GST Laws Of Union Territories With Legislature
This article is related to the validity of the Puducherry Goods and Services Tax Act, 2017 and The Delhi Goods and Services Tax Act, 2017. Views expressed in this article are my personal views and do not constitute or furnish any kind of legal advice. Views expressed hereunder are meant only for academic discussion.
Clause (12A) of Article 366 of the Constitution of India (hereinafter referred to as the Constitution) provides definition of expression “goods and services tax”. Said clause 12(A) of Article 366 of the Constitution runs as follows:–
“(12A) “goods and services tax” means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption”
In view of above quoted definition of expression “goods and services tax”, goods and services tax does not include any tax on any kind of supply of alcohol liquor for human consumption. Second important thing is that expression “supply of goods, or services or both”, used in the definition of expression of “goods and services tax”, includes any or all kinds of supplies of goods, or services, or both, irrespective of the nature of the supply and the mode, or the manner, in which a supply of goods, or services, or both is made.
Article 265 of the Constitution runs as follows:–
“265. Taxes not to be imposed save by authority of law.—No tax shall be levied or collected except by authority of law.”
In its judgment in Bengal Immunity Co. Ltd. Vs. State Of Bihar & Ors., judgment dated 06/09/1955, the Honorable Supreme Court had, inter-alia, held as follows:–
“It is, however, clear from article 265 that no tax can be levied or collected except by authority of law which must mean a good and valid law. The contention of the appellant company is that the Act which authorises the assessment, levying and collection of sales tax on inter-State trade contravenes and constitutes an infringement of article 286 and is, therefore, ultra vires, void and unenforceable. If, therefore, this contention be well founded, the remedy by way of a writ must, on principle and authority, be available to the party aggrieved.”
A body or group of persons which has authority to make law is called a Legislature. In view of Article 1 of the Constitution of India, India is a Union of States, and the territory of India comprise-
(a) the territories of the States;
(b) the Union territories specified in the First Schedule; and
(c) such other territories as may be acquired.
The executive power of the Union vests in the President. The Union has its Parliament. Parliament consists of the President and two Houses to be known respectively as the Council of States (Rajya Sabha) and the House of the People (Lok Sabha). Article 245 of the Constitution, apart from conferring legislative powers on the Legislatures of the States, also confers legislative powers on Parliament by laying down that subject to the provisions of the Constitution, Parliament may make laws for the hole or any part of the territory of India, and the Legislature of a State may make laws for the whole or the part of the State. When Parliament is not in session, legislative power, conferred on Parliament, may be exercised by the President. The executive power of State vests in the Governor of the State. The Governor of a State is appointed by the President. Legislature of a State consists of the Governor of the State, and –
(i) two Houses to be known respectively as the Legislative Council and the Legislative Assembly, in cases of States specified in the Constitution; and
(ii) one House to be known as the Legislative Assembly.
When the Legislature is not in session, legislative powers, conferred by the Constitution on the Legislature of the State, may be exercised by the Governor of the State.
Part VIII of the Constitution relates to “The Union Territories”. Articles starting from 239 to 242, of the Constitution find place in Part VIII of the Constitution. So far as it relates to the Union territories with Legislature, there are Two Union territories which have their Legislative Assembly. Such Union territories are: (i) Union territory of Puducherry; and (ii) The National Capital Territory of Delhi (Union territory of Delhi).
Article 239, and Article 239A, of the Constitution run as follows:-
“239. Administration of Union territories.—(1) Save as otherwise provided by Parliament by law, every Union territory shall be administered by the President acting, to such extent as he thinks fit, through an administrator to be appointed by him with such designation as he may specify.
(2) Notwithstanding anything contained in Part VI, the President may appoint the Governor of a State as the administrator of an adjoining Union territory, and where a Governor is so appointed, he shall exercise his functions as such administrator independently of his Council of Ministers.
239A. Creation of local Legislatures or Council of Ministers or both for certain Union territories.—
(1) Parliament may by law create for the Union territory of Puducherry—
(a) a body, whether elected or partly nominated and partly elected, to function as a Legislature for the Union territory, or
(b) a Council of Ministers,
or both with such constitution, powers and functions, in each case, as may be specified in the law.
