9911796707
TMI Blog2023 (4) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... ution Bench has held that the Court examining the validity of a validating statute must first examine the issue of legislative competence. Secondly, granted legislative competence, it is not sufficient to declare merely that the decision of the Court shall not bind, for that would tantamount to reversing the decision in the exercise of judicial power, which the Legislature does not possess or exercise. A Court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances - the validity of a validating law depends upon whether the Legislature possesses the competence that it claims over the subject matter and whether, in making the validation, it removes the defect that the Courts had found in the existing law and makes adequate provisions in the validating law for a valid imposition of the tax. The super-session of judicial verdicts through legislation sometimes involves the violation of the separation of powers doctrine under the Constitution of India. The Hon'ble Supreme Court considered this issue in Government of Kerala, Irrigation Department and Ors, vs James ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat GST Act, 2017 and Section 174 of the Goa GST Act, 2017. The Maharashtra VAT Act, 2002 was never formally repealed after the Constitution (101st Amendment) Act, 2016, entered into force though some exercise was undertaken to align its provisions with the constitutional amendments. Manifest arbitrariness - HELD THAT:- The State of Goa does not dispute liability to refund the excess tax amount in the present cases. The State does not even dispute the liability to pay interest at 8% per annum. However, the State contends that interest would not become payable from the 91st day of the refund order but the 91st day of the sanction order. As noted earlier, no time limit for making the sanction order is fixed. No reasons are required to be provided for any delay in making the sanction order. Thus, the State contends that it can, based upon its Officers' tardiness or procrastination, retain the excess tax amount for an indefinite period or at least an unreasonably lengthy period without obligation for payment of any interest - prima facie, such a provision would be arbitrary and unreasonable given the reasoning in the decisions of the Hon'ble Supreme Court on the issue of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of this Court's decisions in Writ Petition No. 424 of 2018 and connected matters despite Special Leave Petitions against the same being dismissed by the Hon'ble Supreme Court on the specious plea that such decisions stand nullified or are rendered ineffective after the passage of the Goa Value Added Tax (12th Amendment) Act, 2020 (impugned Amendment Act). In the alternative, the petitioners challenge the constitutional validity of the impugned Amendment Act on several grounds, including legislative override, legislative competence, manifest arbitrariness, etc. 2. Since substantially similar issues of law and fact arise in these matters, they are disposed of by a common judgment and order. The petitioners in Writ Petition Nos. 139, 140, 141, 148, 228 and 350 of 2022 (United Spirits Limited vs State of Goa) deal with alcohol for human consumption. Therefore, some of the challenges raised in this petition may not be available to these petitioners. However, most of the other challenges are common to all the petitioners. Therefore, with the consent of the learned Counsel for the parties, Writ Petition No. 23 of 2021 (Mr Rohan Lobo vs State of Goa) is taken as the lead petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompliance had already expired, and the Hon'ble Supreme Court had granted no interim relief. Thus, even after the SLP was dismissed, the mandamus was not honoured. 3.8. Accordingly, the Petitioner was constrained to institute Contempt Petition under Stamp Number No. 1304/2020. After seeking several adjournments, the Assistant Commissioner of Commercial Taxes filed an affidavit in reply on 05.11.2021. 3.9. In this affidavit, a reference was made to the impugned Amendment Act, and based thereon, it was submitted that this Court's decision dated 19.11.2019 in Writ Petition No. 720/2019 and the mandamus issued therein has been rendered ineffective due to the removal of the bases on which the said order was rendered . 3.10. Accordingly, the Petitioner was constrained to institute the present petition. PETITIONERS' CONTENTIONS : 4. The learned Counsel for the petitioners made the following submissions in support of their respective petitions:- 4.1 The impugned Amendment is an instance of impermissible legislative override and infringes the doctrine of separation of powers. The fundamental bases of the judicial decisions sought to be nullified or declared ineffective remain sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017, to align the tax on goods and services law with the Constitution (101st Amendment) Act, 2016. Therefore, in terms of Section 174 of the Goa Goods and Services Tax Act, 2017, GVAT Act, 2005 was repealed except in respect of goods included in Entry 54 of the State List of Seventh Schedule to the Constitution, viz. petroleum products and alcohol for human consumption. 