Accrued tax exemption cannot be withdrawn retrospectively by a later notification where the earlier benefit was already acted upon.

A later exemption notification could not retrospectively withdraw tax relief granted under an earlier notification where eligible non-conventional power units had already acted on the original benefit. The earlier notification contained no cut-off date, while the amendment introduced a cut-off date and additional conditions that would have defeated accrued exemption for units that had commenced generation before the change. The Court applied the principle that a vested or accrued exemption cannot be taken away retrospectively, even though the power to rescind exemption notifications exists, because such rescission operates prospectively. The retrospective effect of the amendment was therefore invalid to that extent, and the claim had to be reconsidered under the unamended notification.

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Issues: Whether the subsequent notification could retrospectively withdraw the exemption granted under the earlier notification and thereby deny the petitioner the benefit of tax exemption.

Analysis: The earlier exemption notification granted tax relief to eligible non-conventional power generation units and consuming units without prescribing any cut-off date. The later notification introduced a cut-off date and additional conditions, which had the effect of taking away exemption in respect of units that had already commenced generation before the amendment. The statutory provisions empowering exemption notifications permitted rescission, but the rescission was to operate prospectively. The Court relied on the principle that a vested or accrued benefit under an existing exemption cannot be destroyed by a later notification with retrospective effect, particularly where the earlier notification had already been acted upon.

Conclusion: The retrospective operation of the amending notification was invalid to that extent, and the petitioner was held entitled to have its claim reconsidered under the unamended notification.

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