# Supreme Court: Retrospective tax valid but not penalty 2026-08-09T14:42:39+00:00 | Governance | Indian Opinion Desk Corroboration: 1 independent outlet The Supreme Court has ruled that a tax liability can be imposed retrospectively through a legislative amendment, but a penalty cannot be applied retrospectively on a dealer who followed the law as it stood at the time of the transaction. A bench of Justice Aravind Kumar and Justice Prasanna B. Varale upheld the constitutional validity of the retrospective tax provision while striking down retrospective penalty. LiveLaw reports that the court distinguished between the power to tax and the power to punish, holding that penalty provisions must be prospective to meet fairness standards. ## Coverage - livelaw.in Tags: constitutional validity, LiveLaw, penalty, retrospective tax, Supreme Court, tax law Canonical: https://indianopinion.org/supreme-court-retrospective-tax-valid-but-not-penalty/ License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources. Cite: https://indianopinion.org/supreme-court-retrospective-tax-valid-but-not-penalty/#story-in-brief Review state: restored archive article, accurate at time of publication, not offered to search indexes.