Retrospective tax liability cannot be created by a removal-of-difficulties notification when the statute lacks retroactive effect.

A taxing statute that is not expressed to operate retrospectively cannot be applied to a completed period before its commencement, even if assessment and demand occur later. On that basis, surcharge under section 3(1) of the Kerala Surcharge on Taxes Act, 1957 could not be levied on turnover for 1956-57 because the Act came into force only on 1 September 1957. A notification issued under section 6 could not extend the levy to that earlier year, as a power to remove difficulties does not authorise creation of retrospective fiscal liability absent legislative sanction.

---

---

Issues: Whether surcharge under section 3(1) of the Kerala Surcharge on Taxes Act, 1957 could be levied on sales tax relating to the turnover of 1956-57, assessed after 1 September 1957, and whether the notification issued under section 6 could validly extend the levy to that earlier period.

Analysis: The surcharge provision tied liability to the dealer's turnover in a year, and the Act came into force only on 1 September 1957. A taxing statute cannot affect an anterior period unless it operates retroactively. Even assuming that tax becomes payable only on assessment and demand, the Act did not authorise the surcharge to be imposed on a year that had already ended before commencement. The notification under section 6 could not cure this defect, because the power to remove difficulties does not permit the Government to confer a retrospective operation on the Act that the Legislature itself had not given.

Conclusion: The surcharge could not validly be levied on the 1956-57 turnover, and the notification was invalid to the extent it authorised such levy. The issue is decided in favour of the assessee.

Final Conclusion: The levy of surcharge for the pre-commencement year was held unsustainable, and the petitions succeeded.

Ratio Decidendi: A taxing statute that is not retroactive cannot be applied to a completed period anterior to its commencement, and a delegated power to remove difficulties cannot be used to create retrospective fiscal liability.

---