Every Statute Is Prima-Facie Prospective In Nature Unless It’s Expressly Made To Have Retrospective Operations: SC
The Apex Court dismissed the Civil Appeals of the Maharashtra State against the Judgment of the High Court by which it allowed a Writ Petition.
The Supreme Court reiterated that every statute is prima-facie prospective in nature unless it is expressly made to have retrospective operations.
The Court was deciding a batch of Civil Appeals filed by the Maharashtra State against the Judgment of the High Court by which it allowed a Writ Petition.
The two-Judge Bench of Justice P.S. Narasimha and Justice Pankaj Mithal elucidated, “It is a cardinal principle of construction that every statute is prima-facie perspective (sic) in nature unless it is expressly or by necessary implication made to have retrospective operations. Unless there are words in the statutes sufficient to show the intention of the legislature to affect existing rights, it is deemed to be prospective only.”
The Bench also reiterated that if a substantive right has accrued to a person, it cannot be taken away unilaterally without notice or an opportunity of hearing to the said person.
Solicitor General Tushar Mehta represented the Appellants while Senior Advocate V. Sridharan represented the Respondents.
Brief Facts
The assessee i.e., Respondent, a public limited company invoked the extraordinary writ jurisdiction of the High Court, challenging the three trade circulars issued by the Commissioner of Sales Tax, Mumbai and various notices issued by the Deputy Commissioner of Sales Tax under Section 38 of the Bombay Sales Tax Act, 1959 (BST Act) for revising the assessments of the Respondent made for the Assessment Years (AY) 2002-2003 to 2004-2005. The Respondent challenged the decision which directed it to pay or refund the exempted portion of the tax as per the provision of Package Scheme of Incentives 1993 (PSI) on the sale of goods effected in the course of inter-State trade or commerce.
The Writ Petition was allowed by the Division Bench, holding that even after the amendment of Section 8(5) of the Central Sales Tax Act (CST Act) by the Finance Act, 2002, the State Governments are empowered to grant total or partial exemption from tax payable on inter-State sales covered under Section 8(1) as also under Section 8(2) of the CST Act in public interest, subject to the fulfilment of requirements of Section 8(4). Accordingly, the trade circulars and the notices impugned were quashed holding that the State incorrectly proceeded to issue the same on the premise that the State Government had no power to grant total or partial exemption in respect of transactions covered under Section 8(2) of the CST Act after the 2002 amendment. This Judgment was challenged before the Apex Court.
Reasoning
The Supreme Court in view of the above facts, observed, “… in term of clause (c) of Section 6, unless a different intention appears the repeal shall not affect any right, privilege or liability acquired, accrued or incurred under the repealed enactment. The effect of the amendment would be the same as the repeal of the Act.”
The Court added that a person would be entitled to protection, as had accrued to him prior to the amendment of the Act, for the period such right had accrued to him under the unamended Act.
“Thus, after the amendment of Section 8(5), the Government was not authorised to pass a unilateral order affecting the rights of the assessee-respondent for claiming absolute exemption from payment of tax. The assessee respondent was not given any notice either cancelling the Eligibility Certificate or the Entitlement Certificate”, it further noted.
The Court said that without revoking the certificates, the substantive right which had accrued to the assessee continues to subsist and does not get impacted by the subsequent amendment of Section 8(5) inasmuch as there is nothing in the amended provision which provides for taking away such a right granted to the assessee.
“The State Government while applying the aforesaid amended Section 8(5) was not justified in taking away such a right accrued to the assessee-respondent on mere prospective amendment of Section 8(5) without revoking the Entitlement Certificate dated 24.03.1998 without notice or opportunity of hearing”, it also observed.
The Court, therefore, concluded that the State Government was not competent to issue the impugned notices for revising the assessment of the assessee and to demand the exempted tax only for the reason that the assessee has not submitted Form ‘C’ and ‘D’ in support of inter-State sale, trade & commerce.
Accordingly, the Apex Court dismissed the Appeals.
Cause Title- The State of Maharashtra & Ors. v. Prism Cement Limited & Anr. (Neutral Citation: 2025 INSC 199)
Appearance:
Appellants: Solicitor General Tushar Mehta, AORs Aaditya Aniruddha Pande, Anil Katiyar, and Deepanwita Priyanka.
Respondents: Senior Advocate V Sridharan, AORs Punit Dutt Tyagi, Zoheb Hossain, Charanya Lakshmikumaran, S. Ravi Shankar, K. Paari Vendhan, Anushree Prashit Kapadia, M. P. Devanath, Advocates Amarjit Singh Bedi, Surekha Raman, Shreyash Kumar, Yashwant Sanjenbam, Imlikaba Jamir, Sahil Parghi, S Sriram, Neha Choudhary, Umang Motiyani, Aayush Agarwal, Falguni Gupta, Ayush Agarwal, Yamunah Nachiar, Meghna Mukherjee, Ujjwal A Rana, Himanshu Mehta, Rishabh Sancheti, Padma Priya, and Paarivendhan.
