Telangana Value Added Tax (Second Amendment) Act, 2017 is unconstitutional

Sri Sri Engineering Works Vs Deputy Commissioner (CT) (Telangana High Court)

Challenge made in this batch of writ petitions is to the constitutionality of Telangana Value Added Tax (Second Amendment) Act, 2017. It is the contention of the petitioners that Telangana Value Added Tax (Second Amendment) Act, 2017 is ultra vires the Constitution of India and thus unconstitutional.

Held by High Court

We are in respectful agreement with the views expressed by the Kerala High Court in Baiju A.A (10 supra). Intention of Parliament in ushering in the GST regime through the Constitution Amendment Act and enactment of the CGST Act and simultaneous enactment of various State GST Acts by the State Legislatures is to avoid multiplicity of taxes by subsuming those indirect taxes in a single tax called GST. It is in this context we have analyzed Section 19 of the Constitution Amendment Act.  Viewed thus the amendments brought in by the Second Amendment Act, as discussed above, are wholly inconsistent with the scheme of the Constitution Amendment Act read with the CGST Act and the TGST Act.

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 Section 32 (3) of the VAT Act which have been impugned in the present batch of writ petitions are hereby set aside and quashed.

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