4.5 The learned Counsel for the petitioners, therefore, contended that the State legislature could have never amended the repealed GVAT Act, 2005 without even bothering to revive the same, assuming such revival was possible after 16.09.2017. The learned Counsel for the petitioners relied upon several decisions supporting the contention that a repealed Act cannot be amended without revival. These include Reliance Industries Ltd. vs State of Gujarat 2020 SCC OnLine Guj. 694, Sri Sri Engineering Works and Ors. vs. Deputy Commissioner (CT) Ors. 2022 SCC OnLine TS 1367, Baiju A.A. vs State Tax Officer, State Goods Services Tax Department and Anr. 2019 SCC OnLine Ker 5362, State Tax Officer vs Baiju A.A. (WA No.48/2020), and Jatindra Nath Gupta vs Province of Bihar AIR 1949 FC 175. 4.6 The learned Counsel for the Petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these Sections and even some linked Sections were substantially amended with retrospective effect, the bases of the judicial decisions stood altered, thereby rendering the judicial decisions ineffective and unimplementable. 5.2 The learned Advocate General submitted that this is a time-tested and permissible legislative exercise. He relied on Goa Foundation and Anr. vs. State of Goa (2016) 6 SCC 602, The Government of Andhra Pradesh and Anr. vs. Hindustan Machine Tools Ltd. (1975) 2 SCC 274, Easland Combines, Coimbatore vs. Collector of Central Excise (2003) 3 SCC 410, Bakhtawar Trust and Ors. vs. M.D. Narayan and Ors. (2003) 5 SCC 298, Shri Prithvi Cotton Mills Ltd. (supra), State of H.P. and Ors. vs. Yash Pal Garg (dead) by Lrs and Ors. (2003) 9 SCC 92, I.N. Saksena vs. State of Madhya Pradesh (1976) 4 SCC 750 and M/s. Tirath Ram Rajindra Nath, Lucknow vs. State of U.P. and Anr. (1973) 3 SCC 585. 5.3 The learned Advocate General submitted that GVAT Act, 2005, was not entirely repealed by Section 174 of the Goa Goods and Services Tax Act, 2017. Therefore, its amendment was validly brought about by the impugned Amending Act. The learned Advocate General submitted that the repeal pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RIDE? 6. The first question that falls for consideration is whether the impugned Amendment Act is an instance of impermissible judicial override to reverse or set at nought the judicial decisions of this Court even after SLPs against the same were dismissed by the Hon'ble Supreme Court. The petitioners contend that the Legislature has not removed the fundamental bases of the judicial decisions. On the other hand, the learned Advocate General argued that the fundamental bases are removed with retrospective effect; therefore, this is not an instance of legislative override. 7. Several decisions of the Hon'ble Supreme Court have fairly settled the legal position of validating statutes. However, there are always issues of application of such principles depending upon facts and circumstances peculiar to the cases that fall for consideration. 8. Since both sides relied strongly on Shri Prithvi Cotton Mills Ltd. (supra), reference to this decision at the very outset would be appropriate. This is a leading case on the legal effect of validating statutes, and the principles explained by the Constitution Bench have stood the test of time. 9. The Constitution Bench has held that the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... organs the Legislature, Executive and Judiciary, is also nothing but the consequence of principles of equality enshrined in Article 14 of the Constitution of India. Thus, legislation can be invalidated based on a breach of the separation of powers since such a breach negates equality under Article 14 of the Constitution. 13. The Hon'ble Supreme Court further elaborated that the doctrine of separation of powers applies to final judgments of the Courts. Therefore, the Legislature cannot declare any decision of a Court of law to be void or of no effect. It can, however, pass an amending Act to remedy the defects pointed out by the Court of law or on coming to know of it aliunde. In other words, a Court's decision must always bind unless the conditions on which it is based are fundamentally altered that the decision could not have been given in the altered circumstances. Further, suppose the Legislature has power over the subject matter and competence to make a validating law, in that case, it can make such a validating law at any time and make it retrospective. The validating of the Validating Law, therefore, depends upon whether the Legislature possesses the competence that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t's decisions. In short, the scope of inquiry is whether the impugned Amendment Act is genuinely a validating Act or an instance of impermissible judicial override. 19. In USL, the main issue involved was the date from which simple interest at the rate of 8% per annum would become payable on the amount refundable under the provisions of the GVAT Act. The Court held that such interest would become payable on the 91st day from the expiry of the refund order, where such refund is not paid within 90 days of such determination. 