. He submits that, Sub Section 6A, 6B and 6C will apply only for those orders which are passed after 15th April, 2017 and not to the prior orders. All earlier orders are governed by the original provisions of Section 26(6) and not by the amendment. Both the provisions i. e. old Section 26(6) and the amendment introduced by Sub Section 6A, 6B and 6C to Section 26 will apply and co-exist. There is no conflict between these provisions. If both these provisions co-exist then there is no question of any conflict. 81. The learned Advocate General distinguished the judgment of the Gujarat High Court in a case of Reliance Industries Ltd and others Vs. State of Gujarat and others (supra) relied upon by the learned Senior Counsel for the petitioner and would submit that, Sectio....
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....levied under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, Service Tax, Additional Customs Duty commonly known as Countervailing Duty, Special Additional Duty of Customs, and Central Surcharges and Cesses so far as they relate to the supply of goods and services. 87. By Constitution (One Hundred and First Amendment) Act, 2016, various provisions of various Acts came to be amended. Article 246A was inserted in the Constitution of India which reads thus :- "246A (1) Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State. (2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce." 88. In 6th Schedule to the Constitution of India, in List II, entry 54 was substituted as under :- "54. Taxes on the sale of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human con....
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....of premises, transfer of proceedings, payment and recovery, calculation of cumulative quantum of benefits, exemption from payment of tax and deferment of due date for payment of tax, cancellation of the certificate of Entitlement, collection or deduction of tax at source, refund or set off of any tax, withholding of any refund, exemption from payment of tax, collection of statistics, the power to make rules, the imposition of any penalty, or of interest or forfeiture of sum where such levy, returns assessment, re-assessment, appeal, determination, revision, rectification, reference, limitation, payment and recovery, calculation of cumulative quantum of benefits, exemption from payment of tax and deferment of due date for payment of tax, cancellation of the certificate of entitlement, collection, deduction of tax at source, refund, set-off, withholding of any refund, exemption, collection of statistics, the power to make rules, limitation, production and inspection of accounts and documents and search of premises, transfer of proceedings, penalty, interest or forfeiture of any sum relates to any period ending before the appointed day of the Maharashtra Goods and Services Tax Act, 20....
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....een crores. (6B) No appeal shall be filed, before the Tribunal, against an order, which is passed on or after the commencement of the Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2017, unless it is accompanied by the proof of payment of an aggregate of following amounts, as applicable,- (a) in case of an appeal against an order, in which claim against declaration or certificate has been disallowed on the grounds of non-production of such declarations or, as the case may be, certificates then, amount of tax, as provided in the proviso to sub-section (6), (b) in case of an appeal against an order, which involves disallowance of claims as stated in clause (a) above and also tax liability on other grounds, then, an amount equal to 10 per cent. of the balance amount of disputed tax, so far as such tax liability pertains to tax, on grounds, other than those mentioned in clause (a), (c) in case of an appeal against an order, other than an order, described in clauses (a) and (b) above, an amount equal to 10 per cent. of the balance amount of disputed tax, (d) in case of an appeal against any other order, an amount, as directed by the Tribunal : Provided that, the ....
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....urrent- powers to legislate on certain items. Indeed, concurrency yields to the doctrine of repugnancy, but simultaneous legislative power does not. That is, both the legislatures, say one from the Union and the other from the State, coexist-operate in the same sphere, subject to other constitutional safeguards. 95. It is further held that the legislative power of the State had not been taken away; they have been, on the contrary, constitutionally permitted to be shared with the Union Government. The principles laid down by the Kerala High Court in case of Sheen Golden Jewels (India) Pvt.Ltd. (supra) applies to the facts of this case. We are in respectful agreement with the view expressed by the Kerala High Court in the said judgment. 96. Recently, the Hon'ble Supreme Court in case of Union of India & Anr. vs. M/s. Mohit Minerals Pvt. Ltd. in the judgment delivered on 19th May, 2022 in Civil Appeal No. 1390 of 2022 has held that the Parliament and the State Legislatures have the power to enact laws on GST. Article 246A does not envisage the repugnancy provision to resolve the inconsistencies between the Central and the State Laws of GST. It is held that the distribution of the Le....
