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Telangana High Court has also quashed notices issued to various traders under the amendment Act while striking down the impugned legislation as a whole.
Holding the legislation to be contradictory to the intentions of lawmakers who brought in a unified GST regime for the country, the Telangana High Court has struck down the Telangana Value Added Tax (Second Amendment) Act, 2017.
A Chief Justice Ujjal Bhuyan led bench found the legislation to be unfair and declared the same unconstitutional.
Several grievances were raised by traders from all over the state, which led to the High Court also quashing the notices issued under section 32(3) by VAT authorities under the amended Act in the last five years.
The amended Act is said to have given an undue advantage to assessing authorities who can take six years to tax or revise the tax, which was earlier limited to four years.
On the other hand, time given to the aggrieved traders to prefer an appeal before a revisional authority was reduced to 30 days from the earlier 60 days by the said Amended Act.
A division bench of the High Court, also consisting of Justice P Madhavi Devi noted that the intention of Parliament in ushering in new GST regime, enacting CGST Act and simultaneously enacting state GST Acts by state legislatures was to avoid multiplicity of taxes by subsuming indirect taxes in single tax called goods and services tax.
Accordingly, it was held that the amendments brought in by the second amendment Act were wholly inconsistent with the scheme of the Constitution and the new GST regime.
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