TEAM CODE ‘40’

II JLU MOOT COURT COMPETITION 2018

BEFORE
THE HONOURABLE SUPREME COURT OF EUTOPIA

(UNDER ARTICLE 131 OF THE CONSTITUTION EUTOPIA)

ASSOCIATION OF TRADERS AND OTHERS ………….………………PETITIONER

VERSUS

UNION OF EUTOPIA………………………………………………………RESPONDENT

MEMORANDUM ON BEHALF OF THE PETITIONER

 Memorandum On Behalf Of The Petitioner

TABLE OF CONTENTS
LIST OF ABBREVIATION………………………………………………………...3
INDEX OF AUTHORITIES………………………………………………………..4
STATEMENT OF JURISDICTION……………………………………………….5
STATEMENT OF FACTS……………………………………………………….6 -7
STATEMENT OF ISSUES………………………………………………………….8
SUMMARY OF ARGUMENTS…………………………………………………9-10
ARGUMENTS ADVANCED……………………………………………...……11-26

1. WHETHER EXEMPTION OF CERTAIN GOODS OUT OF THE PURVIEW

OF GST IS GROUNDED ON SOME REASONABLE CLASSIFICATION OR IS
ARBITRARY IN NATURE AND THEREFORE
UNCONSTITUTIONAL?.........................................................................11-15

1.1 Exemption of certain out of the good out of the purview of gst is not grounded on
some reasonable classification.
1.2 Exemption of certain out of the good out of the purview of gst is arbitrary in nature
and therefore unconstitutional.

2. WHETHER GST ACT PAVES WAY FOR EXCESSIVE DELEGATION OF

POWER & IS THEREFORE UNCONSTITUTIONAL?......................15-23

3. WHETHER CONSTITUTION (ONE HUNDRED AND FIRST AMENDMENT)

ACT, 2017 IS AGAINST THE FEDERAL SETUP OF THE EUTOPIA AND IS
THEREFORE UNCONSTITUTIONAL?...............................................23-26

3.1 It Is Against Federal Set Up.

3.2 It Is Unconstitutional.

PRAYER………………………………………………………………….27

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 Memorandum On Behalf Of The Petitioner

LIST OF ABBREVIATIONS

1. AIR ALL INDIA REPORTER

2. AC APPELLATE CASES

3. ALL ER ALL ENGLAND LAW REPORTS

4. AP ANDHRA PRADESH

5. CLR COMMON WEALTH LAW REPORTS

6. EDN. EDITION

7. L.R. LAW REPORT

8. Q.B. QUEEN’S BENCH

9. K.B. KING’S BENCH

10. KER KERALA

11. CO. COMPANY

12. ER ENGLAND REPORTER

13. SC SUPREME COURT

14. SCC SUPREME COURT CASES

15. UKHL UNITED KINGDOM HOUSE OF LORDS

16. V VERSUS

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 Memorandum On Behalf Of The Petitioner

INDEX OF AUTHORITIES

TABLE OF CASES
LIST OF CASES

1. UGAR SUGAR WORKS LTD V. DELHI ADMINISTRATION, AIR (2001) SC 1447.

2. R.K. GARG V. UNION OF INDIA, AIR (1981) 4SCC 675, 689-90.
3. RANI RAJ RAJESHWARI DEVI V. THE STATE OF U.P. AND ORS. (ALLHC)
4. PAPNASAM LABOUR UNION V. MADURA COATS LTD AND ANR. MANU/SC/0567.
5. STATE OF MADRAS V. V. G. ROW MANU/SC/0013/1952 : 1952CRILJ966
6. FATECHAND HIMMATLAL AND ORS. V. STATE OF MAHARASHTRA ETC. MANU/SC/0041/1977
: [1977]2SCR828.
7. KESAVANANDA BHARATI SRIPADANAGALAVARU V. STATE OF KERALA MANU/SC/0445/1973 :
AIR1973SC1461
8. BOMBAY V. DILIPKUMAR R. NANDKARNI, MANU/SC/0184/1982 : (1983) 1 SCC 124.
9. OLGA TELLIS V. BOMBAY MUNICIPAL CORP, AIR (1986) SC 180.
10. KHARAK SINGH V. THE STATE OF U.P. , AIR 1963 SC 1295
11. A.L. KALRA V. P&E CORPN OF INDIA LIMITED, AIR (1984) SC 1361,1367.
12. HYDERABAD KARNATAKA EDUCATION SOCIETY V. STATE OF KARNATAKA, AIR (1983) KNT
251, 268.
13. S.R. BOMMAI AND ORS V. UNION OF INDIA AND ORS (1994)2SCR644.
14. STATE OF WEST BENGAL V. KESORAM INDUSTRIES LTD AND ORS (2004)266ITR 721 (SC)
15. S.R. BOMMAI AND OTHERS V. UNION OF INDIA (1994) 2SCR644.

Books and Articles

1. M.P. JAIN, INDIAN CONSTITUTIONAL LAW 6th Edition, Publisher LexisNexis.

2. V.N.SHUKLA’S CONSTITUTION OF INDIA, 12th Edition, Publisher Easter Book

Company.

3. M P JAIN & S.N. JAIN ADMINISTRATIVE LAW 6th Edition, Publisher LexisNexis.

4. DURGA DAS BASU, SHORTER CONSTITUTION OF INDIA, 13th Edition,

Publisher Wadhawa Nagpur.

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 Memorandum On Behalf Of The Petitioner

STATEMENT OF JURISDICTION

The Petitioner humbly submits this memorandum for appeal filled under this Honorable Court
under Article 131of Constitution of India.

