TaxTMI 
TaxTMI 
2023 (10) TMI 1208
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....LP(C) No. 13562-13574/2023, SLP(C) No. 13561/2023, SLP(C) No. 13539- 13540/2023, SLP(C) No. 13527-13528/2023, SLP(C) No. 13560/2023, SLP(C) No. 13534- 13537/2023, C.A. No. 2433/2023, C.A. No. 2436/2023, C.A. No. 2437-2443/2023, C.A. No. 2730/2023, C.A. No. 2731/2023, C.A. No. 1645/2023, C.A. No. 1649/2023, C.A. No. 1643/2023, C.A. No. 1636/2023, C.A. No. 1652/2023, C.A. No. 1679/2023, C.A. No. 1637/2023, C.A. No. 1632/2023, C.A. No. 1651/2023, C.A. No. 1633/2023, C.A. No. 1648/2023, C.A. No. 1634/2023, C.A. No. 1647/2023, C.A. No. 1644/2023, C.A. No. 1638/2023, C.A. No. 1678/2023, C.A. No. 1631/2023, C.A. No. 1681/2023, C.A. No. 1641/2023, C.A. No. 1640/2023, C.A. No. 1680/2023, C.A. No. 1639/2023, C.A. No. 1646/2023, C.A. No. 1635/2023, C.A. No. 1642/2023, C.A. No. 1650/2023 S. RAVINDRA BHAT And ARAVIND KUMAR , JJ. For the Appellant : Mr. Vikram Nankani, Sr. Adv. Ms. Kavita Jha, AOR Mr. Shammi Kapoor, Adv. Mr. Arnab Roy, Adv. Mr. Aditeya Bali, Adv. Mr. Prithwiraj Choudhury, Adv. Ms. Prachi Jain, Adv. Mr. Prithwiraj Choudhuri, Adv. Ms. Archana Pathak Dave, Adv. Ms. Deepanwita Priyanka, AOR Mr. Varun Mishra, Adv. Mr. Ankur Jain, Adv. Mr. Prablin Singh Abrol, Adv. Mr. Aniruddha....
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.... Reddy, Adv. Mr. Uchit Sheth, Adv. Mr. Uchit N. Sheth, Adv. Mr. Malak Manish Bhatt, AOR Mr. Ishaan George, AOR Mr. Jay Savla, Sr. Adv. Mr. Jasdeep Singh Dhillon, Adv. Ms. Pinky Behera, AOR Mr. Prabhat Kumar Chaurasia, Adv. Mr. Dama Sheshadari Naidu, Sr. Adv. Mr. Rizwan Ahmad, AOR Mr. Shakeel Ahmed, Adv. Mr. Amir Kaleem, Adv. Mr. Jatin Anand Diwedi, Adv. Mr. Raghvendra Pratap Singh, Adv. Mr. Mohd Wasiq Khan, Adv. Mr. Ahmed Pervez, Adv. Mr. Ravinder Kumar Yadav, AOR Mr. Vinay Mohan Sharma, Adv. Mrs. Arti Anupriya, Adv. Ms. Arti Anupriya, Adv. Mr. Vineet Yadav, Adv. Mr. Kartikey, Adv. Mr. Vineet Kumar Yadav, Adv. Mr. Amir Yadav, Adv. Mr. Raghav Anthwal, Adv. Mr. Paras Juneja, Adv. Mr. Baljeet Singh, Adv. Mr. Vinayak Sharma, Adv. Mrs. Akshi Kaushal, Adv. Mr. Jai Subhash Thakur, Adv. Mr. Soumik Ghosal, AOR Mr. Ramesh Allanki, Adv. Ms. Aruna Gupta, AOR Mr. Syed Ahmad Naqvi, Adv. Mr. B Krishna Reddy, Adv. Mr. K. Aroah, Adv. Mr. Sarvam Ritam Khare, AOR Mr. K.K.tyagi, Adv. Ms. Garima Tyagi, Adv. Mr. Vikash Chandra Shukla, AOR Mr. V. C. Shukla, Adv. Mr. Naga Deepak, Adv. Mr. Aishvary Vikram, Adv. Mr. Ajay Awasthi, Adv. Mr. Anantha Narayana M.g., Adv. Mr. Siddhartha Relan, Adv. Mr. Prakash Ga....
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....of the Goods and Services Tax (GST). It confers new powers upon the Union Parliament and State Legislative Assemblies, and also creates institutions that have a significant bearing on the federal character of the Constitution. 3. The pre-Amendment constitutional scheme had a vision of taxation of goods and services supplied within India. Excise and customs duty and excise on manufacture were within the scope of the legislative powers of the Union Parliament Entries 83 and 84, List I, Seventh Schedule of the Constitution of India, under the Seventh Schedule. No separate entry for Service Tax existed in the Constitution at the time it was enacted. In T.N. Kalyana Mandapam Assn. v. Union of India 2004 Supp (1) SCR 169; (2004) 5 SCC 632, this court held that service tax as a subject matter was within the "residuary power" of the Union; nevertheless, Entry 92C was introduced into the Union List by the Constitution (88th Amendment) Act, 2004 clarifying that the Union had exclusive authority to impose a service tax. Taxation of sale and movement of goods was within the exclusive purview of the States, by Entries 52 and 54 of the State List (List II of the VIIth Schedule to the Constitu....
