TMI Blog2020 (9) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... sel from 21.5% and 17.15% to 22.15% and 18.15% respectively was also only by way of Notification under Section 31 and was in force till the present impugned amendment, this does not per se invalidate a subsequent illegitimate and unauthorised levy. Except for some differences in detail, the amendment of schedules in the VAT enactments extracted above, uniformly require that the notification for amendment once made, be placed before the House within the timeframes stipulated therein for deliberation and ratification. It was thus incumbent upon the respondents to have followed the proper procedure for amendment of schedules set out under Section 75 of the PVAT Act and the invocation of Section 31 in the above circumstances is contrary to law. Impugned Notification quashed - Petition allowed. - W.P.No.8054 of 2020 And WMP No.9528 of 2020 - - - Dated:- 27-8-2020 - Dr. Justice Anita Sumanth For the Petitioner : Mr.Sreedhar For the Respondents : Mr.J.Kumaran Additional Government Pleader (P) ORDER The petitioner is a resident of Karaikal, Puducherry and seeks a Writ of Certiorari calling for and quashing G.O.Ms.No.24 dated 27.05.2020 issued by the Secretary t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the amendment made under G.O.Ms.No.24 dated 27.05.2020 constitutes an excess of power insofar as the provision invoked, Section 31, only provides for the reduction of the tax rate by notification and not an increase , which is what has been done in the present case. By virtue of the impugned G.O., Puducherry has increased the tax rate of petrol and diesel from 22.5% and 18.5% to 28% and 21.8% respectively and this increase, according to the petitioner, could only be made by amendment of the schedule under Section 75. However, since the procedure set out under Section 75 required presentation of the Bill seeking amendment, deliberation and passing thereof by the Legislative Assembly of Puducherry, a cumbersome and time consuming procedure in the best of times, the Union Territory has proceeded to adopt the easier but erroneous procedure set out under Section 31. This, in sum and substance, is the argument of Mr.Sridhar, learned counsel for the petitioner. 6. Mr.Kumaran, learned Additional Government Pleader for the respondents would defend the impugned Notification pointing out that the rate of tax pegged under the Schedule was 35% for both commodities. Power under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t may, by notification, whether prospectively or retrospectively make an exemption, or reduction in rate, in respect of any tax payable under this Act- (a) on the sale or purchase of any specified goods or class of goods, at all points or at a specified point or points in the series of sales by successive dealers; or (b) by any specified class of persons, in regard to the whole or any part of their turnover; or (c) on the sale or purchase of any specified classes of goods by specified classes of dealers in regard to the whole or part of their turnover. (2) Any exemption from tax, or reduction in the rate of tax, notified under sub-section (1) - (a) may extend to the whole State or to any specified area or areas therein; or (b) may be subject to such restrictions and conditions as may be specified in the notification. (3) The Government may, by notification, cancel or vary any notification issued under sub- section (1). PVAT 31. Power of Government to notify reductions of tax. - The Government may, by notification, reduce the tax payable under sub-section (1) of section 14 of this Act in respect of any goods, subject to such restrictions and conditions as may be sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition or cancellation, as the case may be, of the Schedules specified in the notification, and the notification shall cease to have effect when such Bill becomes law whether with or without modifications, but without prejudice to the validity of anything previously done there under: Provided that if the notification under sub-section (1) is issued when the Legislative Assembly is in session, such a Bill shall be introduced in the Legislative Assembly during that session: Provided further that where for any reason a Bill as aforesaid does not become law within six months from the date of its introduction in the Legislative Assembly, the notification shall cease to have effect on the expiration of the said period of six months. (3) All references made in this Act to any of the Schedules shall be considered as relating to the Schedules as for the time being amended in exercise of the powers conferred by this Section. PVAT 75. Power to amend Schedules. - (1) The Government may, by notification, alter, add to, or cancel any of the Schedules. (2) Where, a notification has been issued under sub-section (1), there shall, unless the notification is, in the mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30 as the extension of an exemption or reduction of rate of tax to a specified class of assessees or transactions, upon satisfaction of certain conditions. Thus, in order for Sections 17, 30 and 31 to apply, Legislature has to carve out a smaller group of assessees/transactions from the general pool of assessees/transactions and extend the benefit of exemption or reduced/nil rate of tax to the former only. It is only in such a scenario that the aforesaid provisions can be utilized or deployed. Thus, the amendment of rate of tax in general, sans the imposition of conditions upon satisfaction of which the amended (reduced) rate or exemption would apply, can only be done by way of an amendment to the Schedule. 