Tribunal explains ‘Explanation'
‘Explanation' has of late become an important tool in the hands of those who draft legislations hastily and repent at leisure for the slips that they cause. To cover up the lacuna, an amending notification is normally issued ‘explaining' the intent of the provision. The authorities latch on to this ‘explanation' and start issuing demand notices for the past period by simply interpreting that the inserted ‘explanation' has retrospective effect.
In a recent case before the Tribunal, the issue on hand was whether an ‘explanation' inserted at a later date by an amending notification is retrospective or prospective. After a thorough look at the amending notification which inserted the ‘explanation' the Tribunal held that the explanation inserted therein only has prospective effect.