Prospective operation of tax exemption notifications upheld; retrospective benefit rejected absent clear statutory authorisation.

The Orissa HC held that notifications issued under section 7 of the Orissa Sales Tax Act, 1947 could operate only prospectively because the provision authorising exemption or deferment of tax did not clearly permit retrospective effect. In fiscal statutes, retrospective operation requires express legislative indication, and a notification issued under a prospective power cannot be read backward by implication. The notifications dated 16 August 1990 and 28 April 1992 were therefore valid, but only from their respective dates of issue; any claim to retrospective benefit was rejected.

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Issues: Whether notifications issued under section 7 of the Orissa Sales Tax Act, 1947 could be construed as operating retrospectively or only from the date of their issuance.

Analysis: Section 7 empowers the State Government to exempt dealers from tax or allow deferment of tax by notification, but the provision is prospective in operation. In fiscal statutes, a retrospective operation can be given only when the legislature clearly indicates such intent. In the absence of such indication, the notification issued under a prospective power cannot be read as having retrospective effect.

Conclusion: The notifications dated 16 August 1990 and 28 April 1992 are valid only prospectively and cannot operate retrospectively.

Final Conclusion: The challenged notifications were upheld, but their effect was confined to the dates of issuance, and any claim to retrospective benefit was rejected.

Ratio Decidendi: A notification issued in exercise of a power that is prospective in nature cannot be given retrospective effect unless the statute clearly authorises such retrospective operation.

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