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5/15/2018 Prospective Vs.

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Prospective Vs. Retrospective


In general every statute is prospective unless it is expressed in the statute that it has retrospective
operation. This article lays emphasis on retrospective and retroactive laws in India.....

Author Name:   rubyplp

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In general every statute is prospective unless it is expressed in the


statute that it has retrospective operation. This article lays emphasis
on retrospective and retroactive laws in India.....

“Prospective Vs. Retrospective” Statutes


Coke Maxim: “A new law ought to be prospective, not retrospective in its operation.”

Ordinarily, a legislature has power to make prospective laws, but Art.20 of the Indian
Constitution, 1950 provides certain safeguards to the persons accused of crime and
so Art. 20(1) of the Indian constitution imposes a limitation on the law making power
of the constitution. It prohibits the legislature to make retrospective criminal laws
however it does not prohibit a civil liability retrospectively i.e. with effect from a past
date. So a tax can be imposed retrospectively. Clause (1) of the Article 20 of the Indian
Constitution guarantees rights against ex-post facto laws. It provides that “ no person
shall be convicted of any offence except for violation of a law in force at the time of
the commission of the act charged as an offence, nor be subjected to a penalty
greater than that which might have been inflicted under the law in force at the time of
the commission of the offence.” The American Constitution also constitutes a similar
provision prohibiting ex-post facto laws both by the Central and State legislatures.

Meaning:
The dictionary meaning of the word prospective with reference to statutes shows that
it is concerned with or applying the laws in future or atleast from the date of
commencement of the statute. Whereas the word retrospective when used with
reference to an enactment may mean:

1. Effecting an existing contract or


2. Reopening of the past , closed and completed transactions, or
3. Affecting accrued rights and remedies, or Top
4. Affecting procedure.
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The retrospective operation of an enactment may mean one thing and its affecting
the rights of parties another. Normally, an enactment is prospective in nature. It does
not affect that which has gone, or completed and closed up already. Ordinarily, the
presumption with respect to an enactment is that, unless there is something in it to
show that it means otherwise, it deals with future contingencies, and does not annul
or affect existing rights and liabilities or vested rights, or obligations already acquired
under some provisions of law although its effect is that it does not affect an existing
right as well. If an enactment expressly provides that it should be deemed to have
come into effect from a past date, it is retrospective in nature. It then operates to
affect existing rights and obligations, and is construed to take away, impair or curtail,
a vested right which had been acquired under some existing law. If an enactment is
intended to be retrospective in operation, and also in effect, the legislature must
expressly, and in clear and unequivocal language, say so, in the enactment itself. A
retrospective operation is not given to a statute, so as to impair an existing right or
obligation, otherwise than as regards matters of procedure unless that effect cannot
be avoided without doing violence to the language of the enactment. If the enactment
is expressed in a language which is capable of either interpretation, it ought to be
construed prospectively.

In Young v. Adams, it was observed that retrospective operation ought not to be given
to a statute, unless an intention to that effect is expressed in plain and unambiguous
language. However, it does not seem probable that the legislature should intent to
extinguish by means of a retrospective enactment, rights and interests which might
already have vested. The retrospective operation should not be favoured, unless the
legislature clearly and distinctly authorizes the doing of something which is physically
inconsistent with the existence of an existing right and a statute is not construed to
have a greater retrospective operation than what its language renders it necessary,
because it may be that the retrospective operation may be partial and not full at
some places in the enactment.

In Smt. Dayawati v. Inderjit , It was held that "Now as a general proposition, it, may be
admitted that ordinarily a Court of appeal cannot take into account a new law,
brought into existence after the judgment appealed from has been rendered,
because the rights of the litigants in an appeal are determined under the law in force
at the date of the suit. Even before the days of Coke whose maxim - a new law ought
to be prospective, not retrospective in its operation - is off-quoted, Courts have
looked with dis-favour upon laws which take away vested rights or affect pending
cases. Matters of procedure are, however, different and the law affecting procedure is
always retrospective. But it does not mean that there is an absolute rule of
inviolability of substantive rights. If the new law speaks in language, which, expressly
or by clear intendment, takes in even pending matters, the Court of trial as well as the
Court of appeal must have regard to an intention so expressed, and the Court of
appeal may give effect to such a law even after the judgment of the Court of first
instance."

