Bombay High Court
Larsen And Tourbo Ltd vs The State Of Maharashtra Thru Thr Gp And ... on 12 July, 2022
Author: R.D. Dhanuka
Bench: R.D. Dhanuka, Nitin W. Sambre, Abhay Ahuja
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION AND
WRIT PETITION NO.2883 OF 2018
ALONG WITH
NOTICE OF MOTION NO.521 OF 2018
IN
WRIT PETITION NO.2883 OF 2018
United Projects )
Through its Partner )
Nisar Fateh Mohd. Khatri, )
Age 53 years, Indian Inhabitant )
Having Officer at :-
202, Pearl Heights, 105, )
TPS-III, 8th Floor, Khar (West) )
Mumbai - 400 052. ) .. Petitioner
Versus
1. The State of Maharashtra through )
The Commissioner of Sales Tax, )
Maharashtra State, Having his office at )
8th Floor, GST Bhavan, Nesbit Road, )
Mazgaon, Mumbai - 400 010. )
2. The Joint Commissioner of State Tax, )
(Appeals) -II, Mumbai City Division, )
8/D/13, GST Bhavan, Mazgaon, )
Mumbai - 400 010. ) .. Respondents
ALONG WITH
CIVIL APPELLATE JURISDICTION
WRIT PETITION (ST.) NO.11589 OF 2021
Mahyco Monsanto Biotech Pvt. Ltd. a Company )
incorporated under the provisions of the )
Companies Act, 1956 , and having its office at )
Bayer House, Central Avenue, )
Mumbai - 400 607. ) .. Petitioner
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Versus
1. The State of Maharashtra )
Through the Government Pleader )
High Court, Mumbai. )
2. The Commissioner of Sales Tax, )
8th Floor, Vikrikar Bhavan, Mazgaon, )
Mumbai - 400 010. )
3. The Deputy Commissioner of Sales Tax )
E-706, Nodal Division-7, )
GST Bhavan, Mazgaon, )
Mumbai - 400 010. )
4. The State Tax Officer )
C-704, Nodal Division-7, )
GST Bhavan, Mazgaon, )
Mumbai - 400 010. ) .. Respondents
ALONG WITH
WRIT PETITION NO.13754 OF 2018
Larsen and Tourbo Ltd., a Company )
incorporated under the provisions of the )
Companies act, 2013, and having its office at )
Powai Campus, Gate No.1, Ambedkar Garden, )
Saki Vihar Road, )
Mumbai ) .. Petitioner
Versus
1. The State of Maharashtra )
Through the Government Pleader )
High Court, Mumbai. )
2. The Commissioner of Sales Tax, )
8th Floor, Vikrikar Bhavan, Mazgaon, )
Mumbai - 400 010. )
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3. The Joint Commissioner of Sales Tax )
(Appeal-VI), Suburban State GST Office, )
Bandra Kurla Complex, Bandra (East), )
Mumbai - 400 051. )
4. The Deputy Commissioner of Sales Tax )
(E-623), Large Tax Payer Unit-2, )
Vikrikar Bhavan, Mazgaon, )
Mumbai - 400 010. ) .. Respondents
---
Mr.Vikram Nankani, Senior Advocate a/w Mr.Prithviraj Chaudhari,
Mr.Roshil Nichani, Mr.Mehul Taleva, Mr.Dhruv Nyadhish,
Mr.Sandip Ghaterao and Mr.Prathamesh Gargate i/by Mr.N.V.
Tapare for the petitioner in WP/2883/2018.
Mr.Prakash Shah a/w Mr.Jas Sanghavi and Mr.Mihir Mehta i/by
M/s.PDS Legal for the petitioner in WPST/11589/2021 and
WP/13754/2018.
Mr.Ashutosh Kumbhakoni, Advocate General a/w Ms.Jyoti Chavan,
Asstt. Govt. Pleader, a/w Mr.S.B. Lolge, "A" Panel 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.
---
CORAM : R.D. DHANUKA
NITIN W. SAMBRE
ABHAY AHUJA, JJJ.
RESERVED ON : 4th MARCH, 2022
PRONOUNCED ON : 12th JULY, 2022
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.
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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 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?
(c) Whether the decision of the Division bench in the case of
Anshul Impex Pvt. Ltd. Vs. State of Maharashtra laying
down that right of filing appeal accrues on the date of
order of assessment and requirement of mandatory pre-
deposit introduced by way of amendment does not apply
to the orders passed in the assessment years prior to 15 th
April 2017, is a correct proposition since the right of
appeal can be made conditional by the Legislature with
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express indication and, therefore, the decision in the
case of Anshul Impex Pvt. Ltd. Vs. State of Maharashtra
requires reconsideration by the Larger Bench ?
Facts and submissions in Writ Petition No. 2883 of 2018
3. The petitioners filed first quarterly returns for the period
2013-2014, under the Maharashtra Value Added Tax Act, 2002
(hereinafter referred to as 'the MVAT Act, 2002') on 24 th July 2013.
On 18th July, 2016, the assessment proceedings were initiated by the
Deputy Commissioner of Sales Tax, Issue Base Audit, Mumbai. On
13th October 2017, the assessing officer passed an assessment order
for the period 2013-2014 under the MVAT Act, 2002. On 10th July
2018 , the petitioner filed a stay application in Form No. 311 of the
MVAT, Act. 2002 before the Joint Commissioner of State Tax,
(Appeals) Mumbai. It being the First Appellate Authority. The
petitioners also filed appeal in Form No. 301 before the State First
Appellate Authority.
4. The Joint Commissioner of State Tax (Appeals) II
addressed a letter to the petitioners on 10 th August, 2018, inviting
attention to Section 26(6A) of the MVAT Act, 2002 and stated that
until a part payment towards the tax liability is made, as per the said
provisions of the MVAT Act, 2002, the document submitted by the
petitioners cannot be called as an appeal.
5. The MVAT Act, 2002 came into force w.e.f. 1st March
2005 to consolidate and amend the Laws regarding levies and
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collection 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. The tax
collected is to be apportioned between the Union and States in the
manner as provided by Parliament by law on the recommendation of
the Goods and Services Tax Council.
6. On 15th April 2017, the State Government published
Maharashtra Tax Laws ( Levy, Amendment and Validation) Act 2017
in the Government Gazette thereby amending various provisions of
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various Acts. In paragraph No. 26 of the MVAT Act, 2002, Section
6(A), 6(B) and 6(C) were inserted.
7. Several amendments were made in the Lists attached to
Seventh Schedule of the Constitution, including Entry 54 in List II,
which deals with the right of the State Government to levy a tax on
goods. Prior to the said Entry No. 54, the State Government could
collect tax on sale or purchase of the goods other than the newspaper
viz only on the sale of petroleum crude, high-speed petrol, natural gas
and aviation turbine fuel and alcoholic liquor for human consumption.
8. On 26th June 2018, a Division Bench of this Court at
Nagpur in case of Anshul Impex Private Ltd Vs. State of
Maharashtra (Sales Tax Appeal No.2 of 2018 in a Judgment
delivered on 28th September, 2018) held that the amended section
26(6B)(c) of the MVAT Act requiring appellant to deposit 10% of the
disputed tax is not applicable to the appellant therein as lis had
commenced in the year 2011 while the amendment was prospective
w.e.f. 15th April 2017. The said Division Bench accordingly held that
the Tribunal had committed an error in dismissing the appeal filed by
the petitioner therein as not maintainable for non payment of amount
i.e. 10% of the amount assessed.
9. The Nagpur Bench accordingly quashed and set-aside the
order passed by the Tribunal and remanded the matter back to the
Tribunal for deciding the same afresh by affording opportunity of
hearing the parties with liberty to raise all relevant questions of law
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and facts before the Tribunal. The Hon'ble Supreme Court by an
order dated 11th March 2019 dismissed the Special Leave Petition
filed by the State of Maharashtra against the said Judgment delivered
by the Nagpur Bench of this Court in case of Anshul Impex Private
Ltd (supra).
10. On 6th March, 2019, the Hon'ble Governor of
Maharashtra promulgated an Ordinance i.e. Maharashtra Ordinance
No. VI of 2019, which was published in the Government Gazette on
6th March, 2019. By the said Ordinance the State of Maharashtra
inserted an 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
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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 Limited (supra) and various other Judgments
formulated three questions of law for opinion of the larger bench of
this Court. In paragraph No. 14 of the Division Bench of this Court at
principal seat expressed its inability to agree with the view taken by
the Nagpur Bench in case of Anshul Impex Private Limited (supra)
and referred various issues to the larger bench.
14. Mr. Ashtuosh Kumbhakoni, learned Advocate General
for the State argued first by consent of the learned Advocate for the
petitioners. He invited our attention to various provisions of the
MVAT Act, 2002, various Articles of Constitution of India, provisions
of the Central Goods and Services Act 2017, Maharashtra Tax Laws
(Levy, Amendment and Validation) Act, 2017, explanation inserted by
the 2019 Ordinance and several Judgments of Hon'ble Supreme
Court and this Court.
15. It is submitted by the learned Advocate General that
"Right of Appeal'' is neither a fundamental right nor a Constitutional
right and it is not even an ingredient of 'natural justice'. It is a
statutory right and is a creature of Statute. Such a right accrued under
the statute and can be even taken away completely by the Legislature
by effecting statutory amendment provided there are provisions
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made by the Legislature to take away such a right. Since the right can
also be taken away by a provision as and by way of a necessary
intendment, it cannot be however taken away merely 'impliedly'. It
cannot be taken away by an executive fiat or an administrative
instruction.
16. It is submitted that a Statute can always impose various
conditions for exercise of such a right, subject to the restrictions that
the restrictions or conditions subject to which it can be exercised, that
are so imposed, are not so onerous amounting to unreasonable
restrictions on such a right, rendering the right itself illusionary. It is
submitted that if such right of an appeal can be made conditional at
the first instance itself, such conditions can also be imposed
subsequent to its unconditional grant, by inserting amendment into
the Statute, which in first place has granted it.
17. It is submitted that these principles would apply for
taking away right itself or regulating it or making it conditional at the
first instance itself, apply with equal force for introducing by way of
an amendment, a new conditions making such a right, a conditional
one, which 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
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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 the appellant.
19. It is submitted that the term "shall be filed'' must be
appreciated in sharp contrast to the terms appearing in other Statutes
dealing with right of an appeal such as, "shall be entertained'' or
"shall be decided.'' He submits that such operation of the amended
provision is certainly not "retrospective'' operation of the amended
provision. He submits that if the amended provision would have been
made retrospective in its operation it would affect even such appeals
which were pending and not just filed ' on or after' the date on which
such amendment had been brought into force i.e. 15th April, 2017. He
submits that the retrospective, prospective or retroactive operation of
the amendment at hand, really is irrelevant and totally beside the
point. The said question does not arise for the consideration in case of
appeals that are filed on or after 15th April, 2017.
