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TMI Blog2022 (7) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... al accrues on the date of order of assessment and requirement of mandatory predeposit introduced by way of amendment does not apply to the orders passed in the assessment years prior to 15th April 2017, is correct or not. HELD THAT:- There is no substance in the submission made by Mr.Nankani, learned senior counsel for the petitioner that the State Government had no power to legislate including the power to amend the legislation or that such power to legislate of power has been taken away in view of the introduction of Article 246A in the Constitution of India. The argument of the learned senior counsel that post constitutional amendment, the provision of MVAT Act, 2002 virtually has the effect of repealing the MVAT Act, 2002 in so far as all other goods, except the 6 mentioned in Entry-54 of List-II of Schedule-VII of the Constitution are concerned, has no merit - Article 367 of the Constitution of India provides that unless the context otherwise requires, the General Clauses Act, 1897, shall, subject to any adaptations and modifications that may be made therein under Article 372, apply for the interpretation of this Constitution as it applies for the interpretation of an Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kes away the effect of the judgment of the Nagpur Bench of this Court in case of M/s. Anshul Impex Private Ltd. - There is no substance in the submission made by the learned senior counsel for the petitioner that the impugned amendment directly or indirectly overrules or overreaches the judgment in case of M/s. Anshul Impex Private Ltd. The Legislature has power to remove the defects retrospectively and prospectively by Legislative action so as to cure the defect or inconsistency in the law declared by the Court so as to remove such inconsistency from the statute for effective enforcement of law - when a law is enacted with retrospective effect, it is not considered as an encroachment upon judicial power when the legislature does not directly overrule or reverse a judicial dictum. The legislature cannot, by way of an enactment, declare a decision of the Court as erroneous or a nullity, but can amend the statute or the provision so as to make it applicable to the past. The legislature has the power to rectify, through an amendment, a defect in law noticed in the enactment and even highlighted in the decision of the court. This plenary power to bring the statute in conformity with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Maharashtra Value Added Tax Act, 2002 to incorporate a condition/modifying the earlier condition for entertaining an appeal for a mandatory pre-deposit for filing appeals against the assessment orders pertaining to all the goods after 16th September 2016 that is post 101 Constitutional Amendment Act, 2016 - the explanation to section 26 of the MVAT Act introduced by the Maharashtra Tax Laws (Amendment and Validation) Act, 2019 does not take away the right of the assessee to file an appeal without statutory deposit in respect of the orders passed for the assessment year prior to 15th April, 2017. The said explanation also does not nullify the decision of the Division of this Court of Nagpur Bench in case of M/s. Anshul Impex Private Ltd. Thus, it is declared that the explanation inserted in 2019 amendment w.e.f. 15th April, 2017 would apply to those orders which are passed after 15th April, 2017and not to the prior orders. All earlier orders are governed by the original provisions of Section 26(6) and not by the amendment. Both the provisions i.e. old Section 26(6) and the amendment introduced by Sub Section 6A, 6B and 6C to Section 26 and the explanation thereto will apply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ullifies the decision of the Division Bench of this Court (Nagpur Bench) in the case of Anshul Impex Pvt. Ltd. Vs. State of Maharashtra in Sales Tax Appeal No.2/2018? (c) Whether the decision of the Division bench in the case of Anshul Impex Pvt. Ltd. Vs. State of Maharashtra laying down that right of filing appeal accrues on the date of order of assessment and requirement of mandatory predeposit introduced by way of amendment does not apply to the orders passed in the assessment years prior to 15th April 2017, is a correct proposition since the right of appeal can be made conditional by the Legislature with express indication and, therefore, the decision in the case of Anshul Impex Pvt. Ltd. Vs. State of Maharashtra requires reconsideration by the Larger Bench ? Facts and submissions in Writ Petition No. 2883 of 2018 3. The petitioners filed first quarterly returns for the period 2013-2014, under the Maharashtra Value Added Tax Act, 2002 (hereinafter referred to as the MVAT Act, 2002 ) on 24th July 2013. On 18th July, 2016, the assessment proceedings were initiated by the Deputy Commissioner of Sales Tax, Issue Base Audit, Mumbai. On 13th October 2017, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Gazette thereby amending various provisions of various Acts. In paragraph No. 26 of the MVAT Act, 2002, Section 6(A), 6(B) and 6(C) were inserted. 7. Several amendments were made in the Lists attached to Seventh Schedule of the Constitution, including Entry 54 in List II, which deals with the right of the State Government to levy a tax on goods. Prior to the said Entry No. 54, the State Government could collect tax on sale or purchase of the goods other than the newspaper viz only on the sale of petroleum crude, high-speed petrol, natural gas and aviation turbine fuel and alcoholic liquor for human consumption. 8. On 26th June 2018, a Division Bench of this Court at Nagpur in case of Anshul Impex Private Ltd Vs. State of Maharashtra (Sales Tax Appeal No.2 of 2018 in a Judgment delivered on 28th September, 2018 ) held that the amended section 26(6B)(c) of the MVAT Act requiring appellant to deposit 10% of the disputed tax is not applicable to the appellant therein as lis had commenced in the year 2011 while the amendment was prospective w.e.f. 15th April 2017. The said Division Bench accordingly held that the Tribunal had committed an error in dismissing the appeal filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Anshul Impex Private Limited (supra) and referred various issues to the larger bench. 14. Mr. Ashtuosh Kumbhakoni, learned Advocate General for the State argued first by consent of the learned Advocate for the petitioners. He invited our attention to various provisions of the MVAT Act, 2002, various Articles of Constitution of India, provisions of the Central Goods and Services Act 2017, Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2017, explanation inserted by the 2019 Ordinance and several Judgments of Hon ble Supreme Court and this Court. 