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Issues: Whether penal interest under section 24(3) of the Madras General Sales Tax Act, 1959 could be levied on arrears of sales tax that had accrued before the Act came into force, and whether the repealing and saving clause in section 61 authorised such levy.
Analysis: The arrear of sales tax arose under the Madras General Sales Tax Act, 1939, which contained no provision for levy of interest by way of penalty for delayed payment. Section 61 of the 1959 Act saved previous operations of the repealed Act and permitted recovery of arrears due at the commencement of the new Act as if they had accrued under the new Act, but that language was confined to recovery of arrears already due. Penal interest under section 24(3) was a fresh liability, not merely a mode of recovery of an existing arrear. The saving clause did not expressly or by necessary implication authorise retrospective imposition of a penalty that was unavailable under the earlier law.
Conclusion: The levy of penal interest on the pre-existing arrear was not authorised and was invalid.
Ratio Decidendi: A penal liability created for the first time by a later statute cannot be imposed retrospectively on arrears that accrued under an earlier enactment unless the saving or transitory provision clearly authorises such imposition.
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