THE STATE OF MAHARASHTRA & ORS. versus PRISM CEMENT LIMITED & ANR

Citation: [2025] 2 S.C.R. 1861 · Decided: 12-02-2025 · Supreme Court of India · Bench: PAMIDIGHANTAM SRI NARASIMHA · Disposal: Dismissed

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Judgment (excerpt)

[2025] 2 S.C.R. 1861 : 2025 INSC 199
The State of Maharashtra & Ors. 
v. 
Prism Cement Limited & Anr.
(Civil Appeal No. 13928 of 2015)
12 February 2025
[Pamidighantam Sri Narasimha and Pankaj Mithal,* JJ.]
Issue for Consideration
Whether the amendment to s.8(5) of the Central Sales Tax Act, 
1956 (CST Act), introduced by the Finance Act, 2002, applies 
retrospectively to take away tax exemption benefits granted under 
the Package Scheme of Incentives, 1993 (PSI 1993).
Whether the State Government was justified in taking away a 
right accured to the assessee-respondent on mere prospective 
amendment of s.8(5) without revoking the Entitlement Certificate 
dated 24.03.1998 without notice or opportunity of hearing.
Headnotes†
Central Sales Tax Act, 1956 – s.8(5) – Amendment of s.8(5) of the 
Central Sales Tax Act by the Finance Act, 2002 with effect from 
11.05.2002 – Effect of Amendment – Whether the amendment to 
s.8(5) of the Central Sales Tax Act, 1956 (CST Act), introduced 
by the Finance Act, 2002, applies retrospectively to take away 
tax exemption benefits granted under the Package Scheme 
of Incentives, 1993 (PSI 1993):
Held: In the case at hand, the assessee-respondent was held 
eligible for absolute exemption under the PSI 1993 issued in 
exercise of power under s.8(5) of the CST Act as per Eligibility 
certificate dated 20.02.1998 and Entitlement certificate dated 
24.03.1998 granting exemption to it from payment of tax under 
the BST Act and CST Act to the extent of Rs.273.54 crore or up 
till 2012, whichever is earlier – The said exemption granted to the 
assessee-respondent was much prior to the enforcement of the 
Finance Act, 2002 with effect from 11.05.2002 – The amended Act 
nowhere stipulates that rights previously accrued stand nullified 
or all previous exemptions stand cancelled or revoked – The 
requirement for fulfilling the condition of s.8(4) of the CST Act for 
* Author
1862
[2025] 2 S.C.R.
Supreme Court Reports
getting the benefit of tax exemption came subsequently after the 
amendment of s.8(5) with effect from 11.05.2002 and would apply 
prospectively to transactions in respect of which eligibility and 
entitlement certificates are issued subsequently – It is a cardinal 
principle of construction that every statute is prima-facie perspective 
in nature unless it is expressly or by necessary implication made 
to have retrospective operations – Unless there are words in the 
statutes sufficient to show the intention of the legislature to affect 
existing rights, it is deemed to be prospective only. [Paras 21 and 23]
Central Sales Tax Act, 1956 – s.8(5) – Amendment of s.8(5) of 
the Central Sales Tax Act by the Finance Act, 2002 with effect 
from 11.05.2002 – Whether the State Government was justified 
in taking away a right accured to the assessee-respondent 
on mere prospective amendment of s.8(5) without revoking 
the Entitlement Certificate dated 24.03.1998 without notice or 
opportunity of hearing:
Held: The law is settled that if a substantive right has accrued 
to a person, it cannot be taken away unilaterally without notice 
or an opportunity of hearing to the said person – Thus, after the 
amendment of s.8(5), the Government was not authorised to pass 
a unilateral order affecting the rights of the assessee-respondent for 
claiming absolute exemption from payment of tax – The assessee-
respondent was not given any notice either cancelling the Eligibility 
Certificate or the Entitlement Certificate – Therefore, without revoking 
the said certificates, the substantive right which had accrued to the 
assessee-respondent thereunder continues to subsist and does not 
get impacted by the subsequent amendment of s.8(5) inasmuch 
as there is nothing in the amended provision which provides for 
taking away such a right granted to the assessee-respondent – 
The State Government while applying the aforesaid amended 
s.8(5) was not justified in taking away such a right accrued to the 
assessee-respondent on mere prospective amendment of s.8(5) 
without revoking the Entitlement Certificate dated 24.03.1998 without 
notice or opportunity of hearing. [Paras 28 and 29]
Central Sales Tax Act, 1956 – s.8(5) – Amendment of s.8(5) of 
the Central Sales Tax Act by the Finance Act, 2002 with effect 
from 11.05.2002 – Whether the requirement of submission of 
Form ‘C’ and ‘D’ would apply prospectively after 11.05.2002 
i.e., after the Finance Act of 2002:
[2025] 2 S.C.R. 
1863
The State of Maharashtra & O

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