TaxTMI 
TaxTMI 
2019 (10) TMI 1291
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....'Act'). The petitioners are dealers in Iron, Steel and Cement (Kamatchi Steels) Electric and Electronic goods, (Makkal Stores) and Manufacturers and sellers of Chewing Tobacco (Angumari Trading Company and Tamil Nadu Scented & Chewing Tobacco Manufacturers Association). 3. In the case of the Tobacco manufacturers and dealers 'beedi, beedi tobacco, tobacco leaves, snuff and cheroot' had been exempted from tax under Notification G.O.Ms. No.146 Commercial Taxes and Registration (B2) Department on 08.08.2007. A representation had been made by the manufacturers/dealers requesting inclusion of chewing tobacco also in the Exemption Notification. This was accepted and a Notification issued in G.O. Ms.No.149 dated 12.10.2009. Both the first and second Notifications are extracted below for the sake of clarity: ANNEXURE NOTIFICATION In exercise of the powers conferred by sub-section (1) of section 30 of the Tamil Nadu Value Added Tax Act, 2006 (Tamil Nadu Act 32 of 2006), the Governor of Tamil Nadu hereby makes an exemption in respect of tax payable under the said Act on the sale of beedi, beedi tobacco, tobacco leaves, snuff and cheroot. 2. This Notification shall ....
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....the 18th day of June 2008. 2. In section 3 of the Tamil Nadu Value Added Tax Act, 2006 (hereinafter referred to as the principal Act), for sub-section (4), the following subsection shall be substituted, namely:- "(4)(a) Notwithstanding anything contained in sub-section (2), but subject to the provisions of sub-section (1), every dealer, who effects second and subsequent sales of goods purchased within the State, whose turnover relating to taxable goods, for a year, is less than rupees fifty lakhs may, at his option, instead of paying tax under sub-section(2), pay a tax, for each year, on his turnover relating to taxable goods at such rate not exceeding one per cent, as may be notified by the Government. Such option shall be exercised by a dealer,- (i) Who commences business, within thirty days from the date of commencement of the business; (ii) Whose turnover relating to taxable goods is below rupees fifty lakhs during the previous year, on or before the 30th day of April of the year for which he exercises such option; (iii) for the year 2008-2009, within thirty days from the date of commencement of the Tamil Nadu Value Added Ta....
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.... of a dealer with turnover in excess of the eligible turnover shall be in terms of Section 3(2) of the Act. According to the dealers, the liability should be staggered thus: eligible turnover at the rate of 0.5% and in excess of eligible turnover, at regular rate. 8. The revenue had taken the stand then that once an assessee had achieved turnover of even a rupee more than Rupees Fifty lakhs, it exposes itself to the rigours of a regular assessment in respect of the entirety of its turnover for that very year. 9. According to the petitioners, it is in the light of this contested position that the 2011 Amendment should be viewed and interpreted. This Amendment clarifies that the liability to tax shall be two-fold, presumptively in respect of the eligible turnover upto Rupees Fifty lakhs and at regular rate in respect of the turnover in excess of the eligible turnover. Since the Amendment is clarificatory, it was clearly intended to remove doubts that arose from the implementation of the 2008 Amendment and the 2011 Amendment is thus to be implemented retrospectively, for period prior to the date of amendment as well. 10. Detailed submissions have been advanced by Mr.S.Elamuru....
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....se assessees that had carried out exports from notified container depots. 15. The original notification did not contain 'Guntur' as one of the notified depots. The scheme was amended and in addition to the notified ports contained originally, several other ports were also included and the benefit was extended to the newly included ports as well. The contention of the assessee therein was that the subsequent notification having substituted the words 'Ludhiana, Hyderabad, Nagpur, Agra, Faridabad, Jaipur, Guntur and Varanasi' for the original two ports that is 'Ludhiana and Hyderabad', the benefit under the original Notification would be available to all the subsequently included ports including Guntur, from date of original Notification, that is, from 01.04.1997 itself. Per contra, the contention of the revenue was that exports of tobacco during the period 01.04.1997 to 26.11.1997 would not qualify for the incentive. 16. The Court reiterated the settled position that an exemption notification must be construed having regard to the objects and purposes which the same seeks to achieve. In determining the effect of the second notification, the Bench took into accou....
