TMI Blog2023 (3) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... inter-state trade and tax has been paid under the Central Sales Tax Act, 1956, retrospectively is within or beyond the scope of the powers conferred on the Government in terms of Section 17 of the TNGST Act, 1959 (or) Section 30 read with Section 88 (4) of the TNVAT Act? - HELD THAT:- The question is no longer res integra . Power may be conferred to make subordinate/ delegated legislation in the shape of rules, bye-laws, notifications etc., which have retrospective operation. - Such a power may be either conferred in express words or may be inferred by necessary implication. In the absence, however, of an express or necessarily implied power to that effect, subordinate/ delegated legislation, be it a rule, a bye-law or a notification, cannot have retrospective operation. It has been consistently held by this Court in the context of Section 17 of TNGST Act which is pari materia with Section 30 of the TNVAT Act, that while the Government is conferred with the power to grant exemption prospectively or retrospectively, the power to withdraw, annul, modify or vary a notifcation traceable to sub-Section (3) to Section 17 of the TNGST Act, cannot be exercised retrospectively. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d rather cannot pass orders pre-empting a quasi-judicial authority from exercising its power. It is made clear that the above declaration on the validity of the impugned notification would not preclude the authorities to recover the sums if any collected by way or purporting to be by way of taxes if law enables/permits to do so. Needless to state that any such exercise shall be in accordance with law. Petition disposed off. - Writ Petition Nos.3928, 8660, 8661, 8662, 8663, 8664, 9394, 9395 of 2008; 6518, 6519, 8280 of 2009; 6922 6924 of 2020 Honourable Mr.Justice S.Vaidyanathan And Honourable Mr.Justice Mohammed Shaffiq For the Petitioner : Mrs.AL.Ganthimathi For the Respondents : Mr.Haja Nazimudeen, Additional Advocate General-I, assisted by Mr.M.Venkateswaran, Special Government Pleader Mr.P.Haribabu, Government Advocate. COMMON ORDER The common questions that arise in this batch of Writ Petitions relates to the validity of Notification No.II (1)/CTR/75 (b-2)/2007, dated 19.12.2007 (G.O.Ms.No.198) which is challenged on the premise that the same is ultra vires Sections 30 and 88 of the Tamil Nadu Value Added Tax Act, 2006, (in short, ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... W.P. Nos.6518 and 6519 of 2009, the petitioners were engaged in manufacture of corrugated boxes. The petitioners purchased waste paper from registered/unregistered dealers and used the same in the manufacture of corrugated boxes/ boards. The period in dispute relates to the assessment years 2000- 2006. In W.P.Nos.6518 and 6519 of 2009, the petitioners purchased used/old bottles, except for the difference in the product the question raised in the above writ petitions also revolves around the scope and ambit of the power of the State Government to impose conditions retrospectively thereby curtailing / whittling down the scope of the exemption. It is relevant to state that the notifications for waste paper, paper board and used/old bottles granting exemption and the subsequent notification importing conditions retrospectively are identically worded and part of the same notification. 5. Section 3 of the TNGST Act, is the charging provision. Sub-section (2) to Section 3 of the TNVAT Act, 2006, prescribes the rate of tax and the point of levy in respect of goods mentioned in the First Schedule to the TNGST Act. During the relevant period Waste Paper and Corrugated Board were liable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansactions, or dealers in the entire State or part of it, subject to any restrictions or conditions that may be specified in the notification. The State Government in exercise of the power under Section 17 of the TNGST Act, 1959, granted exemption in respect of the tax payable under the said Act by any dealer on the last purchase of waste paper, waste of paper board and old/used bottles vide Notification G.O. Ms. No.176, Commercial Taxes and Registration (B2), dated the 28th December, 2006 with retrospective effect from 16th June 2000 to 21.07.2006. The notification is extracted hereunder: Last purchase of waste paper and waste of paper board- Exemption (Tamil Nadu) Notification G.O. Ms. No. 176, Commercial Taxes and Registration (B2), dated the 28th December, 2006 No. II(1)/CTR/58(d-2)/2006.- In exercise of the powers conferred by sub-section (1) of section 17 of the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959), the Governor of Tamil Nadu hereby makes an exemption in respect of the tax payable under the said Act by any dealer on the last purchase of waste paper and waste of paper board. 