131. Original jurisdiction of Supreme Court, —

Subject to the provisions of this Constitution, the Supreme Court shall, to the exclusion
of any other court, have original jurisdiction in any dispute—

(a) between the Government of India and one or more States; or

(b) between the Government of India and any State or States on one side and
one or more other States on the other; or
(c) between two or more States,

if and in so far as the dispute involves any question (whether of law or fact) on which the
existence or extent of a legal right depends:

[Provided that the said jurisdiction shall not extend to a dispute arising out of any treaty,
agreement, covenant, engagement, sanad or other similar instrument which, having been
entered into or executed before the commencement of this Constitution, continues in operation
after such commencement, or which provides that the said jurisdiction shall not extend to such
a dispute.]

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 Memorandum On Behalf Of The Petitioner

STATEMENT OF FACT
1. The Constitution granted several fundamental rights to the citizens of Eutopia. Further,
to strengthen the nation’s economic development, the government of Eutopia had in
place its system of taxation which was a three tier federal structure consisting of the
central government, the state government and the local bodies.

2. With the changes in the tax structure across the globe, the state of Eutopia in order to
remove the cascading effect of the indirect taxes, sought to reform its existing indirect
tax structure.

3. The newly developed tax structure was a four set of enactments i.e. Central GST Act,
2017; Integrated GST Act, 2017; Union Territory GST Act, 2017 and GST
(Compensation to States) Act, 2017.

4. The introduction and injection of GST could be done only through amending a number
of provisions of the Constitution. as it purported to affect the existing distribution of
revenue between the Centre and the states and thereby impacting the federal set up.

5. The tax regime of GST being known to none, has been apprehended skeptically, for the
real impact on economy, common masses, business fraternity and state could not be
precisely professed by any economist.

6. A number of petitions including those in the form of Public Interest Litigations (“PILs”)
have been filed in various High Courts and the Supreme Court of Eutopia. These PILs/
Writ Petitions, seek to challenge the validity of the GST Act and the Constitution (One
Hundred and First Amendment) Act, 2017, on a variety of grounds.

7. The Supreme Court, considering the gravity of unrest and frustration empathized with
people of Eutopia and has on its own motion, transferred the cases pending in the high
court’s on similar questions of law, to itself, using its power under Article 139A of the
Constitution.

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 Memorandum On Behalf Of The Petitioner

8. Various associations of traders in respective items have challenged the constitutionality

of the GST Act on the ground of being abridgement of the Article 14 of the Constitution.
They base their contention on the fact that various items like petroleum, liquor etc. have
been left out of the purview of GST on arbitrary grounds. These traders also grieve that
they still have to pay different rates of taxes under different states. The exemption to
such commodities has been alleged to be arbitrary. Secondly, it is also alleged that such
a differential treatment is further agonized when the states charge VAT on such
commodities as per their own discretion having no uniformity at all and thereby being
against the very object of GST i.e. having a uniform price and uniform tax base for all
the goods in all the states.

9. Some have alleged that GST to violative of not only Article 14 of the Constitution but
also Article 21 of the Constitution as being abridgment of life and liberty.
10. Along with introduction of GST, the government has also claimed to scrap the paper
based filing and the registration, payment, filing and return being done only through
electronic means and internet.

11. The GST Act is also challenged on the grounds of vagueness and excessive delegation,
in derogation of the Constitutional norms.

12. The GST Act and its implementation have also been challenged as being against good
governance and public trust.

13. A few states seem discontent with the idea of GST itself and base their argument that it
seeks to usurp the autonomy and independence of the states to a great extent and thereby
causing a imbalance in the federal structure. Having assumed federal structure of the
Constitution as a basic feature of the Constitution, they have challenged the
Constitution (One Hundred and First Amendment) Act, 2017 itself.

14. The Chief Justice of Eutopia, in the light of seriousness of the issues involved and that
the issues also pertain to the interpretation of the Constitution has constituted a bench
of 5 judges to hear the matter in the case of “Association of Traders and Others versus
Union of Eutopia.
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 Memorandum On Behalf Of The Petitioner

STATEMENT OF ISSUES

1. WHETHER EXEMPTION OF CERTAIN GOODS OUT OF THE PURVIEW

OF GST IS GROUNDED ON SOME REASONABLE CLASSIFICATION OR IS
ARBITRARY IN NATURE AND THEREFORE UNCONSTITUTIONAL?

2. WHETHER GST ACT PAVES WAY FOR EXCESSIVE DELEGATION OF

POWER & IS THEREFORE UNCONSTITUTIONAL?

3. WHETHER CONSTITUTION (ONE HUNDRED AND FIRST AMENDMENT)

ACT, 2017 IS AGAINST THE FEDERAL SETUP OF THE EUTOPIA AND IS
THEREFORE UNCONSTITUTIONAL?

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 Memorandum On Behalf Of The Petitioner

SUMMARY OF ARGUMENTS

1. WHETHER EXEMPTION OF CERTAIN GOODS OUT OF THE PURVIEW OF

GST IS GROUNDED ON SOME REASONABLE CLASSIFICATION OR IS
ARBITRARY IN NATURE AND THEREFORE UNCONSTITUTIONAL?

It is humbly submitted before this Hon’ble court That Union Government by it’s Central Excise
and Customs Board has proposed major tax reforms known as “Goods and Services Taxes”.
That the fact that various items like petroleum products, liquor and entertainment amusement
etc. kept out of the purview of GST on arbitrary grounds and also against the fundamental
rights of Equality before Law. Selection of commodities and imposing a particular rate of
taxation on them has been done irrationally, unreasonably and arbitrarily. This classification
will not only affect the citizens or the consumers but also affect the business and trading related
to the particular items. Further leading to obstruction, in freedom of trade and commerce
guranteed under Article 19 (1)(g) .

