Prospective operation of tax notifications: amendment to exemption wording took effect only from publication, not retrospectively.

Amendments to exemption notifications operate prospectively unless retrospective effect is clearly expressed. Here, the substitution of the words "under the U.P. Act" with "under the Act" in the later notification was made effective from its Gazette publication on 5 May 1997, and nothing in the text extended it back to 1 April 1995. The supposed clerical error in the earlier notification was therefore corrected only from the date the amending notification came into force. The amendment was held to have prospective effect only, and the issue was decided in favour of the assessee.

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Issues: Whether the amendment made by the notification dated May 5, 1997 to the earlier exemption notification operated retrospectively from April 1, 1995 or only prospectively from its date of publication.

Analysis: The exemption under the earlier notification was linked to the rate normally applicable under the U. P. Act, and the later notification expressly substituted the words "under the U. P. Act" with "under the Act" with effect from the date of publication in the Gazette. A taxing provision or notification is ordinarily prospective unless retrospective operation is clearly provided. Here, the later notification contained an express commencement clause fixing its effectiveness from May 5, 1997, and there was no language extending it back to the date of the earlier notification. Any supposed clerical mistake in the earlier notification stood corrected only from the date on which the amending notification came into force.

Conclusion: The amendment was held to be effective only from May 5, 1997 and not retrospectively from April 1, 1995. The question was answered in favour of the assessee and against the Department, and the revision was allowed.

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