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2019 (11) TMI 779 - HC - VAT and Sales TaxRefusal of registration -non-compliance with the pre-deposit - non-deposit of ten per cent of the disputed amount now mandated under the amended provision of Section 26 of the Act - Maharashtra VAT Act - Whether the State of Maharashtra, after the 101st constitutional amendment dated 16 September 2016, has legislative competence to amend the MVAT Act to enact the mandatory condition of pre-deposit of the disputed amount for filing appeal regarding the goods? - Whether the explanation to section 26 of the MVAT Act takes away the right of the assessee to file an appeal without statutory deposit in respect of assessment orders passed before 15 April 2017? HELD THAT - The Registry is directed to place papers and proceedings of the present two writ petitions before the learned Chief Justice to obtain suitable directions to place the questions of law for the opinion of the Larger Bench of this Court. Place the petitions on board after 12 weeks under the caption for directions.
Issues Involved:
1. Legislative competence of the State of Maharashtra to amend the MVAT Act post-101st Constitutional Amendment. 2. Validity and effect of the Explanation to Section 26 of the MVAT Act introduced by the 2019 amendment. 3. Reconsideration of the decision in Anshul Impex Pvt. Ltd. v. State of Maharashtra. Detailed Analysis: 1. Legislative Competence: The petitioners argued that post the 101st Constitutional Amendment, the State of Maharashtra lacks legislative competence to amend the MVAT Act to impose a mandatory pre-deposit for filing appeals concerning all goods except the five items listed in Entry 54 of List-II. They contended that the amendment to Section 26 should only relate to these five items, and any further amendments would be ultra vires. The State, however, argued that the entries in the Lists of Schedule-VII are fields of legislation and not sources of legislative power. The State maintained that the MVAT Act has not been repealed and amendments post the 101st Constitutional Amendment are valid, citing Article 246, 246A, and 323B of the Constitution. 2. Validity and Effect of the Explanation to Section 26: The petitioners contended that the Explanation to Section 26 introduced by the 2019 amendment is a case of legislative overruling, which is permissible only to cure defects pointed out in judicial decisions. They argued that the decision in Anshul Impex was based on legal interpretation, not on any defect, and thus the Explanation is invalid as it encroaches upon judicial powers and violates Article 14 of the Constitution. The State countered that the Explanation clarifies the legislative intent behind the 2017 amendment and removes doubts created by the Anshul Impex decision, thus being valid. 3. Reconsideration of Anshul Impex Decision: The Division Bench in Anshul Impex held that the right to appeal is governed by the law at the time of initiation of proceedings, not by the law at the time of the decision. The State argued that this decision did not consider the express intention of the legislature to make the right of appeal conditional. The court, agreeing with the State, noted that the decision in Anshul Impex needs reconsideration as it did not fully address the implications of the legislative amendments. Conclusion: The court found itself in prima facie agreement with the State on the issue of legislative competence but agreed with the petitioners that the Explanation encroaches upon judicial powers. Given the complexity and importance of the issues, the court decided to refer all three issues to a larger bench for a comprehensive resolution. The questions of law referred include the legislative competence of the State to amend the MVAT Act post-101st Constitutional Amendment, the validity of the Explanation to Section 26, and the correctness of the Anshul Impex decision regarding the right of appeal and mandatory pre-deposit.
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