2019 (2) TMI 300 – KERALA HIGH COURT – TMI – Constitutionality of section 174 of KGST Act and 101st Constitutional Amendment – Jurisdiction – power to enact section 174 of KGST Act – amendment to Entry 54 of List II – the assertion mainly comes from 101st Constitutional Amendment that is the attenuated or modified Entry 54 of List-II, the State List – Does the State have the legislative competence to enact section 174 and save the past taxation events-comprising levy, and recovery-when Entry 54, List II, which is the field of legislation empowering the State, stood omitted permanently with effect from 16.09.2017? – repeal of statutes – transitional provisions.
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Held that:- With the Entry 54 of List II unavailable for the State to incorporate Section 174 of KSGST Act, the whole saving mechanism vis-a-vis transactions before 16-09-2017 crumbles – it is fallacy on the petitioner's part to content that the State lacks the legislative power to enact Section 174 of KSGST Act. Article 2
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. ADVOCATE GENERAL GOVERNMENT PLEADER SRI. K.K. RAVINDRANATH ADDL. ADVOCATE GENERAL OTHER PRESENT : ADDL. AG K.K. RAVINDRANATH, SPI G.P. SRI. C.E. UNNIKRISHNAN, GP DR. THUSHARA JAMES., ADDL. SOLICITOR GENERAL SRI. K.M. NATRAJ., CGC., JAISHANKAR V. NAIR., SR. SC. SRI. SREELAL N. WARRIER JUDGMENT Introduction: The lure of lucre and the power of purse are too seductive to be resisted-be it for an individual, or an institution, or even a nation. Internationally, the rhetoric of freedom, fraternity, comity, and human rights apart, the nations are guided by naked economic compulsions. The latter part of the last century dedicated itself to dismantling walls around the nations; this century has begun, it seems, determined to raise a few. At the national level, this clamour for economic hegemony is felt acutely, at least, institutionally. 2. Granted, federalism is the pinnacle of a democracy s political maturity; sharing the power signifies its wisdom. But there, too, fiscal discipline demands
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owered to levy Service Tax. 4. Since the States had the legislative competence to impose a sales tax, under Entry 54, List Il, indiscriminate tax rates were applied by the respective States resulting in tax wars, tax holidays, deferrals, incentives, and concessions. Each State started to offer attractive schemes to invite investments into its States. When the Central levies such as the Customs Duty and the Excise Duties remained the same throughout the Country, Sales Tax rates varied among States. 5. To avoid a lopsided or imbalanced growth, the Union Government took steps, beginning with constituting Empowered Committees, to usher in further tax reforms. Besides that, then the Sales Tax, in its original form, was invariably a single tax levy, imposed at the first stage of the sale. The subsequent resale and its value addition were not captured to tax. This and other shortcomings made the Sales Tax give way to the Value Added Tax; the sale at every stage till the point of consumption g
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th the insertion of Article 246A of the Constitution and deletion of Entry 52 of List II in Seventh Schedule- there has been a realignment of legislative powers of the Union and the States. Now, Entry 54 stands modified. In its attenuated form, it denudes, according to the petitioners, from 16.09.2016, the State s legislative power to tax on those items now removed from that Entry. They insist that Section 19 of the CA Act allows interim or temporary continuation of all the Acts made earlier under the unamended Entry 54 only up to 16.09.2017. As a Case in point, the petitioners assert that the Kerala Value Added Tax Act has become a dead letter from 16.09.2017. 8. Section 174 of the Kerala Goods and Services Act, 2017, is a saving provision brought about by the State Legislature to save the transactions under the State s various pre-GST enactments, including the KVAT Act. About that provision, the petitioners, first, maintain that Section 19 of the CA Act has repealed all the State law
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rm 10DA. 11. But the Intelligence Officer (IB)-II, Thiruvananthapuram, issued to the petitioner notices under Sec 67 in the KVAT Act for the assessment years 2009-2010, 2010-2011 and 2011-2012. The grounds of the notices are not germane here, though the petitioner s objections to the notices are. Succinctly stated, the petitioner is accused of not maintaining the true and correct accounts, and that has led to evasion of tax. So the Intelligence Officer proposed penalty under Sec 67(1)(b) and (d) of the KVAT Act. The petitioner replied to the notices for AYs 2010-2011 and 2011-12 and produced material in defence. Yet the Intelligence Officer confirmed the proposal for imposing a penalty. Aggrieved, the petitioner challenged the penalty orders before this Court in W. P.(C) No.12648 of 2016. This Court admitted the Writ Petition and stayed the recovery of the penalty. 12. On parallel lines, the Assessing Authority sought the Deputy Commissioner s prior approval for cancelling the compound
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Section of the KVAT Act. WP (C) No. 11335 of 2018: 14. The Petitioner, a jeweler, is a dealer under the Kerala Value Added Tax Act. The State Tax Officer, the second respondent, inspected the petitioner s business premises in November 2012, seized some records, and, later, issued a notice. He directed the petitioner to produce books of accounts. The petitioner, instead, asked for the return of the seized records. But they were not returned. So the petitioner filed WP (C) No.25376 of 2012. The Court stayed further proceedings. 15. When the stay was in force, in March 2013, the second respondent issued a penalty Notice under section 67 (1) of the KVAT Act, proposing to impose penalties of ₹ 88,22,948/- and ₹ 40,99,06,936/- for the years 2010-11 and 2011-12 respectively. Reminded of the Court s restraint order in WP (C) No.25376 of 2012, the second respondent recalled those notices. Finally, in June 2013, the WP (C) No.25376 of 2012 was disposed of. And as nothing was heard u
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e Assessing Officer accepted all the returns filed and the tax paid, with no demur. so, the assessments for the years are deemed to have been completed under Section 21 of the KVAT Act. 19. But, recently, on 23.112018, the Assessing Officer served on the petitioner the pre-assessment notices under Section 25(1) of the KVAT Act 2003, proposing to assess an alleged escapement of turnover for all the above years. So the petitioner challenges those notices on the premise that the Assessing Officer has no jurisdiction to invoke the KVAT Act, for it stood repealed With the 101st Constitutional Amendment ( the CA Act ). WP No. (C) No. 40561 of 2018: 20. petitioner, an assessee, claims to have been filing proper returns periodically, besides paying tax. But on 05.122018 he received a notice for AY 2012-13 under Section 25(1) of the KVAT Act 2003. The petitioner, in this writ petition, maintains that as per the Amendment Act, the provisions of the KVAT Act could be enforced for one year after t
