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2016 (11) TMI 751 - HC - VAT and Sales TaxVires of Section 42(4) and 42(5) of U.P. Value Added Tax Act, 2008 - Validity of Rule 70(5) of U.P. Value Added Tax Rules, 2008 - Provincial Tax under Section 54(1)(1) - late payment of tax - imposition of penalty - eligibility certificate under Section 4-A of U.P. Trade Tax Act, 1948 - petitioner was entitled to avail aforesaid exemption up to 15.02.2010 or till the amount of exemption of tax reaches to the extent of ₹ 959,51,76,417/-, which ever is earlier - compliance of deposit of net tax to which petitioners were entitled for exemption with regard to period of January 2008 to June 2008 was practically impossible for the reason that Section 42 for the first time making such different procedure came to be enacted on 16.07.2008 and relevant rule came to be enacted on 30.01.2009 by which date time for deposit of tax along with return had already elapsed. Held that: - When issues of a statute is challenged, Court presumes constitutionality unless shown otherwise but presumption cannot go to uphold a provision whereof compliance is impossible by any person and still that statute hold one guilty and further liable of penalty and other dues for non compliance. The above doctrine and also exposition of law that a statute cannot require performance of something which is impossible and places a burden upon a person for no fault of him has also been considered in M/s. D.C.M. Ltd. and others Vs. State of U.P. And others Writ C No. 9513 of 1989 - In view of above exposition of law, when we look into the amended Rule 70(5) of Rule, 2008 as substituted by U.P. VAT (First Amendment) Rules, 2009, we find that rule framing authority, while framing a rule and enforcing the same on 30.01.2009, has required concerned units to deposit tax and submit return between July 2008 to December 2008 which is ex-facie irrational, unreasonable and improbable. When information by way of framing Rules is being given on 30.01.2009, no one can be expected to comply in retrospect i.e. during July 2008 to December 2008. In our view, Sub-rule (5) of Rule 70 as substituted by U.P. VAT (First Amendment) Rules, 2009 in Rules, 2008 is apparently irrational, arbitrary, illegal and unreasonable, hence violative of Article 14 of the Constitution. We have no hesitation in striking down the same, being wholly illegal, absurd, unfair and unreasonable, thus, violative of Article 14 of the Constitution. Consequently, sub-rules (7) to (11) of Rule 70 in respect of net tax of January 2008 to June 2008 would render inoperative for the reason that they would come into operation only when a valid sub-Rule (5) is in existence but when we strike down sub-rule (5), consequences provided under sub-rule (7) of Rule 70 also cannot be complied. Therefore, the same would become inoperative till a valid provision providing a rational procedure for compliance under Section 42(4)(d) is made by competent rule framing authority. Since dispute relates to deposit of tax from January 2008 to June 2008 and sufficient period had already elapsed since then, in order to mitigate and avoid any further scope of litigation and in the interest of both the parties, we provide and permit petitioners to deposit requisite amount of tax along with return within two months from today,if not already deposited, and if the said direction is complied with, respondent tax authorities shall treat said deposit and submission of return as due compliance of requirement of Section 42(4)(d) of Act, 2008 as amended by Amendment Act, 2008 and proceed accordingly for the purpose of refund of tax as provided under amended Section 42(5). If deposit has already been made, the same shall be treated as a deposit of tax in time then respondents shall proceed accordingly. Petition disposed off - decided partly in favor of petitioner.
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