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....e Union and the States on various facets of GST, including Model GST laws, principles to determine the place of supply, levy of the tax, design of GST, dispute settlement, special provisions for a special category of States, and so forth". GST Council's recommendations led Parliament to enacted legislation. The Central Goods and Services Tax Act, 2017: it levies a tax on intra-State supplies of goods and services in all supplies within a State; the Integrated Goods and Goods and Services Tax Act, 2017: it levies a tax on inter- State supplies of goods and services; and (3) the Union Territory Goods and Services Tax Act, 2017: it levies a tax on intra-State supplies of goods and service. 8. The coming into force of the GST regime, and the passage of the amendment demonstrates a rare unanimity, a resolve across the political spectrum, to ensure that there is a single indirect taxation regime. The effect of the Amendment is to subsume all state and union taxes, on goods and services. Both the Union and the States will ostensibly have the power to tax the supply of goods and services. The 101st Amendment Act takes away neither the Union's nor the States' taxing power but ....
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....hat certain functions of other constitutional institutions shall be carried out on the basis of the recommendations of the GST Council For illustration, see Art. 246-A Explanation, Art. 269-A(1), Constitution of India; (4) has overarching jurisdiction and carries extensive functions in relation to the design and structure of the goods and services tax; (5) has substantial role in resolution of disputes amongst the executive governments relating to GST, etc. Article 279-A, infra, for a detailed discussion In fact, the GST Council is empowered to even recommend on the model legislations and rates of tax on supply of goods and services. 12. The relevant parts of the Amending Act, read as follows: In terms of Section 2 of the aforesaid Constitution Amendment Act, after Article 246, a new Article 246-A came to be inserted which reads as under: "246A. Special Provision with respect to goods and services tax--- (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....
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.... the following members, namely:- (a) the Union Finance Minister.......Chairperson; (b) the Union Minister of State in charge of Revenue or Finance...... Member; (c) The Minister in charge of Finance or Taxation or any other Minister nominated by each State Government .....Members. (3) The Members of the Goods and Services Tax Council referred to in subclause (c) of the clause (2) shall, as soon as may be, choose one amongst themselves to be the Vice-Chairperson of the Council for such period as they may decide. (4) The Goods and Services Tax Council shall make recommendations to the Union and the State on--- (a) the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in the goods and services tax; (b) the goods and services that may be subjected to, or exempted from the goods and services tax; (c) model Goods and Services Tax Laws, principles of levy, apportionment of Goods and Services Tax levied on supplies in the course of inter-state trade or commerce under article 269-A and the principles that govern the place of supply; (d) the threshold limit o....
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....ndia and one or more States; or (b) between the Government of India and any State or States on one side and one or more other States on the other side; or (c) between two or more States, arising out of the recommendations of the Council or implementation thereof." 13. Section 14 (of the Amendment) had the effect of introducing Article 366 (12A), (26-A) and (26-B). A crucial amendment was in the VIIth Schedule to the Constitution. In List I (Union List) for Entry 84, the following entry was substituted: "84. Duties of excise on the following goods manufactured or produced in India, namely:--- (a) Petroleum crude; (b) High speed diesel; (c) Motor spirit (commonly known as petrol); (d) Natural gas; (e) Aviation turbine fuel; and (f) Tobacco and tobacco products."; Entries 92 and 92 C (Union List) were omitted. Similarly, Entry 52 was omitted and Entry 54 was substituted. The new Entry 54, reads as follows: "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 consumption, but n....
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....t. By the impugned judgment, the High Court accepted the challenge and struck it down, on various counts, including that the State had limited scope to amend its VAT Act, which in terms of Section 19 of the Amendment could have done it only to bring it in conformity with the amended Constitution. Other reasons included that the ordinance, could not have been confirmed, as the state was denuded of legislative competence after 01.07.2017. 15. In the batch of appeals arising from the judgment of the Bombay High Court, the parties were aggrieved by the fact that the Maharashtra VAT Amendment Act, which was initially made on 15.04.2017, was read down by a Division Bench judgment, of the Bombay High Court. That position was sought to be reversed, through an amendment which was brought into force, on 15.04.2017 and later in an effort to reverse the effect of a judgment, given retrospective effect. The writ petitions filed by such aggrieved parties, were dismissed. Consequently, they are in appeal. 16. In the Gujarat batch of cases, Section 84A was introduced in the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as "the Gujarat VAT Act") by the Gujarat Value Added Tax (Am....
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....furthered. 18. Learned counsel relied upon the provisions of the Amendment to emphasize that the GST Council is comprised of Finance Ministers of all States and that the Union has only 1/3rd weightage in its decision making. The balance is with the States collectively. Furthermore, any decision in the council becomes effective when it is voted for by a 3/4ths majority. 19. It was contended, that the almost the revolutionary change brought about by redistribution of indirect taxation power and the giving effect to it through the Amendment meant that both Parliamentary and state legislative powers were denuded in respect of fields of taxation as far as they covered central excise, service tax, sales tax and other taxes which the states could hitherto levy and collect. As an effect of the Amendment, the fields of taxation in Entries 84 of the Union List (List I) of the Seventh Schedule to the Constitution of India and Entries 54 and 62 of the State List, too were amended. The revamping of these fields of taxation resulted in such powers getting pooled or collected as a sovereign taxation power, shared by the state and the centre. This became the subject matter of a separate entr....
