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2009 (4) TMI 868 - HC - VAT and Sales Tax


Issues involved:
1. Validity of notice issued under the Luxury Tax Act.
2. Legality of the revisional order passed by the Deputy Commissioner.
3. Effect of the Supreme Court's declaration on the constitutionality of the Luxury Tax Act.
4. Applicability of subsequent judgments on prior orders.

Detailed analysis:
1. The petitioner sought a declaration that the notice issued by the second respondent under the Luxury Tax Act was void ab initio, non est, without authority of law, illegal, and invalid. The petitioner argued that since the Luxury Tax Act was declared unconstitutional by the Supreme Court, any orders passed under it, including the impugned notice, would also be void. The petitioner relied on legal precedents to support their argument, emphasizing that an order declared void collapses automatically and does not need to be set aside separately. The court allowed the amendment of the prayer in the writ petition to declare the revisional order and the tribunal's order as ab initio void, leading to the setting aside of the impugned notice.

2. The Deputy Commissioner revised the assessment order, holding the petitioner liable to pay a substantial amount under the Luxury Tax Act. The petitioner appealed to the Sales Tax Appellate Tribunal, which dismissed the appeal. The respondent argued that the revisional order had attained finality, and the petitioner was liable to pay the tax despite the subsequent declaration of the Act's unconstitutionality. However, the court held that the revisional order was null and void following the Supreme Court's declaration, rendering the impugned notice illegal and setting it aside.

3. The Supreme Court's decision declaring the Luxury Tax Act unconstitutional had a significant impact on the case. The court emphasized that when a statute is adjudged unconstitutional, it is as if it never possessed legal force, and any orders passed under it are disregarded. The revisional order by the Deputy Commissioner was declared null and void in light of the Act's unconstitutionality, leading to the setting aside of the impugned notice demanding payment of luxury tax.

4. The respondents argued that the revisional order predated the Supreme Court's judgment and should not be affected by subsequent decisions. However, the court rejected this contention, stating that the Supreme Court's decision applies to all cases irrespective of the stage of pendency. The law laid down by the Supreme Court must be considered effective from the beginning unless indicated otherwise. Since the petitioner had not paid the luxury tax or collected it from customers, the impugned notice was set aside, and the writ petition was allowed without costs.

 

 

 

 

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