2013 (5) TMI 998 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the expression "with immediate effect" in the notification dated 18.06.2009.
2. Assessment of 2% C.S.T. on inter-State sales for the period 01.04.2009 to 17.06.2009.
3. Retrospective application of the Cabinet decision dated 20.05.2009.

Summary:

1. Validity of the expression "with immediate effect" in the notification dated 18.06.2009:
The petitioner challenged the expression "with immediate effect" in the notification dated 18.06.2009, arguing that it should be disregarded in favor of the Cabinet decision dated 20.05.2009, which extended the concessional rate of CST @ 1% beyond 31.03.2009. The court held that the notification issued by the Excise and Taxation Department on 18.06.2009, which was issued in exercise of statutory powers u/s 8(5)(b) of the Central Sales Tax Act, 1956, would prevail. The plain language of the notification indicated prospective application, and the expression "with immediate effect" confirmed this intent.

2. Assessment of 2% C.S.T. on inter-State sales for the period 01.04.2009 to 17.06.2009:
The petitioner was assessed for payment of 2% C.S.T. on inter-State sales for the period 01.04.2009 to 17.06.2009. The court found no merit in the petitioner's argument that the Cabinet decision should have retrospective effect from 01.04.2009. The court emphasized that the right under the 2004 industrial policy ended by efflux of time on 31.03.2009, and there was no pre-existing right when the notification dated 18.06.2009 was issued. Thus, the assessment of 2% C.S.T. for the specified period was upheld.

3. Retrospective application of the Cabinet decision dated 20.05.2009:
The petitioner argued that the Cabinet decision dated 20.05.2009 should have retrospective effect from 01.04.2009. The court rejected this argument, stating that the notification dated 18.06.2009 introduced the concession with immediate effect and did not impact any pre-existing right. The court also noted that the notification was a new dispensation, not an extension of the old regime, and thus could not be assumed to have retrospective effect. The court cited various precedents, including State of Bihar vs. Suprabhat Steel Ltd., to support its conclusion that no pre-existing right was affected by the notification.

Conclusion:
The petition was dismissed, and the court upheld the prospective application of the notification dated 18.06.2009, the assessment of 2% C.S.T. for the period 01.04.2009 to 17.06.2009, and rejected the argument for retrospective application of the Cabinet decision dated 20.05.2009.