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....only for a period of one year from the commencement of the amendment. Section 20 authorized the President to, by order, make provisions, including modification and adoption of "any provision of the Constitution as amended by the amendment Act in case of any defect, including defect in relation to transition from the provisions of the State as they stood immediately before the commencement of the amendment Act, for a period of three years." 22. In view of Section 19 of the Amendment, the Telangana legislature amended the existing state statute - Value Added Tax Act (hereafter "the Telangana VAT Act") Sections 20(4), 21(3), 21(4), 21(6), 21(7), 21(8), 31(1), 32(3), 32(6), 32(7) and 57(5). The amended provisions empowered the Assessing Officer to reassess the returns which had been assessed previously - additionally for a period of two years. In other words, originally the power to reassess was limited to four years. The lengthening of the period by two more years meant that dealers whose assessments had either escaped notice and who had mis-declared or withheld information could now be exposed to the possibility of reassessment for a further period of two years. 23. It was subm....
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....gh Section 19. 26. Learned counsel submitted that if one takes into account the fact that the effect of an ordinance and the effect of law are identical which is that they bind the space or subject matter to the extent they provide for it, the difference lies only in the manner of their creation. Learned counsel emphasized that the distinction lies in the procedure adopted rather than the content or the effect of the law. Whereas the origin of an ordinance is through a different entity which is the executive (clothed with limited legislative power), the Act, on the other hand, is an expression of a State legislative or Parliament. This distinction cannot obliterate the effect of the law which is the same and would continue to bind the parties for which express provision is made. 27. In support of the proposition that there is no difference between the legislative power of the State and that of the executive, learned counsel relied upon the decision of the Constitution Bench of this Court in R.K. Garg v. Union of India (1982) 1 SCR 947. It was argued further that the provision requiring placing or tabling the ordinance before the house, either the State legislature or the Parl....
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....to amend or repeal the existing law. Being a constitutional amendment, no expression or term ought to be interpreted in a limited manner. The reasoning of the Telangana and Gujarat High Courts that the power of amendment was limited to bringing the existing enactments, i.e. State VAT Acts in conformity with the express terms of the 101st amendment, was erroneous. It was submitted that till the date specified in the 101st amendment, i.e. the expiration of one year which was effectively 30th June, 2017, the power of the competent legislatures, i.e. the State and the Union was untrammeled. Learned counsel also pointed to amendments made to the Central Excise Act, much in the same terms as in the case of the Telangana and Gujarat amendments which enlarged the period of limitation in certain respects. It is fallacious to contend that the State legislatures were denuded the power to legislate. The power was traceable to the amended provisions of the Constitution notwithstanding that relevant entries in the State List 54 and 62 had been altered. It was submitted that such a view was taken notice of and discussed in UOI & Anr. v. Mohit Minerals Private Limited 2022 (9) SCR 300. 29. It i....
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....s on the decisions, to say that the right to appeal remains unaltered, only its conditions are controlled, or regulated, with pre-deposit requirements, at the appellate stage, i.e. Anant Mills Company Limited v. State of Maharashtra (1975) 3 SCR 220; Vijay Prakash D. Mehta v. Collector of Customs (Preventive), Bombay (1988) Supp (2) SCR 434 State of Haryana v. Maruti Udyog Limited & Ors (2000) Supp 3 SCR 185 Thirumali Chemicals Limited v. Union of India (2011) 4 SCR 739; Neena Aneja & Anr. v. Jai Prakash Associated Limited (2021) 15 SCR 96. 33. The state of Gujarat urges that the High Court fell into error in not recognizing that in somewhat similar situations, this court in A. Hajee Abdul Shakoor & Co v. State of Madras 1964 (8) SCR 217; AIR 1964 SC 1729 (hereafter, "Hajee Abdul Shukoor") recognized the power of states to even retrospectively validate assessments under the Act of 1939 even though the earlier Act had failed for want of Presidential assent. It was also pointed out that this court in M/s West Ramnad Electric Distribution Co. Ltd. v. State of Madras 1963 (2) SCR 747 validated the power of states to retrospectively validate actions taken under notifications of enact....
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....er "the assesses") that continuance of inconsistent existing law is solely for the purposes of making them consistent (through amendments) with the amended architecture of the Constitution. It was submitted that to elucidate the ambit of powers under Section 19 of the Amendment, an inference can be drawn from Article 243ZF of the Constitution, which has been couched in a manner identical to Section 19. There are however, two distinctive features inter se between them, first, being, that unlike Section 19 Article 243ZF was incorporated into the body of the Constitution, and the second is while Article 243ZF has a non-obstante clause seeking to override all Articles contained in Part IXA of the Constitution, Section 19 of the Constitutional Amendment Act, 2017 ("CAA") only overrides the provision of the Amendment and not the Constitution of India. In other words, ex facie Article 243ZF of the Constitution can be said to be at a pedestal higher than that of CAA. It is argued that this court had interpreted Article 243ZF in Sundergarh Zilla Adivasi Advocates Association and Ors v State of Odisha and Ors (2013) 6 SCR 420 (hereafter, Sundergarh Zilla")., wherein this court, at para held ....
