VIJAY DAL MILL Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THE facts leading to this petition under Article 226 of the Constitution are as follows :

(2.) THE argument of the learned counsel for the petitioner is that the notification dated 1st April, 1978, withdrawing the concession granted under the notification dated 1st April, 1966, could not be given retrospective effect from 21st May, 1975, by the notification issued on 6th July, 1979. In our opinion, this contention must be accepted. Section 8 (5) of the Central Act reads as follows:

(3.) THE first notification granting concession to the dealers dealing in pulses was issued on 1st April, 1966. Under that notification the rate of tax was fixed at 2 per cent. This notification was withdrawn on 1st April, 1978, by a notification issued on that date. There is no difficulty so far. The difficulty arises because of the notifications issued on 6th July, 1979, by which the notification dated 1st April, 1978, was given retrospective effect from 21st May, 1975 and the rate of tax was enhanced to 4 per cent. The State Government may grant retrospective exemption or concession to a dealer by notifications issued under Section 8 (5 ). The question is not before us. But we are clear that Section 8 (5) does not authorise the State Government to withdraw an exemption or concession retrospectively so as to increase the rate of tax retrospectively. The effect of the notifications issued on 6th July, 1979, was that the rate of tax on inter-State sales of pulses which was 2 per cent up to 1st April, 1978, was enhanced to 4 per cent from 21st May, 1975. The retrospective enhancement of rate and withdrawal of concession to the dealers, in our opinion, was unauthorised. The result is that the petitioner would be liable to pay tax at 2 per cent under the notification dated 1st April, 1966, up to 1st April, 1978 and from 1st April, 1978, the rate of tax would be 4 per cent. The first and second notifications dated 6th July, 1979 (annexure-I), will not have the effect of increasing the rate of tax to 4 per cent for the period from 21st May, 1975, to 1st April, 1978. To that extent the petition will have to be allowed.