2. WHETHER GST ACT PAVES WAY FOR EXCESSIVE DELEGATION OF

POWER & IS THEREFORE UNCONSTITUTIONAL?
The unreasonable classification of different commodities in different slabs, the selection of
commodities and imposing a particular rate of taxation has been done irrationally,unreasonably
and is arbitrary to the article 19 which is right to freedom by keeping liquor, petroleum and
other goods out of the purview of the GST the Union is also affecting the right of free trade
and commerce. After the Union has passed the GST the small business holder are forced to
register in case the turnover crossed the limit of 20 lakhs in previous regime manufacturers
were not required to comply with excise rule, if the turnover is below 5 crores. Such restrictions
are unreasonable and also against Reasonable Restrictions under Articles 19(2) to 19(6). A
legislature cannot restrict this freedom beyond the requirements of Articles 19(2) to 19(6).

3. WHETHER CONSTITUTION (ONE HUNDRED AND FIRST AMENDMENT) ACT,

2017 IS AGAINST THE FEDERAL SETUP OF THE EUTOPIA AND IS THEREFORE
UNCONSTITUTIONAL?
It violates the basic features of the constitution of Federalism, especially financial federalism
and separation of powers between the Union and States and encroaches upon the basic

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 Memorandum On Behalf Of The Petitioner

authority of the States to levy taxes by restricting its rights, including the right to determine
the rates of tax under GST. As opposed to the idea of decentralization which is the essence of
a federal structure, there is a trend towards centralization with the Centre exhibiting unitary
tendencies. The attempts of the Centre to prevail upon the financial recourses of the states by
using its fiscal superiority are certainly against prudent federal practices e.g., In the area of
indirect taxes, an attempt is underway to make a national level law on the taxation of goods
and services which is a state subject.

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 Memorandum On Behalf Of The Petitioner

ARGUMENTS ADVANCED

1. WHETHER EXEMPTION OF CERTAIN GOODS OUT OF THE PURVIEW OF

GST IS GROUNDED ON SOME REASONABLE CLASSIFICATION OR IS
ARBITRARY IN NATURE AND THEREFORE UNCONSTITUTIONAL?

It is humbly submitted before this Hon’ble court That Union Government by it’s Central Excise
and Customs Board has proposed major tax reforms known as “Goods and Services Taxes”
(hereinafter referred to as GST) as Single Tax Market easing Business in place of excise duty
and central Sales act 1956 (hereinafter referred to as ‘CST’), Service tax from 1994 and Value
Added Tax ((hereinafter referred to as ‘VAT’) Service tax was added to Union list in the year
1994 - 1995 and now removed from the Union List of 7th Schedule by the 101th constitutional
amendment on the month April 2017.
That the fact that various items like petroleum products, liquor and entertainment amusement
etc. kept out of the purview of GST on arbitrary grounds and also against the fundamental
rights of Equality before Law under Article 14 provided by The Constitution of Eutopia to its
citizen.
Even after the imposition of GST the traders are still being under the earlier VAT and excise
regime, have to pay different taxes under different states which are again arbitrary and against
the core of the GST as per the union slogan GST is meant to be “one nation one tax” but the
business class of Eutopia is still under the burden of other indirect taxes such as VAT and other
taxes imposed by the states. Such a differential treatment further agonizes when states charge
VAT on such commodities as per their own discretion having nouniformityat all and thereby
being against the very object of GST i.e. having a uniform price and uniform tax base for all
the goods in all states.

1.1 Exemption of certain good out of the purview of GST is not grounded on some
reasonable classification.
That the selection of commodities and imposing a particular rate of taxation on them has
been done irrationally, unreasonably and arbitrarily. Many items of basic necessities which
are essential for bare survival have been slapped with a higher rate of taxation, whereas
many useless/ luxurious goods have been offered a lower tax rate. And some goods such
as petroleum products, liquor, and entertainment amusement etc. kept out of the purview
of GST in unreasonable classification.

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 Memorandum On Behalf Of The Petitioner

This classification will not only affect the citizens or the consumers but also affect the
business and trading related to the particular items. Further leading to obstruction, in
freedom of trade and commerce guranteed under Article 19 (1)(g) . However, the liquor
trade is not in ambit of article 19 but, lately in case of ugar sugar1 it was held that, A Caveat
may however be added here. Although, regulation of liquor trade may fall outside of
Article 19(1)(g), Article 14 can still be invoked if a restriction imposed on liquor trade is
found to be arbitrary, irrational, or unreasonable.

The classification under the section 9(1)(2) of the Central Goods and Services Act
(hereinafter referred to as ‘CGST Act’) is arbitrary in nature and is violating the
fundamental rights of the citizens.
Section 92 (1) (2) of CGST Act:-
9. (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the
central goods and services tax on all intra-State supplies of goods or services or both,
except on the supply of alcoholic liquor for human consumption, on the value determined
under section 15 and at such rates, not exceeding twenty per cent., as may be notified
by the Government on the recommendations of the Council and collected in such manner
as may be prescribed and shall be paid by the taxable person.
(2) The central tax on the supply of petroleum crude, high-speed diesel, motor spirit
(commonly known as petrol), natural gas and aviation turbine fuel shall be levied with
effect from such date as may be notified by the Government on the recommendations of
the Council.