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....r to amend to breathe any more life into the statute concerned. Further, the usage of the word 'inconsistent' followed later with the word 'until amended', clearly suggests that the intention was to let the inconsistent provisions survive for a limited time, until it is amended to make it consistent. Had the intention been to confer plenary power to amend, then section 19 would have been couched in a manner such that it provided for 'subject to amendment', which would have then suggested that the existing inconsistent law 'as is' or 'as amended', could continue to be in force until the lapse of one year or its repeal, whichever was earlier. However, such is not the case for the nonce. 41. Further, by applying purposive construction, Section 19 of the CAA admits to the exercise of 'curative legislative action'. This is so because with the advent of GST, as per Article 279-A (6) of the Constitution, the need for a harmonized structure of goods and services tax and for the development of a harmonized national market for goods and services was specifically provided within the Constitution. This harmony has been interpreted by the Supreme Court in ....
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....herefore, to interpret the word "amend" in Section 19 of the Amendment to mean conferment of a parallel power wider than making curative legislation, which runs contrary to the revised Constitutional architecture of simultaneous levy through the introduction of GST, cannot be said to be in aid of the main subject of Amendment. 43. It is alternatively argued that assuming arguendo, Section 19 has been legislated by the Parliament in exercise of power under Entry 97 of List I of the Seventh Schedule (being a residuary entry for matters not enumerated in List II or List III including any tax not mentioned in List II or III), even then in such cases, such power can only be exercised by the Parliament and can in no manner be said to be transferred to the State Legislatures thereby enabling them to amend the plenary legislations. Neither Article 258 nor Article 258A of the Constitution admits of any transfer of legislative power by the Parliament to the State Legislatures. It cannot, therefore, be said that Parliament entrusted the legislative functions to the State Legislature. 44. Counsel argued that the amendment to the VAT legislation cannot also find its source of power in Art....
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....ed by the State of Telangana on 01.06.2016. Further, the subsequent decision of this court which set aside the order of the Hon'ble AP High Court cannot breathe life and validate the adoption as it was well settled that the validity of a statute is to be tested at the time of enactment by the legislature. An After-acquired power cannot ex proprio vigore validate a statute void when enacted. 49. Section 6 of the Telangana Tax on Entry of Goods into Local Area Act, 2001 incorporates the provisions of the Telangana VAT Act in relation to assessment, returns etc. Accordingly, the present is a case of 'legislation by incorporation'. On this basis, it is submitted that the amendments in the Telangana VAT Act will have no impact and bearing on the Telangana Tax on Entry of Goods into Local Area Act, 2001 and as such the extension in the period of limitation from 4 to 6 years would not be applicable to the assessment made in respect of entry tax. This is based on a well settled principle of law as laid down by this Court in the case of State of Madhya Pradesh v. M.V. Narasimhan (hereafter, "M.V. Narasimhan") (1976) 1 SCR 6, which held that where a subsequent enactment incorporates t....
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....tes amendment by a "competent legislature". Post amendment the competence has to be determined with reference to post amendment provisions. It is submitted that States had legislative competence only as an incidental power to amend or repeal the provisions dealing with State indirect taxes so as to bring them in line with the amended Constitution. An example of a valid amendment would have been to amend the definition of "goods" in the Telangana VAT Act. The same was however achieved by S.174(1)(i) of the Telangana Goods and Services Tax Act, 2017 ("TGST Act") by confining the repeal of the Telangana VAT Act to all goods except those covered by Entry 54 of List II of the 7th Schedule. Section 19 of the 101st Amendment is pari materia with Clause 20 of the Constitution 122nd Amendment Bill, 2014. The said Bill was considered by the Select Committee of Rajya Sabha in its report dated 22.07.2015. 53. The assessees also argue that the extension of limitation is done so with a view to secure revenue of the state by enlarging the duration. It is submitted that this argument is not tenable and cannot be sustained. The further argument that provisions of limitation on assessments etc., ....
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....The State legislature amends the inconsistent law to bring it in conformity with the Constitution as amended by the 101stAmendment OR b. The State Legislature repeals the inconsistent law OR c. The period of one year from the commencement of the Act expires i.e., 15.09.2017. 57. The purpose of using the word 'amend' is to allow the State Legislature to bring existing laws in conformity with the 101st Constitution Amendment so that they can continue to operate. If the legislatures chooses to take such a route, the inconsistent provisions of the Act cease to exist upon amendment. In the language of Section 19 - until it was amended. Therefore, the State Legislature did not possess any legislative competence with respect to goods other than those included in the new and limited Entry 54 either on the date of the Ordinance i.e., 17.06.2017, or on the date of the Amendment Act, i.e., 02.12.2017. 58. The Telangana VAT Act 2005, was effectively repealed from 01.07.2017 by Section 174(1)(i) of the TGST Act 2017 except in respect of goods included in Entry 54 of List II. Section 174(1) operates as an express acknowledgment and acceptance of the 101st Amendmen....
