The word 'substitute' in a tax statute is to be interpreted strictly as per the legislative intention, with prospective effect.

JUDGMENT :

K.S. JHAVERI, J.

By way of this writ petition, the petitioner has challenged the order dated 26.05.2006 under Annexure-9 and the consequential notice dated 03.07.2006 under Annexure-10 issued by the Assistant Commissioner of Sales Tax, Cuttack II Range, Cuttack-opposite party No.2 under Rule 16 of the Central Sales Tax (Orissa) Rules, 1957 and prays for a direction to the opposite parties to refund Rs.15,00,000/-.

2. Learned counsel for the petitioner contended that in view of the White Paper on State-Level Value Added Tax issued by the Government of Orissa at Annexure-12, the State Government assured the industries that payment of Orissa Value Added Tax will be given set off for which he has relied upon Section 21 of the VAT Act which came into force with effect from 01.04.2005 and has remained in force up to 30.06.2005. However, the State Government with effect from 01.07.2005 amended Section 21 (1) of the OVAT Act which reads as under:

“S.21(1) If the input tax credit of a registered dealer other than an exporter selling goods outside the territory of India determined under Section 20 for any tax period exceeds the tax liability for that period, the excess credit shall be set off against any “[outstanding tax, interest and penalty under this Act or under the Central Sales Tax Act, 1956 (74 of 1956) and the rules made thereunder, against that dealer].”

Section 21 (1) of the OVAT Act was further substituted on 01.06.2008 which reads as under:

“S.21(1) If the input tax credit of a registered dealer other than an exporter selling goods outside the territory of India determined under Section 20 for any tax period exceeds the tax liability for that period, the excess input tax credit shall be set off against the tax payable under the provisions of the Central Sales Tax Act, 1956 (74 of 1956) for that period at the first instance and if any balance input tax credit is still available, the same shall be carried forward for being set off against the tax payable for subsequent tax period or periods by that dealer.”

3. The Assistant Commissioner of Sales Tax relying on the law, on 26.05.2006 (Annexure-9) passed an order rejecting the claim of the petitioner holding that it is not entitled to avail the input tax credit.

Consequently, notice under Annexure-10 was issued. Therefore, the petitioner has challenged the order before this Court.

4. Learned counsel for the petitioner has strongly relied upon the judgment of the Hon’ble Supreme Court in the case of Sunil Kumar Rana v. State of Haryana and others, reported in (2003) 2 SCC 628, paragraphs 3, 7 and 8 of which read as under:

“3. The factual basis, which provided the ground for his disqualification and consequent rejection of the nomination, is that at the time of filing his nomination, the appellant had four children and that of the said four children, two were born after the coming into force of the Haryana Municipal (Amendment) Act, 1994 (Haryana Act 15 of 1994), the actual date of birth of them, twins, being 11-5-1995, as per the municipal records. The stand of the appellant was and even now before us is that the relevant date for determining the disqualification is the coming into force of the Haryana Municipal (Amendment) Act, 1994 (Haryana Act 15 of 1994) viz. 4-10-1994, the date of publication of the Amendment Act in the Government Gazette and not 5-4-1994, the date of coming into force of the Haryana Municipal (Amendment) Act, 1994 (Haryana Act 3 of 1994). The High Court was of the view that the disqualification will operate after 5-4-1995 — on the expiry of the period of one year from 5-4-1994, the date of coming into force of Amendment Act 3 of 1994. Per contra, the claim of the appellant was that the disqualification will be attracted only after 4-10-1995, the expiry of one year from the date of coming into force of Amendment Act 15 of 1994.

7. On a careful consideration of the relevant statutory provisions and the submissions of the learned counsel on either side, we a