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for bringing into force the provisions of a Constitutional amendment is not a constituent power because, it does not carry with it the power to amend the Constitution in any manner. It is, therefore, permissible to the Parliament to vest in an outside agency the power to bring a Constitutional amendment into force. In the instant case, that power is conferred by the Parliament on another organ of the State, namely, the executive, which is responsible to the Parliament for all its actions. The Parliament does not irretrievably lose its power to bring the Amendment into force by reason of the empowerment in favour of the Central Government to bring it into force. If the Central Government fails to do what, according to the Parliament, it ought to have done, it would be open to the Parliament to delete Section (2) of the 44th Amendment Act by following the due procedure and to bring into force that Act or any of its provisions.”

80Copy pinpoint80. In the opinion of this Court, the mere circumstance that Section 19 does not get added to the Constitution, would not make any difference. If one looks closely at Articles 243 ZF which this Court interpreted in Bondu Ramaswamy (supra) and Article 243 ZT which was interpreted in Vipulbhai (supra) the effects of those provisions are the same as Section

19. Although those provisions continued to be part of the Constitution, they have no meaning and were merely historical. The reason is that they were operative, for a limited duration – like Section 19. However, the fact remains that those provisions as well as Section 19 were enacted in exercise of the constituent power. Section 19 is not, in this court’s opinion comparable to a mere Parliamentary enactment. There cannot be any gain in saying that Section 19 is not a mere legislative device. It was adopted as part of the 101st Constitutional Amendment Act. Undoubtedly, it was not inserted into the Constitution. Whatever reasons impelled Parliament to keep it outside the body of the Constitution, the fact remains that it was introduced as part of the same Amendment Act which entirely revamped the Constitution.

81Copy pinpoint81. Furthermore, it is clear that apart from Section 19 there is another proviso to Section 20 (which is also part of the 101st Amendment Act) that proviso reads as follows: “20. (1) If any difficulty arises in giving effect to the provisions of the Constitution as amended by this Act (including any difficulty in relation

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to the transition from the provisions of the Constitution as they stood immediately before the date of assent of the President to this Act to the provisions of the Constitution as amended by this Act), the President may, by order, make such provisions, including any adaptation or modification of any provision of the Constitution as amended by this Act or law, as appear to the President to be necessary or expedient for the purpose of removing the difficulty: Provided that no such order shall be made after the expiry of three years from the date of such assent. (2) Every order made under sub-section (1) shall, as soon as may be after it is made, be laid before each House of Parliament.”

82Copy pinpoint82. It cannot be in dispute that Section 20 existed for a period of two years and enabled the President to issue orders for the removal of difficulties experienced in the course of implementing the amendments to the Constitution. If indeed those parts of the amendments were not enacted in the exercise of constituent power but mere legislative power, there would be no legitimacy of the power conferred upon the President under Section 20.

83Copy pinpoint83. On an overall interpretation of the provisions of the Amendment, it is held that Sections 19 and 20 constitute incidental and transitory provisions which have limited life, so to speak. Whether they became part of the Constitution or not is really academic. What really matters is the effect of those provisions. B. Whether the power of amendment or repeal is subject to limitations under Section 19

84Copy pinpoint84. In this context, Section 143(2) of the Government of India Act, 1935 was considered by a Constitution Bench of this court in Rama Krishna Ramanath (supra). That provision reads as follows: “143(2) Any taxes duties, cesses or fees which, immediately before the commencement of Part III of this Act, were being lawfully levied by any Provincial Government, municipality or other local authority or body for the purposes of the Province, municipality, district or other local area under a law in force on the first day of January, nineteen hundred and thirty-five, may, notwithstanding that those taxes, duties,

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cesses or fees are mentioned in the Federal Legislative List, continue to be levied and to be applied to the same purposes until provision to the contrary is made by the Federal Legislature.”

85Copy pinpoint85. In Rama Krishna Ramanath (supra) it was held that considering the use of the phrase “continue to be levied” found in Section 143(2) of the Government of India Act, until provisions to the contrary are made by the Federal Legislature, the provision posits a limited legislative power in the province to indicate or express a desire to continue or not to continue the levy, which would include the power to repeal the statute in its entirety. Such limited legislative power would also include reducing the rate of tax, though continuing the levy. Having said so, this court observed how this limited legislative authority could be exercised: “the effect of the provision of the Constitution would be to enable the continuance of the power to levy the taxbut this does not alter the fact that the provision by its implication confers a limited legislative power to desire or not to desire the continuance of the levy subject to the overriding power of the Central Legislature to put an end to its continuance and it is on the basis of the existence of this limited legislative power that the right of the Provincial Legislature to repeal the taxation provision under the Act of 1920 could be rested. Suppose for instance, a Provincial Legislature desires the continuance of the tax by considers the rate too High and wishes it to be reduced and passes an enactment for that purpose, it cannot be that the legislation is incompetent and that the State Government must permit the local authority to levy tax at the same rate as prevailed on April 1, 1937 if the latter desired the continuance of the tax. If such a legislation were enacted to achieve a reduction of the rate of the duty, its legislative competence must obviously be traceable to the power contained in words “may continue to be levied” in s. 143(2) of the Government of India Act. If we are right so far it would follow that in the exercise of this limited legislative power the Provincial Legislature would also have a right to legislate for the continuance of the tax provided, if of course, the other conditions of s. 143(2) are satisfied, viz., (1) that the tax was one which was lawfully levied by a local authority for the purposes of a local area at the commencement of Part III of the Government

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of India Act., (2) that the identity of the body that collects the tax, the area for whose benefit the tax is to be utilised and the purposes for which the utilisation is to take place continue to be the same and (3) the rate of the tax is not enhanced nor its incidence in any manner altered, so that it continues to be same tax. If as we have held earlier there is a limited legislative power in the Province to enact a law with reference to the tax levy so as to continue it, the validity of the Act of 1949 which manifested the legislative intent of Continue the tax without any break, the legal continuity being established by the retrospective operation of the provision, has to be upheld.”

86Copy pinpoint86. It would be worthwhile to recollect that in Synthetics and Chemicals Ltd. and Ors. v. State of U.P. & Ors.33 this court observed that: “[..] The power to legislate is given by Article 246 and other Articles of the Constitution. The three lists of the Seventh Schedule to the Constitution are legislative heads or fields of legislation. These demarcate the area over which the appropriate legislatures can operate. It is well settled that widest amplitude should be given to the language of the entries in three Lists but some of these entries in different lists or in the same list may override and sometimes may appear to be in direct conflict with each other, then and then only comes the duty of the court to find the true intent and purpose and to examine the particular legislation in question. Each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be comprehended in it. ...”

