M/S Sushee Infra Privaate Limited vs. The Assistant Commissioner (St)

The Coun made tE follow, g: ORDER i I

To, THE HON'BLD THE CHIEF JUS?ICE UJJAL BHIryAN THE IION'BLE MRS WSTICE SUREPALLI NANDA \Ilrit Petition No.15962 ol 2O2l ORDER: (Per rhe Hoft'ble the ChieJ Justice lrJol Bhuyo ) Heard Mr. Bhaskar Reddy Vemireddy, learned counsel for the petitioner and Mr. K.Raji Reddy, learned counsel for the respondents.

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\\ HIGH COURT DATED:081071N22 ORDER W.P.No.15961 of 2021 .y'.:{..,t CT'\I'F i^ 11 l,iilil flfll L \) l) ALLOWING - HE WRIT PETITION WITHOUT CoSTS I y\i

I * THE HON'BLE THE CHIDP JUSTICE UJJAL BHUYAN AND THE HON'BLE SMT. JUSTICE P. MADHAVI DEVI + WRIT PETITION Nos.7893 95sO L6s27 16853 16496 16903 oF 2020. 494. 712A. 7054. 9622. 10()

-1 THE HON'BLE THE CHIEF JUSTICE UJJAL BHIIYAN AND THE HON'BLE SMT. JUSTICE P.MADHAVI DEVI WRIT PETITION Nos.7893. 9550, L6527,16853, 16896, 16903 0F 2020. 494. 7t2A. 7os4. 9622. 1(}046, tt4l4. 11996 t2774 15215 15422 15841 15853 L5942 17095, t7tO2, L73L4, 17988, 18258, 20079, 207LO, 2074a 2L542 2265L 22940 23336 23346 242A2 25561 27294 27533 24797 29743 32L29 32373 326s3 32697 and 34O54 OF 2O2L COMMON JUDGMENT & ORDER: (Per Honble the Chief Justice Ujjal Bhuyan) Issue raised in all the writ petitions being identical, those were heard together and are being disposed of by this common judgment and order.

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9 may initiate proceedings to revise, modify or set aside such order or proceeding and may pass such order in reference thereto as he thinks fit. 10. l. As per Sub-Section (2), such power may also be exercised by the Additional Commissioner, Joint Commissioner, Deputy Commissioner and Assistant Commissioner in the case of orders passed or proceedings recorded by the authorities, officers or persons subordinate to them. However, as per the proviso, such power shall not be exercised by the revisional authority in respect of an issue or question which was decided on appeal by the Appellate Tribunal under Section 33.

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t2 Act, after Articl, 246 of the Constitution of India a new Article 246-A catne to b ' inserted- Article 246-A reads as tinder: "246A Special Prouision uith resped to good,s ond seruices tax-- ( 1 ) N( ,uitlstanding anything contained in artictes 246 and 254, Parliam,nt, and, subject to clause (2), the LegLslature of euery State, haue [. )u)er to make lauLs u-tith respect to goods ond seruices tax imposed ,y the Union or bg such State. (2) Pc liament has exclusiue pouer to make laus u.tith respect to goo ts and seruices tox uhere the supplg of 7oods, or of serutces, or b, th takes place in the course of inter-Stcie trade or commerce. Explan ation.- -The prouisions of this article, in resped of goods and selices tox refered to in clause (5) of the article 279A, take elfect frot t the date recommended by the Goods and Seruices Tax Council. "

l3 article 246A, such amount shall not form parl of the Consolidated Fund of lrulia. (4) Where on amount collected as tax leuied bg a State under article 246A has been used for payment of the tax leuied under clause (1), such amount shall not form part of tlLe Consolidated Fund of the &.ate. (5) Parliament may, by lau.t, formulate the pinciples for determining the place of supplg, and u-then a supply of goods, or of seruices, or both takes place in lhe course of inter-State trade or commerce.'

IJ by each St( te Gouemment .....Members (3) The Mem ,ers of the Goods and Seruices Tax Cc,un:ii reJerred to in sub-cla se I c ) of the clause (2) shall, os soon cs maq be, choose one a \ongst them-selues to be the Vice-Chairpe'son of the Courtcil _fiir st ':h peiod as they mag decide. (4) The ( oods and Seruices Tax Council slall make recommenda 'ons to the Union and the State on-- (a) the ta-x( s, cesses and surcharges leuied bg the Urtion, the Stales and tl ,z local bodies uhich may be sub9umed in the goods and seruices a-r; (b) the good ; and seruices that maA be stbjected to, or exempted from the qoot :; and seruices tax; ( c ) model Goods and Seruices Tax Lau.ts, pinciple.s of leug, apporlionmer r of Goods and Seruices Tax leuied on supplies in the course of int r-state lrade or commerce under article .269-A and the pinciples that gouem lhe place of supplA; (d) the thr shold limit of tumouer belout uthich goods and seruices may trc exempted from goods and seruices tox; (e) the rat. ; including JToor rates with bands of ltoods and seruices tax: (fl any spe ial rate or rates for a specified peioc', to ,aise additional re: )urces duing any natural calamitg or discster; (g) special .'rouision uith respect to the States of Arunachal Pradesh, As. zm, Jammu and Kashmir, Manipur, Itblthaloga" Miz,oram, Na rcland, Sikkim, Tipura, Himachctl Pradesh and Uttarakhand; and (h) anA othe matter relating to the goods and seruices la:c, as the Council mag t ecide. (5) The Goc ls and Seruices Tax Council shall recon,.mend. the date on u-thic : lhe goods and seruices tax be levied on pe:troleum crude, high s1 ee-d diesel, motor spirit (commonlg knoutn a:; petrol), natural gas a d auiation atrbine fuel. {6) White dt charging the functions confened. bg thb orlicle. the Coods and & r'z,,ices Tax Council shall be guided bg the need Jor a harmonized . tructure of goods and seruices tax and for the deuelopment 'tf a harmonised national market for goods and seruices. (7) One-hall cf the total number of Members oJ' the (br.tds and Seruices Tax t ouncil shall constitute the quorum at its m,?e!inqs.

l5 (8) Tle Goods and *rvices Tax Council shall determine the procedure in the performance of its functions. (9) Euery decision ofthe Goods and Seruices Tax Council shall be taken at a meeting, bg a majoity of not less than three-fourths of the ueighted uotes of the members present and uoting, in accordance with the following pinciples, namelg:-- (a) the uote of the Central Gouernment sLnll be a ueightage of one-third of the total uotes cast, and (b) the uotes of all the State Gouernments taken together shall tnue a LDeightage of tuo-thirds of the total uotes cast, in that meeting. (1O) No act or proceedings of the Goods and. Seruices Tax Council statl be inualid merely by reason of-- (a) ang uacancA in, or any defect in, the constitution of the Council; or (b) ang dekct in the appointment of a person as a Member of the Council; or (11) The Goods and Seruices Tax Council shall establish a mechanism to adjudicate ang dispute-- (a) betu-teen the Gouernment of India and one or more States; or (b) betueen the Gouemment of India and. any State or ,States on one sid.e and one or more other States on the other side; or ( c ) behaeen tuo or more States, arising out of the recommendations of the Council or implementation thereof.'

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"54. ',l diesel, mott auiation h consumptiot trade or con commerce o- '1xes on the sale of petroleum crude, hi,7h speed r spirit (commonlg knou-tn as petrol), natural llas, :bine fuel and alcoholic liquor for human but not including sale in the course crf tt,:'r-St.ate ,nerce or sale in th.e course of international trade or such gads! 12.9 . Secti< n I 9 says that notwithstalci ing anything contained in the Constitution (lolst Amendment) l\ct, 2076, any provision of any law relating to tax on goods and sen"ices or on both in force in any State immediately before commencement of the aforesaid Acl which is inconsistent with the provisions of the Constitution pos such amendment shall continue to be in force until amended c : repealed by a competent legisle.tt ire or other

t7 competent authority or until expiration of one year from such commencement whichever is earlier.

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and collection of tax on inter-State supply of goods or services or both by the Central Government and for matters connected therewith or incidental thereto. Like the CGST Act, Central Government notified various dates as the date for coming into force of relevant provisions of the IGST Act, such as, 22.06.2017 and O1 .O7.2O17. Further, two more Acts were enacted by the Parliament post the Constitution (l0l$ Amendment) Act, 2016. 16. Legislature of the State of Telangana enacted the Telangana Goods and Services Tax Act, 2017 (TGST Act' hereinafter) to make provision for lely and collection of tax on intra-State supply of goods or services or both by the State of Telangana. TGST Act received the assent of the Governor on 25.O5.2O17 and was first published in the Telangana Gazette on 27.05.2017. Various provisions of the TGST Act came into force on various dates While Sections I and 2 (definition clause) came into force on 22.06.2017 , Section 174 which provides for repeal and saving came into force on Ol.O7 .2017 .

20 Entry 54 of the State List of the VII Schedule to the Constitution were repealed. Sub-Section (2) clarifies that such repeal would not revive anytl ing not in force or existing at the time of such repeal or affect t ie previous operation of the repe;rled Act, etc.

27 arrd audit assessment proceedings etc, which may be instituted, continued or enforced, whereafter tax, surcharge, penalty, fine, interest, forfeiture or punishment may be levied or imposed as if those Acts had not been so amended or repealed. That apart, such repeal would not affect any proceedings, such as, appeal, revision, review or reference which shall be continued under the amended Acts or repealed Acts. It was also mentioned that it was considered necessary to strengthen certain provisions of the VAT Act to overcome any limitations to help effective revenue realization besides preventing leakages. Accordingly, it was decided to amend the relevant provisions of the VAT Act by undertaking legislation. Since it was decided to give effect to the above decision immediately and since the Legislature was not in session, and as the Governor of Telangana was satisfied that circumstances exist which rendered it necessary for him to take immediate action; therefore, in exercise of the powers conferred by Clause (1) of Article 213 of the Constitution of India, the Governor promulgated. Telangana Ordinance No.2 of 2Ol7 called the Telangana Value Added Tax (Amendment) Ordinance, 2017, which came into force with immediate effect i.e., 17.06.2017. By the said amendment, certain provisions of the VAT Act, such as, in Section 20 (4), Section 21 (31, (4), (6), (7) and (8), Section 32 (3),

22 (6) and (7) and n Section 57, the words four years' or 'four years or six years' or 'three years' stood substituted by t.he words 'six years'.