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tions has been filed. Those writ petitions may count up to a few thousands. But only a handful of advocates-about half a dozen-argued; the rest adopted those arguments. Shri Abhishek Manu Singhvi, the learned Senior Counsel, instructed by Shri A. Kumar, the counsel on record, led the arguments. He was admirably complemented by Shri Venkataraman, another learned Senior Counsel, instructed by Shri K.P. Abdul Azees and Shri Akhil Suresh. Then they were ably supplemented by Sri K.S. Hariharan, Sri Sukumar Nainan Oomen, and a few more counsel, well-informed and determined to press forward their clients cause. 24. All argued on the same theme-the constitutional validity of Section 174 of the KSGST Act. Then came the refutation, matching the petitioners counsel in erudition and expression, from Shri KM. Natarai, the learned Additional Solicitor General, instructed by Shri Jaishanker Nair, the learned Central Government Counsel; and Shri Ravindranath, the learned Additional Advocate General, a
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ed to exist. Instead, what reigns is the substituted Entry 54. Section 19 of the Amendment Act is the transitional provision, besides being the saving provision. Nothing from the pre-existing legislative regime saves itself from or transits across what is set out in Section 19-a sunset clause. First, Entry 54 abrogated, from 16.09.2016 the States have been denuded of the power of taxation. Second, the interim or transitional existence of the unamended Entry 54, if ever, could have survived only up to 16.09.2017, as per Section 19. Any judicial effort to save or resurrect the erstwhile Entry 54 beyond 16.09.2017 renders Section 19 of the Amendment Act otiose, meaningless, and insignificant. Section 19 of the Amendment Act itself provides for the repeal, for the savings, and for the consequences, too. so there remains no more power or authority to have a further repeal and saving, as provided-erroneously though-in Section 174 of the SGST Act. Pithily put, Section 174 of the SGST Act cann
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pply because repealing enactment itself provides explicitly for transition and saving. In other words, only in the absence of the repeal or saving is the General Clauses Act attracted. Section 24 of the General Clauses Act saves the subordinate legislation and applies if there are repeals and re-enactments. Here neither is present. So machinery provisions are not saved. Then follows the well-accepted proposition: there is no tax without machinery provisions. Respondent s: By the CA Act, the Parliament never intended that dealers or assessees should escape the tax network, letting the society or exchequer suffer. The Parliament has enacted the Goods and Services Tax (Compensation to States) Act, 2017, empowered by Section 18 of the Amendment Act, on the recommendation of the GST Council, though. This enactment is, however, does not derive its legitimacy from any legislative entry or field of legislation enumerated in the Central List. Similarly, Section 19 of the Amendment Act empowers
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SGST Act, 2017. The Legislature does not derive its power to legislate from the Entries in the three lists of the 7th Schedule; therefore, the substitution of an entry in any List of the 7th Schedule does not affect the State s lawmaking power. The Amendment Act is only prospective, and the constitutional amendment does not in any way deal with the past transactions or any rights and liabilities accrued. The provisions contained in Sections 173 and 174 of the State Act are not inconsistent with the provisions contained in the Amendment Act. On the General Clauses Act and Application: Every latter enactment which supersedes an earlier one or puts an end to a previous state of the law is presumed to intend the continuance of rights accrued and liabilities incurred under the superseded enactment. This interpretative presumption could be negated only if there were sufficient indications express or implied in the later enactment designed to obliterate the earlier state of the law. If the le
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States and the Union as the constituents have demarcated spheres of legislation and governance. With Clearly delineated legislative fields, neither can trespass upon the other s legislative territory-the residuary powers lying with the Union, though. The division of powers is zealously guarded in no other sphere than fiscal. Taxation as the backbone of a welfare nation, which India is; the legislative fields are as distinct, yet interconnected, as the spinal segments do. 27. That said, 101st Constitutional Amendment is the epoch-making federal feat unparalleled in constitutional democracies-almost. It is, I may say, a constitutional coup de grace delivered against the fiscal confusion compounded by conflicting taxation regimes. This amendment, perhaps, marks the crest of cooperative federalism. It has created even a constitutional institution-GST Council. 28. As constitutional democracies have gained experience, Utopian vision of justice has given way to utilitarian view. Material com
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s shifted from taxable event to destination-based taxation. It avoids the evil of cascading taxation or tax on tax trouble. So goes the motto: One Nation-One Market-One Tax. 31. A nascent enactment in a nebulous field of taxation will have many teething troubles. GST is no exception. In its path to perfection, GST has much dust to settle-legislatively and judicially. These are the days of confusion and cacophony: many views, many interpretations, and many jurisprudential mumblings. GST: The Origins: 32. Before its advent as a revolutionary indirect tax regime, Goods and Services Tax (GST) had been on the parliamentary anvil for more than a decade. Its need as a harmonised indirect tax, encompassing all goods and services was documented as early as in 2004. That year the Task Force on Implementation of the Fiscal Responsibility and Budget Management in its Report stressed the need. The first official announcement for a transition to GST, though, was made by the Government of India in 20
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echanism for a harmonious structure of GST that would not affect the federal fabric. 35. Then, with the deliberations between the Centre and States, aided by the Empowered Committee, the constitutional amendment process to usher in GST began. It resulted in the Constitution (One Hundred and Fifteenth Amendment) Bill, 2011 After that one got lapsed, came the 2014 Amendment Bill (as passed by Parliament). Passed on 8 September 2016, this Bill became the Constitution (One Hundred and First Amendment) Act, 2016 . 36. The GST Council, constituted in September 2016, is a constitutional institution comprising as its members the Finance Ministers of the Union and the SMteS3 including Union Territories with Legislatures. It has the authority to recommend to the Union and the States on various facets of GST, including Model GST laws, principles to determine the place of supply, levy of the tax, design of GST, dispute settlement, special provisions for a special category of States, and so forth.
