Retrospective penalty bar and failure of duty demand prevent penalty survival on the same charges.

Penalties under sections 11AC and 11AB were considered unsustainable for an incident occurring before those provisions came into force, because penal provisions cannot operate retrospectively. The analysis also noted that the underlying duty demand had already been set aside by the Tribunal, so once the principal demand ceased to exist, no penalty could logically survive on the same charges. The reference petition was dismissed.

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Issues: Whether penalty under sections 11AC and 11AB could be sustained for an incident that occurred before those provisions came into force, and whether any penalty could survive after the demand of duty itself had been set aside.

Analysis: The provisions in question were penal in nature, and the settled rule applied was that such provisions cannot be given retrospective operation. The duty demand arising from the same set of charges had already been set aside by the Tribunal, and once the principal demand did not survive, the penalty could not logically be sustained.

Conclusion: The penalty was not maintainable and the reference petition was dismissed.

Ratio Decidendi: A penal provision cannot be applied retrospectively, and where the underlying duty demand is set aside, no penalty can survive on the same charges.

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