Retrospective cancellation of tax exemption certificate barred after expiry of the exemption period and full availing of benefit

An eligibility certificate granting entry tax exemption could not be cancelled retrospectively after the exemption period had expired and the dealer had already fully availed the benefit. The High Court applied the principle that, once the defined exemption period is over and the concession has been enjoyed, the State lacks authority to unsettle that benefit by a later retrospective cancellation; at most, any permissible cancellation during the currency of the period could operate only prospectively. The retrospective cancellation was therefore invalid, and the order quashing the certificate was set aside.

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Issues: Whether the State could retrospectively cancel an eligibility certificate granting exemption from entry tax after the exemption period had expired and after the dealer had already availed the full benefit.

Analysis: The exemption certificate had been issued for a defined period and was fully acted upon by the dealer. The cancellation was made long after the expiry of that period. The governing principle applied was that, once the eligibility period is over and the benefit has been enjoyed, the State has no authority to cancel the certificate with retrospective effect. At most, any cancellation during the currency of the period could operate prospectively and not so as to disturb benefit already availed. The facts were treated as covered by the earlier decisions relied upon in the judgment.

Conclusion: The retrospective cancellation was invalid and the impugned order quashing the eligibility certificate was set aside.

Ratio Decidendi: An eligibility certificate granting tax exemption cannot be cancelled retrospectively after the exemption period has expired and the benefit has already been fully availed; any cancellation, if otherwise permissible, can operate only prospectively.

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