Retrospective sales tax exemption cannot be cancelled for past periods absent clear statutory power to do so.

Retrospective sales tax exemption could be granted under section 10(1) of the Kerala General Sales Tax Act, 1963, but section 10(3) empowered only cancellation or variation of the notification and did not authorise retrospective withdrawal by express words or necessary implication. A cancellation that fastened liability for an earlier period therefore exceeded delegated power and was ultra vires. The exemption could not be withdrawn for the past period.

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Issues: Whether the cancellation of the retrospective sales tax exemption notification, issued under section 10(3) of the Kerala General Sales Tax Act, 1963, was within power and valid.

Analysis: The exemption had originally been granted retrospectively under section 10(1), which expressly permitted retrospective or prospective exemption. The later cancellation was issued under section 10(3), but that provision conferred only the power to cancel or vary the exemption notification and did not expressly or by necessary implication authorise retrospective cancellation. Where the statute grants power to issue a retrospective exemption but does not confer a corresponding power to withdraw that exemption retrospectively, the authority cannot travel beyond the statutory limits. The impugned cancellation therefore operated to fasten liability for an earlier period and exceeded the scope of the delegated power.

Conclusion: The retrospective cancellation was ultra vires section 10(3) of the Kerala General Sales Tax Act, 1963, and the exemption could not be withdrawn for the past period.

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