(2) Any such law as is referred to in clause (1) shall not be deemed to be an amendment of this Constitution for the purposes of article 368 notwithstanding that it contains any provision which amends or has the effect of amending this Constitution.”
We see here that clause (1)(a) of Article 239A of the Constitution, inter-alia, provides that Parliament may by law create for the Union territory of Puducherry a body to function as Legislature for the Union territory with such Constitution, powers and functions as may be specified in the law. In exercise of its powers under clause (1) of Article 239A, Parliament has made “The Government of Union Territories Act, 1963” (Act No. 20 of 1963).
Section 2(h) of Act No. 20 of 1963 defines expression “Union territory” to mean the Union territory of Pondicherry. Section 3 of said Act 20 of 1963 relates to creation of Legislative Assembly and other matters related to the Legislative Assembly, except the extent of legislative powers of the Legislative Assembly. Sections from 18 to 21 of the said Act No. 20 of 1963 relate to legislative powers, Said sections run as follows:–
18. Extent of legislative power.
(1) Subject to the provisions of this Act, the Legislative Assembly of the Union territory may make laws for the whole or any part of the Union territory with respect to any of the matters enumerated in the State List or the Concurrent List in the Seventh Schedule to the Constitution in so far as any such matter is applicable in relation to Union territories.
(2) Nothing in sub- section (1) shall derogate from the powers conferred on Parliament by the Constitution to make laws with respect to any matter for the Union territory or any part thereof.
19. Exemption of property of the Union from taxation- The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempted from all taxes imposed by or under any law made by the Legislative Assembly of the Union territory or by or under any other law in force in the Union territory: Provided that nothing in this section shall, until Parliament by law otherwise provides, prevent any authority within the Union territory from levying any tax on any property of the Union to which such property was immediately before the commencement of the Constitution liable or treated as liable, so long as that tax continues to be levied in that Union territory.
20. Restrictions on laws passed by Legislative Assembly with respect to certain matters.
(1) The provisions of article 286, article 287 and article 288 shall apply in relation to any law passed by the Legislative Assembly of the Union territory with respect to any of the matters referred to in those articles as they apply in relation to any law passed by the Legislature of a State with respect to those matters.
(2) The provisions of article 304 shall, with the necessary modifications, apply in relation to any law passed by the Legislative Assembly of 1 the Union territory with respect to any of the matters referred to in that article as they apply in relation to any law passed by the Legislature of a State with respect to those matters.
21. Inconsistency between laws made by Parliament and laws made by Legislative Assembly.
If any provision of a law made by the Legislative Assembly of the Union territory with respect to any matter enumerated in the State List in the Seventh Schedule to the Constitution is repugnant to any provision of a law made by Parliament with respect to that matter, whether passed before or after the law made by the Legislative Assembly of the Union territory, or, if any provision of a law made by the Legislative Assembly of the Union territory with respect to any matter enumerated in the Concurrent List in the Seventh Schedule to the Constitution is repugnant to any provision of any earlier law, other than a law made by the Legislative Assembly of the Union territory, with respect to that matter, then, in either case, the law made by Parliament, or, as the case may be, such earlier law shall prevail and the law made by the Legislative Assembly of the Union territory shall, to the extent of the repugnancy, be void: Provided that if such law made by the Legislative Assembly of the Union territory has been reserved for the consideration of the President and has received his assent, such law shall prevail in that Union territory: Provided further that nothing in this section shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislative Assembly of the Union territory.”
Reading of section 18(1) of the Government of Union Territories Act, 1963 reveals that said provision confers legislative power on the Legislative Assembly with respect to any of the matters enumerated in the State List or the Concurrent List in the Seventh Schedule to the Constitution in so far as any such matter is applicable in relation to Union territories. It is important to note that matters, with respect to which the Legislative Assembly may exercise legislative powers, do not include matter of “goods and services tax”. Another important thing is that provisions of section 18 are subjected only to the provisions of the said Act. Provisions of section 18 of the Act No. 20 of 1963 are not subjected to any provision of the Constitution.
