' This judgment disposes of the following four petithns filed under Article 98 of the late Constitution of 1962 challenging the levy and demand of additional tax under section 45-A of the Income-tax Act for the period 1-7-1963 to 30-6-1964. Such additional tax has been levied on arrears of income- tax due from the petitioners for the assessment years 1949 to 1963 :-
(1) W. P. No, 1340/64, Mian Hamid Ahmai of Premier Cloth Mills Ltd. v. Income-tax Officer and another involving a total demand of Rs, 20,953.
(2) W. P. No, 1341/64, Mian Zahur Abmad v. Income-tax Ofcer and another involving a sum of Rs, 21,951.
(1) W. P. No, 1342/64, Mian Rashid Ahmad v. Income-tax Officer and another involving a sum of Rs, 24,665.
(4) W. P. No, 1343/64, Mian Sheikh Allah Bakhsh v. Income-tax Officer and another involving a sum of Rs, 18,273.
2. The circumstances in which these petitions were filed in the year 1964 were that by the Finance Act of 1963 (Act No, XVI of 1963) section 45-A, an entirely new provision, for levying additional tax was enacted. It is reproduced in extenso hereunder:-- "45-A. Additional tax for delayed payments.-Where any assessee fails to pay the tax due from him, he shall, without prejudice to his liability under any other provisions of the law, be liable to pay an additional amount of tax equal to six per cent. Per annum of the amount of tax due from him from the date on or before which it was originally made payable (hereafter referred to as the said date) to the date of its payment ' Provided that where at the request of the assessee, the tax is allowed to be paid in instalments, such additional amount of tax shall be payable in respect of each instalment from the said date to the date on which it is paid."
' For the assessm ent years 1949 to 1963 the petitioners had already been assessed to income-tax and a demand had also been made of the income-tax due and payable by them. However, the tax remained unpaid when section 45-A came to be enacted. The tax due in all cases and for all the years aforementioned was in fact paid by the 30th Jane 1964 and there is no dispute pending at all with respect to the tax demanded and paid. It is the amount of the additional tax worked out for the period starting 1-7-1963, the date of enforcement of the Finance Act introducing section 45-A in the income-tax Act, and ending 30-6-1962 when the arrears were cleared, which is under challenge in these petition's.
3. The main ground taken up in the petitions for challenging the levy and the demand and noted in the admission order is that section 45-A which was introduced as from 1-7-1963 could not be given retrospective effect to cover cases of demands finalised and made payable before that date.
Additionally, at the stage of arguments grounds dealt with by a Division Bench in the case of M.
Shakeel Saigol v. Income-tax Officer (1) were also reiterated. So far as this latter category of grounds is concerned it stands decided for the purposes of this petition by the decision of the Division Bench. However, with regard to the retrospectivity, the first ground taken up by the learned counsel for the petitioners, there is no finding in that reported case. Actually this ground does not appear to have been taken note of in that decision, may be, because it was not attracted to the facts of the cases then dealt with.
4. The Department's stand in the matter appears to be somewhat inconsistent and not supported by the words of the fiscal statute on the subject. In the first place it is conceded that the provisions of section 45-A of the Income-tax Act are not sought to be given retrospective effect in any manner. All the same a power is claimed for giving it prospective effect in a manner to make liable every amount due or outstanding as tax payable on or before 1-7-1963 for the payment of the additional tax as from that dated under the law. It is also explained that the Beard of Revenue had by a direction invited the attention of all defaulters to this provision and had called upon them to pay the arrears by 1-1-1964 and if the amount was so paid no additional tax was to be realised, but if the arrears remained unpaid then the additional tax was leviable as from 1-7-1963. This has been explained as a part of the departmental practice adopted to met the situation coming into existence by the enforcement of section 45-A of the Income-tax Act.
5. An examination of section 45-A of the Income-tax Act makes it clear that it provides the date from which, the date up to which, and the rate at which the additional tax is to be levied and realised. There is, therefore, no scope either for the Department or for this Court to depart from such a manifest legislative intent as is found in the express words. The rate of additional tax and the date up to which it was leviable are not in dispute in the present case because they have been correctly determined and applied. However, the dispute is with regard to the date from which such additional tax was to be computed. The date prescribed in the law is "from the date on or before which it was originally made payable." In all cases in hand it is admitted that the date so prescribed by the Department for the payment of the dues as old as of 1949-50 or of 1951-52 was prior to 1-7-1963. If the Department or the respondents were to follow the letter of the law they had no choice in the matter to adopt 1.7-1963, which ii the date of enforcement of the Act as the date from which the additional tax would be leviable. The logically consistent stand would have been to levy the additional tax from the date on or before which the tax was originally made payable or in case it amounted to giving a retrospective effect to the provision to apply it to a case where such a date fell after 1-7-1963 and not on any earlier date.
6. It is not the case of the Department that they are well within their right to demand the additional tax from a date earlier than 1-7-1963 and this would appear to be the correct legal view in interpreting and applying provisions of a fiscal statute imposing a penalty. The Legislature's intention to give it retrospective effect being not manifest, it has to be applied
(1) PLD 1976 Lah. 616 prospectively to the demands created after the provision was enacted. The Legislature having specified the date from which, the rate at which and the date up to which such an additional tax would be leviable has left no choice for anyone ; not even for the Department to substitute a date of its own liking I e 1-7-1963. This would amount to reading words in the statute which are not there.
In the circumstances, these petitions are allowed with costs and the application of. Section 45-A to demands already finalized and made payable before 1-7-1963 is held to be without lawful authority and of no legal effect.