Accrued sales tax exemption cannot be withdrawn retrospectively by a later notification or Form C requirement.

An absolute exemption granted under an earlier notification remains protected unless it is lawfully revoked, and a later notification cannot retrospectively withdraw that accrued benefit. The amendment to Section 8(5) of the Central Sales Tax Act, which made compliance with Section 8(4) mandatory for exemption, operates prospectively from 11-05-2002 and governs future exemptions only. It does not disturb a substantive exemption already vested under the notification dated 07-11-1997. Accordingly, the later notification dated 31-10-2006 could not be applied to compel production of Form C or deny the petitioner the continuing exemption already available up to 17-04-2013.

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Issues: Whether the notification dated 31-10-2006 could be applied to deny the petitioner the benefit of exemption earlier granted under the notification dated 07-11-1997, so as to insist upon production of Form C under Section 8(4) of the Central Sales Tax Act, 1956.

Analysis: The exemption earlier granted to the petitioner was absolute and had commenced from 07-11-1997. The amendment to Section 8(5) of the Central Sales Tax Act, 1956, which made compliance with Section 8(4) mandatory for availing exemption, was held to operate prospectively from 11-05-2002. Such amendment could regulate future grants of exemption, but it could not unsettle a substantive right already accrued under an earlier exemption notification unless the earlier entitlement was revoked in accordance with law. The subsequent notification of 31-10-2006, therefore, could not be applied to take away the existing exemption already available to the petitioner up to 17-04-2013.

Conclusion: The petitioner was entitled to continue to avail the exemption under the earlier notification without furnishing Form C, and the later notification could not be applied against it.

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