Central Sales Tax Act, 1956 – s.8(5) – Amendment of s.8(5) of the Central Sales Tax Act by the Finance Act, 2002 with effect from 11.05.2002 – Effect of Amendment – Whether the amendment to s.8(5) of the Central Sales Tax Act, 1956 (CST Act), introduced by the Finance Act, 2002, applies retrospectively to take away tax exemption benefits granted under the Package Scheme of Incentives, 1993 (PSI 1993):
Held: In the case at hand, the assessee-respondent was held eligible for absolute exemption under the PSI 1993 issued in exercise of power under s.8(5) of the CST Act as per Eligibility certificate dated 20.02.1998 and Entitlement certificate dated 24.03.1998 granting exemption to it from payment of tax under the BST Act and CST Act to the extent of Rs.273.54 crore or up till 2012, whichever is earlier – The said exemption granted to the assessee-respondent was much prior to the enforcement of the Finance Act, 2002 with effect from 11.05.2002 – The amended Act nowhere stipulates that rights previously accrued stand nullified or all previous exemptions stand cancelled or revoked – The requirement for fulfilling the condition of s.8(4) of the CST Act for getting the benefit of tax exemption came subsequently after the amendment of s.8(5) with effect from 11.05.2002 and would apply prospectively to transactions in respect of which eligibility and entitlement certificates are issued subsequently – It is a cardinal principle of construction that every statute is prima-facie perspective in nature unless it is expressly or by necessary implication made to have retrospective operations – Unless there are words in the statutes sufficient to show the intention of the legislature to affect existing rights, it is deemed to be prospective only. [Paras 21 and 23] Central Sales Tax Act, 1956 – s.8(5) – Amendment of s.8(5) of the Central Sales Tax Act by the Finance Act, 2002 with effect from 11.05.2002 – Whether the State Government was justified in taking away a right accured to the assessee-respondent on mere prospective amendment of s.8(5) without revoking the Entitlement Certificate dated 24.03.1998 without notice or opportunity of hearing:
Held: The law is settled that if a substantive right has accrued to a person, it cannot be taken away unilaterally without notice or an opportunity of hearing to the said person – Thus, after the amendment of s.8(5), the Government was not authorised to pass a unilateral order affecting the rights of the assessee-respondent for claiming absolute exemption from payment of tax – The assesseerespondent was not given any notice either cancelling the Eligibility Certificate or the Entitlement Certificate – Therefore, without revoking the said certificates, the substantive right which had accrued to the assessee-respondent thereunder continues to subsist and does not get impacted by the subsequent amendment of s.8(5) inasmuch as there is nothing in the amended provision which provides for taking away such a right granted to the assessee-respondent – The State Government while applying the aforesaid amended s.8(5) was not justified in taking away such a right accrued to the assessee-respondent on mere prospective amendment of s.8(5) without revoking the Entitlement Certificate dated 24.03.1998 without notice or opportunity of hearing. [Paras 28 and 29] Central Sales Tax Act, 1956 – s.8(5) – Amendment of s.8(5) of the Central Sales Tax Act by the Finance Act, 2002 with effect from 11.05.2002 – Whether the requirement of submission of Form ‘C’ and ‘D’ would apply prospectively after 11.05.2002 i.e., after the Finance Act of 2002:
Held: The State Government was not competent to issue the impugned notices for revising the assessment of the assesseerespondent and to demand the exempted tax only for the reason that the assessee-respondent has not submitted Form ‘C’ and ‘D’ in support of inter-State sale, trade & commerce – The requirement of submission of Form ‘C’ and ‘D’ would apply prospectively after 11.05.2002 i.e., after the Finance Act of 2002. [Para 30]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Aishani Narain, Hony. Associate Editor (Verified by: Ankit Gyan, Editor). Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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