87Copy pinpoint87. Recently, Bimolangshu Roy (Dead) through L.Rs. v. State of Assam & Ors34 this court had held that: “23. Article 246 is one of the sources of authority to legislate under the Constitution of India. It declares that Parliament and the legislatures of the various states have the “power to make laws with respect to any of the matters enumerated” in each of the three lists contained in the Seventh Schedule. It also makes clear that the power of the Parliament

33 1989 Supp (1)SCR 623 34 [2017] 13 SCR301

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is exclusive with respect to List I and that of the State Legislature with respect to List II. List III indicates various fields over which both the Parliament as well as the State legislatures would have authority to legislate concurrently subject of course to the discipline of Article 254.

24. Apart from declaration contained in Article 246, there are various other Articles of the Constitution which confer authority to legislate either on the Parliament or on a State legislature, as the case may be in various circumstances. For example, Article 3 authorises the Parliament to make a law either creating a new State or extinguishing an existing State. Such a power is exclusively conferred on the Parliament.

25. Article 326 while declaring a right of every citizen who is not less than 18 years of age to register as a voter at any election to the House of the People or to the legislative assembly of a State, authorises the appropriate legislature to disqualify any such citizen to be a voter on any one of the grounds specified Under Article 326 by making a law. The authority to make such a law obviously flows directly from the text of Article 326 but not from Article 246. See also Articles 2, 3, 11, 15(5), 22(7), 32(3), 33, 34, 59(3), 70, 71(3), 98(2). The Articles mentioned above are only illustrative but not exhaustive of the category.

26. It must be remembered that this Court repeatedly held that the entries in the various lists of the Seventh Schedule are not sources of the legislative power but are only indicative of the fields w.r.t. which the appropriate legislature is competent to legislate.

27. The task of this Court in identifying the scope of an entry in the Lists contained in the Seventh Schedule is not easy. While examining the scope of the entries this Court must necessarily keep in mind the scheme of the Constitution relevant in the context of the Entry in question.

28. A broad pattern can be identified from the scheme of the three lists, the salient features of which are (i) Fields of legislation perceived to be of importance for sustaining the federation, are exclusively assigned to the Parliament, (ii) State legislatures are assigned only specified fields of legislation unlike the US Constitution, (iii) Residuary legislative

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power is conferred in the Parliament; (iv) taxing entries are distinct from the general entries24, and (v) List III does not contain a taxing entry,

29. At the same time, it can also be noticed that there is no logical uniformity in the scheme of the three lists contained in the Seventh Schedule.”

88Copy pinpoint88. In Bondu Ramaswamy (supra) the provision in question was Article 243 ZE. This was inserted, by way of amendment, in the 73rd and 74th amendments of the Constitution of India which came into force on 24.04.1993 and 01.06.1993. The object of the amendments - as indeed their enacted provisions was to strengthen the democratic political government and grass root level in urban and semi-urban areas by providing constitutional status to municipalities and panchayats. Article 243ZF’s wording is identical to Section 19 in the present case. This court discussed the effect of Article 243ZF and stated as follows: “40. Any statute or provision thereof which is inconsistent with any constitutional provision will be struck down by the courts. Consequently, if the BDA Act or any provision of the BDA Act is found to be inconsistent with any provision of Part IX-A of the Constitution, it will be struck down by the courts as violative of the Constitution. In regard to any provision of any law relating to municipalities, Article 243-ZF suspends such invalidity or postpones the invalidity for a period of one year from 1-6-1993 to enable the competent legislature to remove the inconsistency by amending or repealing such law relating to municipalities to bring it in consonance with the provisions of Part IX-A of the Constitution.

41. Article 243-ZF is a provision enabling continuance of any provision of a law relating to municipalities in spite of such provision being inconsistent with the provisions of Part IX-A of the Constitution for a specified period of one year. It does not extend the benefit of continuance to any law other than laws relating to municipalities; it also does not provide for continuance of a law for one year, if the violation is in respect of any constitutional provision other than Part IX-A; and it does not declare any provision of a statute to be inconsistent with it nor declare any statute to be invalid. The invalidity

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of a statute is declared by a court when it finds a statute or its provision to be inconsistent with a constitutional provision.

42. The benefit of Article 243-ZF is available only in regard to laws relating to “municipalities”. The term “municipality” has a specific meaning assigned to it under Part IX-A. Article 243-P(e) defines the word as meaning an institution of self-government constituted under Article 243-Q. Article 243-Q refers specifically to three types of municipalities, that is, a Nagar Panchayat for a transitional area, a Municipal Council for a smaller urban area and a Municipal Corporation for a larger urban area. Thus, neither any city improvement trust nor any Development Authority is a municipality, referred to in Article 243-ZF. Thus Article 243-ZF has no relevance to test the validity of the BDA Act or any provision thereof. If the BDA Act or any provision thereof is found to be inconsistent with the provisions of Part IX-A, such inconsistent provision will be invalid even from 1-6- 1993, and the benefit of continuance for a period of one year permitted under Article 243-ZF will not be available to such a provision of law, as the BDA Act is not a law relating to municipalities.

45. Part IX-A seeks to strengthen the democratic political governance at grass root level in urban areas by providing constitutional status to municipalities, and by laying down minimum uniform norms and by ensuring regular and fair conduct of elections. When Part IX-A came into force, the provisions of the existing laws relating to municipalities which were inconsistent with or contrary to the provisions of Part IX-A would have ceased to apply. To provide continuity for some time and an opportunity to the State Governments concerned to bring the respective enactments relating to municipalities in consonance with the provisions of Part IX-A in the meanwhile, Article 243-ZF was inserted. The object was not to invalidate any law relating to city improvement trusts or Development Authorities which operate with reference to specific and specialised field of planned development of cities by forming layouts and making available plots/houses/apartments to the members of the public.”

89Copy pinpoint89. The effect of the 97th amendment to the Constitution which came into force on 12.01.2012 was to introduce provisions, to strengthen the

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functioning of the cooperative societies in a democratic, autonomous and economically sound manner. Various new provisions granted constitutional status to cooperative societies and inserted Part IX-B in the Constitution which specified several conditions for state laws relating to cooperative societies. Article 243 ZT which is worded similarly to Section 19 of the present case sought to continue in force existing laws, for a limited duration until amended or repealed or until the expiration of one year from the commencement of the amendment act. This court held in Vipulbhai (supra) on an interpretation of 243 ZT that the competent legislature could suitably amend the existing provisions in their laws in tune with the constitutional mandate.

