THE STATE OF MAHARASHTRA & ORS.versusPRISM CEMENT LIMITED & ANR

                 [2025] 2 S.C.R. 1861 : 2025 INSC 199

                   The State of Maharashtra & Ors.
                                  v.
                    Prism Cement Limited & Anr.
                      (Civil Appeal No. 13928 of 2015)
                               12 February 2025
   [Pamidighantam Sri Narasimha and Pankaj Mithal,* JJ.]


                            Issue for Consideration
       Whether the amendment to s.8(5) of the Central Sales Tax Act,
       1956 (CST Act), introduced by the Finance Act, 2002, applies
       retrospectively to take away tax exemption benefits granted under
       the Package Scheme of Incentives, 1993 (PSI 1993).
       Whether the State Government was justified in taking away a
       right accured to the assessee-respondent on mere prospective
       amendment of s.8(5) without revoking the Entitlement Certificate
       dated 24.03.1998 without notice or opportunity of hearing.

                                   Headnotes†
       Central Sales Tax Act, 1956 – s.8(5) – Amendment of s.8(5) of the
       Central Sales Tax Act by the Finance Act, 2002 with effect from
       11.05.2002 – Effect of Amendment – Whether the amendment to
       s.8(5) of the Central Sales Tax Act, 1956 (CST Act), introduced
       by the Finance Act, 2002, applies retrospectively to take away
       tax exemption benefits granted under the Package Scheme
       of Incentives, 1993 (PSI 1993):
       Held: In the case at hand, the assessee-respondent was held
       eligible for absolute exemption under the PSI 1993 issued in
       exercise of power under s.8(5) of the CST Act as per Eligibility
       certificate dated 20.02.1998 and Entitlement certificate dated
       24.03.1998 granting exemption to it from payment of tax under
       the BST Act and CST Act to the extent of Rs.273.54 crore or up
       till 2012, whichever is earlier – The said exemption granted to the
       assessee-respondent was much prior to the enforcement of the
       Finance Act, 2002 with effect from 11.05.2002 – The amended Act
       nowhere stipulates that rights previously accrued stand nullified
       or all previous exemptions stand cancelled or revoked – The
       requirement for fulfilling the condition of s.8(4) of the CST Act for

* Author
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    getting the benefit of tax exemption came subsequently after the
    amendment of s.8(5) with effect from 11.05.2002 and would apply
    prospectively to transactions in respect of which eligibility and
    entitlement certificates are issued subsequently – It is a cardinal
    principle of construction that every statute is prima-facie perspective
    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. [Paras 21 and 23]

    Central Sales Tax Act, 1956 – s.8(5) – Amendment of s.8(5) of
    the Central Sales Tax Act by the Finance Act, 2002 with effect
    from 11.05.2002 – Whether the State Government was justified
    in taking away a right accured to the assessee-respondent
    on mere prospective amendment of s.8(5) without revoking
    the Entitlement Certificate dated 24.03.1998 without notice or
    opportunity of hearing:
    Held: The law is settled 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 – Thus, after the
    amendment of s.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 – Therefore, without revoking
    the said certificates, the substantive right which had accrued to the
    assessee-respondent thereunder continues to subsist and does not
    get impacted by the subsequent amendment of s.8(5) inasmuch
    as there is nothing in the amended provision which provides for
    taking away such a right granted to the assessee-respondent –
    The State Government while applying the aforesaid amended
    s.8(5) was not justified in taking away such a right accrued to the
    assessee-respondent on mere prospective amendment of s.8(5)
    without revoking the Entitlement Certificate dated 24.03.1998 without
    notice or opportunity of hearing. [Paras 28 and 29]

    Central Sales Tax Act, 1956 – s.8(5) – Amendment of s.8(5) of
    the Central Sales Tax Act by the Finance Act, 2002 with effect
    from 11.05.2002 – Whether the requirement of submission of
    Form ‘C’ and ‘D’ would apply prospectively after 11.05.2002
    i.e., after the Finance Act of 2002:
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   The State of Maharashtra & Ors. v. Prism Cement Limited & Anr.


