Summary
The retrospective Maharashtra VAT amendment restricting expansion-unit incentives proportionately was upheld. It cured the missing statutory machinery for an already expressed legislative restriction, rather than merely declaring earlier judgments ineffective. Inability to recover the resulting tax from customers did not itself defeat legislative competence or establish the asserted entitlement to full-turnover exemption.
Issues
- Whether the retrospective proportional-incentive amendment validly cured the earlier defect.
- Whether inability to pass on tax invalidated the amendment.
Provisions considered
- Sections 93 and 93A, as amended in 2009, Maharashtra Value Added Tax Act, 2002The amendment supplied the statutory proportional-benefit machinery with retrospective effect from April 1, 2005. (¶¶ 8–11, 22–27)
- Section 5, Maharashtra Value Added Tax (Levy, Amendment and Validation) Act, 2009Validation operated by curing the legal foundation of the prior invalidity, subject to the stated statutory safeguards. (¶¶ 10, 26–34)
Held
- The prior enactments already mandated proportional incentives, but the executive had attempted implementation by administrative circular instead of prescribed rules. Retrospective statutory amendment removed that underlying defect; it did not directly overrule a judgment by declaration alone. (¶ 22–34)
- The claimed practical inability to pass tax to customers lacked the necessary factual foundation here and, in any event, the legislative power to levy or validate sales tax was not conditional on such recovery. Constitutional limitations still governed that power. (¶ 35–38)
Result
Appeals dismissed with costs; High Court judgment upholding the retrospective amendment affirmed.