90Copy pinpoint90. Once it is conceded that Section 19 was enacted as part of the constituent power and has the same force as the rest of the constitutional amendment and is not a mere Parliamentary enactment, one has to consider the consequence of this sequitur to such a finding. The previous rulings in Bondu Ramaswamy (supra) and Vipulbhai (supra), indicate that even in the case of transitional provisions of the kind that they dealt with – which were enacted as part of the Constitution – the states’ power to amend is limited to bring the existing law inconformity with the new provisions of the Constitution brought into force by the concerned amendment. In those cases, the court was not confronted with the complex situation of the nature that one has to deal with today. The 101st amendment as noted earlier uniquely transformed the indirect taxation regime and revamped the constitutional compact itself in one sense. Gone were the traditional delineations of distribution of legislative power including taxation fields which traced their origins to Articles 245 and 246 and also the rules for handling repugnancy which Article 254 had enacted. Instead,what was brought in was an entirely new concept of sourcing common or concurrent power of both the state legislatures and the Union through the newly added provision Article 246A.

91Copy pinpoint91. As held earlier, the change was dramatic and revolutionary and wisely the constitutional amending body which is the Parliament and the ratifying States felt it expedient to ensure that during the transitional period of one year or till the new GST regime was ushered through an enactment, there ought to be flexibility with the States and Parliament to

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make such changes as the times demanded. In the previous two judgments, Bondu Ramaswamy (supra) and Vipulbhai (supra), however, there was no question of denuding the powers, the State or conferring new powers on the Parliament and the State but rather creation of new bodies as in the case of Panchayats and Zila Parishads in Bondu Ramaswamy(supra) and imposing new standards in Vipulbhai (supra), in relation to cooperative societies. Then, the existing legal regime was preserved for a limited duration. Yet the court felt that the amendments should not have a lasting impact going beyond the period provided by the savings or transitional provisions as that would have inevitably met with challenges as not being inconformity with the new regime.

92Copy pinpoint92. In the present case, however, Section 19 is seen as a plenary constituent power, subject to other limitations in the Constitution, and also given that by the amendment the legislative entries in the fields which are Entry 54 of the State List and Entry 84 of the Central List were substantially changed, this court has to take into account the reality that State’s powers or even Parliament’s power had to be sourced directly from the amendment.

93Copy pinpoint93. There is merit in the argument that although Article 246A in a sense itself comprehends the power to impose tax on goods and services, yet its operationalization could take place only through the recommendations of the GST council. The GST council appears to have been formed in the wake of the 101st amendment, nevertheless, the process of making recommendations had only begun. Therefore, the power to make laws could not have been sourced only to Article 246A. The power to make laws in the opinion of this court (which is to amend or repeal existing laws), could then by sourced to some other provision as well. In the present case, Section 19 itself is held to be the source which enables Parliament and the State Legislatures (along with Article 246A) to amend the existing laws. The analogy of Entry 97 of the Union List, would be tempting. In the case of Parliament, it could be said that once the power to enact laws relating to service tax stood deleted, Entry 92C also stood in a sense, devoid of its essence. Entry 97 could still arguendo, be a source of power to amend the existing Central laws. That interpretation is not feasible, because the expression used in Section 19 is the competent legislature, and not Parliament; the latter alone can enact in

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the exercise of the power conferred by Entry 97 of the Union List. However, that conclusion would not be consistent with the coming into force of the Amendment on 16.09.2016. The only harmonious manner of sourcing the power to amend or repeal could be to Section 19 and Article 246Awhich are to be seen as both the power enabling the existing state of affairs to continue and also enabling both the centre and the states to make necessary changes in the existing laws through amendment or repeal.

94Copy pinpoint94. There is no doubt that the authority to legislate flows from the Constitution. In the context of our Constitution, this authority has been traditionally located primarily in Articles 245 and 246. The courts have consistently recognized that the Lists in the Seventh Schedule to the Constitution merely delineates the fields of legislation; they are not considered as sources of power. The authority or the power stems from Articles 245 and 246. The reorganization of those legislative fields particularly Entry 84 of the First List and Entry 54 of the Second List and the conformant of larger powers, upon both the legislative entities i.e. Parliament and the State Legislatures meant that both authorities to legislate upon all subject matters which are comprehended within the description of “goods and services” for the purpose of indirect taxation under Article 246 A. Yet the operationalization of this provision required the formulation of the principles by the GST Council which occurred later. The hiatus between the coming into force of the constitutional amendment and the enactment of a comprehensive legislation, [based upon the recommendations of the GST Council] provided for by Section

19. As held in the previous segment of this judgment Section 19 is to be construed as part of the Constitution for the limited duration it operated and was effective.

95Copy pinpoint95. Such being the case the sequitur would have to be that the authority to legislate is expressed through Section 19, read with Article 246A. In other words, in the absence of principles formulated by the GST Council, the authority so to say reserved by Section 19 and Article 246A to amend or repeal the law the subject matter as originally understood itself stood obliterated from the Constitution. This would have resulted in a conundrum. Therefore, Section 19 and Article 246Aareto be understood as expressing a field of legislation available to both the Parliament and the

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State Legislatures to in furtherance of the status quo, cater to unforeseen or other eventualities in the administration of existing tax laws. An example can be that a heavy financial burden, being cast as a consequence of holding that the machinery for collection of an existing levy, was defective, the High Court invalidating a rule or statutory provision. In that event, were it to be held, that the state lacked competence altogether to legislate, and cure the defects through a validating enactment, during the period till 01.07.2017, the results could have been catastrophic. The phrase “amend” or “repeal” denotes a legislative activity. That it is spoken of in a provision, introduced through a constituent process, means that it has to be given meaning, because no words or provisions can be considered as surplusage.