In the case of R.K.Garg v. Union of India3 the Hon’ble Supreme Court have set some
ground for reasonable classification the relevant para(8) from the judgment is quoted below
for the reading references:
8. That takes us to the principal question arising in the writ petitions namely,
whether the provisions of the Act are violative of Article 14 of the Constitution.
The true scope and ambit of Article 14 has been the subject matter of discussion in
numerous decisions of this Court and the propositions applicable to cases arising
under that Article have been repeated so many times during the last thirty years that

1
Ugar sugar works ltd v. Delhi administration, AIR 2001 SC 1447
2
CGST Act, REGISTERED NO. DL—(N)04/0007/2003—17
3
(1981) 4SCC 675,689-90

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 Memorandum On Behalf Of The Petitioner

they now sound platitudinous. The latest and most complete exposition of the
propositions relating to the applicability of Article 14 as emerging from "the
avalanche of cases which have flooded this Court" since the commencement of the
Constitution is to be found in the Judgment of one of us (Chandrachud, J. as he then
was) in Re: Special Courts Bill. It not only contains a lucid statement of the
propositions arising under Article 14, but being a decision given by a Bench of
seven Judges of this Court, it is binding upon us. That decision sets out several
propositions delineating the true scope and ambit of Article 14 but not all of them
are relevant for our purpose and hence we shall refer only to those which have a
direct bearing on the issue before us. They clearly recognize that classification can
be made for the purpose of legislation but lay down that:

1. The classification must not be arbitrary but must be rational, that is to say, it must
not only be based on some qualities or characteristics which are to be found in
all the persons grouped together and not in others who are left out but those
qualities or characteristics must have a reasonable relation to the object of the
legislation. In order to pass the test, two conditions must be fulfilled, namely,(l)
that the classification must be founded on an intelligible differentia which
distinguishes those that are grouped together from others and (2) that differentia
must have a rational relation to the object sought to be achieved by the Act.
The two conditions which are mentioned in the above case the Supreme Court has
itselfprovided the grounds for the reasonable classification the core object of the Act is having
a uniform price and uniform tax base for all the goods in all states but leaving certain goods
such as liquor, petroleum etc. Out of purview of GST is the violation of fundamental rights of
a public at large because the total number of registered motor vehicles in India was 210023289
as on 31.03. 2015. There were 7 states having more than 10000000 registered motor vehicles
viz. Maharashtra, Tamil Nadu, Uttar Pradesh, Gujarat, Karnataka, Rajasthan and Madhya
Pradesh as on 31.03. 20154 and exemption of petroleum out of the purview of GST is affecting
the fundamental right of the public at large enshrined in article 14 of The Constitution due to
such exemption the state authorities are charging VAT as per their convenience and imposing
the higher rate of tax on the people of Eutopia.

4
https://community.data.gov.in/registered-motor-vehicles-in-india-as-on-31-03-2015/

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 Memorandum On Behalf Of The Petitioner

The High Court of Allahabad (Lucknow bench) gave its view that “if certain facts have to be
proved to establish the fact that there is discrimination or that the law is unreasonable, it is for
the person alleging this to establish it. Further, if there is any doubt as to the meaning of a
Statute, that is to say, if there is any scope for interpretation, that interpretation will if possible
be adopted which will make the Statute constitutional. It does not mean that a Statute should
be misconstrued or that established facts should be ignored in order to hold a law to be of
constitutional validity. In case of Rani Raj Rajeshwari Devi Vs. The State of U.P. and Ors.
(ALLHC)5.

1.2 Exemption of certain good out of the purview of GST is arbitrary in nature and
therefore unconstitutional.
The exemption of certain goods out of the purview of the GST by the virtue of section 9 of the
CGST is arbitrary in nature and against the fundamental right enshrined in Article 14 (n) of
The Constitution of India, therefore, it should be declared as unconstitutional.
Section 9 of the CGST Act:-
9. (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central
goods and services tax on all intra-State supplies of goods or services or both, except on the
supply of alcoholic liquor for human consumption, on the value determined undersection 15
and at such rates, not exceeding twenty per cent., as may be notified by the Government on the
recommendations of the Council and collected in such manner as may be prescribed and shall
be paid by the taxable person.
(2) The central tax on the supply of petroleum crude, high-speed diesel, motor spirit(commonly
known as petrol), natural gas and aviation turbine fuel shall be levied with effectfrom such
date as may be notified by the Government on the recommendations of theCouncil.
The particular above mentioned section specfically States that “there shall be levied a tax
called the central goods and services tax on all intra-State supplies of goods or services or both,
except on the supply of alcoholic liquor for human consumption” the union of Eutopia is also
exempting the necessary good such as petroleum crude, high speed diesel, motor
spirit(commonly known as petrol), natural gas and aviation turbine fuel when the union have
compiled all other inderect taxes and brought under the one roof of GST and even after
replacing VAT with GST, why the union is still imposing VAT on this certain goods? Is it for
its own benefit or for the benefit of industries close to the incumbent government? Whatever,

5
MANU/UP/0239/1954, Para 47

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 Memorandum On Behalf Of The Petitioner

the cause is, keeping these goods out of the constitutional mandate of levying a tax under GST
is unreasonable and solely arbitrary in nature and also against the fundamental right enshrined
in Article 14 (n) of The Constitution of India, therefore, should be declared as unconstitutional.

2.WHETHER GST ACT PAVES WAY FOR EXCESSIVE DELEGATION OF POWER

& IS THEREFORE UNCONSTITUTIONAL?
The unreasonable classification of different commodities in different slabs, the
selection of commodities and imposing a particular rate of taxation has been done
irrationally,unreasonably and is arbitrary to the article 19 which is right to freedom by
keeping liquor, petroleum and other goods out of the purview of the GST the Union is
also affecting the right of free trade and commerce which is enshrined in Article
19(1)(g) and 19(6).
After the Union has passed the GST the small business holder are forced to register in
case the turnover crossed the limit of 20 lakhs in previous regime manufacturers were
not required to comply with excise rule, if the turnover is below 5 crores.

