Strict construction of sales tax exemption notifications: no enforceable right to demand extension beyond the notified period.

Sales tax exemption under the Kerala General Sales Tax Act was treated as a limited concession granted by notification for a fixed period, and not as an enforceable right to demand a further extension. The court noted that the power to issue, vary, or cancel exemption notifications does not oblige the Government to continue the benefit for a particular dealer beyond the notified term. Exemption provisions were construed strictly, so the concession could not be extended merely because the industrial unit had not fully used it within the original period. A later notification for a different class of units did not amount to an individual relaxation, and the refusal to extend the exemption was upheld.

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Issues: Whether the petitioner was entitled to extension of the period of sales tax exemption granted under the industrial exemption notification, and whether the Government could be compelled to issue a further notification extending the benefit beyond the original period.

Analysis: The exemption was granted under section 10 of the Kerala General Sales Tax Act, 1963 pursuant to the prevailing industrial policy and was limited to a specified period. The power under section 10 includes the authority to grant exemption or reduction by notification and to cancel or vary a notification, but the provision does not create an enforceable right in a particular dealer to demand a further extension of the concession. Exemption provisions are to be construed strictly, and the benefit cannot be extended to an individual unit merely because it could not fully utilise the incentive within the original period. The later notification relied on by the petitioner was issued for a distinct class of industrial units and not as an individual relaxation.

Conclusion: The petitioner was not entitled to insist upon extension of the exemption period, and the Government's refusal to grant such extension was upheld.

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