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f goods or services as against the present concept on the manufacture of goods, or on the sale of goods, or on the provision of services. (ii) GST is based on the principle of destination-based consumption taxation as against the present principle of origin-based taxation. (iii) It is a dual GST with the Centre and the States simultaneously levying a tax on a common base. GST to be levied by the Centre is called Central GST(CGST) and that to be levied by the States called State GST (SGST). (iv) An Integrated GST (IGST) is levied on inter-state supply (including stock transfers) of goods or services. This shall be levied and collected by the Government of India, and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by Law on the recommendation of the GST Council. (v) Import of goods or services is treated as inter-state supplies and is subject to IGST, besides the applicable customs duties. (vi) CGST, SGST & IGST are levied
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(Rs.10 Lakh for special category States) would be exempted from GST. For small taxpayers with an aggregate turnover in a financial year up to 50 lakhs, a composition scheme is available. Under the scheme, a taxpayer shall pay tax as a percentage of his turnover in a State during the year without the benefit of Input Tax Credit. This scheme will be optional. (xiii) The list of exempted goods and services would be kept to a minimum, and it would be harmonized for the Centre and the States and across States as far as possible. (xiv) Exports would be zero-rated supplies. Thus, goods or services that are exported would not suffer input taxes or taxes on finished products. (xv) The credit of CGST paid on inputs may be used only for paying CGST on the output, and the credit of SGST paid on inputs may be used only for paying SGST. Input Tax Credit (ITC) of CGST cannot be used for payment of SGST and vice versa. In other words, the two streams of Input Tax Credit (ITC) cannot be cross-utilised
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les and Textile Products), (e) Additional Duties of Customs (commonly known as CVD), (f) Special Additional Duty of Customs(SAD), (g) Service Tax, (h) Cesses and surcharges, in so far as they relate to the supply of goods and services. 41. State taxes that get subsumed within the GST are: (a) State VAT, (b) Central Sales Tax, (c) Purchase Tax, (d) Luxury Tax, (e) Entry Tax (All forms), (f) Entertainment Tax and Amusement Tax (except those levied by the local bodies), (g) Tax on advertisements, (h) Tax on lotteries, betting and gambling, (i) State cesses and surcharges in so far as they relate to the supply of goods and services, 42. To have the whole GST system backed by a robust IT system, Parliament has set up the Goods and Services Tax Network (GSTN). It will provide front end services and will also develop back end IT modules for States who chose the same. Constitutional Amendment Acc An Overview: 43. As we shall see, the CA Act inserts, repeals, and amends certain parts of the Con
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ntre and the States as per the GST Council s recommendations. Under the GST, if the Centre collects the tax, it assigns State s share to the State concerned; on the other hand, if the State collects the tax, it assigns the Centre s share to the Centre. Those proceeds will not form a part of the Consolidated Fund of India, so it avoids having an Appropriation Bill passed every time a deposit is made. 46. And Article 279A provides for the constitution of a GST Council, besides prescribing its powers and positions. Earlier, Article 268A dealt with the service tax levied by Union and collected and appropriated by the Union and States. Now, this Article stands repealed. As to the amended constitutional provisions, Article 248 confers residuary legislative powers on Parliament. Now this provision is subject to Article 246A of the Constitution. Article 249, amended through Section 4 of the Act, now stands changed so that if Rajya Sabha approves the resolution with 2/3rd majority, Parliament w
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e Schedules, the Sixth Schedule has been amended to give power to the District Councils to levy and collect taxes on entertainment and amusements. And the Seventh Schedule has also been amended. In the Union List, petroleum crude, high-speed diesel, motor spirit (petrol), natural gas, and aviation turbine fuel, tobacco and tobacco products have been removed from the ambit of GST and have been subjected to Union jurisdiction. Newspapers advertisements, and Service Tax have been brought under GST (entries 84, 92, 92C). Similarly, in the State List, petroleum crude, high-speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel, and alcoholic liquor for the human consumption have been included, unless the sale is in the course of inter-State or International trade and commerce. Entry tax and Advertisement taxes have been removed. Taxes on entertainment are only to be included to the extent of that imposed by local bodies. (entries 52, 54, 55, 62)[5] 49. To
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y 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. 52. Until the Constitution Suffered its 101st Amendment-that is, The Constitution (One Hundred & First Amendment) Act, 2016- the Union and the State Governments have been collecting, as is relevant here, the indirect taxes under dearly demarcated legislative fields as shown in the Seventh Schedule. Then, there were 97 Entries in List-I, 66 in List-II, and 47 in List-III, not all those dealings with the Legislature s taxing power though. In List I, principal among the Entries concerning taxes are Articles 41, 42, 83, 84, 87 to 92, 92A, 92B, 92C, 97; and in List II are Entries 26, 45, 47 to
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levied by the Union but collected and appropriated by the States Amended Additional Duties of Excise (Medicinal and toilet preparations) Stand subsumed into GST. 268A Service tax levied by Union and Collected and appropriated by the Union and the States: Omitted Service tax has been subsumed into GST. So Entry No. 92C of List-I too stands omitted. 269 Taxes levied and collected by the Union but assigned to the States Amended The arrangement under Article 269 is subjected to Article 269A, a new provision. 269A Not existing Inserted Levy and collection of goods and services tax during inter-State trade or commerce. The power to levy and collect GST during inter-State trade or commerce is vested with the Government of India. The taxes so collected will be apportioned between the Union & the States in manner prescribed. 270 Taxes levied and distributed between the Union and the States. Amended Now Article 268A an Entry No. 92C of List-I stand omitted; so service tax is subsumed under G
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tract GST. 366. Definition Inserted The definitions have been added to the Constitution: (12A) Goods and Services Tax; (26A) Services; and (26B) State. 368 Power of Parliament to amend the Constitution and procedure therefore Amended As regards provisions and laws regarding GST Council, Parliament has been vested with the power to amend the Constitution. Sixth Schedule Provisions on the Administration of Tribal Areas in the States of Assam, Meghalaya, Tripura, and Mizoram 8. Powers to assess and collect land revenue and to impose taxes. Amended It concerns powers to assess and collect land revenue and to impose taxes in the Tribal Areas of a few States. Seventh Schedule List I : Barring those excluded, the Union could levy excise duty on all other goods, including tobacco, manufactured or produced in India. The excluded ones are these: (a) alcoholic liquors for human consumption; (b) opium, Indian hemp, and other narcotic drugs and narcotics, but including medicinal and toilet preparat
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peed diesel, motor spirit (petrol), natural gas, aviation turbine fuel, and alcoholic liquor for human consumption. But excluded is the sale in the course of inter-State trade or commerce. (Now the sale or purchase of goods stands subsume by GST) Entry 55 Taxes on advertisements other than advertisements published in the newspapers and advertisements broadcast by radio or television. Omitted Taxes on advertisements other than advertisements broadcast by radio or television has also been subsumed into GST. Entry 62 Taxes on luxuries, including taxes on entertainments, amusements, betting, and gambling. Amended (a) Taxes on Luxury betting, and gambling have been subsumed into GST. (b) Right to levy Tax on entertainments and amusements has been restricted to Panchayats, municipalities, Regional Councils, and District Councils. The State Enactments: 54. In the above background, the States have enacted the respective State Goods and Services Tax Acts. These laws, among Other things, (i) Car
