Gujarat HC: Retroactive Amendment Cannot Nullify Judgment

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Published on Thu, Jul 12,2012 | 15:38, Updated at Thu, Jul 12 at 15:44Source : Moneycontrol.com 

In a recent judgment, in the case of Avani Exports v. Commissioner of Income Tax, the Gujarat High Court has struck down the retroactive amendment made to the provisions of the Income-tax Act, 1961 (‘the Act’) which classified and levied onerous conditions only on a particular sect of taxpayers to be eligible to claim benefits on exporting goods out of India.

The law was struck down broadly on two folds that while granting a benefit to taxpayers there cannot be unreasonable classification with unreasonable conditions and second, such an amendment cannot be retroactively made being substantial in nature.  More so, a retroactive amendment cannot be made to nullify the effect of an adverse judgment when the Revenue has an option to prefer appeal to a higher forum against such a judgment.

This Nishith Desai Associates alert analyses the Gujarat High Court judgment.

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