YEMMIGANUR SPINNING MILLS LIMITED Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THE petitioners are registered dealers under the Central Sales Tax Act and the Andhra Pradesh General Sales Tax Act dealing in cotton and cotton yarn. By G. O. Ms. No. 167 (Revenue) dated 9th February, 1971, issued under Section 9 (1) of the State Act, the State Government granted exemption in the case of sales of hank yarn from the levy of tax under the said Act with effect from 9th February, 1971. The petitioners say that on account of the said exemption, they were not charging or collecting the sales tax from their customers on the sales of the said commodity. However, it appears that the State Government issued another notification in G. O. Ms. No. 437 (Revenue) dated 18th May, 1971, rescinding the said G. O. Ms. No. 167 with effect from 19th April, 1971. The said G. O. was, however, published in the Andhra Pradesh Gazette only on 1st July, 1971. The petitioners say that they knew of the said rescinding G. O. only in the second week of July when a copy of the same was communicated by the Andhra Pradesh Chambers of Commerce and Industry to its members. In the assessment for the relevant year, the petitioners claimed exemption on a turnover of Rs. 10,60,496. 00 and Rs. 16,56,083 respectively, representing the turnover of inter-State sales of hank yarn during the period 19th April, 1971, to 30th June. 1971, but the department refused the said exemption with reference to the said G. O. Ms. No. 437. Hence the writ petition.

(2.) THE relief claimed by the petitioners is for a declaration that the said G. O. Ms. No. 437 dated 18th May, 1971, comes into force only on and from the date of its publication in the Andhra Pradesh Gazette, i. e. , 1st July, 1971, and, consequently, to restrain the respondents from levying or collecting the Central sales tax on the sales of hank yarn for the period between 19th April, 1971, and 30th June, 1971.

(3.) SRI P. Venkatarama Reddy, the learned Counsel for the petitioners, contends that under Section 9 (1) of the Andhra Pradesh General Sales Tax Act, an exemption can be granted by the State Government by a notification published in the Andhra Pradesh Gazette, which obviously means that the exemption would be effective only from the date of its publication in the Andhra Pradesh Gazette. By virtue of the provisions of the Andhra Pradesh General Clauses Act, the power to rescind an exemption may be conceded to the State Government under the said provision itself. But even a notification rescinding an earlier notification has to be similarly published in the Andhra Pradesh Gazette and would therefore be effective from the date of such publication. He further contends that the power under Section 9 being in the nature of delegated legislation, cannot be given retrospective effect and, particularly, when Section 9 neither expressly nor by necessary implication confers the power to issue a notification with retrospective effect. Sri D. V. Sastry, the learned Government Pleader, however, submits that none can deny the essential requirement of publication in the Gazette, which is expressly provided by the Act. He submits that every notification under Section 9 of the Act, whether prospective or retrospective, has got to be published in the Gazette and that, in fact, G. O. Ms. No. 437 was so published in the Gazette. The main question that is in issue, according to him, in this writ petition is the power of the State Government to give retrospective effect to its notification issued under Section 9. He submits that there is no limitation on the power of the State Government to grant or rescind an exemption with retrospective effect and that, therefore, G. O. Ms. No. 437 is valid even with respect to its retroactivity.