”EXPLANATIONS" and their "RETROSPECTIVE EFFECT"
Abhishek Raja "Ram"
GST & Income Tax Litigation Expert | NIRC RCM (2025-2029) | MEC STBA (2023-2025) | 9810638155 | DM for quick Tax tips & Consultations!
Clarificatory Explanation: The object of such an explanation is to understand the Act in the light of the explanation.
Expansion of Scope: Explanation does not ordinarily enlarge the scope of the Original Section which it explain, but only make the meaning clear beyond dispute.
1. Collector of Central Excise, Shillong vs Wood Craft Products Ltd.
(1995) 3 SCC 454 | (1995) 77 ELT 23
A clarificatory notification would take effect retrospectively.
2. WPIL Ltd, Ghaziabad vs Commissioner of Central Excise
(2005) 3 SCC 73 | AIR 2005 SC 1321 | (2005) 181 ELT 359 : 2005-TIOL-52-SC-LB
Where an explanation merely clarifies the position and makes EXPLICIT what was IMPLICIT. Clarificatory Notifications have been issued to end the dispute between the parties.
3. Govt. of Andhra Pradesh vs Corporation Bank
(2007) 9 SCC 55
If the object of the Explanation is to expand the meaning of any word then it cannot be read as retrospective.
How to determine the function of Explanation: In a particular statute whether it is to clarify the ambiguity or to widen the scope of main section?
HELD, there is no single yardstick to decide the question. Court should find out the true legislative intent and give effect thereto
4. Entertainment Tax Officer vs Ambae Picture Palace
(1994) 1 SCC 209
Changing the mode of the tax with retrospective effect. Such provision in the stature, held, need not be supported by an explanation for the retrospectivity.
领英推荐
5. Kanthi Enterprises vs State of Karnataka
(2002) 7 SCC 283: AIR 2002 SC 3227
Explanation to First Proviso to S.5(1-A) of Karnataka Sales Tax was inserted.
Held, this explanation is merely declaratory and not imposing a new burden on the dealer.
6. Premier Enterprises vs CTO
(2001) 9 SCC 753 | AIR 2003 SC 4449
Retrospective effect of Explanation is neither oppressive not unreasonable.
Conclusion:
To give retrospective effect, it need not be stated so expressly. Intention or Object of legislature can be culled out from background facts.
If the Government wanted to extend the benefits only with prospective effect it should be made explicitly clear.
Thanks and Regards,
Abhishek Raja Ram
9810638155