The Calcutta High Court today refused to stay the introduction of value-added tax (VAT) from April 1 on a petition by former West Bengal Finance Minister Ashoke Mitra. |
Refusing to pass any interim stay at this stage, a Division Bench comprising Chief Justice VS Sirpurkar and Justice Ashoke Ganguly also said it would consider the question of maintainability of the petition when the matter would come up for hearing after 8 weeks. |
The court directed all the parties in the case to file affidavits before the next date of hearing. |
Mitra, in his petition, said that VAT should be declared ultra vires of the Constitution. |
Claiming that VAT was not within legislative competence of the state, Mitra said without a constitutional amendment, the state's right to impose sales tax could not be replaced by VAT |
Mitra, who held the finance portfolio in Jyoti Basu's government, had earlier criticised VAT and said its implementation replacing sales tax would seriously affect the state's economic health. |
Ironically, West Bengal's current Finance Minister Asim Dasgupta has been the strongest advocate for the introduction of VAT across the country and has been made chairman of the empowered committee of state finance ministers on VAT by the Centre. |
Meanwhile, traders closed down business today in several states to protest against VAT with wholesale trade being virtually paralysed across the country. |
The empowered committee campaigning for VAT, however, appealed to traders to call off the three-day bandh. |
Reports reaching from various parts of the country revealed that wholesale trading was virtually paralysed on the first day of the strike although it evoked a mixed reaction among retailers, many of whom made brisk business. |
The bandh badly affected trade in Uttar Pradesh, Kerala, Madhya Pradesh, Maharashtra, Himachal Pradesh, Andhra Pradesh, Jharkhand and Jammu & Kashmir. |
The strike evoked mixed response in Delhi, Bihar, Assam, Orissa and Punjab. Traders in Tripura and Karnataka will go on strike tomorrow while there was no response in Tamil Nadu, Haryana, Goa and Meghalaya. |
Later in the day, Dasgupta appealed to traders for calling off the strike and sought to allay fears that VAT would lead to rise in prices of essential items. |
He also said foodgrains, vegetables and sweets will be out of the VAT net while medicines would attract a nominal tax rate. |
So far, 21 states and all Union Territories are ready to implement VAT from the next month as Uttar Pradesh, Tamil Nadu, Meghalaya and 5 BJP-ruled states are reluctant to join the league. |
"The strike, which was peaceful so far, would be an eye-opener for the Centre and states to roll back the decision on VAT," Confederation of All India Traders General Secretary Praveen Khandelwal said. |