Criminal Law:
Article 20 of the Indian Constitution is divided into two parts. Under the first part, no
person shall be convicted of any offence except for violation of ‘law in force’ at the
time of the commission of the act charged as an offence. A person is to be convicted
for violating a law in force when the act charged is committed. A law enacted later
making an act done earlier as an offence, will not make person liable for convicted for
violating a law in force when the act charged is committed. A law enacted later, Top
making an act done earlier as an offence, will not make person liable for convicted
under it This means that if an act is not an offence at the date of its commission it
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under it. This means that if an act is not an offence at the date of its commission it
cannot be an offence at the date subsequent to its commission. In Prahlad Krishna vs.
State of Bombay, it has been held that an immunity is thus provided to a person from
being tried for an act under a law enacted subsequently, which makes the law
unlawful.

In Pareed Lubha Vs. Nilambaram, it has been held that if the non-payment of the
Panchayat Tax was not an offence on the day it fell due, the defaulter could not be
convicted for the omission to pay under a law passed subsequently even if it covered
older dues. The protection afforded by Clause (1) is available only against conviction
or sentence for a criminal offence under ex-post fact law and not against the trial.
Under the American law the prohibition applies even in respect of trial. So the
guarantee provided the American constitution is wider than that under the Indian
constitution. A trial under a procedure different from what it was at the time of the
commission of the offence or by a special court constituted after the commission of
the offence cannot ipso facto be held unconstitutional.

The protection of clause (1) of the Article 20 cannot be claimed in case of preventive
detention or demanding security from a person. This immunity extends only against
punishment by courts for a criminal offence under an ex-post facto law and cannot be
claimed for acts done before the relevant law has been passed or demanding a
security from a press under the press law. The prohibition is just for conviction and
sentence only and not for prosecution and trial under a retrospective law. An ex-post
facto law which imposes penalty retroactively i.e. upon acts already done or which
increases the penalty for such acts but not retrospective law.

Strictly speaking a retrospective law only looks backward on things that are past and
ex-post facto law is a retroactive law that acts on things that are past, but the terms
retroactive and retrospective are used synonymously. Retrospective law is made to
affect acts or facts occurring, or rights occurring before it came into force. Every
statute which takes away or impairs vested rights acquired under existing laws, or
creates a new obligation, imposes a new duty, or attaches a new disability in respect
to transactions or considerations already past. Retroactive statute means a statute
which creates a new obligation on transactions or considerations already part or
destroys or impairs vested rights.

The second part of Article 20(1) protects a person from ‘a penalty greater than that
which he might have been subjected to at the time of the commission of the offence.
Thus a person cannot be made to suffer more by an ex-post facto law than he would
be subjected to at the time he committed the offence. This clause applies to
punishment for criminal offences only. In Kedarnath vs. State of West Bengal, the
accused committed an offence under the Prevention of Corruption Act then in force
was punishable by imprisonment or fine or both. The Act was amended in 1949 which
enhanced the punishment for the same offence for an additional fine equivalent to
the amount of money procured by the accused through the offence. The Supreme
Court held that the enhanced punishment prescribed in 1949 could not be applicable
to the act committed by the accused in 1947 and hence set aside the additional fine
imposed by the amended Act.

Taxation:
While tax laws by themselves are complicated, even more so are the provisions of the
Income-Tax Act, 1961. Even after five decades there is uncertainty with regard to
interpreting both the substantive and procedural provisions of the law. The focus and
Top
battle lines have shifted from domestic tax to international tax. Retrospective
amendments to the tax law completely upset the applecart and make a mockery of
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p y p Prospective
ppVs. Retrospective y
business models which take into account certain concessions and incentives. Despite
repeated representations not to make retrospective amendments, the usual quota of
amendments are made every year.