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20. In his alternate submission the learned Advocate General
submits that even if the 2017 amendment adversely affects the right
of appeal of the petitioners on account of its retrospective operation,
the legislature is fully empowered to enact such provisions which
may adversely affect the right of appeal. This is because it is so done
in clear and specific terms expressly or by necessary intendment.
21. It is submitted that newly inserted sub sections 6(A),
6(B) and 6 (C) of Section 26 of the MVAT Act, 2002 clearly and
conspicuously demonstrate that they apply to all the Appeals that are
filed under Section 26 "against an order passed on or after'' 2017
amendment in issue, which has been brought into force w.e.f. 15 th
April, 2017. Thus, provisions by way of 2017 amendment apply to
an order passed on or after 15th April 2017 irrespective of the period
of assessment to which the order appealed against relates or the date
on which the proceedings in respect of such lis commenced.
22. The learned Advocate General invited our attention to
various paragraphs from the Judgment of the Nagpur Bench of this
Court in case of M/s Anshul Impex Private Limited (supra) and
stated that this Court had interpreted the newly inserted provisions in
such a way that, they would not apply to orders, which have been
passed prior to the introduction of the said amendment i.e. 15 th April,
2017. It is submitted that the altered package of the "Right of Appeal,
post amendment (s) has various advantageous to the revenue as well
as the assessee clearly granting a justifiable time balance between
their respective rights and liability.
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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 also protected to the
extent of pre-deposit amounts. If the appellate authority directs the
appellant not to deposit any amount as condition precedent for
granting stay and if the assessee does not succeed in the appeal, in all
such cases, the revenue would not be able to recover any tax dues
from the such assessee. If the business of the assessee is wound up
due to precarious financial condition, no recovery would be possible.
In that event, the decision in favour of the revenue would remain only
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as a decree with no actual recovery possible.
26. It is submitted that the condition of 10% deposit
introduced by the amendment is not oppressive as, upon deposit of
10% of the amount stay is automatically granted for the remaining
90% of the amount. He submits that though a vested right of appeal
accrues in favour of the assessee, such a right expressly made
conditional does not oppress or nullify the right of appeal.
27. Learned Advocate General invited our attention to the
Judgment of Supreme Court in case of Hoosein Kasam Dada (India)
Ltd Vs. The State of Madhya Pradesh and others AIR (1953) SC
114. He submits that the Supreme Court in the said Judgment had
considered the amended Section 22 (I) of the Central Provinces And
Berar Sales Tax Act, 1947. He submits that the question for
consideration before the Supreme Court in the said matter 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. He submits that the
Supreme Court in the said Judgment reiterated that the right of appeal
was not a mere matter of procedure but is inherent from the
commencement of the action in the Court of first instance and that
such a right could not be taken away except by express provision or
by necessary implication.
28. It is submitted that the Supreme Court in Hoosein
Kasam Dada (India) Ltd. (supra) did not deal on facts the case where
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"right of appeal'' was adversely affected retrospectively without any
statutory provision expressly or by necessary implications to that
effect. He submits that Supreme Court has held that statutory
provision expressly or by necessary intendment enacted to that effect
can even take away right of appeal. He submits that the impugned
amendments in these case are by the express statutory provisions and
in any case do so 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
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submits that after considering various Judgments the Supreme Court
upheld the order passed by the Punjab and Haryana High Court
declaring that the provision of 25% pre-deposit as not onerous or
harsh, unreasonable and violative of Article 14 of the Constitution of
India. He submits that in this case the State Government has
prescribed deposit of 10% of the tax which is much less than 25%
declared as reasonable.
31. Learned Advocate General placed reliance on the
Judgment of Supreme Court in case of Videocon International Ltd
Vs. Securities And Exchange Board of India, (2015) 4 SCC 33 and
in particular paragraphs No.37, 39 and 40 and submitted that by
prescribing the condition of pre-deposit of 10% and thereby staying
the recovery of 90% is one of the package provided by the State
Government to all the assesees.
32. Learned Advocate General placed reliance on the
Judgment of Madras High Court in case of Dream Castle Versus
Commissioner of Service Tax-I in Writ Petition No. 13431 of 2015
delivered on 18.04.2016 and in particular paragraphs No. 52, 55, 59,
78 and 79. He stated that Madras High Court had considered identical
facts and held that when the unamended condition gave an assessee a
total waiver at the discretion of the Appellate Authority, the same
cannot be stated as a vested right. The Madras High Court held that
the amendment did not take away right vested, but merely made a
chance divested.
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33. Learned Advocate General placed reliance on the
Judgment of M/s Newtech Promoters And Developers Pvt. Ltd Vs.
State of Uttar Pradesh and Others Etc. in Civil Appeal No.(S). 6745
-6749 of 2021 delivered on 11th November, 2021 and in particular
paragraphs Nos 31,43,48 to 51, 121 and 122. He submits that the
amendment inserted by the State Government cannot be construed as
retrospective merely because it affects existing right or its
retrospection because a part of requisites for its action is drawn from
a time antecedent to its passing. At the same time, retroactive statute
means a statute which creates a new obligation on transactions or
considerations already passed or destroys or impairs vested rights.
34. It is submitted that even if assessment year in question is
for the period prior to the amendment and if the action is initiated
after such amendment the assessee would be governed by the
provision applicable on the date of action.
35. It is submitted that the original statute as it is would
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
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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 Judgment that Government has legislative
competence to retrospectively remove the substratum of foundation of
a Judgment. The said exercise is a valid legislative exercise provided
it does not transgress any other constitutional limitation. It is
submitted that the State Government is empowered to amend the law
by use of appropriate phraseology removing the defects pointed out
by the Court in any Judgment. He submits that the State Government
has neither directly nor indirectly overruled the view taken by the
Nagpur Bench of this Court as sought to be canvassed by the
petitioners. The State Government has simplicitor removed the
defects pointed out by the Nagpur Bench of this Court in the said
Judgment.
38. Learned Advocate General placed reliance on the
Judgment of the Supreme Court in case of Assistant Commissioner
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of Agricultural Income Tax & Ors. Versus Netley 'B' Estate And
Others, (2015) 11 SCC 462 and in particular paragraphs No. 15 and
18. He submits that though the Legislature cannot directly overrule
the decision or make a direction as not binding, it has the power to
make the decision ineffective by removing the base on which the
decision was rendered.
39. Learned Advocate General placed reliance on the
Judgment of this Court in case of Godrej Soaps Ltd Vs. State of
Maharashtra And others, 2005 SCC OnLine Bom 1297 in particular
paragraphs No.10,11,21,24 to 26 30, 36 and 53. He submits that since
the State Government in this case has inserted the amendment in the
MVAT Act, 2002 to cure the defect pointed out by the Nagpur Bench
of this Court, the rule of reasonable interpretation should apply to the
amendment inserted by the State Government.
40. The learned Advocate General placed reliance on the
Judgment of the Supreme Court in case of Ssangyong Engineering
& Constructions Company Limited Vs. National Highway Authority
of India, 2019 SCC OnLine SC 677 and in particular paragraph Nos.
22 and 32. He submits that the two explanations added by the
Legislature in the original provision were inserted with a view to
reduce the scope of Section 34 of the Arbitration and Conciliation Act
1996 so as to reduce the powers of the Court to review the Arbitral
Award on merits to do away with the interpretation of Section 34 by
the Supreme Court in case of Oil and Natural Gas Corporation Ltd
Versus Western Geco International Ltd., (2014) 9 SCC 263 as
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understood by 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
of the Nagpur Bench of this Court or to encroach upon the judicial
turf but carried out the amendment to remove the base on which the
Judgment of the Nagpur Bench of this Court is founded.
42. It is submitted by the learned Advocate General that
there is misconception of the petitioners that only the Seventh
schedule provides the Lists of the Legislative heads speaking out the
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Legislative competence or the Legislature of either Center or State.
He submits that even if no entry is stated in any of the List prescribed
in the Seventh schedule but is in the body of the Constitution, the
State is empowered to Legislate on any such subject and cannot be
objected to. The powers of legislation flows from various sources
under the Constitution of India and not only from the Seventh
schedule. Amendment of entry No. 54 in List II by 101 st Constitution
amendment does not denude the powers of the State Government to
legislate.
43. Learned Advocate General placed reliance on the
Judgment of Supreme Court in case of Bimolangshu Roy Versus
State of Assam And Another, (2018) 14 SCC 408 and in particular
paragraphs No. 10, 17, 18, 20, 21 and 22 to 26. He submits that the
authority to make law flows not only from an express grant of power
by the Constitution to a legislative body but also by virtue of
implications flowing from the context of the Constitution as well as
by the various decisions. Such authority to legislate by the State
Government is inherent in the nature of the sovereignty. The power
to make legislation flows from (i) express text of the Constitution (ii)
by implication from the scheme of the Constitution and (iii) as an
incident of sovereignty. Such power is conferred by Articles of
Constitution by an express grant on the Parliament or State legislature
to make laws for certain purposes specified in each of those articles
even if there is no corresponding entry in the corresponding list
indicating the field of such legislation.
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44. It is submitted by the learned Advocate General that
large number of amendments are carried out in the MVAT Act, 2002
under entry No. 54 List II. He relied upon the list of 24 subjects
amended by the State Government after the enforcement of 101 st
Constitutional amendment in the the MVAT Act, 2002. These
amendments cover not only the six goods listed out in the substituted
entry No. 54 but also all the goods. The learned Advocate 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
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provision of any law relating to tax on goods and services or both in
force in any State immediately before the commencement of that
Act which is inconsistent with the provisions of the Constitution as
amended by the said Act. The said section operates irrespective of
inconsistency in the other provisions of amending Act.
47. It is submitted that the Maharashtra Goods and Services
Tax Act came into force from 1st July 2017 and was gazetted on 15st
July 2017. By the said amendment, pre-deposit of the amount was
prescribed at two stages of appeal. Article 323 (B) deals with the
Tribunal. He submits that as a matter of fact the petitioners have filed
appeals under the provision of the MVAT Act, 2002 even after
insertion of the amendment by the State of Maharashtra in the
provisions of the MVAT Act, 2002. The definition of goods is
amended by the State of Maharashtra in line with entry No. 54 in the
Constitution of India.
48. The learned Advocate General placed reliance on Section
107 of the Maharashtra Goods and Services Tax Act 2017. He
submitted that Section 107(6) (b) deals with the provisions of appeals
and Revisions providing for a 10% pre-deposit of the tax in question.
Learned Advocate General invited our attention to Section 26 of the
MVAT Act, 2002 and submitted that after insertion of the said
amendment the State Government came out with amnesty scheme
under the provisions of the MVAT Act, 2002 wherein assessees have
paid the tax to the extent of Rs. 3436 crores.