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....y relying on the definitions meant for the purposes of the GST Acts and not the Constitution of India. 63. Further, the High Court failed to appreciate that Article 367 of the Constitution of India incorporates the provision of the General Clauses Act, 1897 and makes them applicable to the Constitution. It is in this context, that the effect of the General Clauses Act, needs to be examined at two levels. One with reference to the 101st Constitutional Amendment Act, 2016 and the other with reference to amendment to MVAT Act. As regards to 101st Constitutional Amendment, the power under the old Article 246 has been abridged by simultaneously amending the fields 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 6 presently covered by Entry-54, which survives post- amendment, even by applying the provisions of the General Clauses Act, 1897. 64. It is submitted that Section 19 of CAA does not confer unabridged or wide powers on the state legislatures/ Parliament to make any and every amendment in the laws existing in force at the time of enacting the Amen....
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....ent in favour of the revenue has been pronounced by a Court in another case is manifestly arbitrary and illegal. Moreover, the impugned provision has been retrospectively introduced w.e.f. 1.4.2006. Therefore High Court has rightly struck it down as being manifestly arbitrary and illegal. 68. It is argued that if an unlimited time period is available to the revenue for assessment/reassessment/revision in any case based on decisions in the case of other dealers will lead to unimaginable chaos and therefore it is rightly struck down as being manifestly arbitrary and illegal. The Respondent is supported on all fours by the judgement of Hon. 9 judge bench of this Court in the case of Mafatlal Industries (supra). In that case, this court was faced with a situation converse to the present case in as much as assesses used to claim a refund after number of years on the basis of judgements rendered in the case of other assesses. This court observed that allowing refund claims beyond the stipulated period of limitation based on decisions rendered in other cases would do violence to several well-accepted principles of law. It was further observed that one of the important principles of law....
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.... exclude the period spent during the pendency of any appeal or revision before the appellate authority or High Court, for the purpose of revision or reopening which in the interest of the revenue, was necessary to reopen. These became the subject matter of challenge on diverse grounds before the High Court. The High Court, by its elaborate and reasoned judgment, held the amendment to be unconstitutional on the ground that the legislature lacked competence to enact the provision having regard to Section 19 of the 101st amendment and furthermore that the amended provision was manifestly arbitrary. In the Maharashtra batch of matters, subject matter of the proceedings was MVAT and amendments made to it. MVAT came into force on 01.03.2005 to consolidate laws regarding the collection of tax in sales and purchase of goods. 101st CAA came into effect in 16.09.2016 and by the CAA, the power of the state government to levy tax on sales and purchase of goods under Entry 54 of List II was sought to be restricted only with respect to the 6 goods mentioned therein. The state government amended Section 26 of the MVAT Act and inserted sections 6A, 6B and 6C requiring assessee to deposit 10% of th....
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....ting laws continued till the legal regime was changed in accordance with the amended parts of the Constitution. Keeping in mind that the Amendment, denuded the States - and even Parliament of legislative authority in regard to the pre-existing (i.e. pre-amendment) powers and fields of taxation, the absence of such a transitional provision might have been catastrophic. It was in this context that Section 19 also clarified that not only were the laws to be continued, in force but also that the States - and Parliament, could amend, or repeal them. 74. The petitioners have relied upon the Judgments of this court in Bondu Ramaswamy (supra) and Vipulbhai (supra). In the present case, there is no dispute with respect to the fact that Section 19 also seeks to achieve the same objects i.e. the preservation of existing fiscal and taxation laws prevailing in various statutes and in other parts of the country for a limited duration of one year or till they were amended or repealed. The distinction pointed out by the petitioners is that transitional provisions as they were involved in those cases become the part of the Constitution, as they continued and still continue in force long after th....
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....onstitutional law on the other hand is that it arises out of the Constitution and creates different organs of the State, defines their power and imposes limitations on the functioning of the Executive and legislative wings through the fundamental rights and other limitations. An ordinary law can be made or changed by the same body, the legislating body in exercising legislative power. Since constitutional amendments relates to the fundamental law of the land which is a source of authority for other laws, it can be achieved only through fulfilling the special procedure. 78. The distinction between constituent power and legislative power was commented upon by the late H.M. Seervai in the Constitutional Law of India 4th Edition Volume 3 page 3119 : "the constituent power therefore a juristic entity or category separate from legislative power. In the case of India there are three different modes of amending the Constitution - the first is the easiest or the simplest where states reorganization or names of States are sought to be changed, in that event a Parliamentary enactment would suffice. In other cases, an amendment to the Constitution requires the special procedure of ....
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....rticle 368 (1) which defines at once the scope of the constituent power of the Parliament and limits that power to the Parliament. The power to issue a notification for bringing into force the provisions of a Constitutional amendment is not a constituent power because, it does not carry with it the power to amend the Constitution in any manner. It is, therefore, permissible to the Parliament to vest in an outside agency the power to bring a Constitutional amendment into force. In the instant case, that power is conferred by the Parliament on another organ of the State, namely, the executive, which is responsible to the Parliament for all its actions. The Parliament does not irretrievably lose its power to bring the Amendment into force by reason of the empowerment in favour of the Central Government to bring it into force. If the Central Government fails to do what, according to the Parliament, it ought to have done, it would be open to the Parliament to delete Section (2) of the 44th Amendment Act by following the due procedure and to bring into force that Act or any of its provisions." 80. In the opinion of this Court, the mere circumstance that Section 19 does not get added t....