Part V of the Constitution relates to “The Union”. Part VI of the Constitution relates to “The States”. Part XI of the Constitution relates to “Relations between the Union and the States”. Chapter I of Part XI of the Constitution is related with ‘Legislative Relations – Distribution of Legislative Powers”. Articles starting from 245 to 255 find place in Chapter I of Part XI of the Constitution. Chapter II of Part XI of the Constitution relates to “Administrative Relations”.
For the purpose of introducing goods and services tax in the country, the Constitution of India has been amended by the Constitution (One Hundred And First Amendment) Act, 2016 (hereinafter referred to as the 101st Amendment of the Constitution). It is noteworthy that Article 245 of the Constitution has not been amended by the 101st Amendment of the Constitution. Said Article 245 runs as follows:–
“245. Extent of laws made by Parliament and by the Legislatures of States.—(1) Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State.
(2) No law made by Parliament shall be deemed to be invalid on the ground that it would have extra-territorial operation.”
By the 101st Amendment of the Constitution, Articles 246 of the Constitution has also not been amended. Said Article 246 of the Constitution runs as follows:-
“246. Subject-matter of laws made by Parliament and by the Legislatures of States.—(1) Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the “Union List”).
(2) Notwithstanding anything in clause (3), Parliament, and, subject to clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the “Concurrent List”).
(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 in the Seventh Schedule (in this Constitution referred to as the “State List”).
(4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List.”
The Honorable Supreme Court of India, in its judgment, in Civil Appeal No(s) 1532-1533 of 1993, the State of West Bengal vs. Kilogram Industries Ltd. and Ors., decided on 15 January, 2004, has, inter-alia, held as follows:-
“Article 245 of the Constitution is the fountain source of legislative power. It provides – subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State, may make laws for the whole or any part of the State. The legislative field between the Parliament and the Legislature of any State is divided by Article 246 of the Constitution.”
Which Article, out of Articles 245 and 246 of the Constitution, provides “source of Legislative powers” for Parliament and the Legislatures of the States, was again considered by the Constitution Bench of the Honorable Supreme Court in Civil Appeal No. 6660 of 2005, State Of Kerala & Ors vs. M/S. Mar Appraem Kuri Co. Ltd. & Anr., decided on 8 May, 2012. In the judgment of said appeal, the Honorable Supreme Court has made following observations, namely:-
“The verb make, in the present tense, exists in Article 245(1) whereas the verb made, in the past tense, finds place in Article 245 (2). While the legislative power is derived from Article 245, the entries in the Seventh Schedule of the Constitution only demarcate the legislative fields of the respective Legislatures and do not confer legislative power as such.”
“Article 246, thus, provides for distribution, as between Union and the States, of the legislative powers which are conferred by Article 245. Article 245 begins with the expression subject to the provisions of this Constitution. Therefore, Article 246 must be read as subject to other provisions of the Constitution.”
In view of two decisions of the Honorable Supreme Court referred to above, beyond any doubt, it is clear that Parliament and the Legislature of each State derive their legislative powers from Article 245 of the Constitution.
Careful reading of three Lists of the Seventh Schedule to the Constitution, viz. List I – Union List, List II- State List, and List III – Concurrent List, of the Seventh Schedule to the Constitution, reveal that matter of “goods and services tax” has not been enumerated in any of the said three Lists. It is noteworthy that Entry 97 of the List I – Union List does not refer to any individual subject matter of law and therefore, matters which may fall under said Entry 97, are not matters enumerated in said List I. Said Entry 97 of List I -Union List runs as follows:-
“97. Any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists.”
Earlier to 101st Amendment of the Constitution, Article 248 of the Constitution had run as follows:–
“248. Residuary powers of legislation.—(1) Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List.
(2) Such power shall include the power of making any law imposing a tax not mentioned in either of those Lists.”