24 iv) in sub-sections(7) and (8), for the words :bur years or six years, as the case may be, the :yords 'six years' shall be substituted. n the principal Act, in section 31, in sub-section 1),- (i) the first proviso shall be ornitted (ii) after omitting the first provis r, in tJ:e :xisLing proviso, for the words "provide,l furller hat" the words "provided that' :;ha-11 be lubstituted. n the principal Act, in section 32, in sub-secrion 3), (60 arrd (7), for the words 'four years' tie .vords 'six years' shall be substituted. n the principa.l Act, in Section 57, in sub-section 5) and the proviso thereunder, for the words three years', the words 'six years' sLLa-Il be ,rubstituted. l'he Telangana Value Added Tax (Am3ndment) .)rdinance, 2017 is hereby repealed.

25 Section 21 (7): Where any assessment has been deferred by the Commissioner under sub-section (5) of Section 32 or as the case may be, the Appellate Tribunal under the proviso to sub-section (4) of Section 33 on account of any stay order granted by the Appellate Tribunal or as the case may be, the High Court or the Supreme Court respectively, or whereas appeal or other proceedings is pending before the Appellate Tribunal or the High Court or Supreme Court involving a question of law having a direct bearing on the assessment in question, the period during which the stay order was in force or such appeal or proceedings was pending sha-ll be excluded in computing the period of six years as the case may be for the purpose of making the assessment. Section 31 (1): Any VAT dealer or TOT dealer or any other dealer objecting to any order passed or proceeding recorded by arry authority under the provisions of the VAT Act, other than the order passed or proceeding recorded by any authority under the provisions of the VAT Act, other thar the order passed or proceeding recorded by an Additional Commissioner or Joint Commissioner or Deputy Commissioner, may within 3O days from the date on which the order or proceeding was served on him, appeal to such authority in the manner prescribed. Provided that an appeal so preferred shall not be admitted by the appellate authority concerned unless the dealer produces proof of payment of tax, penalty, interest or any other amount admitted to be due, or of such installments as have been granted, and the proof of payment of twelve and half percent of the difference of the tax, penalty, interest or any other amount, assessed by t}Ie authority prescribed and the tax, pena-lty, interest or any other amount admitted by the appellant, for the relevant tax period, in respect of which the appeal is preferred. Section 32 (3): In relation to an order of assessment passed under the Act, tJ:e powers conferred by sub-sections (l) ald (2) shall be exercisable only vrithin a period of six years from the date on which the order was served on the dealer. Section 32 (6): Where an order passed under this Section has been set-aside by any court or other competent authority under the Act for any reason, the period between the date of such order and the date on which it has been so set-aside shall be excluded in computing the period of six years specified in sub-section (3), for the purpose of making a fresh revision, if any, under this Section. Section 21 (8): Where a.n assessment made has been set aside by any Court or as the case may be the Appellate Tribunal, the period between the date of such assessment and the date on which it has been set aside shall be excluded in computing the period of six years as the case may be, for making any fresh assessment.

26 Section 32 I j) Where any proceeding under this Section has been deferred on i r:count of anv stav order granted by the Appellate Tribunal or t e High Court or Supreme Court in any case, or by reason of the fact that an appeal or other proceeding, is pending before the Atr rrellate Tribunal or the High Court of the Supreme Court involvir g a question of law having a direct beering on the order or proc, eding in question, the period during wh.ich tlrc stay order was in rrce or such appeal or proceeding was pr:nding shall be excluded ir computing the period of six years specified in sub- section (3), f( r the purposes of exercising the power under this Seclion. Section 57 ( ,): No order for the forfeiture under this s,:ction, shall be made after he expiration of six years from the date :f collection of the amount refcrred to in sub-section (4).

28 four years i.e., rn or before 30.03.2019, in terms of Section 32 (2) of the VAT Ac. Hou,ever, the re',risional order u,as passed on 74.O9.2O2O wh; ::h is beyond four years but within six years. In so far the Second A.mendment Act is concerned, it is contended that the said arnenc ment is not valid in the eye of law as it was made after the GST regime had come into effect. Therefore, the extended perioc of limitation of six years instead o:. four years was not available to Lhe Deputy Commissioner.

32 the revisional order dated 05.03.2020 as being barred by limitation anc thereafter to quash the same a s u'ell as the consequential,rder dated 07.O3.2020. 38. Likewise, in all the Writ Petitions forming pa:'r of the present batch, the cha enge is either to the rerrisional ord,:r passed during the extended 1::riod of limitation or to the notices to show cause issued during he extended period of limitation oI six vears as to why the orders of assessment should not be revised. Additionally, constitutionalit ,, of the Second Amendment Act has been questioned.

I 33 the VAT Act except for the goods listed in Entry 54 of List II of the VII Schedule. Ordinance No.2 of 2Ol7 was promulgated by the Governor of Telangana under Article 213 of the Constitution of India on 17.06.2017 whereby limitation was extended from four years to six years. 01 .O7 .2017 is the date on and from which TGST Act became enforceable. Section 174 of the TGST Act repealed the VAT Act in respect of all goods except those mentioned in the substituted Entry 54 of the State List. On 29.11.2017 the Second Amendment Act received the assent of the Covernor whereafter it was published in the Telangana Gazette on 02.12.2017 giving retrospective effect from 17.06.2017. 40. Mr. S.Ravi, learned senior counsel, submits that prior to the Constitution Amendment Act coming into force, States had legislative competence to levy Value Added Tax (VAT) on sales of all goods except newspapers in the course of intra-State trade pursuant to Article 246 of the Constitution read with Entry 54 of List ll of the VII Schedule. Constitution Amendment Act has amended the Constitution of India to redistribute the legislative powers to give effect to the new GST regime based on cooperative federalism-pooled sovereignty. The Second Amendment Act was adopted on 02.12.2017 with retrospective effect frorn 17.06.2017

-1{ enlarging the pr riod of limitation more particularly trnder Sections 21 and 32 of th VAT Act from four years to six l ear:,,. lle submits that after the Cr nstitution Amendment Act, Slate of ''lelangana did not have the legislative competence to enact th e Second Amendment Act for all goods either on the basis ol tht: erstwhile legislative schen e prior to the Constitution funendrent Act or on the basis of Arti le 246 read with Entry 54 of List Il, as amended, or under Artic :: 246 A or in terms of Se,:lion 19 of the Constitution Ar: rendment Act or on the prin<:i ple of pooled sovereignty or or the basis of Ordinance No.2 of 201 ,' or in terms of Section 174 of.'he TGST Act. 4I . Elaborating on the above aspect, Mr. Ravi sulrnrits that the Second Amendm rnt Act seeks to retrospectively aret nd the VAT Act to eniarge tl e limitation period with retrospe,:trve effect to assess tax in re ipect of those assessment years nhen it had legislative comp( lence to impose VAT on al] 11oods except newspapers. Hov ever, he points out that the Seconrl ,\mendment Act was passed or O2.12.2OI7 alter the date of enlbr,:ement of the Constitution Ame rdment Act. Referring to a tle<:isrion of the Supreme Court in A..Hajee Abdul Shukoor Vs. Statr: cf Madrasl reflected in pre-amended Entry 54 of List II prior to 16.09.2016 for legislative competence on the ground that the Second Amendment Act is retrospective and intended to deal with VAT demands prior 2 2O2o 82 GSTR 32 (Guj.)

3(r to the coming ir to force of GST. Thus, Section 6 of the Genera-l Clauses Act, 18'|7 cannot be pressed into service to save the pre- amended Entry i4 of List II.

37 Legislatures is based on the principle of pooled sovereignty / cooperative federalism. Further, he submits that all such legislations must be based on recommendations of the GST Council. Therefore, he contends that legislative competence of 5 2021 SCC Online SC 7O6

-llt Telangana Stat ' Legislature for enacting the Seccnd Amendment Act cannot flow from Article 246A.

39 54 had not y:t been amended, even then a-l so the Second Amendment Ac having been passed on 02.12.2Ol',7 vvas beyond the one year p,riod in terms of Section 19 of the Constitution Amendment Act and therefore invalid.

of the one year window period. On the day of enacting the Second Amendment Act, the State Legislature had lost its competence for making law in respect of other goods barring the goods mentioned in the amended Entry 54 of List II. State Legislature must have the competence both on the date of enactment i.e. 02.12.2O17 and also on the day when it was brought into force retrospectively i.e. 17.06.2017. 50. Referring to Article 213 (3) of the Constitution of India he submits that the Ordinance would be ultra uires for the very same reason for which the Second Amendment Act is ultra uires. He further submits that life of the Ordinance was only six weeks from date of convening of the State Legislature. This period, he submits, was till O8.12.2OI7. Even assuming that the State Legislature was competent to enact and apply the Ordinalce qua the goods not mentioned in amended Entry 54, such operation {l could not have continued beyond 08.12.2017 as per Article 213 of tl.e Constitution. Clarifying the position, he submits that the Ordinance was not challenged because the Ordinance was repealed by the Second Amendment Act and is no longer in existence. Besides, the Second Amendment Act was brought into force with effect from 17.06.2017 which was the date of the 42 Ordinance. Thus, e ,,en for the period when the Ordine rrl ce was in existence it was thr Second Amendment Act which o<:cupied the legislative field and not the Ordinance. Therefore. anv reliance placed on the Ordilrnce would be misplaced and the fact that the Ordinance was not hallenged would have no legal bea:'irrg.

J3 Amendment Act can only be in respect of the VAT Act as existing on 02.12.2017 , even if given retrospective effect from 17 .06.2017 .

