TaxTMI 
TaxTMI 
2023 (3) TMI 1005
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....7, dated 19.12.2007 (G.O.Ms.No.198) which is challenged on the premise that the same is ultra vires Sections 30 and 88 of the Tamil Nadu Value Added Tax Act, 2006, (in short, ''the TNVAT Act''), apart from being unconstitutional and violative of Articles 14, 19 (1) (g), 265, 301 and 304 (a) of the Constitution of India. 2. In all, there are 33 writ petitions though the prayers in all the 33 writ petitions are not the same, however, the common issue revolves around the validity of the impugned notification. Broadly the prayers can be categorised as under: WASTE PAPER / WASTE PAPER BOARD S.No. Writ Petition No. Subject matter of Challenge 1 W.P.Nos.1003, 1649, 2545, 3536, 3537, 3538, 3539, 3653,3927, 3928, 8660 , 8661 of 2008, 6922 of 2020 G.O.Ms.No.198 dated 19.12.2007 2 W.P.Nos.36171 of 2007, 8662, 8663, 8664, 9394, 9395 of 2008 and 6924 of 2020 Assessment order 3 W.P.Nos.37143, 37144, 37145, 37146, 37147, 36996, 36997, 36998 and 36999 of 2007 To apply G.O.Ms.No.176 dated 28.12.2006 4 W.P.Nos.36170 of 2007, 8280 of 2009 Show cause Notice WASTE BOTTLES (O....
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....vant Entries in the Schedule to the TNGST Act, 1959, with regard to Waste Paper reads as under: "Schedule 1 -82-A S.No. Description of Goods Point of Levy in the State Rate of Tax 1 Waste Paper - '' ENTRY FROM 5-3-1997 TO 15-6-2000 First Sale 4% 2 Waste Paper - "ENTRY FROM 16-6-2000 TO 18-8-2001" Last Purchase 4% 3 Waste Paper and (waste of paper board) - ENTRY FROM 28-8-2001 (Vide Note 4) Last Purchase 4% The relevant Entries in the Schedule to the TNGST Act, 1959, with regard to Corrugated Boards are extracted below : ENTRY FROM 18-8-2001 (Vide Note 3) Paper, all sorts (including paste board, mill-board, straw board and card board) that is to say - (i) Cigarette tissue, (ii) Bottling, filter, toilet or target tissue (other than cigarette tissue), Bank, art, chrome, tub-sized, cheque, stamp or cartridge paper, parchment board including art-board, chrome board and board for playing cards (iii) Packing and wrapping paper, straw board and pulp board including grey board, corrugated board, duplex and triplex boards. The relevant Entries in the First Schedule to the TNGST....
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....all deemed to have remained in force up to and Inclusive of the 5th September, 2006." Thereafter, the State Government issued G.O.Ms.No.198 dated 19.12.2007 whereby the exemption granted in respect of the tax payable under the said Act by any dealer on the last purchase of waste paper, waste of paper board and old/used bottles was subject to the condition that Waste Paper, Waste Paper Board and old or used bottles are sold on inter-state trade and tax has been paid under the Central Sales Tax Act 1956 (Central Act 74 of 1956). The above notification(s) was deemed to have come into force on the 16th June 2000 and was deemed to have remained in force upto and inclusive of the 21st July 2006. The said notification is extracted hereunder: EXEMPTION IN RESPECT OF THE TAX PAYABLE BY ANY DEALER ON THE LAST PURCHASE OF WASTE PAPER AND WASTE OF PAPER BOARD UNDER THE ACT. [G.O. Ms. No. 198, Commercial Taxes and Registration (B2), 19th December 2007.] No.11 (1)/ CTR / 75 (b-2)/2007. In exercise of the powers conferred by sub-sections (1), (2) and (3) of Section 30 read with sub-section (4) of Section 88 of the Tamil Nadu Value Added Tax Act, 2006 (Tamil Nadu A....
