SGST High Court Cases

GST - Goa Cess on Fluid Milk (Control) Act, 2000 – Section 4 – Goa Cess and Fluid Milk (Control) Rules, 2001 – Rule 3 – Constitutionally valid and Rule 3 of the Goa Cess and Fluid Milk (Control) Rules, 2001 - Levy of Cess on fluid milk for use of facilities, infrastructure or any other amenities belonging to or provided by the State for consumption – Challenge to validity of levy of cess post-GST on the ground that the State Legislature lacked competence after the 101st Amendment to the Constitution and omission of Entry 52 in List II (State List) on entry tax and Entry 54 in List II on sales tax – The challenge also on the ground that cess on fluid milk brought into the State for sale was being collected irrespective of whether the facilities provided by the State are used for consumption – Petitioner also urge that Section 4 of the Act is violative of Article 301 of the Constitution and not saved by Article 304 thereof, since no assent of President was obtained - HELD – the cess which is collected under the impugned Act is for a specific purpose catering to a specific class and therefore is distinct from the tax which is levied as a common burden and since it do not cater for the general purpose of the State, it cannot be regarded as a tax - The whole emphasis of the GST regime being the supply of goods, the necessary entries being Entry No.52 and Entry No. 54 of the State List were omitted. However, since it is not only the entries which determine the legislative competence of the legislature but also other provisions of the Constitution and in the present case Article 246 and Article 269 along with Article 270 in its amended form in sub-clause I(A) provided for distribution of tax collected by Union between the Union and the State in the manner prescribed, it cannot be held that the State is denuded of imposing of any cess/ levy on use of its infrastructure, facilities, etc. for consumption of the fluid milk which happened to be enlisted as 'goods' - Every State is empowered to impose taxes for compensating it for services, benefits and facilities provided by it – Impugned Rules determines the rate of levy on milk brought in State for sale – Amount of cess so collected is credited to Government treasury, but is to be utilized to augment dairy production, which aim at making State self-reliant in milk production – Levy imposed is for utilisation of infrastructure of State – Non-discriminatory tax per se cannot be regarded as restriction on freedom of trade, commerce and intercourse under Article 301 of the Constitution – Impugned legislation satisfy the test of being non-discriminatory and can be declared as constitutionally valid without undergoing a process envisaged by Article 304(b) of the Constitution - Entry 52 is not invocable as the milk cess is not restricted only on entry of milk into the State but is also equally levied on the fluid milk meant for sale within the State, thus removing the discrimination between the milk brought in the State and milk produced in the State. Entry 54 being tax on sale or purchase of goods is also not invocable since the cess imposed is on utilization of the infrastructure – The word ‘restriction’ in Article 304(b) has been held not to include any regulations and therefore taxes or other measures which are regulatory will not come within the Article 304(b) and, therefore, the contention that the assent of the President was necessary before passing the impugned legislation deserve a rejection - Impugned Act is well within competence of State legislature – Impugned Act and the Rules are not ultra vires of the Constitution – Validity of impugned Act and the Rules is upheld and the writ petition is dismissed

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