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....ve effect. One of the parameters to determine whether the statute in question was to be read as a substitution or as an amendment would be to test whether the new Notification/Amendment Act was brought in for the purpose of supplying an obvious omission in the existing Act/Notification. If it did, then the subsequent Act/Notification would relate back in time to when the prior act had been passed. 18. In Indian Tobacco Association (supra), the Court held that the Notification in question was intended to give a benefit, in general, to all exporters. Such a benefit, originally intended to all cultivators of Tobacco should not be denied to those in Guntur and some other regions that had been omitted to be mentioned in the original Notification, particularly, when it is not the intention of the authorities to carve out any exception to the original incentive scheme. Thus, having regard to the objects, as discernible from the Scheme, that it was always intended that all tobacco cultivators were to receive a uniform benefit, a construction and interpretation in line with this object was given in that case and the claim of the assessee/dealers allowed. 19. In Shakti Masala (P) Ltd. ....
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....son of a judgment of a court, the law was found to be vague or ambiguous. There is also nothing to show that it was found to be vague or ambiguous by the executive. In fact, the Board circular shows that invocation of clause (ii) had never been in contemplation of the taxing authorities. 22. The observations of the Supreme Court in Cooperative Company Ltd. Vs. Commissioner of Trade Tax, U.P [(2007) 4 SCC 480], in the context of whether amendments effected to Section 3AB inserted in the U.P. Trade Tax Act, 1948 (for short, 'the Act') on 01.08.1990 were to be construed as clarificatory/declaratory and having retrospective effect are also pertinent: The Act having been brought into force from a particular date, no retrospective operation thereof can be contemplated prior thereto. The said provision furthermore contains a substantive provision which is itself a pointer to the fact that for the earlier period packing materials would not be exempted merely because main commodity is exempted from tax, but albeit subject to the condition that there was an agreement to sell in respect thereof. The amendment sought to deal with a matter which created some problem in imple....
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....ember was not in the service of the Central or a State Government. The newly-added provision contained in Regulation 8(3) is therefore a remedial measure to remove the anomaly then existing. Regulation 8(3) being a remedial measure, must receive a beneficial construction and if it is capable of two interpretations, the Courts must prefer that construction which permits the beneficent purpose behind it. When language of a statute is free from ambiguity, no duty is cast upon the Court to do anything more than to give effect to the word or words used. We do not mean to say that there might not be something in the context of an Act of Parliament, or to be collected from its language, which might give to words prima facie prospective a larger operation, but that ought not to receive a larger operation unless you find some reason for giving it. Now, it would be seen that cl.(5) similarly 'substituted' new Regulation 6(1) dealing with the salary and allowances payable to the Chairman and other Members of the Public Service Commission, and underneath appears the following: "Notwithstanding anything contained in the Regulations, clause (i) of the proviso to sub- regulation ....
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....the Income- Tax Act to be prospective and inapplicable for any assessment year prior to 1st April, 1962, the date on which the Income Tax Act came into force: "11. Now it is a well settled rule of interpretation hallowed by time and sanctified by judicial decisions that, unless the terms of a statute expressly so provide or necessarily require it, retrospective operation should not be given to a statute so as to take away or impair an existing right or create a new obligation or impose a new liability otherwise than as regards matters of procedure. The general rule as stated by Halsbury in Vol. 36 of the Laws of England (3rd Edn.) and reiterated in several decisions of this Court as well as English courts is that all statutes other than those which are merely declaratory or which relate only to matters of procedure or of evidence are prima facie prospectively and retrospective operation should not be given to a statute so as to affect, alter or destroy an existing right or create a new liability or obligation unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of eit....
