Completed tax default attracts the penalty law in force on the due date, not a later enhanced rate.

A statutory penalty triggered by failure to pay tax by the specified due date is governed by the law in force when the default is completed. The later enhancement of the penalty rate under section 36(3) of the Bombay Sales Tax Act, 1959 was not retrospective, as the amendment contained no express or implied indication to that effect. The unpaid amount remaining outstanding after the due date did not convert the completed default into a continuing one. The penalty therefore had to be calculated under the unamended provision, in favour of the dealer.

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Issues: Whether the amended rate of penalty under section 36(3) of the Bombay Sales Tax Act, 1959 applied to a default in payment of tax that was complete on the due date, though the delay continued after the amendment.

Analysis: The liability under section 36(3) arose when the dealer failed to pay the amount demanded by the date specified in the notice under section 38(4). The default was complete on that date and was not transformed into a continuing default merely because the unpaid amount remained outstanding thereafter. The later amendment enhancing the penalty rate did not contain any indication of retrospective operation, express or implied. The principle applied was that, unless the statute clearly provides otherwise, the extent of penal liability is governed by the law in force when the default is completed, not by a later amendment increasing the rate. Authorities dealing with interest on tax arrears or with different statutory settings did not alter this position.

Conclusion: The amended rates did not apply. The penalty had to be calculated under section 36(3) as it stood on the date when the default was committed, and the answer was in favour of the dealer.

Final Conclusion: A completed tax-default attracted the penalty regime then in force, and a later enhancement of the rate could not be applied to that pre-existing default.

Ratio Decidendi: For a statutory penalty triggered by non-payment by a specified due date, the governing law is the law in force on the date the default is completed, unless the amending provision expressly or by necessary implication makes the enhancement retrospective.

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