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TMI Blog2020 (9) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... n 75 and not by issuance of a Notification under Section 31 of the PVAT Act - Though the 2017 amendment to the rate of petrol and diesel 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. X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Section 31 can be invoked in any instance so far as the rate of tax stayed within the rate fixed under the Schedule and did not exceed the same. In the present instance, the rate fixed under the impugned Notification was 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 specified in the notification. 9. The requirement for satisfaction of conditions is inbuilt in the three statutory provisions as aforesaid. The consequence of non-satisfaction of the inbuilt statutory conditions finds place in Section 32 of the PVAT Act extracted be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification 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 meantime, rescinded, be introduced in the Legislative Assembly of Puducherry, as soon as may be, but in any case during the next session of the Legislative Assembly following the date of the issue of the notification, a Bill on behalf of the Government to give effect to the alteration, addition or cancellation, as the case may be, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption 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 Puducherry, the 27th May, 2020 ORDER: The following notification shall be published in the Extra-ordinary issue of the Official Gazette of the Government of Puducherry. NOTIFICATION In exercise of the powers conferred by section 31 of the Puducherry Value Added Tax Act, 2007 (Act No.9 of 2007) and all other powers enabling in this behalf and in supersession of the notification issued vide G.O.Ms.No.17, dated 17th April, 2020 of the Commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 renders this order rather verbose, I extract the relevant provisions in the other VAT statutes as well to illustrate this point effectively: I . D elhi Value Added Tax Act, 2004 103. Power to amend Schedules (1) If the Government is of opinion that it is expedient in the interest of general public so to do, it may, by notification in the Official Gazette, add to, or omit from, or otherwise amend, the First, the Second, the Third, the Fourth, the Fifth, the Sixth, or the Seventh Schedules, either retrospectively or prospectively, and thereupon the said Schedules shall be deemed to have been amended accordingly: PROVIDED that no such amendment shall be made retrospectively if it would have the effect of prejudicially affecting the interests of a dealer. (2) The Commissioner may, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 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. I II. A ssam Value Added Tax Act, 2003 17. Powers of Government to amend Schedules: The Government may, by notification in the Official Gazette, add to or omit from any Schedule any entry or entries or transpose any entry or part of entries or the rate or rates or the point or points of levy or otherwise amend or modify any Schedule, prospectively or retrospectively, and thereupon the Schedule shall be deemed to have been amended accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-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 sessionsin which it is so laid or of the session immediately following the House of the State Legislature makes any modification in such notification or resolves that any such notification should not be issued, such notification thereafter have effect only in such modified form or be on no effect, as the case may be, so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done thereunder." V . M aharashtra Value Added Tax Act, 2002: 9. Amendment of Schedule :- (1) The State Government may, from time to time, by notification in the Official Gazette,- (a) amend the Schedule by adding or modifying or deleting any entry therein and thereupon the Schedule shall stand amended accordingly for the purpose of levy of tax; (b) provide for reducing or enhancing the rates of tax or for specifying the rates of tax where NIL rates are specified, and thereup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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