Sales tax exemption ends with withdrawal of the notification; a continuing licence does not extend exemption rights.

A sales tax exemption granted by notification applies only while that notification remains in force for the relevant commodity. A licence obtained under the rules as a condition for availing the exemption does not extend the exemption period or create a vested right to continue it after the notification is withdrawn. Once copra was deleted from the exempted goods by the later notification, exemption ceased from that date and tax liability arose accordingly, even though the dealer's licence had not expired. The withdrawal was therefore effective prospectively from its operative date and did not depend on the remaining life of the licence.

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Issues: Whether the withdrawal of a sales tax exemption notification took effect from the date of withdrawal so as to make the dealer liable to tax notwithstanding that his licence obtained as a condition of exemption continued for a longer period.

Analysis: The exemption from tax was granted by the notification issued under section 6 of the General Sales Tax Act, 1125, and the taking out of a licence under rules 21 and 22 of the Travancore-Cochin General Sales Tax Rules, 1950, was only a condition for availing that exemption. The duration of the licence did not control the duration of the exemption. Once the later notification deleted copra from the exempted goods and came into force, the exemption ceased for that commodity from that date. The withdrawal was not retrospective merely because the dealer's licence had not yet expired, and no vested right to continue the exemption beyond the life of the original exemption notification arose from the continuing licence.

Conclusion: The dealer was liable to be taxed on copra from the date on which the exemption was withdrawn, and the contention that the exemption survived until expiry of the licence was rejected in favour of the Revenue.

Final Conclusion: The appeal succeeded and the suit for protection against tax recovery failed in full, as the exemption notification ceased to apply once withdrawn and the licence condition did not extend its life.

Ratio Decidendi: A tax exemption granted by notification continues only so long as the notification remains in force for the relevant commodity, and a licence taken as a condition of exemption does not create a vested right to exemption beyond the date of withdrawal.

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