15. It is submitted by the learned Advocate General that Right of Appeal is neither a fundamental right nor a Constitutional right and it is not even an ingredient of natural justice . It is a statutory right and is a creature of Statute. Such a right accrued under the statute and can be even taken away completely by the Legislature by effecting statutory amendment provided there are provisions made by the Legislature to take away such a right. Since the right can also be taken away by a provision as and by way of a necessary intendment, it cannot be however taken away merely impliedly . It cannot be taken away by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the amended provision is certainly not retrospective operation of the amended provision. He submits that if the amended provision would have been made retrospective in its operation it would affect even such appeals which were pending and not just filed on or after the date on which such amendment had been brought into force i.e. 15th April, 2017. He submits that the retrospective, prospective or retroactive operation of the amendment at hand, really is irrelevant and totally beside the point. The said question does not arise for the consideration in case of appeals that are filed on or after 15th April, 2017. 20. In his alternate submission the learned Advocate General submits that even if the 2017 amendment adversely affects the right of appeal of the petitioners on account of its retrospective operation, the legislature is fully empowered to enact such provisions which may adversely affect the right of appeal. This is because it is so done in clear and specific terms expressly or by necessary intendment. 21. It is submitted that newly inserted sub sections 6(A), 6(B) and 6 (C) of Section 26 of the MVAT Act, 2002 clearly and conspicuously demonstrate that they ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not be able to recover any tax dues from the such assessee. If the business of the assessee is wound up due to precarious financial condition, no recovery would be possible. In that event, the decision in favour of the revenue would remain only as a decree with no actual recovery possible. 26. It is submitted that the condition of 10% deposit introduced by the amendment is not oppressive as, upon deposit of 10% of the amount stay is automatically granted for the remaining 90% of the amount. He submits that though a vested right of appeal accrues in favour of the assessee, such a right expressly made conditional does not oppress or nullify the right of appeal. 27. Learned Advocate General invited our attention to the Judgment of Supreme Court in case of Hoosein Kasam Dada (India) Ltd Vs. The State of Madhya Pradesh and others AIR (1953) SC 114. He submits that the Supreme Court in the said Judgment had considered the amended Section 22 (I) of the Central Provinces And Berar Sales Tax Act, 1947. He submits that the question for consideration before the Supreme Court in the said matter was whether the imposition of a condition requiring payment of entire assessed amount a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India. He submits that in this case the State Government has prescribed deposit of 10% of the tax which is much less than 25% declared as reasonable. 31. Learned Advocate General placed reliance on the Judgment of Supreme Court in case of Videocon International Ltd Vs. Securities And Exchange Board of India, (2015) 4 SCC 33 and in particular paragraphs No.37, 39 and 40 and submitted that by prescribing the condition of pre-deposit of 10% and thereby staying the recovery of 90% is one of the package provided by the State Government to all the assesees. 32. Learned Advocate General placed reliance on the Judgment of Madras High Court in case of Dream Castle Versus Commissioner of Service Tax-I in Writ Petition No. 13431 of 2015 delivered on 18.04.2016 and in particular paragraphs No. 52, 55, 59, 78 and 79. He stated that Madras High Court had considered identical facts and held that when the unamended condition gave an assessee a total waiver at the discretion of the Appellate Authority, the same cannot be stated as a vested right. The Madras High Court held that the amendment did not take away right vested, but merely made a chance divested. 33. Learned Advocate Ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gress any other constitutional limitation. It is submitted that the State Government is empowered to amend the law by use of appropriate phraseology removing the defects pointed out by the Court in any Judgment. He submits that the State Government has neither directly nor indirectly overruled the view taken by the Nagpur Bench of this Court as sought to be canvassed by the petitioners. The State Government has simplicitor removed the defects pointed out by the Nagpur Bench of this Court in the said Judgment. 38. Learned Advocate General placed reliance on the Judgment of the Supreme Court in case of Assistant Commissioner of Agricultural Income Tax Ors. Versus Netley B Estate And Others, (2015) 11 SCC 462 and in particular paragraphs No. 15 and 18. He submits that though the Legislature cannot directly overrule the decision or make a direction as not binding, it has the power to make the decision ineffective by removing the base on which the decision was rendered. 39. Learned Advocate General placed reliance on the Judgment of this Court in case of Godrej Soaps Ltd Vs. State of Maharashtra And others, 2005 SCC OnLine Bom 1297 in particular paragraphs No.10,11,21, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch of this Court is founded. 42. It is submitted by the learned Advocate General that there is misconception of the petitioners that only the Seventh schedule provides the Lists of the Legislative heads speaking out the Legislative competence or the Legislature of either Center or State. He submits that even if no entry is stated in any of the List prescribed in the Seventh schedule but is in the body of the Constitution, the State is empowered to Legislate on any such subject and cannot be objected to. The powers of legislation flows from various sources under the Constitution of India and not only from the Seventh schedule. Amendment of entry No. 54 in List II by 101st Constitution amendment does not denude the powers of the State Government to legislate. 