Prospective tax amendment rule: post-dissolution assessment liability cannot be imposed retrospectively without clear legislative intent.

An amendment to section 18 of the East Punjab General Sales Tax Act, 1948 was construed as prospective only because it contained no clear indication of retrospective operation. Although the amendment permitted assessment of a dissolved firm and made partners jointly and severally liable, it could not validate assessment proceedings initiated after dissolution for an earlier period. The court treated the duty to notify discontinuance or dissolution under section 16 as administrative and not as creating retrospective tax liability. The governing principle was that, absent express legislative intent, an amendment imposing post-dissolution assessment liability does not operate retrospectively.

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Issues: Whether the amendment introduced in section 18 of the East Punjab General Sales Tax Act, 1948 by the Punjab General Sales Tax (Amendment) Act, 1963 applied retrospectively so as to validate assessment of a firm dissolved before the assessment proceedings were initiated.

Analysis: The amendment enabled assessment of tax payable by a firm after its dissolution and made partners jointly and severally liable, but its language did not contain any indication of retrospective operation. The earlier view that a dissolved firm could not be assessed for a pre-dissolution period once dissolution had taken place before the initiation of assessment proceedings had been affirmed by the Supreme Court, and the later amendment was noted not to be retrospective. The wording of the amended provision, particularly its use of the present tense, indicated that the legislature intended only prospective operation. The obligation to give information of discontinuance or dissolution under section 16 was treated as administrative and did not by itself create retrospective assessment liability.

Conclusion: The amendment did not operate retrospectively, and the dissolved firm could not be validly assessed for the period in question on the basis of that amendment.

Ratio Decidendi: In the absence of clear legislative intent, an amendment imposing post-dissolution assessment liability on a firm is to be construed prospectively and cannot be used to validate assessment proceedings initiated after dissolution for an earlier period.

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