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2020 ] HERO MOTOCORP. LTD. v. UNION OF INDIA 113
cifically mention that under Clause (1) of Article 269A of the Constitution of In-
dia, the Goods and Services Tax on supplies in 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 States in the manner as may be pro-
vided by the Parliament by law on recommendations of GST Council. This has
been operationalized by the levy of tax under IGST Act. Since the entire gamut of
taxation has been completely restructured, we fail to understand as to how the
Petitioner is claiming, as a matter of right, that the Central Government should
bear the burden and also give Budgetary support to the extent of the entire tax,
irrespective of the fact that a portion thereof is passed on to the States. If the
submissions of the Petitioner were to be accepted, it would mean that the Central
Government would not only not pocket any tax from the Petitioner, it would also
be out of pocket to the extent the collected tax devolves upon the States. The
States are not bound to take a cut on the tax collected from the Petitioner under
any statute or any equitable principle such as promissory estoppel.
27. The Finance Commission’s Reports, which are recommendations in
terms of Article 280(3)(a) of the Constitution, are recommendations of the Fi-
nance Commission regarding, inter alia, the sharing of the Union Tax Revenue.
The said 14th Finance Commission’s Report is valid for a period of five years
from 1st April, 2015 till 31st March, 2020. The Finance Commission Report does
provide for tax devolution of 42% to the State. Mr. Ganesh has argued that the
sharing of Revenue existed even in the erstwhile regime and, therefore, that can-
not be the rationale behind the restriction of the budgetary support to the extent
of the Central Government share therein. We, however, do not agree with this
contention of Mr. Ganesh. Firstly, for the reason, that it is not for the Petitioner to
question the sharing of Revenues that have been recommended by the Finance
Commission. Secondly, the rationale for fixing 58% has a reasonable nexus to the
support extended under the Scheme of Budgetary Support and the same to our
mind does not call for any judicial intervention.
28. Mr. Ganesh, while advancing his arguments, had also reasoned that
all the erstwhile duties such as central excise duty, Service Tax etc. which were
levied by the Central Government before the enactment of GST legislations, have
been subsequently replaced by CGST under the existing GST law and likewise,
all the duties levied by the State Government in the erstwhile tax regime have
been replaced by SGST in the present tax regime. This is a completely wrong
proposition as under the dual GST model, both the Centre and the States concur-
rently levy and collect the tax on supply of goods and services. This leads to con-
solidation of tax base and better administration. We fail to comprehend in what
way the Petitioner has equated erstwhile excise duty and other duties levied by
the Central Government in the erstwhile regime with existing CGST, as the two
tax regimes are completely different. It is not the case that erstwhile duties levied
by the Centre have been replaced by CGST.
29. Now let us also examine the case law that has been relied upon by
the Petitioner in support of his submissions. Reliance placed on the decision of
the Court in K.M. Refineries (supra) is misplaced. We agree with the submissions
of Mr. Bansal in this regard that in K.M. Refineries (supra), the Court was dealing
with only an executive order. As opposed to it, in the present case, the exemption
from excise duty has been taken away by a legislative fiat of the Parliament.

GST LAW TIMES  2nd April 2020  275