(Prayer: Tax Case (Revision) is filed under Section 51(2) of the Puducherry Value Added Tax Act, 2007, to revise the judgment and decree dated 24.10.2014 made in Tax Appeal No.5/2013 on the file of the Puducherry Value Added Tax Appellate Tribunal, Puducherry.)

1. The Appellant before us is the Puducherry Co-operative Building Centre, registered under the Puducherry Co-operative Society Act, 1972. The Puducherry Government thought fit that the turnover of the societies run by the co-operative societies must be exempted from tax under the Puducherry General Sales Tax Act, 1967(herein after referred to as “PGST Act”). Hence, in exercise of the powers conferred under Sub-section (1), (2) and (3) of Section 19 of the PGST Act, G.O.Ms.No. 6/F2/2005, dated 17.01.2005, was issued exempting the tax payable under the Puducherry Sales Tax Act, 1967 on all sales of goods by the Puducherry Co-operative Building Centre, No.P.554 of Puducherry in the year 2007.

2. When the Value Added Tax ( hereinafter referred to as “VAT”)regime came into force with the introduction of the Puducherry Value Added Tax Act, 2007 (herein after referred to as “PVAT Act) with effect from 01.07.2007, the issue, as to whether the concession given to the Appellant-Society would continue or not, came up for consideration. On 20.08.2007 the Commercial Tax Officer-II, issued notice to the Appellate-Society demanding tax on the entire turnover without any exemption, despite the representation made by the Appellant-Society on 26.06.2007 stating that it was exempted as per G.O.No.6/F2/2005, dated 17.01.2005 and the same has been saved by Section 81 (3) and 81 (9) of the PVAT Act.

3. Thereafter, the matter has been referred to the Authority for Clarifications and Advance Rulings seeking clarification, which reads as below:-

               “We request your goodself to clarify whether the exemption granted under the PGST Act, 1967 prevails under the Puducherry Value Added Tax Ordinance 2007 also, so as to enable us to proceed further in this regard.

4. The Authority, after considering the question framed for clarification, has passed the following order:-

               “The incidence and levy of tax under PVAT Act, 2007 arises based on Section 14 of the said Act and any exemption has to be granted by following the procedures laid down under the said Act only. Moreover, granting of exemption under the repealed PGST Act, 1967 does not confer any right on the dealer.

               Hence, the exemption already granted under the PGST Act is inconsistent with the provisions of the PVAT Act, 2007 and will not hold good in view of the provisions contained in sub section (8) of Section 81 of the PVAT Act, 2007.”

 5. Being aggrieved the order of the respondent dated 26.09.2013 passed in No.22/AR/CTD/2013/550, the Appellant-Society has approached the Puducherry Value Added Tax Appellate Tribunal in Tax Appeal No.5 of 2013 wherein the Tribunal, vide order dated 24.10.2014 dismissed the claim of the assessee and upheld the clarification given by the Authority for Clarifications and Advance Rulings.

6. Challenging the order of the Appellate Tribunal, the present appeal is preferred before this Court raising the following Substantial Questions of Law:-

                   1. Whether in view of the provisions contained under Section 81(9) of the PVAT Act, 2007, the exemption from payment of Tax granted by the Government of Puducherry under the Notification bearing G.O.Ms.6/F2/2005, dated 17.01.2005 to the petitioner under the PGST Act 1967 until further orders, would continue to be in force and exempt it from payment of tax under the PVAT Act 2007 also till the said Notification is rescinded by the Government of Puducherry under Notification bearing G.O.Ms.No.64/F2/2008, dated 16.10.2008?

                   2. Whether the Tribunal below was right in ignoring the provisions contained under Sub-Section (9) of Section 81 of the PVAT Act, 2007, referring to the provisions contained under Sub-Section (3) & (8) of Section 81 of the PVAT Act 2007, holding that the exemption should have been under the PVAT Act 2007 and not under the repealed PGST Act 1967 and dismissing the Tax Appeal and such mistake has vitiated its findings and judgment and made them perverse? and

                   3. Whether in view of the provisions contained under Sub-Section(3) of Section 81 of the PVAT Act, 2007, the provisions contained under the said Act would affect the right, including the right of exemption from payment of Tax acquired under the repealed PGST Act 1967 under the Notification bearing G.O.Ms.6/F2/2005, dated 17.01.2005 till it is rescinded by the Notification bearing G.O.Ms.No.64/F2/2008, dated 16.10.2008?

