Thread by @barandbench

Constitution Bench led by Justice Indira Banerjee hearing matter relating to the validity of the 1st and 3rd Schedules of the Delhi Sales Tax Act, 1975. #SupremeCourt to decide whether exceptions can be provided for tax exemption provisions in sales tax laws.

Advocate for the Petitioner: Need to determine if such exemptions can be general or through a specific notification.

SC: We're asking was there any notification.

Adv: It was in the scheme of the Act itself, the Delhi one not UP. Act says declared goods, doesn't exempt gutka.

SC: for the purpose of argument of law, your question would be whether your goods are exempt or not? We'll assume it was.

Adv for respondents: issue before the HCs was how do you construe the expression gutka and pan masala, as to whether it would constitute tobacco or not.

Adv for respondents: Because they didn't have excise and were not considered tobacco in common parlance, States started imposing sales tax.

Adv for respondents: Then in central excise act, pan masala was classified as under 24 of the statute.

Adv: HC orders were prior to the Amendments.

Adv for Petitioners Raja Ram Aggarwal: These merits will be decided by regular Bench, answer the reference.

Justice Gupta remarks that One question is if States can impose two levies.

[ASG N Venkataraman is the counsel for the respondents, appearing for the Union govt.]

Bench notes it is not going to determine if chewing-tobacco products are tobacco.

ASG: My friend is attempting to claim that even prior to 11.5.2001, pan masala is tobacco. The reason is, when the 3 judgments came in a referral order they held so. Statute didn't deem it tobacco

SC: Prima facie there looks to be no conflict between the two orders.

Aggarwal: I would differ. Third schedule LG is empowered to include any good for tax free status. Here issue is whether exemption could have been withdrawn by putting in first schedule without amendment.

SC: Power of exemption and power of levy should be with State government?

Adv: Yes

SC: But that is not the issue in this case. Has this Court decided if pan masala is tobacco?

Aggarwal: Question of common parlance was laid before tribunal, whose finding was placed before...

Aggarwal: the regular bench.

SC: That will be heard, but is there a conflict at present?

Aggarwal: Power to tax and exempt were under the States and the same legislative competence in all these cases my lords.

SC: Can it include something i. The Central excise and salt act?

Counsel: it can.

ASG: But bar is on AED (additional excise duty). It'll be taxed only at manufacturing stage where understanding is Sales won't impose further sales tax.

ASG: After 11.5.2001 it was held to be part of the tobacco family.

SC: Then judgment in Radhe Shyam needs clarity then? Rest of the issues are academic.

ASG: Ld friend said it was entry by incorporation but it's entry by reference only.

Aggarwal: We are on the power and the method of exemptions, otherwise it may go before regular bench if my lords don't find a conflict. Because that is not the reference here and i haven't argued on merits.

Bench: Yes that's our prima facie view.

Bench discusses.

Justice Banerjee: There does not appear to be conflict.

Aggarwal: Then my lords may send it back, to determine whether pan masala and gutka can be exempt.

SC: What about second condition?

Aggarwal smiles: But to override 5-judge decision, a larger Bench with more than 5..

Aggarwal: judges in majority opinion has to be there.

SC: So say to overturn Kesavananda Bharti ? (Smiles)

Aggarwal: Will need 14 judge majority opinion.

Justice Gupta: We can say that question of incorporation or reference can also be raised before the regular Bench.

ASG: Lordships may kindly see one submission.

#SupremeCourt #CourtroomExchange

As Bench takes time to find the relevant page

SC: This convenience compilation is inconvenient (laughs).

SC notes ASG's concern that Bench should clarify that gudaku and gutka are different.

SC: Who's opposing the same?

Adv: Schedule and orders don't distinguish.

ASG: Gutka is betel nut, gudaku already under AED.

Sr Adv Gopal Sankaranarayanan makes the point that the argument of reference to a larger bench with a majority larger than that of the order under challenge should be buried.

SC: orders reserved.