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49. Learned Advocate General placed reliance on the
judgment of the Kerala High Court in case of Shreen Golden Jewels
(India) Pvt. Ltd. Vs. State Tax Officer, Thiruvanathapuram, (2019)
62 GSTR 207(Ker) and in particular paragraphs No. 123, 130 and
133, 176, 181, 184 and would submit that the Kerala High Court in
identical situation has upheld the validity of the amendment having
founded the legislative competence of the State Government.
50. On the other hand, Mr.V. S. Nankani, learned senior
advocate for the petitioner invited our attention to various documents
annexed to the writ petition, averments made by the State
Government in the affidavit in reply, various provisions of law
forming part of the record and various judgments of the Hon'ble
Supreme Court, this Court and various other High Courts in support
of his rival contentions.
51. It is submitted that, after coming into force of 101st
Constitutional Amendment Act, 2016 effective from 16 th September,
2016, 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
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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
regime of taxation where parliament and state legislature would have
concurrent powers to tax supply of goods and services.
53. It is submitted that, though the said constitutional
amendment while introducing Article 246A also makes corresponding
changes in the entries in the two lists i.e. List - I and List - II of
Schedule VII, these changes show that the power to legislate under
Article 246 is now confined only to six items mentioned in Entry - 54
List II of Schedule VII. He submits that as Article 246 is confined
only to the six items covered by Entry - 54 of List II. Article 246A
covers totally new and different tax, namely the Goods and Service
Tax, which is on supply, and beyond and outside the MVAT Act,
2002. The State legislature does not have the power to amend the
existing MVAT Act, 2002 after 16.09.2016 on any matter including
appeals in relation to goods other than the six items mentioned in
Entry - 54 of List II.
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54. It is submitted by the learned senior counsel that, the
power to legislate includes the power to amend the legislation. Once
the power to legislate has been taken away the power to amend the
legislation also ceases to exist. He submits that, though technically,
the MVAT Act, 2002 was not repealed, but post the said constitutional
amendment, the provisions thereof were amended to align with
Article 246 of the Constitution by the Maharashtra Goods and
Services Tax related laws (amendments, validation and Savings) Act,
2017. It virtually has the effect of repealing the MVAT Act, 2002 in
so far as all other goods, except the 6 mentioned in Entry-54 of List-II
of Schedule-VII of the Constitution. The power to legislate with
respect to all other goods have also ceased to exist.
55. It is submitted by the learned senior counsel that, the
submission that Article 246-A is the source of power for the State
Legislature to amend the MVAT Act, 2002 as it stood prior to 29th
May, 2017, when the aforesaid Maharashtra Amendment Act of 2017
came into force is legally unsustainable. The pith and substance test
has to be applied. The Goods and Service Tax referred in Article 246-
A is totally different and distinct from the tax levied on goods by the
State Legislature. He submits that prior to the said Constitutional
amendment, legislative power to tax was clearly divided. Post the
federal structure of the Constitution Parliament was empowered to
levy certain taxes, such as Central Excise Duty and Service Tax,
whereas the State was empowered to levy Sales Tax, Entry Tax,
Entertainment Tax, amongst others.
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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 them applicable to the Constitution. He submits that,
on account of this incorporation the effect of Section 6 of the General
Clauses Act also applies to the amendments to the Constitution.
However, what is saved by Section 6 of the General Clauses Act is
the pre-existing power to continue with the assessment, appeal,
recovery, etc. in respect of matters pending on the date of the repeal
or amendment. This is distinct and different from the powers to
legislate which have been repealed or amended and do not exist in the
eyes of law.
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58. It is submitted 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 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.
59. It is submitted by the learned senior counsel for the
petitioner that, in so far as the MVAT Act, 2002 is concerned, the
State Legislature amended the same by Taxation Laws Amendment
Act, 2017. This was to change the definition of goods therein in order
to align it with Entry-54 of List-II, as amended by the said
constitutional amendment Act 2016. Instead of repealing the old
MVAT Act, 2002 and enacting a new legislation in keeping with
Article 246, the State Legislature amended the definition of "goods"
along with other consequential changes in the Taxation Laws
Amendment Act of 2017. He submits that, though a separate Act,
namely the Maharashtra Goods and Services Tax related laws
(Amendment, Validation and Savings) Act, 2017 has a saving clause
in Section 78 thereof. Such a saving clause does not save the power to
legislate on matters on which the power under the Constitution has
been taken away, and merely saves rights and liabilities accruing
under the MVAT Act, 2002.
60. It is submitted that, though the State Government was
allowed to recover sales tax for a period of one year after the said
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amendment, the power to legislate available to the State Government
then was taken away. He submits that, the legislative competence of
the State is dependent upon the power to legislate after 16 th
September, 2016.
61. It is submitted by the learned senior counsel that,
insertion of an explanation 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), in a case of S. R. Bhagwat Vs
State of Mysore reported in (1995) 6 SCC 16 and in a case of State of
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Karnataka Vs. Karnataka Pawn Brokers Association reported in
AIR 2018 SC 1441.
63. It is submitted by the learned senior counsel that, Nagpur
Bench of this Court in Anshul Impex (supra) came to the conclusion
purely based on legal interpretation of the principles laid down in the
case of Hossein Kasam Dada (supra). The entire action on the part
of the State of Maharashtra to introduce the 2019 amendment is not in
the nature of legislative overruling, but is a case of legislative
overreaching into the functions of the judiciary, thereby violating the
doctrine of separation of powers. The legislature cannot simply
overrule any unfavourable decision by bringing a subsequent
amendment. It can do so only in specific circumstances to remove or
cure any defect pointed out by the Court. He submits that 2019
amendment is invalid in as much as it encroaches upon powers of
judiciary as it seeks to overrule a decision of this Court without any
legal basis for the same.
64. The learned senior counsel attempted to distinguish the
judgment of this Court in a case of Noopura Vishwajit Kulkarni Vs.
State of Maharashtra (supra) and submitted that, the said judgment
does not decide upon the issue that the explanation inserted by the
amendment to SEBC Act, 2018 validated an earlier judgment of this
Court as can be seen from paragraphs No.39 to 44 thereof. He
submits that, said judgment would not apply in the facts of this case.
65. It is submitted by the learned senior counsel that though
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the explanation starts with the words "for removal of doubts", same
does not invariably mean that the explanation is clarificatory. He
submits that, the said explanation shall have retrospective effect in the
sense of being applicable to appeals filed against orders where the lis
commences prior to 15th April 2017. He relied upon the judgment of
the Supreme Court in a case of Union of India Vs. Martin Lottery
Agencies reported in (2009) 12 SCC 209 in support of his contention.
The learned senior counsel also placed reliance on the judgment of
the Gujarat High Court in a case of Reliance Industries Ltd. Vs.
State of Gujarat and others, 2020 SCC OnLine Guj 694.
66. It is submitted by the learned senior counsel that, the
explanation inserted by the State Government relates back to
15.04.2017, 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
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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 the explanation inserts a new condition.
68. It is submitted by the learned senior counsel that, the said
impugned explanation not only violates Article 14 of the Constitution
of India but also discriminates between two assessees in the same
assessment year. It causes delay in passing assessment orders wholly
attributable to the Government. The right of appeal of such similarly
situated assessees cannot be different merely due to a fortuitous event
of different assessing officers completing the assessment at different
time for the same assessment years, some before and some after 15 th
April 2017. He submits that, subject to the legislative competence and
to passing the constitutional test of Article 14 of the Constitution, at
best the explanation would have prospective effect.
69. It is submitted by the learned senior counsel that, the
Nagpur Bench of this Court after relying upon the judgment of the
Hon'ble Supreme Court in a case of Hoosein Kasam Dada (supra)
held that sub-section (6A), (6B) and (6C) do not take away the vested
right of an assessee and that the right to file an appeal is governed by
the law on the date of commencement of the lis. The said judgment
of Nagpur Bench has attained finality since the challenge thereto did
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not succeed on account of dismissal of the SLP on 11th March 2019.
70. The learned senior counsel distinguished the judgment of
the Allahabad High Court in a case of Ganesh Yadav Vs. Union of
India, 2015(320) ELT 711 (All) and the judgment of this Court in a
case of Nimbus Communications Ltd. Vs. Commissioner of Service
Tax, Mumbai - IV, 2016 SCC Online Bom 6792 by contending that,
the amendment to Section 35F of the Central Excise Act, 1944 with
the corresponding Section 129E of the Customs Act, 1962 are
materially different. Under the Excise Act or the Customs Act, prior
to its amendment in the year 2014, the Tribunal or the First Appellate
Authority as the case may be had discretion to grant waiver of pre-
deposit while deciding the stay application. Subsequently, the entire
Section 35F was substituted which prescribed payment of mandatory
pre-deposit for entertaining an appeal and simultaneously deleted the
powers of granting partial or full waiver. On the contrary, when
Section 26 of the MVAT Act was amended in 2017, Section 26(6) was
not deleted and accordingly discretionary powers of the Appellate
Authority to waive the 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
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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 the judgment in Hoosein Kasam Dada (supra),
there is no discussion why the law laid down therein does not apply to
the amendments to Section 35F/129E. He submits that, when there is
direct judgment in relation to same provision i. e. Section 26 of the
MVAT Act, 2002 considered by Nagpur Bench of this Court in a case
of Anshul Impex (supra) then judgments interpreting other Acts
would not be applicable.
73. The learned senior counsel for the petitioner placed
reliance on the judgment of the Supreme Court in a case of Ambika
Prasad Mishra Vs. State of UP reported in (1980) 3 SCC 719 and
submitted that, it was clearly 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." He submits that, the
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respondents thus cannot be allowed to urge that the decisions in the
case of Anshul Impex (supra) is not binding merely because certain
decisions were not brought to the notice of the Nagpur Bench of this
Court even though the point of law considered in those decisions had
been dealt with.
74. The learned senior counsel for the petitioner submits
that, there is no dispute that an appeal is a creature of statute and is a
substantive right created by express provision or by necessary
implication. It is submitted that, any conditions introduced for filing
appeal cannot be introduced at the later stage. Any conditions which
take away the right of appeal cannot be introduced even by way of
amendment. If 'lis' has commenced before the amendment then the
assessees would be governed by the old provisions and not by the
amendment. However, if the lis is commenced after amendment then
the amended provisions would apply.
75. The learned senior counsel for the petitioner placed
reliance on the judgment of the Supreme Court in a case of ECGC
Limited Vs. Mokul Shriram EPC JV reported in 2022 SCC Online
SC 184 and particularly paragraphs No.4 to 6, 8, 13 and 14. He
submits that, if returns are filed before amendment and notice is
issued after amendment, amended provisions in that event may apply.