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....ndments were not enacted in the exercise of constituent power but mere legislative power, there would be no legitimacy of the power conferred upon the President under Section 20. 83. On an overall interpretation of the provisions of the Amendment, it is held that Sections 19 and 20 constitute incidental and transitory provisions which have limited life, so to speak. Whether they became part of the Constitution or not is really academic. What really matters is the effect of those provisions. B. Whether the power of amendment or repeal is subject to limitations under Section 19 84. In this context, Section 143(2) of the Government of India Act, 1935 was considered by a Constitution Bench of this court in Rama Krishna Ramanath (supra). That provision reads as follows: "143(2) Any taxes duties, cesses or fees which, immediately before the commencement of Part III of this Act, were being lawfully levied by any Provincial Government, municipality or other local authority or body for the purposes of the Province, municipality, district or other local area under a law in force on the first day of January, nineteen hundred and thirty-five, may, not withstanding that those ....
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....hority for the purposes of a local area at the commencement of Part III of the Government of India Act., (2) that the identity of the body that collects the tax, the area for whose benefit the tax is to be utilised and the purposes for which the utilisation is to take place continue to be the same and (3) the rate of the tax is not enhanced nor its incidence in any manner altered, so that it continues to be same tax. If as we have held earlier there is a limited legislative power in the Province to enact a law with reference to the tax levy so as to continue it, the validity of the Act of 1949 which manifested the legislative intent of Continue the tax without any break, the legal continuity being established by the retrospective operation of the provision, has to be upheld." 86. It would be worthwhile to recollect that in Synthetics and Chemicals Ltd. and Ors. v. State of U.P. & Ors. 1989 Supp (1) SCR 623 this court observed that: "[..] The power to legislate is given by Article 246 and other Articles of the Constitution. The three lists of the Seventh Schedule to the Constitution are legislative heads or fields of legislation. These demarcate the area over which the a....
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....t exhaustive of the category. 26. It must be remembered that this Court repeatedly held that the entries in the various lists of the Seventh Schedule are not sources of the legislative power but are only indicative of the fields w.r.t. which the appropriate legislature is competent to legislate. 27. The task of this Court in identifying the scope of an entry in the Lists contained in the Seventh Schedule is not easy. While examining the scope of the entries this Court must necessarily keep in mind the scheme of the Constitution relevant in the context of the Entry in question. 28. A broad pattern can be identified from the scheme of the three lists, the salient features of which are (i) Fields of legislation perceived to be of importance for sustaining the federation, are exclusively assigned to the Parliament, (ii) State legislatures are assigned only specified fields of legislation unlike the US Constitution, (iii) Residuary legislative power is conferred in the Parliament; (iv) taxing entries are distinct from the general entries24, and (v) List III does not contain a taxing entry, 29. At the same time, it can also be noticed that there is no ....
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....) defines the word as meaning an institution of self-government constituted under Article 243-Q. Article 243-Q refers specifically to three types of municipalities, that is, a Nagar Panchayat for a transitional area, a Municipal Council for a smaller urban area and a Municipal Corporation for a larger urban area. Thus, neither any city improvement trust nor any Development Authority is a municipality, referred to in Article 243-ZF. Thus Article 243-ZF has no relevance to test the validity of the BDA Act or any provision thereof. If the BDA Act or any provision thereof is found to be inconsistent with the provisions of Part IX-A, such inconsistent provision will be invalid even from 1-6-1993, and the benefit of continuance for a period of one year permitted under Article 243-ZF will not be available to such a provision of law, as the BDA Act is not a law relating to municipalities. 45. Part IX-A seeks to strengthen the democratic political governance at grass root level in urban areas by providing constitutional status to municipalities, and by laying down minimum uniform norms and by ensuring regular and fair conduct of elections. When Part IX-A came into force, the provis....
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....quely transformed the indirect taxation regime and revamped the constitutional compact itself in one sense. Gone were the traditional delineations of distribution of legislative power including taxation fields which traced their origins to Articles 245 and 246 and also the rules for handling repugnancy which Article 254 had enacted. Instead, what was brought in was an entirely new concept of sourcing common or concurrent power of both the state legislatures and the Union through the newly added provision Article 246A. 91. As held earlier, the change was dramatic and revolutionary and wisely the constitutional amending body which is the Parliament and the ratifying States felt it expedient to ensure that during the transitional period of one year or till the new GST regime was ushered through an enactment, there ought to be flexibility with the States and Parliament to make such changes as the times demanded. In the previous two judgments, Bondu Ramaswamy (supra) and Vipulbhai (supra), however, there was no question of denuding the powers, the State or conferring new powers on the Parliament and the State but rather creation of new bodies as in the case of Panchayats and Zila Par....
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....repeal could be to Section 19 and Article 246A which are to be seen as both the power enabling the existing state of affairs to continue and also enabling both the centre and the states to make necessary changes in the existing laws through amendment or repeal. 94. There is no doubt that the authority to legislate flows from the Constitution. In the context of our Constitution, this authority has been traditionally located primarily in Articles 245 and 246. The courts have consistently recognized that the Lists in the Seventh Schedule to the Constitution merely delineates the fields of legislation; they are not considered as sources of power. The authority or the power stems from Articles 245 and 246. The reorganization of those legislative fields particularly Entry 84 of the First List and Entry 54 of the Second List and the conformant of larger powers, upon both the legislative entities i.e. Parliament and the State Legislatures meant that both authorities to legislate upon all subject matters which are comprehended within the description of "goods and services" for the purpose of indirect taxation under Article 246 A. Yet the operationalization of this provision required the ....