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{7 make laws for saving the repealed Acts under Section 19 of the Constitution Amendment Act. Accordingly, Section 174 was included in the TGST Act as a measure to save the repealed Acts, including the VAT Act. He submits that Section 174 saves operation of the VAT Act in respect of transactions made prior to 01.07.2017. Insofar the VAT Act is concerned, the sarne was amended by the Second Amendment Act prior to the effective date of repeal by way of an Ordinance dated 17.06.2017. Article 13 (3) of the Constitution of India states that law includes Ordinance as well. Section 6 (b) of the General Clauses Act, 1897 also makes it clear that repeal of an Act shall not effect the previous operation of any enactment so repealed or anything done thereunder. According to him, reliance placed by the petitioners on the decision of the Kerala High Court in Hlndalco Industries Limited l3 supral and on ttre Gujarat High Court decision in Reliance Industries Limited (2 supra) would be of no assistance to the petitioners as in those cases there was no Ordinance or legislative enactment pertaining to the State VAT Acts prior to introduction of GST. 59 Elaborating further Mr. B.S.Prasad submits that the Ordinance was promulgamated by the Governor of Telangana on .lll 17.06.2017 whe :'eby the time limit for assessmenti and revisions was extended f: om four years to six years before annulment of VAT Act. The C)rdinance became an Act i.e. the Second Amendment Act on 02.12.2017 . Prior to that, the Jrdinance was approved by thr legislative assembly of the St.rte rrf 'felangana within six mont rs from the date of the Ordinance. Referring to Article 213 (2) r l' the Constitution of India, he subrnits that an Ordinance prom "rlgated by the Governor would have the same force and effect as an Act of the legislature urless such an Ordinance is not placed before the legislative assr:mblv or rejected by the legislativ:: assembly when placed before it within the stipulated time. Insofar the present case is corLcerned, the Ordinance was 1 lerced before the legislative assernirly and the assembly approv( d the same. Therefore, in thr: ligh: of the above constitutional prc vision, the limitation to make ar asr;essment or reassessment or r:vision is six years and not fotr yeerr;. According to him, the Ordir ance issued and the subsequent le$slative Act for prolonging th, limitation made such extension ol limitation valid. Therefore, he proceedings initiated under th: VAT Act in respect of the petit ioners are valid, being within limitatirrn. Insofar decision of the X,:rala High Court in Baiju AA (l.O supra) 1S concerned, the sa ne would not be applicable to the llacts of the 49 present case inasmuch as amendment to the Kerala VAT Act was made long after annulmeht of the Kerala VAT Act. Insofar the present case is concerned, the Ordinance was promulgated prior to 01.07.2017 when the VAT Act was still in force. 60 Mr. Prasad, learned Advocate General, asserts that Telangana State was competent to promulgate the Ordinance on 17.06.2017 and thereafter to pass the Second Amendment Act on 02.12.2O17 in respect of goods not covered by amended Entry 54 of List II. Power and competence of the State in this regard is traceable to Article 246 of the Constitution read with Section 19 of the Constitution Amendment Act; the savings provision in Section 174 of the TGST Act; Article 246A of the Constitution; and Sections 8 and 8A of the Telangana Genera-l Clauses Act, 189 1 . 61 Mr. Prasad submits that State is only securing and protecting the revenue due to it by enlarging the duration by which the dealers can be assessed etc., but not imposing any new tax or levy. Legislation being a sovereign function of the State, thus, the Second Amendment Act cannot be questioned as being without competence. 62 State has the power to enforce the Second Amendment Act with retrospective effect. State has the power to even take away

50 vested rights of he assessees i.e. even where asses,lntents become barred by time under the pre-amended provision. State can enlarge the limit,ltion even for such time barred asscssments and take away vestr,l rights. Looked at from this p:rspective, the Second Amendn,ent Act cannot be said to be arbitrary, not to speak of being rr ;mifestly arbitrarv 63 Provisions or enlarging time limitation on .lsserisments etc., are only procedu ra1 aspects of levy and assessm€nt of tELx. These are not substant ve provisions. Assessing Officers are competent to adjudicate on imitation since it is a mixed (luestron of fact and 1aw. 64 Referring t Hindalco Industries Limitecl l3 supra), he submits that dec sion of the Kerala High Court, as t,xpressed in the said case, is < istinguishable. In the said decision, Keraia High Court did not dea I with the effect of Section 19 of tht: (lonstitution Amendment Act md the savings provision under t-re State GST Act. As a mat ':r of fact, State of Kerala had cnacted the impugned law af'er the permissible window penod of one year a-llowed under Sr r:tion 19 of the Constitution Ame'ndment Act. Likewise, Mr.Pras,rcl submits that decision of the t}rjalat High

5l Court in Reliance Industries Limited (2 supraf would also have no persuasive va-lue for this Court. period of limitation cannot be ca-lled as substantive right. An aggrieved person cannot claim any vested right in procedure; that he should be governed by the old provision relating to the period of limitation. Procedural law is retrospective, meaning thereby, that it may apply even to acts or transactions under the repealed Act. Time and again it has been held and clarified by the Supreme Court that every litigant has a vested right in substantive law but no such right edsts in procedural law. According to Mr. Prasad, law of limitation is generally regarded as procedural and its object is not to create any right but to prescribe periods within which legal proceedings be instituted for enforcement of rights which exists under the substantive law. Statutes of limitation are retrospective insofar those apply to all legal proceedings brought after their operation for enforcing cause of action accrued earlier, r1 (2O1U 6 SCC 739 65 Mr. Prasad, learned Advocate General, relied on a decision of 52 but they are pr rspective in the sense that they nr:ither have the effect of revivin5 the right of action nor do they have the effect of extinguishing a ight of action subsisting on that day. 66 Learned A lvocate General has also placed relia-nce on a there is an Ord: nance which is followed by al Act on the same subject matter, t he Act will come into force in continuation of the Ordinance. In .hat case, a gazette notilication rizas issued on 22.O8.L996 whic r appointed 22"d day of August, 1996 as the date on which the A< t in question would come into force. The said gazette notificati( n was issued in exercise of the porvers conferred by Section 1 (3) rf the Arbitration and Conciliation Act, 1996. In the facts of that case, it was held that while the .{ct came into force on 22.OA.l<- 96, for all practical and legal purposes, it would be deerned to h rve been effective from 25.01.191)6, rvhen the Ordinance was p -omulgated, particularly, when the provisions of the Ordinance ar d the Act are similar there being nothing in the Act so as to ma :e the Ordinance ineffective. The Act being a continuation of t re Ordinance, would be deemed ..o have been 12 (2OOl) 6 SCC 356

5-1 the legislature capriciously, irrationally and / or without adequate determining principle. He submits that wide latitude is allowed to the legislature in enacting a law. The freedom to experiment must be conceded to the legislature, particularly in economic laws. If problems emerge in the working of laws and which require legislative intervention, the Court cannot be oblivious of the power of the legislature to respond by stepping in with necessary amendments. Since the law, in this case, the Second Amendment Act has been enacted to augment the revenue of the State, the constitutional Court will leal heavily in favour of such a law. The law under scrutiny is an economic measure. In economic matters, t3 (2O2Ll 5 SCC I

wider latitude is gi 'en to the law makers, which is based on sound principle. Mr. Prar ad asserts that even a vested right can be the subject matter of 'etrospective law. No doubt, such a law must pass master Artic es 14, 19, 2l and 3OOA of the Constitution of India. Therefore, the issue really boils down to whether the impugned enactr ent is manifestly arbitrar5r or not. If it is not, question of interfr rence by the Court would not arise. 68 Learned Ad ,ocate General has referred to anri relied upon the decision of t re Kerala High Court in Sheen Golden Jewels (India) Ptrt. Limi:ed l7 supra) in great detail. 69 Mr. Prasad has also referred to an article tifleC, 'Transitional Proui,sions In C,mmercial Legislations: An Analy.sis' by Priyal Parikh accordin6 to which the view taken by a maj,rrity of Courts is that the reven re authorities retain the power to lew appropriate taxes under the erstwhile indirect tax laws for everLts prior to the introduction of ( ST. 70 Mr.S.Ravi, learned senior counsel for the peti iioners in reply submits that tl e State has not addressed the following crucial aspects raised t y the petitioners: i. Effeo o[ amendment of Entr5r 54 by Sectior .17 of the Constitutior Amendment Act, 5.1

55 ii. Effect of reped of VAT Act for all other goods except the goods mentioned in the amended Entry 54 of List II as per Section 174 of the TGST Act, in. Competence of the State as on 02.12.2017 to pass the Second Amendment Act, given the requirements of the present legislative competence as on that date; iv. Requirement of simultaneous levy by Parli.rrnent and State Legislature for legislative competence under Article 246A, v. Objective and effect of Section 19 of the Constitution Amendment Act, 7I Mr. Ravi contends that it is not the stand of the petitioners that the State has no competence whatsoever to promulgate the Ordinance or to enact the Second Amendment Act. State does have the power and competence in respect of the goods specifically mentioned in the amended Entry 54 but not goods in general. It is the contention of the petitioners that other than the goods mentioned in amended Entry 54, the State does not possess legislative competence. This crucial aspect was not countered by the State. 72 Mr. Ravi submits that it is not the argument of the petitioners that the Ordinance or the Second Amendment Act are manifestly arbitrar5r or that those cannot be given retrospective effect. Therefore, the a-rgument advanced by the learned Advocate vi. State did not at all ma]<e any endeavour to show any distinguishing feature in the judgment rendered by the Gujarat High Court in Reliance Industries Lirnited (2 supral and why the same should not be applied to the present case.

