Bombay High Court
M/S. Swaraj Infrastructures Pvt. Ltd vs The State Of Maharashtra Thr. Ministry ... on 19 January, 2024
Author: G. S. Kulkarni
Bench: G. S. Kulkarni
2024:BHC-AS:2808-DB 929-WP-439-2024-GROUP.DOC
S.R.JOSHI
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
APPELLATE SIDE CIVIL JURISDICTION
WRIT PETITION NO.439 OF 2024
Bul Infra Developers Pvt. Ltd., ... Petitioner
Versus
The State of Maharashtra through
Ministry of Finance & Others ...Respondents
WITH
INTERIM APPLICATION NO.686 OF 2024
IN
WRIT PETITION NO.439 OF 2024
WITH
WRIT PETITION NO.14101 OF 2022
WITH
INTERIM APPLICATION NO.692 OF 2024
IN
WRIT PETITION NO.14101 OF 2022
WITH
WRIT PETITION (ST.)NO.10625 OF 2022
WITH
INTERIM APPLICATION NO.684 OF 2024
IN
WRIT PETITION (L) NO.10625 OF 2022
WITH
INTERIM APPLICATION NO.678 OF 2024
IN
WRIT PETITION NO.790 OF 2024
WITH
WRIT PETITION (ST.)NO.10632 OF 2022
WITH
INTERIM APPLICATION NO.679 OF 2024
IN
WRIT PETITION (L) NO.10632 OF 2022
WITH
WRIT PETITION (ST.)NO.10636 OF 2022
WITH
INTERIM APPLICATION NO.680 OF 2024
IN
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WRIT PETITION (L)NO.10636 OF 2022
WITH
WRIT PETITION (ST.)NO.10638 OF 2022
WITH
INTERIM APPLICATION NO. 681 OF 2024
IN
WRIT PETITION (L) NO.10638 OF 2022
WITH
WRIT PETITION NO.16295 OF 2023
WITH
INTERIM APPLICATION NO.682 OF 2024
IN
WRIT PETITION NO.16295 OF 2023
WITH
WRIT PETITION NO.16294 OF 2023
WITH
INTERIM APPLICATION NO.683 OF 2024
IN
WRIT PETITION NO.16294 OF 2023
WITH
WRIT PETITION NO.13764 OF 2022
IN
INTERIM APPLICATION NO.690 OF 2022
IN
WRIT PETITION NO.13764 OF 2022
WITH
WRIT PETITION NO.13766 OF 2022
WITH
INTERIM APPLICATION NO.691 OF 2024
IN
WRIT PETITION NO.13766 OF 2022
WITH
WRIT PETITION (ST.)NO.12111 OF 2022
WITH
INTERIM APPLICATION NO.677 OF 2024
IN
WRIT PETITION (L)NO.12111 OF 2022
Mr, Arun Jain with Mr. Ashutosh Dash, for the Petitioner/Applicant.
Ms. Shruti D. Vyas, Addl. G.P. with Ms. P.N. Diwan, AGP for the
Respondent-State in WP No. 439 of 2024, WP No.14101 of 2022, WP
No.790 of 2024, WP No.16295 of 2023, WP No.16294 of 2023, WP
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No.13764 of 2022, WP No.13766 of 2022 and WP (St.) No.12111 of
2022.
Mr. Kedar B. Dighe, Addl.G. P. with Ms. P. N. Diwan, AGP for the
Respondent-State in WP(St.) No.10625 of 2022,WP (St.) No.10632 of
2022, WP(St.) No.10636 of 2022 and WP (St.) No.10638 of 2022.
_______________________
CORAM: G. S. KULKARNI &
FIRDOSH P. POONIWALLA, JJ.
DATED: 19 JANUARY, 2024
_______________________
P.C.
We have heard the learned Counsel for the Petitioner on these
batch of Petitions which primarily seeks to assail the Assessment Orders
passed by the Assessing Officer under the provisions of Section 23 of the
Maharashtra Value Added Tax (MVAT), 2007.
2 At the outset, the learned Counsel for the Petitioner submitted
that the grievance of the Petitioner canvassed in the present Petition would
stand covered considering the view taken by this Court in a batch of Petitions
in Bharat Udyog Limited & Another v/s. State of Maharashtra & Another in
Writ Petition No.15338 of 2023, along with companion Petitions, decided on
20th December, 2023.
3 The issues which have arisen before the Court were in regard to
the provisions of sub-section (6A) of Section 26 of the Act and the legal
position in that regard which stood concluded in view of the decision of the
Supreme Court in the case of State of Telangana v/s. Tirumala
Constructions1. The Counsel for the Petitioner has submitted that these
Petitions can be disposed of in terms of the orders passed in the case of Bharat
Udyog Limited (supra). For convenience, we note our orders which were
passed in Bharat Udyog Limited (supra) which reads thus:-
1 2023 (10) 1028 SC
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"1 These batch of petitions raise common issues of law,
inasmuch as, these petitions were filed assailing the Constitutional
validity of Section 26(6A) of the Maharashtra Value Added Tax
Act, 2002 (for short "2002 Act"), which was inserted by
Maharashtra Amendment Act 31 of 2017 w.e.f. 15 th April 2017.