     Held: The State Government was not competent to issue the
     impugned notices for revising the assessment of the assessee-
     respondent and to demand the exempted tax only for the reason
     that the assessee-respondent has not submitted Form ‘C’ and ‘D’
     in support of inter-State sale, trade & commerce – The requirement
     of submission of Form ‘C’ and ‘D’ would apply prospectively after
     11.05.2002 i.e., after the Finance Act of 2002. [Para 30]

                              Case Law Cited
     MRF Ltd. v. Asstt. Commissioner (Assessment) Sales Tax &
     Ors. [2006] Supp. 6 SCR 417 : (2006) 8 SCC 702; Southern
     Petrochemical Industries Co. Ltd. v. Electricity Inspector & Ors.
     [2007] 6 SCR 955 : (2007) 5 SCC 447; Darshan Singh v. Ram
     Pal Singh & Anr. [1990] Supp. 3 SCR 212 : AIR 1991 SC 1654;
     S.L. Srinivasa Jute Twine Mills (P) Ltd. v. Union of India & Anr.
     [2006] 2 SCR 235 : (2006) 2 SCC 740; Shree Digvijay Cement
     Co. Ltd. & Ors. v. State of Rajasthan & Ors. [1999] Supp. 5 SCR
     428 : (2000) 1 SCC 688 – referred to.

                                List of Acts
     Central Sales Tax Act, 1956; Bombay Sales Tax Act, 1959; Finance
     Act, 2002; General Clauses Act, 1897.

                             List of Keywords
     Package Scheme of Incentives, 1993; Prospective amendment
     of s.8(5) of Central Sales Tax Act, 1956; Tax exemption benefits;
     Prospective amendment; Retrospective amendment; Eligibility
     certificate; Entitlement certificate; Enforcement of the Finance Act,
     2002; Notice or an opportunity of hearing; Principle of construction;
     Sales Tax; Inter-State trade – ‘C’ Form – ‘D’ Form; Trade circulars.

                            Case Arising From
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 13928 of 2015
     From the Judgment and Order dated 30.08.2012 of the High Court
     of Judicature at Bombay in WP No. 6475 of 2009
     With
     Civil Appeal Nos. 13522, 13523, 13524, 13525, 13526 and 13527
     of 2015 and Civil Appeal Nos. 2328-2334 of 2025
1864                                                             [2025] 2 S.C.R.

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                                 Appearances for Parties
       Tushar Mehta, Solicitor General, Aniruddha Joshi, Siddharth
       Dharmadhikari, Aaditya Aniruddha Pande, Bharat Bagla, Sourav
       Singh, Aditya Krishna, Ms. Preet S. Phanse, Adarsh Dubey,
       Ms. Deepanwita Priyanka, Ritesh Patil, Mrs. Anil Katiyar, Atulesh
       Kumar, S.N. Terdal, Advs. for the Appellants.
       Rakesh Mudgal, AAG, V. Sridharan, Ms. Meenakshi Arora, Sr. Advs.,
       Punit Dutt Tyagi, Ms. Apeksha Mehta, S. Sriram, Sahil Parghi,
       S. Sriram, Ms. Neha Choudhary, Ms. Umang Motiyani, Aayush
       Agarwal, Ms. Falguni Gupta, Ms. Charanya Lakshmikumaran,
       S. Ravi Shankar, Ms. Yamunah Nachiar, M/s. Gagrat And Co,
       Ujjwal A. Rana, Himanshu Mehta, Zoheb Hossain, M/s. K.J. John
       And Co, Ms. Surekha Raman, Amarjit Singh Bedi, Shreyash
       Kumar, Yashwant Sanjenbam, Rishabh Sancheti, Ms. Padma
       Priya, Naman Jain, Vidhan Malik, K. Paari Vendhan, Ms. Anushree
       Prashit Kapadia, Ms. Ekta Kundu, M.P. Devanath, Sudhir Mehta,
       Ms. Sailee Mehta, Ms. Dharita Purvish Malkan, Alok Kumar, Kush
       Goel, Suraj Pandey, Ms. Neha Ambashtha, Purvish Jitendra Malkan,
       Dr. Monika Gusain, Advs. for the Respondents.