i6 General based rn the principles of manifest arbitrariness or retrospectivity an e not at a-ll germane to adjudicate on the issues raised by the pet tioners. 73 Besides re' erating reliance on Reliance Industries Limited (2 supra) and I lindalco Industries Limited (3 supra), Mr.Ravi has also presse 1 into service a decision of the Allahabad High Court in Jain D stillery Private Limited (4 supral. 74 Insofar ex ension of time limit in tax matters is concerned, Mr.Ravi submit ; that time limits are a fetter on th,: iuri iction of the departmen al authorities. Enlargement of tirne under the Second Amenr ment Act in extending the lirnitation period amounts to co tferring juri iction on departrne ntal authorities that did not e) ist earlier. Therefore, such al ar,endment is not merely for se, uring old liabilities but impacts; the rights of assessees, thr s being a fresh legislation which is devoid of Iegislative coml,etence. 75 Insofar r --liance placed by learned Advoc:ate General in Tirumalai che micals Limited (r1 supraf it is submitted that the said decision ir of no application to the present batch of cases. He submits that he question for determination in that case was whether the lir ritation to file appeal against order for violation of 57 provisions of Foreign Exchange Regulation Act, 1973 (FERA) would be governed by the appellate mechanism under the Foreign Exchange Regulation Act, 1973 or under the Foreign Exchange Management Act, 1999, The above decision has no relevance insofar the present batch of writ petitions is concerned where the challenge is primarily to the competence of the State Legislature to enact the Second Amendment Act after the Constitution Amendment Act. 76 Regarding Fuerst Day Lawson 112 supra) relied upon by the learned Advocate General, Mr. Ravi submits that in the present batch of cases petitioners are primarily concerned with the validity of the Second Amendment Act and not the Ordinance. Even if it is assumed that the State had the competence to promulgate the Ordinance in June,2O17 before onset of GST with effect from Ol.O7.2Ol7, by the time the Second Amendment Act was passed, the State had lost its competence for legislating on goods 1n general, except for petroleum products and liquor for human consumption as mentioned in the amended Entry 54 of List II. However, he submits that though the Ordinance has not been specifically challenged, nonetheless, it is clear that on and from 16.09.2016 when the Constitution Amendment Act came into 58 force, the Ordrr ance could not have been promu lp.ate:d. Thus, both the Ordint nce and the Second Amendment Act cannot be sustained after 16.09.2016. Again in this judgmt:nt question of legislative comp ':tence of the State to promulgate i,Ln Ordinance follou,ed bv an ., ct on the same subject matter \r,as not in issue. He submits tha't an Ordinance as well as an Act are two pieces of legislation. Legi ,lative competence of each has tc be separately determined in t re light of the Constitution and the point of time when those wer ,: enacted. Insofar Manish Kuma:r {13 supra} is concerned, he s rrbmits that it is not the case of ttre petitioners that the Seconc Amendment Act should be struc < down on the 'ground of being manifestly arbitrary. That apart, 'vhile there can be no dispute t , the proposition that a wider latil:ude should be allowed to the le {slature while legislating economic 1aws, it is also equally clear th rt while making such law, the l-egf-.l611rre or the Parliament carrr ot transgress the constitutional tirnits. In the instant case, tl e challenge to the Second Ame rclment Act is purely on the ; ,round of legislative competence; rather lack of legislative coml etence. Petitioners are not q restioning the legislative wi rm in extending the limitation for making assessments, re rssessments, revisions etc., from fc,ur years to six years, but have questioned the Second Amendmt:nt Act on the 59 ground that the State did not have the legislative competence to enact the same. 77 Insofar Sheen Golden Jewels (India) hrt. Limited (7 supra) is concerned, learned senior counsel submits that a division bench of the Gujarat High Court in Reliance Industries Limited 12 supra) has distinguished the said decision. In Sheen Golden Jewels (India) Pvt. Limited (7 supra) petitioners had challenged validity of Section 774 of the Kerala Goods and Services Tax Act, 2017 which is pai mateiato Section 174 of the TGST Act, on the anvil of Section 19 of the Constitution Amendment Act. According to Mr.Ravi, petitioners herein are not questioning validity of Section 174 of the TGST Act. Rather, according to the petitioners, Section 17 4 of the TGST Act only supports what is being contended by the petitioners. 78 The article, 'Transitional Prouisions in Commercial Legislation: An Analysis'follows the same logic given by the Kera-la High Court in Sheen Golden Jewels {Indtaf hrt. Limited (7 supra). That apart, the article a-lso relied upon the decision of the Gauhati High Court in Lakshminarayan Sahu Vs. Union of Indiar+ which dealt with validity of show cause notices for service tax after Section 14 2Ol8 SCC Online Gau 1457

60 174 of the State C}ST Act was brought in. Mr. I?a'ri submits that according to th( aforesaid article, Section 19 of the Constitution Amendment Ac has elements of both transitional as well as savings clause. However, he contends that Sectit;n l9 of the Constitution fu rendment Act only suspencls invnlidity of the inconsistent le1 islation for a period of one l,r€'ar or till the inconsistent leg slations are amended or repealetl. He asserts that Section 19 is nt ither a source of power nor a savrrrgs provision. It is only a transit r)r-lal provision. 79 Mr.S.R.R.' 'iswanath, learned counsel for some of the petitioners alsc made submissions replying to the arguments advanced by th : learned Advocate General. While admitting that to Tirumalai C hemicals Ltmited (11 supraf reli,:cl upon by the t5 53 ITR 231

6t learned Advocate General, he submits that in the said case Supreme Court was dealing with the limitation prescribed for filing appeals, which is of entirely different nature, 80 Mr. Viswanath submits that two dates are extremely crucial. Firstly, 16.O9.2016 when the Constitution Amendment Act came into force. Secondly, 27.O5.2O17 when the TGST Act was enacted. The Ordinance as i.r''ell as the Second Amendment Act were made subsequent to the enactment of the TGST Act. Therefore, learned Advocate General is not right in saying that the Ordinance was promulgated prior to coming into force of the TGST Act. Thus, he would submit that neither the Governor nor the State Legislature had legislative competence to promulgate the Ordinance or to make the Second Amendment Act after 16.09.20i6 and also after 27.Os.2017 81 Referring to Section 19 of the Constitution Amendment Act, Mr. Viswalath submits that the window provided by Section 19 was completely exhausted on 27.05.2017 when the TGST Act was enacted and Section 174 thereof partially repealed the VAT Act. There is no merit in the a-rgument of the learned Advocate General that Section 19 of the Constitution Amendment Act could be invoked even after 27.05.2017 and that the Ordinance and the 62 further submits that neither the Ordinanco nol tht: Second Amendment Act < ;ln be traced to Article 246A ol the Constitution. 82 lnsofar dec ,sion of the Kerala High Court in lih.een Golden Jewels (India) P irt, Limited (7 supraf is concernecl, ht: submits that in the said c ,rse the challenge was made to Sec.rr,n 174 of the Kerala Goods an i Services Tax Act, 2017 which ts prli mateia to Section 17 4 ol the TGST Act. Petitioners he rt:in are not challenging valid ty of Section 174 of the TGST Ar:t. lle, therefore, submits that thr re is no merit in the arguments zrclv,,rn<:ed by the learned Advocatt General. 83 Submissior rs made by leamed counsel for the parties have received the due ,:onsideration of the Court. 84 We shall irst deal with the issue relatin5i to legislative competence. He ading of Article 246 of the Constitution of India is subject matter o - laws made by Parliament and by thr: Legislatures of States. Clz use (I) says that notwithstandin g anything in clauses (2) and 3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I (Union List) of the VII Schedule to the Constitution of India. As per Clause (2), not rrithstanding anything in Clause (3), Parliament Second Amendn::nt Act owe their genesis to Se ction 19. He

63 and subject to Clause (l), the Legislature of any State also have power to make laws with respect to any of the matters enumerated in List III (Concurrent List) in the VII Schedule. In terms of Clause (3), subject to Clauses (1) and (2) the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II (State List) in the Vll Schedule. Clause (4) clarifies that Parliament has power to make laws with respect to any matter for any part of the territory of India not included in any State notwithstanding that such matter is a matter enumerated in the State List. 85 Thus, the power to make laws either by the Parliament or by the State Legislatures is traceable to Article 246 of the Constitution of lndia. The Lists in the VIl Schedule defines and limit the respective competence of the Union and the States. The various entries in the three lists of the VII Schedule are not sources of legislative power. These are legislative heads demarcating the field of legislation; of course, being the field of legislation, the entries should be given the widest possible amplitude. 86 Prior to the Constitution Amendment Act i.e., prior to 16.09.2016, Entry 54 of List II was as follows:

6{ "54: T ues on the sale or purchase of goods other than neuspapers, .,ubject to the prouisions of entry 92 A o-f l,ist 1".

"

inconsistency b' rtween laws made by Parliament errd laws made by Legislatures rf State)' Parliament and subject to clause (2)' the kgrslature of e' ery State have power to make laws $ith respect to goods and sen ices tax (GST) imposed by the Union or by such State. As per c.ause (2) Parliament has exclusive power to make laws with resp( ct to GST where the supply of goorls or of services or both take: place in the course of inter- State trade or commerce. T. r.e Explanation clarifies that prov- sions of Article 246A in resl ect of GST shall take effect from the date recommended :y the GST Council in terms of Clause (5) of Article 66 279-4. 92 Thus wh at Article 246A provides is that ooth Parliament and the Legisl rture of every State have power to rrrake laws with respect to GS'l imposed by the Union or by suct fitate except in the case of GS I where the supply of goods or of services or both tales place ir the course of inter-State trade or commerce in which case Pa liament has the exclusive compet€:nce. Of course, *=. ";" '.,:u '*" errect rrom the date of recorrrnendafibn 93 Articte 36e e:rl:ressrbrrs w&r.cI d6y r.i 35 PatbUs ;,::,"T,.";;.; n. l.t,ltise 112)

67 defines "goods' to include all materials, commodities and articles. Clause (12A) which was inserted by the Constitution Amendment Act with effect from 16.09.2076 defines "goods and services tax" (GST) to mean any tax on supply of goods or services or both except taxes on the supply of alcoholic liquor for human consumption. Clause (26A), also inserted by the Constitution Amendment Act with effect from 16.O9.2016, defines "services" to mean anything other than goods. 94 Article 246 A of the Constitution of India came up for analysis before the Supreme Court in VKC Footsteps India Private Limited (5 supral, Supreme Court has held as follows:

"