7. The learned Senior Counsel appearing for the appellant would submit that the purpose of granting exemption from payment of tax been well spoken in G.O.Ms.No.6/F2/2005, dated 17.01.2005 wherein the Puducherry Government has taken a conscious decision to exempt the Appellant-Society from paying the tax on the sale of goods. No time limit was prescribed for the extension of the said concession. This exemption was granted in exercise of power conferred under Section 19 of the Puducherry Sales Tax Act. While so, on the introduction of Puducherry Value Added Tax, 2007, which repealed the Puducherry General Sales Tax Act, 1967 by virtue of Section 81(3) ,any right, title and obligation accrued have been saved till specifically rescinded or withdrawn. While so, the concession extended under G.O.Ms.No.6/F2/2005, was specifically withdrawn only after issuance of G.O.Ms.No.64/F2/008 dated 16.10.2008, which has expressly rescinded the notification issued in G.O.Ms.No.6/F2/2005, dated 17.01.2005. Hence, the finding of the Authority for Clarifications and Advance Rulings is contrary to the provisions of law. It is not necessary to issue a fresh Government Order under Section 14 of the PVAT Act, since Section 81 of the PVAT Act, already saves the right conferred to the society.

8. The learned Additional Government Pleader (Pondy) appearing for the respondent would submit that the repeal and saving clause under the Pondicherry Value Added Tax 2007 makes it clear that if any notification is issued under the repealed Act is inconsistent with the new Act, then the same will not be saved. He relies upon the expression under Sub-Section (8) of Section 81 as well as Section 14 of the Value Added tax, which lays down the procedure for granting exemption.

9. Heard the learned Senior Counsel appearing for the appellant and the learned Additional Government Pleader (Pondy) appearing for the respondent.

10. Section 19 of the repealed Act namely, Pondicherry General Sales Tax Act, 1967 reads as below:-

                   19. Power of Government to notify exemptions and reductions of tax:(1) The Government may, if it is satisfied that it is necessary so to do in the public interest, by notification, make an exemption or reduction in rate, in respect of any tax payable under this Act .

                   (i) on the sale or purchase of any specified goods or class of goods at all points or at a pecified point or points in the series of sales by, successive dealers,

                   (ii) in regard to the whole or any part of turnover of any specified class of persons, or

                   (iii) in respect of any specified class of sales or purchases.

                   (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 Union territory or to any specified area or areas therein ;

                   (b) may be subject to such restrictions and conditions as may be specified in the notification.

                   (3) The Government may, by notification, cancel or vary any notification issued under sub-section (1)

11. The reading of the above Section indicates that the State Government has the exclusive power to notify exemption in respect of any taxpayer from paying the tax in the public interest. The period of such exemption is not prescribed and it shall continue until it is modified or rescinded. When the Pondicherry General Sales Tax 1967 got repealed and the new Act namely, the Pondicherry Value Added Tax Act 2007 came into force, the Legislature has thought it fit to save the rights, title, obligation and liability already accrued or acquired until they are specifically rescinded or withdrawn.

12. Thus, we find that Sub Section (3) of Section 81 of the New Act, which reads as below:-

                   81.Repeal and saving:-(3)The provisions of this Act shall not affect any right, title, obligation or liability already acquired, accrued or incurred under the repealed Act, and subject thereto, anything done or any action taken including any appointment, notice, order in exercise of any power conferred by that Act, shall be valid till specifically rescinded or withdrawn.

13. No doubt, Sub-Section (8) of Rule 81 provides a rider to the saving clause to the effect that such right will be saved only if there is no inconsistency between repealed Act and new Act. For the better understanding Sub-Section (8) of Section 81, is extracted below:-

                   8.Any rule, regulations, notifications or orders made or issued under the repealed Act and continuing in force on the day immediately before the commencement of this Act, shall continue to be in force on or after the commencement of this Act in so far as they are not inconsistent with the provisions of this Act.

14. From the impugned order passed by the Authority for Clarifications and Advance Rulings, it is obvious that in the new Act namely, Pondicherry Value Added Tax, 2007, there is a provision for granting exemption to dealers from payment of tax. Under the Pondicherry Value Added Tax Act, 2007, Section 10 empowers the Government to grant exemption in certain cases by notification. Therefore, we do not find any inconsistency between Section 19 of the Repealed Act and Section 10 of the Pondicherry Value Added Tax Act, 2007, in sofar as the power of the Government to grant exemption from payment of tax.

15. In the said circumstances, we hold that it may not be proper to confine the saving clause only to industrial units enjoying exemption prior to the commencement of the Pondicherry Value Added Tax Act, 2007. Therefore, we hold that Section 81 (3), (8) and (9) read in conjunction and harmoniously would clearly indicate that the Appellant-Society which has been granted exemption under the Repealed Act, is entitled to enjoy such protection till the exemption is rescinded or withdrawn. In the present case, the exemption has been expressly rescinded or withdrawn only on 16.10.2008 through G.O.Ms.No.64/F2/2008. Accordingly, the Substantial Questions of Law framed are answered in favour of the assessee and we make it clear that the concession conferred on the Appellant-Society to continue till the issuance of G.O.Ms.No.64/F2/2008, dated 16.10.2008.

16. With the above observations, this Tax Case (Revision) is disposed of. No costs.