Clarificatory tax notification amendment held retrospective where circular showed only explicit restatement of existing scheme.

Notification No. 67/97 was treated as clarificatory because the amended wording, read with the Board's circular, merely made explicit what was already implicit in the scheme and did not create a new liability or right. The circular's statement that past recoveries could be regularised supported retrospective operation of the amendment. On that basis, the change was held to be retrospective rather than prospective, and the contrary view was set aside.

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Issues: Whether Notification No. 67/97 dated 27-11-97 was clarificatory in nature so as to operate retrospectively, or whether it introduced a substantive having only prospective effect.

Analysis: The amended notification was read with the Board's circular, which expressly treated the amendment as clarificatory and stated that recoveries for the past period could be regularised. Where an amendment merely makes explicit what was implicit, it is to be treated as clarificatory and not as creating a new liability or right. The binding circular supported the conclusion that the change in wording did not amount to a substantive alteration of the scheme.

Conclusion: The amendment was held to be clarificatory and therefore retrospective in operation. The order holding it to be prospective was set aside, and the appeal succeeded.

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