For convenience sub-sections (6A), (6B) and (6C) of Section 26, is
required to be noted which reads thus:-
"[(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, unless it is accompanied by
the proof of payment of an aggregate of the following amounts, as applicable,-
(a) in case of an appeal against an order, in which claim against declaration or
certificate, has been disallowed on the ground of non-production of such
declaration or, as the case may be, certificate then, amount of tax, as provided in
the proviso to sub-section (6),
(b) in case of an appeal against an order, which involves disallowance of claims
as stated in clause (a) above and also tax liability on other grounds, then, an
amount equal to 10 per cent. of the amount of tax, disputed by the appellant so
far as such tax liability pertains to tax, on grounds, other than those mentioned
in clause (a),
(c) in case of an appeal against an order, other than an order, described in clauses
(a) and (b) above, an amount equal to 10 per cent. of the amount of tax disputed
by the appellant,
(d) in case of an appeal against a separate order imposing only penalty, deposit
of an amount, as directed by the appellate authority, which shall not in any case,
exceed 10 per cent. of the amount of penalty, disputed by appellant:
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.
(6B) No appeal shall be filed, before the Tribunal, against an order, which is
passed on or after the commencement of the Maharashtra Tax Laws (Levy,
Amendment and Validation) Act, 2017, unless it is accompanied by the proof of
payment of an aggregate of following amounts, as applicable,--
(a) in case of an appeal against an order, in which claim against declaration or
certificate has been disallowed on the grounds of non-production of such
declarations or, as the case may be, certificates then, amount of tax, as provided
in the proviso to sub-section (6),
(b) in case of an appeal against an order, which involves disallowance of claims
as stated in clause (a) above and also tax liability on other grounds, then, an
amount equal to 10 per cent. of the balance amount of disputed tax, so far as
such tax liability pertains to tax, on grounds, other than those mentioned in
clause (a),
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(c) in case of an appeal against an order, other than an order, described in clauses
(a) and (b) above, an amount equal to 10 per cent. of the balance amount of
disputed tax,
(d) in case 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).]"
2 It may be observed that the Central Goods and Services Tax and
Maharashtra Goods and Services Tax Act, 2017 (for short "CGST
& MGST Act, 2017") came to be enacted and brought into force
from 1st July 2017, in view of the Constitution 101st Amendment
Act, 2017, which was notified on 16 th September 2017. By
enactment of the CGST & MGST Act, 2017, the 2002 Act stood
subsumed in these GST legislations.
3 On such change in legislative regime, in regard to the validity
of the provisions of requirement of pre-deposit as introduced by
sub-section (6A), (6B) and (6C) to Section 26 of the 2002 Act, as
incorporated by Maharashtra Act 31 of 2017 w.e.f. 15 th April 2017
had fell for consideration of this Court in Anshul Impex Pvt.
Limited Vs. State of Maharashtra2. The said proceedings came to
be decided on 28th September 2018, wherein this Court held such
an amendment to be inapplicable to the years prior to the
amending act.
4 It appears that subsequent to the decision of this Court in
Anshul Impex Pvt. Ltd. (supra), the State amended the 2002 Act
by an ordinance namely Maharashtra Ordinance No.VI of 2019
published in the Government Gazette on 6 th March 2019, whereby
an explanation came to be inserted below sub-section (6C) of
Section 26 with effect from 15th April 2017. The said explanation
2(STA No.2 of 2018 dt. 28.09.2018)
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is also required to be noted which reads thus:-
"(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).]
[Explanation.--For the removal of doubts, it is hereby clarified that, the
provisions of sub-sections (6A), (6B) and (6C) shall be applicable for any
appeal, against all such orders, referred to in those sub-sections, irrespective of
the period to which the order, appealed against, relates or irrespective of the date
on which the proceedings in respect of such order have commenced.]"
(emphasis supplied)
5 Such amendment as brought about by the ordinance was
subsequently replaced by an Act of the legislature, namely the
Maharashtra Tax Laws (Amendment and Validation) Act 2019 as
notified on 9th July 2019. As seen from the explanation below sub-
section (6C) of section 26, it had the effect of clarifying that, the
provisions of sub-sections (6A), (6B) and (6C) shall be applicable
for any appeal, against all such orders, referred to in those sub-
sections, irrespective of the period to which the order, appealed
against, relates or irrespective of the date on which the proceedings
in respect of such order had commenced.
