Top News Headlines 12th Jan 2022: Article 246 and 246A can be exercised simultaneously

Article 246 and 246A can be exercised simultaneously: Karnataka HC while upholding CGST and Central Excise Duty On Tobacco

• In the case of M/s V.S.Products vs. Union of India, the Hon’ble Karnataka HC has upheld the notification dated July 6,2019 issued by the GOI by which central excise duty has been levied on tobacco and tobacco products.
• The petitioners in this case had sought for setting aside the aforesaid notification and for a declaration that the Repeal and Saving clause as contained in section 174 of the Central Goods and Services Act in so far as it seeks to save the operation of the Central Excise Act to be unconstitutional.
• The petitioner also sought for a declaration that section 136 of the Finance Act under which there is levy and collection of the National Calamity Contingent Duty as unconstitutional.
• It was argued that Article 246A is a sui generis power exhaustive of all taxes and on all facets of supply of goods including tobacco and its products. It overrides the taxing power of the legislature conferred by article 246 in view of the non-obstante clause in article 246.
• The Court noted that the effect of the introduction of Article 246A is the conferment of the power of simultaneous levy of Goods and Services Tax. The use of the word ‘notwithstanding’ does not have the effect of abrogation of the power mentioned under Article 246.
• The Court also observed that the words ‘notwithstanding anything contained in Article 246’ merely clarifies that in spite of the power under Article 246, the power under Article 246A could be exercised and the former would not act as an impediment to the operation of the latter.
• The Court also observed that the Legislature enjoys a wide array of powers to decide on the various methods of revenue generation.
• The Court also rejected the contention of the petitioners that surcharge cannot be levied under Article 271 as regards goods included in Article 246A as a plain reading of Article 271 provides that a surcharge can be levied at any time to increase taxes. The Court also noted that the surcharge being levied by way of the Finance Act has nothing to do with the surcharge on GST.
• The Court also held that the levy of excise duty and NCCD is not violative of Article 14. It was also observed that the choice of goods cannot, in themselves, be a ground for judicial review. Something more has to be brought on record for the same, for instance, hostile discrimination or singling out a particlar category of goods.
• The Court also observed that the choice of the category of goods, like in the present case, can be to discourage consumption, and is hence, non-arbitrary.

Private Medical Colleges Collecting Advance Fees Before Completion Of Current Academic Year ‘Profiteering’: Kerala HC

• A Division Bench of Kerala HC, in the case of Sanju Simon and ors. vs. State of Kerala and ors. has held that collection of fees from medical students for the next academic year while the current one is still going on amounts to profiteering.
• In the instant case, a bunch of petitions were filed before the Court by students of various private medical colleges alleging that the medical colleges were demanding fees for the third year of the course while they were still in their second year.
• By doing the same, the appellants contended that they were collecting fees in advance which was not permissible under law. The respondents, on the other hand, contended that it was the third calendar year since the students’ admission and hence they were entitled to collect the same.
• After hearing the contentions of both the parties, the Court observed that the Covid-19 pandemic had undoubtedly disrupted the lives of everyone around the globe. In its wake, even if the months in the calendar year passed, no education was imparted to the students.
• This led to a situation wherein the petitioners were called upon to remit the fee payable for third year when they were effectively still pursuing their second year. Reliance was placed by the Court on the decision of the Apex Court in the case of Islamic Academy of Education and anr. vs State of Karnataka and ors. wherein it was held that the institutions shall charge fees for only one year in accordance with the rules and not for the entire year.
• The Bench, therefore, noted that educational institutions are wholly unjustified in collecting any amount towards fees for a longer period than the year in question.
• The Court also took note of the fact that fees, as a concept, meant the collection of remuneration for the services already rendered. The Court, in this light, observed that the collection of any fees for the academic year of which educational service has not yet been departed would amount to profiteering as it would be for services not yet rendered.
• Thus, the appeal was allowed and the medical colleges were refrained from collecting fees for any year for which education had not yet been departed.

Maintenance: Effective Date Is The Date Of Application And Not Date Of Judgment- Jharkhand HC

• In the case of Rinki Kumari @ Anita Kumari vs. Kundan Kumar @ Kundan Kumar Singh, the Hon’ble Jharkhand HC has held that the effective date for the grant of maintenance would be the date on which the application was filed and not the date the judgement was pronounced.
• The matter arose from a revisional application against the order of the Family Court Judge wherein it had allowed the petitioner’s application and had directed the respondent to pay a monthly allowance of Rs. 1500 from the date of the judgement.
• The HC refused to adjudicate upon the quantum of maintenance but did undertake the issue of the effective date of the grant of maintenance.
• Reference was made to the decision of the Hon’ble SC in the case of Rajnesh vs. Neha (passed on 4 November, 2020) where the Court had held that the maintenance is to be granted from the date of the filing of application in the concerned Court. The reason accorded to this observation was that the duration for which the proceedings would remain pending in the court was not within the control of the petitioner.
• Thus, relying on the aforesaid judgment, the Hon’ble HC modified the order of payment of maintenance and directed the payment of monthly allowance from the date of filing of the application.