The Hon’ble Bombay High Court at Goa in the case of Sesa Sterlite Limited v. State of Goa [Writ Petition No. 244 of 2009 dated January 10, 2024] dismissed the writ petition thereby holding that, the levy of Cess under Goa Rural Improvement and Welfare Cess Act, 2000 (“the Goa Cess Act”) is valid as the Goa Cess Act is not subsumed by the GST Laws.
Facts:
Sesa Sterlite Limited (“the Petitioner”) is engaged in the business of mining iron ore, extraction, processing, transportation, and export of iron ore from South Goa. The Petitioner also carries out mining activity in different states. State of Goa (“the Respondent”) by way of the Goa Cess Act, levied cess on the transportation of ore and related mining activity.
Aggrieved by the Cess levied, the Petitioner has filed the writ petition, challenging the provisions of the Goa Cess Act on one of the grounds that the Goa Cess Act has been subsumed by the GST Laws.
Issue
Whether Cess levied under the Goa Cess Act is valid and not subsumed by the GST Laws?
Held:
The Hon’ble Bombay High Court at Goa in Writ Petition No. 244 of 2009 held as under:
- Observed that, the Cess levied under the Goa Cess Act, is intended to be levied for a specific object and purpose of providing additional resources for the improvement of infrastructure and health, with a view to promote welfare of people residing in rural areas affected by use of plastics, dumping of garbage and spillage of minerals.
- Further observed that, the power to recommend to the Union and State on taxes, cess and surcharge levied by the Union, State, and local bodies, which may be subsumed by the Goods and Services Tax, is exclusively conferred with GST Council under Article 279A of the Constitution of India.
- Further observed that, Section 174 of the Goa Goods and Services Tax Act, 2017 (“the GGST Act”) lists the existing acts which stand repealed.
- Noted that, there is no material on record to show that the GST Council has decided to subsume the Goa Cess Act under the GST laws.
- Further noted that, the Goa Cess Act, does not fall within the purview of list of acts repealed under Section 174 of the GGST Act.
- Opined, the levy of cess under the Goa Cess Act, is not subsumed by the GST laws, introduced by inserting Article 246A, Article 269A and Article 279A and amending Article 286 of the Constitution.
- Held that, the Goa Cess Act is legal and not subsumed by the GST Laws. Hence, the writ petition is dismissed.
Conclusion: The judgment by the Hon’ble Bombay High Court provides clarity on the status of the cess levied under the Goa Cess Act. By emphasizing the specific purpose of the cess and noting the absence of any decision by the GST Council to subsume the Goa Cess Act, the court establishes the validity of the cess under the existing legal framework. This decision holds significance for businesses engaged in activities subject to such cess in Goa, offering legal certainty regarding the continued applicability of the Goa Cess Act.
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