96Copy pinpoint96. The meaning of the term ‘amend’ is well-known it takes within its sweep the idea of correcting something, adding something, deleting, or substituting something or doing something to an existing document, enactment, or rule to make it better. P. Ramanatha Aiyar’s Advance Law Lexicon35, has this to say: “Amendment/Repeal. Amendment is, in fact, a wider term and it includes abrogation or deletion of a provision in an existing statute. If the amendment of an existing law is small, the Act professes to amend; if it is extensive, it repeals a law and re-enacts it. There is no real distinction between repeal and an amendment. Bhagwat Ram Sharma v UOI, AIR 1988 SC 740, 746.9 Amend. A word derived from the French word signifying ‘to make better’; ‘to change for the better.’ To alter formally by some addition, omission or substitution [Preamble, T.P. Act (4 of 1882)]. The power to ‘amend’ Constitution conferred by Article 368 of the Constitution is wide enough to include the power to take away fundamental rights. [Shankri Prasad Singh v. UOI, AIR 1951 SC 458] The dictionary meaning of the word ‘amend’ is to correct a fault or reform; but in the context of Article 368 reliance on the dictionary

35 P. Ramanatha Iyer, Advance Law Lexicon, Volume I at Page 271

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meaning of the word is singularly inappropriate, because what Article 368 authorises to be done is the amendment of the provisions of the Constitution. An amendment of a law may in a proper case include the deletion of any one or more of the provisions of the law and substitution in their place of new provisions. Similarly an amendment of the Constitution which is the subject matter of the power conferred by Article 368, may include modification or change of the provisions or even an amendment which makes the said provisions inapplicable in certain cases. The power to amend in the context is a very wide power and it cannot be controlled by the literal dictionary meaning of the word ‘amend’. Sajjan Sing v State of Rajasthan Mad LJ: QD (1961-1965) Vol II C 1204-1205: (1965) 1 SCJ 377 : (1965)1 Mad LJ (SC) 57 : AIR 1965 SC 845 *************** ************** Amend; emend; Correct; Rectify; Reform. All these words convey the idea of making a things into a more perfect state. We correct when we conform things to some standard or rule; as to correct proof sheets. We amend by removing faults or errors as to amend a decree or a law. Emend is another form of amend and is mostly applied to editions of books. To reform is to put into a new and better form, as to reform one’s life. Rectify is to make right, as, to rectify a mistake, to rectify an abuse. The amendment of a law may in a proper case include the deletion of any one or more of the provisions of the law and substitution in their place of new provisions. An amendment of the constitution which is the subject-matter of the power conferred by Article 368, may include modifications or change of the provisions or even an amendment which makes the said provisions inapplicable in certain cases. Sajjan Singh v State of Rajasthan AIR 1965 SC 845, 854. [Constitution of India, Article 368] The term ‘amended in Section 1(2) of the Calcutta Trika Tenancy Amendment Act must be construed in its natural meaning ‘as altered by addition, substitutions and omissions’. Deorajin Debi v Satyadhyan, AIR 1954 Cal 119.”

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97Copy pinpoint97. It is, therefore, held that there were no limitations under Section 19 (read together with Article 246A), of the Amendment. That provision constituted the expression of the sovereign legislative power, available to both Parliament and state legislatures, to make necessary changes through amendment to the existing laws. As held in Rama Krishna Ramanath (supra) the transitional power (in that case, Section 143 (3)) “the provision by its implication confers a limited legislative power to desire or not to desire the continuance of the levy.” This limited legislative power was not constricted or limited, in the manner alleged by the states; it is circumscribed by the time limit, indicated (i.e. one year, or till the new GST law was enacted). It could, therefore, enact provisions other than those bringing the existing provisions in conformity with the amended Constitution. C. Validity of Telangana Act tested from the touch stone of its originating as an ordinance

98Copy pinpoint98. Telangana had argued that although with effect from 1 st July 2017, due to the enactment of the CGST Act, its state legislature could not per se enact a new law on a subject matter contained within the original entry 54 of the State list, nevertheless, the approval of the ordinance which amended the existing State -law on 02.07.2017 had the effect of relating back to the original date when in fact it was validly amended. This is sought to be supported by the theory of the relating back of the law to a date when the power to enact existed. The argument in support was that in terms of its effect there is no difference between an ordinance [which is merely a product of a different procedure i.e., or executive law making] as compared to enactment of law by the legislature. An ordinance may have a limited life but once confirmed, or enacted,it acquires permanence. Even during the time it is in force, it is as effective and as binding on the subject matter and the State as an enacted law. The effect of an ordinance was explained in A.K. Roy (supra), in the following terms: “[..] the Constitution makes no distinction in principle between a law made by the legislature and an ordinance issued by the President. Both, equally, are products of the exercise of legislative power and, therefore, both are equally subject to the limitations which the Constitution has placed upon that power”.

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99Copy pinpoint99. In R.K. Garg Etc. Etc v. Union Of India & Ors36 this court held similarly, that ordinance making power is “co-extensive with the power of the Parliament to make laws, it is difficult to see how any limitation can be read into this legislative power of the President so as to make it ineffective to alter or amend tax laws. If Parliament can by enacting legislation alter or amend tax laws, equally can the President do so by issuing an Ordinance under Article 123.”

100Copy pinpoint100. This court is of the view that the submissions of the Telangana State are not substantial. There can be no doubt that an ordinance promulgated by the Government is as much a law as much as is any binding law enacted by State legislature. The difference is that contrary to the traditional role of the executive, law making does not fall within its primary domain. Yet the Constitution clothes the executive with the emergency power of promulgating ordinances which can operate for a limited duration to be mandatorily raised before the House of the State legislature for its approval or disapproval. In the event of approval, the ordinance is given the shape that the legislature accrues it in. In India, practice has been largely to enact the provisions or incorporate the provision ordinance in the form of the Bill which is then approved by the House or Houses of the State legislature and then it results in an Act. Although, the State is correct in characterizing that law making in both cases only is shaped or the products of two different procedures, nevertheless, to stop at that would be an oversimplification.

101Copy pinpoint101. This court had on previous occasions, dealt with the effect of the power of issuing ordinances and their effect. There were few conflicting judgments on the issue, especially on whether the effect of anything done during the time when the ordinance is in force can continue to bind and be effective even after it ceases to be or is inoperable, or in other words, has lapsed. Since conflicting decisions existed, a larger seven judge bench combination examined the matter in detail in Krishna Kumar Singh (supra). A majority judgment of 5 Judges is of the opinion that the theory of lasting effect of an ordinance cannot be supported. Krishna Kumar Singh (supra) first explained the effect of an ordinance:

36 1982 (1) SCR 947

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“Is the requirement of laying an Ordinance before the state legislature mandatory? There can be no manner of doubt that it is. The expression “shall be laid” is a positive mandate which brooks no exceptions. That the word ‘shall’ in Sub-clause (a) of Clause 2 of Article 213 is mandatory, emerges from reading the provision in its entirety. As we have noted earlier, an Ordinance can be promulgated only when the legislature is not in session. Upon the completion of six weeks of the reassembling of the legislature, an Ordinance “shall cease to operate”. In other words, when the session of the legislature reconvenes, the Ordinance promulgated has a shelf life which expires six weeks after the legislature has assembled. Thereupon, it ceases to operate.” The larger Bench then proceeded to examine the need to lay the ordinance before the State Legislature: “31. Laying of an Ordinance before the state legislature subserves the purpose of legislative control over the Ordinance making power. Legislation by Ordinances is not an ordinary source of law making but is intended to meet extra-ordinary situations of an emergent nature, during the recess of the legislature. The Governor while promulgating an Ordinance does not constitute an independent legislature, but acts on the aid and advice of the Council of Ministers Under Article