69 97 In BaiJu A.A. ll0 supraf the challenge before a single bench of the Kerala High Court was to the legality of the notices and assessment orders issued in connection with the assessments under the Kerala Value Added Tax Act, 2O03 for the assessment years 2O1O-2011 and 2O71-2012. The challenge was made on the ground that the concerned authorities did not have the juri iction to issue the notices and assessment orders since the amendments introduced to Section 25 ( 1) of the Kerala Value Added Tax Act, 2OO3 through the Kerala Finance Acts of 2Ol7 and 2018 notilied on 19.06.2017 and 31.03.2O18 respectively did not contemplate a retrospective operation of the amended provisions. Section 25 of the Kerala Value Added Tax Act, 2OO3 deals with assessment of escaped turnover. ln case of escaped turnover for any reason the assessing authority could determine to the best of his judgment the turnover which had escaped assessment to tax at any time within five years from the last date of the year to which the return relates. As per the last proviso the period for completion of assessment was extended up to 31.03.2016. By the Kerala Finance Act of 2017, the period of limitation under Section 25 (1) for proceeding to determine escaped turnover was enhanced from five years to six years and in the last proviso the extension was made up to 31.03.2O1a. Thereafter, by the Kerala Finance

10 Act, 2018, in tl e last proviso, the extension was made up to 31 .03.2019 98 One of the questions framed by the Kerala [-r igh Court was whether after th : Constitution Amendment Act anl repeal of the retained any re .ridual power of legislation so as to amend the provisions of Se, tion 25 (1) through the Kerala Finzrrice Act, 2018. After due consid rration Kerala High Court helc1 as frrllows:

7l 99 According to the Kerala High Court, after the Constitution Amendment Act, the State Legislatures stood denuded of their power to legislate in respect of taxes on sale or purchase of goods covered under Entry 54 of List ll of the VII Schedule; rather they were conferred with legislative powers to be exercised simultaneously with the Parliament in respect of taxes on supply of goods or senrices or both. While the new legislative power could justiS, the inclusion of a savings clause in the new legislation enacted in respect of the new levy of tax to save accrued rights etc., under the erstwhile enactment, the truncation of Entry 54 of List II automatically denuded the State Legislatures of the power to further legislate on the subject of taxes on sa-le or purchase of goods, except to the limited extent retained under the Constitution. It has been held that the power to amend a statute being a facet of the legislative power itself, the State Legislature could not have exercised a power to amend the Kerala Value Added Tax Act, 2OO3 except to the extent permissible when it did not retain any residual right to further legislate on the subject of taxes on sale or purchase of goods. legislate on the subject of taxes on sale or purchase of goods, except to the limited extent retained under the Constitution. The power to amend a statute being a facet of the legislative power itself, the State Legislature could not have exercised a power to amend the KVAT Act, save to the extent permitted, when it did not retain any residual right to furtler legislate on the subject of taaes on sale or purchase of goods.

72 100 An ident ::al issue came up before another s,n:Jle bench of the Kerala High ( rurt in HINDALCO INDUSTRIES LIMITED (3 supral. Following he same line of reasoning adopted by the previous bench in fAIJU A.A. (lO supra) it has beee held that after the Constitut,rn Amendment Act, State Legislatures stood denuded of their p, vrer to legislate in respect of taxer;,rn sale or purchase ofgoods 1 rat was covered under Entry 54 ol List II of the VII Schedule; they have instead been conferred wit.-r legislative powers to be exer::ised simultaneously with the Perlianrent in respect of taxes ol supply of goods or services or both. It has been held as follow .r . ...............Afier the CAA 2016, tl,e Siate Legislatures stoo ;. denuded of thetr power to legislate n t espect of taxes on sale or 1 lrchase of goods, that uas couered undet Entry 54 of List of the S,uenth Schedule to the Con-stitution, and thr:g urcre instead con-fen, d uith legislatiue pou)ers, to be exercised simultaneously L ith the Parliament, in resped of taxes on strpplg of goods or service , or bottt While the neut legislatiue potue:r u>uld justrfu the inclu,ictn of a sauings clause in the netu leqblation enacted in respe:t of the neu-t leug of tax, to saue accruzd ights, piuileges, immt nities, etc., under the ersfiuhile endcttnent, the deletion of Enb ; 54 of List II automaticallg denuded th.e State Legislatures of t e pouer to further legblate on the sultjett of tcues on sale or purcl zse of goods, except to the limited extenl ,etoined under the Const ulion. The pouer to amend a stah)te beit11 a Jctcet of the legislatiu( pou)er itsetf, the State Legislature could not haue exercised a pol .er to amend the KVAT Act, saue to thc, extent permitted, uha it did not retain ang residual ight to furlher legislate on the : 'bject of toxes on sale or purchase of g<tods" .

73 101 A division bench of the Allahabad High Court in M/s. rea-lization of advertisement tax under the U.P. Municipalities Act, 1916 on the ground that when there is no provision to impose such tax there can be no power to frame any by-laws in that rega-rd. The power to levy advertisement tax was traceable to Entry 55 of List Il. Allahabad High Court noted that the Constitution Amendment Act came into effect from 16.09.2016. U.P. Goods and Services Tax Act, 2Ol7 catne into operation with effect from O1.O7.2017. The by-laws by which the municipalities intended to levy and collect taxes on advertisement were framed on 12.01.2017 but published on 19.O8.2O17 i.e., a-fter Ol.O7.2Ol7 when the U.P.Goods and Services Tax Act, 2Ol7 came into effect. Allahabad High Court also noted that by virtue of the Constitution Amendment Act, Entry 55 of List II was omitted. It was in that context that Allahabad High Court held that after omission of Entry 55 of List II of the VII Schedule to the Constitution of India by the Constitution Amendment Act with effect from 16.09.2016, even the State Legislature did not have the iegislative competence to levy or collect taxes on advertisement which was earlier 'u qzozol t3 GSTR 235 (Alt)

71 available under llntry 55. Further, the bench noted that the power to tax ear ier vested with the municipalities urtder Section 128 (21 (VII) of rhe U.P. Municipalities Act, 1916. l-laving been omitted by virtu , of Section 17 3 of the U. P. (ioc,d s r,rnd Services Tax Act, 2017, the municipalities did not harue the statutory competence to k w, impose or collect advertisemen., 1ax. Further clarifying the pc sition Allahabad High Court held ttrat the State Legislature was nvested with the power to make lir\'.,s rn respect of taxes on ad' ertisement vide Entry 55 of List II to the VII Schedule but t ie said entry was deleted by thr: Constitution Amendment Act with effect from 16.09.2016 lhe Constitution Amendment Act vide Section 17 amended the t/ll lichedule and omitted Iintry 5 : of List II, thus deleting the porr''er o I th'e State to make laws in re ipect of taxes on advertisement. Therelbre, when the State was c enuded of the power to make laws in respect of taxes on adver. isement, obviously the municipal. ties were also divested of the l ower to impose any tax on advertis,lnrent. 102 This line of reasoning has also been foll,rr^red by a later division bench :l the Allahabad High Court in .lain Distillery Private Limitel (4 supraf. In this case, th€' lJlahabad High Court examine I the position as to the comp el ence of the 75 Parliament and State Legislatures to enact laws to impose duties on excise and to levy tax on sale of a-lcoholic liquor not for human consumption post the Constitution Amendment Act. It was noted that the express intent of the constitutional chalge made vide the Constitution Amendment Act was to tax alcohol under the GST regime except alcoholic liquor for human consumption. Thus, alcoholic liquor not for human consumption or industrial alcohol or non potable a.lcohol would be subject to GST laws only. According to the Allahabad High Court this intent has been expressed through Section 17 4 (l) (i) of the U.P.Goods and Services Tax Act, 2O17. Section l7a (l) (i) of the U.P.Goods and Services Tax Act, 2017 reads as follows: " 174. (1) Saue as otherwi.se prouid.ed inthis Act, on and from the date of commencement of this Act: (i) The Uttar Pradesh Value Added Tax Act, 2OO8, except in respect of goods included tn Entry 54 of the &ate List of the Seuenth Schedule lo the Constitution are herebg repealed." IO2.l It was in that context Allahabad High Court held as follows:

"

76 consumption". Hence, in anA case, afier the enacln eit cJ the UPGST Act, 21 17 and in absence of ang amendment to !ie,,-tion 174 (1) (t) of that qd, there neither suruiues nor erists rtrrt' r-leleqated pou-ter uith the State Gouemment, to issue the t npuqned Notifcation, & inpose UPVAT on ENA.

79 Luas to replace number of indirect taxes being leuied bg the Union and the State Gouernments and to remoue the cascading effect of taxes and provide for a common notional market for goods and seruices. This i.s apparent from the statement of objects and reasotls referred to bA the Supreme Court in Mohit Mineral Put. Ltd. [2018] 58 G.STR 1 (SC) : l2o19l 2 SCC s99. 92. Further sedion 18 to the Constitution Amendment Act provides for compensation to the States for the /oss of revenue aising on account of the implementatton of the goods and seruices tax for a peiod. of fiue years. Thus the entire scheme of the Corlstitution Amendment Act recognbes imposition of onlg "goods and seruices tax" under article 246A of the Constitution of India. The phrase the 'goods and seruices tax" is defined under article 366 (29A) to mean anA tax on supply of goods or service or both except toxes on the supplg of alcoholic liquor for human consumption. S\tch "supply" cannot be fragmented into different components bA the State Legislature and assume pouer to impose ind-ependent tax on the sale of goods without rekrence to the Goods and Seruices Tox Council- Such interpretation uould be contrary to the entire scheme as uell as the object and purpose of *Le Con-stitution Amendment Act. ln fact the proui.sion prouiding for compensation to the Slates for the loss of reuenue due to the goods and seruices tax u.tould also be irreleuant if the State l,egislatures ore independentlg empoutered to enact sales tax/ ualue added tox legislalions bg taking recourse to article 246A of the Constitution of India.

ft0 benches of Allahat r<i High Court in M/s. Pankaj Advertising (16 supral, Jain Distil rery Private Limited (4 supra) and the clivision bench of Gujarat ligh Court in Reliance Industries Limited (2 supra|. Not only t re Second Amendment Act cannot be traced to Article 246 of the ( lonstitution read u,ith Entry 54 of List II of the VII Schedule, the r irme cannot also be sustained as a stand alone legislation of the I tate under Article 246A of the Co.rstitution in the absence of sim rltaneous legislation by the Parliament. 106 Let us row deal with Section i 9 of the t},rnstitution Amendment Act, w rich reads as under:

