Various facets of simultaneous power in Article 246A

27-10-2020 Manish Sachdeva

Indian polity forced India to adopt the dual GST model where both the Centre and the State would collectively levy and collect GST. Before the insertion of Article 246A in the Constitution of India (COI), both the Parliament (P) and Legislature of the States (SLs) possessed independent powers to levy and collect taxes on different mutually exclusive aspects. Both the functionaries’ tried to maintain respectable distance with the legislative field belonging to the other. The conflicts, if any are dealt as follows;

  • Where the legislation is in [pith and] substance within the competence of the respective legislator, the statute survives, even when it incidentally encroaches upon the subject reserved for the other legislator [effect of Article 246 (1), (2) and (3)]
  • Where a part of the otherwise valid statute, is in conflict because of incidental encroachment towards the other’s legislator’s competency[1], that part of the statute is repugnant and therefore void [effect of Article 254 (1)]

In line with the accepted dual-model of channelizing GST in India, it was decided via Article 246A (1) to grant simultaneous powers to both the P and the SL to make laws “with respect to goods and services tax”, therefore dislodging the above dis-qualifications of Article 246. Further (apparently) Article 254 was itself made derogatory to Article 246A, to curb the effect of the repugnancy on the laws made with respect to goods and services tax.

The apparent consequential effect, therefore, means that both P and SL can make laws on the same subject viz. GST. Seemingly therefore Section 9 of the CGST Act and Section 9 of the SGST Act survive the litmus test. But Article 246A open flood gates for other hosts of provisions to be test constitutionally. Does the simultaneous power hold water qua other provisions of the SGST Act also? Whether number of punishment provisions for offences committed under the SGST Act’s that are linguistically same as that provided in the CGST Act puts a person under double jeopardy? This piece attempts to highlight few of the provisions where Article 246A may play a big role.


1. Scope of ‘with respect to’ in Article 246A

Article 246A (1) states say that both P and SL have the powers to make laws “with respect to” GST [on intra-state supplies[2]]. The age-old jurisprudence hints that the power to make laws with respect to [WRT] a subjected tax inter alia includes powers to make incidental provisions to enable the collection of the tax, however it important to decipher if WRT is broad enough to include the power to make an arrest or impose penalty with respect to GST offence(s) or if such drastic measures[3] are not couched by it.


Pith and Substance test

The phrase WRT may have been borrowed from Article 246 (1), wherein the pith and substance test (P&S) is employed to examine the competency of the legislator. P&S means if a statute by the substance or by its true nature and characteristics is within the competence of a legislator, then the statute can be said to be ‘with respect to’ one or more entries available with that legislator, and therefore valid.

In that sense if the SGST Act in true nature and characteristics concerns with GST then SGST Act per se is within the competence of the SL under Article 246A i.e. the provisions relating to offences/ penalties in the SGST Act can be traced to Article 246A. This would in turn mean that both P and SL can make simultaneous provisions relating to offences concerning GST and in that regard, all offence related provisions of SGST Act be constitutionally saved by the special features of Article 246A.


Non applicability of P&S

While the P&S theory may have general consensus, but the following arguments create some doubts in the above exposition. There is an underlying presumption vis-à-vis Article 246 that fields of legislation in respective entries are mutually exclusive leading very less room for conflicting entries qua main subjects. However, Article 246A seeks to create an altogether different source which itself provides for simultaneous legislation(s). P&S resolves the conflict when the subject matter is questioned on exclusive competency of two legislators, but when main is already available to both the legislators, the P&S test would always lead to the validity of the statute. It would not be an exaggeration to say that pith and substance test is brought to its knees by Article 246A.


