Supreme Court notice on Kerala GST law permitting levy of tax under repealed VAT regime

The Supreme Court has sought response from commercial tax authorities in a petition challenging the legality of provisions in the Kerala Goods and Services Tax (GST) law which allows assessment, levy and collection of tax under the repealed Value Added Tax (VAT) regime.

A Bench of Justices S. Ravindra Bhat and Dipankar Datta recently protected traders, including the lead petitioner, T.S. Belaraman, represented by advocate S. Mahesh Sahasranaman, who were affected by the levy of tax under the VAT system, which was replaced by GST.

Advocates Arjun Garg, Aakash Nandolia and Sagun Srivastava also appeared for the petitioner.

Mr. Sahasranaman submitted that small traders and enterprises had suffered immensely during the pandemic and they should be allowed to get back on their feet rather than being pulled down by oppressive tax laws. He said the issue was of considerable constitutional importance and concerned the fundamental right to life and livelihood.

The special leave petition was filed in the top court against a November 30, 2022 judgment of the Kerala High Court in a batch of petitions which had challenged the constitutional validity of the Kerala GST Act.

The High Court had dismissed the petitioners’ arguments against the continued use of a ‘saving’ clause in the State GST Act to levy, collect and assess tax under the repealed VAT law. The High Court said the State had sufficient legislative powers to engraft the ‘saving clause’ into the Kerala GST Act.