43. Learned Advocate General placed reliance on the Judgment of Supreme Court in case of Bimolangshu Roy Versus State of Assam And Another, (2018) 14 SCC 408 and in particular paragraphs No. 10, 17, 18, 20, 21 and 22 to 26. He submits that the authority to make law flows not only from an express grant of power by the Constitution to a legislative body but also by virtue of implications flowing from the context of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The said section operates irrespective of inconsistency in the other provisions of amending Act. 47. It is submitted that the Maharashtra Goods and Services Tax Act came into force from 1st July 2017 and was gazetted on 15st July 2017. By the said amendment, pre-deposit of the amount was prescribed at two stages of appeal. Article 323 (B) deals with the Tribunal. He submits that as a matter of fact the petitioners have filed appeals under the provision of the MVAT Act, 2002 even after insertion of the amendment by the State of Maharashtra in the provisions of the MVAT Act, 2002. The definition of goods is amended by the State of Maharashtra in line with entry No. 54 in the Constitution of India. 48. The learned Advocate General placed reliance on Section 107 of the Maharashtra Goods and Services Tax Act 2017. He submitted that Section 107(6) (b) deals with the provisions of appeals and Revisions providing for a 10% pre-deposit of the tax in question. Learned Advocate General invited our attention to Section 26 of the MVAT Act, 2002 and submitted that after insertion of the said amendment the State Government came out with amnesty scheme under the provisions of the MVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53. It is submitted that, though the said constitutional amendment while introducing Article 246A also makes corresponding changes in the entries in the two lists i.e. List I and List II of Schedule VII, these changes show that the power to legislate under Article 246 is now confined only to six items mentioned in Entry 54 List II of Schedule VII. He submits that as Article 246 is confined only to the six items covered by Entry 54 of List II. Article 246A covers totally new and different tax, namely the Goods and Service Tax, which is on supply, and beyond and outside the MVAT Act, 2002. The State legislature does not have the power to amend the existing MVAT Act, 2002 after 16.09.2016 on any matter including appeals in relation to goods other than the six items mentioned in Entry 54 of List II. 54. It is submitted by the learned senior counsel that, the power to legislate includes the power to amend the legislation. Once the power to legislate has been taken away the power to amend the legislation also ceases to exist. He submits that, though technically, the MVAT Act, 2002 was not repealed, but post the said constitutional amendment, the provisions thereof were amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the General Clauses Act also applies to the amendments to the Constitution. However, what is saved by Section 6 of the General Clauses Act is the pre-existing power to continue with the assessment, appeal, recovery, etc. in respect of matters pending on the date of the repeal or amendment. This is distinct and different from the powers to legislate which have been repealed or amended and do not exist in the eyes of law. 58. It is submitted by the learned senior counsel that, the power under the old Article 246 has been abridged by simultaneously amending the field of legislation in Entry-54 of List-II, which is referred therein. In this case, there is no question of any power to legislate in respect of rest of the goods other than the six presently covered by Entry 54, which survives post-amendment even by applying the provisions of General Clauses Act. 59. It is submitted by the learned senior counsel for the petitioner that, in so far as the MVAT Act, 2002 is concerned, the State Legislature amended the same by Taxation Laws Amendment Act, 2017. This was to change the definition of goods therein in order to align it with Entry-54 of List-II, as amended by the said consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Karnataka Vs. Karnataka Pawn Brokers Association reported in AIR 2018 SC 1441. 63. It is submitted by the learned senior counsel that, Nagpur Bench of this Court in Anshul Impex (supra) came to the conclusion purely based on legal interpretation of the principles laid down in the case of Hossein Kasam Dada (supra). The entire action on the part of the State of Maharashtra to introduce the 2019 amendment is not in the nature of legislative overruling, but is a case of legislative overreaching into the functions of the judiciary, thereby violating the doctrine of separation of powers. The legislature cannot simply overrule any unfavourable decision by bringing a subsequent amendment. It can do so only in specific circumstances to remove or cure any defect pointed out by the Court. He submits that 2019 amendment is invalid in as much as it encroaches upon powers of judiciary as it seeks to overrule a decision of this Court without any legal basis for the same. 64. The learned senior counsel attempted to distinguish the judgment of this Court in a case of Noopura Vishwajit Kulkarni Vs. State of Maharashtra (supra) and submitted that, the said judgment does not decide upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned senior counsel that, the said impugned explanation not only violates Article 14 of the Constitution of India but also discriminates between two assessees in the same assessment year. It causes delay in passing assessment orders wholly attributable to the Government. The right of appeal of such similarly situated assessees cannot be different merely due to a fortuitous event of different assessing officers completing the assessment at different time for the same assessment years, some before and some after 15th April 2017. He submits that, subject to the legislative competence and to passing the constitutional test of Article 14 of the Constitution, at best the explanation would have prospective effect. 69. It is submitted by the learned senior counsel that, the Nagpur Bench of this Court after relying upon the judgment of the Hon ble Supreme Court in a case of Hoosein Kasam Dada (supra) held that sub-section (6A), (6B) and (6C) do not take away the vested right of an assessee and that the right to file an appeal is governed by the law on the date of commencement of the lis. The said judgment of Nagpur Bench has attained finality since the challenge thereto did not succeed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussion why the law laid down therein does not apply to the amendments to Section 35F/129E. He submits that, when there is direct judgment in relation to same provision i. e. Section 26 of the MVAT Act, 2002 considered by Nagpur Bench of this Court in a case of Anshul Impex (supra) then judgments interpreting other Acts would not be applicable. 