Prospective operation of amended penalty law under the Gift-tax Act governed by the date the default occurred.

The amended minimum-penalty provision in section 17(1)(a) of the Gift-tax Act, 1958, was held not to apply to a return-filing default committed before the Gift-tax (Amendment) Act, 1962 came into force. The relevant infringement occurs on the due date for filing the return, and penalty proceedings are distinct from assessment, so the governing law is fixed by the date of default rather than the penalty order or assessment year. In the absence of clear retrospective language, the amendment was construed as prospective, and the unamended provision alone governed the levy.

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Issues: Whether the amended minimum-penalty provision in section 17(1)(a) of the Gift-tax Act, 1958, applied to a default in filing the gift-tax return that was committed before the Gift-tax (Amendment) Act, 1962 came into force.

Analysis: The relevant infringement in a case of failure to furnish a return in time occurs on the due date for filing the return. Penalty proceedings under the Gift-tax Act are distinct from assessment, and the governing law cannot be fixed by reference either to the date of the penalty order or to the assessment year alone. In the absence of clear language showing that the amendment was intended to operate on earlier defaults, the amendment is construed as prospective. The applicable law is therefore the law in force when the default was committed.

Conclusion: The amended section 17(1)(a) did not apply to the assessee's default, which occurred before 1 April 1963, and the Tribunal was right in holding that only the unamended provision governed the levy of penalty.

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