TMI Blog2015 (8) TMI 1397X X X X Extracts X X X X X X X X Extracts X X X X ..... vier still when a taxing statute is under attack. Further, the State can validly pick and choose one commodity for taxation and the same is not open to attack under Article 14 - the burden is on the petitioners to show that the impugned amendment is discriminatory and offends Article 14 of the Constitution. In taxation, the legislature possess greater freedom in classification and the petitioners to succeed in striking down the impugned amendment should be able to demonstrate that the impugned amendment makes an improper discrimination, it is arbitrary and amounts to class legislation. The argument of the petitioners is that the live chicken sold in Mahe region alone cannot be subjected to payment of tax and it amounts to a class legislation as the same product is exempted from tax in other regions in the Union Territory of Puducherry. For the petitioners to succeed, it is not sufficient for the petitioners to state that it is a class legislation. What is required to be established is that such legislation makes an improper discrimination. Therefore, it has to be seen as to whether the Government of Puducherry was justified in making such a distinction and whether the same was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .68/F2/2011, brought an amendment to Entry No.39 of the First Schedule by splitting up the same into two entries namely, 39A and 39B. The products which fall under those entries are as hereunder:- 39-A, Meat, Fish Prawn and other aquatic products when not cured or frozen and eggs; 39-B, Live Stock other than chicken sold in Mahe Region 4. It is further submitted that under Entry 81, a new entry namely, Entry 81A was inserted to include live stock sold in Mahe region. The said notification dated 31.12.2011, came into effect from 01.01.2012, and the petitioners became liable to pay Value Added Tax on live chicken sold in Mahe Region. The petitioner filed Writ Petitions in W.P.Nos.3568 and 3569 of 2012, challenging the notification and the consequential amendments to the First and Third Schedule of the Act and while Writ Petitions were pending, the impugned enactment was passed by the Legislative Assembly of the Puducherry. Therefore, the Writ Petitions were dismissed as withdrawn by order dated 23.08.2012, with liberty to challenge the amendment provisions. In the background of these facts, the present Writ Petitions have been filed. 5. Mr.C.Vigneswaran, learned counsel a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uducherry in exercise of sovereign power and in order to augment revenue levied tax at a reasonable rate of 5% on the sale of live chicken in Mahe region. Consequent on such imposition of tax, there is an additional revenue of ₹ 6.7 crores per annum to the Government which is being used to undertake welfare measure. It is submitted that earlier Empower Committee conducted a study and recommended exemption from levy of tax on live chicken and on coming to know that in Mahe region, the benefit of exemption was not passed on to the consumers and public, the Government decided to levy tax at the rate of 5% on sale of live chicken in Mahe region by notification dated 31.12.2011, which was given effect to from 01.01.2012, after which, the Act was amended replacing the notification. It is submitted that though the notification came into effect from January 2012, the petitioners did not remit any tax and it is stated that a total amount of ₹ 13,62,73,652/- is due and payable by all the petitioners towards tax and penalty. 7. Further, it is submitted that similarly placed persons like that of the petitioners have been paying tax and except the petitioners herein, none have qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge that Union Territory of Puducherry consists of four regions and its unique geographical location is in close proximity with three neighbouring States. Puducherry and Karaikal are adjoining the State of Tamil Nadu, Yanam adjoining the State of Andhra Pradesh and Mahe adjoining the State of Kerala. The amendment brought out by notification dated 31.12.2011, which was subsequently substituted by the impugned amendment to the Puducherry Value Added Tax Act, was brought into effect from 01.01.2012 thereby levying tax at the rate of 5% on the sale of live chicken only in Mahe region. The petitioners content that this is discriminatory and violative of Article 14 of the Constitution of India. It is the further submission that even a taxing statute has to satisfy the test of Article 14 of the Constitution of India. In this regard, reliance was placed on the decision of the Hon'ble Supreme Court in the case of Karimbil Kunhikoman Ors., vs. State of Kerala reported in AIR 1962 SC 723, and Aashirwad Films vs. Union of India Ors., reported in (2007) 5 MLJ 170 (SC). 10. The legal principle deducible from the decisions of the Hon'ble Supreme Court relied on is that a taxing st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is not open to attack under Article 14 (See Twyford Tea Co. Ltd., vs. State of Kerala reported in (1970) 1 SCC 189 and East India Tobacco Co., vs. State of A.P., reported in AIR 1962 SC 1733). 13. Thus, the burden is on the petitioners to show that the impugned amendment is discriminatory and offends Article 14 of the Constitution. In taxation, the legislature possess greater freedom in classification and the petitioners to succeed in striking down the impugned amendment should be able to demonstrate that the impugned amendment makes an improper discrimination, it is arbitrary and amounts to class legislation. 14. The argument of the petitioners is that the live chicken sold in Mahe region alone cannot be subjected to payment of tax and it amounts to a class legislation as the same product is exempted from tax in other regions in the Union Territory of Puducherry. For the petitioners to succeed, it is not sufficient for the petitioners to state that it is a class legislation. What is required to be established is that such legislation makes an improper discrimination. Therefore, it has to be seen as to whether the Government of Puducherry was justified in making such a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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