163. The Council of Ministers is collectively responsible to the elected legislative body to whom the government is accountable. The Constitution reposes the power of enacting law in Parliament and the state legislatures under Articles 245 and 246, between whom fields of legislation are distributed in the Seventh Schedule. Constitutional control of Parliament and the state legislatures over the Ordinance making power of the President (under Article 123) and the Governors (under Article 213) is a necessary concomitant to the supremacy of a democratically elected legislature. The reassembling of the legislature defines the outer limit for the validity of the Ordinance promulgated during its absence in session. Within that period, a legislature has authority to disapprove the Ordinance. The requirement of laying an Ordinance before the legislative body subserves the constitutional purpose of ensuring that the provisions of the Ordinance are debated upon and discussed in the legislature. The legislature has before it a

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full panoply of legislative powers and as an incident of those powers, the express constitutional authority to disapprove an Ordinance. If an Ordinance has to continue beyond the tenure which is prescribed by Article 213(2)(a), a law has to be enacted by the legislature incorporating its provisions. Significantly, our Constitution does not provide that an Ordinance shall assume the character of a law enacted by the state legislature merely upon the passing of a resolution approving it. In order to assume the character of enacted law beyond the tenure prescribed by Article 213(2)(a), a law has to be enacted. The placement of an Ordinance before the legislature is a constitutional necessity; the underlying object and rationale being to enable the legislature to determine (i) the need for and expediency of an ordinance; (ii) whether a law should be enacted; or (iii) whether the Ordinance should be disapproved.

32. The failure to lay an Ordinance before the state legislature constitutes a serious infraction of the constitutional obligation imposed by Article 213(2). It is upon an Ordinance being laid before the House that it is formally brought to the notice of the legislature. Failure to lay the Ordinance is a serious infraction because it may impact upon the ability of the legislature to deal with the Ordinance. We are not for a moment suggesting that the legislature cannot deal with a situation where the government of the day has breached its constitutional obligation to lay the Ordinance before the legislature. The legislature can undoubtedly even in that situation exercise its powers Under Article 213(2)(a). However, the requirement of laying an Ordinance before the state legislature is a mandatory obligation and is not merely of a directory nature. We shall see how in the present case a pattern was followed by the Governor of Bihar of promulgating and re-promulgating Ordinances, none of which was laid before the state legislature. Such a course of conduct would amount to a colorable exercise of power and an abuse of constitutional authority. Now it is in this background, and having thus far interpreted the provisions of Article 213, that it becomes necessary to refer to the precedents on the subject and to the nuances in the interpretation of the constitutional provisions.”

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This court then examined the legal effects of an ordinance, in case, it ceased to operate: “58. What then is the effect upon rights, privileges, obligations or liabilities which arise under an ordinance which ceases to operate? There are two critical expressions in Article 213(2) which bear a close analysis. The first is that an ordinance “shall have the same force and effect” as an act of the legislature while the second is that it “shall cease to operate” on the period of six weeks of the reassembling of the legislature or upon a resolution of disapproval. The expression “shall have the same force and effect” is prefaced by the words “an ordinance promulgated under this article”. In referring to an ordinance which is promulgated Under Article 213, the Constitution evidently conveys the meaning that in order to have the same force and effect as a legislative enactment, the ordinance must satisfy the requirements of Article 213. Moreover the expression “shall have the same force and effect” is succeeded by the expression “but every such ordinance..” shall be subject to what is stated in sub-clauses(a) and (b). The pre-conditions for a valid exercise of the power to promulgate as well as the conditions subsequent to promulgation are both part of a composite scheme. Both sets of conditions have to be fulfilled for an ordinance to have the protection of the ‘same force and effect’ clause. Once the deeming fiction operates, its consequence is that during its tenure, an ordinance shall operate in the same manner as an act of the legislature. What is the consequence of an ordinance ceasing to operate by virtue of the provisions of Article 213(2)(a)? There are two competing constructions which fall for consideration. The expression “shall cease to operate” can on the one hand to be construed to mean that with effect from the date on which six weeks have expired after the reassembling of the legislature or upon the disapproval of the ordinance, it would cease to operate from that date. ‘Cease’ to operate in this sense would mean that with effect from that date, the ordinance would prospectively have no operation. The ordinance is not void at its inception. The second meaning which can be considered for interpretation is that the expression “shall cease to operate” will mean that all legal consequences that

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arose during the tenure of the ordinance would stand obliterated. According to the second construction, which is wider than the first, the consequence of an ordinance having ceased to operate would relate back to the validity of an ordinance.

59. Now, one of the considerations that must be borne in mind is that Article 213 has not made a specific provision for the saving of rights, privileges, obligations or liabilities that have arisen under an ordinance which has since ceased to operate either upon the expiry of its term or upon a resolution of disapproval. Significantly, there are other provisions of the Constitution where, when it so intended, the Constitution has made express provisions for the saving of rights or liabilities which arise under a law.” The court then overruled previous judgments, which had relied on and applied the “enduring rights” theory, to hold that rights and privileges, acquired, or created, and obligations cast or assumed would continue, even if the ordinance were to lapse, or become void. It was held that: “68. [..] The enduring rights theory which was accepted in the judgment in Bhupendra Kumar Bose was extrapolated from the consequences emanating from the expiry of a temporary act. That theory cannot be applied to the power to frame ordinances. Acceptance of the doctrine of enduring rights in the context of an ordinance would lead to a situation where the exercise of power by the Governor would survive in terms of the creation of rights and privileges, obligations and liabilities on the hypothesis that these are of an enduring character. The legislature may not have had an opportunity to even discuss or debate the ordinance (where, as in the present case, none of the ordinances was laid before the legislature); an ordinance may have been specifically disapproved or may have ceased to operate upon the expiry of the prescribed period. The enduring rights theory attributes a degree of permanence to the power to promulgate ordinances in derogation of parliamentary control and supremacy. Any such assumption in regard to the conferment of power would run contrary to the principles which have been laid down in S.R. Bommai…. **************** *****************

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The Constitution has not made a specific provision with regard to a situation where an ordinance is not placed before a legislature at all. Such an eventuality cannot be equated to a situation where an ordinance lapses after the prescribed period or is disapproved. The mandate that the ordinance will cease to operate applies to those two situations. Not placing an ordinance at all before the legislature is an abuse of constitutional process, a failure to comply with a constitutional obligation. A government which has failed to comply with its constitutional duty and overreached the legislature cannot legitimately assert that the ordinance which it has failed to place at all is valid till it ceases to operate. An edifice of rights and obligations cannot be built in a constitutional order on acts which amount to a fraud on power. This will be destructive of the Rule of law. Once an ordinance has been placed before the legislature, the constitutional fiction by which it has the same force and effect as a law enacted would come into being and relate back to the promulgation of the ordinance. In the absence of compliance with the mandatory constitutional requirement of laying before the legislature, the constitutional fiction would not come into existence. In the present case, none of the ordinances promulgated by the Governor of Bihar were placed before the state legislature. This constituted a fraud on the constitutional power. Constitutionally, none of the ordinances had any force and effect. The noticeable pattern was to avoid the legislature and to obviate legislative control. This is a serious abuse of the constitutional process. It will not give rise to any legally binding consequences.”

