TMI Blog2019 (9) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... x by allowing the input tax credit as mentioned in the Objects and Reasons of the Constitution 122nd Amendment Bill, 2014. The Objects and Reasons of the Constitution 122nd Amendment Bill, 2014 clearly set out that it is intended to remove the cascading effect of taxes and to bring out a nationwide taxation system. The cascading of taxes, in simple language, is tax on tax'. The denial of carry forward of tax paid on stock on the appointed day may lead to cascading effect of tax because the GST will again have to be paid on the Central Excise duty already suffered on the stock. It is an established principle of law that it is necessary to look into the mischief against which the statute is directed, other statutes in pari materia and the state of the law at the time. It was held by the Supreme Court in the case of District Mining Officer and Ors. v. Tata Iron and Steel Co. and Ors. , [ 2001 (7) TMI 1277 - SUPREME COURT ] that, the process of construction combines both literal and purposive approaches. In other words, the legislative intention, i. e. the true or legal meaning of an enactment, is derived by considering the meaning of the words used in the enactment in ligh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... With R/SPECIAL CIVIL APPLICATION NO. 5760 of 2019 With R/SPECIAL CIVIL APPLICATION NO. 5762 of 2019 - - - Dated:- 6-9-2019 - MR J. B. PARDIWALA AND MR A. C. RAO, JJ. For The Petitioner (s) : MR. VINAY SHRAFF WITH MR. VISHAL J. DAVE WITH MR. NIPUM SINGHVI For The Respondent (s) : MR SOAHAM JOSHI, AGP AND NOTICE SERVED BY DS COMMON CAV JUDGMENT ( PER : HONOURABLE MR. JUSTICE J. B. PARDIWALA) 1. Since the issues raised in all the captioned writa-pplications are the same, those were heard analogously and are being disposed of by this common judgment and order. 2. RULE returnable forthwith in all the captioned writ-applications. Mr. Soaham Joshi, the learned AGP waives service of notice of rule for and on behalf of the respondents nos. 1 and 2 respectively. 3. For the sake of convenience, the Special Civil Application No. 5758 of 2019 is treated as the lead matter. By this writapplication under Article 226 of the Constitution of India, the writ-applicant, a partnership firm, has prayed for the following reliefs : ( a) Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicants, in the alternative, have prayed for a declaration that the due date contemplated under Rule 117 of the Rules to claim transitional credit is procedural in nature, and thus, merely directory and not a mandatory provision. SUBMISSIONS ON BEHALF OF THE WRIT-APPLICANTS : 7. Mr. Shraff, the learned counsel appearing with Mr. Dave for the writ-applicants, vehemently submitted that when the Indirect Tax regime transitioned from the Central Excise regime to the Goods and Services Tax regime, the CGST Act, 2017, allowed the carry forward of the CENVAT credit on the duty paid stock on the appointed day, i. e. 1st July 2017. 8. It is submitted that the CGST was payable on such duty paid stock and, therefore, the credit was allowed because the intention of the Government was not to collect tax twice on the same goods. It is pointed out that in such cases, it was provided that the credit of the duty/tax paid earlier would be admissible as credit. 9. The learned counsel submitted that as his clients were not able to file the form GST TRAN-1 within the date specified, i. e. 27th December 2017, on account of the technic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e absence of the meaning of the phrase technical difficulties on the common portal in the CGST Act or Rules, the same should be given a liberal interpretation because it is a settled principle of law that an interpretation unduly restricting the scope of a beneficial provision should be avoided so that it may not take away with one hand what the policy gives with the other. 15. The learned counsel, in support of his submissions, has placed strong reliance on the decision of the Supreme Court in the case of Union of India v. Suksha International Nutan Gems and another, 1989 (39) ELT 503 (SC) [para-9]. 16. The learned counsel, in the last, submitted that the technology has been added to the system for the benefit and convenience of the tax payers but it should not be subservient to the purpose and hence the impediments, if any, should not make the writ-applicants servants of the technology. 17. In such circumstances referred to above, the learned counsel prays that there being merit in all the writ-applications, those be allowed and the reliefs as prayed for be granted. SUBMISSIONS ON BEHALF OF THE RESPONDENTS : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Council meeting dated 20. 02. 2019. 10. It is respectfully submitted that the petitioner has placed reliance upon two decisions of the Hon ble High Court of Allahabad and Hon ble High Court of Mumbai which is averred in paragraph 2. 14 and paragraph 2. 15 to the memorandum of application. In light of the same upon reading the cause title of the case the respondent was the Union of India and in the present case the petitioner has not joined the Union of India as party respondent. 11. It is respectfully submitted that, upon perusal of the 33rd GST Council meeting the said report contains 195 pages and agenda item 4 reads as decisions/ recommendations of the 4th I. T. Grievance Redressal Committee for information of the council, which is at page no. 104 of the report and agenda item on GST Tran-1 cases were discussed and decided on 12/02/2019. The Hon ble Court may be please to consider the submission made at the time of argument as far as the said report is concerned. 