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TMI Blog2025 (2) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... ied by the dealer in context with the aforesaid interstate sale, trade and commerce. The absolute power initially conferred under Section 8(5) upon the State Government to grant exemption/partial exemption of tax in connection with inter-State sale, trade or commerce with the amendment was circumscribed and restricted to the fulfilment of the requirement of Section 8(4) of the CST Act which prescribes for the submission of Form 'C' and 'D' only w.e.f. 11.05.2002. However, such restrictions are prospective in nature and would not apply retrospectively to cases where absolute exemption was permitted much prior to the amendment. In the instant case, the assessee-respondent was granted tax benefits under the PSI 1993 issued in exercise of power under Section 8(5) of the CST Act as per the eligibility and entitlement certificates dated 20.02.1998 and 24.03.1998 respectively and that said benefit was available to the assessee-respondent up to the period of 2012 or to the extent of Rs.273.54 crore, whichever was earlier. The said benefit granted to the assessee-respondent was not with any restriction, much less the condition of submission of Form 'C' and 'D'. Thus, on the basis of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M SRI NARASIMHA And PANKAJ MITHAL , JJ. JUDGMENT PANKAJ MITHAL , J. Civil Appeal No. 13928 OF 2015 : 1. Heard learned counsel for the parties at length. 2. The assessee-respondent Prism Cement Limited, a public limited company, invoked the extraordinary writ jurisdiction of the High Court, challenging the three trade circulars issued by the Commissioner of Sales Tax, Mumbai In short 'Commissioner' on 27.05.2002, 20.07.2002 and 08.02.2007 respectively and various notices issued by the Deputy Commissioner of Sales Tax under Section 38 of the Bombay Sales Tax Act, 1959 In short 'BST Act' for revising the assessments of the assessee-respondent made for the assessment years 2002-2003 to 2004-2005. Consequentially, calling upon the assessee-respondent to pay/refund the exempted portion of the tax as per the provision of Package Scheme of Incentives 1993 Hereinafter referred to as 'PSI 1993' on the sale of goods effected in the course of inter-State trade or commerce. 3. The above writ petition has been allowed by the Division Bench of the High Court by the impugned judgment and order dated 30.08.2012 and it has been held that even after the amendment of Section 8(5) of the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue which arises for consideration is whether the exemption from tax granted under the PSI 1993 issued under Section 8(5) of the CST Act as it existed at the relevant time read with eligibility & entitlement certificate could be withdrawn by the subsequent amendment to Section 8(5) of the CST Act by the Finance Act of 2002 with effect from 11.05.2002 as the assessee respondent failed to fulfil the requirements of Section 8(4) of the CST Act which mandated for submission of declaration in Form 'C' or 'D'. Ancillarily, whether the aforesaid amendment could be applied retrospectively taking away the benefit which have accrued to the assessee-respondent prior to coming into force by the Finance Act 2002. 9. In this context we had to first refer to Section 8(1) of the CST Act as it stood prior to its amendment by the Finance Act 2002 with effect from 11.05.2002. The Section 8 of the CST Act as a whole as it stood prior to the amendment by the Finance Act 2002 reads as under: "Section 8: Rates of tax on sales in the course of inter-State trade or commerce 1. Every dealer, who in the course of inter-State trade or commerce: (a) sells to the Government any goods; or (b) sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding anything contained in this section, the State Government may, if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette and subject to such conditions as may be specified therein, direct: (a) that no tax under this Act shall be payable by any dealer having his place of business in the State in respect of the sales by him in the course of inter-State trade or commerce, from any such place of business of any such goods or classes of goods as may be specified in the notification; or that the tax on such sales shall be calculated at such lower rates than those specified in sub-section (1) or sub-section (2) as may be mentioned in the notification. (b) that in respect of all sales of goods or sales of such classes of goods as may be specified in the notification, which are made, in the course of inter-state trade or commerce, by any dealer having his place of business in the State or by any class of such dealers as may be specified in the notification to any person or to such class or persons as may be specified in the notification, no tax under this Act shall be payable or the tax on such sales shall be calculated at suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Rajasthan and Others (2000) 1 SCC 688. This Court in deciding the above case inter-alia held that as Section 8(5) starts with a non-obstinate clause and overrides Section 8(1) and 8(4) of the CST Act, the power of the State Government to grant exemption/partial exemption from tax includes dispensing with the requirement of Form 'C' and 'D' in respect of inter-State sales and trade. To put it simply it was held that when the State Government grants exemption/partial exemption in tax in exercise of powers under Section 8(5) it impliedly has the power to dispense with the requirement of Form 'C' and 'D'. 15. It was to overcome the decision of this Court in Shree Digvijay (Supra) that Section 8(5) of the CST Act was amended by Finance Act 2002 with effect from 11.05.2002. The amended Section 8(5) of the CST Act reads as under: "Section 8(5) - Notwithstanding anything contained in this section, the State Government may, if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette and subject to such conditions as may be specified therein, direct: (a) no tax under this Act shall be payable by any dealer having his place of bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial exemption of tax in connection with inter-State sale, trade or commerce with the amendment was circumscribed and restricted to the fulfilment of the requirement of Section 8(4) of the CST Act which prescribes for the submission of Form 'C' and 'D' only w.e.f. 11.05.2002. However, such restrictions are prospective in nature and would not apply retrospectively to cases where absolute exemption was permitted much prior to the amendment. 18. In the instant case, the assessee-respondent was granted tax benefits under the PSI 1993 issued in exercise of power under Section 8(5) of the CST Act as per the eligibility and entitlement certificates dated 20.02.1998 and 24.03.1998 respectively and that said benefit was available to the assessee-respondent up to the period of 2012 or to the extent of Rs.273.54 crore, whichever was earlier. The said benefit granted to the assessee-respondent was not with any restriction, much less the condition of submission of Form 'C' and 'D'. Thus, on the basis of such exemption granted by the petitioner vide Eligibility Certificate dated 20.02.1998 and Entitlement Certificate dated 24.03.1998, a substantive right had accrued to the respondent to claim th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crued stand nullified or all previous exemptions stand cancelled or revoked. The requirement for fulfilling the condition of Section 8(4) of the CST Act for getting the benefit of tax exemption came subsequently after the amendment of Section 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. 22. In support of the above contention, reliance has been placed upon Darshan Singh v. Ram Pal Singh and Anr. AIR 1991 SC 1654 :: 1992 Supp (1) SCC 191 which provides that the benefits conferred earlier to the amendment would remain unaltered, however, the availment of the said benefit in future would be restrictive to conditions imposed by the amended provision. 23. 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. 24. In S.L. Srinivasa Jute Twine Mills (P) Ltd. vs. Union of India & Anr. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taken away unilaterally without notice or an opportunity of hearing to the said person. Thus, after the amendment of Section 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 Section 8(5) inasmuch as there is nothing in the amended provision which provides for taking away such a right granted to the assessee-respondent. 29. The State Government while applying the aforesaid amended Section 8(5) was not justified in taking away such a right accrued to the assessee-respondent on mere prospective amendment of Section 8(5) without revoking the Entitlement Certificate dated 24.03.1998 without notice or opportunity of hearing. 30. In view of the above facts and circumstances, on the above short point, the State Government was not competent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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