Prospective operation of tax exemption amendment prevents retrospective withdrawal of accrued incentive rights and invalidates reassessment notices.

A statutory amendment curtailing the State's exemption power under Section 8(5) of the Central Sales Tax Act operated prospectively and did not retrospectively withdraw an exemption already crystallised under the Package Scheme of Incentives. The Court treated the eligibility and entitlement certificates as creating an accrued substantive right for the fixed period and limit granted, unaffected by the later requirement of Forms C and D. Because there was no express or implied legislative intent to extinguish that vested benefit, and the certificates were neither revoked nor preceded by notice and hearing, reassessment notices based solely on non-production of forms were unsustainable.

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Issues: Whether the amendment to Section 8(5) of the Central Sales Tax Act, which made exemption under the State notification subject to compliance with Section 8(4), could retrospectively withdraw an absolute exemption already granted under the Package Scheme of Incentives and supporting eligibility and entitlement certificates, and thereby sustain the impugned reassessment notices for want of Forms C and D.

Analysis: The exemption granted under the Package Scheme of Incentives had been issued in exercise of the then existing power under Section 8(5) of the Central Sales Tax Act and was coupled with eligibility and entitlement certificates granting exemption for a fixed limit and period, without any condition requiring production of Forms C and D. The 2002 amendment to Section 8(5) curtailed the State Government's power and made exemption subject to Section 8(4), but the amendment was prospective and contained no express or implied intention to extinguish benefits already accrued. Once the exemption had crystallised in favour of the assessee, it created a substantive and accrued right that could not be taken away unilaterally, especially without revocation of the certificates or notice and opportunity of hearing. The reassessment notices were founded only on the post-amendment requirement of forms and sought to apply that restriction to prior granted benefits.

Conclusion: The amendment did not operate retrospectively to withdraw the exemption already granted, and the reassessment notices demanding tax for non-production of Forms C and D were unsustainable.

Final Conclusion: The appeal failed, and the assessee retained the benefit of the earlier granted tax exemption for the relevant period notwithstanding the subsequent amendment.

Ratio Decidendi: A statutory amendment curtailing exemption power operates prospectively unless the legislature clearly provides otherwise, and it cannot retrospectively divest an accrued exemption or vested substantive right already granted under an earlier notification or certificate.

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