2019 (4) TMI 1586 - HC - VAT and Sales Tax

Levy of tax on supply of goods by way of or as part of any service - sub-clause (f) of Article 366(29A) of the Constitution of India - HELD THAT - Issue Rule returnable on 27th June, 2019. Since the constitutional validity of clause (g) of section 2(23) of the Gujarat Value Added Tax Act, 2003 is subject matter of challenge, Issue Notice to the learned Advocate General. By way of interim relief, the respondents are restrained from making any coercive recovery pursuant to the impugned assessment order dated 15.3.2019.

Summary

Issues involved:
Challenge to the constitutional validity of clause (g) of section 2(23) of the Gujarat Value Added Tax Act, 2003.

Analysis:

1. The petitioner sought leave to amend the prayer clause. The advocate for the petitioner argued that the definition of "sale" in the Gujarat Value Added Tax Act, 2003, specifically clauses (g) and (h), deviates from the provisions of Article 366(29A) of the Constitution of India. The contention was that the State Government's attempt to tax the supply of goods as part of a service goes beyond its constitutional powers.

2. Reference was made to the Supreme Court's decision in Bharat Sanchar Nigam Limited v. Union of India, highlighting paragraphs 44 to 46, and the Allahabad High Court's ruling in International Hospital Pvt. Ltd. v. State of U.P. The petitioner also pointed out that a similar petition was admitted by the court for another assessment year.

3. The court issued a Rule returnable on 27th June, 2019, considering the challenge to the constitutional validity of clause (g) of section 2(23) of the Act. The learned Advocate General was served notice. Additionally, the respondents were restrained from making any coercive recovery based on the assessment order dated 15.3.2019 as an interim relief measure.

4. The case was scheduled to be heard along with two other Special Civil Applications. Direct service was permitted for the proceedings.