2. This notification shall be deemed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Board, subject to the condition that the said goods are sold on interstate trade and tax has been paid under the Central Sales Tax Act 1956 (Central Act 74 of 1956). 2. The exemption hereby made shall be deemed to have come into force on the 16th June 2000 and shall deemed to have remained in force upto and inclusive of the 21 July 2006. [G.O. Ms. No. 198, Commercial Taxes and Registration (B2), 19th December 2007.] No.11 (1)/ CTR / 75 (b-1)/2007. In exercise of the powers conferred by sub-sections (1), (2) and (3) of Section 30 read with sub-section (4) of Section 88 of the Tamil Nadu Value Added Tax Act, 2006 (Tamil Nadu Act 32 of 2006) and in supersession of the Commercial Taxes and Registration Department Notification No.II(1)/CTR/58(d-1)/2006 published at page I of Part II Section 1 of the Tamil Nadu Government Gazette Extraordinary dated the 28th December 2006, the Governor of Tamil Nadu hereby makes an exemption in respect of the tax payable under the said Act by any dealer on the last purchase of glass bottles whether old or used, subject to the condition that the said goods are sold on inter-state trade and tax has been paid under the Central Sales Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase of any specified goods or class of goods, at all points or at a specified point or points In the series of sales by successive dealers;.or (b) by any specified class of persons, in regard to the whole or any part of their turnover; or (c) on the sale or purchase of any specified classes of goods by specified classes of dealers in regard to the whole or part of their turnover. (2) Any exemption from tax, or reduction in the rate of tax, notified under sub-section (1)- (a) may extend to the whole State or to any specified area or areas therein; or (b) may be subject to such restrictions and conditions as may be specified in the notification. (3) The Government may, by notification, cancel or vary any notification issued under sub-section (1).'' Section 88 (4) of the TNVAT Act : ''88 (4) - All arrears of tax, interest, penalty, fee or other amount due under the said Act or 1970 Act, as the case may be, on the date of commencement of this Act, whether assessed or levied before such commencement, or assessed or levied after such commencement, may be recovered as if such tax, penalty, interest, fee or other amount is ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h sides. Perused the materials on record. 12. Two questions arise for consideration in these batch of cases viz., (1) Whether the impugned notification(s) which imports the condition that the exemption to Waste Paper, Paper Boards and used/old bottles shall be subject to the concession that the said goods are sold on inter-state trade and tax has been paid under the Central Sales Tax Act, 1956, retrospectively is within or beyond the scope of the powers conferred on the Government in terms of Section 17 of the TNGST Act, 1959 (or) Section 30 read with Section 88 (4) of the TNVAT Act. (2) Whether any refund consequent to a declaration that the impugned notifications are ultra vires would be subject to the doctrine of ''Unjust Enrichment''. 13. We shall now proceed to answer the above questions in seriatim. 14. The first question is no longer res integra . Power may be conferred to make subordinate/ delegated legislation in the shape of rules, bye-laws, notifications etc., which have retrospective operation. (Prohibition Excise Supdt., A.P. v. Toddy Tappers Coop. Society, (2003) 12 SCC 738) Such a power may be either conferred in express words or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spective effect and to put it otherwise, such a power may be exercised only prospectively. (emphasis supplied) (iii) In the case of State of Tamil Nadu v. Kannapiran Steel Re-rolling Mills, (1999) 112 STC 161 (Mad.) while considering similar provisions under Section 8(5) of the CST Act, 1956, this Court was pleased to hold as under: 21....There is no provision in the Act which confers power on the State Government to issue a notification under section 8-A with retrospective effect. It is beyond dispute that a competent Legislature may make a law even on matters relating to taxation with retrospective effect. The question, however, is whether the executive authority, to which the power to modify a law as delegated by a Legislature under a statute, can withdraw a benefit already given in the absence of an express provision in the statute itself, enabling it to exercise that power with retrospective effect. The question is no longer res integra. In India Sugars and Refineries Ltd. v. State of Mysore AIR 1960 Mys. 326, the question which arose for consideration was whether the power conferred by a Legislature on a subordinate legislative body like Government to iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as the submission of the learned Advocate General that the exemption granted vide