73. The learned senior counsel for the petitioner placed reliance on the judgment of the Supreme Court in a case of Ambika Prasad Mishra Vs. State of UP reported in (1980) 3 SCC 719 and submitted that, it was clearly held that, fatal flaws silenced by earlier rulings cannot survive after death because a decision does not lose its authority merely because it was badly argued, inadequately considered and fallaciously reasoned. He submits that, the respondents thus cannot be allowed to urge that the decisions in the case of Anshul Impex (supra) is not binding merely because certain decisions were not brought to the notice of the Nagpur Bench of this Court even though the point of law considered in those decisions had been dealt with. 74. The learned senior counsel for the petitioner submits that, there is no dispute that an appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imited Vs. Mokul Shriram EPC JV (supra), the judgment of the Supreme Court in Sri Satya Nand Jha, Kharkhand Vs. Union of India reported in 2016 SC Online SC 1627 has not been relied upon. 77. Learned senior counsel for the petitioner tenders a compilation of various provisions in support of his submissions. He submits that, the MVAT Act, 2002 is not repealed in toto and some of the provisions were either deleted or amended. Amendments were carried out by the respondents to remove the alleged inconsistency in the Act in view of 101st Constitutional Amendment. The old Act is saved for all other goods previously covered by the earlier provisions. He invited our attention to Section 78 of the MVAT Act, 2002 and would submit that, the provision of appeal prescribed under the said Act has been continued. He invited our attention to the Maharashtra Tax Laws (Levy Amendment and Validation) Act, 2017 and would submit that, sub section 6A is added by the said amendment. 78. It is submitted that, the ratio in the judgment of the Supreme Court in a case of Hoosein Kasam Dada (supra) is not diluted in the said judgment and continues to apply. The amendment introduced by the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Section 84A considered by the Gujarat High Court came to be incorporated by the State Legislation from 3rd April 2018. The constitutional amendment relied upon by the State Government came into effect from 16th September, 2016. Amendment to Section 84A was carried out after one year of the said constitutional amendment i.e. on 3rd April, 2018. On 1st July, 2017, the Gujarat GST Act came into force. On 3rd April, 2018 amendment was brought even after Gujarat GST Act came into force. 82. It is submitted by the learned Advocate General that, the Court has to interpret the provisions harmoniously. The State Government could have carried out amendment within one year from the date of constitutional amendment which is rightly done by the State Government. In this case amendment to the MVAT Act, 2002 came to be carried out within one year before the Maharashtra Goods and Service Tax Act came into force. The provisions of the MVAT Act, 2002 were amended so as to cure the lacuna in MVAT Act and to avoid inconsistency with powers granted by the Legislation to the Central Government as well as the State Government. 83. Mr. Nankani, learned senior counsel in his sur-rejoinder argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uel and alcoholic liquor for human consumption, but not including sale in the course of inter-State trade or commerce or sale in the course of international trade or commerce of such goods. 89. Clause 19 of the said Amendment Act reads thus :- 19. Notwithstanding anything in this Act, any provision of any law relating to tax on goods or services or on both in force in any State immediately before the commencement of this Act, which is inconsistent with the provisions of the Constitution as amended by this Act shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until expiration of one year from such commencement, whichever is earlier. 90. The State Government issued Maharashtra Goods and Services Tax related laws (Amendment, Validation and Savings) Act, 2017 published in the Government Gazette on 29th May, 2017 to amend various laws including MVAT Act, 2002. Clause 12 of section (2) of the MVAT Act was substituted and reads thus :- (12) goods means petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed day of the Maharashtra Goods and Services Tax Act, 2017 or for any other purpose whatsoever connected with or incidental to any of the purposes aforesaid and whether or not the tax, penalty, interest, sum forfeited or tax deducted at source, if any, in relation to such proceedings is paid before or after the appointed day of the Maharashtra Goods and Services Tax Act, 2017. (2) Without prejudice to the provisions contained in the foregoing sub- section, the provisions of section 7 of the Maharashtra General Clauses Act, shall apply in relation to the repeal of any of the provisions of the Acts referred to in sub-section (1). On 1st July, 2017, the Central Government enacted Central Goods and Services Act, 2017. On the same date, the State Government enacted Maharashtra Goods and Services Act, 2017. 92. Sub-sections 6A, 6B and 6C were added to section 26 of the MVAT Act which read thus :- 26. Appeals:- ..... ..... ..... ..... ..... ..... ..... ..... (6A) No appeal against an order, passed on or after the commencement of the Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2017, shall be filed before the appellate authority in first appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of an appeal against any other order, an amount, as directed by the Tribunal : Provided that, the amount required to be deposited under clause (b) or, as the case may be, clause (c), shall not exceed rupees fifteen crores. Explanation :- For the purposes of clause (b) or clause (c) of sub-section (6B), the expression, balance amount of disputed tax shall mean an amount of disputed tax, which remains outstanding, after considering the amount paid, as directed by the appellate authority in first appeal under clause (b) or, as the case may be, clause (c), respectively of sub-section (6A). (6C) The appellate authority or, as the case may be, Tribunal shall stay the recovery of the remaining disputed dues, in the prescribed manner, on filing of an appeal under sub-section (6A) or, as the case may be, sub-section (6B). 93. It is the case of the State Government in the wake of interpretation rendered by the Nagpur Bench of this Court in case of M/s.Anshul Impex Private Ltd. (supra), it has inserted the explanation after sub-section 6(c) to section 26, stating that shall be deemed to have been inserted w.e.f. 15th April, 2017 , the said subsections 6A, 6B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he repugnancy provision to resolve the inconsistencies between the Central and the State Laws of GST. It is held that the distribution of the Legislative power between the federating units the Union and the States, is among the paramount features of a federal Constitution. Articles 246 and 254 have been centre of debate on the federal nature of the Indian Constitution. Article 246A, is a special provision with respect to goods and service tax , and begins with a non obstante clause overriding Articles 246 and 254. 