Earlier to 101st Amendment of the Constitution, several indirect taxes on goods and services were being separately levied by the Union, the State Governments and the Legislative Assemblies of Union territories with Legislature, under the Laws made by their Legislatures, with respect to matters in relation to which they had powers to make laws. Article 246A of the Constitution provides distribution of matters, enumerated in Three Lists of the Seventh Schedule to the Constitution, in between Parliament and the Legislatures of the States. Matter of “goods and services tax” had not been a matter enumerated in any of the three Lists of the Seventh Schedule. In view of provisions of Article 248 of the Constitution, Parliament had exclusive power to make laws with respect to “goods and services tax”. Had Parliament made laws with respect to “goods and services tax”, without amending the Constitution, all revenue receipts from goods and services tax would have gone to the Government of India. Levy of multiple indirect taxes would have continued. It would have been against the interests of our trade and industry as well as against the economic growth of our nation. Had goods and services tax been introduced by withdrawing indirect taxes on goods and services, to the extent they were to be subsumed in the goods and services tax, States would have lost their important source of revenue receipts from taxes, like sales tax, entry tax. In this case, only the Union Government would have been gainer, that too on the cost of revenue of the States. Main object of introducing goods and services tax had been of removing cascading effect of multiple indirect taxes on goods and services without compromising revenues of the Governments. For this purpose, the Empowered Committee of State Finance Ministers, who had been assigned work of preparing design and roadmap for introducing goods and services tax in the country, had, in its “First Discussion Paper On Goods and Services Tax In India”, inter-alia, suggested that-
(i) on supplies of goods, or services, or both within a State, Union and the States both should be given simultaneous power for levy and collection of goods and services tax;
(ii) exclusive power of levy and collection of goods and services tax on supplies of goods, or services or both should be given to the Union where such supplies take place in the course of inter-State trade or commerce;
(iii) on import supplies of goods, or services, or both, tax should be collected by the Union and the State;
(iv) export supplies of goods, or services, or both should be zero rated;
(v) free flow of credit from State to Center and from Center to State should be insured.
(vi) Central Sales Tax should be phased out.
(vii) indirect taxes should be subsumed in goods and services tax.
Any of three Lists of the Seventh Schedule to the Constitution cannot be amended to give simultaneous power to Parliament and the Legislatures of the States. Structure of Article 246 of the Constitution does not allow simultaneous power to make law on same subject matter. Provisions of the Concurrent List are subjected to repugnancy clause provided in Article 254 of the Constitution. Article 248 gives exclusive power to Parliament. For these reasons, a separate provision, for the purpose of distributing legislative fields with respect to goods and services tax in between Parliament and the Legislature of a State, was required in Chapter I of Part XI of the Constitution was required.
For the purpose of distributing legislative fields (with respect to goods and services tax), to Parliament, the Legislature of every State and the Union territories with Legislature, a new Article 246A, with head note “Special provision with respect to goods and services tax”, was added in the Constitution. Said Article 246A runs as follows:–
“246A. Special provision with respect to goods and services tax.—(1) Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State.
(2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.
Explanation.—The provisions of this article, shall, in respect of goods and services tax referred to in clause (5) of article 279A, take effect from the date recommended by the Goods and Services Tax Council.”
Article 366(26B) of the Constitution runs as follows:-
“(26B) “State” with reference to articles 246A, 268, 269, 269A and article 279A includes a Union territory with Legislature;”
Conjoint reading of Article 246A and Article 366(26B) of the Constitution reveals that new Article 246A, apart from demarcating legislative fields (with respect to goods and services tax) to Parliament and the Legislatures of the States, also demarcates legislative fields, with respect to goods and services tax, to the Union territories with Legislature.
In order to exclude matter of goods and services tax from Article 248, in the beginning of said Article 248, words “Subject to Article 246A” have been added as follows:–
“248. Residuary powers of legislation.—(1) Subject to Article 246A, Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List.
(2) Such power shall include the power of making any law imposing a tax not mentioned in either of those Lists.”