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....me is ultra vires Section 30 and Section 88 of the TNVAT Act, apart from being unconstitutional and violative of Articles 14, 19 (1) (g), 265, 301 and 304 (a) of the Constitution of India, insofar as it imports conditions with retrospective effect which has the effect of curtailing/whittling down the exemption. 7. To appreciate the above contention, it is relevant to refer to the following provisions under the TNGST Act and TNVAT Act respectively: ''Section 17. Power of Government to notify exemptions and reductions of tax.- (1) The Government may, by notification, issued whether prospectively or retrospectively, make an exemption, or reduction in rate, in respect of any tax payable under this Act - (i) on the sale or purchase of any specified goods or class of goods, at all points or at a specified point or points in the series of sales by successive dealers; or (ii) by any specified class of persons, in regard to the whole or any part of their turnover; or (iii) on the sale or purchase of any specified classes of goods by specified classes of dealers in regard to the whole or part of their turnover. ......... Sec.17....
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....ely resulting in curtailing/ whittling down the scope of exemption is beyond the powers under Section 17 (or) Section 30 read with Section 88 (4) of the TNGST Act and TNVAT Act respectively. 9. In support of the above contention, reliance was sought to be placed on the judgments of this Court in Honest Corporation v. State of Tamil Nadu, [(1999) 113 STC 26 (Mad.)], and State of Tamil Nadu v. Kannapiran Steel Re-rolling Mills, [(1999) 112 STC 161 (Mad.)], wherein, while dealing with Section 17 of the TNGST Act, it was held that the power of the Government under Sub-section (3) to Section 17 of the TNGST Act, 1959, cannot be exercised retrospectively. 10. To the contrary, it is submitted by the learned Additional Advocate General that it was always intended that the benefit is only to grant either an exemption to waste paper, paper board and old or used bottles from the levy of last purchase or from the levy of the Central Sales Tax but not both. The original notification dated 28.12.2006 resulted in exemption from last purchase as well as levy under the Central Sales Tax, which was unintended. It was to rectify the above error, which according to the State had inadvertently cr....
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....7 of the TNGST Act, cannot be exercised retrospectively. In this regard, it is relevant to refer to the following judgments : (i) Honest Corporation v. State of Tamil Nadu (Mad.), (1999) 113 STC 26 (Mad) : 12. If we carefully peruse, the language in which sub-section (1) of section 17 is couched, it will be crystal clear that as and when the Government may, by notification, make an exemption or reduction in rate in respect of any tax payable under the Act, the same may be done whether prospectively or retrospectively. But, if we take into account the language in which sub-section (3) of section 17 is couched, the phraseology whether prospectively or retrospectively is not there and what is stated therein is the Government is empowered by way of a notification to cancel or vary any notification issued under sub-section (1). That means that notification issued under the said sub-section can be only prospectively and not retrospectively. ii) G. Packirisamy & Co. v . State of Tamil Nadu [1995] 9 9 STC 21 : "By the enactment of sub-section (1) of section 17 of the TNGST Act the Legislature has given power to the Government to make subordinate legislat....
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.... Ltd. AIR 1960 Mys 326 and the decision of the Supreme Court in Indramani's case AIR 1963 SC 274, the Kerala High Court held : "unless the power to act retrospectively had been expressly conferred by the Legislature on the Government exercising subordinate and delegated legislative powers, the Government could not act retrospectively. No decision which takes a contrary view has been cited before us. We are of the opinion that in the absence of express power granted by the Legislature to act retrospectively it is not open to a subordinate legislative body like the State Government to issue a notification either taking away vested rights or imposing obligations with retrospective effect." (emphasis supplied) iv) Cannanore Spinning and Weaving Mills Ltd. v. Collector of Customs and Central Excise AIR 1970 SC 1950: "..............The rule-making authority had not been vested with the power under the Central Excises and Salt Act to make rules with retrospective effect. Therefore the retrospective effect purported to be given under exhibit P12 was beyond the power of the rule-making authority......" On a reading of the above judgments it is beyond the....