12. It is also respectfully submitted that, the petitioner has not joined GSTN nor the I. T. Grievance Redressal Committee as party respondent and therefore, the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid context, we may refer to the following decisions : ( 1) The Madras High Court, in the case of Tara Exports v. Union of India, reported in 2019 (20) G. S. T. L. 321 (Madras), has held as under : 8. GST is a new progressive levy. One of the progressive ideal of GST is to avoid cascading taxes. GST Laws contemplate seamless flow of tax cred its on all eligible inputs. The input tax credits in TRAN-1 are the credits legitimately accrued in the GST transition. The due date contemplated under the laws to claim the transitional credit is procedural in nature. In view of the GST regime and the IT platform being new, it may not be justifiable to expect the users to back up digital evidences. Even under the old taxation laws, it is a settled legal position that substantive input credits cannot be denied or altered on account of procedural grounds. ( 2) The Supreme Court, in the case of Union of India v. Suksha International Nutan Gems Anr. , reported in 1989 (39) E. L. T. 503 (S. C. ), has held that an interpretation unduly restricting the scope of a beneficial provision should be avoided so that it may no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment thus : 11. We have given our careful consideration to these submissions. We are afraid the stand of the Revenue suffers from certain basic fallacies, besides being wholly technical. In Kedarnath's case, the question for consideration was whether the requirement of the declaration under the proviso to Section 5(2)(a)(ii) of the Bengal Finance (Sales-tax) Act, 1941, could be established by evidence aliunde. The court said that the intention of the Legislature was to grant exemption only upon the satisfaction of the substantive condition of the provision and the condition in the proviso was held to be of substance embodying considerations of policy. Shri Narasimha Murthy would say the position in the present case was no different. He says that the notification of 11th August, 1975 was statutory in character and the condition as to 'prior-permission' for adjustment stipulated therein must also be held to be statutory. Such a condition must, says counsel, be equated with the requirement of production of the declaration form in Kedarnath's case and thus understood the same consequences should ensue for the non-compliance. Shri Narasimhamurt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain condition of prior-permission clearly envisages a procedure to give effect to the exemption. A distinction between the provisions of statute which are of substantive character and were built-in with certain specific objectives of policy on the one hand and those which are merely procedural and technical in their nature on the other must be kept clearly distinguished. What we have here is a pure technicality. Clause 3 of the notification leaves no discretion to the Deputy Commissioner to refuse the permission if the conditions are satisfied. The words are that he will grant . There is no dispute that appellant had satisfied these conditions. Yet the permission was withheld-not for any valid and substantial reason but owing to certain extraneous things concerning some inter-depart-mental issues. Appellant had nothing to do with those issues. Appellant is now told we are sorry. We should have given you the permission But now that the period is over, nothing can be done . The answer to this is in the words of Lord Denning: Now I know that a public authority can not be estopped from doing its public duty, but I do think it can be estopped from relying on a techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary to go into that question as, in our opinion, sub-rules (2) and (3) of rule 39-A are wholly unreasonable rules and consequently these cannot be sustained. Sub-rule (3) of Rule 39-A provides that before a person is entitled to refund under Section 15 of the Central Sales Tax Act. 1956, as well as under Section 5 (4) of the Mysore Sales Tax Act, 1957, he must have made the refund application within the time before which he should have submitted his Sales-tax return. In many States the dealers have to submit quarterly returns. Under Rule 18 framed under the Mysore Sales Tax Act, 1957, we are informed that a dealer will have to submit his annual return within 30 days of the end of the financial year. That means even if a sale in the course of inter-State trade has been made on the 31st March of a year, the refund application will have to be made within 30 days from that date. The position will be worse still if the dealer is required to submit quarterly returns. The learned counsel for the State was not in a position to tell us whether in the Mysore State the dealers have to file quarterly returns. In our opinion the impugned Rule is merely an attempt to deny the dealers the refund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rights of the manufacturer of the specified final product to claim MODVAT credit for the duty paid on the inputs subsequent to the date of the receipt of those inputs. Consequently, the respondent-manufacturer in the present case was entitled to take credit between the period 16. 8. 1987 to 30. 12. 1987 in the sum of ₹ 6,43,994. 