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....mall, the Act professes to amend; if it is extensive, it repeals a law and re-enacts it. There is no real distinction between repeal and an amendment. Bhagwat Ram Sharma v UOI, AIR 1988 SC 740, 746.9 Amend. A word derived from the French word signifying 'to make better'; 'to change for the better.' To alter formally by some addition, omission or substitution [Preamble, T.P. Act (4 of 1882)]. The power to 'amend' Constitution conferred by Article 368 of the Constitution is wide enough to include the power to take away fundamental rights. [Shankri Prasad Singh v. UOI, AIR 1951 SC 458] The dictionary meaning of the word 'amend' is to correct a fault or reform; but in the context of Article 368reliance on the dictionary meaning of the word is singularly inappropriate, because what Article 368 authorises to be done is the amendment of the provisions of the Constitution. An amendment of a law may in a proper case include the deletion of any one or more of the provisions of the law and substitution in their place of new provisions. Similarly an amendment of the Constitution which is the subject matter of the power conferred by Article 368, may include m....
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....l the new GST law was enacted). It could, therefore, enact provisions other than those bringing the existing provisions in conformity with the amended Constitution. C. Validity of Telangana Act tested from the touch stone of its originating as an ordinance 98. Telangana had argued that although with effect from 1st July 2017, due to the enactment of the CGST Act, its state legislature could not per se enact a new law on a subject matter contained within the original entry 54 of the State list, nevertheless, the approval of the ordinance which amended the existing State - law on 02.07.2017 had the effect of relating back to the original date when in fact it was validly amended. This is sought to be supported by the theory of the relating back of the law to a date when the power to enact existed. The argument in support was that in terms of its effect there is no difference between an ordinance [which is merely a product of a different procedure i.e., or executive law making] as compared to enactment of law by the legislature. An ordinance may have a limited life but once confirmed, or enacted, it acquires permanence. Even during the time it is in force, it is as effective and ....
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....ven after it ceases to be or is inoperable, or in other words, has lapsed. Since conflicting decisions existed, a larger seven judge bench combination examined the matter in detail in Krishna Kumar Singh (supra). A majority judgment of 5 Judges is of the opinion that the theory of lasting effect of an ordinance cannot be supported. Krishna Kumar Singh (supra) first explained the effect of an ordinance: "Is the requirement of laying an Ordinance before the state legislature mandatory? There can be no manner of doubt that it is. The expression "shall be laid" is a positive mandate which brooks no exceptions. That the word 'shall' in Sub-clause (a) of Clause 2 of Article 213 is mandatory, emerges from reading the provision in its entirety. As we have noted earlier, an Ordinance can be promulgated only when the legislature is not in session. Upon the completion of six weeks of the reassembling of the legislature, an Ordinance "shall cease to operate". In other words, when the session of the legislature reconvenes, the Ordinance promulgated has a shelf life which expires six weeks after the legislature has assembled. Thereupon, it ceases to operate." The larger Bench....
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....r and expediency of an ordinance; (ii) whether a law should be enacted; or (iii) whether the Ordinance should be disapproved. 32. The failure to lay an Ordinance before the state legislature constitutes a serious infraction of the constitutional obligation imposed by Article 213(2). It is upon an Ordinance being laid before the House that it is formally brought to the notice of the legislature. Failure to lay the Ordinance is a serious infraction because it may impact upon the ability of the legislature to deal with the Ordinance. We are not for a moment suggesting that the legislature cannot deal with a situation where the government of the day has breached its constitutional obligation to lay the Ordinance before the legislature. The legislature can undoubtedly even in that situation exercise its powers Under Article 213(2)(a). However, the requirement of laying an Ordinance before the state legislature is a mandatory obligation and is not merely of a directory nature. We shall see how in the present case a pattern was followed by the Governor of Bihar of promulgating and re-promulgating Ordinances, none of which was laid before the state legislature. Such a course of co....
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....ense would mean that with effect from that date, the ordinance would prospectively have no operation. The ordinance is not void at its inception. The second meaning which can be considered for interpretation is that the expression "shall cease to operate" will mean that all legal consequences that arose during the tenure of the ordinance would stand obliterated. According to the second construction, which is wider than the first, the consequence of an ordinance having ceased to operate would relate back to the validity of an ordinance. 59. Now, one of the considerations that must be borne in mind is that Article 213 has not made a specific provision for the saving of rights, privileges, obligations or liabilities that have arisen under an ordinance which has since ceased to operate either upon the expiry of its term or upon a resolution of disapproval. Significantly, there are other provisions of the Constitution where, when it so intended, the Constitution has made express provisions for the saving of rights or liabilities which arise under a law." The court then overruled previous judgments, which had relied on and applied the "enduring rights" theory, to hold that ri....