There are several provisions in the Constitution which control the legislative powers with respect to goods and services tax. For example, for the Legislatures of the States, Article 246A provides that, subject to the provision that Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce, the Legislature of every State, has power to make laws with respect to goods and services tax imposed by such State. On the other hand, clause (1) of Article 286 provides as follows:-
“(1) No law of a State shall impose, or authorise the imposition of, a tax on the supply of goods or of services or both, where such supply takes place —
(a) outside the State; or
(b) in the course of the import of the goods or services or both into, or export of the 3[goods or services or both out of, the territory of India.”
For the sake of arguments, let us assume that Article 246A, apart from demarcating legislative fields with respect to goods and services tax to Parliament, the Legislatures of the States, and the Legislatures of the Union territories with Legislature, also confers legislative powers with respect to legislative fields demarcated to such Legislatures. Then, careful reading of goods and services tax related provisions of the Constitution reveals that certain provisions of the Constitution are in conflict with provisions of Article 246A. Article 246A(1) provides that the Legislature of every State has power to make laws with respect to goods and services tax imposed by such State, except where the supply of goods, or services, or both takes place in the course of inter-State trade or commerce. This provision states that the Legislatures of every State has power to make law with respect to tax on any supply of goods, or services, or both except where the supply takes place in the course of inter-State trade or commerce. Therefore, Article 246A provides that the Legislatures of a State has power to make laws with respect to goods and services tax where supply of goods, or services, or both takes place-
(a) outside the State; or
(b) in the course of the import of the goods or services or both into, or export of the 3[goods or services or both out of, the territory of India.”
But Article 286(1) of the Constitution provides as follows:-
“(1) No law of a State shall impose, or authorise the imposition of, a tax on the supply of goods or of services or both, where such supply takes place —
(a) outside the State; or
(b) in the course of the import of the goods or services or both into, or export of the goods or services or both out of, the territory of India.”
We find that there is conflict in between the provisions of Article 246A and Article 286(1) of the Constitution. We also find that both provisions are independent. Article 246A does not start with words “Subject to the provisions of this Constitution”. On the other hand, clause (1) of Article 286 also does not start with a non-obstante clause, like “Notwithstanding anything contained contrary to in Article 246A,”. We find that both provisions are in conflict with each other. There is nothing to resolve the conflict in between the two provisions. Extent of a law is essential feature of the law. Reading of Article 246A of the Constitution reveals that it does not provide extent of those goods and services tax laws which can be made by Parliament, the Legislature of a State, or the Legislative Assembly of the Union territory with Legislature.
Contrary to our assumption, that Article 246A of the Constitution, apart from demarcating legislative fields (with respect to goods and services tax) to Parliament, the Legislatures of the States, and the Legislatures of the Union territories with Legislature, also confers legislative powers with respect to legislative fields demarcated to such Legislatures), if we assume that-
(1) clause (1) of Article 245 confers legislative power on Parliament and the Legislatures of all States; and
(2) Article 246A, only, demarcates legislative fields (with respect to goods and services tax) to Parliament, the Legislature of each State, and the Legislative Assembly of Union territory with Legislature, then, legislative power of the Legislature of the State, provided in Article 245(1), with respect to goods and services tax shall be read subject to provisions of Article 286(1).
This is also to be noted that said three Articles, viz. Article 246, Article 246A, and Article 248, of the Constitution have not been enacted by overriding Article 245 of the Constitution. Reading of Article 245 reveals that-
(a) Head Note of said Article 245 runs as “Extent of laws made by Parliament and by the Legislatures of States”;
(b) Article 245(1) starts with words “Subject to the provisions of this Constitution”;
(c) in Article 245(1), words “may make laws” have been used;
(d) Article 245(1), irrespective of subject matter, with respect to which Parliament or the Legislature of a State may make a law, provides that Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State.
Reading of Article 245 of the Constitution reveals that provisions of said Article 245 do not confer legislative powers on the Legislatures of the Union territory with Legislature.