Offences, separate from taxes

An argument has been taken before the Hon’ble P&H HC in Tarun Bassi case that provisions relating to arrests and prosecution are substantive laws and they should not be traced to Article 246A. The petitioner had contended that power to make laws on subjects is separate power from power to make laws on offences relating to such subjects, taking illustrations from following provisions in the COI;

  • Entry 93 of List I and Entry 64 of List II are specific power for offences relating to other parts of the respective list, therefore taxation entry under the respective lists do not give powers to make provisions for offences
  • Similarly, the power to make law with respect to incidental matters is separately listed from the power to make specific laws in Article 323-B and
  • Other examples taking cues from Article 35 and Article 369

Finding force in arguments, the Court has issued notice for motion. For all of the underlying weakness of the proposed challenge[4], if for argument sake it is accepted that power is not traceable to Article 246A (but traceable to Article 246), then powers relating to offences under GST would be deprived of special features of Article 246A. Consequently, the duplicate powers under the SGST would be liable to be read repugnant under Article 254 (1).


Perhaps, it would be prudent to accept that WRT in Article 246A is of wide coverage to include incidental matters in as much as such incidental matters would enable the proper collection of such GST, but with Courts, we never know.


2. Reading down Article 246A on double jeopardy

The above expositions indicate that WRT is large enough to include all incidental matters related to GST within its ambit, however, such simultaneous exercise of power by the P and SL, with respect to prosecution provisions, could potentially be violative of double jeopardy prohibition under Article 20. It would be worthwhile to have a side by side look at Section 132 of the CGST Act and (pick any) SGST Act;


Haryana GST Act

132. (1) Whoever commits ….. shall be punishable with – (i) in cases where the amount of tax evaded ….. exceeds five hundred rupees, with imprisonment for a term which may extend to five years with fine;


Explanation.— For the purposes of this section, the term “tax” shall include the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or refund wrongly taken under the provisions of this Act, the State Goods and Services Tax Act, the Integrated Goods and Services Tax Act or the Union Territory Goods and Services Tax Act and cess levied under the Goods and Services Tax (Compensation to States) Act.

132. (1) Whoever commits ….. shall be punishable with – (i) in cases where the amount of tax evaded ….. exceeds five hundred rupees, with imprisonment for a term which may extend to five years with fine;


For the purposes of this section, the term “tax” shall include the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or refund wrongly taken under the provisions of this Act, the Central Goods and Services Tax Act, 2017 the Integrated Goods and Services Tax Act, 2017 and cess levied under the Goods and Services Tax (Compensation to States) Act, 2017.


While it is permissible to have separate penal provisions with respect to different ingredients of one offence, but it’s quite obnoxious to first club the threshold of offence and then basis such same clubbed threshold, punishment is thrown twice under two different statute. This dual jeopardy clearly violates Article 20 (2) of the COI.

The discussion might just be academic, in as much as Centre and State functionaries are unlikely to launch prosecution twice [let alone once[5]] under both Section 132 of the CGST and SGST Act. Nonetheless, the comparative look at the corresponding provisions under the both CGST Act and SGST Act reveals that, one single offence [Section 132 (1) r.w. Explanation at the end], is being made punishable twice under two statute, and therefore potentially leading to reading down of one of the statute.


Prosecuted criminal offences

It’s worthwhile to peruse Section 47 (1), the source of late fees for filing monthly/ quarterly returns;


Haryana GST Act

47. (1) Any registered person who fails to furnish the details of outward or inward supplies required under section 37 or section 38 or returns required under section 39 or section 45 by the due date shall pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum amount of five thousand rupees.

47. (1) Any registered person who fails to furnish the details of outward or inward supplies required under section 37 or section 38 or returns required under section 39 or section 45 by the due date shall pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum amount of five thousand rupees.


An interesting way to look at Article 20 (2) is to see if apart from Section 132, whether other provisions under both the CGST Act and SGST that provides for punishment [e.g. late fees, the residuary penalty] for offences could also be found fall of double jeopardy?

The jurisprudence on Article 20 (2) indicates that the expression “prosecuted and punished” should not be read disjunctively, so much so that punishment must have been the outcome of successful prosecution. The prosecution for that matter is understood as a criminal breach, leading to an inference that breaches that are envisaged under Section 47 (1) of the CGST Act and SGST Act are not at all within the circumference of Article 20 (2).

