Retrospective cancellation of exemption notification failed where the notification fell outside the clause to which the deeming provision was confined.

An exemption notification dated 10 September 1970 was treated as falling under section 8A(1)(b) of the Karnataka Sales Tax Act, not section 8A(1)(a). Because section 8A(3A) applied only to notifications issued under section 8A(1)(a), the basis for treating the notification as retrospectively cancelled failed. Revision, reassessment and rectification proceedings founded on that premise, together with the consequential notices and orders, were unsustainable and liable to be quashed.

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Issues: Whether the notification dated 10 September 1970 was issued under section 8A(1)(b) of the Karnataka Sales Tax Act, 1957, and therefore did not attract section 8A(3A) of that Act, with the result that the revision, reassessment and rectification proceedings and the impugned notices or orders based on that provision were unsustainable.

Analysis: The notification granting exemption was treated by the respondents as one issued under section 8A(1)(a), but the memo filed on behalf of the State stated that it was in fact issued under section 8A(1)(b). Section 8A(3A) operated only in respect of notifications issued under section 8A(1)(a). Once the State accepted that the notification did not fall under section 8A(1)(a), the premise for applying section 8A(3A) disappeared. The proceedings initiated on the footing that the notification stood retrospectively cancelled could not therefore be sustained.

Conclusion: The notification did not attract section 8A(3A), and the impugned proceedings, notices and orders were liable to be quashed.

Final Conclusion: The writ petitions were allowed in part and the impugned tax proceedings were set aside on the basis that the exemption notification remained outside the scope of the retrospective cancellation provision.

Ratio Decidendi: A provision deeming cancellation of exemption notifications applies only to notifications issued under the specific statutory clause to which it is confined, and cannot sustain proceedings founded on a notification falling under a different clause.

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