As I have pointed out hereinabove, Part XI of the Constitution relates to “Relations between the Union and the States”. Chapter I of Part XI of the Constitution relates to ‘Legislative Relations – Distribution of Legislative Powers”. Matters of Union territories have separately been dealt in Part VIII of the Constitution. Inclusion of a Union territory with Legislature in the definition of word “State” for the purpose of Article 246A, simply distributes legislative fields to the Legislative Assembly of Union territories with Legislature with respect to goods and services tax. In reference to the Union territories with Legislature, Article 246A of the Constitution may be read as follows:–
(1) Notwithstanding anything contained in Article 246 and Article 254 of the Constitution, subject to clause (2), the Legislature of Union territory with Legislature has power to make laws with respect to goods and services tax imposed by such Union territory.
(2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.
Above provision does not confer legislative powers on the Legislative Assembly of the Union territory with Legislature. Moreover, Article 246A does not provide extent of goods and services tax laws. Said Article 246A also does not take note of other provisions of the Constitution. On the other hand, Section 18 of the Government of Union Territories Act, 1963, which provides extent of legislative powers of the Legislative Assembly of the Union territory of Puducherry, does not include legislative power with respect to goods and services tax.
The legislative powers of the Legislative Assembly of Puducherry are subjected to provisions of the Government of Union Territories Act, 1963 (Act No. 20 of 1963). Such powers are not subject to any provision of the Constitution, except where such provision of the Constitution has been made part of said Act No. 20 of 1963. Section 18 of said Act No. 20 of 1963, which confers legislative power on the Legislative Assembly of the Union territory of Puducherry, runs as follows:-
“18. Extent of legislative power.-
(1) Subject to the provisions of this Act, the Legislative Assembly of the Union territory may make laws for the whole or any part of the Union territory with respect to any of the matters enumerated in the State List or the Concurrent List in the Seventh Schedule to the Constitution in so far as any such matter is applicable in relation to Union territories.
(2) Nothing in sub- section (1) shall derogate from the powers conferred on Parliament by the Constitution to make laws with respect to any matter for the Union territory or any part thereof.”
Careful reading of above quoted section 18 of Act No. 20 of 1963 reveals that,-
(1) Legislative power provided to the Legislative Assembly is subjected to other provisions of said Act No. 20 of 1963;
(2) section 18 provides that the Legislative Assembly may make laws for the whole or any part of the Union territory;
(3) section 18 of said Act No 20 of 1963 provides that the Legislative Assembly may make laws with respect to any of the matters enumerated in the State List or the Concurrent List in the Seventh Schedule to the Constitution in so far as any such matter is applicable in relation to Union territories.
We find that the Legislative power provided to the Legislative Assembly in section 18 is only with respect to matters enumerated in State List or the Concurrent List in the Seventh Schedule to the Constitution. The said Act No. 20 of 1963 nowhere provides legislative powers to the Union territory with respect to goods and services tax.
To the best of my knowledge, before enacting the Puducherry Goods and Services Tax Act, 2017, the Government of Union Territories Act, 1963 has not been amended to give legislative powers to the Legislative Assembly of the Union Territory of Puducherry with respect to legislative fields (with respect to goods and services tax) as demarcated to the Legislature of the Union territory by Article 246A of the Constitution.
In view of the discussion made above, my personal opinion is that although Article 246A of the Constitution assigns legislative fields (with respect to goods and services tax) to the Legislative Assembly of the Union territory of Puducherry, but, neither the Constitution, nor does the Government of Union Territories Act, 1963, does confer legislative power on the Legislative Assembly of the Union territory of Puducherry for making laws with respect to goods and services tax.
Another Union territory which has its Legislature is the National Capital Territory of Delhi (Union territory of Delhi). Article 239AA of the Constitution relates to the National Capital Territory of Delhi. By the 101st Amendment of the Constitution, no amendment has been made in Article 239AA of the Constitution. Clause (2) of Article 239AA is about the Legislative Assembly of the National Capital Territory of Delhi. Clause (2) of said Article 239AA runs as follows:–
“(2) (a) There shall be a Legislative Assembly for the National Capital Territory and the seats in such Assembly shall be filled by members chosen by direct election from territorial constituencies in the National Capital Territory.
