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TMI Blog2021 (2) TMI 1339X X X X Extracts X X X X X X X X Extracts X X X X ..... rds indicating that the amending Act is declaratory, it would not be so construed when the pre-amended provision was clear and unambiguous. An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect and, therefore, if the principal Act was existing law which the Constitution came into force, the amending Act also will be part of the existing law. The amendment to Section 3(4)(b) of the Tamil Nadu Value Added Tax Act, 2006 received the assent of the Governor on 26.09.2011. It was notified vide G.O.Ms.No.135, Commercial Taxes and Registration (B1), dated 31.10.2011 for the purpose of Section 1(2) of Act No.27 of 2011 - Though the said amendment was notified vide G.O.Ms.135, Commercial Taxes and Registration (B1), dated 31.10.2011, the Government appointed the 1st day of April 2012 as the date from which the said amendment was to come into force. It has not declared that the amendment will come into force from an anterior date. Since the Government has not given the amendment effect from an earlier date during the Assessment Years 2010-2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be imposed with tax liability in terms of unamended provisions as it stood prior to its substitution with effect from 26.09.2011. 5. The learned counsel for the petitioner has placed reliance on the following two recent decisions of the Madurai Bench of this Court and this Court:- i. Tvl.Shandmugamari Timbers V. The Commercial Tax Officer, Chokkikulam Assessment Circle, dated 20.12.2018 in WP(MD).No.3744 of 2015,. ii. Makkal Stores and Others V. State of Tamilnadu, dated 03.10.2019 in W.P.No.9996 of 2012 and etc. 6. As per these two decisions, the amendment brought to Section 3(4)(b) of the Tamil Nadu Value Added Tax Act, 2006 vide Act No.27 of 2011 clarified the law and therefore the benefit of amendment was to be granted to the petitioner for a period covered by the prior to amendment. 7. The learned counsel for the petitioner also drew my attention to the statement and objects of the amendment in 2011 to highlight the amendment. He further submitted that it was brought to eliminate the hardship caused to the dealers in as much as the provisions sought to tax on the entire value of the sale, on which, the dealer would not have collected tax at the rate prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on his turnover relating to taxable goods upto rupees fifty lakhs at such rate not exceeding one per cent, as may be notified by the Government and is liable to pay tax under sub-section (2) on all his sales of taxable goods above rupees fifty lakhs'' shall be substituted. * Vide G.O.Ms.No.135, Commercial Taxes and Registration (B1), dated 31.10.2011. 12. Under the provision as it read prior to the amendment, on reaching the threshold, a dealer was liable to pay tax under Sub-Section (2), on all his sales of Rs.50 lakhs and above and was entitled to avail input tax credit on the purchases made from and the date, and on the stock available with him, the purchase of which has been made within 90 days before the date, such turnover on which has reached Rs.50 lakhs. 13. Therefore, the petitioner ought to have stopped selling goods on reaching the threshold limit of 50 lakhs. Instead, the petitioner continued to make sales and thereby disqualifying itself from the concession under Section 3(4)(b) of the Tamil Nadu Value Added Tax Act, 2006 for the current assessment year and for the succeeding assessment year. 14. It has to be construed that the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vious Assessment Year 2010-11, it should be remembered that the cardinal rule under the taxing statutes law is to apply the law as it stood during the relevant period. There is no scope for interpretation based on the subsequent amendment to the law during the subsequent Assessment Year. 21. This is the law laid down by the Hon'ble Supreme Court in CIT v. Scindia Steam Navigation Co. Ltd, AIR 1961 SC 1633 : (1962) 1 SCR 788. The Hon ble Supreme Court there held that the liability to pay tax is computed according to the law in force at the beginning of the assessment year, i.e. the first day of April, and any change in law affecting tax liability after that date though made during the currency of the assessment year, unless specifically made retrospective, does not apply to the assessment for that year. 22. Therefore, normally, a subsequent amendment in a taxing statutes cannot be used to reopen the assessment by implying that the law was amended was intended to be applied retrospectively. It can either create a right or liability for the past assessments. To do so would be to imply to what was not implicit in the law as it stood unless such a law has been made with retros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not have actually further the case of the petitioner therein. 