102Copy pinpoint102. In the present case, the Telangana ordinance was promulgated on 17.6.2016. The Telangana State GST Act was enacted and received the assent of the Governor on 25.05.2017; it was brought into force on 01.07.2017. The state GST Act contained a savings and repeal law, which sought to save acts done, privileges and rights accrued under the repealed enactment, i.e. the State VAT Act. It was sought to be argued that once the State Legislature approved the ordinance and enacted the amendment, in conformity with it, the provisions of the Ordinance became part of the act. The question of legislative competence would not arise, because the mere confirmation of an ordinance is within the competence of the State legislature. Since the law was introduced through a different procedure, i.e. ordinance, the effect of

THE STATE OF TELANGANA & ORS. v. M/S TIRUMALA 203 CONSTRUCTIONS [S. RAVINDRA BHAT, J.]

that law, empowering the VAT officials to reopen or complete assessments, was no different.

103Copy pinpoint103. This court held in Hajee Abdul Shukoor(supra) that: “The State legislature is free to enact laws which would have retrospective operation. Its competence to make law for a certain past period, depends on its present legislative power and not on what it possessed at the period of time when its enactment is to have operation. We therefore do not agree with this contention. The matter can be looked at in a different way. The 1939 Act required no assent of the President. The State Legislature was doing in 1963 what the legislature enacting the 1939 Act was supposed to have enacted and therefore its enactment was not governed by the Constitutional requirement for an Act to be enacted during the period Act LII of 1952 was in force. Lastly, it has been urged for the petitioner that hides and skins have been declared to be of special importance in inter-State trade or commerce by s.14 of the Central Sales Tax of 1956. The tax imposed by sub-section (1) of s. 2 of the Act is a tax on the sale of hides and skins in the course of inter-State trade or commerce and therefore fen within entry No. 92A of list 1 of Seventh Schedule and that therefore the State legislature was not competent to impose it. It could impose by virtue of entry No. 54 in List II of Seventh Schedule tax on the sale or purchase of goods subject to the provisions of entry No. 92A of List

1. There is no force in this contention. The tax is imposed on the sale which took place within the State. The State legis- lature is competent to impose such a tax. The mere fact that the article sold in the State had been brought from outside the State does not make the sale of that article a sale in the course of inter-State trade or commerce. It is only when A, in State X, purchased through a commission agent in a State Y and receives the articles purchased through the commercial agency that the sale comes within the expression ‘in the course of inter-State trade’: See State of Travancore Cochin v Shanmugha Vilas Cashew Nut Factory . (supra at p. 70). It has been argued for the State that the Act is not affected by the provisions of Arts. 301 to 304 of the Constitution as they affect the legislative power with respect to Acts to operate in the future and not

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the power to enact Acts which would operate in the past. We do not consider the contention sound. The Act makes provision for a period subsequent to the commencement of the Constitution and therefore is to be subject to the provisions of the Constitution. We therefore hold that sub-section (1) of S. 2 of the Act discriminates against imported hides and skins which were sold up to the 1st of August 1957 upto which date the tax on sale of raw hides and skins was at the rate of 3 pies per rupee or 19/16th percent. This however does not mean that the sub-section is valid with respect to the sales which took place subsequent to August 1, 1957. The subsection being void in its provisions with respect to a certain initial period, we cannot change the provision with respect to the period as enacted to the period for which it could be valid as that would be re-writing the enactment. We have therefore to hold that sub-s.(1) of Section 2 void accordingly hold so.”

104Copy pinpoint104. It was held by this court, in Jaya Thakur v Union of India & 37 Ors that: “the challenge to the legislative Act would be sustainable only if it is established that the legislature concerned had no legislative competence to enact on the subject it has enacted.”

105Copy pinpoint105. The state of Telangana had argued to the contrary, and explained that when the ordinance was issued, there was no doubt about the state possessing legislative competence. As of that date (17.06.2017) the power to amend existing laws, was permissible under Section 19 of the Amendment. However, that argument is not tenable, because the ordinance’s validity and effect might not have been suspect on the date of its promulgation; yet, the issue is that on the date when it was in fact, approved and given shape as an amendment, the State legislature had ceased to possess the power. By that time, the State GST and the Central GST Acts had come into force (on 01.07.2017). Therefore, Section 19 ceased to be effective. The original entry (Entry 54 of the State List) ceased to exist. In the circumstances, the state legislature had no legislative

37 2023 SCC OnLine SC 813

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competence to enact the amendment, which approved the ordinance, which consequently was rendered void.

106Copy pinpoint106. A subsidiary argument was that acts done in pursuance of the ordinance cannot lapse, because they are saved, by virtue of the repeal and savings clause (Section 17438) of the State GST Act, all action taken pursuant to the ordinance, when it was in force, would be saved. In the opinion of this court, there is no merit in that argument. The invalidity of the amendment by the state legislature (which conformed to the ordinance, on 02.12.2017) went to its root of the jurisdiction of those acting under the amended provisions of the State GST, rendering them (as indeed, the substantive provisions) void and unenforceable. Furthermore, even if for some reason, there were any doubts regarding validity and continuance of any notice, or proceedings, initiated pursuant to the provisions of the ordinance, their invalidity is such that they cannot be sustained. Furthermore, as held in Krishna Kumar Singh (supra) unless the consequences are “irreversible” there is ordinarily no question of any action- taken under an ordinance that is rendered void, due to operation of the provisions of the Constitution, being continued. Though the observations of this court were in the context of ordinances lapsing due to their not being presented before the House of the legislatures, the same principle would, in this court’s considered view, apply to cases, where the legislature ceases to have competence over the subject matter.

