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Judgment
Umesh Chandra Banerjee, C.J.—It is a well settled principle of law that statutes should be interpreted as far as practicable so as to respect the legislative intent. The validity of the statute is normally presumed and unless invalidity is writ large the question of declaring the same to be invalid would not arise. Similar is the situation as regards the retrospective element in the statute. Normally, retrospectivity is an artificial element and cannot be termed to be a proper legislative exercise unless, however, the Legislature deems it expedient clearly and explicilly to have the operation retrospectively since the true principle is the lex prospicit non respicit (law looks forward and not back). Hence, retrospectivity being artificial and artificiality are generally repugnant to law, it therefore follows that the Courts apply the general presumption that an enactment is not intended to have retrospective effect. The power, however, of the Legislature to produce such an effect where it so desires is nevertheless undoubted and the general presumption therefore applies only unless the contrary intention appears. In ''Maxwell on the Interpretation of Statutes'' it is stated :
"It is a fundamental rule of English law that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication."
This presumption, as stated in Maxwell''s Interpretation, has received a judicial recognition and there has been a steady recording of acceptance of the same by the law Court. As a matter of fact, where, on a weighing of factors it seems that some retrospective effect was intended, the general presumption against retrospectivity indicates that this should be kept in as narrow a compass as will accord with the legislative intent. In this context, reference may be made to the decision of the Court of Appeal in the case of Skinner v. Cooper, (1979) 2 All. ER 836.
It is a general principle of legal policy that no one should suffer detriment by the application of a doubtful law. The general presumption against retrospectivity means that where one of the opposing constructions of an enactment would, without clear words justifying it, impose an ex post facto law, that construction is necessarily doubtful. As a matter of fact, a retrospective enactment to some extent inflicts a detriment, as has been stated by Lord Brightman in Yew Bon Tew v. Kenderaan Bos Maria, (1982) 3 All. ER 833 at page 836.
Having dealt with the law on the subject, let us now, at this juncture, advert to the contextual facts. The principal grievance of the petitioners in these writ petitions is in regard to the rate of tax for sale of articles of jewellery made of bullion or specie or both, including precious stones. The contextual facts depict that by a Government Order being G.O. Ms. No. 252, Revenue, dated 19-05-1995, the tax leviable on the sale of jewellery manufactured out of such tax paid gold, and sold in the State shall be 2 per cent, including those set with precious stones, as also in respect of precious stones loose, other than pearls at the rate of 2 per cent. Be it noted here that there was neither any contusion nor irregularity observed as regards payment of tax. Subsequently, however, on 15-04-1997 in another Government Order being G.O. Ms. No. 303 there was some modification so far as the earlier Government Order being G.O. Ms. No.252 is concerned. As a matter of fact, Clause (b) of G.O.Ms. No. 252, Revenue, dated 19-05-1995 stood rescinded and Clause (c) was also amended to read: "at the reduced rate of 3 per cent". Clauses (b) and (c) of G.O. Ms. No. 252, Revenue, dated 19-5-1995, are however, set-out hereunder for proper appreciation of the submissions advanced in the matter :
"(b) that the tax leviable under the said Act shall in respect of sale of jewellery including those set with precious stones be at the reduced rate of 2%.
(c) that the tax leviable under the said Act shall in respect of sale of precious stones loose, other than pearls, be at the reduced rate of 2%".
For fuller appreciation of the submissions, the relevant extract of G.O.Ms. No.303, Revenue, dated 15-4-1997, is also set-out herein below.
"(a) Clause (b) of the said notification shall be rescinded.
(b) The tax leviable under the said Act shall be in respect of sale of precious stones, loose other than pearls, be at the reduced rate of 3%."
It is this modification which was released subsequently and it is this notification which obviously created some confusion and by reason wherefor the State Government itself issued an errata by way of a further notification in G.O. Ms. No. 304, dated 04-05-1998. The errata reads as follows:
"ERRATA
In the Notification appended to the G.O.Ms. No.303, Revenue (CT.II) Department, dated 15-4-1997 for Clause (a) read as follows:
(a) The tax leviable under the said Act shall be in respect of sales of articles of jewellery made of bullion or specie or both, including precious stones shall be at the reduced rate of 3%."
In support of these three petitions, it has been contended that the State Government, admittedly realising the error or omission, issued the errata, but it should have avoided the retrospectivity which is apparent on the face of the record. By the notification in G.O.Ms. No.303, Revenue, dated 15-4-1997 Clause (b) of the earlier notification in G.O.Ms. No.252, Revenue, dated 19-05-1995, stands rescinded and by the errata issued after more than one year Clause (b) or original Clause (b) with some modification is brought back imposing liability in respect of sale of articles of jewellery made of bullion or specie or both, including precious stones. It is this subsequent insertion which has been strongly commented upon and criticised by both Mr. Krishnamurthy and Mr Ravi, appearing for different parties in support of the petitions. It has been contended that it is a subordinate legislation and the Government does not have any authority or jurisdiction neither has been conferred with any power by the Andhra Pradesh General Sales-tax Act, 1957, to issue notification with a retrospective effect.
