Retrospective tax enhancement invalid where subordinate legislation lacked power to apply a higher lump sum rate to an earlier period.

An enhancement of the lump sum tax rate under the Haryana Value Added Tax regime could not operate retrospectively in the absence of enabling power. A notification issued on 8 June 2010 substituted a higher rate for an earlier period, but delegated legislation cannot impose a higher tax burden for a prior period unless the parent statute or rules expressly authorise retrospective effect. The earlier rate therefore continued to apply for the period before the notification date, and the attempted retrospective enhancement was invalid.

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Issues: Whether the impugned notification enhancing the lump sum tax rate could operate retrospectively from a date prior to its issuance.

Analysis: The levy arose under the Haryana Value Added Tax Act, 2003 and the relevant rules governing lump sum payment by brick kiln owners. The notification issued on June 8, 2010 substituted a higher rate for an earlier period, thereby making the enhancement effective for a period preceding the date of the notification. In the absence of any provision authorising retrospective enhancement of the rate, the delegated authority could not impose the higher rate for the prior period. The matter was covered by the earlier decision holding that subordinate legislation cannot be given retrospective effect without enabling power.

Conclusion: The retrospective operation of the enhanced rate was invalid and the petitioner remained liable only at the pre-existing rate for the period before June 8, 2010.

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