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....otsteps India Private Limited, (2022) 2 SCC 603 in which it was held that Article 246-A has brought about several changes in the constitutional scheme. Article 246-A defines the source of power as well as the field of legislation (with respect to goods and services tax) obviating the need to travel to the Seventh Schedule. The provisions of Article 246-A are available both to Parliament and the State Legislatures, save and except for the exclusive power of Parliament to enact GST legislation where the supply of goods or services takes place in the course of inter-State trade or commerce. Article 246-A embodies the constitutional principle of simultaneous levy as distinct from the principle of concurrence which operated within the fold of the Concurrent List, was regulated by Article 254. 101. The Hon'ble Supreme Court in case of Union of India vs. Mohit Minerals Pvt. Ltd., (Civil Appeal No. 1392 of 2022) has held that Article 246A provides Parliament and the State legislature with the concurrent power to legislate on GST. Article 246A has a non obstante provision which overrides Article 254. Article 246 A does not provide a repugnancy clause. It is further held that unlike Article....
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....ax, and excise duty. The States had the exclusive power to impose tax on intra-State sale of goods, luxury tax, entertainment tax, purchase tax, and taxes on gambling and betting. The GST regime has subsumed all the indirect taxes. Article 246A which was introduced by the Constitution Amendment Act 2016 vests the Parliament and the State legislatures with the concurrent power to make laws with respect to GST. The principles laid down by the Hon'ble Supreme Court in case of Union of India & Anr. vs. M/s. Mohit Minerals Pvt. Ltd. in the judgment delivered on 19th May, 2022 in Civil Appeal No. 1390 of 2022 apply to the facts of this case. 106. In our view, there is no substance in the submission made by Mr.Nankani, learned senior counsel for the petitioner that the State Government had no power to legislate including the power to amend the legislation or that such power to legislate of power has been taken away in view of the introduction of Article 246A in the Constitution of India. The argument of the learned senior counsel that post constitutional amendment, the provision of MVAT Act, 2002 virtually has the effect of repealing the MVAT Act, 2002 in so far as all other goods, excep....
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....tion of Article 246A of the Constitution of India. 110. Learned senior counsel for the petitioner does not dispute that the appeal has filed by the petitioner after introduction of Article 246A and after the provisions of the Central Goods and Services Act, 2017, Maharashtra Goods and Services Tax, 2017 and the provisions of the MVAT Act including the amendment to section 26 and insertion of explanation to the said provision. 111. Similarly there is no substance in the submission made by the learned senior counsel that the power under the old Article 246 has been abridged by simultaneously amending the field of legislation in Entry-54 of List-II, which is referred to therein. In this case, there is no question of any power to legislate in respect of rest of the goods, other than the six presently covered by Entry - 54, which survives post-amendment, even by applying the provisions of General Clauses Act. There cannot be any separate provision or the condition imposed for filing an appeal or for entertaining the same in respect of six items covered by Entry - 54 and different provisions for other items not covered by the said entry. 112. There is no substance in the submission ma....
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.... one year from the date of introduction of Article 246A of the Constitution of India, the impugned amendment was within the legislative competence of the State Government and has neither overreached nor overruled the effect of the judgment by the Nagpur Bench of this Court in case of M/s. Anshul Impex Private Ltd. (supra). There is no merit in the challenge to the constitutional validity thereof. 117. Insofar as the judgment of the Supreme Court in case of State of Karnataka and others vs. Karnataka Pawn Brokers Association and others (supra) relied upon by the learned senior counsel for the petitioner is concerned, the Hon'ble Supreme Court in the said judgment has held that the legislature has the power to enact laws including the power to retrospectively amend laws and thereby remove causes of ineffectiveness or invalidity. The Legislature basically corrects the errors which have been pointed out in a judicial pronouncement. Resultantly, it amends the law, by removing the mistakes committed in the earlier legislation, the effect of which is to remove the basis and foundation of the judgment. If this is done, the same does not amount to statutory overruling. 118. In our view, t....
