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2015 (1) TMI 1274 - HC - VAT and Sales Tax


Issues:
Interpretation of notification dated May 5, 1997 regarding amendment of notification dated March 31, 1995 for exemption/reduction in tax under the Central Sales Tax Act, 1956.

Analysis:
The judgment pertains to a revision under section 11 of the U. P. Trade Tax Act, 1948 against an order of the Tribunal related to the assessment year 1997-98 under the Central Sales Tax Act, 1956. The assessee, engaged in manufacturing electronic goods, was granted an eligibility certificate for expansion under section 4A of the U. P. Act. The issue revolved around the interpretation of Notification No. 781 dated March 31, 1995, which provided exemption/rebate on tax for the first 10 years of production/sale. Column 4 of the notification limited the exemption or reduction in tax to five percent of the sale price based on the rate of tax under the U. P. Act.

The notification was subsequently amended on May 5, 1997, replacing "U. P. Act" with "Act" in column 4. The question before the court was whether this amendment applied from the date of publication of the notification in the gazette, i.e., May 5, 1997, or whether it operated retrospectively from the date of the original notification in 1995. The Tribunal had denied the benefit of exemption/reduction in tax to the assessee for the relevant year, considering the change from "U. P. Act" to "Act" as a rectification of a clerical mistake, effective from 1995.

The court held that unless specifically provided, taxing statutes are generally prospective. The notification dated May 5, 1997 clearly stated that the amendment would be effective from the date of its publication, i.e., May 5, 1997. Therefore, the court ruled that the amendment could not be applied retrospectively to 1995. The court emphasized that the language of the notification was plain and unambiguous, indicating the effective date of the change. It further stated that any mistake in the original notification was rectified by the subsequent amendment, which did not relate back to the earlier notification.

In conclusion, the court sided with the assessee revisionist, holding that the amendment to the notification dated March 31, 1995, by the notification dated May 5, 1997, would be effective from May 5, 1997, and not retrospectively from April 1, 1995 as determined by the Tribunal. The revision was allowed in favor of the assessee, with no order as to costs.

 

 

 

 

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