Retrospective withdrawal of sales tax exemption was impermissible; tax liability arose only from the later notification date.

A delegated sales tax exemption for desi sweetmeats could not be withdrawn retrospectively because the governing provision did not confer express power to take away the exemption from an earlier date. The later notification dated 5 October 1972 was treated as an addendum, so tax liability arose only from that date, not from 26 April 1972. On the turnover finding, the sales for 1972-73 did not cross the applicable threshold for tax on desi sweetmeats and namkins prepared by halwais, so no tax demand could be sustained for the relevant year.

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Issues: (i) whether the exemption from sales tax granted to desi sweetmeats could be withdrawn retrospectively by the corrigendum notification dated 5 October 1972 so as to fasten liability from 26 April 1972; (ii) whether the assessee was liable to pay tax for the relevant period on the basis of the turnover found by the Tribunal.

Issue (i): whether the exemption from sales tax granted to desi sweetmeats could be withdrawn retrospectively by the corrigendum notification dated 5 October 1972 so as to fasten liability from 26 April 1972.

Analysis: The power under section 4(2) of the Rajasthan Sales Tax Act, as it then stood, authorised exemption by notification but did not contain express authority for retrospective withdrawal. The subsequent notification dated 5 October 1972 was treated as an addendum and not a true corrigendum, because the earlier notification of 26 April 1972 dealt only with namkins and did not itself withdraw the exemption for desi sweetmeats. In the absence of express retrospective power, subordinate legislation could not take away the exemption with effect from an earlier date.

Conclusion: The withdrawal of exemption could not operate retrospectively from 26 April 1972; liability commenced only from 5 October 1972.

Issue (ii): whether the assessee was liable to pay tax for the relevant period on the basis of the turnover found by the Tribunal.

Analysis: The Tribunal found total sales of Rs. 60,000 for the period 26 April 1972 to 31 March 1973. Under the relevant notification dated 28 July 1972, sales of desi sweetmeats and namkins prepared by halwais became taxable only if turnover exceeded Rs. 50,000. On the Tribunal's own finding, the turnover attributable to the period after 5 October 1972 was not shown to exceed the statutory limit. Accordingly, no tax liability could be fastened for the year 1972-73.

Conclusion: The assessee was not liable to pay tax for the sales effected during 1972-73.

Final Conclusion: The revisions were disposed of by modifying the assessment only to the extent of the date from which registration liability arose, while deleting the tax demand for the relevant year.

Ratio Decidendi: In the absence of express statutory authority, a delegated fiscal notification cannot operate retrospectively to withdraw an exemption or impose tax liability from an earlier date.

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