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.... the said constitutional amendment i.e. on 3rd April, 2018. On 1st July, 2017, the Gujarat GST Act had already come into force. The said judgment of the Gujarat High Court in case of Reliance Industries Ltd. Vs. State of Gujarat and others (supra) is thus clearly distinguishable on the facts and would not assist the case of the petitioner. 122. Insofar as issue raised by the learned senior counsel for the petitioner that by way of impugned amendment, retrospective effect cannot be given so as to take away the vested right is concerned, learned Advocate General for the State of Maharashtra has already clarified that sub-sections 6A, 6B and 6C will apply for those orders which are passed after 15th April, 2017 and not to the prior orders. All earlier orders are governed by the original provisions of Section 26(6) and not by the amendment. Both the provisions i. e. old Section 26(6) and the amendment introduced by Sub Section 6A, 6B and 6C to Section 26 will apply and co-exist. There is no conflict between these provisions. Admittedly in the facts of this case, the appeal has been filed by the petitioner after insertion of the impugned amendment to section 26 of the MVAT Act. 123. T....
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....fferently at the "pre" and "post" amendment stages, there could only be two eventualities. Firstly, the pre-amendment appellate package, could have been decreased by the amendment, or alternatively, the post-amendment package, could have been increased by the amendment. In the former situation, all that was available earlier, is now not available. In other words, the right of an individual to the appellate remedy, stands reduced or curtailed. In the latter situation, the amendment enhances the appellate package. The appellate remedy available prior to the amendment, stands included in the amendment, and some further addition has been made thereto. In the latter stage, all that was available earlier continues to subsist. 127. It is held that the two situations contemplated as referred to will obviously lead to different consequences, because in the former position, the amendment would adversely affect the right, as was available earlier. In the latter position, the amendment would not affect the right of appeal, as was available earlier, because the earlier package is still included in the amended package. 128. The Hon'ble Supreme Court held that the right of appeal being a vested....
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....tal waiver is not a vested right. After considering the amendment thereby prescribing pre-deposit of the fixed percentage of 7.5% of the demand as mandatory, it is held that the said amendment did not take away a right vested, but merely made a chance divested. What has now gone, is not the right , but the chance or hope. 131. In our view, the principles of law laid down by the Madras High Court in case of M/s. Dream Castle (supra) would apply to the facts of this case. We are in respectful agreement with the views expressed by the Madras High Court in the said judgment. In the facts of this case also, the unamended provisions which gave wide discretion upon the Appellate Authority to pass the order of deposit as pre-condition for granting stay could be between 0% to 100%, which is substituted by fixed percentage of 10% of the disputed dues. The discretion granted to the Appellate Authority earlier gave only a chance or hope for the assessee to get a total waiver and thus could not be equated to a vested right. Per contra, by the said judgment, the prescribed fixed percentage of the 10% of the demand to be deposited mandatorily and granting stay of the balance 90% of the demand do....
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....itled to file the appeal. 134. It is held that it is neither an absolute right nor an ingredient of natural justice, the principles of which must be followed in all judicial and quasi-judicial litigations. It is always be circumscribed with the conditions of grant. At the given time, it is open for the legislature in its wisdom to enact a law that no appeal shall lie or it may lie on fulfillment of pre-condition, if any, against the order passed by the Authority in question. After considering various provisions providing for such condition of deposit as condition precedent for entertaining of the appeal, the Hon'ble Supreme Court held that in no circumstance the said provision can be said to be onerous as prayed for or in violation of Articles 14 or 19(1) (g) of the Constitution of India. 135. In our view, the principles laid down by the Hon'ble Supreme Court in case of M/s. Newtech Promoters And Developers Pvt. Ltd. (supra) would apply to the facts of this case. The provisions considered by the Hon'ble Supreme Court in the said judgment are in pari materia with the impugned amended provisions which are the subject matter of these petitions. We are respectfully bound by the princ....
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....he same is clarificatory in nature and takes away the effect of the judgment of the Nagpur Bench of this Court in case of M/s. Anshul Impex Private Ltd. (supra). There is no substance in the submission made by the learned senior counsel for the petitioner that the impugned amendment directly or indirectly overrules or overreaches the judgment in case of M/s. Anshul Impex Private Ltd. (supra). 140. In our view, the State Government in this case has not transgressed any constitutional limitation while inserting the amendments in the Act which are the subject matter of these petitions. The State Government has legislative competence to remove the substratum of foundation of a Judgment retrospectively. The State Government is empowered to carry out amendment suitably to amend the law by use of appropriate phraseology removing the defects pointed out by the Court in any judgment and by amending the law inconsistent with the law declared by the Court so that the defects which were pointed out were never on the statute for effective enforcement of law. There is no judicial encroachment directly or indirectly by the State Government by inserting amendment which are the subject matter of t....
