Retrospective tax-rate notification could not enhance liability or interest without express statutory authority

A tax-rate notification, as delegated legislation, could not be applied retrospectively to enhance the assessee's liability for the 1990-91 assessment year because the parent statute did not expressly authorise retrospective operation. The reassessment under section 22 therefore exceeded the permissible scope, and the higher tax demand was invalid. Consequential interest on the differential demand for the period before the revised rate took effect was also unsustainable. The reassessment order and the appellate orders based on the retrospective application of the revised rate were set aside.

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Issues: Whether the assessing authority could, by invoking section 22, retrospectively enhance the tax rate for the assessment year 1990-91 and levy interest on the differential tax demand for the period before the later notification took effect.

Analysis: The applicable entry under the trade tax notifications was altered during the relevant period, but the later notification did not authorise retrospective enhancement of tax liability. A notification fixing the rate of tax is delegated legislation, and unless the parent statute clearly permits retrospective operation, such a notification cannot increase a dealer's tax burden retrospectively. On the same principle, interest consequential to the enhanced demand could not be levied for the period prior to the effective date of the revised rate. The reassessment made under section 22 therefore exceeded the permissible scope.

Conclusion: The retrospective levy of the higher tax rate and the consequential interest demand were invalid, and the assessee succeeded.

Final Conclusion: The reassessment order and the appellate orders based on the retrospective application of the revised tax rate were set aside, and the revision was allowed.

Ratio Decidendi: A notification fixing tax rates, being delegated legislation, cannot retrospectively increase tax liability or consequential interest unless the parent statute expressly authorises such retrospective operation.

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