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2020 ] NOTIFICATION — WHEN PROSPECTIVE/ RETROSPECTIVE A191

NOTIFICATION — WHEN PROSPECTIVE/
RETROSPECTIVE
By
Vijay Shekhar Jha, LL.M.
ASSOCIATE AT ASAV ATTORNEYS & ADVISORS LLP

Abstract
More often than not, we have witnessed that focal
point of very many cases has been the issue of prospec-
tive or retrospective operation of a tax notification.
General notion prevailing regarding this crucial mat-
ter is that tax circular/notification is always prospective in nature unless, oth-
erwise has been specifically stipulated in the respective circular/notification.
Against this background, focus of this paper is to demystify the cloud of confu-
sion surrounding this crucial matter.
Introduction
Before discussing the topic at hand the reader’s attention is adverted to
following settled legal certain accepted positions relevant to this discussion;
which are as follows :-
(i) Circulars/Notifications (including tax circulars/notifications)
issued under different statutes are also a “law” as defined under Ar-
ticle 13(3)(a) of the Constitution and is liable to be struck down, if it
is averse to Part III of the Constitution [Indian Express Newspaper
(Bombay) Pvt. Ltd. v. Union of India, 1999 (110) E.L.T. 3 (S.C.)].
(ii) Circular issued by the CBDT is binding on the department and the
assessing officer but is not binding on the assessee. Moreover, tax
notifications/circulars cannot be issued to arrogate power. Circulars
beneficial to the assessee which tone down the rigour of the law are
binding on the authorities in the administration of the Act [UCO
Bank, Calcutta v. Commissioner of Income Tax, West Bengal, AIR 1999
SC 2082].
(iii) Tax provision/circular/notification is construed as per the Principle
of Strict Construction. This principle was best expressed by Justice
Rowlatt [Cape Brandy Syndicate v. IRC, (1921) 1 KB 64, 71] in his cel-
ebrated statement that :
“In a taxing statute one has to look merely at what is clearly said.
There is no room for any intendment. There is no equity about a tax.
There is no presumption as to a tax. Nothing is to be read in, noth-
ing is to be implied. One can only look fairly at the language used.”
(iv) Exemption Notifications are construed strictly; consequently, in
case where there is any ambiguity as to its interpretation, the same
is resolved in favour of Revenue [Commissioner of Customs (Import) v.
M/s. Dilip Kumar and Company & Ors. - 2018-TIOL-302-SC-CUS-CB].
Moreover, in this case burden of proving that his case comes within
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