20. To support the above conclusion/decision, the Division Bench of this Court did refer to and rely upon the provisions of Sections 10 and 33 of the GVAT Act. However, such reliance was not the sole or exclusive basis to support the above conclusion or decision. In addition, the Court referred to the phraseology of Rule 30, the interplay between the Act and Rules, and the need for a harmonious construction. The Court referred to and relied upon the entire scheme of the GVAT Act, including the schematic interpretation of the provisions of Sections 10, 29, 30, 33 and 34 of the GVAT Act and Rule 30 of the Rules made under the said Act. The Court also assessed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of expiry of 90 days from the date of sanction or under Rule 30 of the said Rules. 24. In paragraphs 53 and 54, the Court relied upon Ranbaxy Laboratories Limited vs. Union of India and others (2011) 10 SCC 292., and Union of India and Ors. vs. Hamdard (WAQF) Laboratories (2016) 6 SCC 621., to hold that interest under Section 11-B and 11-BB of the Central Excise Act, 1944 commences from the date of expiry of three months from the date of receipt of an application for refund or on the expiry of three months from the date on which the refund order is made. Accordingly, the Court ruled that interest becomes payable after the expiry of three months from the date of application for refund and payment of such interest cannot be resisted based on any procrastination by the Authorities. 25. Thus, it is clear that this Court's decisions, whether in Writ Petition No. 424/2018 or the connected matters, were not solely or exclusively based upon this Court's interpretation of the provision in Sections 10 and 33 of the GVAT Act. The interpretation of the said provisions was one of the bases but not the sole or exclusive base as it was assumed to resist or at least indefinitely p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities to issue a sanction order, this Court held that the 90-day time limit provided in Section 33(2) of the GVAT Act was, in fact, the time limit within which the assessing authorities must obtain sanction in terms of Rule 30 of the said Rules ; Even this finding remains relatively untouched except that now it could be contended that the time limit under Section 10 or 33 is about 180 days. Accordingly, the principle remains unaffected by the impugned Amendment Act. 31. Sixthly , this Court also held that if, for any reason, a sanction order under Rule 30 of the said Rules was not obtained within these 90 days, the Assessing Authorities could not avoid liability for payment of simple interest at the rate of 8% per annum on the specious plea that such a liability commences only from the date of expiry of 90 days from the date of the sanction or under Rule 30 of the said Rules. Again, the principle remains unaffected by the impugned amendment Act. 32. The fact that the impugned Amendment Act has not altered most of the bases of the judicial decisions or that its sole object was to legislatively override the judicial decisions without any serious attempt to remove the defects po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest on refund of Tax ; (b) That the Advocate General, in his opinion, tendered to the Government had suggested certain amendments to the GVAT Act in order to do away with the effect of such an interpretation and to save revenue of the State ; (c) That the Bill seeks to retrospectively bring into effect the amendments of the proposed bill notwithstanding contained in any order, judgment, decree, directions of any authority, tribunal or court or any other instrument having the force of law and shall apply to all cases from the date of enactment of the Goa Value Added Tax (Act 9 of 2005) ; (d) The Bill seeks to fix the time limit of giving a refund from three months from the date of the order of the sanctioning authority in case of an application for a refund under sub-section (3) of section 10 ; (e) The Bill also seeks to amend sub-section (2) of Section 33 so as to fix the time limit of giving refund from 90 days from the date of the order of the sanctioning authority in case of an application for refund under sub-section (3) of Section 10 ; (f) The Bill also seeks to insert sub-section (10) to section 29 so as to fix time limit for assessing authority to submit refund proposal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sanction order of such authority, as prescribed shall be substituted. 3. Amendment of section 29. - In section 29 of the principal Act, after sub-section (9), the following sub-section shall be inserted, namely: (10) Where any order passed under this section, results in refund of any amount of tax, interest or penalty and no appeal, review or revision is filed against such order within the time limit specified in this Act, the Appropriate Assessing Authority shall after expiry of time limit for filing of appeal, review or revision shall submit the complete proposal for sanction of refund, within a period of 90 days from the date of expiry of such period to the sanctioning authority as prescribed. . 4. Amendment of section 33. - In section 33 of the principal Act, for sub-section (2), the following sub-sections shall be substituted, namely: When any amount refundable to any dealer or person under an order made under any provisions of this Act, including refund admissible to an exporter under sub-section (3) of section 10, is not refunded within a period of ninety days, - (a) where the amount to be refunded does not exceed rupees fifty thousand, from the date of order of refund; or . