Prospective application of penalty law bars retrospective penalty under section 76 for earlier conduct

A penal provision cannot be applied retrospectively unless the statute clearly authorises such operation. Section 76, which prescribed penalty for failure to pay duty, came into force on 10.09.2004, while the dispute related to an earlier period. Penalty under section 76 was therefore held inapplicable to that prior conduct, and the revenue appeal was rejected. The stated effect is that the amended penalty provision operates prospectively only.

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Issues: Whether penalty under section 76 could be imposed for a period prior to the coming into force of the provision.

Analysis: The penal provision under section 76, which prescribed penalty for failure to pay duty, came into force only on 10.09.2004. The period involved in the dispute related to an earlier period. A penal provision cannot be applied retrospectively to conduct that occurred before its commencement.

Conclusion: Penalty under section 76 could not be imposed for the earlier period, and the rejection of the revenue appeal follows.

Final Conclusion: The dispute was resolved in favour of the assessee by holding that the amended penalty provision had only prospective effect.

Ratio Decidendi: A penal provision cannot be applied retrospectively unless the statute clearly provides for such operation.

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