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t in respect of goods included in entry 54 of the State List of the Seventh schedule to the Constitution including the Goods to which the Kerala General Sales Tax Act, 1963 (15 of 1963) is applicable as per the provisions of the Kerala Value Added Tax Act, 2003 (30 of 2004); (ii) the Kerala Tax on Entry of Goods into Local Areas Act, 1994 (15 of 1994); (iii) the Kerala Tax on Luxuries Act, 1976 (32 of 1976); and (iv) the Kerala Tax on Paper Lotteries Act, 2005 (20 of 2005) (hereinafter referred to as the repealed Acts) are hereby repealed. (2) The repeal of the said Acts and the amendment of the Acts specified in section 173 (hereinafter referred to as such amendment or amended Act , as the case may be) to the extent mentioned in sub-section (1) or section 173 shall not,- (a) revive anything not in force or existing at the time of such amendment or repeal; or (b) affect the previous operation of the amended Acts or repealed Acts and orders or anything duly done or suffered thereunder;
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erification (including scrutiny and audit), assessment proceedings, adjudication and other legal proceedings or recovery of arrears or remedy may be instituted, continued or enforced, and any such tax, surcharge, penalty, fine, interest, forfeiture or punishment may be levied or imposed as if these Acts had not been so amended or repealed; (f) affect any proceedings including that relating to an appeal, revision, review or reference, instituted before, on or after the appointed day under the said amended Acts or repealed Acts and such proceedings shall be continued under the said amended Acts or repealed Acts as if this Act had not come into force and the said Acts had not been amended or repealed. (3) The mention of the particular matters referred to in section 173 and sub-sections (1) and (2) shall not be held to prejudice or affect the general application of section 4 of the Interpretation and General Clauses Act, 1125 (Act VII of 1125) with regard to the effect of repeal. (4) The K
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Jha in his illuminating Judicial Review of Legislative Acts[7] enumerates five forms of unconstitutionality: (i) Legislative incompetence arising out of the distribution of powers; (ii) a delegation of essential legislative functions by the Legislature to the Executive; (iii) violation of the Fundamental Rights guaranteed in Part III of the Constitution; (iv) violation of other constitutional restrictions, prohibitions, and the limitations affecting legislative competence and jurisdiction, and (v) infringement of the principles of natural justice. While determining the constitutionality of a provision or an Act, the Court looks at these aspects: (a) Has the Legislature been constitutionally empowered to pass the legislative Act? (b) Has the legislative act got the territorial nexus? (c) Are there any other connotational constraints or limitations which put fetters on the power of the Legislature?[8] 58. In State of Bihar v. Bihar Distillery Ltd, JT 1996 (10) SC 854 = 1996 (12) TMI 383
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t in Bhanumati v. State of UP [AIR 2010 SC 3796] = 2010 (5) TMI 783 – SUPREME COURT OF INDIA, like a phonographic recorder, but he must act as an interpreter of the social context articulated in the legal text. The Judge must be, in the words of Justice Krishna Iyer, "animated by a goal-oriented approach" because the judiciary is not a "mere umpire, as some assume, but an active catalyst in the Constitutional scheme". Then, referring to Bihar Distillery Ltd., the Court invokes Lord Denning s observations in Seaford Court Estates Ltd Vs. Asher[1949 (2) KB 481]: the job of a Judge in construing a statute must proceed on the constructive task of finding the intention of Parliament and this must be done (a) not only from the language of the Statute but also (b) upon consideration of the social conditions which gave rise to it, (c) and also of the mischief to remedy which the statute was passed; and if necessary, (d) the Judge must supplement the written word to give for
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the Constitution coming into force. For to hold that these proceedings were affected would amount to treating the Constitution as retrospective. 62. State of Orissa v. M.A. Tulloch and Co.[AIR 1964 SC 1284,] = 1963 (8) TMI 42 – SUPREME COURT OF INDIA, after quoting Keshavan Madhava Menon, elaborates on the doctrine of repugnancy: the test of two enactments containing contradictory provisions is not, however, the only criterion of repugnancy. If a competent legislature with a superior efficacy expressly or impliedly evinces its legislative intention to cover the whole field, the enactments of the other legislature whether passed before or after would be overturned on the ground of repugnance. 63. Every statute is, according to Kesavan v. State of Bombay[AIR 1951 SC 128] = AIR 1951 SC 128, prima facie prospective unless it is expressly or by necessary implications made to have retrospective operation. There is no reason why this rule of interpretation should not be applied for interpret
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on the same entry, as is held in Southern Petrochemical Industries Co. Ltd. v. Electricity Inspector.[(2007) 5 SCC 447] = 2007 (5) TMI 591 – SUPREME COURT Federal Features: Article 246A – A Unique Federal Feat: 66. The first illustration to this effect is Article 246-A which makes a special provision for GST. By way of Article 246-A, the Constitution Amendment Act creates (a) a new legislative field conferring, (b) outside the three Lists of the Seventh Schedule, (c) concurrent powers on both Parliament and the State Legislatures to enact on the same subject matter at the same time. Thus, there is a fundamental change to the scheme of legislative relations between the Union and the States by the CA Act: Article 246-A.[9] 67. To exemplify, Article 246-A does change the legislative distribution of powers; however, it does not upset the delicate balance between the Union and the States. Instead, it carries out the function of cross-empowerment. On the one hand, it enables the Union, acco
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, points out the Supreme Court in Bimolangshu Roy (Dead) v. State Assam, [AIR 2017 SC 3552] = 2017 (7) TMI 1260 – SUPREME COURT OF INDIA are designed to define and delimit the respective legislative areas of the Union and the State Legislatures. Bimolangshu Roy emphasises that they neither impose any restrictions on the legislative power nor prescribe any duty for the exercise of the legislative power in any particular manner. In the context of that case, it holds that the language of the entries should be given the widest scope of which their meaning is fairly capable. Yet it also cautions that the rule of widest construction would not enable the legislature to make a law relating to a matter which has no rational connection with the subject-matter of an entry. 69. When the vires of enactment are challenged, the court primarily presumes, notes Bimolangshu Roy, the constitutionality of the statute, by putting the most liberal construction upon the relevant legislative entry so that it
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us decisions of the Supreme Court of America in the context of American Constitution. A principle which is too well settled in all the jurisdictions where a written Constitution exists. The US Supreme Court also recognised that the Congress would have the authority to legislate with reference to certain matters because 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. In substance, the power to make the legislation flows from various sources: (1) express text of the Constitution; (2) by implication from the scheme of the Constitution; and (3) as an incident of sovereignty. 71. In Synthetics and Chemicals Ltd. v. State of U.P.,[ (1990) 1 SCC 109] = 1989 (10) TMI 214 – SUPREME COURT OF INDIA the Supreme Court has held that the power to legislate does not flow from a single Article of the Constitution
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stipulates the competence of the Parliament and the state legislatures on the various fields of legislation. Articles 249, 250 and 252 contain provisions which enable the Parliament to legislate regarding any matter enumerated in List II in the exigencies specified in those Articles. The Scheme of Entries, such as 52 and 54 and the corresponding Entries in the List-II, Bimolangshu Roy underlines, is nothing but another instance of special arrangement akin to the one made in Articles 249, 250 and 252. To conclude, Bimolangshu Roy reminds us that a great deal of schematic examination of the entire Constitution is essential for us to interpret the scope of each Entry in the three Lists of the Seventh Schedule. And no rule with a universal application on interpreting all entries in the 7th Schedule can be postulated. 74. If legislation purporting to be under a particular legislative entry is assailed for lack of legislative-competence, the State can seek to support it based on any other e
