In Brief
Industrial units in backward areas of Maharashtra challenged the constitutional validity of the Maharashtra Value Added Tax (Amendment and Validation) Act 2009, which retrospectively restricted their VAT exemption benefits to a proportionate share of production rather than the entire turnover. The High Court upheld the amendment. The Supreme Court affirmed, holding that the legislature has plenary power to enact retrospective fiscal legislation. The amendment was not a fresh levy but a cure of the State's defective implementation of an existing legislative intent to grant proportionate incentives. The Court rejected arguments that retrospective operation was arbitrary or violated fundamental rights, finding the legislative mandate clear from the statutory text and Objects and Reasons since 2001.
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