Article 20 (2) is based on the common law doctrine of autrefois convict but with a variation that only criminal breaches are covered, in UOI vs Purushottam at para 12, the Apex Court observed that although trial before a court of law or judicial tribunal is not to be found in Article 20(2), considering the whole background[6] and the words used in Article 20 viz. convicted, commission of the act charged as an offence, be subjected to a penalty, "commission of the offence, prosecuted, and punished, accused of any offence indicates that the proceedings therein contemplated are of the nature of criminal proceedings before a court of law or a judicial tribunal and the prosecution in this context would mean an initiation or starting of proceedings of a criminal nature before a court of law or a judicial tribunal in accordance with the procedure prescribed in the statute which creates the offence and regulates the procedure. Having said that riding on Article 20 (2) to rule the un-constitutionality might just be too radical for any Court.

Nonetheless, simultaneous operation of two penalties for same offence brutally violates the common law doctrine of Nimo Bis Debet Puniri pro Uno Delicto. Put it this way, if the government can provide for punishment for a civil offence twice, what stops the government from punishing the same offence thrice [or multiple times]. This whole idea jolts the proportionality principle at its core. If not for unconstitutionality, certainly SGST provisions [for sheer doubling the offence] should at least be read down for them being inappropriate.


3. Assuming cross-sectional powers Article 246A

It’s quite easy for the executive functionaries to cross empower themselves by issuing executive orders/ notifications/ notices etc. It is true that both P and SL have powers to make laws with respect to GST, but should not that powers to be within their respective domain? Whether Article 246A is wide enough for both of them to legislate for each other?

The historic Central Sales Tax (CST) was levied under an act made by P [Central Sales Tax, 1956 (CST Act)], but the power to collect, assess, penalize etc. were all devolved by the Parliament to appropriate State by virtue of Section 9 of the CST Act. On the basis of such devolution, the SLs in their respective Sales Tax/ VAT enactments provided necessary provision for collection, assessment of the tax dues under the CST Act[7]. This devolution and assumption theory of empowerment enabled State’s executives to issues orders for the collection of CST, provide for appellate mechanism qua CST etc. Important to note that had Section 9 of CST Act was not there would State executives be competent to collect CST by virtue of necessary provisions under their own banner? Perhaps not.

Putting the above analogy on the plank on some of the provisions in the CGST Act (and SGST Act), the constitutional impediment becomes very apparent. E.g.

  • Explanation to Section 132 of the CGST Act includes SGST tax into the threshold of launching prosecution under the CGST Act. If P is competent to provide for an offence related to breach under the SGST Act.
  • Section 107 (2) enables the Central designated proper officer to file an appeal to Appellate Authority against an order having a default of SGST tax[8]. The catch here is that the Appellate Authority under Section 107 of the CGST Act assumes jurisdiction qua the SGST tax without the SGST Act devolving such jurisdiction to such authority [and vice versa].
  • In Notification No. 76/2018-CT, the 1st proviso thereof waives late fees for delayed furnishing of Form GSTR-3B in case central tax payable is “Nil”. The ironical part is that this time while CG has bound its power to waive under Section 128 only on the basis of CGST tax, the GSTN played the devil when it still continued to impose late fees of the CGST Act even if central tax payable was Nil. Wonder how much illegal late fees is still possessed by the GSTN [PIL anyone?]. Think of the future when CG would retrospectively retrospective amend this notification.

Article 246A empowers both P and SL to make laws with respect to GST, however, does it authorize to make cross-sectional laws? Making cross-sectional laws in any form of government implies a foreign government making laws for the territory of India. On one hypothesis it can be said that threshold under Explanation to Section 132 can be provided by any means by the P, however, think of a situation, P making laws to penalize an India citizen who has committed theft in a foreign jurisdiction and the amount of theft is considered an offence under the Parliament made law, absurd!


4. Mutual exclusivity between Article 246 and Article 246A

The 101st CAA apart from inserting Article 246A also deleted/ curtailed the scope of certain entries in the Seventh Schedule also. Entry 54 of List II in Seventh Schedule, after amendment, provides for levy of sales tax only on 5 petroleum products. An interesting argument is if the State can levy sales tax on all other goods in the guise of its power under Article 246A?

