Statutory exemption notifications can be amended and can validly exclude subdivided goods within the same exempt class.

A statutory power to grant exemption under section 6(1) of the Madras General Sales Tax Act includes power to amend an earlier exemption notification, because the general clauses law permits rescission, revocation, amendment or variation of statutory orders and notifications. An exemption framed for a specified class of goods remains valid even when the class is subdivided by exclusions such as particular vegetables, so the amended notification excluding yams, green chillies and green ginger was intra vires section 6(1)(i). The suggested wider reading of section 6(2)(b) was rejected, as that provision concerns operational restrictions capable of breach in business, not the subject-matter of exemption. The amended notification therefore stood.

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Issues: (i) Whether the Government had power to modify an exemption notification issued under section 6(1) of the Madras General Sales Tax Act, 1939. (ii) Whether the amended notification excluding yams, green chillies and green ginger from the exemption was within the scope of section 6(1)(i). (iii) Whether the amendment could be supported as a restriction under section 6(2)(b) of the Madras General Sales Tax Act, 1939.

Issue (i): Whether the Government had power to modify an exemption notification issued under section 6(1) of the Madras General Sales Tax Act, 1939.

Analysis: The power to grant exemption under section 6(1) was not exhausted by the first notification. Section 13 of the Madras General Clauses Act, 1891, recognised that a statutory power may be exercised from time to time as occasion requires. Section 15 further enabled rescission, revocation, amendment or variation of orders issued under statutes. The expression used in the Madras General Clauses Act was held broad enough to include notifications.

Conclusion: The Government had power to amend the earlier exemption notification.

Issue (ii): Whether the amended notification excluding yams, green chillies and green ginger from the exemption was within the scope of section 6(1)(i).

Analysis: Section 6(1)(i) authorised exemption of any specified class of goods. The amended notification was read as a single integrated exemption of vegetables other than the specified excluded items. The Court held that vegetables could be subdivided into recognised classes and varieties, and that an exemption framed by reference to such classes remained an exemption of a specified class of goods. The validity of the notification did not depend on the drafting form used.

Conclusion: The amended notification was intra vires section 6(1)(i).

Issue (iii): Whether the amendment could be supported as a restriction under section 6(2)(b) of the Madras General Sales Tax Act, 1939.

Analysis: Section 6(2)(b) was construed in the light of the scheme of the Act, including sections 5 and 6-A. The restriction contemplated was one capable of contravention in the course of carrying on business, such as conditions regarding accounts or returns, and not a restriction on the subject-matter of exemption itself. The Court therefore rejected the suggested wider construction.

Conclusion: The notification was not upheld on the basis of section 6(2)(b), though it remained valid under section 6(1)(i).

Final Conclusion: The challenge to the amended exemption notification failed, and the petition was dismissed with no order as to costs.

Ratio Decidendi: A statutory power to grant exemption includes, by necessary implication and by the operation of the general clauses law, the power to amend an earlier exemption notification, and an exemption may validly be framed by reference to a subdivisible specified class of goods.

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