Retrospective tax liability requires clear language; amendment to Central Sales Tax jurisdiction was held prospective only.

Clause (b) of the amended proviso to section 9(1) of the Central Sales Tax Act, 1956 was treated as a substantive amendment because it imposed a new tax liability on unregistered dealers and shifted taxing jurisdiction to a different State. The Court noted that retrospectivity must be expressed in clear legislative language, and the validation provision relating to penalties and connected matters under section 9(2) did not extend retrospective effect to the substantive change in section 9(1). The prior position, under which an unregistered dealer was not taxable under the proviso, therefore continued until 7 September 1976, and the amendment operated only prospectively.

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Issues: Whether clause (b) of the amended proviso to section 9(1) of the Central Sales Tax Act, 1956 operated retrospectively so as to fasten tax liability on an unregistered dealer for the period prior to 7 September 1976.

Analysis: The amendment to section 9(1) was considered in the context of the scheme of the principal Act and the Amendment Act, 1976. The text of the amending provisions showed that where retrospectivity was intended, it was expressed in clear language. The validation provision dealt with penalties and the matters connected with section 9(2), and did not furnish a basis for reading retrospective operation into the substantive amendment made to section 9(1). The change was held not to be merely procedural because it altered the liability position by making an unregistered dealer taxable and by conferring jurisdiction on the taxing authority in a different State. The prior rule that an unregistered dealer was not taxable under the proviso continued to govern the case.

Conclusion: Clause (b) of section 9(1) of the Central Sales Tax Act, 1956 was held to be operative only from 7 September 1976 and not retrospectively; the assessee was not liable under the earlier provision.

Ratio Decidendi: A statutory amendment imposing a new tax liability and altering taxing jurisdiction is substantive in nature and is not retrospective unless the legislature clearly and expressly provides for retrospectivity.

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