Section 226 of the CGST Act deals with registration of a supplier:-

22. (1) Every supplier shall be liable to be registered under this Act in the State or
Union territory, other than special category States, from where he makes a
taxable supply of goods or services or both, if his aggregate turnover in a
financial year exceeds twenty lakh rupees:

Provided that where such person makes taxable supplies of goods or services
or both from any of the special category States, he shall be liable to be
registered if his aggregate turnover in a financial year exceeds ten lakh
rupees.

Such restrictions are unreasonable and also against Reasonable Restrictions under
Articles 19(2) to 19(6). A legislature cannot restrict this freedom beyond the
requirements of Articles 19(2) to 19(6).
Thatseveral otherrestrictions imposed in different sections of the GST Act which is
unreasonable restrictions such as proviso of section 107 of the CGST Act:

6
CGST Act, REGISTERED NO. DL—(N)04/0007/2003—17
7
CGST Act, REGISTERED NO. DL—(N)04/0007/2003—17

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 Memorandum On Behalf Of The Petitioner

Provided that the Government may, by notification, increase the said limit of
fifty lakh rupees to such higher amount, not exceeding one crore rupees, as may
be recommended by the Council.
(2) The registered person shall be eligible to opt under sub-section (1), if:—
(a) he is not engaged in the supply of services other than supplies referred to in
clause (b) of paragraph 6 of Schedule II;
(b) he is not engaged in making any supply of goods which are not leviable to
tax under this Act;
(c) he is not engaged in making any inter-State outward supplies of goods;
(d) he is not engaged in making any supply of goods through an electronic
commerce operator who is required to collect tax at source under section 52;
and
(e) he is not a manufacturer of such goods as may be notified by the Government
on the recommendations of the Council:
The sub clause (a) of the proviso of section 10 is imposing restrictions on the registered
suppliers that “he is not engaged in the supply of services other than supplies referred
to in clause (b) of paragraph 6 of Schedule II;” firstly these small traders are forced to
register if there turnover crosses the limit of 20 lakhs under GST and then they are
imposing unreasonable restrictions that they cannot be involved in the other supply of
the other services which is not mentioned inSchedule II they are restricted from carrying
out the supplies of others services. Which is against the reasonable restrictions.
Three significant characteristics of clauses 19(2) to 19(6) may be noted:
(1) The restriction under them can be imposed only by or under the authority of law;
no restriction can be imposed by executiveaction alone without there being a law
to back it up.
(2) Each restriction must be reasonable.
(3) A restriction must be related to the purposes mentioned in Clauses 19(2) to 19(6).
There is thus a double test to adjudge the validity of a restriction:
a) Whether it is reasonable; and
b) Whether it is for the purpose mentioned in the clause under which the
restriction is being imposed?
Both these question are to be determined finally by the Courts when a law is challenged as
unconstitutional. The legislative determination of what restrictions to impose on a freedom is
not final conclusive as it is subject to judicial review.
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 Memorandum On Behalf Of The Petitioner

In the case of Papansam8the Supreme Court has stated that the following principles and
guidelines should be kept in view while considering the constituionality of a statutory provision
imposing reastriction on a Fundamental Right guaranteed by Art.19(1)(a) to (g) when
challenged on the ground of unreasonableness of the restriction imposed by it. The relevent
para(15) is quoted below fo the reading refferences:
15. After considering the respective submissions of the learned Counsel for the parties and
considering various decisions of this Court in deciding the question of reasonableness of the
restriction imposed by a statute on the fundamental rights guaranteed by Article 19 of the
Constitution of India (reference to which would be made hereinafter), it appears to us that the
following principles and guidelines should be kept in mind for considering the constitutionality
of a statutory provision upon a challenge on the alleged vice of unreasonableness of the
restriction imposed by it:

(a) The restriction sought to be imposed on the fundamental rights guaranteed by Article 19 of
the Constitution must not be arbitrary or of an excessive nature so as to go beyond the
requirement of felt need of the society and object sought to be achieved.

(b) There must be a direct and proximate nexus on a reasonable connection between the
restriction imposed and the object sought to be achieved.

(c) No abstract or fixed principle can be laid down which may have universal application in
all cases. Such consideration on the question of quality of reasonableness, therefore, is
expected to vary from case to case.

(d) In interpreting constitutional provisions court should be alive to the felt need of the society
and complex issues facing the people which the legislature intends to solve through effective
legislation.

(e) In appreciating such problems and felt need of the society the judicial approach must
necessarily be dynamic, pragmatic and elastic.

8
Papnasam Labour Union vs. Madura Coats Ltd. and Anr. (08.12.1994 - SC) : MANU/SC/0567/

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 Memorandum On Behalf Of The Petitioner

(f) It is imperative that for consideration of reasonableness of restriction imposed by a statute,

the Court should examine whether the social control as envisaged in Article 19 is being
effectuated by the restriction imposed on fundamental right.

(g) Although Article 19 guarantees all the seven freedoms to the citizen, such guarantee does
not confer any absolute or unconditional right but is subject to reasonable restriction which
the legislature may impose in public interest. It is therefore necessary to examine whether such
restriction is meant to protect social welfare satisfying the need of prevailing social values9.

(h) The reasonableness has got to be tested both from the procedural and substantive aspects.
It should not be bound by processual perniciousness or jurisprudence of remedies10.