He submits that, principles laid down by the Supreme Court in the
case of Hoosein Kasam Dada (supra) are confirmed by the Supreme
Court in a case of ECGC Limited Vs. Mokul Shriram EPC JV
(supra). He submits that, in this case the assessment order was
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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 of ECGC Limited Vs.
Mokul Shriram EPC JV (supra), the judgment of the Supreme Court
in Sri Satya Nand Jha, Kharkhand Vs. Union of India reported in
2016 SC Online SC 1627 has not been relied upon.
77. Learned senior counsel for the petitioner tenders a
compilation of various provisions in support of his submissions. He
submits that, the MVAT Act, 2002 is not repealed in toto and some of
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the provisions were either deleted or amended. Amendments were
carried out by the respondents to remove the alleged inconsistency in
the Act in view of 101st Constitutional Amendment. The old Act is
saved for all other goods previously covered by the earlier provisions.
He invited our attention to Section 78 of the MVAT Act, 2002 and
would submit that, the provision of appeal prescribed under the said
Act has been continued. He invited our attention to the Maharashtra
Tax Laws (Levy Amendment and Validation) Act, 2017 and would
submit that, sub section 6A is added by the said amendment.
78. It is submitted that, the ratio in the judgment of the
Supreme Court in a case of Hoosein Kasam Dada (supra) is not
diluted in the said judgment and continues to apply. The amendment
introduced by the respondents is affected by principles laid down by
the Supreme Court in a case of Hoosein Kasam Dada (supra). He
submits that by amendment to Section 26 of the Amended Act, appeal
provision continues to remain in the Act. Section 6B and 6C
introduced by way of amendment took away the unfettered right of
the petitioner to file an appeal. The said amendment of 2019 lacks
legislative competence beyond Article 246A of the Constitution of
India. The explanation inserted by the amendment by the State
Government is an after-thought and is inserted with an intent to
nullify the view taken by the Nagpur Bench of this Court in a case of
Anshul Impex (supra). Learned senior counsel for the petitioner also
placed reliance on the judgment in a case of State of Karnataka Vs.
Karnataka Pawn Brokers Association reported in AIR 2018 SC
1441 in support of the aforesaid submissions.
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79. Mr. Shah, the learned counsel for the petitioner in other
writ petitions which are on board adopts the arguments advanced by
Mr. V. S. Nankani. He submits that the other issues which are raised
in the individual writ petitions need not be answered and be kept open
in this reference referred to the Full Bench.
80. Mr. Kumbhkoni, 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
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that, Section 84A considered by the Gujarat High Court came to be
incorporated by the State Legislation from 3 rd April 2018. The
constitutional amendment relied upon by the State Government came
into effect from 16th September, 2016. Amendment to Section 84A
was carried out after one year of the said constitutional amendment
i.e. on 3rd April, 2018. On 1st July, 2017, the Gujarat GST Act came
into force. On 3rd April, 2018 amendment was brought even after
Gujarat GST Act came into force.
82. It is submitted by the learned Advocate General that, the
Court has to interpret the provisions harmoniously. The State
Government could have carried out amendment within one year from
the date of constitutional amendment which is rightly done by the
State Government. In this case amendment to the MVAT Act, 2002
came to be carried out within one year before the Maharashtra Goods
and Service Tax Act came into force. The provisions of the MVAT
Act, 2002 were amended so as to cure the lacuna in MVAT Act and to
avoid inconsistency with powers granted by the Legislation to the
Central Government as well as the State Government.
83. Mr. Nankani, learned senior counsel in his sur-rejoinder
argument submits that, Section 19 of the Constitutional Amendment
does not result in stay of operation of Article 246A of the
Constitution. Section 19 is not a saving clause. Literal meaning has
to be given to the said provision by this Court. There was conflict
between Article 246 and 246A for one year.
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REASONS AND CONCLUSIONS
84. Before dealing with the questions of laws referred to the
Full Bench by an administrative order passed by the Hon'ble the
Chief Justice, we feel it appropriate to refer to some of the relevant
provisions which would have bearing while answering the question of
law referred.
85. With effect from 1st March, 2005 MVAT Act was brought
into force to consolidate and amend the Laws regarding levies and
collection of Tax on Sales and purchase of certain goods in the State
of Maharashtra. Various amendments were carried out to the
provisions of the said Act from time to time.
86. On 22nd July, 2015, the report of the Select Committee on
the Constitution (One Hundred and Twenty-Second Amendment) Bill,
2014 came to be presented to the Rajya Sabha. It was proposed to
subsume various Central indirect taxes and levies such as Central
Excise Duty, Additional Excise Duties, Excise Duty 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 :-
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"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
consumption, but not including sale in the course of inter-
State trade or commerce or sale in the course of
international trade or commerce of such goods."
89. Clause 19 of the said Amendment Act reads thus :-
"19. Notwithstanding anything in this Act, any provision of
any law relating to tax on goods or services or on both in
force in any State immediately before the commencement of
this Act, which is inconsistent with the provisions of the
Constitution as amended by this Act shall continue to be in
force until amended or repealed by a competent Legislature
or other competent authority or until expiration of one year
from such commencement, whichever is earlier."
90. The State Government issued Maharashtra Goods and
Services Tax related laws (Amendment, Validation and Savings) Act,
2017 published in the Government Gazette on 29 th May, 2017 to
amend various laws including MVAT Act, 2002.
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"Clause 12 of section (2) of the MVAT Act was substituted and
reads thus :-
"(12) "goods" means petroleum crude, high speed diesel,
motor spirit (commonly known as petrol), natural gas,
aviation turbine fuel and alcoholic liquor for human
consumption."
91. Section 78 of the said Amendment Act provides for
validation service w.e.f. 1st July, 2017 which reads thus :-
"78(1) Notwithstanding the amendments made in the
Mumbai Municipal Corporation Act, the Maharashtra
Entertainments Duty Act, the Maharashtra Municipal
Corporations Act, the Maharashtra Motor Vehicles Tax Act,
the Maharashtra Village Panchayats Act, the Maharashtra
Municipal Councils, Nagar Panchayats and Industrial
Townships Act, 1965, the Maharashtra State Tax on
Professions, Trades, Callings and Employments Act, 1975
and the Maharashtra Value Added Tax Act, 2002 by this
Act, those laws and all rules, regulations, orders,
notifications, form, certificates and notices, appointments
and delegation of powers issued under those laws which are
in force immediately before the appointed day of the
Maharashtra Goods and Services Tax Act, 2017 shall,
subject to the other provisions of this Act, in so far as they
apply, continue to have effect after the appointed day of the
Maharashtra Goods and Services Tax Act, 2017 for the
purposes of the levy, returns, assessment, re-assessment,
appeal, determination, revision, rectification, reference,
limitation, production and inspection of accounts and
documents and search 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
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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, 2017 or for any other purpose whatsoever connected
with or incidental to any of the purposes aforesaid and
whether or not the tax, penalty, interest, sum forfeited or tax
deducted at source, if any, in relation to such proceedings is
paid before or after the appointed day of the Maharashtra
Goods and Services Tax Act, 2017.
(2) Without prejudice to the provisions contained in the
foregoing sub- section, the provisions of section 7 of the
Maharashtra General Clauses Act, shall apply in relation to
the repeal of any of the provisions of the Acts referred to in
sub-section (1)."
On 1st July, 2017, the Central Government enacted Central
Goods and Services Act, 2017. On the same date, the State
Government enacted Maharashtra Goods and Services Act, 2017.
92. Sub-sections 6A, 6B and 6C were added to section 26 of
the MVAT Act which read thus :-
"26. Appeals:-
..... ..... ..... ..... ..... ..... ..... .....
(6A) No appeal against an order, passed on or after the
commencement of the Maharashtra Tax Laws (Levy,
Amendment and Validation) Act, 2017, shall be filed before
the appellate authority in first appeal, unless it is
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accompanied by the proof of payment of an aggregate of the
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 ground of non-production of such declaration or, as the
case may be, certificate 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 amount of tax, disputed by the appellant
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 amount of tax disputed by the
appellant,
(d) in case of an appeal against a separate order imposing
only penalty, deposit of an amount, as directed by the
appellate authority, which shall not in any case, exceed 10
per cent. of the amount of penalty, disputed by appellant:
Provided that, the amount required to be deposited
under clause (b) or, as the case may be, clause (c), shall not
exceed rupees fifteen 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),
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(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 amount required to be deposited
under clause (b) or, as the case may be, clause (c), shall not
exceed rupees fifteen crores.
Explanation :--
For the purposes of clause (b) or clause (c) of sub-section
(6B), the expression, "balance amount of disputed tax" shall
mean an amount of disputed tax, which remains outstanding,
after considering the amount paid, as directed by the
appellate authority in first appeal under clause (b) or, as the
case may be, clause (c), respectively of sub-section (6A).
(6C) The appellate authority or, as the case may be,
Tribunal shall stay the recovery of the remaining disputed
dues, in the prescribed manner, on filing of an appeal under
sub-section (6A) or, as the case may be, sub-section (6B).
93. It is the case of the State Government in the wake of
interpretation rendered by the Nagpur Bench of this Court in case of
M/s.Anshul Impex Private Ltd. (supra), it has inserted the
explanation after sub-section 6(c) to section 26, stating that 'shall be
deemed to have been inserted w.e.f. 15th April, 2017', the said sub-
sections 6A, 6B and 6C were already inserted w.e.f. 15 th April, 2017.
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The said explanation inserted by the said 2019 amendment reads
thus :-
"5. In section 26 of the Value Added Tax Act, after sub-
section (6C), the following Explanation shall be inserted
and shall be deemed to have been inserted with effect from
the 15th April, 2017, namely - "Explanation.- For the
removal of doubts, it is hereby clarified that, the provisions
of sub-sections (6A), (6B) and (6C) shall be applicable for
any appeal, against all such orders, referred to in those sub-
sections, irrespective of the period to which the order,
appealed against, relates or irrespective of the date on
which the proceedings in respect of such order have
commenced."
94. Kerala High Court in case of Sheen Golden Jewels
(India) Pvt.Ltd. (supra) has considered the scope of Article 246A of
the Constitution of India on the Goods and Services Act, 2017, 101st
Constitutional Amendment and also the provisions of the Kerala
Value Added Tax Act and rejected the arguments of the petitioner that
the State Government lacks the legislative power to enact Section 174
of the KSGST Act. Article 246A is the special provision (if it can be
called a provision) on the Goods and Services Tax. It empowers both
the Union and the State, for the first time, to have simultaneous-not
concurrent- 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,
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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 Legislative
power between the federating units - the Union and the States, is
among the paramount features of a federal Constitution. Articles 246
and 254 have been centre of debate on the federal nature of the Indian
Constitution. Article 246A, is a 'special provision with respect to
goods and service tax', and begins with a non obstante clause
overriding Articles 246 and 254.
