Exemption notification can be rescinded to restore a statutory sales tax levy, without creating a fresh tax liability.

A statutory exemption from sales tax granted by notification can be withdrawn by a later notification where the parent law and general clauses provisions confer power to amend or rescind notifications. The cancellation does not impose a new tax; it only restores the levy already imposed by the sales tax statute, so the challenge on Article 265 grounds fails. The exemption was therefore treated as a temporary suspension of collection, and the rescinding notification was held to be within the Government's power and not ultra vires.

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Issues: Whether the Government, having granted an exemption from sales tax by notification under section 6(1) of the Travancore-Cochin General Sales Tax Act, had the power to cancel that exemption by a subsequent notification, and whether such cancellation amounted to an unauthorised imposition of tax.

Analysis: Section 6(1) empowered the Government to issue a notification granting exemption or reduction in rate in respect of tax payable under the Act. Section 20 of the Travancore-Cochin Interpretation and General Clauses Act, 1125 provided that a power to issue notifications includes the power to add to, amend, vary, or rescind them in the like manner. The tax itself had already been imposed by section 3(1) of the Sales Tax Act; the first notification merely suspended its levy for the period of exemption. The later notification did not create a new tax liability but only removed the exemption and restored the operation of the tax already imposed by statute. Article 265 of the Constitution of India was not violated because the levy continued to rest on statutory authority.

Conclusion: The cancellation notification was within the Government's power and was not ultra vires. The challenge to the notification failed.

Ratio Decidendi: A statutory power to grant exemption by notification includes, by virtue of the general clauses law, the power to rescind that exemption by a further notification, and cancellation of an exemption merely restores the levy already imposed by the parent statute.

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