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2016 (5) TMI 912 - HC - VAT and Sales TaxValidity of law - rate of tax - interstate movement of goods - Change in nature of goods merely on the basis of the location in which they are used - Section 2(11) - Petitioner contended that if certain goods are admittedly capital goods, their nature will not change merely because they were sold in the course of inter-state trade or commerce, to persons outside the State - Held that:- argument of the petitioners is based merely upon logic and common sense. Unfortunately, law, much less tax law, is not founded upon logic and common sense. The petitioners have forgotten for a moment that they are challenging the vires of a legislation. The law validly enacted by a State Legislature, cannot be challenged on the ground that it defies logic and common sense. A statutory provision can be challenged only on very limited grounds, namely (a) the infringement of any of the fundamental rights, (b) the lack of competence on the part of the relevant legislature, due to the distribution of powers, (c) contravention of any of the mandatory provisions of the Constitution that impose certain limitations upon the powers of the State legislature, (d) the operation of the impugned law beyond the borders of the State, and (e) the abdication of the essential legislative function. The petitioners in these writ petitions could not establish the existence of any of these grounds, for holding the phrase "in the State" appearing in Section 2(11) of the Tamil Nadu VAT Act, 2006. Therefore, the challenge to the statutory prescription made in these writ petitions has to be failed. The challenge to the validity of Section 2(11) of the Tamil Nadu Value Added Tax Act, 2006, is rejected and the prayer of the writ petitioners for declaration that Section 2(11) is ultra vires and unconstitutional, is dismissed.
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