57. ( 6) The Madras High Court, in the case of Hospira Health Care India P. Ltd. v. Development Commissioner, MEPZ, SEZ Heous, Chennai, reported in 2016 (340) ELT 668 (Madras), has held that a procedure should not run contrary to the substantive right in the policy. If the procedural norms are in conflict with the policy, then the policy will prevail and the procedural norms to the extent they are in conflict with the policy, are liable to be held bad in law. We may quote the relevant paragraphs 27, 28 and 33 of the judgment thus : 27. It is a settled position that the procedure formulated under any Policy is only to operationalise the right and not to prevent the same. If a statute is workable even without framing of the rules, the same has to be given effect to When the petitioner had stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les. Insofar as Rule 57G of the Rules is concerned, there is no power vested in the Central Government to restrict the time-limit within which the credit is required to be taken. To put it differently, the right to avail of credit is conferred under Rule 57A of the Rules. Rule 57G only provides the procedure to be observed by the manufacturer. Thus, while exercising the powers under Rule 57G of the Rules, the Central Government is not empowered to curtail any right conferred under Rule 57A of the Rules. In such circumstances, the impugned notification issued in exercise of the powers under Rule 57G of the Rules insofar as the same prescribes a timelimit for taking of credit, being in excess of the powers conferred under the said rule was held to be ultra vires the same and not sustainable to that extent. We may quote the relevant paragraphs 8 and 9 of the judgment thus : 8. Rule 57G of the Rules as it stood at the relevant time, insofar as the same is relevant for the present purpose reads thus:- RULE 57G. Procedure to be observed by the manufacturer. - (1) Every manufacturer intending to take credit of the duty paid on inputs un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1975, (referred to as specified duty) as may be specified in the notification paid on the goods used in the manufacture of the said final products (referred to as the inputs). Sub-rule (2) of rule 57A provides that the credit of specified duty allowed under sub-rule (1) shall be utilised towards payment of duty of excise leviable on final products, whether under the Act or any other Act, as may be specified in the notification issued under sub-rule (1) and subject to the provisions of the said section and the conditions and restrictions, if any, specified in the said notification. Thus, the manner in which credit taken is required to be utilised is laid down under sub-rule (2) and is subject to the conditions and restrictions, if any, specified in the notification issued under sub-rule (1) of rule 57A of the Rules. Thus, if the time limit within which credit taken under sub-rule (1) of rule 57A is to be restricted, the same would have to be provided under the notification issued under rule 57A (1) of the Rules. Insofar as rule 57G of the Rules is concerned, there is no power vested in the Central Government to restrict the time limit within which credit is required to be taken. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king payment of excise duty on the excisable product. The court held that the credit is indefeasible. In Eicher Motors Ltd. vs. Union of India, (supra) the Supreme Court held thus: We may look at the matter from another angle. If on the inputs, the assessee had already paid the taxes on the basis that when the goods are utilised in the manufacture of further products as inputs thereto then the tax on these goods gets adjusted which are finished subsequently. Thus a right accrued to the assessee on the date when they paid the tax on the raw materials or the inputs and that right would continue until the facility available thereto gets worked out or until those goods existed. Therefore, it becomes clear that Section 37 of the Act does not enable the authorities concerned to make a rule which is impugned herein and, therefore, we may have no hesitation to hold that the Rule cannot be applied to the goods manufactured prior to 16-3- 1995 on which duty had been paid and credit facility thereto has been availed of for the purpose of manufacture of further goods. ( 8) The Madhya Pradesh High Court, in the case of Bharat Heavy Electricals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limit for taking the credit as found by the High Court of Gujarat is found to be ultra vires, as it is beyond the power and is in conflict to the impugn provision of Rule 57A, these are based on the principle laid down by the Hon'ble Supreme Court in the cases of Eicher Motors Limited (supra) and Dai Ichi Karkaria Limited (supra). ( 9) The Allahabad High Court, in the case of Global Sugar Ltd. v. Commissioner of Central Excise, Kanpur, reported in 2016 (334) E. L. T. 604 (Allahabad), has held that Rule 57T of the Rules is only procedural in nature. The Modvat credit cannot be denied on a technical ground that the procedure for availing Modvat credit was not followed at the relevant moment of time. We may quote the relevant paragraphs-7 to 13 of the judgment thus : 7. We find from a perusal of the order that the applicant had filed the application under sub rule (3) of Rule 57T along with an application for condonation of delay showing cause that they were not aware of the procedure for claiming declaration under the said Rule and have filed the same at the earliest