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PAMIDIGHANTAM SRI NARASIMHA, PANKAJ MITHAL
State of Maharashtra – Appellant
Versus
Prism Cement Limited – Respondent
What is... How to determine whether the amendment to Section 8(5) of the CST Act retrospectively affects previously granted tax exemptions? What is... What are the rights accrued under absolute exemptions granted prior to the 2002 amendment to Section 8(5) of the CST Act? What is... What are the conditions under which Form ‘C’ and ‘D’ declarations are required for inter-State sales post-amendment?
Key Points: - The State Government cannot unilaterally revoke previously granted exemptions without notice. (!) - The amendment to Section 8(5) of the CST Act is prospective and does not nullify rights accrued under pre-amendment exemptions; Form ‘C’ and ‘D’ requirements apply prospectively. (!) (!) - Exemptions granted under PSI 1993 in existence before 11.05.2002 created substantive rights up to the earlier of 2012 or Rs. 273.54 crore. (!) (!) - After the 2002 amendment, compliance with Section 8(4) (Forms ‘C’/‘D’) became a condition for exemptions, but this applies to transactions post-amendment. (!) (!) - The appeals related to Maharashtra’s revision notices, based on Form ‘C’ and ‘D’ compliance, were dismissed for lack of retrospective application of the amendment to pre-existing rights. (!) - The decision relies on general principle that repeal or amendment does not affect accrued rights unless explicitly stated or revocation is effected with due process. (!) (!) - Prior judgments reaffirm the principle that substantive rights accrued cannot be taken away unilaterally without notice/hearing. (!)
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, Mumbai1 [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, 19592 [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 19933 [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 Central Sales Tax Act4 [In short ‘CST Act’] by t
The amendment to Section 8(5) of the CST Act does not retrospectively affect previously granted tax exemptions, which remain valid unless revoked with notice.
The amendment to Section 8(5) of the CST Act applies prospectively and does not retroactively affect vested rights to tax exemption granted prior to the amendment.
The court ruled that non-furnishing of 'C' Forms by a purchaser due to financial distress does not absolve entitlement to tax exemptions under Section 6(2) of the Central Sales Tax Act, 1956.
Exemptions under G.O.Ms. No. 1091 are general under state law but do not qualify as general exemptions under the Central Sales Tax Act due to specific conditions in the exemption notification.
The court upheld the Tax Board's interpretation of tax exemption calculations based on percentage increases in inter-State sales, affirming that authorities acted within the notification's spirit.
The Notification under Section 8(5) of the CST Act operates independently, allowing a reduced tax rate without the conditions of Section 8(4) applying.
The main legal point established in the judgment is the application of the principle of legitimate expectation, promissory estoppel, and Section 38A of the Central Excise Act, 1944 in protecting the ....
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