Retrospective validating amendment saved penalty for delayed return filing under Central Sales Tax rules.

Section 9 of the Central Sales Tax (Amendment) Act, 1976 operated as a retrospective validating provision from 5 January 1957, saving penalties imposed or purportedly imposed under a State's general sales tax law in relation to the Central Sales Tax Act. Although the penalty for delayed filing under rule 8(2) of the Central Sales Tax (Orissa) Rules, 1957 had been set aside on the ground that the parent Act contained no express penalty provision, the amendment cured that defect and preserved the levy notwithstanding contrary judgments or orders. The penalty therefore could not be annulled, and the referred question was answered in favour of the revenue.

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Issues: Whether the penalty levied for delayed filing of the return under rule 8(2) of the Central Sales Tax (Orissa) Rules, 1957 could be annulled in view of section 9 of the Central Sales Tax (Amendment) Act, 1976.

Analysis: The penalty had been set aside on the footing that the Central Sales Tax Act contained no substantive provision authorising penalty for delayed returns. Section 9 of Act 103 of 1976, however, was a validating provision with retrospective effect from 5 January 1957 and expressly saved penalties imposed or purported to have been imposed under the general sales tax law of a State in relation to the principal Act. The provision declared such penalties and connected proceedings to be valid notwithstanding any judgment, decree, or order to the contrary.

Conclusion: The validating amendment cured the defect and the levy of penalty could not be challenged. The answer to the referred question was in favour of the revenue.

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