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preme Court has observed that the power of the State Legislature to enact a law to levy tax by reference to List II of the Seventh Schedule has two limitations: one, arising out of the entry itself, and the other, flowing from the restriction embodied in the Constitution. Temporary Statutes: 76. Statutes, as we know, are of two types: perpetual and temporary. By default, mostly the statutes are perpetual, and a very few are temporary. A temporary statute will have its duration specified or fixed. In other words, it ceases to exist by efflux of time; it has thus a shelf life, so to say. Of course, a statute can be transitory or transitional. One ends the legislative mandate by a particular date, and the other lets that mandate move from one state of affairs to another. But once a later statute repeals the earlier one, the one repealed cannot be treated as a temporary statute merely because it has a transitional provision with a time-frame. 77. Often the legislature itself enacts a savin
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aken upon it, and it ceases to have any further effect. 79. The difference between the effect of the expiration of a temporary Act and the repeal of a perpetual Act is pointed out by Parke B. in Steavenson v. Oliver:[ (1841) 151 E. R. 1024] There is a difference between temporary statutes and statutes which are repealed; the latter (except so far as they relate to transactions already completed under them) become as if they had never existed; but with respect to the former, the extent of the restrictions imposed, and the duration of the provisions, are matters of constructions. And Lord Abinger C.B., in a concurrent judgment, said: It is by no means a consequence of an Act of Parliament expiring that rights acquired under it should likewise expire. 80. If an Act contains a proviso that it is to continue in force only for a certain specified time, it is, according to Craies[10], a temporary Act. According to the same learned author, Temporary Acts have these peculiarities: Commencement:
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s only for a specified time, and such a statue expires on the expiry of the specified time unless it is repealed earlier. Simply because the purpose of a statute, as mentioned in its preamble, is temporary, the statute cannot be regarded as temporary when no fixed period is specified for its duration. The duration of a temporary statue may be extended by a fresh statute or by power conferred under the original statute. 83. G.P. Singh also observes that when a temporary Act expires, section 6 of the General Clauses Act, 1879, which in terms is limited to repeals, has no application. The effect of expiry, therefore, depends upon the construction of the Act itself. The leading authority on the point, according to the learned author, is the dicta of Park B in Steavenson. G. P. Singh s view accords with Craies . 84. I must acknowledge that the petitioners counsel have laid much emphasis on the sunset clause and nuanced their arguments to drive home their contention that Section 19 is a suns
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by a sunset clause, differs from repeal. Second, if a clause prescribes that a statute should expire from a certain date, then it is reasonable to assume that it is not valid unless re-enacted. But in practice, there are exceptions in each instance. To begin with, the expiration, or sunset , of an act has the same consequences as if it were repealed. Yet, as Broom remarks, there is a difference between statutes which expire and statutes which are repealed. Although the latter become as if they had never existed (except so far as they relate to transactions already completed under them), yet with respect to the former, the extent of the restrictions imposed, and the duration of the provisions, are matters of construction [14]. 87. Indeed, there are many sunset clauses, such as the entire sunset clause compared to the sectional ; the conditional compared to the unconditional ; the direct compared to the indirect . Confining our discussion to the issue on hand, we may note that a sunset c
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re the expiration of an act, depends on various factors which influence its interpretation. These marginal differences make such clause a distinctive tool in the legislative drafting process. [15] 89. Under the heading Rule of Law and Sunset Clauses , A.E. Kouroutakis observes, there are two distinct categories of temporary laws in times of normality. First, laws adopted in times of crisis; their force is extended in times beyond the exigency. And second are laws enacted in times of normality. Considering Justice Holmes s dicta, Vermeule characterised the invalidation of legislation with sunset clauses before the expiry date as ex post sunsetting , in contrast to the ex ante sunsetting of legislation, which occurs when legislation sunsets due to the lapse of time.[16] (a) Interim Constitutions: 90. In the constitutional context, affirmative action policies aim to regulate and correct a given deficiency; as soon as the deficiency is eliminated, such policies have no reason to stay in fo
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nterim Constitution . It has a two-year sunset clause. (b) Sunset Clauses and Constitutional Design: 92. A.E. Kouroutakis, in the chapter named as above, quotes a very interesting stance Jefferson has taken. The third American President, regarded as the US progenitor of sunset laws, in the pre-constitutional days, was concerned with the perpetuity of the constitution. He suggested to Madison about sunsetting on any statute after nineteen years. According to him, no society can make a perpetual constitution or even a perpetual law. The earth belongs always to the living generation. […] Every constitution, then, and every law, naturally expires at the end of 19 years. If it be enforced longer, it is an act of force and not of right. [17] (c) Pragmatic Injustice and Sunset Clauses: 93. Finally, we may consider the sunset clauses in the context of pragmatic injustice. Pragmatic injustice, according to Roscoe Pound[18], exists when the reality is far from the ideal, which is prescrib
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of Punjab v. Mohar Singh[AIR 1955 SC 84] = 1954 (10) TMI 38 – SUPREME COURT OF INDIA. Section 6 of the General Clause Act, according to them, applies only to repeals and not to omissions. It is a well-settled principle, according to them, that invocation of Section 6 of the General Clause Act is available only with repeal and not with omissions. Transitional Provisions: 96. When one legislative system ends and another begins, it is commonly necessary to enact special rules for actual cases that straddle the transaction. Sometimes the old law is continued for transitional cases, and sometimes the new law is applied; in either event, modifications may be necessary. In other words, as Craies observes in his treatise On Legislation,[19] legislation does not necessarily have effect as law immediately after being passed or made. It may take effect under these circumstances: (1) immediately upon being passed or made; (2) at a point in the future that is specified upon the legislation being p
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ovision in the legislation is to preserve or save a law, a right, a privilege, or an obligation otherwise repealed or ceased to have an effect. 98. The function of a transitional provision, Thornton[22] adds, is to make special provisions for applying legislation to the circumstances which exist when that legislation comes into force. Both terms are loosely used with overlapping meanings; there is little or no advantage in seeking to pursue a water-tight distinction between them. But the distinguishing criterion is the focus of the intent of the drafter: if time is the focus, then the drafter must title and express the provision as transitional; if the focus is on exception, then the drafter must title and express the provision as a saving. At the end of the day, the drafter s pen will identify the nature of the provisions, and there is a great benefit in doing so clearly and accurately. Lumping transitional and savings provisions in a single section is never a good idea. 99. The learn
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so far as an instrument made or having effect as if made, or any other thing done or having effect as if done, under any enactment repealed by this section, could have been made or done under a corresponding provision of this Act, it shall, if effective immediately before the coming into force of this Act, have effect subsequently as if it had been made or done under that corresponding provisions. Saving Clause & Legal Proceedings Under an Expired Statute: 102. A question often arises, as it does here, about the legal proceedings about matters connected with a temporary Act: whether they can be continued or initiated after the Act has expired. The answer to such a question, G. P. Singh observes, again depends upon constructing the Act as a whole. The Legislature very often enacts in the temporary Act a saving provision similar in effect to section 6 of the general Clause Act, 1897.[24] 103. The question before the Supreme Court in Tata Iron and Steel Co. was whether because of the