opportune moment. It was contended that this is only a procedur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly indicates that if the declaration is not filed within the specified period, the same can be considered after the expiry of period on sufficient cause being shown. In the instant case, the applicant clearly stated that they were not aware of such procedure for claiming Modvat credit and the moment they came to know applied for Modvat credit. The fact, that the applicant applied for Modvat credit has not been disputed. Once this is not disputed, it is not open to the respondents to deny Modvat credit on the ground that permission was not granted by the competent authority. There is no evidence that the application of the applicant was rejected. In our opinion, even if there is a procedural lapse, it does not mean that Modvat credit could not be availed. 12. In Commissioner of Central Excise, Allahabad vs. Hindalco Industries Pvt. Ltd, 2013 (293)ELT 208, this Court after considering the provision of Rule 52-A and 57-G of the Rules held that Rule 57-G of the Rules only prescribes the procedure for availing Modvat credit and did not affect any substantial right. In our opinion, the said decision is clearly applicable. 13. In the light of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en away by virtue of Rule 117 of the Central GST Rules, 2017, with retrospective effect for failure to file the form GST Tran-1 within the due date, i. e. 27. 12. 2017. The provision for facility of credit is as good as the tax paid till the tax is adjusted and, therefore, the right to the credit had become absolute under the Central Excise Act and, therefore, the credit is indefeasible and the same cannot be taken away. 24. This High Court, in the case of Filco Trade Centre Pvt. Ltd. v. Union of India, reported in 2018 (17) G. S. T. L. 3 (Gujarat), while striking down clause (iv) of sub-section (3) of Section 140 of the CGST Act, recognized that the benefit of credit of eligible duties on the purchases made by the first stage dealer as per the then existing Cenvat credit rules was a vested right and it cannot be taken away by virtue of clause (iv) of sub-section (3) of Section 140 with retrospective effect in relation to the goods which were purchased prior to one year from the appointed day. We may quote the relevant paragraphs 26 to 31 of the judgment thus : 26. In case of Indusr Global Ltd v. Union of India, 2014 (310) ELT 833 (Guj) Div ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax on those goods gets adjusted which are finished subsequently. Thus a right had accrued to the assessee on the date when they paid the tax on the raw materials or the inputs and that right would continue until the facility available thereto gets worked out or until those goods existed. We may also recall that in the case of Dai Ichi Karkaria Ltd (supra) it was reiterated that a manufacture obtains credit for the excise duty paid on raw material to be used by him in the production of an excisable produce immediately it makes the requisite declaration and obtains an acknowledgment thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. 27. These judgements would thus indicate that the right that the petitioner had to pass on the credit of excise duty paid on goods purchased at the time of sale of such goods was a vested right. It was as good as the duty paid by the assessee to the Government revenue which could be utilised by the purchasers of such goods from the petitioner against future liabilities of course subject to fulfilment of conditions. When the new regime was therefore introduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l purchases towards the manufacturing duty. No time frame of the past dealings was envisaged under such rules. The same grounds of physical identification of goods preventing undue advantage being taken and the administrative convenience would exist even then. Secondly, no limitation of time is prescribed in the proviso to sub-section (3) of section 140 where a dealer is not in possession of any invoice or any other document evidencing payment of duty in respect of inputs in which case credit at the prescribed rate would be granted. 28. The judgment of the Supreme Court in case of Osram Surya (P. ) Ltd. (supra) involved different facts. It was a case in which, first provisio which was introduced in Rule 57-G of the MODVAT Credit Rules was challenged. By virtue of this provision a manufacturer would not be allowed to take MODVAT credit after six months from the date of the documents specified therein. It was on this background the Supreme Court had, while upholding the validity of the provision held and observed that the same did not take away a vested right. The important distinction in the present case as compared to the facts of our case is that the Legislature, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised on 16-3-1995 with a manufacturer of tractors falling under heading No. 87. 01 or motor vehicles falling under heading No. 87. 02 and 87. 04 or chassis of such tractors or such motor vehicles under heading No. 87. 