The Gujarat high court has brought lightning news for all the exporter after scratching the deep down legitimacy of a provision under the goods and services tax (GST) that restrains the use of advance authorisation licenses. These licenses designate the exporters to import goods at 0% tax for further exports.
“This is a big relief for the exporters as the condition was creating huge problems and was difficult to comply in various cases,” Abhishek Rastogi, counsel for petitioners and partner at Khaitan & Co., added
Legal practitioners justified their decision of forwarding the appeal to other courts as well by showcasing their consent with what Rastogi said. “We will use the Gujarat high court judgement to bolster our arguments in these courts,”
Court has come to the conclusion based on these two legal principles :
- The Principle of arbitrariness
- The principle of void for vagueness
The principle of void for vagueness makes the law inoperative in the absence of clarity.
Prior, to the applicability of such licenses, was condensed by the government, based on the pre-import condition which states that exporter is authenticated to operate these licenses only for those tons of exports for which imports are made and not thereupon while Pre-GST tax regime did not stand any such pre-import condition.
The pre-import condition was effective from October 13, 2017, and was rigorously followed the directorate of revenue intelligence (DRI) and strict attentions were taken against exporters, who took advantage of these licenses without importing any goods, by issuing them notices
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Rastogi said, “The high court has struck down the condition as arbitrary, ultra vires and violative of the Constitution.”
After witnessing the boosting decision of Gujarat high court, hopes of betterment have risen as the appeals were also registered at Punjab and Haryana high court, Madras high court, Odisha high court among others, after witnessing the boosting decision of Gujarat high court.
The Centre lifted the conditions from the perspective effect or from January 10, 2019, onwards.
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