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esulting from the provisions of the temporary Act and their character may have to be regarded as determinative of whether the said right or obligation is enduring or not. 105. We have, first, considered what a temporary statute is, amply aided by Craies s and G. P. Singh s commentaries. The next question is, which is the temporary statute here? The Constitutional Amendment Act has affected a few central enactments, as well as a few state enactments. Then, can we call them all -that is, the repealed ones or those getting repealed- temporary statutes? For any provision of any law relating to tax on goods or services or on both inconsistent with the Amendment Act cannot last beyond one year? Of course, before that one year, those inconsistent laws can be amended to render them compatible or altogether repealed. I am afraid the answer is a No . 106. We will also examine a converse situation. Sometimes, a repealing statute, the latter one, can be a temporary one. Again, Section 6(a) of the
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previous one, repeals that previous one either expressly or impliedly. Now, it is time we examined what repeal is and how it affects these cases before us. Repeal of Statutes: 108. We must acknowledge that a total repeal obliterates statutes, except as to transactions past and closed. When an Act of Parliament is repealed, said Lord Tenterden in Surtees v. Ellison, it must be considered (except as to transactions past and closed) as if it had never existed. That is the general rule. Tindal C.J. stated the exception more widely. He said, The effect of repealing a statute is to obliterate it as completely from the records of the Parliament as if it had never been passed; and it must be considered as a law that never existed except for the purpose of those actions which were commenced, prosecuted and concluded whilst it was an existing law . 109. To decide whether any particular transaction is affected by the repeal of an Act, it is necessary to ascertain whether the transaction in questi
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Partial repeal, however, does not entail such drastic consequences as we would have on the total repeal. In fact, we need to look at the repealed portion of an Act to see what remains of the Act and what it means. For an Act of Parliament, which at one time had one meaning, would by the repeal of some clause in it have some other meaning. 112. That said, we must also acknowledge that if a right has once been acquired under some statute, that right will not be taken away by the repeal of the statute under which it was acquired. 113. Therefore, more often than not, when an Act is repealed, a clause is expressly engrafted in the repealing Act that this repeal shall not affect any right or liability acquired, accrued, or incurred. But the rule of law has been well entrenched on this point; so such a clause is apparently unnecessary, and only inserted ex abundanti cautela. 114. Succinctly stated, repeal is not a matter of mere form but one of substance, depending upon the legislative intent
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apply the rule to particular cases must, of necessity, expound and interpret the rule. If two laws conflict with each other, the Court must decide on the operation of each. That is the assertion of Chief Justice Marshall in Marbury v. Madison. Again he famously declared in McCulloch v. Maryland, We must never forget that it is a constitution we are expounding. 116. To begin with, generally, the predominant approach of the Indian Judiciary, according to M.P. Jain[25], was positivist; that is, to interpret the Constitution literally and to apply to it more or less the same restrictive canons of interpretation as are usually applied to interpreting ordinary statutes. To some extent, the Constitution itself incorporates the principle of statutory construction. Article 367 provides that the General Clauses Act, 1897, shall apply for interpreting the Constitution as it applies for interpreting legislative enactments. The courts have held that not only the general definitions in the General
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, the Constitution has to be interpreted, the learned author observes, like a statute. Indeed, he acknowledges that since 1973 the Supreme Court has been struggling to shatter the shackles of statutory interpretation to jump into the freedom of purposive interpretation . For this interpretative freedom, the Supreme Court has invoked the doctrine that the Constitution is a statute of a special kind-that is, to govern the country-and should therefore be liberally interpreted, having regard to its object. 119. The petitioners counsel have quoted a profusion of precedents on the interpretative impact of General Clauses Act vis-a-vis the constitutional provisions. The Constitution (One Hundred and First Amendment) Act, 2016 could have adopted the language, they contend, similar to Section 174 KSGST Act, 2017, and Section 6 of the General Clauses Act. But it has deliberately and consciously not done so because it has not intended the KVAT Act to operate beyond 16.09.2017. 120. Section 6 of t
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foresaid; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the repealing Act had not been passed. 121. Indeed, we can refer to the precedents on Section 6 of the General Clauses Act to appreciate how the repeal of an enactment affects the pending cases or proceedings under that repealed enactment. In Ambalal Sarabhai Enterprises Ltd. v. Amrit Lal & Co., [(2001) 8 SCC 397] = 2001 (8) TMI 1368 – SUPREME COURT the Supreme Court has observed that as a general rule, in view of Section 6, the repeal of a statute, which is not retrospective in operation, does not prima facie affect the pending proceedings which may be continued as if the repealed enactment were still in force. In other words, such repeal does not affect the pending cases which would be decided as if the enactment were not repealed. In fact, when a lis commences, all rights and obligations of the parties get c
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question of any principle in common law or otherwise applying on the lines incorporated in Section 6 of the General Clauses Act. So holds the Supreme Court in Kolhapur Cane Sugar Works Ltd. v. Union Of India.[1986 (24) ELT 205 Del.] = 1985 (11) TMI 137 – DELHI HIGH COURT In Perspective: 123. Most cases concern the Kerala Value Added Tax Act (KVAT); so we will examine the chronology of statutory events in the backdrop of that Act. With effect from 01.04. 2005 came KVAT Act into force. Then, on 08.09.2016 the CA Act was enacted. But it came into effect only from 16.09.2016. Section 19 of the CA Act saved a host of statutes holding field by then; those enactments include the KVAT Act. And the saving was for one year: 16.09.2017. 124. On 22.06.2017, the State of Kerala issued the Kerala State Goods and Services Tax Ordinance; it has heralded the new State GST regime. On 16.09.2017 came the Kerala State Goods and Services Tax Act, 2017 ( KSGST Act ). It has replaced the KSGST Ordinance. On
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eal. In other words, a saving clause is generally used in a repealing act to preserve rights and claims that would otherwise be lost. 127. Benion in his Statutory Interpretation[27] defines a saving as a provision the intention of which narrows the effect of the enactment to which it refers so as to preserve some existing legal rule or right from its operation . According to the learned author, a saving resembles a proviso, except that it has no particular form. A saving often begins with the words Nothing in this [Act shall … . A saving may be qualified or conditional. Indeed, a saving is taken not to be intended to confer any right which did not exist already. 128. The saving clause, according to Crawford[28], is used to exempt something from immediate interference or destruction. It is generally used in repealing statues to prevent them from affecting rights accrued, penalties incurred, duties imposed, or proceedings started under the statute sought to be repealed. Its positi