8l competent autlority or until expiration of one year from such commencement, whichever is earlier. 108 Thus, the purpose of this provision is to provide for a window or transition by suspending invalidity of inconsistent legislations existing immediately before commencement of the Constitution Amendment Act for a period of one year or till such legislations are amended or repealed, whichever is earlier. The objective appears to be for a transition to the GST regime brought into force by the Constitution Amendment Act. All that Section 19 does is to provide a period so as to eliminate or remove a-11 laws inconsistent with the GST regime within an outer limit of one year period. Section 19 does not and cannot be construed to eclipse the amendments carried out in Entry 54 of List II to the VII Schedule or confer legislative competence upon the State Legislatures for making amendments to the VAT Act in respect of goods other than the five petroleum products and alcohol for human consumption covered by the amended (substituted) Entry 54 of List II. 109 As already discussed above, consequence of amendment of Entry 54 of List II is denuding the State Legislature of the power to levy tax on sale of goods other than those as 82 provided in amende I Entry 54; invalidation of State l:gislations existing as on 16.09 2O16 levying tax on sale of goocls other than those finding place in amended Entry 54. Section lt) does not save or postpone; deprivation or competence of Stat Legislature for lelying tax on sale of goods other than those m 'ntioned in amended (substituted) Entr_v 54 of List II. Section 19 rnly allows operation and levy of ta,< under the VAT Act which is ir consistent with the GST regime for a period of one year or until t;.e VAT Act is repealed or amenclec, whichever is earlier. This wo rld mean that the State could continue to levy tax under the VAT Act for the window period of one year or till the VAT Act was amer led or repealed to align it with the GST regime, whichever was ear ier. This transitional provision cloes not enable the State Legislal ,:re to make amendments to the VAT Act in contravention of tl 'e amended Entry 54 of List II 110 At thi: stage, we may refer to Article 2l43ZF of t}:e Constitution. Pan IXA dealing with municipalities w:rs inserted in the Constitution 'ry the Constitution (Seventy-fourth Amendment) Act, 1992 with e lect from 01.06.1993. Articles 243 P to Article 243 ZG comprise.; of Part lXA, a,ll dealing with municipalities. By the aforesaid provisions municipalities ancl municipal denuding of legislative

E3 administration were brought under the umbrella of the Constitution. Article 243 ZF provides for continuance of existing laws and municipalities. This provision is pai mateia to Section 19 of the Constitution Amendment Act. Article 243 ZF reads as under: 243 ZF. Continuance of eisting la uts and Municipalities:- NotlDitltstanding angthing in this Part, ang prouision of ang latu relating to Municipalities in force in a State immediatelg before the commencement of the Constitution (Seuenty-fourth Amendment) Act, 1992, u.thich is inconsistent with tle prouisions of this Part, shall continue to be in force until amended or repealed by a competent Legislature or other competent authoity or until the expiration of one year from such commencement, uhicheuer is earlier: Prouided that all tlte Municipalities existing immediatelg before such commencement shall continue till the expiration of their duration, unless sooner dissolued by a resolution passed to ttwt effect bg the Legislatiue Assemblg of that State or, in the case of a State hauing a Legislatiue Council, by each house of th.e Legislahtre of that State. 1 1 I As per this Article, notwithstanding anything in Part IXA of the Constitution, any provision of law relating to municipalities in force in a State immediately before commencement of the Constitution (Seventy-fourth Amendment) Act, 1992, which is inconsistent with Part IXA, 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.

u{ 112 In Bond r Ramaswamy (6 supra), Supreme (lourt was considering challer ge to acquisition of land for formation of Arkavathi Layout rn the outskirts of Banga-lore cit'7 by the Bangalore Develc;ment Authority under the )3angalore Development Auth( -ity Act, 1976. It was in that context Sttpreme Court considered re question as to whether pro'r-rsions of the Bangalore Develop nent Authority Act, 1976, mor3 particularly, that of Section 15 lealing with the power of the authcrity to draw up schemes for ievelopment of Bangalore MetroJrolitan area became inoperativ , void or was impliedly repealed bJ, virtue of Part IXA of the Cor stitution. Supreme Court held that Article 243 ZF is a provision ,:nabling continuance of any provision of law relating to muni :ipalities ln spite of such prorision being inconsistent with 1 r,: provisions of Part IXA of the Corrslitution for a specilied perior of one year or until amended or repealed, whichever is earlie -. It was held as follows: "Any statute constitutional pr( BDA Act or any I any provision of courts as violativ law relating to rI postpones the in\ the competent L repealing such la' the provisions of 'lr provision thereof which is inconsistenl 1i.ith any ,,ision will be struck down by courts. Conslquenuy, if 'ovision of the BDA Act is found to be incon!)istent with la.t IXA of the Constitution, it will be stnrck dou,n by of the Constitution. In regard to any provision o[ any Drlicipalities, Article 2432F suspends such i:rv;:.lidity or alidity for a period of one year from 1.6.1993 lo enable gislature to remove the inconsistency bv a:rending or relating to municipalities to bring it in consonance. with art IXA of the Constitution."

85 lt4 On the above analysis we have no hesitation in holding that Section 19 of the Constitution Amendment Act cannot be understood or cannot be construed as a source of legislative power. It is also not a saving provision in respect of suspending legislative competence to amend the VAT Act. This aspect was gone into by the Gujarat High Court in Reliance Industries Limited 12 supra) wherein it has been held as follows:

86 ]a\.!'s to bring then in harmony with the CA Act. Otherwise, must repeal them. .\nd they were given one year for achieving States do nejther, I ose inconsistent acts stand repealed. lhc St;rtes this. If the 142. tlere lhe States actedi they amended a few inronsrstent Acts. They also rcp 'aled a few more. As with the KVAT Act, the repeal, if it uere. has not resu e(l in its abroSation or annihilation. So thi: ol)c-ation of the so-cailed suns t clause (as provided in Section 19) has no. (ienuded the States po\vcr i) enforce the KVAT Act in its.amended fornr. Ihe Act remained, wrth its remit reduced, though. Thus goes out of recllorring the petitioners' anothe assertion: that with the repeal ofthe enactln(:nts, the procedural mecha ism has disappeared. It has not. The prosl'e(:tivil) of the amcndment u drsputed, what remains to be examined is tht State's power to save wh: I had happened before the CA Act came int) Ibrc(: or, more precisely, ur il one year after that Act came into forco, Itdeed, the CA Act allowed th€ State Acts in the same legislative held to coe>:is'r for one year: the windorv p 'rrod.

il7 117 Therefore, from the above analysis we can safely conclude that Section 19 of the Constitution Amendment Act is not a source of power to enable the State Legislature to enact the Second Amendment Act, which is clearly inconsistent with the Constitution Amendment Act 118 We have already noted that the Constitution Amendment Act, more particularly Sections 1 to I I and 13 to 20, came into force on ald from 16.09.2016. Thereafter Parliament enacted the CGST Act and other related enactments, most provisions of such enactments having come into force on and from O1.O7.2017. State of Telangana also enacted the TGST Act. While majority of the sections came into force on 22.06.2017, Section ),74 of the TGST Act u,hich provides for repeal and saving came into force on and from 01.O7 .2017 . Section 174 of the TGST Act reads as under: "174. Repeal And Sauing:- (1) Saue as otherui.se prouided in this Act, on and from the date of commencement of this Act, The Telongana Value Added Tax Act, 2OO5 (Act 5 of 2OOS); except in respect of goods included in the Entry 54 of the State List of the Seuenth Schedule to the Constitution, (it) The Telangana Entertainments Tax Act, 1939 (Act X of 1e3s); (iiil Tlrc Telangana Tax on Entry of Motor Vehicles into Local Areas Act, 1996 (Act 26 of 1996); (i)

88 (iu) The Telang na Tax on Entry of Goods into Locat. Areas Act, 2001 (A:t 39 of 2OO1); (u) The Telang rna Tax on Lunties Act, 1987 (Act 24 of 1987); (ui) The Telangt na Horse Racing and Betting Tax Regt kttions, 1358F (Reg:' rlation XLN of 1358F); (uii) The Telangt na Rural Deuelopment &ss Act, 1996 (t\ct 1 1 of 1996); (l ereafier referred to as the repealed Acts) are herebu repe zled. Q) fhe repeal o.1 t]7e said Acts and tte amendment of lhe Acts specified in se :tion 173 (tereafter referred to ar; "such amendment" or "amended Act", as tle case may be) lo i.he extent mentionet' in sub-section (1) or section 173 shall rutt- (a) reuiue anyt ing not in force or exi.sting at the time of stch amendment or r' :peal; or (b) affect the oreuious operation of the amended Acts or repealed Acts c nd orders or anything dulg done or sttffered thereunder; or (c) affect ang ight, piuilege, obligation, or liability ttcquired, accnted or incu red under the amended Acts or repec'.lctd Acts or orders under *Lch repealed or amended Acts: Prouided that ang tax exemption granted as an in:entiue against inuestn ert through a notification shall not cot ir nue' as priuilege if the said notification is rescinded on or tjter the appointed dag; .tr (d) affect anA a-\, surcharge, penaltA, fine, interesr e:; t-.re due or maq become '7ue or ang forfeiture or punishment in:urred or inJlicted in resp ,:ct of ang offence or uiolation committe,T against the prouisions c t'the amended Acts or repealed Acts; o.' (e) alfect an1 inuestigation, inquiry, ueificatiort 1in cluding scrutinA and at dit), assessment proceedings, adjudiattton and ang other legal proceedings or recouery of errears c,r rernedu in respect of ang . uch tax, surcharge, penaltg, fine, inter?s;t, n(tht, piuilege, oblig ttion, liabilitg, forfeiture or punishtnent, as aforesaid, anc anA such investigation, inquiry, uerificc,tion (including scr rtiny and audit), assessmenl proceedings, adjudication an d other legal proceedings or recouery of arrears or remedy ma1 be instituted, continued or enforced, a.nd any 89 such tax, surchorge, penaltA, fine, interest, forfeiture or puni.shment may be leuied or imposed as if these Acts had not been so amended or repealed; (fl affect ang proceedings including that relating to an appea| reubion, reuieu.t or reference, instituted before, on or after the appointed day under the said amended Acts or repealed Acts and such proceedings shall be continued under the said amended Acts or repealed Acls as if thi,s Act had not come into force and the said Acts had not been amended or repealed. (3) The mention of the particular matters referred to in section 173 and sub-section (1) shall not be held to prejudice or offect the general application of section 8, 8A, 9 and 19 of the Telangana General Clauses Act, 1891 (Act 1 of 1891) tDith regard to the eJfect of repeal". 119 Thus, as per Section 174 (l) (i) the VAT Act stood repealed with effect from 01.07.2017 except in respect of goods included in Entry 54 of the State List in the Seventh Schedule. When we refer to Entry 54 of the State List i.e., List II it means the entry as it stood on 01.07.2017. We have already noticed that post the Constitution Amendment Act, Entry 54 of List II has been substituted wherea-fter the field of legislation under the said entry is confined only to taxes on the sale of petroleum crude, high speed diesel, motor spirit (petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption; further clarifying that this would not include sale of such goods in the course of inter-State trade or commerce or sa-le in the course of international trade or commerce of such goods. Therefore, in terms of Section 174 (ll (i) of the TGST Act, the VAT Act stood