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....law. 144. The Supreme Court in the said judgment in case of State of Himachal Pradesh (supra), has adverted to the judgment in case of State of Bihar and others Vs. State Pensioners Samaj, (2006) 5 SCC 65, in which it has been held by the Supreme Court that it is always open to the legislature to alter the law retrospectively as long as the very premise on which the earlier judgment declared a certain action as invalid is removed. The situation would be one of a fundamental change in the circumstances and such a validating Act was not open to challenge on the ground that it amounted to usurpation of judicial powers. The principles laid down by the Hon'ble Supreme Court in case of State of Himachal Pradesh vs. Narain Singh (supra) and other judgments which are adverted to in some of the judgments and are referred to aforesaid applies to the facts of this case. We are respectfully bound by the principles laid down by the Hon'ble Supreme Court in the said judgment. 145. In our view, the Legislature has power to remove the defects retrospectively and prospectively by Legislative action so as to cure the defect or inconsistency in the law declared by the Court so as to remove such inc....
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....arashtra & Ors. (supra) has considered the validity of the amendment to section 2(17) of the Bombay Sales Tax Act, 1959 with retroactive effect. This Court considered the contention of the petitioner that the Explanation - II inserted with a view to amend section 2(17) of the Bombay Sales Tax Act, 1959 was beyond legislative competence of the State of Maharashtra in so far as it operates retrospectively on various grounds. This Court after adverting the various judgments and the impugned amendment held that the said amendment was clarificatory which was necessary to take away the effect of the judgment of the Tribunal. The retrospective effect to the amendment was thus rightly given by this Court in the said judgment in case of Godrej Soaps Ltd. & Anr. vs. The State of Maharashtra & Ors. (supra). The principles laid down therein applies to the facts of this case. We are respectively bound by the said principles laid down by this Court in the said judgment. 150. The Hon'ble Supreme Court in case of Chandra Sekhar Jha vs. Union of India, 2022 SCC OnLine 269 delivered on 28th February, 2022 in Civil Appeal No. 1566 of 2022 has construed section 129E of the Customs Act, 1962 and the a....
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.... as substituted provision would not apply. The substitution of a provision results in repeal of the earlier provision and its replacement by the new provision. 153. The Hon'ble Supreme Court rejected the argument of the appellant that since the incident which triggered the appeal filed by the appellant took place in the year 2013, the appellant must be given the benefit of the power available under the substituted provision. It is held that the substitution has effected a repeal and it has re-enacted the provision as it is contained in section 129E. In fact, the acceptance of the argument would involve a dichotomy in law. On the one hand, what the appellant is called upon to pay is not the full amount as is contemplated in Section 129(E) before the substitution. The order passed by the the Commissioner is dated 23rd November, 2015 which is after the substitution of Section 129E. The appellant filed the appeal in 2017. What the appellant is called upon to pay is the amount in terms of Section 129E after the substitution, namely, the far lesser amount in terms of the fixed percentage as provided in section 129E. The appellant, however, would wish to have the benefit of the proviso w....
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....to enact laws including the power to retrospectively amend laws and thereby remove causes of ineffectiveness or invalidity. 158. It is held that when a law is enacted with retrospective effect, it is not considered as an encroachment upon judicial power when the legislature does not directly overrule or reverse a judicial dictum. The legislature cannot, by way of an enactment, declare a decision of the Court as erroneous or a nullity, but can amend the statute or the provision so as to make it applicable to the past. The legislature has the power to rectify, through an amendment, a defect in law noticed in the enactment and even highlighted in the decision of the court. This plenary power to bring the statute in conformity with the legislative intent and correct the flaw pointed out by the Court can have a curative and neutralizing effect. 159. This Court held that when such a correction is made, the purpose behind the same is not to overrule the decision of the Court or encroach upon the judicial turf, but simply enact a fresh law with retrospective effect to alter the foundation and meaning of the legislation and to remove the base on which the judgment is founded. This does no....
