TMI Blog2018 (12) TMI 1824X X X X Extracts X X X X X X X X Extracts X X X X ..... ld warrant it to be given a retrospective effect. This exactly is the justification to treat procedural provisions as retrospective. Applying the aforesaid standard, there cannot be any difficulty in coming to the conclusion that Tamil Nadu Act 27 of 2011 must be given retrospective application. As rightly pointed out by the learned counsel appearing for the petitioner, this is evident from the statement of objections and reasons annexed to the amendment Act. The legislature was aware that a literal construction of the unamended Section 3(4)(b) of the Act resulted in levy of tax under Section 3(2) of the Act on the entire turn over of the dealer. The dealer was faced with such a levy even though he had not collected any tax on the turnover upto ₹ 50.00 lakhs. In order to rectify the situation the amendment Act was introduced. The intent and object of the legislature is clearly evident by the use of the expression ?substituted?. Therefore, it will have to be necessarily construed as retrospective. In fact, that is the object which the legislature intend to subserve. Therefore, the Tamil Nadu Act 27 of 2011 being a substitutive amendment will cover the case of the writ pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 3(4) of the Act was recast and Section 3(4)(b) was introduced vide Tamilnadu Act No.49 of 2008 with effect from 18.06.2008. Section 3(4)b) read as under : Section 3(4)(b) : If the turnover relating to taxable goods of a dealer paying tax under clause (a), in a year, reaches rupees fifty lakhs at any time during that year, he shall inform the assessing authority in writing within seven days from the date on which such turnover has so reached. Such dealer is liable to pay tax under sub #126;section (2) on all his sales of rupees fifty lakhs and above and he is entitled to the input tax credit on the purchases made from the date, and on the stock available with him, the purchases of which has been made within ninety days before the date, on which such turnover has reached rupees fifty lakhs. Provided that such dealer whose turnover relating to taxable goods has reached rupees fifty lakhs during the previous year shall not be entitled to exercise such option for subsequent years.? 3.But, the said provision was interpreted by the officials as if on crossing of the ceiling of ₹ 50.00 lakhs, the dealer will have to pay tax under section 3(2) of the Act on his entire sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing for the petitioner on the other hand contended that this Court must give retrospective application to Tamil Nadu Act 27 of 2011. He highlighted the fact that this amendment is a substitutive amendment. The effect of a substitutive amendment is that the substituted provision should be deemed to have been present in the statute from the very beginning. He placed reliance on the decision of the Madras High Court reported in (2013) 64 VST 385 (Mad) (Sakthi Masala (P) Ltd vs. Assistant Commissioner (CT), Madurai). He pointed out that if retrospective application is not given, it would lead to disastrous consequence for the dealers like the petitioner. This is because acting under the impression that they need to pay only % as composition tax, they had not collected tax from their purchasers. If they were to taxed at a higher rate on the entire turn over, it will have a catastrophic consequence on their businesses. This is all the more so because they had not availed any ITC. 8.It is true that as per the Tamil Nadu Act 27 of 2011, the dealer who is under the composition scheme should inform the assessing authority in writing within 7 days from the date on which the ceiling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes?. Vis #126; #126;vis ordinary prose, a legislation differs in its provenance, layout and features as also in the implication as to its meaning that arise by presumptions as to the intent of the maker thereof. 28.Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. 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 tomorrows 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. As was observed in Phillips vs. Eyre, a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision imposing some burden or liability where the presumption attaches towards prospectivity. In the instant case, the proviso added to Section 113 of the Act is not beneficial to the assessee. On the contrary, it is a provision which is onerous to the assessee. Therefore, in a case like this, we have to proceed with the normal rule of presumption against retrospective operation. Thus, the rule against retrospective operation is a fundamental rule of law that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication. Dogmatically framed, the rule is no more than a presumption, and thus could be displaced by outweighing factors. 32.Let us sharpen the discussion a little more. We may note that under certain circumstances, a particular amendment can be treated as clarificatory or declaratory in nature. Such statutory provisions are labelled as ?declaratory statutes?. The circumstances under which provisions can be termed as ?declaratory statutes? is explained by Justice G.P. Singh in the following manner: Declaratory statutes The presumption agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ujarat Act 18 of 1965, observed as follows: 8.....The amending clause does not seek to explain any pre #126;existing legislation which was ambiguous or defective. The power of the High Court to entertain a petition for exercising revisional jurisdiction was before the amendment derived from Section 115 of the Code of Civil Procedure, and the legislature has by the amending Act not attempted to explain the meaning of that provision. An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. 11.The said Constitution Bench judgment was followed in (2015) 16 SCC 731 (Sebi v. Alliance Finstock Ltd). The doctrine of fairness was applied in the said decision and it was held that if a benefit can be conferred without a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators object, then retrospectivity should be given. 12.Applying the aforesaid standard, there cannot be any difficulty in coming to the conclusion that Tamil Nadu Act 27 of 2011 must be given retrospective application. As rightly pointed out by the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as mandatory. But when a provision of law relates to the performance of any public duty and the invalidation of any act done in disregard of that provision causes serious prejudice to those for whose benefit it is enacted and at the same time who have no control over the performance of the duty, such provision should be treated as a directory one. Where, however, a provision of law prescribes that a certain act has to be done in a particular manner by a person in order to acquire a right and it is coupled with another provision which confers an immunity on another when such act is not done in that manner, the former has to be regarded as a mandatory one. A procedural rule ordinarily should not be construed as mandatory if the defect in the act done in pursuance of it can be cured by permitting appropriate rectification to be carried out at a subsequent stage unless by according such permission to rectify the error later on, another rule would be contravened. Whenever a statute prescribes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said requirement leads to a specific consequence, it would be difficult to hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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