TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Court quashes retrospective tax exemption rule, upholds petitioner's rights. Remanded for reconsideration without retrospective effect.</h1> <h3>M/s. Malwa Vanaspati & Chemical Co. Ltd. Versus State Level Committee & Two Others</h3> M/s. Malwa Vanaspati & Chemical Co. Ltd. Versus State Level Committee & Two Others - [2017] 103 VST 180 (MP) Issues Involved:1. Validity of the notification dated 05/09/1998 introducing a cutoff date.2. Applicability of the doctrine of promissory estoppel against the State.3. Retrospective withdrawal of tax exemption benefits.Issue-wise Detailed Analysis:1. Validity of the Notification Dated 05/09/1998 Introducing a Cutoff Date:The petitioner, M/s. Malwa Vanaspati & Chemicals Co. Ltd., challenged the validity of the notification dated 05/09/1998, which amended the earlier notification dated 28/02/1995 by introducing a cutoff date of 30/06/1998. The original notification granted tax exemptions to dealers setting up non-conventional power generation systems. The petitioner argued that the subsequent notification's cutoff date retroactively withdrew the exemption benefits for units that commenced power generation between 01/07/1998 and 04/09/1998. The court found that the original notification did not specify any cutoff date and that the retrospective application of the new cutoff date adversely affected the petitioner's accrued rights under the original notification.2. Applicability of the Doctrine of Promissory Estoppel Against the State:The respondent State contended that the doctrine of promissory estoppel should be tested against public interest, especially when public money is involved. The State argued that the exemption was initially granted to promote the use of non-conventional energy sources, but the lack of a cutoff date in the original notification led to ambiguities and potential misuse of public funds. The court noted that while the State has the authority to issue notifications retrospectively under Sections 12 and 17 of the MPGST and MPCT Acts, the doctrine of promissory estoppel cannot be ignored if the petitioner had acted upon the original notification in good faith.3. Retrospective Withdrawal of Tax Exemption Benefits:The court emphasized that retrospective withdrawal of tax exemption benefits is not permissible under the law. The court referred to several judgments, including State of M.P. Vs. G.S. Dall & Flour Mills and State of U.P. & Others Vs. Deepak Fertilizers and Petrochemical Corporation Ltd., which held that while a notification can be prospective or retrospective, only prospective operation can be given to a notification rescinding an earlier exemption. The court concluded that the petitioner's right to exemption, which had already accrued under the original notification dated 28/02/1995, could not be extinguished by the subsequent notification dated 05/09/1998.Conclusion:The court quashed the impugned notification to the extent it was made applicable with retrospective effect. The matter was remanded back to the State Level Committee to pass a fresh order considering the original notification dated 28/02/1995. The committee was directed to conclude this exercise within 90 days. The writ petition was disposed of accordingly.
TaxTMI 