2025-VIL-1201-BOM
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VAT High Court Cases

Goa Value Added Tax Act, 2005 - Validity of Rule 3 of the Green Cess Rules - Green Cess Act, Reassessment, Reasons to believe - Notices under the Goa Cess on Products and Substances Causing Pollution (Green Cess) Act, 2013 proposing to reassess the petitioners for past assessment years and demanding payment of Green Cess - Petitioners challenged the show cause notices on the grounds that they are merely service providers at the port and do not import or bring the goods causing pollution into the state, and hence cannot be subjected to the Green Cess; and that the power of reassessment is being exercised without any "reasons to believe" and is time-barred - Whether the petitioners, being mere service providers at the port and not the importers/owners of the goods causing pollution, can be subjected to the levy of Green Cess – HELD - The charging Section 4 of the Green Cess Act imposes the cess on "every person carrying out" the activities of handling, utilization, consumption, combustion, transportation or movement of the specified products/substances causing pollution. However, Rule 3(1) of the Rules clearly casts the liability to pay Green Cess on "every person who brings or causes to be brought within the State any product and/or substance at the entry point". The petitioners, being merely service providers at the port and not the importers or owners of the goods causing pollution, do not fall within the ambit of Rule 3(1) and hence cannot be subjected to the Green Cess – Further, the impugned show cause notices for reassessment are invalid as they do not fulfil the jurisdictional pre-condition of communicating the "reasons to believe" that the petitioners' turnover has escaped assessment. The power of reassessment under Section 31 of the GVAT Act, 2005, made applicable to the Green Cess proceedings, can only be exercised if the assessing authority has "reasons to believe" about the escapement of assessment. Mere change of opinion by the authority is not a valid ground to reopen the concluded assessments, and the show cause notices do not disclose any tangible material or grounds for the "reasons to believe". Therefore, the reassessment proceedings initiated through the impugned show cause notices are arbitrary and without jurisdiction - the impugned show cause notices are quashed and set aside, as they are not the persons liable to pay the Green Cess under the Act and Rules. However, the challenge to the validity of Rule 3 of the Green Cess Rules was dismissed – The writ petitions are partly allowed - Whether the delegation of power to the executive under Section 4(2) of the Green Cess Act to frame rules for assessment, levy and collection of cess is excessive and ultra vires the Act – HELD - The delegation of power under Section 4(2) of the Green Cess Act to the executive to frame rules for assessment, levy and collection of cess is not excessive or ultra vires the Act. The Act has provided the basic legislative policy and framework by prescribing the nature of activities on which the cess is to be levied, the maximum rate of cess, and has left the procedural aspects to be dealt with by the Rules. The Rules framed under Section 4(2) have provided the detailed mechanism for assessment, payment, filing of returns etc. by the persons liable to pay the cess. As long as the Rules do not contradict or go beyond the statutory provisions, the delegation of procedural aspects to the executive is permissible and does not suffer from the vice of excessive delegation.
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