Retrospective liability under section 179 was rejected for pre-amendment company tax arrears, protecting directors from earlier dues.

Section 179 of the Income-tax Act, 1961, as amended in 1975, was held not to operate retrospectively in the absence of express words or necessary implication. Because the company's tax arrears had arisen and been determined before the amendment, the amended joint and several liability of directors could not be fastened on the petitioner for those pre-amendment dues.

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Issues: Whether section 179 of the Income-tax Act, 1961, as amended in 1975, could be applied retrospectively to recover a company's tax arrears that had been determined before the amendment.

Analysis: The company had been assessed to tax under section 144 of the Income-tax Act, 1961, for earlier assessment years, and the tax arrears arose before the 1975 amendment to section 179. The amended provision imposed joint and several liability on directors where tax due from a private company could not be recovered, but there was nothing in the language of the provision to indicate retrospective operation. In the absence of express words or necessary implication making the amendment retrospective, the liability could not be fastened on the director for pre-amendment tax dues.

Conclusion: Section 179, as amended in 1975, did not apply retrospectively to tax liabilities determined before the amendment, and the petitioner could not be held liable for those arrears.

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