(i) Restriction imposed on the fundamental right guaranteed under Article 19 of the
Constitution must not be arbitrary, unbridled, uncanalised and excessive and also not
unreasonably discriminatory. Exhypothesi, therefore, a restriction to be reasonable must also
be consistent with Article 14 of the Constitution.

(j) In judging the reasonableness of the restriction imposed by Clause (6) of Article 19, the
Court has to bear in mind directive principles of State policy11.

(k) Ordinarily, any restriction so imposed which has the effect of promoting or effectuating a
directive principle can be presumed to be a reasonable restriction in public interest .

The above-mentioned section 22 dose not fall under the significant characteristics and it also
does not satisfy prinicples and guidelines provided by the Supreme Court.
Section 22 of the GST Act paves exessive delegation of power to the legislature that it is as
per the discretion of the legislature to interpret that what is necessary for the citizen which is
subject to Judicial interpretation.
The GST Acts providing excessive power to the Central as in the preamble of the Act specify
that “An Act to make a provision for levy and collection of tax on intra-State supply ofgoods or

9
MANU/SC/0013/1952 : 1952CriLJ966
10
MANU/SC/0041/1977 : [1977]2SCR828
11
MANU/SC/0445/1973 : AIR1973SC1461

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 Memorandum On Behalf Of The Petitioner

services or both by the Central Government and for matters connected therewith or incidental
thereto.”The center have all the powers regarding the tax system under GST.
And because of such excessive power the Central government is volitaing the Rights of its
people.
Moreover, there is no objective to be achieved behind this imposition of rule of registration
crossing turnover of 20 lakhs, its just being a medium of harrasment for the people of Eutopia,
and a hindrance in getting their livelihood. Being the directive principle of state policy, it is the
duty of the state under article 39(a) to provide its citizen, adequate means of livelihood, as
stated below;
The State shall, in particular, direct its policy towards securing—
(a) that the citizens, men and women equally, have the right to an adequate means of
livelihood;
(b) that the ownership and control of the material resources of the community are so
distributed as best to subserve the common good;
(c) that the operation of the economic system does not result in the concentration of
wealth and means of production to the common detriment;
(d) that there is equal pay for equal work for both men and women;
(e) that the health and strength of workers, men and women, and the tender age of
children are not abused and that citizens are not forced by economic necessity to enter
avocations unsuited to their age or strength;
(f) that children are given opportunities and facilities to develop in a healthy manner
and in conditions of freedom and dignity and that childhood and youth are protected
against exploitation and against moral and material abandonment.
Again, in article 48A, The State shall endeavour to protect and improve the environment and
to safeguard the forests and wild life of the country.
But the tax imposed on plastic waste is 12% while that on glass waste is 18 %. This shall
ultimately discourage people from buying recycled goods, leading to environment degradation
and more environmental waste. And imposition of such tax rate shall badly effect the livelihood
of rag pickers and unorganized labour sector, further leading to the violation of both DPSP and
fundamental right protected under article 21. Article 21 of the Constitution of Eutopia give all
its citizens, right to life and liberty, stating,
“No person shall be deprived of his life or personal liberty except according to procedure
established by law.”

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 Memorandum On Behalf Of The Petitioner

With the defining the word ‘life’ in article 21 in a broad and expansive manner, the court came
to hold that ‘the right to life’ guaranteed by article 21 includes the ‘right to livelihood’. And
this judgement was laid down in the case of board of trustees of the port of Bombay v.
Dilipkumar R. Nandkarni.12
And depriving someone from its livelihood is depriving one from his right to life, because
unregistered and small traders are now under the tax net, losing their business to the large
business holder in the system of supply chain. This has been argued even by court in case of
olga tellis13 in para 32, of its judgement;
As we have stated while summing up the petitioners' case, the main plank oftheir argument is
that the right to life which is guaranteed by Article 21 includes theright to livelihood and since,
they will be deprived of their livelihood if they areevicted from their slum and pavement
dwellings, their eviction is tantamount to deprivation of their life and is hence unconstitutional.
For purposes of argument, we will assume the factual correctness of the premise that if the
petitioners are evicted from their dwellings, they will be deprived of their livelihood. Upon that
assumption, the question which we have to consider is whether the right to life includes the
right to livelihood. We see only one answer to that question, namely, that it does.
The sweep of the right to life conferred by Article 21 is wide and far reaching. It does not mean
merely that life cannot be extinguished or taken away as, for example, by the imposition and
execution of the death sentence, except according to procedure established by law. That is but
one aspect of the right to life.
An equally important facet of that right is the right to livelihood because, no person can live
without the means of living, that is, the means of livelihood. If the right to livelihood is not
treated as a part of the constitutional right to life, the easiest way of depriving a person his right
to life would be to deprive him of his means of livelihood to the point of abrogation. Such
deprivation would not only denude the life of its effective content and meaningfulness but it
would make life impossible to live. And yet, such deprivation would not have to be In
accordance with the procedure established by law, if the right to livelihood is not regarded as
a part of the right to life. That, which alone makes it possible to live, leave aside what makes
life liveable, must be deemed to be an integral component of the right to life. Deprive a person
of his right to livelihood and you shall have deprived him of his life. Indeed, that explains the
massive migration of the rural population to big cities. They migrate because they have no

12
AIR 1983 SC 109
13
Olga Tellis v. Bombay municipal corp. AIR 1986 SC 180

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 Memorandum On Behalf Of The Petitioner

means of livelihood in the villages. The motive with which people desertion of their health and
homes in the villages that struggle for survival, that is, the struggle for life. So unimpeachable
is the evidence of the nexus between life and the means of livelihood. They have to eat to live:
Only a handful can afford the luxury of living to eat. That they can do, namely, eat, only if they
have the means of livelihood.