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t the legislative power of the various late legislatures, by the enactment of irrepealable legislation. 130. A saving, to me, is a device that preserves accrued, acquired rights and incurred liabilities under a statute that no longer exists. If the new statute that repeals an old one contains no saving clause, General Clauses Act steps in; Section 6 plays the role of a protector of the rights and liabilities under the repealed act. 131. Here I must observe that Section 19 is not a saving clause; any saving clause starts to operate from the day the previous Act is dead. Here, the CA Act has allowed various enactments-those that contradict it-to coexist. Here, the repeal did not take place on 16.09.2016, when the CA Act came into force, but on 16.09.2017, when the one-year period ended. Saving Clause, in fact, if available, was needed from then on, not before. Indeed, Section 19 of the CA Act saves nothing beyond 16.09.2017. 132. Legislative power, to begin with, inheres in and vests wit
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has the exclusive power to make laws on any matter enumerated in List II (State List). Besides, under Article 245(4) of the Constitution, Parliament has the power on any matter for any part of the territory of India not included in a State. 134. The CA Act examined, we can notice that from 16.09.2016, Article 246 stood amended and modified in its operation; Article 246A was introduced. Section 2 of the CA Act signifies a drastic constitutional shift in the division of legislative powers: instead of division, it fosters amalgamation. Article 246A has no schedules. 135. And the scheme of the CA Act further examined, Entry 54 of List II stands substituted. So comes the assertion from the petitioners that Entry 54 abrogated (it is not, though), the States have been denuded of the power of taxation from 16.9.2016 on the items that stand deleted. For them, the interim or temporary continuation is only up to 16.09.2017, as per Section19 of the CA Act. They also argue that if the State wants t
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that now stand affected by the CA Act. It has brought them in harmony with the Goods and Services Tax regime. On the other hand, Section 174 repealed and saved certain statutes. Let us see which have been amended and which repealed: Amended U/S.173 Repealed through S.174 1. Kerala Value Added Tax Act, 2003 2.Kerala Finance Act, 2011 3. Kerala Finance Act, 2013 4. Kerala General Sales Tax Act, 1963 5. Kerala Surcharge on Taxes Act, 1957 6. Kerala Panchayat Raj Act, 1994 7. Kerala Municipality Act, 1994 1. Kerala Value Added Tax Act, 2003 2. Kerala Tax on Entry of Goods into Local Areas Act, 1994 3. Kerala Tax on Luxuries Act, 1976 4. Kerala Tax on Paper Lotteries Act 139. We can see the KVAT Act, the focal enactment for our discussion, finds a place in the table on both sides: amendment and repeal. The same enactment could not have been amended and repealed simultaneously; if so, it proves the idiom have the cake and eat it too. We can either keep the cake or eat it; so is the case wit
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States must repeal them. And they were given one year for achieving this. If the States do neither, those inconsistent acts stand repealed. 142. Here, the States acted; they amended a few inconsistent Acts. They also repealed a few more. As with the KVAT Act, the repeal, if it were, has not resulted in its abrogation or annihilation. So the operation of the so-called sunset clause (as provided in Section 19) has not denuded the State s power to enforce the KVAT Act in its amended form. The Act remained, with its remit reduced, though. Thus goes out of reckoning the petitioners another assertion: that with the repeal of the enactments, the procedural mechanism has disappeared. It has not. The prospectivity of the amendment undisputed, what remains to be examined is the State s power to save what had happened before the CA Act came into force or, more precisely, until one year after that Act came into force. Indeed, the CA Act allowed the State Acts in the same legislative field to coexi
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ncluding scrutiny and audit), assessment proceedings, adjudication, and any other legal proceedings or recovery arrears or remedy in respect of any such tax, surcharge, penalty, fine, interest, right, privilege, obligation, liability, forfeiture or punishment, as aforesaid, and any such investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and other legal proceedings or recovery of arrears or remedy may be instituted, continued or enforced, and any such tax, surcharge, penalty, fine, interest, forfeiture or punishment may be levied or imposed as if these Acts had not been so amended or repealed. 145. Collaterally it follows that all the judicial and quasi- judicial proceedings arising from the above contingencies, too, stand saved. 146. Of course, in most cases, the question is, as the petitioners put it, whether Section 174 (2) (a) revives the KVAT Act, 2003 for the authorities to issue notices under that Act beyond 16.09.2017. The p
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right, he can take advantage of sub- section (c) of Section 6. That sub-section, holds Ambalal Sarabhai Enterprises, refers to "any right", which need not be a vested right, but can be a mere accrued right. To be explicit, the words 'any right accrued' in Section 6(c) is wide enough to include landlord's right to evict a tenant in case proceeding was pending when repeal came in. I am afraid Ambalal Sarabhai Enterprises does not help the petitioners. Statutory Changes: the Impact on Taxation-a Sovereign Power: (a) Levy, Assessment, and Collection: 149. Time and again, Courts have held that tax imposition will encompass all the three elements: levy, assessment, and collection. A mere Legislation to tax cannot result in fructifying a tax imposition. In other words, for a tax to be imposed, it requires a taxable event to trigger the levy and a taxable person to discharge it. 150. Lord Dunedin pointed out in Whitney v. Inland Revenue Commissioners[[1926] A.C. 37] that
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atory for levy, assessment, and collection, the petitioners assert, to have been completed before 15.09.2017, for any VAT issues under the pre-GST regime lost their relevance beyond 30.06.2017. 152. In Somaiya Organics (India) Ltd. and Ors. vs. State of UP [AIR 2001 SC 1723] = 2001 (4) TMI 84 – SUPREME COURT OF INDIA, the case concerns U.P. Excise Act, 1910. The question to be considered was this: the vend fee, though levied under an appropriate state enactment, was not collected when that enactment was in force. It was prospectively declared ultra vires. Once the source of power disappeared, can the authorities collect the vend fee levied when the act was in force? The Supreme Court has held that the vend fee levied but not collected previously cannot be collected then. 153. In Manattitillah Krishnan Thangal v. State of Kerala,[AIR 1971 Ker 65 (FB)] = 1970 (4) TMI 166 – KERALA HIGH COURT this Court has held that the content of a valid law under Article 265 is that it should provide fo
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restriction within the meaning of Article 19(5). An imposition of tax which in the absence of prescribed machinery and the prescribed procedure would partake of the character of a purely administrative affair can, in a proper sense, be challenged as contravening Article 19(1) (f). 154. In Supreme-Court-Advocates-on-Record Association v. Union of India[(2016) 5 SCC 1] = 2015 (10) TMI 2687 – SUPREME COURT, a Constitution Bench of the Supreme Court has held that the word substitution necessarily or always connotes two severable steps, that is to say, one of repeal and another of a fresh enactment even if it implies two steps. Indeed, the natural meaning of the word substitution is to indicate that the process cannot be split up into two pieces like this. If the process described as substitution fails, it is totally ineffective to leave intact what was sought to be displaced. That seems to be the ordinary and natural meaning of the words shall be substituted. 155. On facts, the Court has h
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tabhai Jethabhai Patel & Co. v. Union of India[AIR 1962 SC 1006] = 1961 (12) TMI 1 – SUPREME COURT OF INDIA, to follow that it could only be imposed by a law which is valid. The law should be (1) within the legislative competence of the legislature; (2) the law should not be prohibited by any particular provision of the Constitution such as, for example, Arts. 276(2), 286 and so on; and (3) the law or its relevant portion should not be invalid under Art.13 being repugnant to those freedoms which are guaranteed by Part III of the Constitution. 158. In Commissioner of Income Tax, Bhopal vs. Shelly Products[(2003 )5 SCC 461] = 2003 (5) TMI 4 – SUPREME COURT, the Tribunal nullified the assessment orders on the ground of jurisdiction. On facts, it was found that the authorities could not frame a fresh assessment. Then the question was whether the respondents could have the refund of income tax paid by them by way of advance tax and self- assessment tax. The Court, first, has held that l
