Madhya Pradesh High Court
Dhannilal Labhchand And Four Ors. vs Sales Tax Officer And Anr. on 27 November, 1987
Equivalent citations: [1988]69STC117(MP)
Author: N.D. Ojha
Bench: N.D. Ojha
JUDGMENT N.D. Ojha, C.J.
1. The State Government, in exercise of the powers conferred on it by Section 12 of the M. P. General Sales Tax Act, 1958 (hereinafter referred to as "the Act"), issued a Notification No. 1041-537-V-ST, dated 7th April, 1967. By this notification a copy whereof has been attached as annexure B to the writ petition, the State Government exempted "in whole the class of goods specified in column No. 1 of the Schedule from payment of purchase tax payable under Section 7 of the said Act for the period specified in column No. 2 and subject to restrictions and conditions specified in column Not 3 of the Schedule". The period mentioned in the Schedule appears to have been extended from time to time. Subsequently, however, another notification was issued on 7th January, 1981, a copy whereof has been attached as annexure C to the writ petition. It reads:
F. No. A3-50-80(2)-ST-V.-In exercise of the powers conferred by Section 12 of the Madhya Pradesh General Sales Tax Act, 1958 (No. 2 of 1959), the State Government hereby cancels this department Notification No. 1041-537-V-ST, dated the 7th April, 1967, with effect from the 1st October, 1978.
It is the validity of the notification which has been challenged in the present writ petition.
2. The first ground which has been urged by the learned counsel for the petitioners in challenge to the aforesaid notification dated 7th January, 1981 is that even though Section 12(2) of the Act permits that any notification issued under the said section may be rescinded before the expiry of the period for which it was to have remained in force and on such rescission, such notification shall cease to be in force, the rescission cannot be made with retrospective effect. In support of this submission, reliance has been placed on the last sentence of Section 12(2), it reads as hereunder :
Any notification issued under this section may be rescinded before the expiry of the period for which it was to have remained in force and on such rescission, such notification shall cease to be in force. A notification rescinding an earlier notification shall have prospective effect.
According to the learned counsel for the petitioners, the aforesaid last sentence in Section 12(2) excludes issuance of a notification rescinding an earlier notification with retrospective effect. Reliance on this submission has also been placed on the decision of a Division Bench of this Court in Vijay Dal Mitt v. State of M.P. 1982 MPLJ 523. In that case, while dealing with the power of exemption contained in Section 8(5) of the Central Sales Tax Act, 1956, it was held that an exemption granted by a notification under Section 8(5) could not be withdrawn retrospectively.
3. Having heard learned counsel for the parties, we are of the opinion that in view of the decision of this Court in case of Vijay Dal Mill 1982 MPLJ 523 and the specific language of Section 12(2) itself, the impugned notification dated 7th January, 1981, in so far as it cancels the earlier notification dated 7th April, 1967 with effect from 1st October, 1978, deserves to be quashed. Of course, cancellation of the notification dated 7th April, 1967 by the impugned notification with effect from the date the impugned notification dated 7th January, 1981 shall be valid inasmuch as it is settled law that an exemption as aforesaid in the nature of concession and can be withdrawn at the instance of the authority granting the exemption.
4. In the result, this writ petition succeeds and is allowed and the impugned notification dated 7th January, 1981, annexure C, in so far as it cancels the earlier notification dated 7th April, 1967 with retrospective effect from 1st October, 1978, is quashed. It shall, however, be valid and enforceable with effect from 7th January, 1981. It would be open to the petitioners to approach the Sales Tax Officer concerned for consequential relief. There shall be no order as to costs. Outstanding amount of security be refunded to the petitioners, if it has been so deposited.