Retrospective curtailment of an accrued tax exemption is impermissible without clear statutory authority.

Retrospective delegated legislation cannot withdraw an accrued tax exemption or curtail an exemption already granted for the unexpired period unless the parent statute clearly authorises such operation. The HC held that the impugned notifications, to the extent they restricted the petitioner's exemption period with effect from 01.04.2006, impaired an existing entitlement and were therefore unsustainable; they were quashed insofar as they applied to the petitioner, who remained entitled to the exemption under the earlier eligibility certificate.

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Issues: Whether the impugned notifications, to the extent they curtailed the petitioner's exemption period retrospectively and restricted the benefit to 31.03.2006, were sustainable in law.

Analysis: The petitioner had been granted an eligibility certificate for exemption for a fixed period, and the later notifications were issued in exercise of delegated powers under the VAT regime. The decisive question was whether such delegated legislation could operate retrospectively so as to cut down an exemption already granted for the unexpired period. The Court held that retrospective withdrawal of an accrued exemption is not permissible unless the parent statute clearly authorises such operation. The notifications, insofar as they restricted the benefit with effect from 01.04.2006, impaired the petitioner's existing entitlement and therefore could not validly curtail the exemption period already granted.

Conclusion: The retrospective curtailment of the exemption was not sustainable, and the notifications were quashed insofar as they applied to the petitioner. The petitioner remained entitled to the exemption for the period covered by the earlier eligibility certificate.

Final Conclusion: The writ petition succeeded, and the impugned notifications could not lawfully reduce the petitioner's exemption period by retrospective effect.

Ratio Decidendi: Delegated legislation cannot retrospectively take away an accrued exemption or vested benefit unless the parent statute clearly authorises such retrospective operation.

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