That is the context in which it was said by Douglas J. in Baksey that the right to work
is the most precious liberty because, it sustains and enables a man to live and the right to life
is a precious freedom. "Life", as observed by Field, J. in Munn v. Illinois
(1877) 94 U.S. 113, means something more than mere animal existence and the inhibition
against the deprivation of life extends to all those limits and faculties by which life is enjoyed.
This observation was quoted with approval by this Court in Kharak Singh v. The State of U.P14.

Every citizen of Eutopia is further enshrined with right to live in a clean enviornment under the
ambit of article 21, but classifying recycled goods to a higher tax rate will diminish its demand
in the supply chain and would degrade the enviornment they live in.
Therefore, this would hinder the only means of livelihood of unorganised labor sector and rag
pickers, who earn their daily wages from this, and leave them with no basic necessities.

Lately, with the implementation of GST, the tax rate on basic necessities are kept higher, than
that of luxurious or useless goods with quite a lower tax rate. This not only provokes
inequality between the economically weaker and stronger section of the society but also has
discriminated group of people on the basis of their sex. As the tax rate of sanitary pads under
GST is much more higher. However, this taxation is like taxing women for being a women,
as it is their necessity and not luxury.
Under article 15 of the constitution which states,
(1) The State shall not discriminate against any citizen on grounds only of religion, race,
caste, sex, and place of birth or any of them.
(2) No citizen shall, on grounds only of religion, race, caste, sex, place of birth or any of
them, be subject to any disability, liability, restriction or condition with regard to—
(a) access to shops, public restaurants, hotels and places of public entertainment; or

14
MANU/SC/0085/1962

21
 Memorandum On Behalf Of The Petitioner

(b) the use of wells, tanks, bathing ghats, roads and places of public resort maintained
wholly or partly out of State funds or dedicated to the use of the general public.
(3) Nothing in this article shall prevent the State from making any special provision for
women and children.
[(4) Nothing in this article or in clause (2) of article 29 shall prevent the State from making
any special provision for the advancement of any socially and educationally backward
classes of citizens or for the Scheduled Castes and the Scheduled Tribes.]
[(5) Nothing in this article or in sub-clause (g) of clause (1) of article 19 shall prevent the
State from making any special provision, by law, for the advancement of any socially and
educationally backward classes of citizens or for the Scheduled Castes or the Scheduled
Tribes in so far as such special provisions relate to their admission to educational
institutions including private educational institutions, whether aided or unaided by the
State, other than the minority educational institutions referred to in clause (1) of article
30.]
No state can discriminate any person, or group of persons only on their race, caste, sex, religion
or place of birth. And higher rate of taxation on basic necessities of women is discrimantory in
nature and is infringement of their right guranteed under article 15.
Again, the filing to be be done each year is increased from one to thirty seven filingswhich is
unreasonable and unending, leading to harrasment of traders and further worsening the
situation, when the filing is not done in time due to poor websites and server problems. In a
country like Eutopia, where access to basic necessities is a huge problem of the citizens, filings
to be made through internet and computers, is going to be troublesome. This delegation of wide
discretinary power given under article 14 to the legislature of taxting statute i.e. GST fails in
the test of reasonability of Article 14, as it is against public interest.
It is benefitting the economically stronger section of the society who can make a compliance
with these rules, but even the medium sized companies are struggling to keep up the rules. This
has been done arbitrarily to support some industrialists. On this point the supreme court has
observed in kalra15:
“Article 14 strikes at arbitrariness in executive or administrative action because any action
that is arbitrary must necessarily involve the negation of equality. One need not confine the
denial of equality to a comparative evaluation between two persons to arrive at a conclusion

15
A.L. Kalra v. P&E corpn of India limited., AIR 1984 SC 1361, 1367

22
 Memorandum On Behalf Of The Petitioner

of discriminatory treatment. An action per se arbitrary itself denies equality of protection by

law”
Again In Hyderabad Karnataka Education Society v. State Of Karnataka 16, court held that,
“when unequally placed persons are treated equally,Article 14 is violated.”
And the filing of return under new tax regime of GST is treating the unequals as equals, because
this computer and internet filling cannot be done by all the economic sections of the society.

3. WHETHER CONSTITUTION (ONE HUNDRED AND FIRST AMENDMENT) ACT,

2017 IS AGAINST THE FEDERAL SETUP OF THE EUTOPIA AND IS THEREFORE
UNCONSTITUTIONAL?

3.1 IT IS AGAINST FEDERAL SET UP.

It violates the basic features of the constitution of Federalism, especially financial federalism
and separation of powers between the Union and States and encroaches upon the basic
authority of the States to levy taxes by restricting its rights, including the right to determine
the rates of tax under GST.

It is an essential feature of federal financing that the state units should be granted an
Opportunity to raise requisite finances in proportion to their spending and development needs.
This would enable them in attaining fiscal self-sufficiency. However in India, the distribution
of revenue generating powers has been made in such a manner so as to leave the states at the
mercy of the Centre and their position can aptly be summed up by as “orphans with a begging
bowl in hand approaching the Union Government for money and help”.

As opposed to the idea of decentralization which is the essence of a federal structure, there is
a trend towards centralization with the Centre exhibiting unitary tendencies. The attempts of
the Centre to prevail upon the financial recourses of the states by using its fiscal superiority are
certainly against prudent federal practices e.g., In the area of indirect taxes, an attempt is
underway to make a national level law on the taxation of goods and services which is a state
subject. Similarly in 1994 the union government exercised its residuary power under entry 97
of the union list to levy tax on services as service sector is the fastest growing sector in the
country and this move would enable the Centre to augment its own resource base.

