Prospective operation of delegated fiscal incentives controls eligibility dates, with valid applications governing tax exemption from filing date.

A delegated fiscal incentive scheme was held to operate prospectively unless the parent statute expressly authorises retrospectivity, so clause 7(d) could not govern applications filed before its insertion. Where valid Form A applications had already been submitted, the eligibility benefit related back to the application date, making later assessment and demand notices unsustainable to that extent. Where the Form A application remained defective until the ISI certificate was furnished, the application was treated as complete only on the curing date, and the eligibility certificate became effective from that later date.

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Issues: (i) Whether clause 7(d) of the Incentive Scheme, providing that the benefit would be available from the date of issue of the eligibility certificate, operated retrospectively or prospectively; (ii) whether the petitioners were entitled to exemption from tax and consequential quashing of the assessment and demand orders from the dates of their applications, and whether the petition involving a defective application was entitled to relief.

Issue (i): Whether clause 7(d) of the Incentive Scheme, providing that the benefit would be available from the date of issue of the eligibility certificate, operated retrospectively or prospectively.

Analysis: The Incentive Scheme was framed by the State Government in exercise of delegated legislative power under Section 4(2) of the Rajasthan Sales Tax Act, 1954. Subordinate or delegated legislation does not have retrospective operation unless such power is expressly conferred by the parent enactment. A fiscal provision is also not to be construed as retrospective unless the statute clearly so provides. Clause 7(d) contained no language indicating retrospective effect and was inserted only later.

Conclusion: Clause 7(d) was prospective and could not govern applications already submitted before its insertion.

Issue (ii): Whether the petitioners were entitled to exemption from tax and consequential quashing of the assessment and demand orders from the dates of their applications, and whether the petition involving a defective application was entitled to relief.

Analysis: For the petitions where applications in Form A had been duly filed before the later insertion of clause 7(d), the earlier applications governed the grant of eligibility certificates, and the benefit of the Incentive Scheme had to relate back to the dates of those applications. The assessment orders made under Section 7-B of the Rajasthan Sales Tax Act, 1954 and under Section 9 of the Central Sales Tax Act were therefore unsustainable to the extent they ignored the operative date of the applications, and the consequential demand notices could not survive. In the petition where the Form A application remained defective until the ISI certificate was furnished, the application was treated as complete only on that later date.

Conclusion: The three petitions based on valid prior applications were allowed and the relief of tax exemption from the dates of application was granted, with the related assessment and demand notices quashed. The petition involving the defective application was dismissed, and the eligibility certificate was held effective only from the date on which the defect was cured.

Final Conclusion: The common ruling held that the amended incentive clause was not retrospective, that valid applications under the scheme entitled the petitioners to the benefit from the application date, and that only the petition with a defective application failed on merits.

Ratio Decidendi: Delegated legislation, especially in fiscal matters, is prospective unless retrospective operation is expressly authorised by the parent statute, and the operative date of an incentive benefit depends on the date of a valid application where the scheme so applies.

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