90 repealed witl effect from ol .o7 2017 except ln respect of the goods covered by the amcnded (established) Entry I 4 of List II 120 As a mr tter of fact, we may observe thzLt the very presence of Sectior 17 4 lll (i) in the TGST Act buttresses the stand taken by the retitioners. 121 In Sher rn Golden Jewels (Indiaf Pvt. l-imited (7 supra) the questior before the single bench of thr: Iie'ral r High Court was whether the State had the legislative conrpetence to enact Section 774 rl the Kerala Goods and Services Tax Act. 2017 and save the past taxation events when Entry 54 List I1 stood omitted permaren llz with effect from 16.O9.2O16. We may mention that Secti ,n 174 of the Kerala Goods anrl S'er-vicrr:s Tax Act, 2017 is pari r utteia to Section 174 of the TGSI Act. The Court was called upon to examine constitutional valiclity of Section 174 of the Kerala Goods and Services Tax Acl., 2A77 on the anvil of Section 19 of the Constitution Amendmt:nt l\ct. It was contended that Ste l-e had no legislative power to over ride Section 19. Kerala High { ourt took the view that while Section 19 is a transitional provis:>n; the job of saving is done b'y liection 174 Though Section l7 - has repealed the Kerala Value ,{dlr,.d'l'ax Act,

9l 2003, the repeal has not affected the previous operation of the repealed act. ln other words, the repeal has not affected any right, privilege, obligation or Iiability acquired, accrued or incurred under the repealed act. In the above back drop, single bench of the Kerala High Court rejected the contention that the State lacked the competence to engraft Section 174 into the Kerala Goods and Services Tax Act, 2Ol7 and accordingly upheld constitutional validity of Section 174. 122 We see no conflict or contradiction between Section 19 of the Constitution Amendment Act and Section 174 of the TGST Act. While Section 19 has deferred invalidity of inconsistent legislations till such time those are amended or repealed or for a period of one ye€r whichever is earlier, Section 174 of the TGST Act has repealed arnongst other enactments the VAT Act with effect from Ol.O7.2Ol7 except in respect of goods covered by the substituted Entry 54 of List II. Thus Section 174 of the TGST Act is in consonance with Section l9 of the Constitution Amendment Act. The above position only supports the case of the petitioners that the State was denuded of its competence to legislate on GST after 16.O9.2O16 and certainly after Ol.O7.2Ol7. 92 123 Repeal ,rf an enactment u,ould mezln thal such an enactment is erase I from the statute book; it would tro longer be in existence. This lspect was gone into by the Gujarat- lligh Court in Reliance Indus [ries Limited (2 supra]. It ]ras bet,n reld as follows: "68.Effect of epeal at common law-Repeal ctbliter es the statute as if it h ts neuer been enacted:

93 MANU/SC/0020/1951 : AIR 1951 SC 128 refened to a passage from tlrc Crawford's book on Statutory Construction tuhich reads as under: "lt is well-settled that if a statute giuing a special remedy is repealed uithout a sauing clause in fauour of pending suits all suils must stop where tle repeal ftnds them. If Jinal relief has not been granted before the repeal uent into effect, it cannot be after, if a case is appealed, and pending the appeal the law is changed, the oppellate court must dispose of the case under the law in force uhen its decision taas rendered. The effect of the repeal i.s to obliterate tLe statute repealed as completely as if it had neuer existed, except for the purposes of those octions or suils uthich were commenced, prosecuted and concluded uthile it u)as on existing law. Pending judicial proceedings based upon a stahtte cannot proceed afier its repeal. This rule holds true until the proceedings haue reached a final judgment in the court of last resort, for that cour1, when it comes to announce its deci.sion, conform.s it to te lau then eisting, and may tlrcrefore, reuerse a judgment uhich utas correct uhen pronounced in tle subordinate tribunal from uhich uthence the appeal u-tas taken, if it appears that pending the appeal a statute uhich u)as necessary to support the judgment of the louter court has been withdraun by an absolute repeal." (p.601) (emphasis supplied)

9J "

95 any other enactment, then the repeal shall not effect anything done or any offence committed or any fine or penalry incurred or any proceeding taken before commencement of the repealing Act; or reviving anything not in force or eisting at the time when the repeal takes effect; or affect the previous operation of any enactment so repealed or anything duly done or suffered under arry enactment so repealed; or alfec t any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or affect any fine, penalty, forfeiture etc, incurred in respect of any offence committed under any enactment so repealed; or affect any investigation, lega-l proceeding or remedy in respect of any such right, privilege, obligation, liability, fine, penalty, forfeiture or punishment and any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such fine, penalty, forfeiture or punishment may be imposed as if the repealing Act had not been passed. t26 Section 8 of the Telangana Genera.l Clauses Act, 1891 is similar to Section 6 of the Genera-l Clauses Act, 1897. 127 Section 8 A of the Telangana General Clauses Act, 1891 says that where any act repeals any enactment by which the 96 text of arry prev ous enactment was amended b1' express omission, insertior-" or substitution of any matter tht:r:L ulrless a different intention i ppears, the repeal shall not affect <:ontinuance of any such amenc rnent made by the enactment sc, rt:pealed and in operation at the ime of such repeal t28 Article : 67 of the Constitution of India sp'eaks about the interpretation c t he Constitution of India. Clause (I) of Article 367 is relevant. I t says that unless the contex': otherwise requires, the Ger eral Clauses Act, 1897, subject to any adaptations and rn:rdifications that may be macle thr:rein under Article 372, sha-l! a oply for the interpretation of the Oonstitution as it applies for the '.nterpretation of an Act of the Leglslature. 129 Gujarat lJigh Court in Reliance Industrles Limited (2 supra) examined his aspect as well and held that General Clauses Act, 189 7 applies only for interpretati,rn of the Constitution but in respect of other matters, such as, savings in the case of repeal , tc which are unrelated to interprertation may not apply by virtu: of Article 367. Section 6 of the General Clauses Act, 1897 or Sections 8/BA of the Telangara General Clauses Act, 1891 vould apply only to repeal of an enactment. A Constitution Amenr ment Act is not or cannot be termed as an 97 enactment. Therefore, beyond what is stated in Clause (I) of Article 367 of the Constitution, provisions of the General Clauses Act, either the Central Act or the State Act, would not apply to the Constitution, including the Constitution Amendment Act since a Constitution Amendment Act is made bv the Parliament in exercise of its sovereign powers under Article 368 of the Constitution. It has been held as follows:

" 1. 30. Effect t - section 8 on article 367.-Will section I of the General Clau: :s Act, which provides ttrat when €rn enactme t is repealed a: d re-enacted, references to the old enactment w'ill be constr red as references to that, re-enacted one, make any difference We do not think so. It should be noted tnat thc words'unless the context otherwise requires'(in aflic Le 367) mean that tl ,: General Clauses Act, section 8, is to be excluded. Eve by its terms, section 8 of the Genererl ()lauses Act will not . pDly to the Constitution, because exp'ession 'enactment' (u rich occurs in section 8) would not ta-ke in the Constitution, . hich is not ar 'enactment'. The Constitt tir>n is supreme and i ,, in fact, the foundation of all enactmentsr."

99 the repealed act in respect of those goods by virtue of the Second Amendment Act would not arise. 131 Though there is no challenge to the Ordinance, nonetheless we may also examine the same since it is the contention of the State that the Ordinance was promulgated during the window period and the subsequent Second Amendment Act is given effect to from the date of promulgamation of tJle Ordinance, thereby making it a valid piece of legislation. 132 It was strongly argued by learned Advocate General that when the Ordinance was promulgated, State of Telangana had the legislative competence to so promulgate the Ordinance and the Second Amendment Act which was made subsequently was nothing but a continuation of the law as promulgated by way of Ordinance since it was given effect to from the date of promulgamation of the Ordinance. 133 To appreciate the above contention, we may note that the Constitution Amendment Act came into force on and from 16.09.2016. Section 19 of the Constitution Amendment Act provided for a window period to the States to remove any inconsistent enactments by way of amendment or repeal or until expiration of one year from such commencement whichever was 100 earlier. Telangana ,Jrdinance No.2 of 2017 was pronrtrlgated by the Governor of Te angana on 17.06.201.7 to further a:nend the into force of the C,,nstitution Amendment Act on i6.O9.2016, it \\'AS SO promulgatr'l within the window period ol' one year as provided by Sectio 19 of the Constitution Amendment r\ct. At this stage we m, y mention that following the C)onstitution Amendment Act, S ate of Telangana enacted the TGSII' Act with effect from O1.O7 .2t 17 r34 Before r e deal with the Telangana Ordinan<:e No.2 of 2077 , we may nol : that power of the Governor io promulgate ordinance is trace€ :rle to Article 213 of the Constitution of India. Article 2 13 provide, as foilows: '273. Pouer of Izglslature--(1 ) If c in session, or where Houses of the Leg circumslcnces exisl L mag promulgate such Prouided that promulgate anA si (a) a Bilt haue requirec theleof into th lb) he wot same prouisio (c) an Act would under reserued lor l, the President. (2) An Ordinance elfect as an Acl of lfu such Ordinance- Qouentor to promulgate Ordinances du;ing rec*s oJ anA time, except uhen the Legislatiue As-sembft1 of a State is lh.ere is a Legislattue Council in a State, except u,hen both slature are in session, th.e Gouenar rs i,atrsfed lhal htch render it necessary for him to take imnu,diate action, he L)rdinances as th.e ()irci]mst.]Ices appear to hirt lo reqtire: \?. Govemor shall not, without instructions from tLLe President, ch Ordinance if- ,)nlaining the same proui,sions uould under tluri C(,nstrtution the previous sanction oJ the President for lhe introduction kzgislature; or id have deemed. it necessary to reserue a Bi,l containing the s for the consideration of the President; or tf the lagislature of the State containittg the sa,ne prouisions ,hrs Consritution haue been invqlid unless, harnng been ? consideration oJ the President, it had recavzd the assent of ,romulgated under this article shall haue |.he some force and legislahue of the State assented to bA the Got'ernor, but every VAT Act. Though t rt: Ordinance was promulgated atr::r coming