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder . The other bases, which were fundamental, have not been touched by the impugned Amendment Act. 37. Apart from the wordings of unamended Sections 10 and 33 of the GVAT Act, 2005, the foundation of the judicial decisions of this Court, as affirmed by the Hon'ble Supreme Court, was that the Revenue could reap no undue advantage from its own delays or due to the procrastination of its officials. The Court felt such a situation would be arbitrary, and even the statutory scheme did not support such a construction. Therefore, the Court thought that the 91st day from the sanction order could not be the starting point for the statutorily prescribed interest on excess refundable tax payable to the Assessee. The Court, therefore, held that the sanction order had to be obtained within 90 days of the refund order. The Court also held that in case of any delay in getting the sanction order, such order, as and when obtained, would relate back to the refund order. All these findings supported the fundamental premise that the State could not deny an Assessee interest on the excess tax refundable by taking undue advantage of the procrastination and delay of its Officials. Unfortunately, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hwith from the date of the sanction order as provided in Rule 30 of the said Rules. The impugned Amendment has not even dealt with the findings, based upon the interpretation of the scheme of the GVAT Act and the said Rules about the sanction order relating back to the date of refund order made by the Assessing Authority at least to the extent of the amount referred to in the sanction order. The impugned Amendment has not even dealt with this Court's finding that 90 days time limit provided in Section 33(2) of the GVAT was the time limit within which the appropriate Assessing Authority had to obtain sanction in terms of Rule 30 of the said Rules. 41. More importantly, the impugned Amendment Act has not even dealt with the findings recorded by this Court that the Revenue could not deny interest on the excess tax retained by it based on its own procrastination or by taking undue advantage of its own officers delaying sanction. These findings relate to the principles of non-arbitrariness enshrined in Article 14 of the Constitution, which eschews arbitrariness in the State's action. Further, these findings relate to Article 265 of the Constitution which provides that no tax sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the two decisions were founded. Therefore, notwithstanding the form of the impugned Amendment, the same cannot be regarded as a proper validating Act sufficient to render the two decisions ineffective, as claimed by the State Government in its affidavit. Based upon the impugned amendments, therefore, the State Government cannot avoid the obligation of complying with the directions in the judgment and decision. 45. The learned Advocate General argued that a Court's judgment could be nullified if the decision is based on a statutory provision and the relief is granted based on the interpretation of such statutory provision. He submitted that the competent Legislature could amend the statute based on which the judgment is delivered and upon which relief is granted to the party. He, however, submitted that where a judgment or a mandamus is granted not based on a statute but independent of a statute, such a judgment cannot be overruled by legislative intervention. Written submissions were also filed, precisely transcribing such arguments. In the written submissions, it was contended that if a statute is struck down as unconstitutional and relief is granted to the party, the Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be nullified or rendered ineffective. The State cannot refuse to follow such binding decisions based upon part removal of deficiencies or by partly altering the basis of the judicial decisions. 49. The Hon'ble Supreme Court stalled a similar attempt at nullifying a judicial decision in the State of Karnataka Ors. Vs Karnataka Pawn Brokers Association Ors. (2018) 6 SCC 363. In this case, the main issue was whether the amendments made to the Karnataka Moneylenders Act, 1961 and the Karnataka Pawnbrokers Act, 1961, in the year 1998, providing that the security deposit furnished by the moneylenders and pawnbrokers in terms of Sections 7-A and 4-A of the Acts respectively shall not carry interest, was constitutional, legal and valid. 50. The Division Bench of the Karnataka High Court upheld the provisions' validity. But relying upon Jagdamba Paper Industries (P) Ltd. vs Haryana SEB (1983) 4 SCC 508 held that the moneylenders/pawnbrokers were entitled to interest on the security deposits at the prevailing interest rate the scheduled banks paid on a fixed deposit for one year. Furthermore, the Division Bench held that though there was no specific provision providing for payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... damentals on which it is based are altered, and the decision could not have been given in the altered circumstances. Therefore, by introducing an amendment, the Legislature cannot overturn a judicial pronouncement and declare it to be wrong or nullity. 