Prospective penalty and interest provisions cannot apply to prior periods, and administrative circulars cannot bind quasi-judicial decision-making.

Mandatory penalty and interest provisions under Rules 57U(6) and 57R(8) were treated as prospective, so they could not be applied to a period before their insertion merely because the show cause notice was issued later. The later notice did not change the legal position that no such liability existed when the alleged contravention occurred. The Board's circular was binding only on departmental officers in an administrative sense and could not control the independent judgment of quasi-judicial authorities, who must decide according to law and binding precedent. Existing Tribunal decisions were followed, the remand for de novo consideration was upheld, and the Revenue's appeal failed.

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Issues: Whether the provisions prescribing mandatory penalty and interest under Rules 57U(6) and 57R(8) could be applied to a period preceding their introduction merely because the show cause notice was issued later, and whether the Board's circular could bind the quasi-judicial authorities.

Analysis: The disputed credit related to a period prior to the insertion of the impugned penalty and interest provisions. The later issue of the show cause notice did not alter the legal position that the liability provisions were not in force when the alleged contravention occurred. The Board's circular was binding on departmental officers in an administrative sense, but it could not control the decision of quasi-judicial authorities, which are required to decide independently in accordance with law and binding judicial precedent. As the matter had already been covered by Tribunal decisions, the appellate authority was justified in following those decisions rather than the circular.

Conclusion: The provisions imposing mandatory penalty and interest were held inapplicable to the prior period, and the Board's circular could not override the quasi-judicial view. The remand for de novo consideration was upheld and the Revenue's appeal failed.

Ratio Decidendi: Penal and interest provisions operate prospectively unless the statute clearly provides otherwise, and administrative circulars cannot fetter the independent judgment of quasi-judicial authorities.

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