97. It is held that Article 246 sets down the constitutional
framework defining the legislative competence of Parliament and the
State Legislatures. Article 254 provides the framework for addressing
inconsistency between the central and state laws on matters in the
concurrent list. Article 246A entrusts Parliament and State legislatures
the power to legislate on the goods and services tax. The power of
the States however is subject to the conferment of the exclusive
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domain to Parliament to levy the goods and services tax where the
supply of goods or services takes place in the course of inter-state
trade and commerce.
98. The Hon'ble Supreme Court also adverted to the earlier
judgment in case of Union of India vs. Mohit Minerals Pvt. Ltd.,
(2019) 2 SCC 599 in which it was observed that Constitution
Amendment Act 2016 confers concurrent taxing powers on the Union
as well as the States for levying GST on transactions of supply of
goods or services or both.
99. After adverting to the judgment of the Hon'ble Supreme
Court, the Hon'ble Supreme Court approved the principles laid down
by the Kerala High Court in case of Baiku vs. State Tax Officer,
GST, 2019 SCC OnLine Ker 5362 in which the Kerala High Court
had considered whether the Kerala State legislature had the legislative
competence to amend the KVAT Act after the introduction of Article
246A to the Constitution, and the repeal of KVAT pursuant to the
amendment. Kerala High Court in the said judgment further held that
the special power introduced by Article 246A allows Parliament and
the State legislatures to 'simultaneously' make laws. Subsequently,
while explaining the 'simultaneous' nature of power held by
Parliament and State legislature, it has observed that the power under
Article 246A can be exercised simultaneously by the State legislature
and Parliament as none of them hold any 'unilateral or exclusive'
legislative power.
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100. The Hon'ble Supreme Court also considered the earlier
judgment in case of Union of India v. VKC Footsteps 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 254 which stipulates that the law made by Parliament on a
subject in the Concurrent list shall prevail over conflicting laws made
by the State legislature, the constitutional design of Article 246A does
not stipulate the manner in which such inconsistency between the
laws made by Parliament and the State legislature on GST can be
resolved. The concurrent power exercised by the legislatures under
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Article 246A is termed as a 'simultaneous power' to differentiate it
from the constitutional design on exercise of concurrent power under
Article 246, the latter being subject to the repugnancy clause under
Article 254.
102. The Hon'ble Supreme Court in the said judgment has
considered the statement of objects and reasons and the Legislative
History of the Constitution Amendment Act 2016. The Hon'ble
Supreme Court considered the First Discussion Paper on Goods and
Services Tax in India released by the Empowered Committee in
November 2009 explaining the rationale for introducing the GST
regime.
103. It is held that for this GST to be introduced at the State-
level, it is essential that the States should be given the power of levy
of taxation on all services. This power of levy of service taxes has so
long been only with Centre. A Constitutional Amendment will be
made for giving this power also to the States. Moreover, with the
introduction of GST, burden of Central Sales Tax (CST) will also be
removed. The GST at the State-level is, therefore, justified for (a)
additional power of levy of taxation of services for the States etc.
104. The Hon'ble Supreme Court also considered the
introduction of the Constitution (One Hundred and Fifteenth
Amendment) Bill 2011 which sought to amend the provisions of the
Constitution to introduce the GST regime. The Hon'ble Supreme
Court after considering the Union and the State lists observed that
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while the Union primarily has the power to impose income taxes,
except for agriculture, the State has the power to impose tax on
agricultural income. Both the Union and the States had a separate
and an exclusive domain over specific heads of taxation. The Union
and the State could not impose tax under the same head since the
concurrent list did not include an entry for taxes.
105. It is held that in the pre-GST regime, the Union had the
exclusive power to impose indirect taxes, that is, on inter-state sale of
goods, customs duty, service tax, 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
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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, except the 6 mentioned in Entry-54 of List-II of Schedule-VII
of the Constitution are concerned, has no merit. These submissions of
the learned senior counsel is contrary to the principles of law laid
down by the Hon'ble Supreme Court in case of Union of India &
Anr. vs. M/s.Mohit Minerals Pvt. Ltd. (supra) and the objects of
legislative intent of introducing with the Article 246A in the
Constitution of India.
107. Learned senior counsel does not dispute that after
introduction of Article 246A in the Constitution of India, the State
Government has already carried out amendment to various provisions
of the MVAT Act, 2002 about 24 times which were never impugned
by the petitioner or others on the ground of legislative incompetence
or otherwise. In our view, the power to legislate on the GST
concurrently vest with the Union as well as all the States irrespective
of the fact whether GST is not included in any of the three lists
provided in VIIth Schedule of the Constitution of India.
108. Article 367 of the Constitution of India provides that
unless the context otherwise requires, the General Clauses Act, 1897,
shall, subject to any adaptations and modifications that may be made
therein under Article 372, apply for the interpretation of this
Constitution as it applies for the interpretation of an Act of the
Legislature of the Dominion of India.
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109. By virtue of Article 367 of the Constitution of India, the
provisions of the General Clauses Act, 1897 stands incorporated by
interpreting the provisions of the Constitution of India and more
particularly including section 6 of the General Clauses Act. In our
view, there is no merit in the submission of the learned senior counsel
for the petitioner that what is saved by Section 6 of the General
Clauses Act is the pre-existing power to continue with the assessment,
appeal, recovery, etc. in respect of matters pending on the date of the
repeal or amendment which is distinct and different from the powers
to legislate which has been repealed or amended and does not in the
eyes of law exist. The provisions of the MVAT Act are not repealed
as sought to be canvassed by the learned senior counsel for the
petitioner. The said provision continued to apply in respect of the
earlier transactions/assessment which are not governed by the
amendments carried out to the provisions of the MVAT Act by the
State Government after introduction 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
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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 made by the
learned senior counsel for the petitioner that in view of the provisions
of Maharashtra Goods and Services Tax related laws (Amendment,
Validation and Savings) Act, 2017 having a saving clause in Section
78 thereof such a saving clause does not save the power to legislate
on matters on which the power under the Constitution has been taken
away, and merely saves rights and liabilities accruing under the
MVAT Act, 2002.
113. It is not the case of the petitioner that the provision of the
MVAT Act in toto have been repealed by the provisions of
Maharashtra Goods and Services Tax Act, 2017. In our view, in view
of the specific saving clause in section 78 of the Maharashtra Goods
and Services Tax related laws (Amendment, Validation and Savings)
Act, 2017, power to legislate the matters or to bring the amendment in
the provisions of the MVAT Act have not been taken away rather
saves rights to that extent.
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114. Insofar as Shri Prithvi Cotton Mills Ltd. (supra) relied
upon by the learned senior counsel for the petitioner is concerned, in
the said judgment, Hon'ble Supreme Court held that when a
Legislature sets out to validate a tax declared by a Court to be
illegally collected under an ineffective or an invalid law, the cause for
ineffectiveness or invalidity must be removed before validation can
be said to take place effectively. It is held that if a tax is held to be
illegal validation of the same can be done if such illegality or
invalidity are capable of being removed.
115. It is held that sometimes this is done by conferring
jurisdiction where jurisdiction has not been properly invested before.
Sometimes this is done by re-enacting retrospectively a valid and
legal taxing provision and then by fiction making the tax already
collected to stand under the re-enacted law. The legislature may
neutralise the effect of the earlier decision of the court which
becomes ineffective after the change of the law. Whichever method is
adopted, it must be within the competence of the legislature and legal
and adequate to attain the object of validation. If the legislature has
the power over the subject-matter and competence to make a valid
law, it can at any time make such a valid law and make it
retrospectively so as to bind even past transactions.
116. In our view, since by carrying out amendment to the
provisions of the MVAT Act and that also within a period of one year
from the date of introduction of Article 246A of the Constitution of
India, the impugned amendment was within the legislative
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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, the principles laid down by the Hon'ble
Supreme Court in the said judgment would support the case of the
State Government and not the petitioner. There is no merit in the
submission of the learned senior counsel for the petitioner that the
Nagpur Bench of this Court in case of M/s. Anshul Impex Private
Ltd. (supra) has decided the issue based on the legal interpretation of
the principles laid down the judgment of Supreme Court in the case of
Hoosein Kasam Dada (India) Ltd.(supra).
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119. In our view, there is no violation of any doctrine of
separation of powers as sought to be canvassed by the learned senior
counsel for the petitioners. The petitioners have also not disputed the
proposition of the law that the State Government has power to
legislate for the purpose of removing or curing any defect pointed out
by the Court in the said judgment. In our view, there is no
encroachment on the part of the State Government upon the power of
the judiciary by carrying out the amendment in the provision of
MVAT in any manner whatsoever. There is no merit in the submission
of the learned senior counsel for the petitioners that in the amending
Act though the explanation starts with the words "for removal of
doubts", the same does not invariably mean that the explanation is
clarificatory.
120. The judgment of the Supreme Court in case of Union of
India Vs. Martin Lottery Agencies (supra) relied upon by the learned
senior counsel would not assist the case of the petitioners. The said
judgment is distinguishable on the facts. On plain reading of the
words "for removal of doubts" and also the legislative intent for
introducing the said explanation which is subject matter of these
petitions clearly indicate that the same was inserted for clarifying the
doubts raised by the Nagpur Bench of this Court in case of M/s.
Anshul Impex Private Ltd. (supra).
121. Insofar as judgment of the Gujarat High Court in a case
of Reliance Industries Ltd. Vs. State of Gujarat and others (supra)
relied upon by the learned senior counsel for the petitioner is
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concerned, perusal of the said judgment clearly indicates that section
84A considered by the Gujarat High Court in the said judgment was
incorporated by the said Legislature w.e.f. 3rd April, 2018. The
amendment came into effect on 16th September, 2016. The said
amendment carried out by the State of Gujarat was carried out after
one year to the said constitutional amendment i.e. on 3 rd 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. This Court in case of Nimbus Communications Ltd. Vs.
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Commissioner of Service Tax, Mumbai - IV (supra) relied upon by
the learned Advocate General, considered the judgment of the
Division Bench of Allahabad High Court in a case of Ganesh Yadav
Vs. Union of India (supra) and accepted the view of the Allahabad
High Court delivered in case of Ganesh Yadav Vs. Union of India
(supra). Learned senior counsel for the petitioner could not
distinguish the judgment of the Allahabad High Court in a case of
Ganesh Yadav Vs. Union of India (supra) and judgment of this Court
in case of Nimbus Communications Ltd. Vs. Commissioner of
Service Tax, Mumbai - IV (supra).
124. There is no substance in the submission made by the
learned senior counsel for the petitioner that the amendment
introduced by the State Government is hit by principles laid down by
the Supreme Court in case of Hoosein Kasam Dada (supra). This
Court has to interpret the provisions harmoniously. By virtue of the
constitutional amendment made under the provisions of GST
empowers the State Government to carry out amendment within one
year from the date of such constitutional amendment, such powers are
rightly exercised by the State Government within the time prescribed
and the Maharashtra Goods and Service Tax Act came into force. The
provisions of the MVAT Act, 2002 were amended so as to cure the
lacuna in MVAT Act and to avoid inconsistency with the Central
Legislature.