97. It is held that Article 246 sets down the constitutional framework defining the legislative competence of Parliament and the State Legislatures. Article 254 provides the framework for addressing inconsistency between the central and state laws on matters in the concurrent list. Article 246A entrusts Parliament and State legislatures the power to legislate on the goods and services tax. The power of the States however is subject to the conferment of the exclusive domain to Parliament to levy the goods and services tax where the supply of goods or services takes place in the course of inter-state trade and commerce. 98. The Hon ble Supreme Court also adverted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on GST. Article 246A has a non obstante provision which overrides Article 254. Article 246 A does not provide a repugnancy clause. It is further held that unlike Article 254 which stipulates that the law made by Parliament on a subject in the Concurrent list shall prevail over conflicting laws made by the State legislature, the constitutional design of Article 246A does not stipulate the manner in which such inconsistency between the laws made by Parliament and the State legislature on GST can be resolved. The concurrent power exercised by the legislatures under Article 246A is termed as a simultaneous power to differentiate it from the constitutional design on exercise of concurrent power under Article 246, the latter being subject to the repugnancy clause under Article 254. 102. The Hon ble Supreme Court in the said judgment has considered the statement of objects and reasons and the Legislative History of the Constitution Amendment Act 2016. The Hon ble Supreme Court considered the First Discussion Paper on Goods and Services Tax in India released by the Empowered Committee in November 2009 explaining the rationale for introducing the GST regime. 103. It is held that fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned senior counsel that post constitutional amendment, the provision of MVAT Act, 2002 virtually has the effect of repealing the MVAT Act, 2002 in so far as all other goods, except the 6 mentioned in Entry-54 of List-II of Schedule-VII of the Constitution are concerned, has no merit. These submissions of the learned senior counsel is contrary to the principles of law laid down by the Hon ble Supreme Court in case of Union of India Anr. vs. M/s. Mohit Minerals Pvt. Ltd. (supra) and the objects of legislative intent of introducing with the Article 246A in the Constitution of India. 107. Learned senior counsel does not dispute that after introduction of Article 246A in the Constitution of India, the State Government has already carried out amendment to various provisions of the MVAT Act, 2002 about 24 times which were never impugned by the petitioner or others on the ground of legislative incompetence or otherwise. In our view, the power to legislate on the GST concurrently vest with the Union as well as all the States irrespective of the fact whether GST is not included in any of the three lists provided in VIIth Schedule of the Constitution of India. 108. Article 36 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al or for entertaining the same in respect of six items covered by Entry 54 and different provisions for other items not covered by the said entry. 112. There is no substance in the submission made by the learned senior counsel for the petitioner that in view of the provisions of Maharashtra Goods and Services Tax related laws (Amendment, Validation and Savings) Act, 2017 having a saving clause in Section 78 thereof such a saving clause does not save the power to legislate on matters on which the power under the Constitution has been taken away, and merely saves rights and liabilities accruing under the MVAT Act, 2002. 113. It is not the case of the petitioner that the provision of the MVAT Act in toto have been repealed by the provisions of Maharashtra Goods and Services Tax Act, 2017. In our view, in view of the specific saving clause in section 78 of the Maharashtra Goods and Services Tax related laws (Amendment, Validation and Savings) Act, 2017, power to legislate the matters or to bring the amendment in the provisions of the MVAT Act have not been taken away rather saves rights to that extent. 114. Insofar as Shri Prithvi Cotton Mills Ltd. (supra) relied upon by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving the mistakes committed in the earlier legislation, the effect of which is to remove the basis and foundation of the judgment. If this is done, the same does not amount to statutory overruling. 118. In our view, the principles laid down by the Hon ble Supreme Court in the said judgment would support the case of the State Government and not the petitioner. There is no merit in the submission of the learned senior counsel for the petitioner that the Nagpur Bench of this Court in case of M/s. Anshul Impex Private Ltd. (supra) has decided the issue based on the legal interpretation of the principles laid down the judgment of Supreme Court in the case of Hoosein Kasam Dada (India) Ltd.(supra). 119. In our view, there is no violation of any doctrine of separation of powers as sought to be canvassed by the learned senior counsel for the petitioners. The petitioners have also not disputed the proposition of the law that the State Government has power to legislate for the purpose of removing or curing any defect pointed out by the Court in the said judgment. In our view, there is no encroachment on the part of the State Government upon the power of the judiciary by carrying out th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll apply and co-exist. There is no conflict between these provisions. Admittedly in the facts of this case, the appeal has been filed by the petitioner after insertion of the impugned amendment to section 26 of the MVAT Act. 123. This Court in case of Nimbus Communications Ltd. Vs. Commissioner of Service Tax, Mumbai IV (supra) relied upon by the learned Advocate General, considered the judgment of the Division Bench of Allahabad High Court in a case of Ganesh Yadav Vs. Union of India (supra) and accepted the view of the Allahabad High Court delivered in case of Ganesh Yadav Vs. Union of India (supra). Learned senior counsel for the petitioner could not distinguish the judgment of the Allahabad High Court in a case of Ganesh Yadav Vs. Union of India (supra) and judgment of this Court in case of Nimbus Communications Ltd. Vs. Commissioner of Service Tax, Mumbai IV (supra). 