Sales tax holiday entitlement accrues on first sale; later amendment cannot enlarge an already accrued substantive right.

Eligibility for a sales tax holiday under section 39 arose on the date of the first sale of the unit's product. At that point, rule 99 then in force provided a five-year holiday for a small-scale industrial unit outside the CMDA area. The later amendment extending the holiday to seven years was not retrospective and did not alter accrued substantive rights. A pending eligibility-certificate application did not shift the accrual date or enlarge the entitlement. The article also distinguishes procedural limitation authorities, treating this question as one of substantive entitlement. The refusal to grant a seven-year eligibility certificate was upheld.

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Issues: Whether the assessee was entitled to claim a seven-year tax holiday under the amended rule 99 of the West Bengal Sales Tax Rules, 1995 when its first sale, which fixed the accrual of eligibility under section 39 of the West Bengal Sales Tax Act, 1994, had taken place before the amendment came into force.

Analysis: Eligibility for tax holiday under section 39 arose on the date of the first sale of the unit's product. On that date, the then-existing rule 99 allowed a five-year holiday for a small-scale industrial unit situated outside the CMDA area. The amendment enhancing the period to seven years came into force later and was not expressed to operate retrospectively or to alter the nature of rights already accrued. The amendment therefore could not be applied so as to shift the relevant date of first sale or convert an already accrued substantive entitlement into a larger one merely because the application for eligibility certificate remained pending when the amendment took effect. The Court also distinguished procedural limitation cases, holding that the present case concerned a substantive right and not a procedural bar.

Conclusion: The assessee was not entitled to a seven-year tax holiday on the amended rule and the refusal to grant an eligibility certificate for seven years was upheld.

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