                          Judgment / Order of the Supreme Court

                                       Judgment

       Pankaj Mithal, J.

       Civil Appeal No. 13928 OF 2015:

1.     Heard learned counsel for the parties at length.
2.     The assessee-respondent Prism Cement Limited, 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, Mumbai1 on 27.05.2002, 20.07.2002 and 08.02.2007
       respectively and various notices issued by the Deputy Commissioner
       of Sales Tax under Section 38 of the Bombay Sales Tax Act, 19592 for
       revising the assessments of the assessee-respondent made for the


1    In short ‘Commissioner’
2    In short ‘BST Act’
[2025] 2 S.C.R.                                                        1865

     The State of Maharashtra & Ors. v. Prism Cement Limited & Anr.



       assessment years 2002-2003 to 2004-2005. Consequentially, calling
       upon the assessee-respondent to pay/refund the exempted portion
       of the tax as per the provision of Package Scheme of Incentives
       19933 on the sale of goods effected in the course of inter-State trade
       or commerce.
3.     The above writ petition has been allowed by the Division Bench of the
       High Court by the impugned judgment and order dated 30.08.2012
       and it has been held that even after the amendment of Section 8(5)
       of the Central Sales Tax Act4 by the Finance Act, 2002 with effect
       from 11.05.2002, 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) of the CST Act. Accordingly, the trade circulars and the
       notices impugned were quashed holding that the State of Maharashtra
       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.
4.     Under challenge in this appeal is the aforesaid judgment and order
       dated 30.08.2012 passed by the High Court allowing the above writ
       petition.
5.     The State of Maharashtra introduced the PSI in 1993 so as to
       encourage the establishment of industrial units in backward areas
       and for that purpose envisaged to provide tax incentives, inter alia,
       including partial/total exemption from payment of sales tax under
       the BST Act as well as CST Act. This scheme was announced in
       exercise of powers under Section 8(5) of the CST Act vide notification
       dated 05.07.1980. The scheme provided a specified time period and
       the maximum amount up to which units were entitled to avail such
       incentives.
6.     Undisputedly, the assessee-respondent was eligible for tax exemption
       under the said scheme and was duly issued the Eligibility Certificate
       dated 20.02.1998 and the Entitlement Certificate dated 24.03.1998