124. There is no substance in the submission made by the learned senior counsel for the petitioner that the amendment introduced by the State Government is hit by principles laid down by the Supreme Court in case of Hoosein Kasam Dada (supra). This Court has to interpret the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able earlier. In the latter position, the amendment would not affect the right of appeal, as was available earlier, because the earlier package is still included in the amended package. 128. The Hon ble Supreme Court held that the right of appeal being a vested right, the appellate package, as was available at the commencement of the proceedings, would continue to vest in the parties engaged in a lis, till the eventual culmination of the proceedings. Obviously, that would be subject to an amendment expressly or impliedly, providing to the contrary. The principles laid down by the Hon ble Supreme Court in case of Videocon International Limited (supra) apply to the facts of this case. In this case, the State Government has provided the package to all the assessees by prescribing the condition of pre-deposit of 10% and thereby staying the recovery of 90% as a pre-condition for entertaining an appeal. Such package by the Legislature is permissible in law. 129. Madras High Court in case of M/s. Dream Castle (supra) has held that right of appeal is neither an absolute right nor an ingredient to natural justice and that it is only a statutory right which can be circumscribed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only a chance or hope for the assessee to get a total waiver and thus could not be equated to a vested right. Per contra, by the said judgment, the prescribed fixed percentage of the 10% of the demand to be deposited mandatorily and granting stay of the balance 90% of the demand does not take away a right vested, if any, but merely made a chance divested. In our view, there is no substance in the submission of the learned senior counsel for the petitioner that the vested right of the petitioner of filing an appeal against the order of assessing officer or the First Appellate Authority is taken away by the impugned amendment. 132. The Hon ble Supreme Court in case of M/s. Newtech Promoters And Developers Pvt. Ltd. (supra) has held that the statute is not retrospective merely because it affects existing rights or its retrospection because a part of the requisites for its action is drawn from a time antecedent to its passing, at the same time, retroactive statute means a statute which creates a new obligation on transactions or considerations already passed or destroys or impairs vested rights. The Hon ble Supreme Court in the said judgment considered various issues including the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers And Developers Pvt. Ltd. (supra) would apply to the facts of this case. The provisions considered by the Hon ble Supreme Court in the said judgment are in pari materia with the impugned amended provisions which are the subject matter of these petitions. We are respectfully bound by the principles laid down by the Hon ble Supreme Court in the said judgment which apply to the facts of this case. 136. The Hon ble Supreme Court in case of Ssangyong Engineering Construction Co. Ltd. (supra) has considered the amendment to section 34(2) (b)(ii) of the Arbitration and Conciliation Act, 1996 including the Explanation 2 and held that it is clear that public policy of India is now constricted to mean firstly, that a domestic award is contrary to the fundamental policy of Indian law, as understood in paragraphs 18 and 27 of Associate Builders vs. Delhi Development Authority, (2015) 3 SCC 49, or secondly, that such award is against basic notions of justice or morality as understood in paragraphs 36 to 39 of Associate Builders (supra). It is held that Explanation 2 to Section 34(2)(b)(ii) and Explanation 2 to section 48(2)(b)(ii) were added by the Amendment Act only so that j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment and by amending the law inconsistent with the law declared by the Court so that the defects which were pointed out were never on the statute for effective enforcement of law. There is no judicial encroachment directly or indirectly by the State Government by inserting amendment which are the subject matter of these petitions as sought to be canvassed by the learned senior counsel for the petitioner. 141. In our view curing the defect pointed out by any Court through a judgment or simplicitor removing such defects does not amount to encroachment directly or indirectly or overruling the view taken by the Court or overreaching the powers of the State Government by nullifying the effect of the law laid down by the Court. 142. Hon ble Supreme Court in case of State of Himachal Pradesh vs. Narain Singh (supra) considered the question as to whether the State can in exercise of its sovereign legislative power enact an amending Act seeking to remove and cure the defects in the previous law despite there being a judgment on the previous law or not? The Hon ble Supreme Court held that the power of the Sovereign legislature to legislate within its domain, both prospectively a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of this case. We are respectfully bound by the principles laid down by the Hon ble Supreme Court in the said judgment. 145. In our view, the Legislature has power to remove the defects retrospectively and prospectively by Legislative action so as to cure the defect or inconsistency in the law declared by the Court so as to remove such inconsistency from the statute for effective enforcement of law. 146. The Hon ble Supreme Court in case of Assistant Commissioner of Agricultural Income Tax and others (supra) has held that in exercising legislative power, the legislature by mere declaration, without anything more, cannot directly overrule, revise or override a judicial decision. It can render judicial decision ineffective by enacting valid law on the topic within its legislative field fundamentally altering or changing its character retrospectively. The changed or altered conditions are such that the previous decision would not have been rendered by the court, if those conditions had existed at the time of declaring the law as invalid. It also empower to give effect to retrospective legislation with a deeming date or with effect from a particular date. 147. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn therein applies to the facts of this case. We are respectively bound by the said principles laid down by this Court in the said judgment. 