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....ng on the circumstance as sought to be contended by the Revenue. 2. Secondly, it is trite law that the notifications granting exemption would be strictly construed and effect would be given to the plain language and the question of interpretation would not arise where the language is unambiguous. In the case on hand, admittedly there was no ambiguity as to the scope and width of the notification granting exemption vide G.O.Ms.No.176 dated 28.12.2006. The impugned notification even according to the Revenue was issued only with a view to curtail the scope of the exemption as it did not reflect the supposed intent of the notifying authority viz., the State Government. What the legislature intended to be done or not to be done can only be ascertained from that it has chosen to enact and when the language is unambiguous looking beyond the plain language ought to be avoided. One cannot call in aid supposed intention to curtail the notification for intention is a slippery phrase. In this regard, it may be relevant to refer to the following judgments of the Hon'ble Supreme Court: a) In the case of Innamuri Gopalan v. State of A.P., (1964) 2 SCR 888, the Hon'ble Su....
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.... "Intention of the legislature is a common but very slippery phrase, which, popularly understood may signify anything from intention embodied in positive enactment to speculative opinion as to what the legislature probably would have meant, although there has been an omission to enact it. In a Court of Law or Equity, what the Legislature intended to be done or not to be done can only be legitimately ascertained from that which it has chosen to enact, either in express words or by reasonable and necessary implication." b. In, Hansraj Gordhandas v. H.H. Dave, (1969) 2 SCR 253, the Hon'ble Supreme Court while dealing with a notification which granted exemption from excise duty to cotton fabrics produced on power looms owned by Co-operative Societies, it was found for a fact that the appellant who was a dealer in textiles had entered into an agreement with Co-operative Society to manufacture cotton fabrics. The Society claimed exemption. The Revenue was of the view that the Society was not entitled to exemption as in its view the intention was to grant exemption to goods produced by the Society "for itself". The same was rejected stating that the language being clear the a....
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....governed wholly by the language of the notification. If the tax-payer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom, the matter is different, but that is not the case here." The above ratio laid down in Hansraj case was followed by a Constitution Bench in the case of CCE v. Hari Chand Shri Gopal, (2011) 1 SCC 236, and stands reiterated by a recent Constitution Bench in the case of Commissioner of Customs v. Dilip Kumar & Co., (2018) 9 SCC 1, wherein it was held as under: "In Hansarj case, the Constitutional Bench unanimously pointed out that an exemption from taxation is to be allowed based wholly by the language of the notification and exemption cannot be gathered by necessary implication or by construction of words; in other words, one has to look to the language alone and the object and purpose for granting exemption is irrelevant and immaterial." 17. We are therefore of the view that though exemption notifications ought to be strictly constru....
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.... second question as to the applicability of 'Unjust Enrichment', except in one case, viz., W.P.No.6519 of 2009, it was submitted by the learned counsel for the petitioners in the other matters that as and when a claim for refund is made, if the Assessing Officers choose to examine the claim applying the principle of "Unjust Enrichment", they would respond/ meet the said aspect. 22. However, in W.P.No.6518 of 2009, it was submitted that it was not a case of claim of refund, but a case where the assessment orders were made granting refund and the prayer is to direct the 1st Respondent herein to forbear from giving effect to or rely upon Notification No.II(1)/CTR/75/(81)/07 [G.O.Ms.No.198, Commercial Taxes and Registration (B2)] dated 19.12.2007, to revise or review completed proceedings granting exemption in respect of the purchases of old/ used empty bottles during the period from 1st June, 2000 to 5th September, 2006. It is submitted by the learned counsel that Doctrine of Unjust Enrichment is applicable only against a claim for refund and not to reopen closed assessment thereby resulting in recovery of any sums/amounts collected by way of or purporting to be by way of t....