3    Hereinafter referred to as ‘PSI 1993’
4    In short ‘CST Act’
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     granting exemption from payment of tax under the BST Act and
     CST Act to the extent of Rs.273.54 crores or up till 2012 whichever
     is earlier.
7.   The assessee-respondent in the three assessment years 2002-2003,
     2003-2004 and 2004-2005 availed the tax exemption benefits under
     the above scheme but after the CST Act was amended by the Finance
     Act, 2002 with effect from 11.05.2002, the State of Maharashtra, on
     the basis of the impugned trade circulars and the notices issued
     in the month of February, 2009 under Section 38 of the BST Act,
     sought to revise the tax demand of the assessee-respondent on the
     pretext that the assessee-respondent has failed to comply with the
     conditions of Section 8(4) of the CST Act with regard to submission
     of declarations in Form ‘C’ or ‘D’.
8.   In the above backdrop, the issue which arises for consideration is
     whether the exemption from tax granted under the PSI 1993 issued
     under Section 8(5) of the CST Act as it existed at the relevant time
     read with eligibility & entitlement certificate could be withdrawn by
     the subsequent amendment to Section 8(5) of the CST Act by the
     Finance Act of 2002 with effect from 11.05.2002 as the assessee-
     respondent failed to fulfil the requirements of Section 8(4) of the
     CST Act which mandated for submission of declaration in Form ‘C’
     or ‘D’. Ancillarily, whether the aforesaid amendment could be applied
     retrospectively taking away the benefit which have accrued to the
     assessee-respondent prior to coming into force by the Finance Act
     2002.
9.   In this context we had to first refer to Section 8(1) of the CST Act as
     it stood prior to its amendment by the Finance Act 2002 with effect
     from 11.05.2002. The Section 8 of the CST Act as a whole as it stood
     prior to the amendment by the Finance Act 2002 reads as under:
          “Section 8: Rates of tax on sales in the course of inter-
          State trade or commerce
          1. Every dealer, who in the course of inter-State trade or
          commerce:
          (a) sells to the Government any goods; or
          (b) sells to a registered dealer other than the Government
          goods of the description referred to in sub-section (3);
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           shall be liable to pay tax under this Act, which shall be
           four percent of his turnover.
           2. The tax payable by any dealer on his turnover insofar
           as the turnover or any part thereof relates to the sale of
           goods in the course of inter-State trade or commerce not
           falling within sub-section (1):
           (a) in the case of declared goods, shall be calculated at
           twice the rate applicable to the sale or purchase of such
           goods inside the appropriate State; and
           (b) in the case of goods other than declared goods, shall
           be calculated at the rate of ten percent or at the rate
           applicable to the sale or purchase of such goods inside
           the appropriate State, whichever is higher.
           …
           3. The goods referred to in clause (b) of sub-section (1):
           (a) Omitted.
           (b) are goods of the class or classes specified in the
           certificate of registration of the registered dealer purchasing
           the goods as being intended for resale by him or subject to
           any rules made by the Central Government in this behalf,
           for use by him in the manufacture or processing of goods
           for sale or in mining or in the generation or distribution of
           electricity or any other form of power;
           (c) are containers or other materials specified in the
           certificate of registration of the registered dealer purchasing
           the goods, being containers or materials intended for being
           used for the packing of goods for sale;
           (d) are containers or other materials used for the packing
           of any goods or classes of goods specified in the certificate
           of registration referred to in clause (b) or for the packing of
           any containers or other materials specified in the certificate
           of registration referred to in clause (c).
           4. The provisions of sub-section (1) shall not apply to any
           sale in the course of inter-State trade or commerce unless
           the dealer selling the goods furnishes to the prescribed
           authority in the prescribed manner:
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          (a) a declaration duly filled and signed by the registered
          dealer to whom the goods are sold containing the
          prescribed particulars in a prescribed form obtained from
          the prescribed authority; or
          (b) if the goods are sold to the Government, not being
          a registered dealer, a certificate in the prescribed form
          duly filled and signed by a duly authorized officer of the
          Government.
          5. Notwithstanding anything contained in this section, the
          State Government may, if it is satisfied that it is necessary
          so to do in the public interest, by notification in the Official
          Gazette and subject to such conditions as may be specified
          therein, direct:
          (a) that no tax under this Act shall be payable by any
          dealer having his place of business in the State in respect
          of the sales by him in the course of inter-State trade or
          commerce, from any such place of business of any such
          goods or classes of goods as may be specified in the
          notification; or that the tax on such sales shall be calculated
          at such lower rates than those specified in sub-section (1)
          or sub-section (2) as may be mentioned in the notification.
          (b) that in respect of all sales of goods or sales of such
          classes of goods as may be specified in the notification,
          which are made, in the course of inter-state trade or
          commerce, by any dealer having his place of business
          in the State or by any class of such dealers as may be
          specified in the notification to any person or to such class
          or persons as may be specified in the notification, no tax
          under this Act shall be payable or the tax on such sales
          shall be calculated at such lower rates than those specified
          in sub-section (1) or sub-section (2) as may be mentioned
          in the notification.”
10. Section 8(1) of the CST Act provides for a rate of tax for sales carried
    out by dealer to registered dealers of the other States or the sale
    of goods to the Government in respect of specified goods. It inter-
    alia provides that every dealer who in the course of the inter-State
    trade or commerce sells to the Government any goods or sells to
[2025] 2 S.C.R.                                                      1869