107Copy pinpoint107. It is therefore, held that the provisions of the ordinance, as approved by the later state act, which amended the local VAT Act’s, are valid. D. Gujarat and Maharashtra Acts

108Copy pinpoint108. In the case of the Gujarat VAT Act, the brief facts are that the Deputy Commissioner of Commercial Tax, passed an assessment order on

38 The relevant part of Section 174 (2) inter alia, is as follows: “(2) The repeal of the said Acts and the amendment of the Acts specified in section 173 (hereafter referred to as ―such amendmentǁ or ―amended Actǁ, as the case may be) to the extent mentioned in sub-section (1) or section 173 shall not— (a) revive anything not in force or existing at the time of such amendment or repeal; or (b) affect the previous operation of the amended Acts or repealed Acts and orders or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation, or liability acquired, accrued or incurred under the amended Acts or repealed Acts or orders under such repealed or amended Acts:”

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December 23, 2009, for the financial year 2006-07 against the assessee and reversed the input tax credit to the extent of eight per cent., i.e., four per cent, under each of the provisions of sections 11(3)(b)(ii) and 11(3)(b)(iii) of the Gujarat VAT Act. The appellate authority dismissed the assessee. On April 26, 2012, the Gujarat VAT Tribunal allowed the assesses second appeal by quashing and setting aside both the orders of the sales tax authorities by holding that reduction of the input tax credit to the extent of eight per cent, for purchases was not applicable to consignment of branch transfer transactions. The High Court, by judgment39 dated January 18, 2013, dismissed the State Government’s appeal against the aforesaid order of the VAT Tribunal, while holding, inter alia, that the reduction of input tax credit under section 11(3) (b) would, in no case, exceed four per cent. It was held that the limitation of availing of the tax credit as provided under section 11(3)((b) could be applied only once irrespective of the fact as to whether particular commodity purchased falls in more than one sub-clauses of section 11(3)(b) of the VAT Act. An assessment order was made by the concerned officer, for two separate issues. The judgment of the High Court was given effect to by tax authorities. In a decision of the VAT Tribunal, rendered in another case wherein it was observed that tax paid by the assessee on purchases of goods used in manufacture of taxable goods exported outside the country was not to be included. In other words, according to the Tribunal, the said incentive limit cannot be curtailed by the said tax paid by the assessee. These findings were set aside by the High Court40. In view of that judgment, the commissioner issued a revision notice, in March, 2018 under Section 75 of the VAT Act, why the benefit given to them should not be revised to give effect to the judgment of the High Court.

109Copy pinpoint109. As noted earlier, provisions of the Constitution (One Hundred and First Amendment) Act, 2016, were enacted. They came into force with effect from July 1, 2017.On September 20, 2016, the Additional Commissioner of Commercial Tax passed an order and reduced the sales tax incentive, in case of the petitioner-company, while considering the tax paid on the purchase of

39 State of Gujarat v. Reliance Industries Ltd. [2013] 58 VST 376 (Guj); 2013 SCC OnLine Guj 8788 40 State of Gujarat v. Welspun Gujarat Stahl Rohren Ltd. [2014] 71 VST 550 (Guj); 2014 SCC OnLine Guj 15909

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taxable goods used in the manufacture of taxable goods, exported outside the country. On July 1, 2017, two legislations, i.e., the Gujarat Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017 came into force to levy tax on all the intra-State supplies of goods or services or both. The Gujarat Value Added Tax Act, 2003 was substantially amended by way of substitution and deletion of many provisions thereof by virtue of the Gujarat Value Added Tax (Amendment) Act, 2017, which. came into force with effect from July 1, 2017.Meanwhile, the High Court passed an order dated September 22, 2017 in an appeal filed by the State, setting aside the judgment41 dated January 18, 2013 in respect of the assessee who had succeeded.

110Copy pinpoint110. In view of the aforesaid judgment of this court, the Additional Commissioner of Commercial Tax issued a revision notice dated November 3/6, 2017 in Form 503 under section 75 of the Act to revise the assessment order for the financial year 2008-09 made vide order dated March 30, 2013 (Sr. No. 5 above), for reducing the input tax credit to the extent of eight per cent under the provisions of section 11(3)(b)(ii) and 11(3)(b)(iii) of the VAT Act in the light of the judgment dated September 22, 2017, of this court. The revision notice was quashed42 by the High Court.

111Copy pinpoint111. By virtue of the VAT (Amendment) Act, 2018, section 84A was added in the VAT Act to be operative retrospectively with effect from April 1, 2006, inter alia, providing for the exclusion of the period spent between the date of the decision of the Appellate Tribunal and that of the High Court as well as the Supreme Court in computing the period of limitation, referred to in section 75 of the Gujarat VAT Act. In the present case, the period commencing from the date of the decision of high court dated January 18, 201343 rendered against the revenue up to the date of the decision of this court, i.e., September 22, 201744. As a consequence, on September 1, 2018, fresh notice for revision was issued by the Additional Commissioner of

41 State of Gujarat v. Reliance Industries Ltd [2017] 16 SCC 28. 42 In the judgment in Reliance Industries Ltd. v. State of Gujarat [2018] 58 GSTR 366 (Guj)) 43 HC judgment dated 18.01.2013 in Tax Appeal No 934 & 935 of 2012 44 Order of this court in State of Gujarat v Reliance Industries. Civil Appeal No 13047- 13048 of 2017.

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Commercial Tax to the assessee on the basis of the above referred newly added section 84A, for revising the assessment for the financial year 2008- 09 made by order dated March 30, 2013. The original period of limitation as provided under Section 75 of the Gujarat VAT Act for issuing notice was of three years from the date of the assessment order, i.e., March 30, 2013, which had lapsed on March 30, 2016. However, by virtue of the newly enacted section 84A, the period spent from the date of the decision of the High Court up to the date of the decision of this court was to be excluded in computing the aforesaid period of three years, referred to under Section 75 of the Gujarat VAT Act. This development resulted in a challenge to the validity of the amendment. The state had sought to urge that being a validating enactment, which sought to cure the defect found earlier, and given that it operated retrospectively, there is no question of the amendment being invalid.

112Copy pinpoint112. There are undoubtedly several judgments of this court such as Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality45 Government of Andhra Pradesh v. Hindustan Machine Tools Ltd 46; Ujagar Prints v. Union of India47 and several others, which hold that a purely curative and validating enactment, if made retrospective, is unexceptionable. However, it has been held by this court, in Kerala State Electricity Board v. Indian Aluminium Co. Ltd.48: “... Both the 1910 Act as well as the 1948-Act are existing law as contemplated under article 372 of the Constitution. An existing law continues to be valid even though the legislative power with respect to the subject-matter of the existing law might be in a different list under the Constitution from the list under which it would have fallen under the Government of India Act, 1935. But after the Constitution came into force an existing law could be amended or repealed only by the Legislature which would be competent to enact that law if it were to be newly enacted...”

