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TMI Blog1998 (11) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... reinafter referred to as the Act ) provides for levy of tax. As per this provision, there shall be levy and collection of tax on the entry of any goods into any local area for consumption, use or sale therein. The tax shall be at such rate or rates as may be fixed by the Government. But that rate shall not exceed the rates specified for the goods in the First Schedule to the KGST Act. Section 2(ee) defines goods as the goods mentioned in the Schedule. Item 9 of the Schedule to the Act is iron and steel. S.R.O. No. 589 of 1996 is a notification issued under section 3, notifying the rate of tax to the items mentioned thereunder to be levied and collected on entry of those goods into any local area in the State of Kerala. Item 9 is iron and steel and the rate of tax is 4 per cent. Section 7 obliges every person to pay tax and to furnish the return. Section 15 provides for a penalty against any person who fails to comply with any of the provisions of the Act. The said provision enables the officer to impose on him, in addition to any tax payable, a sum by way of penalty not exceeding twice the amount of tax. Section 12 deals with the exemption, as follows: Subject to such condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rate has not been specified for the goods, there cannot be any levy of tax. It is further argued that though the Government is entitled to fix the rate of tax, the same is subject only to the latter part of the section which qualifies that the rate shall not exceed the rate specified for the goods mentioned in the First Schedule of the KGST Act. Since there is no mention of the goods in the First Schedule, it may not be possible to ascertain the rate of entry tax leviable on such goods. MS iron and steel scrap purchased by the petitioner are declared goods which are not mentioned in the First Schedule to the KGST Act and therefore it cannot be treated as goods which are exigible to entry tax. 5.. On the face of it, such a contention cannot be accepted. First of all Schedule I of the KGST Act, item 83 describes as follows: 83. Metal scraps other than those specified in the Second Schedule. Therefore, it is specifically stated in the First Schedule, and the contention that the same is coming under item 68 is not correct. Secondly, the tax under this Act shall be at such rate as may be fixed by the Government. As per the Notification in S.R.O. No. 586/96, the rate of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so State Legislatures have plenary powers of legislation within the field of legislation committed to them and subject to certain constitutional restrictions they can legislate prospectively as well as retrospectively. It is, however, a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have retrospective operation. But the rule in general is applicable where the object of the statute is to affect vested rights or to impose new burdens or to impair existing obligations. Unless there are words in the statute sufficient to show the intention of the Legislature to affect existing rights, it is deemed to be prospective only.......... (emphasis* added) 8.. In Calicut-wynad Motor Service Ltd. v. State of Kerala (1959) KLT 521 a learned Judge of this Court held as follows: Even in a case where the executive Government acts as a delegate of a legislative authority, it has no plenary power to provide for retrospective operation unless and until that power is expressly conferred by the parent enactment. Learned counsel for the petitioner strongly relied on the judgment of the Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 12, there is no scope for retrospective operation. Similarly, notification does not state that the exemption has retrospective effect. If the construction suggested by the learned counsel is adopted, then the Government may have to return all the entry tax collected from April 1, 1997 to March 19, 1998 from all other dealers. Conversely, if exemption order is rescinded or withdrawn without fixing date, is it possible to say that the assessees are liable to pay the entry tax retrospectively? Therefore, the cardinal principle of interpretation, namely, that without express words in the statute, no such retrospective effect can be given to the provision much less to the delegated authority, namely, the Government. 9.. In Nagalingam Nadar Sons v. State of Kerala [1993] 91 STC 61 (Ker); (1993) 1 KLT 822 a learned Judge of this Court dealing with the power of the Government to make retrospective operation of a rule of exemption, held that the Government has no such power. In the words of the learned Judge, it is stated thus: Power is thus given under sub-section (1) to make an exemption or reduction in rate either prospectively or retrospectively in respect of any tax payable u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notification also does not give retrospective operation. From both notification as well as section 12, it is clear that the exemption will be available only prospectively and not retrospectively. 12.. It could further be seen that the petitioner had exported the products substantially and therefore the petitioner would not come within the conditions of the notification. Unless sales tax or Central sales tax is paid, the exemption is not available to the petitioner. 13.. On the question of mens rea, it could be seen that the petitioner is importing iron scraps throughout the year and they have not even bothered to file the return and pay the tax for the whole year. Therefore, in the light of the clear provision of law, the contention of the counsel for the petitioner that there was bona fide dispute, deserves no acceptance. Petitioner has withheld the payment of tax due to the Government for the whole year up to March 19, 1998. Therefore, the failure on the part of the petitioner in not filing the return and not paying the tax is intentional and the finding of the 2nd respondent in this regard cannot be held to be illegal. 14.. For all these reasons, I find no reasons to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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