Delegated penalty power under sales tax rules cannot override a rank-based restriction, and later amendment was not retrospective.

Where delegated penalty power is made subject to the rules, a specific rule barring delegation to officers below Superintendent rank prevails over a general delegation notification. An Inspector of Taxes therefore lacked jurisdiction to impose penalty under the Assam General Sales Tax Act before the rule amendment. The later amendment to rule 10, inserted on 22 September 1998, was treated as prospective only and not as a retrospective curing provision, so it did not validate earlier penalty orders. The resulting penalty orders were quashed, with consequential release or refund of the seized goods or sale proceeds.

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Issues: (i) Whether the Inspector of Taxes had authority to impose penalty under section 44(5)(b) of the Assam General Sales Tax Act, 1993 despite the restriction in rule 10 of the Assam General Sales Tax Rules, 1993. (ii) Whether the amendment inserted in rule 10 on 22 September 1998 validating delegation of penalty power to an Inspector operated retrospectively so as to sustain the impugned penalty orders.

Issue (i): Whether the Inspector of Taxes had authority to impose penalty under section 44(5)(b) of the Assam General Sales Tax Act, 1993 despite the restriction in rule 10 of the Assam General Sales Tax Rules, 1993.

Analysis: Section 44(1) authorises action by an authority appointed under section 3(1), but that power is expressly subject to the rules. Rule 10, as it stood before amendment, prohibited delegation of the power to impose penalty to officers below the rank of Superintendent. Since an Inspector of Taxes is below that rank, the notification delegating power under section 3(3) could not override the rule. Rule 8 was read harmoniously with rule 10 and could not be used to defeat the specific restriction in rule 10.

Conclusion: The Inspector of Taxes lacked jurisdiction to impose penalty under section 44(5)(b) prior to the rule amendment.

Issue (ii): Whether the amendment inserted in rule 10 on 22 September 1998 validating delegation of penalty power to an Inspector operated retrospectively so as to sustain the impugned penalty orders.

Analysis: The amendment permitting delegation of penalty power to an Inspector was held to be intended to remove the difficulty exposed by the case, but it did not purport to cure earlier orders. It was treated as prospective, not clarificatory, and therefore could not validate penalty orders passed before its commencement.

Conclusion: The amendment did not operate retrospectively and did not validate the impugned penalty orders.

Final Conclusion: The penalty orders were without jurisdiction and were quashed, with consequential release or refund of the seized goods or sale proceeds.

Ratio Decidendi: Where a statute makes delegated authority subject to the rules, a specific rule prohibiting delegation to officers below a prescribed rank prevails over a general delegation notification, and a later enabling amendment will not retrospectively cure an earlier jurisdictional defect unless clearly made retrospective.

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