Now Reading: Supreme Court: Retrospective tax valid but not penalty
-
01
Supreme Court: Retrospective tax valid but not penalty
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…
The Story in Brief
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.
The Indian Opinion
The court's fine line will cheer honest taxpayers but the lazy narrative that retrospective tax laws are always arbitrary ignores the state's need to plug evasion. The real test now is whether taxmen abide by the ruling or find ways to penalise indirectly. Will the government amend the relevant Acts to clarify the no-penalty principle?
Source: livelaw.in
This story was synthesised by AI from the source linked above.