16
AIR 1983 Knt. 251, 268.

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 Memorandum On Behalf Of The Petitioner

In S. R. Bommai and Ors. v. Union of India and Ors.17Justice K. Ramaswami in Paragraph 247
and 248 of his separate Judgment in the same case observed as under:
247. Federalism envisaged in the Constitution of India is a basic feature in which the Union
of India is permanent within the territorial limits set in Article 1 of the Constitution and
is indestructible. The State is the creature of the Constitution and the law made by
Articles 2 to 4 with no territorial integrity, but a permanent entity with its boundaries
alterable by a law made by Parliament. Neither the relative importance of the legislative
entries in Schedule VII, Lists I and II of the Constitution, nor the fiscal control by the
Union per se are decisive to conclude that the Constitution is unitary. The respective
legislative powers are traceable to Articles 245 to 254 of the Constitution. The State qua
the Constitution is federal in structure and independent in its exercise of legislative and
executive power. However, being the creature of the Constitution the State has no right
to secede or claim sovereignty. Qua the Union, State is quasi-federal. Both are
coordinating institutions and ought to exercise their respective powers with adjustment,
understanding and accommodation to render socio-economic and political justice to the
people, to preserve and elongate the constitutional goals including secularism.

248. The preamble of the Constitution is an integral part of the Constitution. Democratic
form of Government, federal structure, unity and integrity of the nation, secularism,
socialism, social justice and judicial review are basic features of the Constitution.

Hence, imposing GST seeks to usurp the autonomy and independence of the states to a great
extent and thereby causing an imbalance in the federal structure. Having assumed federal
structure of the Constitution as a basic feature of the Constitution, they have challenged the
Constitution (One Hundred and First Amendment) Act, 2017 itself.

3.2 IT IS UNCONSTITUTIONAL.
In State of West Bengal v. Kesoram Industries Ltd. and Ors.18, decided by a Constitution bench
comprising 5 Judges, the majority judgment in Paragraph 50 observed as under:

Yet another angle which the Constitutional Courts would advisedly do better to keep in view
while dealing with a tax legislation, in the light of the purported conflict between the powers

17
[1994]2SCR644
18
[2004]266ITR721(SC)

24
 Memorandum On Behalf Of The Petitioner

of the Union and the State to legislate, which was stated forcefully and which was logically
based on an analytical examination of constitutional scheme by Jeevan Reddy, J. in S.R.
Bommai and others v. Union of India19 , may be touched. Our Constitution has a federal
structure. Several provisions of the Constitution unmistakably show that the Founding Fathers
intended to create a strong center.

Similarly, is the case of GST which however, imposed dual GST but failed the constitutional
objective of federalism by resting much more power to the Centre than the states. The objective
of decentralisation led to the centralisation of power in the union.

Under the GST regime, an Integrated GST (IGST) would be levied and collected by the Centre
on inter-State supply of goods and services. Under Article 269A of the Constitution, the GST
on supplies in the course of inter State trade or commerce shall be levied and collected by the
Government of India and such tax shall be apportioned between the Union and the States in the
manner as may be provided by Parliament by law on the recommendations of the Goods and
Services Tax Council.

THE INTEGRATED GOODS AND SERVICES TAX ACT, 2017

NO. 13 OF 2017 states;
An Act to make a provision for levy and collection of tax on inter-State supply of goods or
services or both by the Central Government and for matters connected therewith or
incidental thereto.

THE CENTRAL GOODS AND SERVICES TAX ACT, 2017

NO. 12 OF 2017 states;
An Act to make a provision for levy and collection of tax on intra-State supply of goods or
services or both by the Central Government and for matters connected therewith or
incidental thereto.

The most significant tax entry in the above list is entry 54 which deals with the tax on sale or
purchase of goods and hence sales tax/ VAT (value added tax) is covered under the same.
However inter-state sales tax is covered under entry 92-A of List I and hence states have the
power to levy tax on only intra-state sales i.e., the sales which takes place within the state itself.

19
[1994]2SCR644

25
 Memorandum On Behalf Of The Petitioner

Further it is abundantly clear that principal taxes are covered in List I and the ones listed under
list II are subordinate and hence most states lack self-sufficiency as far as financial autonomy
is concerned.
But lately, power to levy tax on inter-state and intra-state both are power of central government
under IGST and CGST as well. This is a complete violation of federal set up of Eutopia as state
has no power and the whole power is centralized.

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 Memorandum On Behalf Of The Petitioner

PRAYER

WHEREFORE, in light of the issues raised, arguments advanced and authorities cited it is
most humbly and respectfully requested that this Hon’ble Supreme Court to adjudge and
declare that:

 That the Hon’ble Court may kindly be pleased to declare that, exemption of certain
goods out of the purview of GST is not grounder on some reasonable classification or
is arbitrary in nature and therefore unconstitutional.

 That the Hon’ble Court may kindly be pleased to declare GST Act as unconstitutional
because it paves way for excessive delegation of powers.

 That the Hon’ble Court may kindly be pleased to declare Constitution (One Hundred
and First Amendment) Act, 2017 Act as unconstitutional because it is gainst the federal
setup of the Eutopia and is therefore unconstitutional.

Any other order as it deems fit in the interest of equity, justice and good conscience.

For This Act of Kindness, the Petitioner Shall Duty Bound Forever Pray.

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