Prospective overruling cannot be imposed by executive instruction to restrict a Supreme Court tax ruling

A State Government cannot, by executive instruction under Article 162, restrict the operation of a Supreme Court ruling on taxability of warranty replacement spare parts or override final quasi-judicial orders under the Andhra Pradesh General Sales Tax Act. The doctrine of prospective overruling belongs to the Supreme Court and applies only when that Court expressly limits the temporal effect of its own judgment. Because no such limitation was made, the declared law operated from inception, and G.O.Ms. No. 144 was void to the extent it fixed a later effective date. The tax demand based on the final assessment and revisional orders was sustained.

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Issues: Whether G.O.Ms. No. 144 could direct that the Supreme Court's ruling on taxability of warranty replacement spare parts would operate only prospectively from 21 July 2004, and whether the demand raised pursuant to the revisional and appellate orders could be interfered with.

Analysis: The statutory scheme under the Andhra Pradesh General Sales Tax Act, 1957 provided separate appellate and revisional remedies against assessment and revisional orders, and those remedies had not been pursued, allowing the earlier orders to attain finality. The Government order was not traceable to any power under the Act or the Rules and was only an executive instruction under Article 162 of the Constitution of India. Executive instructions can supplement administration but cannot override statutory provisions or nullify quasi-judicial orders. The doctrine of prospective overruling is available only to the Supreme Court, and only where that Court expressly limits the temporal operation of its own ruling. In the absence of any such direction in the decision on warranty spare parts, the legal principle declared by the Supreme Court operated from inception and could not be confined by the Government to a later date.

Conclusion: The Government had no power to declare that the Supreme Court decision would apply only from 21 July 2004, and that part of G.O.Ms. No. 144 was void. The endorsement demanding tax in accordance with the final assessment and revisional orders was upheld.

Final Conclusion: The writ petition failed, and the tax demand based on the final statutory orders was sustained.

Ratio Decidendi: A State Government cannot, by executive instruction under Article 162, restrict the operation of a Supreme Court judgment or override final quasi-judicial orders under a taxing statute; unless the Supreme Court itself makes its ruling prospective, the declared law applies from inception.

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