7, Incidentally, it is to be noted, the jewellery made of Gold and Bullion is mentioned at entry 21 of the first schedule to the Andhra Pradesh General Sales Tax Act, 1957, and the rate of tax is at 4%. By the notification in G.O.Ms. No. 252 (Revenue) dated 19-5-1995, the Government has reduced the rate of tax to 2%. On an analysis of factual back-drop we find, by the G.O.Ms.No.303 (Revenue) dated 15-4-1997 that the Government partially modified the G.O.Ms. No. 252 (Revenue) dated 19-5-1995 and rescinded Clause (b) of the said notification and it is on this prespective that the learned Government Pleader submitted that in view of the said Government Order the rate of tax on the sale of jewellery made of gold and bullion obviously relates back to 4% and the rate of tax in respect of sale of precious stones, loose stones other than pearls remained at 3%. This submission could have gained some ground, however, in the event of there being no subsequent notification or the Government Order by reason of which it has been recorded that since 15-4-1997 Clause (a) ought to be read as is mentioned in the notification dated 4-5-1998 in replacement of earlier Clause (a) which records that ''Clause (b) of the notification shall stand rescinded.'' The facts therefore depict that the rate of tax provided in respect of sale of jewellery including those set with precious stones at the rate of 2% by the notification in G.O.Ms. No.252 and which stands rescinded, but subsequently re-introduced, though, with a higher rate of 3%. There is no interregnum so far as the governmental agency is concerned in the matter of applicability of the notification, the period stands covered by reason of the notification dated 04-5-1998, as such question of having a different rate viz., 4% as has been contended by the learned Government Pleader in support of the Revenue does not and cannot arise. At best and giving full credence to the submissions, there is in fact a doubt as regards the imposition of rate and by reason of the doubt, the interpretation beneficial to the assessee ought to be accepted. Hence, we are unable to record our concurrence with the submission of the learned Government Pleader as regards the fixation of rate of 4% during the interregnum.
Turning attention on to the principal issue, the learned Government Pleader contended that it is not the contention of the Revenue that G.O.Ms. No. 304, dated 4-5-1998 is retrospective and that, therefore, the petitioners are liable to pay tax at the rate of 3% from 15-4-1997 but, on the other hand, the learned Government Pleader submitted that G.O.Ms. No.303 was published in Gazette on 23-4-1997 and it was rescinded only on 4-5-1998 through G.O.Ms.No.304 and, therefore, the petitioners are liable to pay tax as per G.O.Ms.No.303 from 23-4-1997 to 25-5-1998 irrespective of the fact as to whether the petitioners have collected tax or not from the customers. It has been contended that in the event the petitioners have not collected tax from the customers the fault is theirs and question of dependancy on the payment of tax to the Government on the collection of tax by the dealer from the customers does not and cannot arise. Liability to pay tax exists under the statute and in that view of the matter question of there being any merit in the writ petitions does not and cannot arise.
There is no matter of doubt that the payment of tax is not dependant on the collection of tax by the dealer from the customers. Liability to pay the tax or fee arises under the statute. But that does not, however, clothe the Government to issue a subsequent notification imposing certain other liability which was rescinded on a particular date retrospectively. As noted above, retrospectivity is an exception to the general rule of prospectivity. The Revenue Department has, in our view, no authority in law to impose liability retrospectively.
Incidentally, be it noted that the tax in issue is an indirect taxation and cannot possibly have any retrospective element. It has been the definite case of the petitioners herein that G.O. Ms. No. 303, as a matter of fact, did not see the light of the day, and by reason wherefor the petitioners have been charging their customers on the basis of the rate as fixed in terms of the notification in G.O.Ms.No.252. As a matter of fact, in some of the matters, certain show cause notices were issued wherein the respondent-authorities have demanded payment of tax at the rate of 2%, and Mr. Ravi relying thereon, submitted that even the assessing authorities were not in the know of the new rate of taxes as is envisaged under G.O.Ms.No.303. Mr. Krishna Murthy, also relying upon one of the assessment orders, contended that the assessing Officer, in fact, has also been proceeding on the basis of rate of taxation being 2%. While it is true that an error or omission on the part of an Officer, does not really alter the situation as regards imposition of tax, but the fact remains, the two instances furnished before us in the matter provide a corroborative evidence in support of the contention that G.O.Ms.No.303, was in fact, not in circulation even so far as the officers are concerned, as otherwise they would not have proceeded in the manner as they have done.
Be it noted that element of tax is not a direct tax invplvement, but an indirect tax, and the incidence of which is always passed on to the customers. Some bills have been produced before us which go to show that the rate of tax charged was at the rate of 2% for the period from 15-4-1997 to 04-5-1998. It is true that the A.P. Federation of Chambers of Commerce came to know of the notification in G.OMs.No. 303 on 05-11-1997. But, the issue arises as to whether intimation to the Federation by itself will prompt the assessing authority to assess at the enhanced rate in terms of the notification, which subsequently stands altered or modified by issuance of an errata.
It is a taxing statute, and in the event of acceptance of an error by the Government by reason of issuance of an errata, would it be proper on the part of the Government to direct payment at the enhanced rate during the interregnum. In our view, the answer cannot, but, be in the negative. Taxing statute cannot have any retrospective element, more so, in the event of there being an indirect tax. On this score, therefore, we record our concurrence with the submissions of the petitioners and as such these writ petitions succeed. We do deem it fit to pass an order directing the respondents to give effect to the notification in G.O. Ms. No.304 to be effective prospectively and not from 15-4-1997.
It is, however, made clear that by reason of specific intimation to the Federation, we hereby direct the petitioners to deposit the differential duty during the interregnum in the event of collection of the same from the customers, and in that perspective, the Sales Tax Officers would be at liberty to check and scrutinize the books, and in the event of any collection, demand tax as may have been collected from the customers.
The writ petitions stand disposed of as above. No order as to costs.