26. In CIT Vs. Vatika Township (P) Ltd., (2015) 1 SCC 1, while dealing with 42.1, the Hon'ble Supreme Court referred to the Notes on Clauses appended to the Finance Bill, 2002 while proposing insertion of proviso to Section 113 to the Income Tax Act, 1961, wherein, it was stated that this amendment will take with effect from 1-6-2002 . 27. It observed that these become epigraphic [Ed.: As per the Oxford Dictionary, epigraphic here means: intending to suggest the theme or purpose of the amendment.] words, when seen in contradistinction to other amendments specifically stating those to be clarificatory or retrospective depicting clear intention of the legislature. The Court also considered few other clauses where it could be seen from the same Notes that a few other amendments in the Income Tax Act were made by the same Finance Act specifically making those amendments retrospective. The Notes on Clauses show that the legislature is fully aware of three concepts: i. prospective amendment with effect from a fixed date; ii. retrospective amendment with effect from a fixed anterior date; and iii. clarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion in rest of the paragraphs in the said judgment explained when an enactment would be and when it would not be clarificatory. 34. The Court observed that a Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow's backward adjustment of it. Our belief in the nature of the law is founded on the bedrock that every human being is entitled to arrange his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as lex prospicit non respicit: law looks forward not backward. It further observed that in Phillips v. Eyre [(1870) LR 6 QB 1], it was held that a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with future acts ought not to change the character of past transactions carried on upon the faith of the then existing law. 35. Only where a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adu Value Added Tax Act, 2006, in sub-section (4), in clause (b), for the expression Such dealer is liable to pay tax under sub-section (2) on all his sales of rupees fifty lakhs and above , the expression Such dealer may pay a tax for each year on his turnover relating to taxable goods upto rupees fifty lakhs at such rate not exceeding one per cent, as may be notified by the Government and is liable to pay tax under subsection (2) on all his sales of taxable goods above rupees fifty lakhs shall be substituted. (By order of the Governor) G. JAYACHANDRAN, Secretary to Government, Law Department. 39. The above amendment to Section 3(4)(b) of the Tamil Nadu Value Added Tax Act, 2006 received the assent of the Governor on 26.09.2011. It was notified vide G.O.Ms.No.135, Commercial Taxes and Registration (B1), dated 31.10.2011 for the purpose of Section 1(2) of Act No.27 of 2011. 40. Though the said amendment was notified vide G.O.Ms.135, Commercial Taxes and Registration (B1), dated 31.10.2011, the Government appointed the 1st day of April 2012 as the date from which the said amendment was to come into force. It has not declared that the amendment will come into force ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tamil Nadu Value Added Tax Act, 2006 was retrospective and the amendment will apply to all Assessment Years from 2006 onwards, it is to be noted that this was not the intention of the legislature when amendment was brought to the Act vide Act No. 27 of 2011. If that was the intention of the legislature was to give a retrospective operation, the proposed amendment at the Bill stage itself would have clarified the position. 46. Since the Government has not given the amendment effect from an earlier date during the Assessment Years 2010-2011 20112012, it cannot be given effect with retrospective date on an earlier date. This aspect was not brought to the attention of the Court in the two decisions which were cited. Therefore, I am unable to accept the two decisions referred by the learned counsel for the petitioner. 47. In the light of the above discussion, I dispose these two Writ Petitions by upholding the orders of the second respondent in so far as demand under Section 3(4)(b) of the Tamil Nadu Value Added Tax Act, 2006 has been made on the petitioner. For the Assessment Years 2010-2011 and 2011-2012, the petitioner has not been given the benefit of Input Tax Credit availa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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