150. The Hon ble Supreme Court in case of Chandra Sekhar Jha vs. Union of India, 2022 SCC OnLine 269 delivered on 28th February, 2022 in Civil Appeal No. 1566 of 2022 has construed section 129E of the Customs Act, 1962 and the amendment thereto, has considered the identical situation and has held that the conspectus of the provisions of Section 129E of the Customs Act, 1962 before and after the substitution, makes it clear that the law giver has intended to bring about a sweeping change from the previous regime and usher in a new era, under which the amount to be deposited was scaled down and pegged at a certain percentage of the amount in dispute. In other words, while under Section 129A, as it stood prior to the substitution, the appellant was to deposit the duty and the interest demanded or the penalty levied, whereas in the present regime, the appeal is maintainable upon the appellant depositing seven and the half percent of the amount. 151. It is held that under the earlier regime, in other words the entire amount which was in d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 23rd November, 2015 which is after the substitution of Section 129E. The appellant filed the appeal in 2017. What the appellant is called upon to pay is the amount in terms of Section 129E after the substitution, namely, the far lesser amount in terms of the fixed percentage as provided in section 129E. The appellant, however, would wish to have the benefit of the proviso which, in fact, appropriately would apply only to a case where the appellant is maintaining the appeal and is called upon to pay the full amount under Section 129E under the earlier avtar. 154. It is further held that the legislative intention would clearly be to not to allow the appellant to avail the benefit of the discretionary power available under the proviso to the substituted provision under Section 129E. Supreme Court found no merit in the matter on the ground that the appellant is not being called upon to pay the full amount but is only asked to pay the amount which is fixed under the substituted provision. 155. Upon applying the principles laid down by the Supreme Court in case of Chandra Sekhar Jha vs. Union of India (supra) to the provisions to the facts of this case challenging the validit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Court can have a curative and neutralizing effect. 159. This Court held that when such a correction is made, the purpose behind the same is not to overrule the decision of the Court or encroach upon the judicial turf, but simply enact a fresh law with retrospective effect to alter the foundation and meaning of the legislation and to remove the base on which the judgment is founded. This does not amount to statutory overruling by the legislature. The principles laid down by this Court in the said judgment in case of Noopura Vishwajit Kulkarni Vs. State of Maharashtra (supra) and by the Supreme Court in case of Shri Prithvi Cotton Mills Ltd. (supra) apply to the facts of this case. 160. In the facts of this case also, it became necessary for the legislation to cure the defects in the provisions of the appeals prescribed in the MVAT Act as pointed out by the Nagpur Bench of this Court in case of Anshul Impex Private Ltd. (supra). In our view, under the circumstances it can be held that by the said amendment, which is the subject matter of these petitions, the State Government has not overruled or overreached the law laid down by this Court in the said judgment. Cur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) also overlooked the fact that sub-section 6(1) to section 26 of MVAT Act was inserted by 2017 amendment with overall package in respect of the Right of Appeal. In our view, right of appeal can be made conditional, with conditions similar to the one inserted by the 2017 amendment in issue, by way of an amendment made with retrospective effect, even if the same adversely affects such a right, much after the lis has begun, containing express words or by necessary implications. 165. In our view learned Advocate General is right in his submission that the statute always makes the right of appeal available, if any and if at all, in a package which includes various facets of such a right such as limitation, overall extent and scope of such a right, will include various aspects thereof, such as the available grounds, conditions subject to which it can be exercised. The Right of Appeal at the pre-amendment stage was available in a package which is now altered and at the post-amendment stage it is very much continued, but in a different package with a right of appeal vested at the pre-amendment stage continues. 166. A perusal of the said amendment clearly indicates that the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant may admit to the demand from him has been paid. The said proviso was subsequently amended and it was provided that no appeal against an order of assessment with or without penalty shall be admitted by the said authority unless such appeal was accompanied by a statutory proof of payment of tax with penalty, if any, in respect of which the appeal has been preferred. The Supreme Court held that right of appeal is a substantive right and not a mere matter of procedure. The Court was bound to admit the appeal whether appellant deposited the amount recoverable in execution of the decree or not. 170. It is held that by requiring such deposit as a condition precedent to the admission of appeal, a new restriction has been put on the right of appeal, the admission of which is now hedged in with a condition. The Supreme Court accordingly held that, there can be no doubt that right of appeal had been affected by the new provision and in the absence of express enactment, amendment cannot apply to the proceedings pending on the date when the new amendment came into force. 171. The Supreme Court held that whenever there is proposition by one party and opposition to that propositi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (supra) considered the question whether the State Government was empowered to enact Section 62(5) of the Punjab Value Added Tax Act, 2005 and whether the condition of 25% pre-deposit for hearing first appeal was onerous, harsh, unreasonable and therefore violative of Article 14 of the Constitution of India. The Supreme Court after adverting to various judgments held that the High Court had rightly held that Section 62(5) of the Punjab Value Added Tax Act, 2005 was legal and valid and the condition of 25% of pre-deposit was not onerous, harsh, unreasonable and violative of Article 14 of the Constitution of India. In this case, the State Government has imposed condition of 10% of pre-deposit for filing an appeal before the Appellate Authorities. It is not in dispute that upon deposit of 10% of pre-deposit, there is automatic stay of the balance of 90% of the tax dues. Prior to the date of the impugned amendment, the discretion was granted to the Appellate Authority to direct any amount as predeposit before entertaining the appeal. 