125. The Hon'ble Supreme Court in case of Videocon
International Limited (supra) has held that an appellate remedy is
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available in different packages. An aggrieved party, is entitled to
pursue such a vested substantive right, as and when, an adverse
judgment or order is passed. Such a vested substantive right can be
taken away by an amendment, only when the amended provision,
expressly or by necessary intendment, so provides. Failing which,
such a vested substantive right can be availed of, irrespective of the
law which prevails, at the date when the order impugned is passed, or
the date when the appeal is preferred. It is held that the legal pursuit
of a remedy, suit, appeal and second appeal, are steps in a singular
proceeding. All these steps, are connected by an intrinsic unity, and
are regarded as one legal proceeding.
126. It is held by the Hon'ble Supreme Court that where the
appellate package, as in the present case, is expressed differently 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
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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 right, the appellate package, as was available at the
commencement of the proceedings, would continue to vest in the
parties engaged in a lis, till the eventual culmination of the
proceedings. Obviously, that would be subject to an amendment
expressly or impliedly, providing to the contrary. The principles laid
down by the Hon'ble Supreme Court in case of Videocon
International Limited (supra) apply to the facts of this case. In this
case, the State Government has provided the package to all the
assessees by prescribing the condition of pre-deposit of 10% and
thereby staying the recovery of 90% as a pre-condition for
entertaining an appeal. Such package by the Legislature is permissible
in law.
129. Madras High Court in case of M/s.Dream Castle (supra)
has held that right of appeal is neither an absolute right nor an
ingredient to natural justice and that it is only a statutory right which
can be circumscribed by the condition in the grant. The Madras High
Court adverted to the judgment of the Hon'ble Supreme Court in case
of Seth Nand Lal vs. State of Haryana, 1980 (supp) SCC 574 and in
case of Vijay Prakash D.Mehta vs. Collector of Customs, (1988) 4
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SCC 402 and held that the right of appeal is a creature of statute and
the legislature is well within its competence to impose conditions for
the exercise of such a right subject to the only restriction that the
conditions so imposed are not so onerous which sounds putting
unreasonable restrictions rendering the right almost illusory.
130. The Madras High Court in the said judgment had
considered the question as to whether the switch-over from a regime
where the deposit of the entire duty was mandatory subject to the
discretion granted to the Appellate Authority to waive the whole or
any part of it, viz. regime where a fixed percentage of 7.5% of the
demand is made mandatory, can be said to be more onerous or less
onerous. After considering the judgment of the Hon'ble Supreme
Court in case of Shyam Kishore vs. Municipal Corporation of Delhi,
(1993) 1 SCC 22 and several other judgments, it is held by the
Madras High Court that when the unamended condition gave only a
chance or hope for an assessee to get a total waiver at the discretion
of the Appellate Authority, the same cannot be equated to a vested
right. A mere chance of convincing the Appellate Authority to
exercise the discretion for the grant of a total 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
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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 does
not take away a right vested, if any, but merely made a chance
divested. In our view, there is no substance in the submission of the
learned senior counsel for the petitioner that the vested right of the
petitioner of filing an appeal against the order of assessing officer or
the First Appellate Authority is taken away by the impugned
amendment.
132. The Hon'ble Supreme Court in case of M/s. Newtech
Promoters And Developers Pvt. Ltd. (supra) has held that the statute
is not retrospective merely because it affects existing rights or its
retrospection because a part of the requisites for its action is drawn
from a time antecedent to its passing, at the same time, retroactive
statute means a statute which creates a new obligation on transactions
or considerations already passed or destroys or impairs vested rights.
The Hon'ble Supreme Court in the said judgment considered various
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issues including the issue whether the condition of pre-deposit under
proviso to section 43(5) of the Real Estate (Regulation and
Development) Act, 2016 for entertaining substantive right of appeal is
sustainable in law or not.
133. The Hon'ble Supreme Court adverted to the several
judgments including the judgment in case of State of Bombay (Now
Maharashtra) vs. Vishnu Ramchandra, AIR 1961 SC 307. In the
said judgment in case of State of Bombay (Now Maharashtra) vs.
Vishnu Ramchandra (supra), the Hon'ble Supreme Court observed
that if the part of requisites for operation of the statute were drawn
from a time antecedent to its passing, it did not make the statute
retrospective so long as the action was taken after the Act came into
force. The Hon'ble Supreme Court considered the said provision
which provides that the promoter has to deposit at least 30 per cent of
the penalty amount or such higher amount as may be directed by the
Appellate Tribunal before the said appeal can be entertained. The
Hon'ble Supreme Court also considered section 18 to SARFAESI
Act, 2002 in the said judgment and also section 19 of the Consumer
Protection Act, 1986, section 19 of the Micro, Small and Medium
Enterprises Development Act, 2006 and section 62(5) of the Punjab
Value Added Tax, 2005 imposing the condition of pre-deposit of
various amounts for hearing of first appeal and held that the right of
appeal which is a creature of the statute and without a statutory
provision, person aggrieved is not entitled to file the appeal.
134. It is held that it is neither an absolute right nor an
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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
principles laid down by the Hon'ble Supreme Court in the said
judgment which apply to the facts of this case.
136. The Hon'ble Supreme Court in case of Ssangyong
Engineering & Construction Co. Ltd. (supra) has considered the
amendment to section 34(2) (b)(ii) of the Arbitration and Conciliation
Act, 1996 including the Explanation 2 and held that it is clear that
public policy of India is now constricted to mean firstly, that a
domestic award is contrary to the fundamental policy of Indian law,
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as understood in paragraphs 18 and 27 of Associate Builders vs.
Delhi Development Authority, (2015) 3 SCC 49, or secondly, that
such award is against basic notions of justice or morality as
understood in paragraphs 36 to 39 of Associate Builders (supra). It is
held that Explanation 2 to Section 34(2)(b)(ii) and Explanation 2 to
section 48(2)(b)(ii) were added by the Amendment Act only so that
judgment of the Hon'ble Supreme Court in case of ONGC Ltd. vs.
Western Geco International Ltd., (2014) 9 SCC 263 as understood in
Associate Builders (supra), and paragraphs 28 and 29 in particular, is
now done away with.
137. It is held that on perusal of the said two explanations
added by the Legislature in the original provision would clearly
indicate that the said explanations were added with a view to reduce
the scope of section 34 of the Arbitration and Conciliation Act, 1996
to reduce the powers of the Court to review the Arbitral Award on
merits, to do away with the interpretation of Section 34 by the
Supreme Court in case of ONGC Ltd. vs. Western Geco
International Ltd., (supra) as interpreted by the Hon'ble Supreme
Court in case of Associate Builders (supra).
138. In this case also in our view, the amendments which are
the subject matter of these writ petitions are carried out to do away
with the interpretation of the Nagpur Bench of this Court in case of
M/s. Anshul Impex Private Ltd. (supra) about the commencement of
lis or the date of order. The principles laid down by the Hon'ble
Supreme Court in case of Ssangyong Engineering & Construction
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Co. Ltd. (supra) would apply to the facts of this case. We are bound
by the principles laid down by the Hon'ble Supreme Court.
139. A perusal of the impugned explanation added by the
State Government by Ordinance of 2017 w.e.f. 15th April, 2017
irrespective of the date of the commencement of the original
proceedings indicates that the 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 these petitions as sought to be canvassed by
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the learned senior counsel for the petitioner.
141. In our view curing the defect pointed out by any Court
through a judgment or simplicitor removing such defects does not
amount to encroachment directly or indirectly or overruling the view
taken by the Court or overreaching the powers of the State
Government by nullifying the effect of the law laid down by the
Court.
142. Hon'ble Supreme Court in case of State of Himachal
Pradesh vs. Narain Singh (supra) considered the question as to
whether the State can in exercise of its sovereign legislative power
enact an amending Act seeking to remove and cure the defects in the
previous law despite there being a judgment on the previous law or
not? The Hon'ble Supreme Court held that the power of the
Sovereign legislature to legislate within its domain, both
prospectively and retrospectively cannot be questioned. After
adverting to the various judgments of the Hon'ble Supreme Court, it
is held that the Legislature has powers by virtue of validating
legislation, to "wipe out" judicial pronouncements of the High Court
and the Supreme Court by removing the defects in the statute
retrospectively when such statutes had been declared ultra vires by
Courts in view of its defects.
143. In case of Bhubaneshwar Singh & another Vs. Union
of India & others, (1994) 6 SCC 77 which was considered by the
Supreme Court in case of State of Himachal Pradesh (supra), it was
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held that where there is a competent legislative provision which
retrospectively removes the substratum of foundation of a judgment,
the said exercise is a valid legislative exercise, provided it does not
transgress any other constitutional limitation. The Supreme Court also
considered the judgment delivered by a three Judge Bench in Meerut
Development Authority etc. vs. Satbir Singh and others, (1996) 11
SCC 462 in which it was held by the Supreme Court that when the
Supreme Court in exercise of power of judicial review, has declared a
particular statute to be invalid, the Legislature has no power to
overrule the judgment; however, it has the power to suitably amend
the law by use of appropriate phraseology removing the defects
pointed out by the Court and by amending the law inconsistent with
the law declared by the Court so that the defects which were pointed
out were never on statute for effective enforcement of the 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
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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 inconsistency from the statute for effective
enforcement of law.
146. The Hon'ble Supreme Court in case of Assistant
Commissioner of Agricultural Income Tax and others (supra) has
held that in exercising legislative power, the legislature by mere
declaration, without anything more, cannot directly overrule, revise or
override a judicial decision. It can render judicial decision ineffective
by enacting valid law on the topic within its legislative field
fundamentally altering or changing its character retrospectively. The
changed or altered conditions are such that the previous decision
would not have been rendered by the court, if those conditions had
existed at the time of declaring the law as invalid. It also empower to
give effect to retrospective legislation with a deeming date or with
effect from a particular date.
147. It is held that the legislature can change the character of
the tax or duty from impermissible to permissible tax but the tax or
levy should answer such character and the legislature is competent to
recover the invalid tax validating such a tax on removing the invalid
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base for recovery from the subject or render the recovery from the
State ineffectual. It is held that it is competent for the legislature to
enact the law with retrospective effect and authorize its agencies to
levy and collect the tax on that basis, make the imposition of levy
collected and recovery of the tax made valid, notwithstanding the
declaration by the Court or the direction given for recovery thereof. It
is held that the legislature cannot directly overrule the decision or
make a direction as not binding on it but has power to make the
decision ineffective by removing the base on which the decision was
rendered, consistent with the law, the Constitution and the legislature
must have competence to do the same.