6 It appears that the such amendment as brought about to the
2002 Act by the 2019 Act was challenged before this Court in the
case of United Projects Vs. State of Maharashtra3. Such proceedings
were referred for adjudication before a full bench of this Court,
which rendered its judgment on 12th July 2022, whereby it was held
that the State Government had legislative competence to remove
the substratum of the foundation of a judgment retrospectively,
namely as to what was held by the Division Bench in the case of
Anshul Impex Pvt. Ltd. (supra). It was held that the State
Government was empowered to carry out amendment suitably to
amend the law by use of appropriate phraseology as pointed out by
the Court in any judgment and by amending the law inconsistent
with a law decreed by the Court, so that the defects which were
pointed out were never on the statute for effective enforcement of
law. It was also held that there was no judicial encroachment
directly or indirectly by the State Government by inserting the
impugned amendment which were the subject matter of the said
petitions.
7 On such backdrop as also a similar legislative amendments
3WP/ST/11589/2021 & WP/13754/2018
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were made by other States, the proceedings were taken before the
Supreme Court which came to be decided by the Supreme Court on
a batch of appeals in the case of The State of Telangana & Ors. Vs.
Tirumala Constructions4. The proceedings arising from the
decision of the Full Bench of the Bombay High Court were also part
of the said proceedings, namely the challenge to the decision of the
full bench of this Court in United Projects Vs. State of Maharashtra
(supra). In adjudicating such issues, insofar as the decision of this
Court in United Projects Vs. State of Maharashtra (supra) was
concerned, the Supreme Court held that in view of the conclusions
as reached on interpretation of the Constitutional amendment and
also the provisions of Article 246A of the Constitution, the
judgment of the Bombay High Court in the United Projects Vs.
State of Maharashtra (supra) was required to be held to take an
erroneous view and accordingly the same was set aside. The
relevant observations in regard to the Supreme Court considering
the Maharashtra position can be found in paragraph Nos.114 and
115, as also in the conclusion which are required to be noted which
reads thus:-
"114. As far as the Maharashtra appeals are concerned, the assessees' grievance is
that the retrospective amendments, made to the Maharashtra VAT Act, were
void. On 15.04.2017, the State published Maharashtra Tax Laws (Levy,
Amendment and Validation) Act 2017 in the Government Gazette thereby
amending various provisions of various Acts. In paragraph No. 26 of the MVAT
Act, 2002, Sections 6(A), 6(B) and 6(C) were inserted. The effect of these was
to require a mandatory pre-deposit of 10% of the disputed tax liability. This was
challenged, and the Nagpur Bench of the Bombay High Court in Anshul Impex
Pvt. Ltd. Vs. State of Maharashtra STA No.2/2018 in a Judgment delivered on
28th September, 2018 (hereinafter, "Anshul Impex Private Ltd") held the
amendment inapplicable to a lis which had started in 2011. The state again
amended the enactment, through ordinance i.e. Maharashtra Ordinance No.VI
of 2019, published in the Government Gazette on 6 th March, 2019. By the
Ordinance the State of Maharashtra inserted an explanation w.e.f. 15 th April
2017. According to the state, the explanation was inserted for the purpose of
removal of doubts, in view of the Judgment of Nagpur Bench of the court in
Anshul Impex Private Ltd. (supra). On 9th July 2019, the Maharashtra Tax Laws
(Levy, Amendment and Validation) Act 2019 was enacted. It was published in
the Government Gazette on 9th July 2019. The Ordinance was replaced by the
enactment of the State Legislature inserting various provisions including the
said explanation to Section 26 (6C) of the MVAT Act, 2002. The explanation
had the effect of clarifying that the pre-deposit requirements applied to pre-
2017 appeals and revisions. This was challenged. The High Court, by a Full
Bench ruling United Projects Vs. State of Maharashtra (Writ Petition (Stamp)
No.11589 of 2021, and Writ Petition No.13754 of 2018), decided on
12.07.2022 upheld the amendment. It was held that
42023 (10) TMI 1208 SC
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"The State Government has legislative competence to remove the substratum of
foundation of a Judgment retrospectively. The State Government is empowered
to carry out amendment suitably to amend the law by use of appropriate
phraseology removing the defects pointed out by the Court in any judgment
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.
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."
115. In the opinion of this court, there is no quarrel with the proposition that a
legislative body is competent to enact a curative legislation with retrospective
effect. Yet, the same vice that attaches itself to the Gujarat amendment, i.e. lack
of competence on the date the amendment was enacted i.e. in this case,
09.07.2019, the Maharashtra legislature ceased to have any authority over the
subject matter, because the original entry 54 had undergone a substantial
change, and the power to change the VAT Act, ceased, on 01.07.2017, when the
GST regime came into effect. Therefore, for the same reasons, as in the other
cases, the amendments to the Maharashtra VAT Act cannot survive.