175. Such discretion can be for any sum from 0% to 100%. In this case, a flat rate of 10% of pre-deposit is thus neither onerous, harsh, unreasona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the order passed by the Supreme Court while dismissing the Special Leave Petition on 11th March, 2019. Be that as it may, this Full Bench can take a different view in the matter and is not bound by the principles of law laid down by the Division Bench of the Nagpur Bench of this Court in case of M/s. Anshul Impex Private Ltd. (supra). 179. The Supreme Court in case of Bimolangshu Roy Versus State of Assam And Another (supra) has held that the authority to make law flows not only from an express grant of power by the Constitution to a legislative body but also by virtue of implications flowing from the context of the Constitution. The US Supreme Court also recognized that the Congress would have the authority to legislate with reference to certain matters because of the fact that such authority is inherent in the nature of the sovereignty. The doctrine of inherent powers was propounded by Justice Sutherland in the context of the role of the American Government in handling foreign affairs and the limitations thereon. 180. It is held that an Entry in one of the 3 lists of the 7th Schedule is not the source of power but are only indicative of the fields of legislati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was badly argued, inadequately considered and fallaciously reasoned . The judgment of the Nagpur Bench of this Court in case of M/s. Anshul Impex Private Ltd. (supra) is not distinguished by the learned Advocate General on the ground that it was badly argued or inadequately considered or fallaciously reasoned. Be that as it may, the said judgment is not binding on the Full Bench of this Court. 184. Insofar as judgment of the Supreme Court in case of ECGC Limited Vs. Mokul Shriram EPC JV (supra) relied upon by the learned senior counsel for the petitioner is concerned, the Supreme Court considered the issue as to whether the appeal would be governed under the provisions of the Consumer Protection Act, 2019 or under the erstwhile 1986 Act. In the said judgment, the Supreme Court considered the argument of the learned counsel for the State that until actual assessment is made, there can be no lis and therefore, no right of appeal can accrue before that date. The Supreme Court observed that when assessee files a return, the lis may not immediately arise. The authority may assess the return under section 11 of the 1947 Act, but if the authority is not satisfied as to the correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviding deposit of 7.5% and 10% respectively as sub-clauses (i), (ii) and (iii) respectively provide. 188. It is held that if such is the aim and insight behind the provision, it certainly cannot be held to be unreasonable, onerous, unfair or discriminatory for two fold reasons. Firstly, the object of a public policy sought to be achieved by the amendment, namely speedy disposal of the appeals before the appellate authorities is a laudable object and cannot be overlooked, so as to label the provision as unreasonable and onerous and violative of Article 14 of the Constitution. Secondly that the amount which is required to be deposited is not unreasonable from what the earlier (pre amended) regime provided. 189. This Court in the said judgment also rejected the submission of the petitioner that the said amended provision was rendered discriminatory as it creates two different classes when it mandates pre-deposit of duty demanded or penalty imposed or both, and more particularly when penalty cannot be considered to be a revenue as it is not a tax requiring it to be safeguarded. This Court also noticed that even the pre-amended provision stipulated for a deposit in case of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent view in the matter. 193. A perusal of the judgment of the Nagpur Bench of this Court in case of M/s. Anshul Impex Private Ltd. (supra) indicates that the implications of the words used in Section 26(6A) expressing clear intention of the legislature to make the right of appeal conditional and not taking away the vested right of filing an appeal by the assessee, has not been considered by the Division Bench in the said judgment. The decision in the said judgment proceeds on the ground that the appeal is governed by the legal position on the date of order of assessment. Though the Division Bench of this Court in the said judgment has taken note of the decisions of the Supreme Court in case of Hoosein Kasam Dada (India) Ltd. (supra) and Garikapatti Veeraya vs. N.Subbaiah Choudhary, AIR 1957 SC 5, which refers to the right of the legislature to curtail the right of appeal or make it conditional, does not comment on this aspect. 194. In the facts of this case, the petitioner has not made out the case of legislative incompetence on the part of the State Government to make the amendment to the provisions of the MVAT including the explanation inserted to section 26(6B). In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sit in respect of orders passed for the assessment years prior to 15th April 2017 and whether the Explanation nullifies the decision of the Division Bench of this Court (Nagpur Bench) in the case of Anshul Impex Pvt. Ltd. Vs. State of Maharashtra in Sales Tax Appeal No.2/2018? is answered in negative and in favour of Revenue. (iii) The question of law (c) as to whether the Explanation nullifies the decision of the Division Bench of this Court (Nagpur Bench) in the case of Anshul Impex Pvt. Ltd. Vs. State of Maharashtra in Sales Tax Appeal No.2/2018 is answered in negative and in favour of the Revenue. (iv) Question of Law (c) i.e. whether the decision of the Division bench in the case of Anshul Impex Pvt. Ltd. Vs. State of Maharashtra laying down that right of filing appeal accrues on the date of order of assessment and requirement of mandatory pre-deposit introduced by way of amendment does not apply to the orders passed in the assessment years prior to 15th April, 2017, is a correct proposition since the right of appeal can be made conditional by the Legislature with express indication is answered in negative and in favour of the Revenue and is thus declared not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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