148. In our view, the principles of law laid down by the
Hon'ble Supreme Court in case of Assistant Commissioner of
Agricultural Income Tax and others (supra) would apply to the facts
of this case as by carrying out the amendment to section 26 of the
MVAT Act or by inserting explanation, the State Government has
cured the defects pointed out by the Nagpur Bench of this Court in
the case of Anshul Impex Private Ltd. (supra) by removing the basis
on which the said decision was arrived at.
149. This Court in case of Godrej Soaps Ltd. & Anr. vs. The
State of Maharashtra & 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
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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 amendment thereto,
has considered the identical situation and has held that the conspectus
of the provisions of Section 129E of the Customs Act, 1962 before
and after the substitution, makes it clear that the law giver has
intended to bring about a sweeping change from the previous regime
and usher in a new era, under which the amount to be deposited was
scaled down and pegged at a certain percentage of the amount in
dispute. In other words, while under Section 129A, as it stood prior to
the substitution, the appellant was to deposit the duty and the interest
demanded or the penalty levied, whereas in the present regime, the
appeal is maintainable upon the appellant depositing seven and the
half percent of the amount.
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151. It is held that under the earlier regime, in other words the
entire amount which was in dispute had to be deposited. Under the
earlier avatar of section 129E, the law giver also clothed the appellate
body with powers as contained in the first proviso. The first proviso
provided the Commissioner (Appeals) or as the case may be,
Appellate Tribunal the power to dispense with such deposit, subject to
conditions as he deemed fit to impose to safeguard the interest of the
revenue. The Hon'ble Supreme Court considered that it was in sharp
departure from the previous regime that the new provision has been
enacted. Under the new regime, the amount to be deposited to
maintain the appeal has been reduced from 100% to 7.5% but the
discretion which was made available to the appellate body to scale
down the pre-deposit has been taken away.
152. The Hon'ble Supreme Court held that the first proviso to
section 129E enacts a limitation on the total amount which can be
demanded by way of pre-deposit. The first proviso provided that the
amount required to be deposited should not exceed Rs.10 Crores. In
this regard, the law giver has purported to grant relief to an appellant.
The second proviso contemplates that section 129E as substituted
would not apply to stay applications and appeals which are pending
before the Appellate Authority prior to the commencement of the
Finance Act (2) of 2014. The amended provision had, as we have
already noticed has come into force from 6 th August, 2014 and
therefore, in regard to stay applications and appeals which were
pending before any Appellate Authority prior to commencement of
The Finance (No.2) Act 2014, section 129E as substituted provision
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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 23 rd 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 which, in fact, appropriately would apply only to a case
where the appellant is maintaining the appeal and is called upon to
pay the full amount under Section 129E under the earlier avtar.
154. It is further held that the legislative intention would
clearly be to not to allow the appellant to avail the benefit of the
discretionary power available under the proviso to the substituted
provision under Section 129E. Supreme Court found no merit in the
matter on the ground that the appellant is not being called upon to pay
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the full amount but is only asked to pay the amount which is fixed
under the substituted provision.
155. Upon applying the principles laid down by the Supreme
Court in case of Chandra Sekhar Jha vs. Union of India (supra) to
the provisions to the facts of this case challenging the validity of the
amended provisions of the MVAT Act, it is clear that under the
amended provisions of MVAT Act, the unlimited discretion granted to
the Appellate Authority to grant waiver or exemption from the
payment of deposit of the tax dues from 0% to 100% is substituted by
the flat rate of deposit of 10% of the total tax due thereby granting
stay of the 90% balance amount of the tax dues so as to safeguard the
interest of assessee as well as the revenue. The principles laid down
by the Supreme Court in case of Chandra Sekhar Jha vs. Union of
India (supra) apply to the facts of this case. We are respectively
bound by the said judgment.
156. This Court in case of Noopura Vishwajit Kulkarni Vs.
State of Maharashtra (supra) has considered the submission as to
whether the amendment effected by the Maharashtra Act No. III of
2013 to the provisions of the Maharashtra State Reservation (of seats
for admission in educational institutions in the State and for
appointments in public services and posts under the State) for
Socially and Educationally Backward Classes (SEBC) (Amendment)
Act, 2019 was an attempt on the part of the State Government to
nullify and render void the decision of the Nagpur Bench of this
Court and Supreme Court or not.
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157. This Court after adverting to the judgment of the
Supreme Court in case of Shri Prithvi Cotton Mills Ltd. vs. Broach
Borough Municipality, (1969) 2 SCC 283 held that it is settled that
there is a demarcation between legislative and judicial functions
predicated on the theory of separation of powers. The legislature has
the power 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 not amount to statutory overruling by the legislature. The
principles laid down by this Court in the said judgment in case of
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Noopura Vishwajit Kulkarni Vs. State of Maharashtra (supra) and
by the Supreme Court in case of Shri Prithvi Cotton Mills Ltd.
(supra) apply to the facts of this case.
160. In the facts of this case also, it became necessary for the
legislation to cure the defects in the provisions of the appeals
prescribed in the MVAT Act as pointed out by the Nagpur Bench of
this Court in case of Anshul Impex Private Ltd. (supra). In our view,
under the circumstances it can be held that by the said amendment,
which is the subject matter of these petitions, the State Government
has not overruled or overreached the law laid down by this Court in
the said judgment. Curing the defects pointed out by this Court in the
judgment in any provision of law is permissible by carrying out an
amendment in the provisions of law and cannot amount to overruling
or overreaching the binding effect of the judgment.
161. The Supreme Court in case of S.R.Bhagwat & Ors.
(supra) has held that the judgment having attained finality, cannot be
overruled by any legislative measure. There is no dispute about this
proposition of law held by the Supreme Court. However, since this
Court is of the view that the judgment of the Nagpur Bench of this
Court in case of M/s. Anshul Impex Private Ltd. (supra) has not been
overruled by the impugned amendment, the said judgment in case of
S.R.Bhagwat & Ors. (supra) would not assist the case of the
petitioners.
162. A perusal of the explanation inserted by 2019
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amendment after sub-section 6(c) of section 26 of the MVAT Act
clearly indicates that the same is deemed to have been inserted w.e.f.
15th April, 2017, i.e. the date of amendment and has been brought into
force in the necessary provisions i.e. sub-sections 6A, 6B and 6C to
section 26 of the MVAT Act. It is thus clear that the said amendment
takes away the basis of the law as it stood when the said judgment of
Nagpur Bench of this Court in case of M/s. Anshul Impex Private
Ltd. (supra) was decided. The said 2019 amendment removes the
doubt created by the judgment in case of Nagpur Bench of this Court
in case of M/s. Anshul Impex Private Ltd. (supra) and has been
inserted by exercising legislative power of the State Government.
163. In our view, the judgment of Nagpur Bench of this Court
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
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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,
containing express words or by necessary implications.
165. In our view learned Advocate General is right in his
submission that the statute always makes the 'right of appeal'
available, if any and if at all, in a package which includes various
facets of such a right such as limitation, overall extent and scope of
such a right, will include various aspects thereof, such as the available
grounds, conditions subject to which it can be exercised. The Right
of Appeal at the pre-amendment stage was available in a package
which is now altered and at the post-amendment stage it is very much
continued, but in a different package with a right of appeal vested at
the pre-amendment stage continues.
166. A perusal of the said amendment clearly indicates that
the said amendment prescribing 10% deposit of the disputed tax
strikes a justifiable fine balance and is beneficial to the assessee as
well as the revenue. Upon pre-deposit of only 10%, the assessee gets
an unconditional stay to the recovery of the balance amount in issue
in appeal. A kind of standardization is brought in. A very wide
discretion conferred upon the Appellate Authority to direct the deposit
from 0% to 100% of the disputed amount as a condition precedent is
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taken away which not only saves valuable time but also the energy
not only of the assessee but also of the Courts or Appellate Authority
in deciding the stay application or the proceedings arising out of such
applications. It also saves money of the assessee as well as revenue
in pursuing such applications or opposing thereof. Filing of such
appeals to the considerable extent would be reduced which would
help in reducing the arrears of other pending proceedings.
167. In the event of the assessee not succeeding in the appeals
before the Appellate Authority after deposit of such 10% as pre-
condition deposit, the revenue would be protected atleast to the extent
of such 10% amount, if the financial condition of the assessee is
precarious at the time of disposal of such appeal. The amount of pre-
condition deposit in various Acts is much more than 10% and the
validity thereof has been upheld by the Supreme Court on the ground
that such provisions of pre-condition of deposit are not onerous and
are reasonable.
168. The Supreme Court in a case of Hoosein Kasam Dada
(supra) had considered the proviso to Section 22(I) of the Central
Provinces and Berar Sales 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
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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 right and not a mere
matter of procedure. The Court was bound to admit the appeal
whether appellant deposited the amount recoverable in execution of
the decree or not.
170. It is held that by requiring such deposit as a condition
precedent to the admission of appeal, a new restriction has been put
on the right of appeal, the admission of which is now hedged in with
a condition. The Supreme Court accordingly held that, there can be
no doubt that right of appeal had been affected by the new provision
and in the absence of express enactment, amendment cannot apply to
the proceedings pending on the date when the new amendment came
into force.
171. The Supreme Court held that whenever there is
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proposition by one party and opposition to that proposition by another
a 'lis' arises. When assessee files his return, a 'lis' may not
immediately arise or under section 22(I) of the Act, the authority may
accept the return as correct and complete. But if authority is not
satisfied as to the correctness of the return and calls for evidence
surely controversy arises involving a proposition by the assessee and
opposition by the State. It is held that, even if the 'lis' is to be taken
as arising only on the date of assessment, there was a possibility of
such a 'lis' arising as soon as proceedings started with the filing of
the return or at any rate when the authority calls for evidence and
began hearing on such dates. For the purpose of accrual of right of
appeal, the critical and relevant date is the date of initiation of the
proceedings and not the date of decision itself.
172. Under the unamended provision i.e. Section 22(1)
considered by the Supreme Court in the said judgment, a restriction
was imposed on the appellate authority not to entertain the appeal
unless it was satisfied that such amount of tax or penalty or both as
the appellant may admit to be due from him has been paid. The
amended Section 22(I) however, prohibited the appellate authority
to admit the appeal unless appeal is accompanied by a satisfactory
proof of payment of tax with penalty, if any, in respect of which
appeal has been preferred. The amended impugned provisions in this
case are different.