VI. Conclusions
116. In view of the foregoing discussion and conclusions, the findings of the
court in these cases are:
(i) .....
(ii) .....
(iii) .....
(iv) The amendments in question, made to the Telangana VAT Act, and the
Gujarat VAT Act, after 01.07.2017 were correctly held void, for want of
legislative competence, by the two High Courts (Telangana and Gujarat High
Court). The judgment of the Bombay High Court Court is, for the above
reasons, held to be in error; it is set aside; the amendment to the Maharashtra
Act, to the extent it required pre-deposit is held void. "
8 It is on the above backdrop, the proceedings are before us.
9 Mr. Rastogi would submit that in regard to the substantive
challenge as raised in this petition, the issue in regard to the pre-
deposit would stand concluded/covered by the decision of the
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Supreme Court in the case of The State of Telangana & Ors. Vs.
Tirumala Constructions (supra). It is however submitted that the
Petitioners in these petitions are yet to file their appeals before the
Appellate Authority/Tribunal and now the Petitioners intend to file
their respective appeals alongwith the delay condonation
applications as also applications for waiver of pre-deposit. In view of
the decision of the Supreme Court in The State of Telangana & Ors.
Vs. Tirumala Constructions (supra), it is submitted that the
Petitioners would take further steps to file the appeals within a
period of four weeks from today along with appropriate applications
for condonation of delay and for waiver of pre-deposit.
10 In the facts and circumstances of the case and considering
the finality now having reached in regard to the issue of pre-deposit
being put to rest by the decision of the Supreme Court in The State
of Telangana & Ors. Vs. Tirumala Constructions (supra), we are of
the opinion that the request of the Petitioners to approach the
Appellate Authority/Tribunal needs to be accepted. We accordingly
dispose of these petitions by the following order:-
ORDER
(i) The Petitioners shall approach the Appellate
Authority/Tribunal by filing their respective appeals along with
applications praying for condonation of delay and also waiver
of pre-deposit within a period of four weeks from today. If such
appeal alongwith application are filed as permitted such
proceedings be considered by the Appellate Authority/Tribunal
in accordance with law and appropriate orders be passed on the
application as also on the appeals.
(ii) All contentions of the parties on such proposed proceedings are
expressly kept open.
(iii) Petitions are disposed of in the aforesaid terms. No costs.
(iv) In view of disposal of these petitions, the above interim
applications do not survive and they are also disposed of.
11 At this stage, we are informed by Mr. Rastogi that there are
demand notices which are issued to some of the Petitioners, if that be so, the
Petitioner is free to move an appropriate application and seek appropriate
interim relief in the appeals which are proposed to be filed. However, as we
have permitted the Petitioners to file an appeal within a period of four weeks,
we direct the department not to take any further steps in regard to such
demands for a period of four weeks from today. Such limited protection as
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granted by us is merely to enable the Petitioners to approach the
Tribunal/Appellate Authority, which ought not to be construed, in any
manner, as an expression on the merits of the case of the Petitioners, which
would be for the Appellate Authority/Tribunal to decide."
4 The learned Counsel for the Respondent would also not dispute
that the Petitions can be conveniently disposed of in terms of the above
directions of this Court in the case of Bharat Udyog Limited (supra), with
liberty to the Petitioner to approach the Appellate Tribunal by filing their
respective Appeals.
5 Accordingly, we dispose of these Petitions in terms of the
following orders:-
(i) The Petitioners shall approach the Appellate Authority/ Tribunal by
filing their respective appeals, along with applications praying for
condonation of delay and also waiver of pre-deposit, within a period of
four weeks from today. If such appeal, along with such applications, are
filed, the same can be considered by the Appellate Authority/ Tribunal
in accordance with law and appropriate orders be passed on the
application as also on the appeals;
(ii) The Petitioners are permitted to file the Appeals within a period of four
weeks from the date a copy of this Order is made available on the
official web-site of this Court. If the Appeals are filed, the same be
considered by the Tribunal on merits and without any objection as to
limitation, inasmuch as the Petitioners were pursuing the present
proceedings bona fide;
(iii) In regard to the demand notices, to enable the Petitioners to file an
Appeal and also the stay application in the Appeal in respect of such
demand notices, such demand notices be not given effect to for a further
period of four weeks. This is without prejudice to the rights and
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contentions of the parties and ought not to be construed any expression on
the merits of the rival contentions.
6 Needless to observe that all contentions of the parties in the
proposed Appeals to be filed by the Petitioners are exclusively kept open.
7 Writ Petitions stands disposed of. No order as to costs.
8 Interim Applications, if any, would also not survive and the same
are also disposed of on the above terms.
(FIRDOSH P. POONIWALLA, J.) (G. S. KULKARNI , J.)
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