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     the registered dealer other than the Government, the goods of the
     particular description, shall be liable to pay tax at the rate of 4 per
     cent of its turnover.
11. Section 8(2) of the CST Act prescribes the rate of tax in respect
    of sales carried by the dealer in other states, not covered by Sub
    Section 1. It provides that the dealer shall be liable for payment of
    tax twice the rate applicable to the sale or purchase of such goods
    inside the state on the declared goods and where the goods are
    other than declared goods the rate of tax shall be 10 per cent or at
    the rate applicable to the sale or purchase of such goods inside the
    state whichever is higher.
12. Section 8(4) of the CST Act mandates that the sales under Section 8(1)
    are required to be supported by the prescribed declarations in the
    Form ‘C’ or ‘D’ as provided under Rule 12 of the CST Rules; meaning
    thereby that exemption/lower rate of tax on inter-State sales or
    commerce was permitted only in respect of the sales in the other
    state to the registered dealer or the Government subject to providing
    Form ‘C’ or ‘D’.
13. Section 8(5) of the CST Act is an overriding provision and it overrides
    Section 8(1) and Section 8(4). Sub Section (5) of Section 8 of the
    CST Act empowers the State Government to issue notification to
    grant partial or full exemption from taxes on inter-State sales or
    commerce in public interest and to prescribe different grade of tax.
14. In view of the mandate contained in Section 8(4) of the CST Act
    that the inter-State sales or trade under Section 8(1) are required to
    be supported by the declarations as envisaged in Form ‘C’ and ‘D’
    as provided under Rule 12 of the CST Rules, the issue whether in
    granting exemption/partial exemption on tax on such sales, the State
    Government is competent to dispense with the production of Form
    ‘C’ and ‘D’, came to be considered in the case of Shree Digvijay
    Cement Co. Ltd. and Others vs State of Rajasthan and Others5.
    This Court in deciding the above case inter-alia held that as Section
    8(5) starts with a non-obstinate clause and overrides Section 8(1)
    and 8(4) of the CST Act, the power of the State Government to grant
    exemption/partial exemption from tax includes dispensing with the


5   (2000) 1 SCC 688
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    requirement of Form ‘C’ and ‘D’ in respect of inter-State sales and
    trade. To put it simply it was held that when the State Government
    grants exemption/partial exemption in tax in exercise of powers
    under Section 8(5) it impliedly has the power to dispense with the
    requirement of Form ‘C’ and ‘D’.
15. It was to overcome the decision of this Court in Shree Digvijay
    (Supra) that Section 8(5) of the CST Act was amended by Finance
    Act 2002 with effect from 11.05.2002. The amended Section 8(5) of
    the CST Act reads as under:
         “Section 8(5) - Notwithstanding anything contained in this
         section, the State Government may, if it is satisfied that it
         is necessary so to do in the public interest, by notification
         in the Official Gazette and subject to such conditions as
         may be specified therein, direct:
         (a) no tax under this Act shall be payable by any dealer
         having his place of business in the State in respect of
         the sales by him, in the course of inter-State trade or
         commerce, to a registered dealer or the Government from
         any such place of business of any such goods or classes
         of goods as may be specified in the notification, or that the
         tax on such sales shall be calculated at such lower rates
         than those specified in sub-section (1) or sub-section (2)
         as may be mentioned in the notification; or
         (b) in respect of all sales of goods or sales of such classes
         of goods as may be specified in the notification, which are
         made in the course of inter-State trade or commerce, to a
         registered dealer or the Government by any dealer having
         his place of business in the State or by any class of such
         dealers as may be specified in the notification to any person
         or to such class of persons as may be specified in the
         notification, no tax under this Act shall be payable or the
         tax on such sales shall be calculated at such lower rates
         than those specified in sub-section (1) or sub-section (2)
         as may be mentioned in the notification.”
16. The aforesaid amendment clearly reveals that the State Government
    though continues to have the power in public interest to grant
    exemption/partial exemption of tax on inter-State sale, trade or
[2025] 2 S.C.R.                                                      1871

