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2021 (4) TMI 961 - HC - VAT and Sales TaxConstitutional validity and clauses (d) and (e) of Section 174(1) of the Karnataka Goods and Service Tax Act, 2017 - petroleum products and liquor for human consumption as per the amended Entry 54 - HELD THAT:- The Hon’ble Supreme Court in R.S. REKCHAND MOHOTA SPINNING & WEAVING MILLS LTD. VERSUS STATE OF MAHARASHTRA [1997 (5) TMI 441 - SUPREME COURT] has held that it is a settled principle of interpretation that legislative entries are required to be interpreted broadly and widely so as to give powers to legislature to enact the laws with respect to the matters enumerated in the legislative entries. Therefore, in the light of the aforesaid judgment, by no stretch of imagination it can be held that clauses (d) and (e) of Section 174(1) of the Karnataka Goods and Service Tax Act, 2017 is ultra vires. The appellant’s basic contention is that the State is denuded of its power to re-assess a dealer’s tax liability under the provisions of the KVAT Act after amendment to Entry 54 of the State List vide the Constitution (101st Amendment) Act, 2016, (the Amendment Act), which was notified to be brought into force w.e.f., 16.9.2016 and the subsequent repeal of the KVAT Act w.e.f., 1.7.2017, vide Section 173 of the KGST Act. The appellant’s contention is totally untenable in view of the insertion of saving clause, namely Section 174 of the KGST Act in order to ensure that the repeal of the KVAT Act shall not affect liabilities accrued or tax payable under the KVAT Act. Therefore, in view of the savings clause under Section 174, the appellant’s contention that the State cannot reassess the liability incurred prior to repeal of the KVAT Act is totally baseless. Constitutional validity and the assertion that the State’s legislative power have been taken away - HELD THAT:- It is pertinent to note that the power to enact Section 174 of the KGST Act can be traced to Article 246A, which, when read with Article 366(12-A), confers power on the States to make laws with respect to any tax on supply of goods. Accordingly, Section 174 is a validly enacted piece of legislation and cannot be said to be without legislative competence. Hence, the contention of the appellant that Section 174 is a still born provision and unconstitutional is devoid of merits and substance. Appeal dismissed.
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