UPES SCHOOL OF LAW, MOOT COURT ASSOCIATION

XVII INTERNAL MOOT

COURT COMPETITION,
2022

MOOT PROPOSITION

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1. The Republic of CENIN got decolonized and framed its Constitution in 1955. Under
the Constitution, the nation opted for Democratic form of government having quasi-
federal governance structure. The Constitution of CENIN establishes autonomous
governance structures at the Central level and at the state level with clearly demarcated
legislative subjects for Central Government and the State Governments.

2. Due to clearly demarcated legislative fields, both Central Government and State
Governments levied numerous taxes according to their legislative competence to enact the
relevant tax statutes which led to multiple and complex taxation system in the Nation.
Such a strenuous taxation system was not only causing hardship to individual taxpayers
but also to persons belonging to business and trading community.

3. The CENIN DEMOCRATIC PARTY (CDP) during General Elections in 2015 in order to
allure the voters promised in their election manifesto that if their Party forms government
at the Centre, they shall make necessary legal changes to abolish the age-old complex tax
system. The citizens of CENIN were exhausted with such disconcerting taxation
mechanism. On 20th June, 2015 the results of General Elections were declared and CDP
were declared victorious with sweeping majority over opposition leaders.

4. In order to fulfill their promise as declared during elections and as incorporated in their
election manifesto the elected government decided to bring in significant reforms in the
taxation structure of the nation. As a measure of reforms, the government declared on 10th
December, 2015 that the new proposed taxation mechanism seeks to bring in a system of
“One Nation, One Tax” subsuming majority of indirect taxes levied by Central
Government and State Governments differently.

5. The Central Government keeping in mind multiple objectives for the new taxation
mechanism intended to look for the following aspects which are to be addressed:
elimination of cascading effect of taxes, curbing tax evasion, enhancement of taxpayer’s
base, introduction of digitized filing and compliance procedures, providing ease of doing
business for businessmen and for competitive pricing and increased consumption.

6. To abolish the age-old system and supplant it with a new entailed Constitutional
challenges and complexities specifically related to the federal structure. In order to make
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a smooth transition in the entire taxation structure and process, the State Governments
were also consulted and almost all the State Governments consented to such
transformation and voted in affirmative for the newly proposed structure of indirect
taxation.

7. As a result of consensus among Central Government and the State Governments, THE
CONSTITUTION (ONE HUNDRED AND FIRST) AMENDMENT ACT, 2016 was
passed by the Parliament of CENIN. The Text of such amendment act is annexed as
ANNEXURE – 1.

8. The said Constitutional amendment enabled the Central Government and State
Governments to enact legislations with respect to “Goods and Service Tax” legislations.
The Central Government enacted “The Central Goods and Service Tax Act, 2016” and the
state governments enacted goods and service tax legislations for their respective states.

9. In July, 2021, a worldwide pandemic, “Perfipox” spread across the globe affecting
billions of people all over the globe and killing 5.4 lakh people in CENIN. This pandemic
was a result of a virus named “PERO-20” which was new to the mankind and no effective
medicine to treat the patients effectively who suffering from ‘Perfipox’ was in existence.
Considering the situation, the Government of CENIN imposed strict lockdown all over
the country which not only restricted the movement but had a drastic effect on country’s
economy. The GDP floated down in a fast speed.

10. Based on citizen’s request government introduced PM-CARES fund whose objective is to
support and undertake assistance or relief of any kind relating to calamity or distress,
public health or any other kind of emergency. This scheme also provided tax exemption
to all its donors. This was the time when the country was in great need of masks, sanitizers
and electronic machines like oximeter. Article titled “CENIN as savior” in THE BINDU
highlights that CENIN not only fulfilled the demand of country but also supplied these
commodities in large number internationally.