G.O.Ms. No.176 dated 28.12.2006, without any condition attached was due to inadvertence inasmuch as the intention was only to grant exemption either under TNGST Act or Central Sales Tax Act, 1956 (in short, CST Act ). However, the notification dated 28.12.2006 resulted in taxes not being payable both under TNGST Act as well as CST Act, contrary to the intention. Thereby necessitating issuance of the subsequent notification dated 19.12.2017 importing the condition that the exemption would be subject to the condition that the goods are sold on inter-state trade and tax paid under the CST Act, with retrospective effect from 28.12.2006 to cure the above defect alleged to have inadvertently crept in. In other words the above circumstance is sought to be relied upon to justify the retrospective exercise of power. The above submission needs to be rejected for two reasons: 1. Firstly, as we have seen from the judgments referred to supra, the power be it under Section 17 or 30 of the TNGST/ TNVAT Act, respectively is not available to withdraw/ import conditions with regard to exemptions/ concessional rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was submitted that admittedly, no additional duty of excise was leviable on the goods in the possession of the appellants and thus the condition of proving that additional duties of excise have been paid to claim the benefit of exemption does not arise. It was submitted that the exemption being granted only with a view to avoid double taxation viz., of the liability to pay excise duty as well as sales tax and that the assessee not being bound to pay additional excise duty cannot claim the benefit of exemption on sales tax as such construction of the exemption notification was contrary to the intention. Rejecting the above contention, it was held by the Hon'ble Supreme Court as under: No doubt, statutes have to be construed as a whole so as to avoid any inconsistency or repugnancy among its several provisions, but if there is nothing to modify, nothing to alter, or nothing to qualify the language of a statute, the words and sentences have to be construed in their ordinary and natural meaning. What we are now concerned with is a fiscal provision and it has often been said that there is no equity in a taxing statute and either the subject is within it or not, on the words of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s therefore a manufacturer, still the appellant was entitled to exemption from excise duty since the case fell within the language of the two notifications dated July 31, 1959 and April 30, 1960, and the cotton fabrics were produced on power-looms owned by the cooperative society and there is nothing in the notifications to suggest that the cotton fabrics should be produced by the Cooperative Society for itself and not for a third party before it was entitled to claim exemption from excise duty. It was contended on behalf of the respondent that the object of granting exemption was to encourage the formation of cooperative societies which not only produced cotton fabrics but which also consisted of members, not only owning but having actually operated not more than four power-looms during the three years immediately preceding their having joined the society. The policy was that instead of each such member operating his looms on his own, he should combine with others by forming a society which, through the cooperative effort should produce cloth. The intention was that the goods produced for which exemption could be claimed must be goods produced on its own behalf by the society. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e repeal of TNGST Act, 1959 and introduction of TNVAT Act, 2006, doubts were expressed if the impugned notification is traceable to Section 17 of TNGST Act or Section 30 of the TNVAT Act. It is clear that the power whether traceable to sub-Section (3) to Section 30 or sub-Section (3) to Section 17 of the TNVAT Act or TNGST Act, respectively cannot be exercised to withdraw or import a condition and impose a disqualification or ineligibility retrospectively as would be clear from the above discussion. 19. We have no hesitation in holding that the impugned notification travels beyond the scope of power conferred under sub-Section (3) to Section 17 (or) Section 30 of the TNGST Act and the TNVAT Act respectively and thus the impugned notification viz., Notification No.II (1)/CTR/75 (b-2)/2007, dated 19.12.2007 (G.O.Ms.No.198) is ultra vires to Sections 17 of the TNGST Act, 1959 (or) Sections 30 and 88 of the TNVAT Act, 2006, insofar as it imports conditions with retrospective effect which has the effect of curtailing/ whittling down the scope of exemption granted vide notification in G.O.Ms.No.176 dated 28.12.2006. 20. It was submitted that in view of Section 88(2)(i) of the TNGST ..... X X X X Extracts X X X X X X X X Extracts X X X X
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