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....urt in case of M/s. Anshul Impex Private Ltd. (supra) did not take into consideration the crucial aspect that the judgment of the Supreme Court in the case of Hoosein Kasam Dada (India) Ltd.(supra) did not deal with the case where the right of the appeal was adversely affected retrospectively without any statutory provision expressly or by necessary implications to that effect. The said judgment on the contrary had held that with statutory provisions expressly or by necessary intendment enacted to that effect, can even take away right of appeal. In the case at hand, the amendments in this case are by the express statutory provisions and in any case do so by necessary intendment. 164. The Nagpur Bench of this Court in case of M/s. Anshul Impex Private Ltd. (supra) also overlooked the fact that sub-section 6(1) to section 26 of MVAT Act was inserted by 2017 amendment with overall package in respect of the Right of Appeal. In our view, right of appeal can be made conditional, with conditions similar to the one inserted by the 2017 amendment in issue, by way of an amendment made with retrospective effect, even if the same adversely affects such a right, much after the 'lis' has begun,....
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....es Tax (Second Amendment) Act. The question that fell for consideration of the Supreme Court in the said judgment was whether the imposition of a condition requiring payment of entire assessed amount as a condition precedent to the admission of the appeal, could affect the assessee's right of appeal from a decision commenced prior to the date of such amendment and which right of appeal was free from such restrictions under the Act at the time of commencement of the proceedings. 169. Proviso to Section 22(I) of the said Act considered by the Hon'ble Supreme provided that no appeal against the order of assessment with or without penalty shall be entertained by the said authority unless it is specified that such an amount of tax or penalty or both as the appellant may admit to the demand from him has been paid. The said proviso was subsequently amended and it was provided that no appeal against an order of assessment with or without penalty shall be admitted by the said authority unless such appeal was accompanied by a statutory proof of payment of tax with penalty, if any, in respect of which the appeal has been preferred. The Supreme Court held that right of appeal is a substantive....
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....der is not merged with the order of the Supreme Court. Review of such order passed under Article 226 of the Constitution of India is thus maintainable. In the facts of this case, the special leave petition filed by the State of Maharashtra against the judgment of Nagpur Bench of this Court in case of Anshul Impex Pvt. Ltd. (supra) was dismissed without recording any reasons by the Supreme Court. The said judgment of Nagpur Bench of this Court in case of Anshul Impex Pvt. Ltd. (supra) thus can be reviewed by this Court. The principles of law laid down by the Hon'ble Supreme Court in case of Gangadhar Palo (supra) applies to the facts of this case. We are respectfully bound by the said judgment. 174. Supreme Court in case of M/s Tecnimont Pvt. Ltd. (supra) considered the question whether the State Government was empowered to enact Section 62(5) of the Punjab Value Added Tax Act, 2005 and whether the condition of 25% pre-deposit for hearing first appeal was onerous, harsh, unreasonable and therefore violative of Article 14 of the Constitution of India. The Supreme Court after adverting to various judgments held that the High Court had rightly held that Section 62(5) of the Punjab Val....
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....o the Government or otherwise. The impugned amendment would apply only for those orders which are passed only after 15th April, 2017 and not to the prior orders being passed by exercising the legislative power of the State Government. The argument of the petitioner that the amendment violates Article 14 of the Constitution of India on the ground that two sets of assessees are discriminated against insofar as the pre-condition of deposit for entertaining the appeal is concerned has no merit. 178. In our view, the impugned amendment also does not take away vested right of the assessee to file an appeal as sought to be canvassed by the learned senior counsel for the petitioner. The judgment of Nagpur Bench has not merged with the judgment of the order passed by the Supreme Court while dismissing the Special Leave Petition on 11th March, 2019. Be that as it may, this Full Bench can take a different view in the matter and is not bound by the principles of law laid down by the Division Bench of the Nagpur Bench of this Court in case of M/s. Anshul Impex Private Ltd. (supra). 179. The Supreme Court in case of Bimolangshu Roy Versus State of Assam And Another (supra) has held that the au....