11. Thereafter, an RTI application was filed by a person named ‘Raj’ seeking information
regarding the expenditure of PM-CARES fund. However, the government rejected the
application stating that PM-CARES Public Charitable Trust comes under the purview of
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Societies Registration Act, 1860. Hence, the application under RTI Act, 2005 will not
be applicable in the following stance. PM-CARES fund has been in the eye of a political
controversy as the government has refused to bring it under the Right to Information (RTI)
Act, India's transparency legislation. Responding to people, the government has
maintained that PM-CARES could neither be brought under the RTI Act as a "public
authority" nor be listed as a "state".

12. Many companies incorporated in CENIN started preparing medicine for PERFIPOX and
within six months, one of a company named as SYLERN LABS claimed that an effective
medicine to cure PERO-20 virus has been discovered and clinical trials are at the final
stage before making it available to the public at large.

13. Very soon the reports of Clinical trials also came out to be positive and regulatory
approvals were also given to the drug named “CERFIN” by the Drug Regulatory Authority
(DRA) of CENIN. The company immediately after receiving the regulatory approvals on
1st May, 2022 initiated the manufacturing of the medicine to be rolled out in the market
for treatment of the patients concerned. They named the medicine as “PEROFAXACIN”
to treat the patients suffering from “Perfipox”.

14. Since, the medicine developed by SYLERN LABS was the only effective medicine at that
time to treat the patients of Perfipox in CENIN, there was a gigantic demand of medicine
nationally and internationally due to which the company was flooded with orders. The
company had an installed capacity to produce 10 Million dozes per day and as a result
they were not capable to fulfill their orders.

15. SMILE FOUNDATION, a Non-Governmental-Non-Profit Organization made an

application to the Ministry of Health, Government of CENIN on 20 th May, 2022 to
exercise powers under The Patents Act, 1970 for grant of compulsory licensing of the drug
“CERFIN’ to other pharmaceutical companies functioning within the nation CENIN so
that the production of the medicine could be enhanced to cater the affected persons from
“Perfipox”.

16. The World Health Organization (WHO), viewing the urgency of the outbreak, declared
“Perfipox” as Public Health Emergency of International Concern (PHEIC) to fast-track
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the availability of effective tests, vaccines and medicines that can be used to save lives
and avert large scale crisis throughout the world.

17. The Ministry of Health, Government of CENIN after considering the said request rejected
the application made by SMILE FOUNDATION on 25th May, 2022 on the ground that no
other company has fulfilled the said licensing criteria, that the other companies located
within the territorial limits of CENIN does not have relevant technical and technological
resources to manufacture the said drug. The ministry in its rejection order also stated that
the drug “CERFIN” is not a normal drug and there are probabilities of getting it misused.

18. On 27th May, 2022 the Government of CENIN notified that, the drug “CERFIN” and its
compounds were placed in the highest slab of taxation i.e., at the rate of 28% under CGST
Act, 2016. It was clarified that the said decision was taken upon the recommendation of
the GST Council constituted under Article 279A of the Constitution of CENIN.

19. Aggrieved by the order dated 25th May, 2022 and imposition of very high rate of taxation
on ‘CERFIN’, SMILE FOUNDATION has filed a Petition in the Hon’ble Supreme Court
of CENIN challenging the Constitutionality of Order dated 25 th May, 2022 and THE
CONSTITUTION (ONE HUNDRED AND FIRST) AMENDMENT ACT, 2016. Upon
preliminary hearing, Hon’ble Supreme Court of CENIN formulated the following issues:

A. Whether ‘THE CONSTITUTION (ONE HUNDRED AND FIRST) AMENDMENT

ACT, 2016’ violates the basic structure of the Constitution of CENIN, 1955?
B. Whether the PM-CARES fund comes within the purview of RTI Act 2005?
C. Whether the recommendation made by the GST Council to the Central Government
of CENIN is binding on the Central Government?
D. Whether the order dated 25th May, 2022 is constitutionally valid due to arbitrary
exercise of power by the Central Government under The Patents Act, 1970?

20. The matter is listed before the full Bench of Supreme Court of CENIN for final hearing.

Note: The Constitution of CENIN and other laws are Pari Materia to the Constitution and
laws of India.

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ANNEXURE- 1

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