P.T. Raman Nayar, J.
1. This appeal is by the 1st defendant State Government against whom a decree has been made restraining it from taking any proceedings to recover the tax assessed on the plaintiff under the General Sales Tax Act, 1125 (for short, the Act) on the purchase of copra made by him from 18th November, 1952, to 31st March, 1953, the turnover in question amounting to Rs. 42,449-11-9. For the rest, the plaintiff's suit has been dismissed and the plaintiff has not chosen to appeal.
2. Section 6 of the Act runs as follows :-
6. (1) Power of Government to notify exemption and reduction of tax.-Government may, by notification in the Gazette, make an exemption, or reduction in rate, in respect of any tax payable under this Act-
(i) on the sale of any specified class of goods at all points or at any specified point or points in the series of sales by successive dealers ; or
(ii) by any specified class of persons, in regard to the whole or any part of their turnover.
(2) Any exemption from tax, or reduction in the rate of tax notified under Sub-section (1)-
(a) may extend to the whole of the State or to any specified area or areas therein;
(b) may be subject to such restrictions and conditions as may be specified in the notification, including conditions as to licences and licence fees.
3. In exercise of the power conferred by this section the State Government issued a notification, No. SRI.-1445/50/R.D. dated 15th June, 1950, exempting dealers other than the first and last dealers (intermediate dealers as they have been called) from the payment of tax in respect of the sale of copra, among other goods, on condition (as authorised by the section) that they took out a licence under Rule 21 of the Travancore-Cochin General Sales Tax Rules, 1950, on payment of the fees prescribed under Rule 22 thereof. The plaintiff, an intermediate dealer in copra, took out such a licence on 31st October, 1950. Under the rules governing the grant of licences, all licences expire on the 31st March following their issue, but can be renewed from year to year, and the plaintiff's licence, exhibit D1, was accordingly renewed for the official years 1951-52 and 1952-53. In other words, the plaintiff had a licence up to the 31st March, 1953. By a notification dated the 20th September, 1952, the State Government amended its earlier notification of the 15th June, 1950, by the deletion therefrom of copra and some other articles so that the sales of these articles were taken outside the scope of the exemption therein. By successive notifications this amending notification was held in abeyance, and it is the admitted case that the amendment came into force only on 18th November, 1952. The question is whether the plaintiff, whose licence enured up to 31st March, 1953, is liable to be assessed to tax on his turnover in copra from 18th November, 1952, the date on which the exemption was withdrawn till 31st March, 1953, the date on which his licence expired. The Court below took the view that he was not, holding, in my opinion wrongly, that to assess the plaintiff for the period in question would be to give retrospective application to the amending notification by which the exemption was withdrawn.
4. Now, it cannot be doubted that if the State Government had the power to grant an exemption, it also had the power to withdraw the exemption by rescinding the notification by which it was granted-see Section 20 of the Interpretation and General Clauses Act-and if a decision were necessary on the point there is Subramania Iyer v. State 1956 K.L.T. 719. It is equally beyond doubt that the power conferred on the State Government by Section 6 of the Act docs not enable it to issue a notification either granting or withdrawing an exemption with retrospective' effect. (Nor did the State Government purport to do so when they withdrew the exemption in question). But what I am quite unable to understand is how it can be said that in withholding the benefit of the exemption from the date of the notification of withdrawal, that notification is being given retrospective effect merely because a licence taken in fulfilment of the conditions stipulated by the notification granting the exemption was for a period beyond the date of the withdrawal. The duration of the exemption was up to 18th November, 1952, on which date it was withdrawn, and the duration of the licence has nothing whatsoever to do with the period for which the exemption is available. A condition of the exemption is that a licence should be taken, in other words that the purchases should be covered by a licence. Neither the Act nor the notification says that the exemption is for the duration of the licence. Supposing, the rules permitting it, the plaintiff had taken out a permanent licence. Could it possibly have meant that the withdrawal of the exemption could never affect him Or, supposing again, the condition of the exemption was that the dealer should be a resident of the State. Could it be said that, notwithstanding the withdrawal of the exemption, the dealer was not liable to be taxed so long as he resided in the State Certainly not. The fact is that the duration of the licence is an entirely irrelevant consideration in determining the period of the exemption. The period of the exemption is, as I have already said, the period for which the notification of the 15th June, 1950, remained in force in respect of copra, in other words, until copra was deleted from that notification by the amending notification which came into effect on 18th November, 1952. I might go further and say that, even if the notification of the 15th June, 1950, had said what it did not say, namely, that there would be an exemption for the duration of a licence taken under Rule 21, even that would not give the plaintiff a vested right to exemption beyond the period for which the notification was in force.
5. Since the duration of the licence has no bearing whatsoever on the duration of the exemption, the question whether the State Government could or could not cancel the licence before the expiry of its term does not arise. In fact the State Government did not cancel the licence. It was not the licence that granted the exemption, but the notification of the 15th June, 1950. The taking out of the licence was only a condition for earning the exemption, and, as I have already said more than once, the fact that the licence continued for a period beyond the withdrawal of the exemption cannot have the effect of continuing the exemption.
6. In the result I allow the appeal and dismiss the plaintiff's suit in entirety with costs both here and in the Court below.