(b) The total number of seats in the Legislative Assembly, the number of seats reserved for Scheduled Castes, the division of the National Capital Territory into territorial constituencies (including the basis for such division) and all other matters relating to the functioning of the Legislative Assembly shall be regulated by law made by Parliament.
(c) The provisions of articles 324 to 327 and 329 shall apply in relation to the National Capital Territory, the Legislative Assembly of the National Capital Territory and the members thereof as they apply, in relation to a State, the Legislative Assembly of a State and the members thereof respectively; and any reference in articles 326 and 329 to “appropriate Legislature” shall be deemed to be a reference to Parliament.”
Clause (3) of Article 239AA of the Constitution is related to legislative powers of the Legislative Assembly of the National Capital Territory of Delhi. Clause (3) of said Article 239AA runs as follows:–
“(3) (a) Subject to the provisions of this Constitution, the Legislative Assembly shall have power to make laws for the whole or any part of the National Capital Territory with respect to any of the matters enumerated in the State List or in the Concurrent List in so far as any such matter is applicable to Union territories except matters with respect to Entries 1, 2 and 18 of the State List and Entries 64, 65 and 66 of that List in so far as they relate to the said Entries 1, 2 and 18.
(b) Nothing in sub-clause (a) shall derogate from the powers of Parliament under this Constitution to make laws with respect to any matter for a Union territory or any part thereof.
(c) If any provision of a law made by the Legislative Assembly with respect to any matter is repugnant to any provision of a law made by Parliament with respect to that matter, whether passed before or after the law made by the Legislative Assembly, or of an earlier law, other than a law made by the Legislative Assembly, then, in either case, the law made by Parliament, or, as the case may be, such earlier law, shall prevail and the law made by the Legislative Assembly shall, to the extent of the repugnancy, be void:
Provided that if any such law made by the Legislative Assembly has been reserved for the consideration of the President and has received his assent, such law shall prevail in the National Capital Territory:
Provided further that nothing in this sub-clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislative Assembly.”
Careful reading of clause (3)(a) of Article 239AA of the Constitution reveals that said provision of the Constitution, confers legislative powers on the Legislative Assembly only with respect to matters mentioned or referred to in the said clause (3)(a) of Article 239AA. These matters do not include matter of goods and services tax. Therefore, Article 239AA(3)(a) does not confer legislative powers on the Legislative Assembly of the National Capital Territory of Delhi with respect to goods and services tax.
Clause (7) of Article 239AA of the Constitution runs as follows:–
“(7)(a) Parliament may, by law, make provisions for giving effect to, or supplementing the provisions contained in the foregoing clauses and for all matters incidental or consequential thereto.
(b) Any such law as is referred to in sub-clause (a) shall not be deemed to be an amendment of this Constitution for the purposes of article 368 notwithstanding that it contains any provision which amends or has the effect of amending, this Constitution.”
Parliament, in exercise of its powers under clause (2), and clause (7), of Article 239AA of the Constitution, has enacted “The Government of National Capital Territory of Delhi Act, 1991 (Act No. 1 of 1992)”. To the best of my knowledge, said Act No. 1 of 1992 has not been amended to enlarge the scope of legislative powers for conferring legislative powers on the Legislative Assembly of the National Capital Territory of Delhi.
Reading of Article 239AA of the Constitution and provisions of the Government of National Capital Territory of Delhi Act, 1991, reveals that in order to give legislative powers to the Legislative Assembly of the National Capital Territory of Delhi with respect to goods and services tax, Article 239AA of the Constitution, and the National Capital Territory of Delhi Act, 1991 have not been amended. In my personal opinion, the Legislative Assembly has no power to make laws with respect to goods and services tax. Article 246A of the Constitution only assigns legislative field with respect goods and services tax.
*****
Disclaimer: Except the quoted versions, interpretations made and all other views expressed here are my personal views and are meant only for academic discussion. Readers are advised to follow the provisions of the law and to seek opinion of their legal advisors before acting upon the views expressed here. I and the publishers of this article disown any liability on account of any loss or damage that may be caused on account of use of views expressed here.
Author Bio