45 1970 (1) SCR 388 46 [1975] Supp (1) SCR 394 47 [1988] Supp 3 SCR770 48 [ 1976 ] 1 SCR 552

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As noted earlier, Ramakrishna Ram Nath (supra) held that the power to repeal is co-extensive with the power to amend, or make a law. It was also held that “(T)he power has to be seen at the time when the repealing legislation is being enacted. […] However, the Legislature should have the competence at the time when such a repealing law is being enacted.”

113Copy pinpoint113. In the present case, the retrospective effect, given to the amendment, which was brought into force, with effect from 2006, cannot in any way save it, after the coming into force of the GST laws, on 01.07.2017. Nor can there can be any argument that the amendment made in February, 2018, is traceable to Article 246A. On this aspect, this court held in Union of India v Mohit Mineral Pvt. Ltd49. that: “ The expression used in article 246A is ‘power to make laws with respect to goods and service tax’. The power to make law, thus, is not general power related to a general entry rather it specifically relates to goods and services tax. When express power is there to make law regarding goods and services tax, we fail to comprehend that how such power shall not include power to levy cess on goods and services tax. True, that the Constitution (One Hundred and First Amendment) Act, 2016 was passed to subsume various taxes, surcharges and cesses into one tax but the constitutional provision does not indicate that henceforth no surcharge or cess shall be levied.”

114Copy pinpoint114. As far as the Maharashtra appeals are concerned, the assessees’ grievance is that the retrospective amendments, made to the Maharashtra VAT Act, were void. On 15.04.2017, the State published Maharashtra Tax Laws (Levy, Amendment and Validation) Act 2017 in the Government Gazette thereby amending various provisions of various Acts. In paragraph No. 26 of the MVAT Act, 2002, Sections 6(A), 6(B) and 6(C) were inserted. The effect of these was to require a mandatory pre-deposit of 10% of the disputed tax liability. This was challenged, and the Nagpur Bench of the Bombay High Court in Anshul Impex Private Ltd. v. State of Maharashtra50 (hereinafter, “Anshul Impex Private Ltd”) held the amendment inapplicable to a lis which had started in 2011. The state again

49 2018 (13) SCR 139 50 STA No. 2/2018 in a Judgment delivered on 28th September, 2018

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amended the enactment, through ordinance i.e. Maharashtra Ordinance No. VI of 2019, published in the Government Gazette on 6th March, 2019. By the Ordinance the State of Maharashtra inserted an explanation w.e.f. 15th April 2017. According to the state, the explanation was inserted for the purpose of removal of doubts, in view of the Judgment of Nagpur Bench of the court in Anshul Impex Private Ltd. (supra). On 9th July 2019, the Maharashtra Tax Laws (Levy, Amendment and Validation) Act 2019 was enacted. It was published in the Government Gazette on 9th July 2019. The Ordinance was replaced by the enactment of the State Legislature inserting various provisions including the said explanation to Section 26 (6C) of the MVAT Act, 2002. The explanation had the effect of clarifying that the pre-deposit requirements applied to pre-2017 appeals and revisions. This was challenged. The High Court, by a Full Bench ruling51 upheld the amendment. It was held that “The State Government has legislative competence to remove the substratum of foundation of a Judgment retrospectively. The State Government is empowered to carry out amendment suitably to amend the law by use of appropriate phraseology removing the defects pointed out by the Court in any judgment and by amending the law inconsistent with the law declared by the Court so that the defects which were pointed out were never on the statute for effective enforcement of law. There is no judicial encroachment directly or indirectly by the State Government by inserting amendment which are the subject matter of these petitions as sought to be canvassed by the learned senior counsel for the petitioner. . In our view curing the defect pointed out by any Court through a judgment or simplicitor removing such defects does not amount to encroachment directly or indirectly or overruling the view taken by the Court or overreaching the powers of the State Government by nullifying the effect of the law laid down by the Court.”

115Copy pinpoint115. In the opinion of this court, there is no quarrel with the proposition that a legislative body is competent to enact a curative legislation with

51 United Projects v State of Maharashtra (Writ Petition (ST.) No. 11589 of 2021, and Writ Petition No. 13754 of 2018, decided on 12.07.2022

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retrospective effect. Yet, the same vice that attaches itself to the Gujarat amendment, i.e. lack of competence on the date the amendment was enacted i.e. in this case, 09.07.2019, the Maharashtra legislature ceased to have any authority over the subject matter, because the original entry 54 had undergone a substantial change, and the power to change the VAT Act, ceased, on 01.07.2017, when the GST regime came into effect. Therefore, for the same reasons, as in the other cases, the amendments to the Maharashtra VAT Act cannot survive. VI. Conclusions

116Copy pinpoint116. In view of the foregoing discussion and conclusions, the findings of the court in these cases are: (i) Section 19 of the Constitution (101st Amendment) Act, 2016 and Article 246A enacted in exercise of constituent power, formed part of the transitional arrangement for the limited duration of its operation, and had the effect of continuing the operation of inconsistent laws for the period(s) specified by it and, by virtue of its operation, allowed state legislatures and Parliament to amend or repeal such existing laws. (ii) Since other provisions of the said Amendment Act, had the effect of deleting heads of legislation, from List I and List II (of the Seventh Schedule to the Constitution of India),both Section 19 and Article 246A reflected the constituent expression that existing laws would continue and could be amended. The source or fields of legislation, to the extent they were deleted from the two lists, for a brief while, were contained in Section 19. As a result, there were no limitations on the power to amend. (iii) The above finding is in view of the vacuum created by the coming into force of the 101st Amendment, which resulted in deletion of the heads of legislation in the two lists aforesaid. (iv) The amendments in question, made to the Telangana VAT Act, and the Gujarat VAT Act, after 01.07.2017 were correctly held void, for want of legislative competence, by the two High Courts (Telangana and Gujarat High Court). The judgment of

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the Bombay High Court is, for the above reasons, held to be in error; it is set aside; the amendment to the Maharashtra Act, to the extent it required pre-deposit is held void.

117Copy pinpoint117. The appeals (and any other special leave petitions) filed by the States of Telangana and Gujarat are hereby dismissed in the above terms; the appeals of the assessees against the judgment of the Bombay High Court (i.e., Civil Appeal No. 2730-2733/2023 & SLP (C) No. 7776/2023), succeed and are allowed. There shall be no order on costs.

Headnotes prepared by: Appeals disposed of. Ankit Gyan