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3.18 In such circumstances, referred to above, the writ applicant seeks to challenge the constitutional validity of Section 84A of the GVAT Act as well as the revision notice dated 01.09.2018.

Submissions on behalf of the writ applicant;

4. Mr. S.N.Soparkar, the learned senior counsel appearing with Mr. Uchit N. Sheth, the learned counsel appearing for the writ applicant vehemently submitted that Section 84A of the GVAT Act is without legislative competence and, therefore, is unconstitutional. Mr. Soparkar would submit that the constitution (101st Amendment) Act , 2016 introduced the Goods & Services Tax regime in India. It sought to replace all the indirect taxes, levied on the goods and services by the Union of India as well as the State Governments. It came to be a comprehensive indirect tax levy on manufacture,, sale or consumption of goods and services. The Act of 2016 inserted Articles 246A, 269A and 279A to the Constitution of India. It amended the provisions of Article 286 of the Constitution. It deleted Entry No.92 and 92C of List-I of the Seventh Schedule and inserted Entry 84 of List-I and Entry 54 of List-II of the Seventh Schedule. In tune with the constitutional amendments incorporated, the Central Goods & Services Tax Act, 2017, Integrated Goods and Services Tax Act, 2017 and the respective State Goods and Services Tax Act, 2017 were enacted. Mr. Soparkar further submitted that Article 246A of the Constitution of India makes the provision with respect to goods and services tax. It empowers the Parliament and the legislature of every State, subject to Article 246A(2) and notwithstanding anything contained in Articles 246 and 254, to make laws with respect to Goods and Services Tax imposed by the Union or the State. According to Mr. Soparkar, while the State Legislatures have been empowered to impose goods and service tax by the newly inserted Article 246A of the Constitution, the scope of Entry 54 has been drastically curtailed to six specific products. It is submitted that the State Legislature does not have the competence to enact any law under Entry 54 except the law concerning only the six specific products. It is vehemently submitted that despite such limited legislative competence, the State Legislature proceeded to enact Section 84A whereby the assessment related to the tax liability of all goods which were earlier covered under Entry 54 are now sought to be reopened. In other words, according to Mr. Soparkar, liability is sought to be imposed and enforced in respect of all goods though the competence of the Legislature is limited to the six products. In such circumstances, according to Mr. Soparkar, Section 84A of the Vat Act is beyond the legislative competence of the State Legislature.

5. According to Mr. Soparkar, the competence of the Legislature could be adjudged at the time of the enactment of the provision. If at the time of passing the law if the Legislature has the necessary competence, then such law can even be passed with retrospective effect covering the period when the Legislature did not have the competence. However, if at the time of the amendment, the Legislature does not have the competence, then the law cannot be enacted on the ground that the same is concerning the period when the Legislature had the necessary competence. In support of this submission, Mr. Soparkar seeks to rely on the decision of the Supreme Court in the case of A. Hajee Abdul Shukoor & Co. vs. State of Madras, (1964) 15 STC 719 (SC) (page 730).

16. Mr. Soparkar vehemently submitted that the impugned amendment leads to an absurd situation with unforeseeable consequences. In such circumstances, the same is manifestly arbitrary. Mr. Soparkar gave an example in this regard. By way of an illustration, he pointed out that a case in which Mr. X of Surat selling cotton yarn was assessed to tax for the year 2006-07 at the rate of 5% in March, 2010. Such assessment was not challenged by either side and the same attained finality. For the same period, issue was raised in the case of Mr. Y of Rajkot, demanding tax at the rate of 15% on the cotton yarn. Mr. Y succeeds before the Appellate Authority and the rate of tax is held to be 5%. The Department prefers appeal before the Tribunal and the same is pending. In the year 2025, the matter in the case of Mr. Y reaches the Supreme Court and holds that the applicable rate of tax on cotton yarn is 15%. In such circumstances, the impugned amendment will enable the authorities to revise in the year 2025 the assessment order passed in the case of Mr. X of Surat in the year 2010. This, according to Mr. Soparkar, is violative of Article 14 of the Constitution as it could be termed as manifestly arbitrary.

17. Mr. Soparkar also submitted that the impugned amendment is violative of Article 19(1)(g) of the Constitution of India as it adversely effects the fundamental right of free trade business.

18. Mr. Soparkar also submitted that Section 84A of the VAT Act is not a validating Act by any stretch of imagination. There was no levy which was held to be illegal by any Court which needs validation. The revision notices had been issued beyond the statutory period of limitation and those were quashed on such ground. Therefore, according to Mr. Soparkar, there is nothing to be validated by Section 84A of the Act. It could be said that a fresh liability is sought to be created by retrospectively extending the period of limitation.