Article 246A (1) uses the expressions “goods and services tax”, and for some convenience sake or otherwise the expression stands defined in Article 366 (12A) as “any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption”. From a conjoint reading of both, it appears that Article 246A is actually a power to levy tax on supply of goods or services, with GST being only reference expression.

If supply is understood as including event of a sale, then, of course, SLs would have the power to levy sales tax under Article 246A. But, isn’t the power to tax [sale] is already being exercised by virtue of the power to tax the supply under the SGST Act? If the Constitution permits a legislator to enact two different statutes basing same power, perhaps yes, because that’s the reason why Medicinal and Toilet Preparations Act, 1955 survived [along with many of its kind] despite imposing simultaneous duty of excise in addition to regular excise duty on M&T preparations[9].

It’s important to refer to Hon’ble Gujarat High Court judgment in Reliance Industries Limited, where it was (logically) observed that power under Article 246A cannot be fragmented to impose power to impose tax on the sale of goods. Leading to an inference that although Article 246A not-with-stands with Article 246, however both the articles to a very large extent are mutually exclusive. The Court was writing an alternative argument for defusing the absurd liability created under the GVAT Amendment Act, so we have to be cautious before taking the judgment for definite word.

The High Court also read constitutional limitations on the State’s power to impose tax under Article 246A viz. implied restrictions flowing from Article 246A (2), 269A, 279, 286, which gives an impression about the marginal value of State’s autonomy. If the State’s rights are indeed sub-standard, it also opens a big question, if at all Article 246A (1) if felt to be read down (for one or other reason) would it be to the advantage of the Centre? The author is short of any credible answer to this question.



Article 246A is undoubtedly the most important provision as far as the very the foundation the GST in India. The simultaneous power seems to have some conflict with the well settled principles of the past. It attempts to resolve the competency conflicts between the legislative bodies, but incidentally, give rise to cross-sectional conflicts. Perhaps, the correct way to go about Article 246A (or for that matter the entire 101st CAA) is to see what we wanted to gain and what we gained. If, Article 246A creates absurdities which were never envisaged (double jeopardy, cross-sectional powers), an interpretation that avoids such flaws should be upheld. Adiós.


[1] Further cases concerning P’s supremacy over SL, the conflicting provisions of SL’s law are repugnant

[2] See generally, Reliance Industries 2020-TIOL-GUJ, para 76.15

[3] Tarun Bassi vs State of Punjab CWP No. 8004 of 2020 (O&M) - P&H High Court

[4] This hypothesis in isolation is again just too weak. Assuming, Article 246A does not capture the powers to make laws on incidental matters relating to GST, then also absurd it would be absurd to say that no power at all exists with P and SL to make such laws in as much as Article 246 is always available with both CG and SG. With that in mind, it would equally absurd to trace powers relating incidental matters in the Seventh Schedule. Therefore this creates a catch-22, and such situations are [never ever] envisaged by COI.

[5] As per an RTI filed with CBIC, as of date no prosecution has been launched under Section 132

[6] The roots of that principle are to be found in the well-established rule of the common law of England "that where a person has been convicted of an offence by a court of competent jurisdiction the conviction is a bar to all further criminal proceedings for the same offence". (Per Charles, J. in Reg v. Miles). To the same effect is the ancient maxim "Nimo Bis Debet Puniri pro Uno Delicto"

[7] Section 9 essentially puts in place the financial assignment of funds as envisaged under Article 269. But hold on, Article 269 is binds Centre’s power to assign a specific tax but does in no way restricts assignment of any other tax to the respective States. Even if Article 269 is not there, P can assign any taxes to any State, subject to other constitutional provisions

[8] The positivists may argue that Section 6 of the SGST Act cross empowers the CGST designated proper officers, but Section 6 only cross empowers “proper officers”, and the Appellate Authority is not appointed as any officer under the SGST Act but is appointed separately as Appellate Authority under Section 107 of the SGST Act, further proper officer by its definition [Section 2 (91)] do not include Appellate Authority.

[9] And we are not even talking about the regular Cess route here