06. However, credit taken on inputs which were lying in the factory on 16-3-1995 either as parts or contained in finished products lying in stock on 16-3-1995 was allowed. Prior to 1995-96 Budget, central excise/additional duty of customs paid on inputs was allowed as credit for payment of excise duty on the final products, in the manufacture of which such inputs were used. The condition required for the same was that the credit of duty paid on inputs could have been used for discharge of duty/liability only in respect of those final products in the manufacture of which such inputs were used. Thus it was claimed that there was a nexus between the inputs and the final products. In 1995-96 Budget MODVAT scheme was liberalised/simplified and the credit earned on any input was allowed to be utilised for payment of duty on any final product manufactured within the same factory irrespective of whether such inputs were used in its manufacture or not. The experience showed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch as availability of a scheme, is affected and, in particular, it loses sight of the fact that provision for facility of credit is as good as tax paid till tax is adjusted on future goods on the basis of the several commitments which would have been made by the assessees concerned. Therefore, the scheme sought to be introduced cannot be made applicable to the goods which had already come into existence in respect of which the earlier scheme was applied under which the assessees had availed of the credit facility for payment of taxes. It is on the earlier scheme necessarily the taxes have to be adjusted and payment made complete. Any manner or mode of application of the said rule would result in affecting the rights of the assessees. 6. We may look at the matter from another angle. If on the inputs the assessee had already paid the taxes on the basis that when the goods are utilised in the manufacture of further products as inputs thereto then the tax on these goods gets adjusted which are finished subsequently. Thus a right accrued to the assessee on the date when they paid the tax on the raw materials or the inputs and that right would continue until the facili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crued under the repealed Central Excise Act, 1944 (1 of 1944) and it has been saved under Section 174(2)(c) of the CGST Act, 2017 and, therefore, it cannot be allowed to lapse under Rule 117 of the CGST, 2017, for failure to file declaration form GST Tran-1 within the due date, i. e. 27. 12. 2017. 28. The right to carry forward CENVAT credit for not being able to file the form GST Tran-1 within the due date offends the policy of the Government to remove the cascading effect of tax by allowing the input tax credit as mentioned in the Objects and Reasons of the Constitution 122nd Amendment Bill, 2014. The Objects and Reasons of the Constitution 122nd Amendment Bill, 2014 clearly set out that it is intended to remove the cascading effect of taxes and to bring out a nationwide taxation system. 29. The cascading of taxes, in simple language, is tax on tax'. The denial of carry forward of tax paid on stock on the appointed day may lead to cascading effect of tax because the GST will again have to be paid on the Central Excise duty already suffered on the stock. It is an established principle of law that it is necessary to look into the mischief agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , following the earlier judgment of the Court in India Cement, invalidated levies made under different Statutes enacted by the States of Orissa, Madhya Pradesh and Bihar and issued a mandamus, directing refund of the monies collected under such void Statutes, the State Governments would have been under a constitutional obligation to carry out the directions issued and were bound to refund the monies collected from the respective States from the date of the Judgment of the High Court, which would have ruinous consequences on the States economy. When the State Governments apprised these problems to the Central Government, the Parliament intervened and to save the State Governments from refunding the monies collected, enacted the Cess and Other Taxes on Minerals (Validation) Act, 1992 to validate imposition and collection of such levies under the State laws which were declared void by the Court. The Statement of Objects and Reasons of the Validation Act unequivocally proclaims that the Act was promulgated to validate collection of such levies by the State Governments up to 4th of April, 1991. The date 4-4-91was chosen because on the date, the Supreme Court delivered the judgment in Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it provides that no tax can be levied or collected except by authority of law. Thus not only the levy, but also the collection must be only by authority of law. The expression authority of law would mean that there should be in existence, a lawful enactment, which authorises the levy or collection of a tax. After 4-4-91, there being no valid law in existence, which could authorise collection of the levy of cess and taxes on minerals, it is difficult to comprehend how the State could be permitted to make the levy and collection of the dues subsequent to 4. 4. 