173. Supreme Court in case Gangadhar Palo (supra) has held
that if the Special Leave Petition arising out of the impugned order
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passed by High Court is dismissed without recording reasons, such
impugned order 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 Value Added Tax Act, 2005 was
legal and valid and the condition of 25% of pre-deposit was not
onerous, harsh, unreasonable and violative of Article 14 of the
Constitution of India. In this case, the State Government has imposed
condition of 10% of pre-deposit for filing an appeal before the
Appellate Authorities. It is not in dispute that upon deposit of 10% of
pre-deposit, there is automatic stay of the balance of 90% of the tax
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dues. Prior to the date of the impugned amendment, the discretion
was granted to the Appellate Authority to direct any amount as pre-
deposit before entertaining the appeal.
175. Such discretion can be for any sum from 0% to 100%. In
this case, a flat rate of 10% of pre-deposit is thus neither onerous,
harsh, unreasonable or violative of Article 14 of the Constitution of
India. The judgment of Supreme Court in case of M/s Tecnimont
Pvt. Ltd. (supra) applies to the facts of this case. We are respectfully
bound by the said judgment.
176. A perusal of the provisions of sections 6A, 6B and 6C of
section 26 of the said MVAT Act makes it clear that all those
provisions apply to all these appeals that are filed under section 26
against the order passed on or after 2017 amendment which has been
brought into force w.e.f. 15th April, 2017. The newly inserted
provision by way of 2017 amendment thus would apply to the order
passed on or after 15th April, 2017 irrespective of the period of
assessment to which the order appealed against relates or irrespective
of the date on which the proceedings in respect of such lis has
commenced. There is no substance in the submission of the learned
senior counsel for the petitioners that the said amendment is applied
with retrospective effect. The Nagpur Bench of this Court in case of
M/s. Anshul Impex Private Ltd. (supra) has interpreted the newly
inserted provisions in the Judgment in such a way that the newly
inserted provisions would not apply to such orders, which have been
passed in respect of such period of assessment i.e. prior to the
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introduction of the said amendment i.e. 15th April, 2017.
177. In our view, there is no substance in the submission of
the learned senior counsel for the petitioners that the impugned
explanation violates Article 14 of the Constitution of India, or
discriminates between two assessees in the same assessment year, or
causes delay in passing assessment orders attributable to the
Government or otherwise. The impugned amendment would apply
only for those orders which are passed only after 15 th 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).
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179. The Supreme Court in case of Bimolangshu Roy Versus
State of Assam And Another (supra) has held that the authority to
make law flows not only from an express grant of power by the
Constitution to a legislative body but also by virtue of implications
flowing from the context of the Constitution. The US Supreme Court
also recognized that the Congress would have the authority to
legislate with reference to certain matters because of the fact that such
authority is inherent in the nature of the sovereignty. The doctrine of
inherent powers was propounded by Justice Sutherland in the context
of the role of the American Government in handling foreign affairs
and the limitations thereon.
180. It is held that an Entry in one of the 3 lists of the 7 th
Schedule is not the source of power but are only indicative of the
fields of legislation. Power to legislate is conferred by some of the
Articles by an express grant either on the Parliament or the State
Legislature to make laws with reference to certain matters specified in
each of those Articles but there is no corresponding entry in the
corresponding list indicating the field of such legislation.
181. It is held that 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 entries,
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and (v) List III does not contain a taxing entry. It is not in dispute
that the taxation in respect of the GST is not inserted in any of the
three lists in Seventh Schedule. The principles laid down by the
Supreme Court in case of Bimolangshu Roy Versus State of Assam
And Another (supra) would apply to the facts of this case. In our
view it is not necessary that in taxing matter, if the subject is not
specified in Seventh Schedule, the State Government has no power to
legislate on the said subject.
182. It is held by the Supreme Court that the authority to
make law flows not only from an express grant of power by the
constitution to a legislative body but also by virtue of implications
flowing from the context of the Constitution as well as settled by the
various decisions. Such authority to legislate by the State Government
is inherent in the 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
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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 EPC JV (supra) relied upon by
the learned senior counsel for the petitioner is concerned, the
Supreme Court considered the issue as to whether the appeal would
be governed under the provisions of the Consumer Protection Act,
2019 or under the erstwhile 1986 Act. In the said judgment, the
Supreme Court considered the argument of the learned counsel for the
State that until actual assessment is made, there can be no lis and
therefore, no right of appeal can accrue before that date. The Supreme
Court observed that when assessee files a return, the lis may not
immediately arise. The authority may assess the return under section
11 of the 1947 Act, but if the authority is not satisfied as to the
correctness of the return and call for evidence, the controversy arises.
The said judgment is distinguishable on facts.
185. The Division Bench of this Court in the judgment
delivered on 19th June, 2017 in Writ Petition No. 4315 of 2016 in case
of Haresh Nagindas Vora vs. Union of India & Anr. and in
companion petition considered the challenge to the constitutional
validity of section 129E of the Customs Act, 1962 and the Finance
Act No.2 of 2014 prescribing a mandatory pre-deposit for filing an
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appeal before the Tribunal or the Commissioner (Appeals). The
petitioners therein had raised various grounds including the ground
that the said section 129E of the Customs Act, 1962 was
discriminatory and violative of Articles 14, 19 and 21 of the
Constitution of India and has taken away the powers earlier conferred
on the appellate authority to waive the pre-deposit, upon forming an
opinion that a pre-deposit would cause undue hardship.
186. The respondents revenue had placed reliance on various
judgments of Division Bench of this Court in case of Nimbus
Communications Ltd. Vs. Commissioner of Service Tax, Mumbai -
IV (supra). The Division Bench of this Court after construing the pre-
amended section 129E and the amended section held that prior to the
amendment, in view of the powers and discretion conferred with the
appellate authority to waive/dispense with the pre-deposit, substantial
time was expended on the adjudication of such applications and in
deciding issues, as to whether, the contention of the applicant in the
stay application, of an undue hardship is being caused, could be
accepted to grant an appropriate waiver.
187. It is held that resultantly, orders on the stay application
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
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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
as unreasonable and onerous and violative of Article 14 of the
Constitution. Secondly that the amount which is required to be
deposited is not unreasonable from what the earlier (pre amended)
regime provided.
189. This Court in the said judgment also rejected the
submission of the petitioner that the said amended provision was
rendered discriminatory as it creates two different classes when it
mandates pre-deposit of duty demanded or penalty imposed or both,
and more particularly when penalty cannot be considered to be a
revenue as it is not a tax requiring it to be safeguarded. This Court
also noticed that even the pre-amended provision stipulated for a
deposit in case of appeals from orders levying penalty. This Court
adverted to the judgment of Supreme Court in case of Vijay Prakash
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D.Mehta and Jawahar D.Mehta vs. Collector of Customs
(Preventive), Bombay, AIR 1988 SC 2010 in which it was held that
right to appeal is a statutory right and not an absolute right, which can
be circumscribed by the conditions in the grant. Similar view is also
taken by the Supreme Court in case of Nand Lal Vs. State of
Haryana, AIR 1980 SC 2097 and in case of Anant Mills Co. Ltd. vs.
State of Gujarat & Ors., AIR 1975 SC 1234.
190. This Court in the said judgment held that by virtue of
section 129E, the right to appeal as conferred under the said provision
is a conditional right, the legislature in its wisdom has imposed a
condition of deposit of a percentage of duty demanded or penalty
levied or both. The fiscal legislation as in question can very well
stipulate as a requirement of law of a mandatory pre-deposit as a
condition precedent for an appeal to be entertained by the appellate
authority and thus section 129E of the Customs Act cannot be held to
be unconstitutional on the ground as assailed by the petitioner therein.
191. This Court also adverted to the judgment of the Madras
High Court in case of M/s.Dream Castle (supra) and the judgment of
the Allahabad High Court in a case of Ganesh Yadav Vs. Union of
India (supra) which are relied upon by the learned Advocate General
in support of his rival contention. This Court dismissed the said writ
petition impugning the constitutional validity of section 129E of the
Customs Act on the similar grounds.
192. In the facts of this case also, under unamended section
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26(6) of the MVAT Act, there was no condition prescribed that 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 the legal
position on the date of order of assessment. Though the Division
Bench of this Court in the said judgment has taken note of the
decisions of the Supreme Court in case of Hoosein Kasam Dada
(India) Ltd. (supra) and Garikapatti Veeraya vs. N.Subbaiah
Choudhary, AIR 1957 SC 5, which refers to the right of the
legislature to curtail the right of appeal or make it conditional, does
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not comment on this aspect.
194. In the facts of this case, the petitioner has not made out
the case of legislative incompetence on the part of the State
Government to make the amendment to the provisions of the MVAT
including the explanation inserted to section 26(6B). In our view, 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 a condition/modifying the earlier condition
for entertaining an appeal for a 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.
195. The explanation to section 26 of the MVAT Act
introduced by the Maharashtra Tax Laws (Amendment and
Validation) Act, 2019 does not take away the right of the assessee to
file an appeal without statutory deposit in respect of the orders passed
for the assessment year prior to 15th April, 2017. The said explanation
also does not nullify the decision of the Division of this Court of
Nagpur Bench in case of M/s. Anshul Impex Private Ltd. (supra).
196. In our view, the decision of the Nagpur Bench of this
Court in case of M/s. Anshul Impex Private Ltd. (supra) holding
down that 'right of filing appeal accrues on the date of order of
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assessment and requirement of mandatory pre-deposit introduced by
way of amendment does not apply to the orders passed in the
assessment years prior to 15th April, 2017', is not a correct
proposition since the right of appeal can be made conditional by
the Legislature with express indication.
197. We accordingly answer the question of law referred to
Full Bench as under :-
(i) Question of Law (a) i.e."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?" 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 15 th 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
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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 Appeal No.2/2018 is answered in
negative and in favour of the Revenue.
(iv) Question of Law (c) i.e. "whether the decision of the Division
bench in the case of Anshul Impex Pvt. Ltd. Vs. State of
Maharashtra laying down that right of filing appeal accrues
on the date of order of assessment and requirement of
mandatory pre-deposit introduced by way of amendment
does not apply to the orders passed in the assessment years
prior to 15th April, 2017, is a correct proposition since the
right of appeal can be made conditional by the Legislature
with express indication" is answered in negative and in
favour of the Revenue and is thus declared not a good law.
(v) It is declared that the explanation inserted in 2019 amendment
w.e.f. 15th April, 2017 would apply to those orders which are
passed after 15th April, 2017and 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
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Section 6A, 6B and 6C to Section 26 and the explanation
thereto will apply and co-exist.
(vi) Office is directed to place these matters before the Division
Bench having assigned these matters for passing further
orders.
R. D. DHANUKA, J.
NITIN W. SAMBRE, J.
ABHAY AHUJA, J.
198. By an order dated 4th March 2022, it was made clear while closing the matter for pronouncement of judgment that ad- interim relief, if any, granted to continue till pronouncement of judgment.
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200. Ad-interim order passed by this Court, if any, to continue till further order is passed by the Division bench.
R. D. DHANUKA, J.
NITIN W. SAMBRE, J.
ABHAY AHUJA, J.
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