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2020 ] NOTIFICATION — WHEN PROSPECTIVE/ RETROSPECTIVE A193

For the sake of proper understanding, this paper has classified the
phrase ‘tax notification’ into following two categories :
(1) Exemption Notification : These are those notifications which ex-
empt particular income/item from the exigibility of tax/duty either
wholly or partially e.g. - Notification issued u/s 25 of the Customs
Act, 1962, u/s 11 of the CGST Act, 2017 and notifications issued un-
der Chapter III or any other exemption providing provision of the
Income-tax Act, 1961.
(2) Non-Exemption Notification : This can be further be classified into
following three categories, viz.
(a) Beneficial Notification - These are those notifications which
though do not exempt the assessee from the exigibility of cer-
tain tax/duty, however, they are beneficial towards the inter-
est of the assessee as they clarify the purported rigorous pro-
vision/notification or it tones down the rigour of tax provi-
sion or extant tax notification in favour of the assessee. In
both cases, assessee would find these notifications in his in-
terest.
(b) Oppressive Notification : These are those notifications
where, as per rule of interpretation, notification can be con-
strued retrospectively to fasten new liability or obligation on-
to the assessee.
(c) Ordinary Notification : All non-exemption notifications oth-
er than the beneficial notifications and oppressive notifica-
tions.
Exemption Notification
As have already been discussed, exemption notification is interpreted
strictly and words couched in the exemption notification are given their literal
meaning. Thus, as far as retrospective or prospective applicability of exemption
notification is concerned, such notifications would be interpreted strictly and in
the absence of any explicit elucidation regarding retrospective operation of the
notification, it can be said to have operated from the date appearing on the noti-
fication in a prospective manner. Further, while postulating so, reference may
also be given to the legal principle i.e. ‘lex prospicit non respicit’ which means law
looks forward not backward. This view cannot be dismissed as a mere surmise,
as time and again different Courts/Tribunals have consistently supported this
position in, inter alia, undernoted cases [Commissioner of Income Tax (Central)-I,
New Delhi v. Vatika Township Private Limited - (2015) 1 SCC 1, Shri Bakul Oil Indus-
tries and Another v. State of Gujarat and Another, 1987 (27) E.L.T. 572 (S.C.), Tractors
and Farm Equipments Limited v. Collector - 1997 (96) E.L.T. A74 (S.C), Bombay Oil
Industries Pvt. Ltd. v. Union of India, 1995 (77) E.L.T. 32 (S.C.), Associated Cement
Companies Ltd. v. Government of Karnataka - 2004 (170) E.L.T. A264 (S.C.)]. Moreo-
ver, it must also be remembered that in case exemption notifications are allowed
to be operated retrospectively, then, in such a situation, Government may end up
losing out substantial amount of revenue/tax collected and recovered. This situa-
tion if allowed, may become a source of serious concern for the Government as
the collection and recovery process of tax/revenue is a tedious and painstaking
process, especially, when it has to be done by complying all requirements of fair-
ness as enjoined by Article 265 of the Constitution.
EXCISE LAW TIMES  15th June 2020  39