91. According to Dr. Singhvi, and interpretation of the provisions of the Validation Act, authorising realisation of levy after 4-4-91 for the past period would be contrary to equity, justice and fair-play. 32. It was held by the Supreme Court, in the case of U. P. Bhoodan Yagna Samiti, U. P. v. Braj Kishore and Ors. , reported in AIR 1988 SC 2239, that it is clear that when one has to look to the intention of the Legislature, one has to look to the circumstances under which the law was enacted, the Preamble of the law, the mischief which was intended to be remedied by the enactment of the statute. We may q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual right over the Mother Earth, in the same way as those born of a mother have over her. It is, therefore, essential that the entire land of the country should be equitably redistributed anew, providing roughly at least five acres of dry land or one acre of wet land to every family. The Sarvodaya Samaj, by appealing to the good sense of the people, should prepare their minds for this equitable distribution and acquire within the next two years at least 25 lakhs of acres of land from about five lakhs of our villages on the rough basis of five acres per village. This land will be distributed to those landless labourers who are versed in agriculture, want to take to it, and have no other means of subsistence. This would clearly indicate the purpose of the scheme of Bhoodan Yagna and it is clear that S. 15 provided that all allotments in accordance with S. 14 could only be done under the scheme of the Bhoodan Yagna. 33. In our opinion, it is arbitrary, irrational and unreasonable to discriminate in terms of the time-limit to allow the availment of the input tax credit with respect to the purchase of goods and services made in the pre-GST regime a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. Unfortunately, in the early stages of the evolution of our constitutional law, Article 14 came to be identified with the doctrine of classification because the view taken was that that Article forbids discrimination and there would be no discrimination where the classification making the differentia fulfils two conditions, namely. (i) that the classification is founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group; and (ii) that that differentia has a rational relation to the object sought to be achieved by the impugned legislative or executive action. It was for the first time in E. P. Ayyappa v. State of Tamil Nadu, (1974) 2 SCR 348 : (AIR 1974 SC 555), that this Court laid bare a new dimension of Article 14 and pointed out that that Article has highly activist magnitude and it embodies a guarantee against arbitrariness. This Court speaking through one of us (Bhatgwati, J. ) said : The basic principle which therefore informs both Articles 14 and 16 is equality and inhibition against discrimination. Now what is the content and reach of this great equalising principle? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial element of equality or non-arbitrariness pervades Article 14 like a brooding omnipresence. This was again reiterated by this Court in International Airport Authority's case ( (1979) 3 SCR 1014) at p. 1042: (AIR 1979 SC 1628) (supra) of the Report. It must therefore now be taken to be well settled that what Article 14 strikes at is arbitrariness because an action that is arbitrary, must necessarily involve negation of equality. The doctrine of classification which is evolved by the Courts is not paraphrase of Article 14 nor is it the objective and end of that Article. It is merely a judicial formula for determining whether the legislative or executive action in question is arbitrary and therefore constituting denial of equality. If the classification is not reasonable and does not satisfy the two conditions referred to above, the impugned legislative or executive action would plainly be arbitrary and the guarantee of equality under Article 14 would be breached. Wherever therefore there is arbitrariness in State action whether it be of the legislature or of the executive or of an authority under Article 12, Art. 14 immediately springs into action and str ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightway from the administrative authorities as no crystallized right as such is involved. The protection of such legitimate expectation does not require the fulfillment of the expectation where an overriding public interest requires otherwise. In other words, where a person's legitimate expectation is not fulfilled by taking a particular decision then the decision-maker should justify the denial of such expectation by showing some overriding public interest. (See : Union of India and Ors. v. Hindustan Development Corporation and Ors. , AIR 1994 SC 988) 9. While the discretion to change the policy in exercise of the executive power, when not trammeled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give the impression that it was so done arbitrar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-rule (3A) of rule must fail. 40. The liability to pay GST on sale of stock carried forward from the previous tax regime without corresponding input tax credit would lead to double taxation on the same subject matter and, therefore, it is arbitrary and irrational. 41. C. B. E. C. Flyer No. 20, dated 1. 1. 2018 had clarified as under : ( c) Credit on duty paid stock : A registered taxable person. other than manufacturer or service provider, may have a duty paid goods in his stock on 1st July 2017. GST would be payable on all supplies of goods or services made after the appointed day. It is not the intention of the Government to collect tax twice on the same goods. Hence, in such cases, it has been provided that the credit of the duty/tax paid earlier would be admissible as credit. 42. Article 300A provides that no person shall be deprived of property saved by authority of law. While right to the property is no longer a fundamental right but it is still a constitutional right. CENVAT credit earned under the erstwhile Central Excise Law is the property of the writ-applicants and it cannot be appropriat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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