Retrospective tax levy ruled out where flat-rate interest arose from post-amendment revised returns and audit intimation.

Interest under Section 30(4) of the Maharashtra Value Added Tax Act, 2002 was held not to be retrospective where revised returns were filed after the provision commenced on 1 July 2009. The levy applied to post-enactment events: audit intimation, revised returns, and payment of differential tax all occurred after commencement, and the liability was a flat 25% of additional tax payable rather than a charge calculated by delay period. The fact that the underlying tax periods related to 2005-06 to 2007-08 did not, by itself, make the provision retrospective. The levy was therefore valid.

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Issues: Whether interest imposed under Section 30(4) of the Maharashtra Value Added Tax Act, 2002 on revised returns filed after 1 July 2009, in respect of tax periods 2005-06 to 2007-08, was retrospective and therefore invalid.

Analysis: Section 30(4) came into force on 1 July 2009 and provided for interest at a flat rate of 25 per cent of the additional tax payable as per revised returns. The relevant audit, intimation under Section 63(7), filing of revised returns, and payment of differential tax all occurred after the provision commenced. The liability under the provision was not computed by reference to the duration of delay in payment, but arose from the post-amendment filing of revised returns pursuant to the audit intimation. Merely because the underlying tax periods preceded the amendment did not make the provision retrospective, since part of the factual requisites for its application arose after its commencement.

Conclusion: The levy of interest under Section 30(4) was valid and was not retrospective.

Ratio Decidendi: A provision imposing a flat-rate liability on the basis of post-enactment events is not retrospective merely because the underlying tax period predates the amendment.

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