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3. In   Special   Civil   Application   No.14856   of   2010,  the   petitioner   is   the   company   engaged   in   the  business of generation and distribution of power. 

C/SCA/14856/2010 JUDGMENT The State Government enacted the Gujarat Special  Economic Zone Act, 2004 (hereinafter referred to  as 'the SEZ Act'), which was brought into effect  from May 15, 2004. The petitioner after obtaining  necessary approval from the State Authorities set  up its power generation unit in Dahej SEZ Area.  The   petitioner   generates   power   at   the   said  location   and   distributes   the   same   to   the   other  units   situated   in   the   SEZ   and   Domestic   Tariff  Area (for short 'DTA'). The petitioner was also  granted   eligibility   certificate   by   the  Development   Commissioner   on   October   26,   2009,  which   certificate   provides  inter   alia  that   the  petitioner   would   be   eligible   to   avail   exemption  from   taxes,   cess,   duties,   fees   or   any   other  levies under the State laws under section 21(1)  of the SEZ Act, including :

(ii) The   intention   of   the   State   legislation   in  enacting  sections  21  and  22  of  the  SEZ  Act  was  clear,   namely,   to   grant   exemption   from   various  State   taxes   to   SEZ   units.   This   was   the   general  fiscal benefit offered to industrial undertakings  to set up their establishments in SEZ areas. To  avoid   any   conflict,   section   22   of   the   SEZ   Act  gave overriding effect to the provisions of the  SEZ Act. Any later enactment without non­obstante  clause cannot have primacy over section 21 of the  SEZ Act.

9. In terms of section 21 of the SEZ Act, thus the  units   located   in   SEZ   area   enjoy   certain  concessions   and   exemptions.   In   particular,   in  terms of clause (c) of sub­section (1) of section  21, all sales and transactions within the areas  specified therein would be exempt from all taxes,  cess,   duties,   fees   or   other   levies   under   any  State   laws   to   the   extent   of   tax   on   sales   or  purchase of goods other than goods specified in  Schedule   III   of   the   VAT   Act,   Luxury   Tax,  C/SCA/14856/2010 JUDGMENT Entertainment   Tax   and   other   taxes   payable   on  sales and transactions. The fact that by virtue  of the said provision, the petitioners were not  required to pay any taxes under the VAT Act, is  not in dispute, more so, since section 22 of the  SEZ  Act   gave  the   provisions  of  the  said  Act  an  overriding   effect   over   other   laws   for   the   time  being   in   force.   This   non­obstante   clause   is  worded   in   expression  "notwithstanding   anything  contained in any other law for the time being in   force".   In   plain   terms,   therefore,   irrespective  of any levy of the above noted taxes prescribed  under any other laws by virtue of sections 21 and  22 of the SEZ Act, no such tax could be levied  from the petitioners. This much is clear and not  even   disputed   by   the   respondents.   Their  contention is that, by virtue of introduction of  sections  5A  and  9(5)  in  the  VAT  Act,  the  total  immunity enjoyed by the petitioners from payment  of  duties  under  the   VAT  Act  got  to  that  extent  curtailed.   It   is   undoubtedly   true   that   sections  2(37), 5A and 9(5) of the VAT Act were introduced  in   the   VAT   Act   for   special   purposes   of   levying  C/SCA/14856/2010 JUDGMENT certain duties even on transactions entered into  by the SEZ units. 

C/SCA/14856/2010 JUDGMENT
21. Such intention, however, has to be gathered  from   the   statute   containing   such   non­obstante  clause. We have perused sections 21 and 22 of the  SEZ   Act   and   also   other   provisions   contained   in  the   SEZ   Act.   There   is   nothing   to   indicate   that  section 22 of the SEZ Act desired to have limited  application when it came to the fiscal benefits  contained   in   section   21   of   the   SEZ   Act.   As   we  have   noted,   section   21   of   the   SEZ   Act   granted  several   benefits   of   tax   waivers   to   the  transactions entered into in the specified areas  within   the   SEZ.   These   were   necessarily   State  taxes.   But   for   section   21   of   the   SEZ   Act   such  taxes   would   be   levied   even   on   the   transactions  entered into within the said specified areas. In  absence of section 22 of the SEZ Act, there would  be a conflict between various taxing statutes and  section 21 of the SEZ Act. In order to avoid such  conflict, section 22 of the SEZ Act was enacted  giving overriding effect. Having done so, in our  opinion, without making any matching provision in  the VAT Act, the overriding effect given to the  provisions   made   in   the   SEZ   Act   by   virtue   of  C/SCA/14856/2010 JUDGMENT section 22 of the Act cannot be whittled   down.  If the VAT Act and in particular, sections 5A and  9(5) also had a similar non­obstante clause, it  would   become   a   matter   of   legal   scrutiny   as   to  which one of the two non­obstante clauses would  prevail.   In   the   present   case,   we   are   not  confronted with such a situation. It was in this  background that the Supreme Court in the case of  Ketan Parekh (supra) had an occasion to consider  as   to   which   one   of   the   two   clauses,   namely,  Special   Court   (Trial   of   Offences   Relating   to  Transactions   in   Securities)   Act,   1992   and  Recovery   of   Debts   Due   to   Banks   and   Financial  Institutions Act, 1993, would prevail since both  contained non­obstante clauses.