Statutory saving of SEZ exemptions preserves prior tax notifications after repeal, defeating purchase tax assessments.

A repeal does not extinguish an SEZ exemption where the successor statute saves accrued rights and existing notifications and directs references to the repealed sales tax law to be read as references to the new VAT law. On that construction, the exemption for a developer or entrepreneur using goods for authorised operations continued under the Tamil Nadu Value Added Tax Act, 2006, and the prior exemption notification remained valid and enforceable because it had not been rescinded or amended. The purchase tax assessments were therefore unsustainable, the assessment orders were quashed, and fresh assessment was directed with the exemption benefit extended.

---

---

Issues: (i) Whether the exemption available to a developer or entrepreneur under the Tamil Nadu Special Economic Zones Act, 2005 continued after the repeal of the Tamil Nadu General Sales Tax Act and applied to assessments under the Tamil Nadu Value Added Tax Act, 2006; (ii) Whether the exemption notification issued under the repealed sales tax regime remained valid and enforceable under the Tamil Nadu Value Added Tax Act, 2006.

Issue (i): Whether the exemption available to a developer or entrepreneur under the Tamil Nadu Special Economic Zones Act, 2005 continued after the repeal of the Tamil Nadu General Sales Tax Act and applied to assessments under the Tamil Nadu Value Added Tax Act, 2006.

Analysis: The entitlement under Section 12(1)(a) of the Tamil Nadu Special Economic Zones Act, 2005 was for exemption from levy of tax on sale or purchase of goods meant for authorised operations. The statutory scheme in Sections 87 and 88 of the Tamil Nadu Value Added Tax Act, 2006 provides that references to the repealed Tamil Nadu General Sales Tax Act in existing instruments are to be construed as references to the Tamil Nadu Value Added Tax Act, 2006, and that repeal does not affect accrued rights, privileges or notifications already in force. The petitioner's status as a developer or entrepreneur and the use of the goods for authorised operations were not disputed.

Conclusion: The exemption under the special economic zone continued to apply and could not be denied on the ground that the repealed Act was no longer in force.

Issue (ii): Whether the exemption notification issued under the repealed sales tax regime remained valid and enforceable under the Tamil Nadu Value Added Tax Act, 2006.

Analysis: The notification issued in 2005 granting exemption for sales made to authorised units in special economic zones was already in force before the commencement of the Tamil Nadu Value Added Tax Act, 2006. By virtue of the saving provision in Section 88(3)(i) of that Act, such notification continued to operate so long as it was not inconsistent with the new Act and until it was repealed or amended. No material showed that the notification had been rescinded or amended, and the construction placed by the respondents ignored the statutory mandate preserving prior notifications.

Conclusion: The exemption notification remained valid and enforceable, and the assessments levying purchase tax were unsustainable.

Final Conclusion: The assessment orders were quashed, and the matter was sent back for fresh assessment with the exemption benefit extended to the petitioner.

Ratio Decidendi: A repeal does not extinguish a pre-existing exemption or notification where the successor statute expressly saves prior rights and directs that references to the repealed enactment be construed as references to the new enactment.

---