Govt.’s move to get taxation laws amendment Ordinance promulgated raises questions of propriety

The Kerala government’s move to push the Kerala Taxation Laws Amendment 2024 Ordinance, at a time when the next session of the Assembly has been announced, has triggered questions about the propriety of the decision.

The State has approached the Governor to promulgate the Ordinance to amend the Kerala Finance Act 2008, Kerala Finance Act 2024, and the Kerala State Goods and Services Tax Act 2017.

While the first two Acts deal with amnesty schemes for traders who have defaulted on payment of taxes, the third one intends to introduce penal provisions for traders who fail to follow mandatory registration procedures for some businesses.

The Central government had introduced amendments to the GST Act earlier this year making the penal provisions enforceable from October 1, 2024. It had also asked the States to bring in corresponding amendments to the State laws from the cut-off date.

“It would be impossible to introduce the amendments before the October 1 deadline through the regular legislative process. It may take at least two weeks for an amendment Bill to be passed by the Assembly through the regular legislative process. Hence, the decision to go for an Ordinance,” Law Minister P. Rajeeve said.

Incidentally, the next session of the Assembly has been slated to begin on October 4.

Mr. Rajeeve contended that there was no impropriety in introducing the Ordinance though the schedule for the Assembly session had been announced.

“The government has to go for the Ordinance to make the penal provisions enforceable from October 1 as it cannot pass any legislation on any subsequent dates and give retrospective effect to the penal provisions. There is a Constitutional bar on giving retrospective effect to penal laws,” Mr. Rajeeve said.

A legal deadlock may arise if the Governor denies permission for the Ordinance. In the event of the governor clearing the ordinance, the State will have to get the bill passed in the ensuing session itself. If not successful in passing the bill in the current session, the government will have to re-promulgate the ordinance on the 42 day of the commencement of the present session, legal sources said.