Reckitt Benckiser (INDIA) Private Limited vs. The State Of Madhya Pradesh

Held

The Court held that the MP Value Added Tax Act, 2002, stood repealed and replaced by the Goods and Services Tax (GST) regime. The Court referred to and relied upon the judgment of the Apex Court in State of Telangana and Ors Vs. Trimula Constructions (2023 SC Online SC 1376). The Apex Court's findings, as reproduced in paragraph 128 of the impugned judgment, indicated that Section 19 of the Constitution (101st Amendment) Act, 2016, and Article 246-A formed part of a transitional arrangement and allowed for the continuation and amendment of inconsistent laws for specified periods. However, the amendments made to State VAT Acts after July 1, 2017, were held void for want of legislative competence. Based on this precedent, the High Court concluded that the question of law involved in the present cases had already been answered. Therefore, the impugned show cause notice issued under Section 52 of the MP VAT Act was quashed. The Court granted liberty to the respondent to proceed in accordance with law, if so advised.

Facts

The petitioner, Reckitt Benckiser India Private Limited, challenged show cause notices issued under Section 52 of the MP Value Added Tax (MPVAT) Act, 2002, for the Assessment Year 2008-09. The petitioner argued that the MPVAT Act stood repealed with the introduction of GST laws, specifically by the Constitution (101st Amendment) Act, 2016, effective from September 16, 2016, and further by the Madhya Pradesh Goods and Service Tax (MPGST) Act, which came into force on June 12, 2017. The show cause notices for penalty were issued on June 26, 2020, significantly after the repeal of the MPVAT Act. The petitioner contended that the respondents lacked jurisdiction to initiate penalty proceedings under a repealed law. The procedural history involved an assessment order from April 25, 2011, subsequent appeals up to the Tax Board, and a High Court appeal (VAT Appeal No. 63 of 2018) against the Tax Board's order.

Key Issues

1. Whether the MP Value Added Tax Act, 2002, stood repealed and replaced by the Goods and Services Tax (GST) regime, thereby rendering the issuance of a show cause notice for penalty under the MPVAT Act after its repeal illegal and without jurisdiction? Petitioner's contention: The petitioner argued that the MPVAT Act, along with the MP Entry Tax Act, was repealed by the Constitution (101st Amendment) Act, 2016, which introduced GST. This repeal was effective either from September 16, 2016, or June 12, 2017, when the MPGST Act came into force. Consequently, the respondent authorities lacked the legislative competence to issue any show cause notice or initiate penalty proceedings under the MPVAT Act after its repeal. The petitioner relied on the Apex Court's judgment in State of Telangana and Ors Vs. Trimula Constructions (2023 SC Online SC 1376). Revenue's contention: The learned counsel for the respondent/state, after examining the Apex Court's judgment cited by the petitioner, fairly submitted that the legal issue had already been answered in the said judgment.