Retrospective withdrawal of tax concession is impermissible absent express statutory authority; earlier exemption continued to apply.

A delegated tax notification could not be used to withdraw an accrued tax concession with retrospective effect unless the parent statute expressly authorised such operation. The Karnataka HC held that section 8-A empowered the State Government to grant, cancel, or vary exemptions prospectively, but did not by itself permit retrospective curtailment of benefits already earned. A later notification seeking to alter the tax burden for a completed period was therefore ultra vires to that extent, and the earlier concessional notification continued to govern the relevant sales period. The assessment had to be revised on that basis, and the petitioners succeeded.

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Issues: Whether the State Government could, by a notification under section 8-A, withdraw a tax concession already granted by earlier notification with retrospective effect so as to alter the tax liability for an already completed period.

Analysis: Section 8-A empowered the State Government to grant exemption or reduction in tax by notification, and also to cancel or vary such notification. The power to cancel or vary was held to operate prospectively, unless the statute expressly authorised retrospective action. A notification issued in exercise of delegated legislative power has statutory force, but that does not by itself confer authority to take away accrued benefits or impose a heavier burden for a past period. In the absence of express statutory power to act retrospectively, the third notification could not operate to the prejudice of dealers for sales already covered by the earlier concession.

Conclusion: The third notification was ultra vires to the extent it purported to operate retrospectively against the petitioners, and the tax concession under the first notification remained applicable for the relevant period.

Final Conclusion: The assessment was required to be revised on the basis of the earlier concessional notification, and the petitions succeeded.

Ratio Decidendi: Delegated legislation cannot be given retrospective effect so as to withdraw an accrued tax concession or impose a past liability unless the parent statute expressly authorises retrospective operation.

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