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e. Then, the question is, have GST laws under the CA Act subsumed all the State tax enactments, which earlier drew their legitimacy from the unamended Entry 54? (b) Repeal and Omission: 160. Clause 17 of the Constitution (One Hundred and First Amendment) Act has omitted, the petitioners maintain, Entries 92, 92C of List I and Entries 52, 55of List II and substituted Entry 84 of List I and Entries 54 and 62 of List II. 161. In Rayala Corporation (P) Ltd. and Ors., v. Director of Enforcement, New Delhi[(1969) 2 SCC 412] = 1969 (7) TMI 109 – SUPREME COURT OF INDIA, the Supreme Court has held that Section 6 only applies to repeals and not to omissions. Granted, Rayala Corporation, a Constitution Bench decision, has not elaborated on how repeal and omission differ, but it has, nevertheless, laid down the law that repeal differs from omission and Section 6 of the General Clauses Act would apply only for repeal and not omissions . Kolhapur Cane Sugar Works Ltd. v. Union of India[(2000) 2 SCC
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st largely depends on the savings applicable. Sometimes, a particular provision in a statute may be omitted, and in its place another provision dealing with the same contingency is introduced. Moreover, that can be without a saving clause in favour of pending proceedings. Then, as can reasonably be inferred, the legislative intention is that the pending proceedings shall not continue, but fresh proceedings for the same purpose may be initiated under the new provision. 164. Indeed, in Shree Bhagwati Steel Rolling Mills v. CCE[(2016) 3 SCC 643] = 2015 (11) TMI 1172 – SUPREME COURT, a two-Judge Bench though, has elaborated on not only on deletion and omission but also on repeal . It has cited Halsbury's Laws of England the Legal Thesaurus (Deluxe Edition) by William C. Burton to unearth semantic distinctions, if any, of those expressions. Then, Shree Bhagwati Steel Rolling Mills has held that on a conjoint reading of the three expressions delete , omit , and repeal , it becomes clear
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The precedential force of an avalanche of authorities cited at the Bar remains undisputed. That said, I must add, on facts, that the petitioners contention that the State has lost legislative power to enact a saving clause-Section 174-in the KSGST Act does not stand the judicial gaze. That power preserved, the concept of repeal, the scope of Section 19 of the CA Act, and the relevance of Section 6 of the General Clauses Act or Section 4 of the Kerala Interpretation and General Clauses Act pale into insignificance. And any discussion, as we have already undertaken, turns out to be an academic exercise. Limitation: 167. The petitioner in one writ petition has argued that on the date when the first ever Show Cause Notice, dated 15.03.2018, under Section 8 (f) (iv), read with Section 25, of KVAT Act was issued, KSGST, 2017 had been in operation for almost six months. And the KVAT, 2003 stood expired. 168. The impugned Notices have been issued for the alleged assessment of the escaped turn
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edings pending when the repeal was effected. Hence nothing remains saved. The mere right, they conclude, to conduct an assessment is not a vested or an accrued right. They have cited a few authorities to support these contentions. But limitation is not an issue that deserves a decision under Article 226. 171. To summarise, they have argued thus: (a) The Constitution Amendment Act is in itself an amending act as well as a repealing enactment. Of that Act, Section 19 is the transitional provision, as also the saving one. But Article 367 does not apply because repealing enactment itself specifically provides for transition and savings. Only in the absence of the repeal or saving, is the General Clauses is attracted; here the General Clauses Act does not apply; (b) Article 367 does not apply to constitutional amendments; the General Clauses Act is only for understanding and for interpreting words not defined and specifically available in the Constitution including Article 366 (12); (c) Spe
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rst, we must acknowledge one thing: none of the provisions repealed through the CA Act is central legislation. Each one is state legislation. And the General Clauses Act does not apply to the State Legislation. But, perhaps, Section 4 of the Kerala Interpretation and General Clauses Act could be roped in, if ever we need anything to be saved under a repealed enactment. We can, however, also accept here that neither act needs to be invoked. 175. Though the General Clauses Act applies to repeals, it does not apply to repeals occasioned by a Constitutional Amendment. This proposition, too, needs no contradiction. 178. What does Section 19 of the CA Act do? It repeals or omits, for instance, a congeries of state statutes. And, indeed, the whole Amendment Act is prospective. So these repealed state acts failed to survive beyond the date mentioned in Section 19. They perished. First, prospectively, no State Legislature could trifle with the constitutional mandate under the Amendment Act. But
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wer. Does it have the power? 179. The petitioners argue that the CA Act has disrupted the federal demarcations; the State s legislative fields under Entry 54 of the Second Schedule have been truncated. Thus, the State has no longer the power to legislate on the files that have been taken away from it. Have the State s legislative power on the items once available for it under the Entry 52 taken away? We will see. 180. First, the State s legislative powers have not been taken away; they have been, on the contrary, constitutionally permitted to be shared with the Union Government. What is gone is the State s exclusivity. To the legislative fields of exclusivity and concurrency, what has been added is the simultaneity-novel as it may sound. 181. To encapsulate, I may observe that all the petitioners have advanced one common argument: the State has been denuded of its legislative power to enact Section 174 of the Kerala State Goods and Services Act, 2017. The obvious prop for this assertio
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ain 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. 184. In Synthetics and Chemicals Ltd., the Supreme Court has held that the power to legislate does not flow from a single Article of the Constitution. To articulate this assertion and to elaborate on it, Bimolangshu Roy observes that besides the declaration in Article 246, there are various other Articles in the Constitution which confer authority on the Parliament or on a State legislature to legislate, under various circumstances. 185. Indeed the State legislatures are assigned only specified fields of legislation, the residuary legislative powers lying with the Parliament. But taxing entries are distinct from the general entries. So comes a federal constitutional experiment in the fiscal field: the 101st Cons
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have already rejected as inapplicable the petitioners other propositions: the survival of the sunset clause, the impact of a temporary statute, and inapplicability of Section 6 of the General Clause Act vis-à-vis a repealed enactment. They need neither repetition nor reiteration. Result: 188. I find no merit in the writ petitions; accordingly, I dismiss all the writ petitions. 189. Yet I clarify: In all these writ petitions various issues arise-constitutionality is only one of them. Even a single issue has many shades of a challenge. I have touched none save the constitutional question. And I answered that in the negative. All other issues-including limitation-remain untouched. After all, the limitation is a mixed question of fact and law. I reckon, in that context, that the petitioners have efficacious alternative remedies under the relevant statutes. 190. Granted, the petitioners have bona fide pursued these writ petitions; so, now, in a few cases, the petitioners may face the
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to, the petitioners will have 15 days to do so. The 15 days' time, too, must be reckoned from the day the petitioners received a copy of the judgment. No order on costs. Notes: 1. Tarun Jain s Goods and Services Tax, Constitutional Law & Policy, ST, EBC, Ed.2018, p.59 (e-book) 2. Id., P.69 (e-book) 3. http://gstcouncil.gov.in/brief-history-gst, accessed on the 10th January, 2019. 4. Examining the of the Constitution (One Hundred and First Amendment) Act, 2016, on Federalism. http://racolblegal.com/examining-the-effect-of-the-constitution-one-hundred-and-first-amendment-act-2016-on-federalism. Accessed on 10th Januuy 2019. 5. Id. 6. Tarun Jain s Goods and Services Tax, Constitutional Law & Policy, ST, EBC. Ed-2018. p.70 (e-book) 7. Lexis-Nexis, 2009 Ed., p.311 8. Id. Pp.312, 313 9. Tarun Jain's Goods and Services Tax, Constitutional Law & Policy, ST, EBC, Ed.2018, pg.89-90 (e-book) 10. Craies On Legislation, Sweet & Maxwell, 2010, p.407 11. Lexis-Nexis, 14th Ed.
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