Retrospective surcharge liability fails where the taxing statute commenced after the assessment year began and lacked express backdating.

Surcharge on agricultural income-tax for assessment year 1957-58 could not be levied under the Kerala Surcharge on Taxes Act, 1957, because the charge is governed by the law in force on the first day of the assessment year unless the statute provides otherwise. The Act came into force only on 1 September 1957 and contained no express retrospective provision or necessary implication extending it back to 1 April 1957. Later notifications did not change that position. The surcharge was therefore not payable for that assessment year.

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Issues: Whether surcharge could be levied on agricultural income-tax payable for the assessment year 1957-58 under the Kerala Surcharge on Taxes Act, 1957, when that Act came into force only on 1 September 1957.

Analysis: The charge for income-tax purposes is governed by the law in force on the first day of the assessment year unless the statute otherwise provides. The surcharge enactment was brought into force only from 1 September 1957 and contained no express retrospective provision or necessary implication making it applicable from 1 April 1957. The later notifications did not alter that position for the assessment year in question.

Conclusion: Surcharge could not be levied for the assessment year 1957-58 under the Act, and the issue was decided in favour of the assessee.

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