14. In the present case, the impugned Notification reads as under: GOVERNMENT OF PUDUCHERRY (Abstract) Commercial Taxes The Puducherry Value Added Tax Act, 2007 Rate of tax on petrol and diesel Notification Orders Issued. ----------------------------------------------------------------------------------------------------- COMMERCIAL TAXES SECRETARIAT G.O.Ms.No.24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his does not per se invalidate a subsequent illegitimate and unauthorised levy. A Constitutional Bench of the Hon ble Supreme Court in the case of Amalgamated Coalfields Ltd V. Janapada Sabha Chhindwara (AIR 1961 SC 964), at paragraph 8 of the judgment, settles the proposition that acquiescence in an illegal tax, for however long a period, is not a ground for denying an assessee relief, where it is established that the levy was invalid or illegitimate in the first place. 17. Incidentally, other states and union territories have also increased the rates of tax on petrol and diesel, namely, New Delhi, Andhra Pradesh, Karnataka, Maharashtra, Telangana, Gujarat, Himachal Pradesh, Assam, Punjab and Rajasthan and such increase has been effected only by amendment to the Schedule. 18. Though the validity or otherwise of a levy has to be tested on the basis of the relevant provision in the local laws only, I find, on an examination of the relevant provisions in the Value Added Tax statutes of New Delhi, Gujarat, Assam, Rajasthan, Maharashtra and Punjab that, the procedure for amendment of schedule is more or less in pari materia with Section 75 of the PVAT Act. 19. Though it rend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h period, as may be prescribed.]; (3) Every notification issued under sub-section (1A) and subsection (2) shall be laid for not less than thirty days before the State Legislature as soon as possible after it is issued and shall be subject to rescission by the State Legislature or to such modifications as the State Legislature may make, during the session in which it is so laid or session immediately following. Any rescission or modification so made by the State Legislature shall be published in the Official Gazette, and shall thereupon take effect. 7. Levy of tax on turnover of sales and rates of tax . (1) ....... (2) The State Government may, by notification in the Official Gazette, reduce any rate of tax specified in Schedule II or Schedule III in respect of any entry (or part thereof) in the said Schedule II or III and may, by like notification, omit or amend any entry (or part thereof) in the said Schedule II or III but not so as to enhance the rate of tax in any case and thereupon the Schedule I,II or III shall be deemed to have been amended accordingly] (3) Every notification issued under sub-section (2) shall be laid for not less than thirty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect to the other provisions of this Act and the provisions of the Central Sales Tax Act, 1956 (Central Act No. 74 of 1956), the tax payable by a dealer under this Act, shall be at such point or points as may be prescribed in the series of sales by successive dealers, and shall be levied on the taxable turnover of sale of goods specified in Schedule III to Schedule VI at the rate mentioned against each of such goods in the said Schedules. .......... (5) Subject to such conditions as it may impose, the State Government may, if it considers necessary so to do in the public interest, by notification in the Official Gazette, add to or omit from, or otherwise amend or modify the Schedules , prospectively or retrospectively, or reduce the rate of tax payable in respect of any goods and thereupon the Schedule shall be deemed to have been amended accordingly. (6) Every notification issued under sub-section (5) shall be laid, as soon as may be after it is so issued, before the House of the State Legislature, while it is in session for period of not less than thirty days which may comprised in one session or in two successive sessions and if before the expiry of the sessions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, there shall be levied on the taxable turnover of a person other than a registered person, VAT at such rate, as specified in Schedules, but not exceeding thirty paise in a rupee: Provided that the rate of tax applicable on purchase or sale of declared goods, shall not exceed four percent or such rate, as specified in clause (a) of section 15 of the Central Sales Tax Act, 1956. ....... (3) The State Government after giving fifteen days notice by notification, of its intention so to do, may by like notification, alter the rate of tax specified in any of the Schedules, add to or omit from or otherwise amend the Schedules and thereupon, the Schedule shall be deemed to have been amended accordingly : Provided that if, the State Government is satisfied that circumstances exist, which render it necessary to take immediate action, it may, for reasons to be recorded in writing, dispense with the condition of previous notice. (emphasis by underlining, supplied) 20. Except for some differences in detail, the amendment of schedules in the VAT enactments extracted above, uniformly require that the notification for amendment once made, be placed before the House ..... X X X X Extracts X X X X X X X X Extracts X X X X
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