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     commerce but the same is subject to fulfilment of the requirements
     laid down under Sub-Section (4) of Section 8 of the CST Act which
     means that henceforth the exemption so granted would be admissible
     only if Form ‘C’ and ‘D’ are supplied by the dealer in context with
     the aforesaid interstate sale, trade and commerce.
17. The aforesaid amendment regulates the power conferred upon the
    State Government under Section 8(5) of the CST to grant exemption/
    partial exemption from tax to dealers on inter-State sales, trade and
    commerce subject to the fulfilment of the requirements laid down in
    sub-Section (4) of the Section 8 i.e., of production of Form ‘C’ and ‘D’
    as the case may be in contrast to the absolute power of exemption/
    partial exemption that was permitted under the unamended Act. It is
    worth noting that the aforesaid amendment is prospective in nature
    and has been made applicable with effect from 11.05.2002 and is
    not applicable from any anterior date or to transactions prior to the
    aforesaid date. In other words, the absolute power initially conferred
    under Section 8(5) upon the State Government to grant exemption/
    partial exemption of tax in connection with inter-State sale, trade or
    commerce with the amendment was circumscribed and restricted
    to the fulfilment of the requirement of Section 8(4) of the CST Act
    which prescribes for the submission of Form ‘C’ and ‘D’ only w.e.f.
    11.05.2002. However, such restrictions are prospective in nature and
    would not apply retrospectively to cases where absolute exemption
    was permitted much prior to the amendment.
18. In the instant case, the assessee-respondent was granted tax
    benefits under the PSI 1993 issued in exercise of power under
    Section 8(5) of the CST Act as per the eligibility and entitlement
    certificates dated 20.02.1998 and 24.03.1998 respectively and that
    said benefit was available to the assessee-respondent up to the
    period of 2012 or to the extent of Rs.273.54 crore, whichever was
    earlier. The said benefit granted to the assessee-respondent was not
    with any restriction, much less the condition of submission of Form
    ‘C’ and ‘D’. Thus, on the basis of such exemption granted by the
    petitioner vide Eligibility Certificate dated 20.02.1998 and Entitlement
    Certificate dated 24.03.1998, a substantive right had accrued to the
    respondent to claim the said benefit up to the year 2012 or to the
    extent of Rs.273.54 crore.
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19. True it is that, in view of the amendment of Section 8(5) by the
    Finance Act, 2002, the State Government ceases to have power to
    grant exemption in respect of sale of goods covered under Section
    8(2) but that is not the issue herein. The precise issue in the present
    case is whether the aforesaid amendment would take away the right
    which had accrued to the assessee-respondent under the Eligibility/
    Entitlement certificates wherein absolute exemptions were granted
    without any condition of submission of Form ‘C’ and ‘D’.
20. It is to be noted that the circular, issued by the Commissioner under
    Section 8(5) of the CST Act after the amendment by the Finance Act,
    2002, though empowers the State Government to grant exemption, is
    restrictive in nature subject to the fulfilment of the conditions specified
    under Section 8(4) of the CST Act, but the issue is whether that
    restriction is retrospective or only prospective in nature. Therefore,
    the issue which remains is whether such restriction would apply
    even to the transactions which had taken place earlier i.e. where
    Eligibility and Entitlement certificates were issued much prior to the
    enforcement of the amending Act.
21. In the case at hand, the assessee-respondent was held eligible for
    absolute exemption under the PSI 1993 issued in exercise of power
    under Section 8(5) of the CST Act as per Eligibility certificate dated
    20.02.1998 and Entitlement certificate dated 24.03.1998 granting
    exemption to it from payment of tax under the BST Act and CST
    Act to the extent of Rs. 273.54 crore or up till 2012, whichever is
    earlier. The said exemption granted to the assessee-respondent was
    much prior to the enforcement of the Finance Act, 2002 with effect
    from 11.05.2002. Therefore, by virtue of the unamended Section
    8(5) and the Notification issued thereunder as well as under the
    aforesaid Eligibility and Entitlement certificates, a substantive right
    of exemption from payment of tax had accrued to the assessee-
    respondent. The contention is that though after the amendment, the
    right of the Government to grant absolute exemption has ceased
    to exist, but that is only prospective in nature and would not apply
    to cases where an absolute exemption without any restriction has
    already been granted. The amended Act nowhere stipulates that rights
    previously accrued stand nullified or all previous exemptions stand
    cancelled or revoked. The requirement for fulfilling the condition of
    Section 8(4) of the CST Act for getting the benefit of tax exemption
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    The State of Maharashtra & Ors. v. Prism Cement Limited & Anr.