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....he nature of the sovereignty. Such power is conferred by some of the articles by an express grant either on the Parliament or State legislature to make laws for certain purposes specified in each in those articles, though there is no corresponding entry in the corresponding list indicating the field of such legislation. 183. The judgment of the Supreme Court in case of Ambika Prasad Mishra vs. State of U.P. (supra) relied upon by the learned senior counsel for the petitioner would not assist the case of the petitioner. The Supreme Court in the said judgment has held that fatal flaws silenced by earlier rulings cannot survive after death because a decision does not lose its authority "merely because it was badly argued, inadequately considered and fallaciously reasoned". The judgment of the Nagpur Bench of this Court in case of M/s. Anshul Impex Private Ltd. (supra) is not distinguished by the learned Advocate General on the ground that it was badly argued or inadequately considered or fallaciously reasoned. Be that as it may, the said judgment is not binding on the Full Bench of this Court. 184. Insofar as judgment of the Supreme Court in case of ECGC Limited Vs. Mokul Shriram EP....
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....pplication generated further litigation before the higher forums taking a toll on the valuable time of the tribunal delaying the adjudication of the appeals. This undoubtedly caused a serious prejudice to the parties before the Tribunal. It is held that the aim of the amended provision is also to curtail litigation which had assumed high proportions, leaving no time to the appellate authorities to devote the same to important issues. Considering these hard realities and to have a expeditious disposal of the statutory appeals which undoubtedly is a necessary requirement of effective trade, commerce and business, the Parliament in its wisdom amended the provisions of section 129E of providing deposit of 7.5% and 10% respectively as sub-clauses (i), (ii) and (iii) respectively provide. 188. It is held that if such is the aim and insight behind the provision, it certainly cannot be held to be unreasonable, onerous, unfair or discriminatory for two fold reasons. Firstly, the object of a public policy sought to be achieved by the amendment, namely speedy disposal of the appeals before the appellate authorities is a laudable object and cannot be overlooked, so as to label the provision a....
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....the Appellate Authority or the Tribunal as the case may be was bound to admit the appeal and to grant stay without imposing any condition for deposit of the part or whole of the disputed amount by the appellant. In our view, the right of appeal which was already provided under section 26 of the MVAT Act has been protected and is not taken away by virtue of sections 6A, 6B and 6C inserted in the said section 26(6) or by inserting explanation to section 26(6C) of the MVAT Act but is only made conditional. The principles laid down by the Division Bench of this Court in case of Haresh Nagindas Vora (supra) apply to the facts of this case. We do not propose to take a different view in the matter. 193. A perusal of the judgment of the Nagpur Bench of this Court in case of M/s. Anshul Impex Private Ltd. (supra) indicates that the implications of the words used in Section 26(6A) expressing clear intention of the legislature to make the right of appeal conditional and not taking away the vested right of filing an appeal by the assessee, has not been considered by the Division Bench in the said judgment. The decision in the said judgment proceeds on the ground that the appeal is governed by....
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....nd the Maharashtra Tax Laws (Amendment and Validation) Act, 2019 to amend the provisions of the Maharashtra Value Added Tax Act, 2002 to incorporate mandatory pre-deposit for filing appeals against the assessment orders pertaining to all the goods after 16th September 2016 that is post 101 Constitutional Amendment Act, 2016?" is answered in affirmative and in favour of the Revenue. (ii) Question of Law (b) i.e. "whether Explanation to Section 26 of the MVAT Act introduced with effect from 15th April 2017 by the Maharashtra Tax Laws (Amendment and Validation) Act, 2019 takes away the right of the assessee to file an appeal without statutory deposit in respect of orders passed for the assessment years prior to 15th April 2017 and whether the Explanation nullifies the decision of the Division Bench of this Court (Nagpur Bench) in the case of Anshul Impex Pvt. Ltd. Vs. State of Maharashtra in Sales Tax Appeal No.2/2018?" is answered in negative and in favour of Revenue. (iii) The question of law (c) as to whether the Explanation nullifies the decision of the Division Bench of this Court (Nagpur Bench) in the case of Anshul Impex Pvt. Ltd. Vs. State of Maharashtra in Sales Tax Appea....