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....e into being and relate back to the promulgation of the ordinance. In the absence of compliance with the mandatory constitutional requirement of laying before the legislature, the constitutional fiction would not come into existence. In the present case, none of the ordinances promulgated by the Governor of Bihar were placed before the state legislature. This constituted a fraud on the constitutional power. Constitutionally, none of the ordinances had any force and effect. The noticeable pattern was to avoid the legislature and to obviate legislative control. This is a serious abuse of the constitutional process. It will not give rise to any legally binding consequences." 102. In the present case, the Telangana ordinance was promulgated on 17.6.2016. The Telangana State GST Act was enacted and received the assent of the Governor on 25.05.2017; it was brought into force on 01.07.2017. The state GST Act contained a savings and repeal law, which sought to save acts done, privileges and rights accrued under the repealed enactment, i.e. the State VAT Act. It was sought to be argued that once the State Legislature approved the ordinance and enacted the amendment, in conformity with it....
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....in v Shanmugha Vilas Cashew Nut Factory . (supra at p. 70). It has been argued for the State that the Act is not affected by the provisions of Arts. 301 to 304 of the Constitution as they affect the legislative power with respect to Acts to operate in the future and not the power to enact Acts which would operate in the past. We do not consider the contention sound. The Act makes provision for a period subsequent to the commencement of the Constitution and therefore is to be subject to the provisions of the Constitution. We therefore hold that sub-section (1) of S. 2 of the Act discriminates against imported hides and skins which were sold up to the 1st of August 1957 upto which date the tax on sale of raw hides and skins was at the rate of 3 pies per rupee or 19/16th percent. This however does not mean that the sub-section is valid with respect to the sales which took place subsequent to August 1, 1957. The subsection being void in its provisions with respect to a certain initial period, we cannot change the provision with respect to the period as enacted to the period for which it could be valid as that would be re-writing the enactment. We have therefore to hol....
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....y the state legislature (which conformed to the ordinance, on 02.12.2017) went to its root of the jurisdiction of those acting under the amended provisions of the State GST, rendering them (as indeed, the substantive provisions) void and unenforceable. Furthermore, even if for some reason, there were any doubts regarding validity and continuance of any notice, or proceedings, initiated pursuant to the provisions of the ordinance, their invalidity is such that they cannot be sustained. Furthermore, as held in Krishna Kumar Singh (supra) unless the consequences are "irreversible" there is ordinarily no question of any action- taken under an ordinance that is rendered void, due to operation of the provisions of the Constitution, being continued. Though the observations of this court were in the context of ordinances lapsing due to their not being presented before the House of the legislatures, the same principle would, in this court's considered view, apply to cases, where the legislature ceases to have competence over the subject matter. 107. It is therefore, held that the provisions of the ordinance, as approved by the later state act, which amended the local VAT Act's, are valid. ....
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...., 2016, were enacted. They came into force with effect from July 1, 2017. On September 20, 2016, the Additional Commissioner of Commercial Tax passed an order and reduced the sales tax incentive, in case of the petitionercompany, while considering the tax paid on the purchase of taxable goods used in the manufacture of taxable goods, exported outside the country. On July 1, 2017, two legislations, i.e., the Gujarat Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017 came into force to levy tax on all the intra-State supplies of goods or services or both. The Gujarat Value Added Tax Act, 2003 was substantially amended by way of substitution and deletion of many provisions thereof by virtue of the Gujarat Value Added Tax (Amendment) Act, 2017, which. came into force with effect from July 1, 2017. Meanwhile, the High Court passed an order dated September 22, 2017 in an appeal filed by the State, setting aside the judgment State of Gujarat v. Reliance Industries Ltd [2017] 16 SCC 28 dated January 18, 2013 in respect of the assessee who had succeeded. 110. In view of the aforesaid judgment of this court, the Additional Commissioner of Commercial Tax issu....
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....ion of the amendment being invalid. 112. There are undoubtedly several judgments of this court such as Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality 1970 (1) SCR 388 Government of Andhra Pradesh v. Hindustan Machine Tools Ltd [1975] Supp (1) SCR 394; Ujagar Prints v. Union of India [1988] Supp 3 SCR 770 and several others, which hold that a purely curative and validating enactment, if made retrospective, is unexceptionable. However, it has been held by this court, in Kerala State Electricity Board v. Indian Aluminium Co. Ltd. [ 1976 ] 1 SCR 552 : "... Both the 1910 Act as well as the 1948-Act are existing law as contemplated under article 372 of the Constitution. An existing law continues to be valid even though the legislative power with respect to the subject-matter of the existing law might be in a different list under the Constitution from the list under which it would have fallen under the Government of India Act, 1935. But after the Constitution came into force an existing law could be amended or repealed only by the Legislature which would be competent to enact that law if it were to be newly enacted..." As noted earlier, Ramakrishna Ram Nath (....
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..... By the Ordinance the State of Maharashtra inserted an explanation w.e.f. 15th April 2017. According to the state, the explanation was inserted for the purpose of removal of doubts, in view of the Judgment of Nagpur Bench of the court in Anshul Impex Private Ltd. (supra). On 9th July 2019, the Maharashtra Tax Laws (Levy, Amendment and Validation) Act 2019 was enacted. It was published in the Government Gazette on 9th July 2019. The 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. The explanation had the effect of clarifying that the pre-deposit requirements applied to pre-2017 appeals and revisions. This was challenged. The High Court, by a Full Bench ruling United Projects v State of Maharashtra (Writ Petition (ST.) No. 11589 of 2021, and Writ Petition No. 13754 of 2018, decided on 12.07.2022 upheld the amendment. It was held that "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 phra....