     came subsequently after the amendment of Section 8(5) with effect
     from 11.05.2002 and would apply prospectively to transactions in
     respect of which eligibility and entitlement certificates are issued
     subsequently.
22. In support of the above contention, reliance has been placed upon
    Darshan Singh v. Ram Pal Singh and Anr.6 which provides that the
    benefits conferred earlier to the amendment would remain unaltered,
    however, the availment of the said benefit in future would be restrictive
    to conditions imposed by the amended provision.
23. It is a cardinal principle of construction that every statute is prima-
    facie perspective 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.
24. In S.L. Srinivasa Jute Twine Mills (P) Ltd. vs. Union of India &
    Anr.7 this Court has quoted the observations of Lopes L.J.: “every
    statute, it is said, which takes away or impairs vested rights acquired
    under existing laws, or creates a new obligation or imposes a new
    duty, or attaches a new disability in respect of transactions already
    past, must be presumed to be intended not to have a retrospective
    effect”.
25. This Court, while relying upon the above observation in reference to
    Section 6 of the General Clauses Act, 1897 which provides for the
    effect of the repeal, observed that 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. Accordingly, it was held 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.
26. This Court in the case of MRF Ltd. Kottayam vs. Asstt.
    Commissioner (Assessment) Sales Tax and Others8 was dealing


6   (1992) Supp. 1 SCC 191 : AIR 1991 SC 1654
7   (2006) 2 SCC 740
8   (2006) 8 SCC 702
1874                                                         [2025] 2 S.C.R.

                         Supreme Court Reports


     with an exemption from Sale Tax granted for a fixed period under
     the eligibility certificate. During the currency of the exemption period,
     State Government issued another notification which had an effect
     of discontinuing such an exemption. The Court held that premature
     deprivement of the benefit of exemption is arbitrary, unjust and
     unreasonable and that the State Government did not have the
     power to issue a notification to take away or affect the rights already
     accrued in favour of a person/ assessee. It was held that the persons/
     units eligible for exemption prior to the issuance of the subsequent
     notification would have the benefit of the exemption for the full period
     of exemption already granted.
27. In another case Southern Petrochemical Industries Co. Ltd. vs.
    Electricity Inspector & Etio and Others9, while dealing with a
    privilege of exemption from payment of tax, this Court held that in
    a case where the right of exemption of tax for a fixed period has
    accrued and the conditions for exemptions have been fulfilled, the
    withdrawal of the exemption cannot affect the rights already accrued,
    unless the statutes provide otherwise.
28. Moreover, the law is settled 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. 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. Therefore, without revoking
    the said certificates, the substantive right which had accrued to the
    assessee-respondent thereunder 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-respondent.
29. 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.


9   (2007) 5 SCC 447
[2025] 2 S.C.R.                                                          1875

   The State of Maharashtra & Ors. v. Prism Cement Limited & Anr.


30. In view of the above facts and circumstances, on the above short
    point, the State Government was not competent to issue the impugned
    notices for revising the assessment of the assessee-respondent and
    to demand the exempted tax only for the reason that the assessee-
    respondent has not submitted Form ‘C’ and ‘D’ in support of inter-State
    sale, trade & commerce. The requirement of submission of Form
    ‘C’ and ‘D’ would apply prospectively after 11.05.2002 i.e., after the
    Finance Act of 2002. Accordingly, in our opinion the appeal lacks
    merit and hence dismissed.

     Civil Appeal No. 13523 of 2015, Civil Appeal No. 13524 of 2015,
     Civil Appeal No. 13525 of 2015, Civil Appeal No. 13526 of 2015,
     Civil Appeal No. 13527 of 2015, Civil Appeal No. 13522 of 2015
     and Civil Appeal Nos. of 2025 arising out of S.L.P. (C) Nos.
     11314-11320 of 2018:
31. Leave granted in Special Leave Petition (C) Nos. 11314-11320 of
    2018.
32. In view of the order passed in Civil Appeal No. 13928 of 2015 today,
    these appeals are dismissed without any order as to costs.

     Result of the case: Appeals dismissed.



     †
         Headnotes prepared by: Aishani Narain, Hony. Associate Editor
                                 (Verified by: Ankit Gyan, Editor)