Prospective withdrawal of sales tax remission only, since retrospective cancellation of eligibility is barred absent clear statutory authority.

Discontinuance of a sales tax remission or eligibility benefit under the West Bengal sales tax scheme operates prospectively unless the statute clearly authorises retrospective withdrawal. The proviso to the relevant discontinuance rule protects remission already enjoyed for periods before the contravention, and the authority cannot cancel the eligibility certificate so as to unsettle benefits already acted upon by the dealer. Retrospective cancellation would be commercially disruptive and inconsistent with the statutory framework governing collection and payment under the exemption certificate.

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Issues: Whether an order discontinuing remission of sales tax eligibility could be given retrospective effect from the date of the original grant, and whether the statutory power under the relevant rules permitted withdrawal of the concession for a prior period.

Analysis: The remission was granted under section 41 of the West Bengal Sales Tax Act, 1994 and later cancelled when the authority found that the dealer did not fall within the applicable table under rule 128(2) of the West Bengal Sales Tax Rules, 1995. The relevant power to discontinue remission was contained in rule 135 of the West Bengal Sales Tax Rules, 1995, which authorises discontinuance upon contravention and, by the proviso, protects remission already enjoyed for any period prior to the date of contravention unless the eligibility certificate is revised or reviewed under the specified provisions. The statutory language, together with the prejudice that would be caused to a dealer who had acted on the basis of the certificate, confined the authority's power to prospective withdrawal. The Court also noted that the tax scheme under the West Bengal Sales Tax Act, 1994 involves collection from purchasers and payment to sellers on the basis of the exemption certificate, making retrospective cancellation commercially disruptive and legally inappropriate.

Conclusion: The cancellation of the eligibility certificate could operate only prospectively and could not be given retrospective effect; the assessee succeeded.

Ratio Decidendi: Where the statute empowers discontinuance of a tax remission or eligibility benefit, the power is confined to prospective operation unless the statute expressly authorises retrospective withdrawal.

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