54. The Hon'ble Supreme Court, by applying the above principles, held that when Manakchand Motilal's case (supra) was decided, there was no provision providing for payment of interest or prohibiting payment of interest. Therefore, there was no error pointed out by the Court that the State Legislature could have corrected. The impugned amendments, thus, did not in any way alter the basis of the judgment. By giving retrospective effect to the amended provisions, the State had attempted to nullify the Writ of mandamus issued by the Courts in favour of the respondents. The mandamus could not have been set at nought by giving retrospective effect to the amended provisions. This would be a direct breach of the doctrine of separation of powers as laid down in State of Tamil Naidu V/s. State of Karnataka (supra). The impugned Acts were held to be illegal in so far as they were given retrospective effect. 55. Similarly, in S.R. Bhagwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to be nullified by enacting the impugned provisions in a new statute. The Court held that this would be clearly an impermissible legislative exercise. 59. The Hon'ble Supreme Court referred to the overriding effect clause , based upon which the State sought to deny consequential financial benefits to the petitioners and held that the State had tried to get out of the binding effect of the decision by resorting to its legislative power. The judicial decisions which had become final against the State were sought to be done away with by enacting the impugned provisions. Such an attempt cannot be said to be a permissible legislative exercise. Instead, it must be held to be an attempt by the State Legislature to legislatively over-rule binding decisions of competent Courts against the State. Such an exercise of legislative power cannot be countenanced. Accordingly, the writ petitions were allowed, and the State was directed to pay all the financial benefits to the petitioners as directed by the Division Bench decision, which had attained finality. 60. Recently, in Madras Bar Association vs. Union of India Anr. 2021 SCC OnLine Sc 463 , the Hon'ble Supreme Court considered sever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Mills Ltd (Supra) and other decisions referred to above. Accordingly, by accepting the propositions of law in such decisions, the impugned Amendment Act cannot be regarded as a validation Act as contemplated by such decisions. 63. For all the above reasons, we hold that the impugned Amendment Act is an impermissible legislative override. Therefore, based upon the impugned Amendment Act, the respondents cannot decline to implement this Court's decisions in Writ Petition No. 424/2018 and connected matters. These decisions have attained finality after SLPs against the same were dismissed by the Hon'ble Supreme Court. Accordingly, notwithstanding the impugned Amendment Act, which is an instance of impermissible legislative override, the respondents will have to comply with the directions in this Court's decisions in Writ Petition No. 424/2018 and connected matters. 64. Given our finding on the first question that arose for determination, it may not be necessary for us to go into the other issues raised in these petitions. However, we propose briefly touching upon these issues and recording our prima facie observations on some of them. AMENDMENT TO A REPEALED/LAPSED STATUT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nath Gupta (supra), wherein it was held that it is competent to the Legislature in exercising its plenary powers to revive or re-enact legislation which has already expired by lapse of time. The Legislature is also competent to legislate with retrospective effect, but neither of these things seems to have been done in the present case. The Legislature proceeds on the footing that the old Act was alive at the date. Then the new Act was passed, and the new Act merely purports to amend one of the provisions of the old Act. There could be no amendment of an enactment which is not in existence. From the fact that the Legislature purports to amend an Act, it could not be held as a matter of construction that the Legislature intended to renew a dead Act or make a new enactment on the same terms as the old with retrospective effect. To the same effect are the observations in Kalyanam Veerabhadrayya vs. The King 1949 SCC OnLine Mad 255. 71. Therefore, at least prima facie, the impugned Amendment Act of 2020 concerning goods other than those included in Entry 54 of the State List of Seventh Schedule to the Constitution is ultra vires, unconstitutional and void. 72. The learned Advocate Gene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxes on sales or purchases of goods other than the six specified goods in substituted Entry 54, List II of the Seventh Schedule to the Constitution. Even in respect of the six specified goods, the State Legislature would lack the legislative competence to tax sales in the course of inter-State trade or commerce or sales in the course of international trade or commerce of such goods. 77. In Mohit Mineral Private Ltd. (supra) or VKC Footsteps India Pvt. Ltd. (supra), the Hon'ble Supreme Court has held that Article 246-A defines the source of power as well as the field of legislation (with respect to goods and service tax) obviating the need to travel to the Seventh Schedule. Further, Article 246-A embodies the constitutional principle of the simultaneous levy as distinct from the principle of concurrence, which is operated within the fold of the Concurrent List. However, the issue about the State Legislature having a legislative competence to enact tax laws in respect of goods not included in the substituted Entry 54 did not directly arise for consideration in Mohit Mineral Private Ltd. (supra) or VKC Footsteps India Pvt. Ltd. (supra). 