l0l (o) shall be laid beJore lhe Legislatiue Assembly of the State, or LDhere there is a Legislotive Council in the Slale, before both the Houses, and shall cease to operate at the expiration of s* weeks from the reassemblV of the Legislature, or if before the expiralton of that period o resolution disapproving il is passed by the Legislatiue Assembly and agreed to bA the Legislatiue Council, rf ang, upon the pc.sstng of the resolution or, os the case mag be, on the resolution being ogreed to bg the Council; and (b) mag be urithdrawn at anu time bg tlle Gouemor. Explanotion.-Where the Houses of the Legislature oJ a State hauing a Legislalive Council are sumrnoned to reassemble on different dates, the peiod of s* weeks shall be reckoned frorn the later of those dates for the purposes ojf this clause. (3) IJ and so far as an Ordvrance under this article makes ang prouision Lrhich would not be uolid if enacted in an Act of the Legislature of the State assented to bA th.e Gouemor, it shall be uoid: Provided thal, for the purposes of the provisior* of this Constihttion relqting to the eJfect of an Act of the Legislature of a State which Ls repugnant to an Act of Parliament or an eisting law with respect to a matter enumerated in tle Concurrent List, an Ordinance promulgaled under this article in pursuance of instntctions from the Presidenl shall be deemed to be on Act of the legislature of the Stale uthich ho.s been reserued for the consideration of lhe President and assented to by him.' in session, that circumstances exist which call for immediate action, he may promulgate such Ordinance. Clause (2) clarifies that an Ordinance so promulgated under Article 2 13 of the Constitution shall have the same force and effect as an Act of the l,egislature of the State assented to by the Governor. However, every such Ordinance shall be laid before the Legislature ard shall cease to operate at the expiration of six weeks from the reassembly of the Legislature. Clause (3) says that if an Ordinance makes any provision which would not be valid if 135 While clause ( 1 ) provides that if the Governor is satislied when the Legislative Assembly of a State is not in session or where there is a Legislative Council in a State, the same is not 102 enacted as an Act rf the Legislature assented to by the Governor, it shall be void. 136 As notir ed above, the Ordinance was prornulgated by the Governor on 1".06.2017. As per preamble to the Ordinance, it is stated that G, ,vernment of India had enacted the CGST Act and Government c i Telangana had enacted the TGST Act. But both the Acts had not been brought into force. Referring to the provisions of the V {T Act, it is stated that it empowers the State Government to evy tax on alcoholic liquor or human consumption and on petroleum products. Accor<ling to the Con stitution Amer dment Act, levy of tax on thosr: petroleum products and alco rolic liquor for human consumption is within the competence of the State Legislature. It further stated that repeal of the VAT \ct except in respect of the goods included in Entry 54 of List II < f the VII Schedule by the TGST Act, which was yet to be brought nto force, would not affect aly investrgation, inquiry, verificatio: r (including scrutiny and audit), assessment proceedings, adjur ication and any other legal pro,:eedings or recovery of arrear s or remedy in respect of any such tax; surcharge, penall , Iine, interest, right, privilege, obligation, liability, forfeiture < r punishment and any such investigation etc.,

r03 may be instituted, continued or enforced and any such tax, surcharge etc, may be levied or imposed as if those Acts had not been so amended or repealed. Such repeal would not also affect any proceedings including those relating to appeal, revision, review or reference instituted before, on or after the appointed day under the said amended Acts or repealed Acts and such proceedings shall be continued under the amended Acts or repealed Acts. Therefore, it was considered necessary to strengthen certain provisions of the VAT Act to overcome any limitations to help effective revenue realization. Therefore, it was decided to amend certain provisions of the VAT Act by undertaking a legislation. Since it was decided to give effect to such decision immediately and as the Legislature of Telangana was not in session, therefore, the Governor, in exercise of powers conferred by Clause ( i ) of Article 2 13 of the Constitution promulgated the Ordinance which basically extended the limitation from four years to six years in respect of assessments, reassessments, revision etc. 137 It is not necessary for us to go into the aspect as to whether the Ordinance was laid before the Assembly or not and as to whether it had ceased to operate after six seeks from l0l reassembly of the I egislature. lt may also not be necess;ary for us to labour on the a rpect that the Second Amendment Act though published in the T ,:langana Gazette on 02.12.2017, rvirs deemed to have come into lbrce with effect from 17 .06.2017 .t:. the date r,r'hen the Ordinanr rl was promulgated. This is becalrr;e legislative competence cann( Ir flow from an earlier legislation, be: it an ordinance or an rnactment. Legislative competelr,r€ rr,ust be traceable to the ,.)onstitution. Therefore, no relian,::e can be placed on the Orc rnance in support of the contentior) tnat the Second Amendme nt Act had derived competenc(: from the Ordinance since it was a continuation of the law ancl haci come into force from * e date of promulgamation of the t.)rdinance. Such a line of rer soning, in our considered view, tras no legal substance. Thereft re, it is immaterial that the Ordinanr:e .xas not challenged in Cour 138 That a1 art, the ostensible objective of th': Ordinance as could be dis erned from the preamble is to save zrny investigation, asse isment, recovery of dues, legal proc:edings etc., pending on the c .rte of coming into force ol the 3,:rnstitution Amendment Act which is perfectly understandablt: and valid. But that does not nean that limitation across the board could be r05 extended by way of amendment to initiate fresh proceedings, such as, fresh revision proceedings, which otherwise had become time barred. 139 With effect from 16.09.2016 the Constitution u,as Article 2464 was inserted immediately after Article 246, the earlier trntry 54 of List II was substituted by the new Entry 54, in the process denuding the States from making any law except on the sale of petroleum crude, high speed diesel, motor spirit (petrol), natura1 gas, aviation turbine fuel and a-lcoholic liquor for human consumption. Thus the States did not have the competence to male law to levy VAT or such tax on any goods other than the above goods. Section 19 of the Constitution Amendment Act, which can be construed to be a sunset clause, provided for a window of one year to remove the laws inconsistent with the Constitution Amendment Act either by way of amendment or by way of repeal. The window period was given to remove the inconsistencies; not to prolong the inconsistencies. Ordinance was not to remove the inconsistencies in the VAT Act. As mentioned above, the Ordinance, in fact, introduced certain amended by virtue of the Constitution Amendment Act. While But what the State of Telangana did by promulgating the I0,t country through the introduction of a Goods and Sen'ice l'ax, and the phasing our o[ the multitude of indirect tax levies, urclucling value added tax, s, that were levied and collected bl the C errtre and the States. Secti )n 19 ol the CAA 2016, which is the suns(:t clause in the said ena( ln.rent, envisaged the continuation of the t:rstrvhile system of tzD(a :on for a period of one year from the date of enactment of tl e CAA or till such time as the St ate k Bslatures amended or rey r:aled their respective VAT legislations. whichever was earlier. Wl en the State Legislature repeded the I(VAT Act, while simultanr rusly bringing into force the new State (-iST Act, with a savinl s clause of limited operation, rt ellectively acknowledged t re absence of any power to Iegislate thert:after on the subject of tz'r on sale or purchase of goods, except in rr:spect of the limited con modities for which the said power was retained under the Con Litution. In respect of all other commodities, the legislative powe of the State was only in respect of ta:les on the supply of goods rr services or both, a power that had to bc cxercised simultaneously with the Parliament and not unilaterally or exclusively. Th.s, at the time of repeal of the KVAT Act, and sirnultaneous er actment of the State GST Act with a savinl4s ciause therein, the sar ngs clause operated only to save rights, privileges, immunities, acl on tal(en etc under the erstwhile enact:nent as it stood at the ti rre of its repeal, which included the anlendments brought in tlrc lgh t}re Kerala Finance Acl, 2017 . There could not have been any rrther legislative exercise by the State lelfslature in relation to the lpealed KVAT Act. 144 We a e in respectful agreement \ rith the views expressed by thr Kerala High Court in Baiju A.A (1O supraf. Intention of Parliu ment in ushering in the GST regim,l through the Constitution Ame.rdment Act and enactment of the OGST Act and simultaneous en: ctment of various State GST Acts try the State Legislatures is to avoid multiplicity of taxes by subr;uming those indirect taxes in r single tax called GST. It is in this context we have analyzed S' ,ction 19 of the Constitution Amt:ndment Act. Viewed thus tt:: amendments brought in by the Second Amendment Act, ls discussed above, are wholly incc,nsistent with 109 the scheme of the Constitution Amendment Act read with the CGST Act and the TGST Act. 145 Thus, upon thorough consideration of all aspects of the matter, we have no hesitation in holding that the Second Amendment Act is unconstitutional being devoid of legislative competence. It is accordingly declared as such. Consequently, the notices issued and orders passed under Sectron 32 (3) of the VAT Act which have been impugned in the present batch of writ petitions are hereby set aside and quashed. t46 A11 the writ petitions are accordingly allowed. However, there shall be no order as to costs. 147 Miscellaneous petitions, if any, pending in all the writ petitions, shall stand closed. UJJAL BHITYAN, CJ SMT. JUSTICE P.MADHAVI DEVI Date:O5- 07-2022. KosnlllrkslPln Note: LR copy be marked (By order) pln