Additional excise duty on pre-commencement textile goods upheld as non-retrospective when assessed after the Act began.

Additional excise duty under the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 could validly be levied on textile goods manufactured before commencement but assessed and cleared later, because the statute tied levy and collection to the stage of assessment under the excise machinery. The court held that this did not make the Act retrospective, as excise remains a duty on manufacture and later collection for administrative convenience does not alter its character. No vested right was taken away, no new disability was imposed on completed transactions, and the assessee's challenge therefore failed.

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Issues: Whether additional duty of excise under the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 could be levied on textile goods manufactured before the Act came into force but cleared and assessed thereafter, and whether such levy was retrospective.

Analysis: Section 3 of the 1978 Act provides that, when the specified goods are assessed to duty under the Central Excises and Salt Act, 1944 and the relevant notifications, an additional duty equal to ten per cent of the total duty so chargeable shall be levied and collected. The provisions of the 1944 Act and the rules made thereunder are applied by reference, so the machinery of assessment under the excise law continues to govern the additional levy. Excise remains a duty on manufacture or production, but the levy may be collected at a later stage for administrative convenience without altering its essential character. A statute is not retrospective merely because one element relevant to its operation is drawn from a past transaction; retrospectivity arises only where vested rights are taken away, new obligations are imposed in respect of completed transactions, or disabilities are attached to past events. Here, the Act imposed no such new disability on a vested right, and the levy on goods already manufactured but not yet assessed did not change the nature of the impost.

Conclusion: The additional duty could validly be levied on the goods in question, and the Act was not retrospective in the prohibited sense; the contention of the assessee failed.

Final Conclusion: The petition was rejected because the additional excise duty applied at the stage of assessment and clearance of the goods, even though manufacture had occurred before the Act commenced.

Ratio Decidendi: Where a taxing statute expressly provides that additional excise duty shall be levied and collected when the goods are assessed to duty, the levy may validly apply to goods manufactured earlier but cleared after commencement, without being treated as retrospective legislation, so long as the impost remains a duty on manufacture and no vested right is taken away.

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