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2023 (12) TMI 997 - HC - VAT and Sales TaxConstitutional validity of Section 26(6A) of the Maharashtra Value Added Tax Act, 2002 - validity of the provisions of requirement of pre-deposit as introduced by sub-section (6A), (6B) and (6C) to Section 26 of the 2002 Act, as incorporated by Maharashtra Act 31 of 2017 w.e.f. 15th April 2017 - HELD THAT - In the case of THE STATE OF TELANGANA ORS. VERSUS M/S TIRUMALA CONSTRUCTIONS 2023 (10) TMI 1208 - SUPREME COURT it was held that The amendments in question, made to the Telangana VAT Act, and the Gujarat VAT Act, after 01.07.2017 were correctly held void, for want of legislative competence, by the two High Courts (Telangana and Gujarat High Court). The judgment of the Bombay High Court Court is, for the above reasons, held to be in error; it is set aside; the amendment to the Maharashtra Act, to the extent it required pre-deposit is held void. Considering the finality now having reached in regard to the issue of pre-deposit being put to rest by the decision of the Supreme Court in The State of Telangana Ors. Vs. Tirumala Constructions, it is opined that the request of the Petitioners to approach the Appellate Authority/Tribunal needs to be accepted. The Petitioners shall approach the Appellate Authority/Tribunal by filing their respective appeals along with applications praying for condonation of delay and also waiver of pre-deposit within a period of four weeks from today. If such appeal alongwith application are filed as permitted such proceedings be considered by the Appellate Authority/Tribunal in accordance with law and appropriate orders be passed on the application as also on the appeals - petition disposed off.
Issues Involved:
1. Constitutional validity of Section 26(6A) of the Maharashtra Value Added Tax Act, 2002. 2. Legislative competence of the State Government to amend the law retrospectively. 3. Applicability of pre-deposit requirements to pre-2017 appeals and revisions. 4. Impact of the Supreme Court's decision in The State of Telangana & Ors. Vs. Tirumala Constructions. Summary: Issue 1: Constitutional Validity of Section 26(6A) of the Maharashtra Value Added Tax Act, 2002 The batch of petitions challenged the constitutional validity of Section 26(6A), inserted by Maharashtra Amendment Act 31 of 2017, which mandated a pre-deposit for filing appeals. The Court noted the provisions of sub-sections (6A), (6B), and (6C) which required a mandatory pre-deposit of 10% of the disputed tax liability for appeals. Issue 2: Legislative Competence of the State Government to Amend the Law Retrospectively The Court referred to the case of Anshul Impex Pvt. Limited Vs. State of Maharashtra, where it was held that the amendment was inapplicable to periods before the amendment. However, the State subsequently amended the 2002 Act through an ordinance and later by the Maharashtra Tax Laws (Amendment and Validation) Act 2019, clarifying that the provisions would apply irrespective of the period to which the order relates. Issue 3: Applicability of Pre-Deposit Requirements to Pre-2017 Appeals and Revisions The Full Bench of the Bombay High Court in United Projects Vs. State of Maharashtra upheld the State's legislative competence to retrospectively amend the law to require pre-deposit for appeals, even for periods before the amendment. The Supreme Court, however, in The State of Telangana & Ors. Vs. Tirumala Constructions, held that the Maharashtra legislature lacked competence to amend the VAT Act after 01.07.2017, rendering the amendments void. Issue 4: Impact of the Supreme Court's Decision in The State of Telangana & Ors. Vs. Tirumala Constructions The Supreme Court's decision set aside the Full Bench ruling of the Bombay High Court, declaring the amendments to the Maharashtra VAT Act void for want of legislative competence after the GST regime came into effect. Consequently, the pre-deposit requirements were invalidated. Conclusion: The petitions were disposed of, allowing the Petitioners to file their appeals along with applications for condonation of delay and waiver of pre-deposit within four weeks. The Appellate Authority/Tribunal was directed to consider these applications in accordance with the law. The Court also provided limited protection against demand notices for a period of four weeks to enable the Petitioners to approach the Tribunal/Appellate Authority. All contentions of the parties were expressly kept open.
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