TMI Blog2019 (8) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... t could enact any law relating to tax on supply of goods, or services or both, it could amend or repeal or save any such law. The VAT Act is one such law, which it had the power to amend or repeal or save. Section 78 of the State GST Savings Act saves the provisions of the VAT Act so far as they relate to any payment or recovery of tax under the VAT Act and any purpose connected or incidental thereto relating to any period prior to the commencement of the State GST Act. There is no inconsistency or repugnancy here with the Constitution as amended. The constitution, as amended, empowers the State legislature to make laws with respect to tax on supply of goods or services. It is under this very power that the State can enact, amend or repeal any law providing for tax on supply of goods. The tax on supply of goods occasioned by sale of goods can be provided for or done away with under this very constitutional power. No such law made or repealed or saved by the State legislature can be said to be inconsistent with Article 246A of the Constitution brought in by the Amendment Act. What it observes is that any sub ordinate legislation, in order to survive the repeal of its parent st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nued, is ultra vires the Constitution Amendment Act. 2. The Petitioner is a Non Banking Finance Company mainly engaged in the business of asset backed financing for purchase of cars, commercial vehicles, etc. The Petitioner has been registered under the VAT Act, filing returns and paying tax thereunder. It is now registered under the Central and State GST Acts and filing returns and paying tax thereunder. The Petitioner's grievance is that on 4 April 2018, its premises were searched by Respondent No.2 Assistant Commissioner of Sales Tax and his team. The premises were sealed during these operations for a number of days. This was followed by a witness summons issued to the Petitioner's Managing Director purportedly under Section 14 of the VAT Act. The Petitioner claims these actions to be illegal and has challenged them in the present petition. 3. It is submitted that the Constitution Amendment Act has amended the Constitution to facilitate introduction of Goods and Services Tax ('GST') in the country. The amendment simultaneously confers powers upon Parliament and State legislatures to make laws for levy of GST on supplies of goods or services or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both takes place in the course of inter State trade or commerce. Explanation .-The provisions of this article, shall, in respect of goods and services tax referred to in clause (5) of article 279A, take effect from the date recommended by the Goods and Services Tax Council. Article 246A, as is apparent from its opening words, overrides Articles 246 and 254. Article 246 provides for the power of Parliament and legislatures of States to make laws with respect to matters enumerated in the three lists of the Seventh Schedule. Whereas Parliament has the exclusive power, under Clause (1) of Article 246, to make laws with respect to matters in List I ( Union List ), both Parliament and State Legislatures have power under Clause (2) to make laws with respect to matters enumerated in List III ( Concurrent List ) subject to Clause (1); the State legislatures, subject to Clauses (1) and (2), have exclusive power to make laws for matters provided in List II ( State List ). Article 254 provides for the rules to be applied wherever there is inconsistency between laws made by Parliament and by the legislatures of States in matters covered by the concurrent List. Overridin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otifications, form, certificates and notices, appointments and delegation of powers issued under those laws which are in force immediately before the appointed day of the Maharashtra Goods and Services Tax Act, 2017 shall, subject to the other provisions of this Act, in so far as they apply, continue to have effect after the appointed day of the Maharashtra Goods and Services Tax Act, 2017 for the purposes of the levy, returns, assessment, re assessment, appeal, determination, revision, rectification, reference, limitation, production and inspection of accounts and documents and search of premises, transfer of proceedings, payment and recovery, calculation of cumulative quantum of benefits, exemption from payment of tax and deferment of due date for payment of tax, cancellation of the certificate of Entitlement, collection or deduction of tax at source, refund or set off of any tax, withholding of any refund, exemption from payment of tax, collection of statistics, the power to make rules, the imposition of any penalty, or of interest or forfeiture of sum where such levy, returns assessment, re assessment, appeal, determination, revision, rectification, reference, limitation, payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below. 8. In the first place, there is no inconsistency between the provisions of Section 78 of the State GST Savings Act and the Constitution as amended. The Constitution Amendment Act provides for concurrent power of the State legislature to make laws with respect to goods and services tax, i.e. any tax on supply of goods, or services or both. The State GST Act has been enacted by the State legislature under this power. Just as it could enact any law relating to tax on supply of goods, or services or both, it could amend or repeal or save any such law. The VAT Act is one such law, which it had the power to amend or repeal or save. Section 78 of the State GST Savings Act saves the provisions of the VAT Act so far as they relate to any payment or recovery of tax under the VAT Act and any purpose connected or incidental thereto relating to any period prior to the commencement of the State GST Act. There is no inconsistency or repugnancy here with the Constitution as amended. 9. The constitution, as amended, empowers the State legislature to make laws with respect to tax on supply of goods or services. It is under this very power that the State can enact, amend or r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the VAT Act could be said to be surviving. Learned Counsel in this behalf relies on the judgment of the Supreme Court in Air India vs. Union of India (1995) 4 SCC 734. The judgment does not support the Petitioner. What it observes is that any sub ordinate legislation, in order to survive the repeal of its parent statute, must be referred to in the Saving Act by express words and not by implication. It cannot possibly be suggested that the sub ordinate legislation under the VAT Act, such as rules, regulations, notifications, etc. issued thereunder, has not been expressly saved by Section 78 of the State GST Savings Act. The wordings of the Section leave no manner of doubt that all these are expressly referred to and saved. The saving provision is both explicit and expansive. It saves all rules, regulations, orders, notifications, form, certificate and notices, appointments and delegation of powers issued under the VAT Act. There is, thus, no substance in the contention. 12. The challenge, in the premises, to the vires of Section 78 has no merit. So far as the other grievance of the Petitioner, namely, non-consideration of its application in Form 701 (made on 2 May 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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