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....guage employed. If it is a necessary implication from the language employed that the legislature intended a particular section to have a retrospective operation, the Courts will give it such an operation. In the absence of a retrospective operation having been expressly given, the Courts may be called upon to construe the provisions and answer the question whether the legislature had sufficiently expressed that intention giving the Statute retrospectivity. Four factors are suggested as relevant: (i) general scope and purview of the statute; (ii) the remedy sought to be applied; (iii) the former state of the law; and (iv) what it was the legislature contemplated (p.388). The rule against retrospectivity does not extend to protect from the effect of a repeal, a privilege which did not amount to accrued right (p.392). 18. In a recent decision of this Court in National Agricultural Cooperative Marketing Federation of India Ltd. And Another Vs. Union of India and Others, (2003) 5 SCC 23, it has been held that there is no fixed formula for the expression of legislative intent to give retrospectivity to an enactment. Every legislation whether prospective or retrospective has to b....
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....ed and applied, whether prospectively or retrospectively. 29. As far as the tobacco dealers are concerned, a comparison of the first and second Notifications does not reveal anywhere the intention that the word 'chewing tobacco' had been inadvertently omitted, originally. The use of the word 'substituted' only means that, going forward, the second Notification will take the place of the first Notification. By virtue of the second Notification having come to be, the first stands effaced. This much is clear. 30. However, there is nothing else in the second Notification or any other explanatory instruction/circular/note that has been brought to my attention to lead me to a conclusion that the substitution was to take effect from the date of the first Notification itself. By virtue of the second Notification, an entirely new commodity has been brought within the beneficial sweep of the exemption, marking a departure in the original intention of the legislature as to the range of products that would be so entitled. I am of the view that if at all the intention that the second Notification were to act retrospectively were to be attributed to Legislature, such intention should be ma....
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....in wax of all grade standards other than food grade 2096 5 percent 120. Sago and starch of all kinds 2120 5 percent 132A. Sugar of all kinds, that is to say, cane sugar, beet sugar, chemically pure sucrose in solid form and imported sugar of all kinds 2155 5 percent PART C (See sub-section (2) of Section 3) Entry No. Description of Goods Commodity Code Number Rate of Tax 1. Mirrors of all kinds 349 14.5 per cent 33. Thus, where legislature intended that upon mere mention of a commodity, all forms and descriptions of the commodity would stand encompassed, it is seen to employ the phrase 'of all kinds' or 'of all sorts'. There is thus no force in the argument of the petitioner that mere mention of tobacco and cheroot should be taken as including chewing tobacco as well. If this had been the intention of the legislature it would have been so mentioned. I am thus of the categoric view that reading the phrase 'chewing tobacco' in the first Notification, would result in rewriting the Notification itself and in the light of the settled position that an exemption Notification has to be strictly construed, rewriting of t....
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.... 3. The Government have decided to amend the Tamil Nadu Value Added Tax Act, 2006 (Tamil Nadu Act 32 of 2006) suitable for the purpose. 4. The Bill seeks to give effect to the above decision. (highlighting supplied for emphasis) 38. The use of the word 'rectify' and the analysis of the reasons for insertion of this amendment in the first paragraph wherein it is captured that a higher rate of tax would be payable by a dealer even in respect of turnover where he has not collected taxes leaves me in no doubt that the amendment was inserted only to correct an unintended anomaly that arose in the operation of the law, by virtue of the amendment inserted in 2006. 39. A learned Single Judge of this Court sitting in the Madurai Bench has considered the amendment to Section 3(4) of the Act concluding that the Act would have to be retrospectively applied in Tvl.Shanmugamari Timbers V. The Commercial Tax Officer (order dated 20.12.2018 in W.P.(MD) No.3744 of 2015). 40. The petitioner in that case, a dealer in timber, had challenged an assessment for the period 2010-11. The turnover of the petitioner had crossed the limit of Rs. 50.00 lakhs in March, 2011 and the sales ....