Retrospective tax enhancement barred where delegated legislation increased liability without clear statutory authority.

A corrigendum enhancing the tax rate on metal scrap from 2 per cent to 4 per cent could not operate retrospectively for the earlier period because section 25 of the U.P. Trade Tax Act, 1948 bars retrospective notifications that increase tax liability. The court further held that delegated legislation fixing tax rates is not retrospectively effective unless the parent statute clearly authorises it. The corrigendum was therefore prospective only, and the metal scrap tax for the disputed period remained payable at 2 per cent.

---

---

Issues: Whether the corrigendum dated 23 October 1990 enhancing the rate of tax on metal scrap from 2 per cent to 4 per cent could operate retrospectively for the period from 1 July 1990 to 23 October 1990.

Analysis: The rate applicable to metal scrap under the tax notifications changed over time, and the later corrigendum sought to supply the omitted rate for the relevant category. The proviso to section 25 of the U.P. Trade Tax Act, 1948 prohibits a notification having the effect of increasing tax liability from being issued with retrospective effect. Independently, a delegated legislation fixing tax rates cannot ordinarily be given retrospective operation unless the statute clearly authorises it. In the absence of such authority, the corrigendum could not be treated as curing the omission retrospectively so as to burden the dealer for the earlier period.

Conclusion: The corrigendum was held to be prospective only, and the tax on metal scrap for the period from 1 July 1990 to 23 October 1990 was payable at 2 per cent and not 4 per cent.

Ratio Decidendi: A notification or corrigendum enhancing tax liability cannot operate retrospectively unless the parent statute expressly permits retrospective delegated legislation.

---