78. In Mohit Minerals Pvt. Ltd. (supra), t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 174 of the Gujarat GST Act, 2017 and Section 174 of the Goa GST Act, 2017. The Maharashtra VAT Act, 2002 was never formally repealed after the Constitution (101st Amendment) Act, 2016, entered into force though some exercise was undertaken to align its provisions with the constitutional amendments. 81. Therefore, based upon the Division Bench decisions of Gujarat, Telangana, Kerala and Allahabad, the petitioners in Writ Petition No. 23/2021 and 229/2022 have an arguable case based even on legislative competence. This ground may however not be available to the petitioners in the remaining petitions. MANIFEST ARBITRARINESS : 82. In Union of India V/s. Tata Chemicals Ltd. (2014) 6 SCC 335, the Hon'ble Supreme Court, precisely in the context of interest payment on refund of excess tax, held that when such amount is refunded, it should carry interest. Interest is a kind of compensation for using and retaining the money collected unauthorisedly by the Revenue. When the collection is illegal, there is a corresponding obligation on the Revenue to refund such amount with interest since they retained and enjoyed the money so deposited. The Court held that the refund due and payable to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interest until the entire outstanding is paid. But when it comes to granting interest on refund of taxes, the refunds are first adjusted towards the taxes and then the balance towards interest. Hence, as the Department always contends that it is liable to pay interest only up to the date of refund of tax while they take benefit of assessees' funds by delaying the payment of interest on refunds without incurring any further liability to pay interest, the Court found that such a stand on behalf of the Department was discriminatory in nature causing great prejudice to lakhs and lakhs of assessees. The Hon'ble Supreme Court referred to compensation as defined in P. Ramanatha Aiyar's Advanced Law Lexicon, 3rd Edn., 2005 and held that the Court has to consider all relevant factors while awarding the rate of interest on compensation. 85. The correctness of the decision in Sandvik Asia Ltd. (supra) came up for consideration before the Three Judge Bench in Commissioner of Income Tax, Gujarat vs. Gujarat Fluoro Chemicals (2014) 1 SCC 126. The Bench, however, explained that there was no conflict between Sandvik Asia Ltd. (supra) and Godavari Sugar Mills Ltd. vs. State of Maharas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounty but was a valuable constitutional right under Articles 19(1)(f) and Article 31(1) of the Constitution, which were then available. Since this was a constitutional right, the Amendment of the rules could not take it away. The Constitution is the supreme law of the land. Hence, a constitutional right can only be taken away by amending the Constitution, not the rules or the statute. 89. The provisions providing interest on delayed refund of excess tax collected by the Revenue created statutory and constitutional rights. Even though Article 19(1)(f) is no longer a fundamental right under the Constitution, Article 300-A provides that no person shall be deprived of his property save by the authority of law. 90. Therefore, by depriving the Assessee of interest on excess tax paid, the State is depriving the Assessee of his property save by authority of law. Besides, there is a constitutional bar under Article 265 about the levy and collection of taxes except by the authority of the law. Even Article 14 would shun the retention of excess taxes determined as refundable either indefinitely or for unreasonably lengthy periods only due to the tardiness of revenue officers making sanction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en relied on decisions in support of such contentions. 95. In all these cases, there is no explanation whatsoever for the unreasonable delay in issuing the sanction orders. Even in the latest affidavit, no such explanation was even attempted to be offered. As noted earlier, refund amounts were already determined by the assessing authorities. Therefore, there could have been no difficulties in issuing the sanction orders within some reasonable period. In the earlier decisions in the petitions instituted by the Petitioners, the Court had found that reasonable time would be about ninety days from the refund order. This finding, as noted earlier, was not even dented by the impugned Amendment Act. The Hon'ble Supreme Court confirmed this finding. 96. Therefore, by simply not issuing sanction orders or delaying the issue of sanctions indefinitely or unreasonably, the State cannot arbitrarily deprive the parties' interest by way of compensation. Such a deprivation, as noted earlier, would fall foul of Articles 14, 265 and 300-A of the Constitution of India. 97. Therefore, even independent of the validity or applicability of the impugned Amendment Act, a mandamus in terms of the ea ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