Recently, the Special Bench of the Delhi Tribunal, in the ITO New Delhi vs Ekta
Promoters Private Ltd case, had to consider whether the levy of interest under
Section 234D of the Act from June 1, 2003, will have retrospective application to case.

Facts and decision:


The only set of facts in this important case is that the I-T department sought to levy
interest under Section 234D for assessment years (AYs) 1998-99 to 2000-2001 by
issuing notices under Section 148 of the Act. The company contested the levy and the
CIT (Appeals) held that interest under Section 234D could not be charged for AYs
before June 1, 2003. The department took the matter to the Tribunal. The Special
Bench of the Tribunal held that levy of interest under Section 234 can be applied only
from AYs 2004-2005 onwards and not for the earlier years.

The Bench reasoned that “there is no dispute to the proposition that a court cannot
read anything into a statutory provision which is plain and unambiguous. A statute is
the edict of the legislature. The language employed in a statute is determinative of
the legislative intent and according to the first and primary rule of construction, the
intention of the legislation must be found in the words used by the legislature itself
and the function of the court is only to interpret the law and the court cannot
legislate. If a provision of law is misused and subjected to the abuse of the process of
law, it is for the legislature to amend, modify or repeal it, if deemed necessary.

“Legislative causus omissus cannot be supplied by judicial interpretative course. Thus,


on the basis of argument that legislature has brought this provision just to fill the
lacuna in the law and therefore these provisions should be construed retrospective
cannot be accepted more particularly when these provisions have been inserted on
the statute with effect from June 1, 2003, and not with retrospective effect. The
legislature has specifically mentioned the date of applicability, that is, June 1, 2003,
and the legislator was not incompetent to make retrospective provision, if it was so
intended. Therefore, merely on the basis of interpretation, retrospective effect cannot
be given to the provisions of Section 234D.”

Accordingly, the Special Bench held that the levy on interest under Section 234D of
the Act would apply prospectively from AY 2004-05 onwards.

Provisions and analysis


Section 234D of the Act was introduced by the Finance Act, 2003 with effect from June
1, 2003, wherein an assessee getting a refund under the provisional assessment and
liable to pay up the same on the regular assessment is liable to return the same with
interest at 18 per cent per annum from the date of the refund to the date of the
regular assessment.

The objective of this levy is to prevent assessees from enjoying free money in their
hands without interest. There is no major concern on the levy per se. The issue
became controversial when the department sought to apply the provision for past
assessment years. The general principle is that provisions in a statute would operate
prospectively unless retrospective operation is expressly provided for. This principle
is laid down in Govind Das vs ITO and Sharma vs. ITO.
Top
Courts have on several occasions held that retrospective legislation can be held
invalid on the ground that it is unreasonable or beyond the legislative competence A
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invalid on the ground that it is unreasonable or beyond the legislative competence. A
new levy of interest is clearly a substantive provision. It is introduced to achieve a
particular objective and take care of situations where refunds are held by assesses for
a period and in the case of a demand returned without interest, for the period in their
custody.

The Finance Act of 2003 made it abundantly clear that it comes into effect from June
1, 2003. It is also settled law that penal laws cannot generally have retrospective
operation. This is confirmed by CIT vs Hindustan Electro and DCIT vs Ashok Paper.
The debate on retrospective and prospective application of amendment is endless
and in a taxing statute the demand for the earlier years on account of the
retrospective application of law can wipe out the net worth of companies. Assessees
typically want the best of both worlds — any new incentive to be retrospective and a
fresh levy, prospective. The solution possibly lies in balancing the two and making it
clear that any new levy or change has to be only prospective.

Rule Of Bene cial Construction


In the Maxwell’s Interpretation of Statutes, 12th Edn. the statement of law relating to
its operation is stated as: "Perhaps no rule of construction is more firmly established
than thus - that a retrospective operation is not to be given to a statute so as to
impair an existing right or obligation, otherwise than as regards matters of procedure,
unless that effect cannot be avoided without doing violence to the language of the
enactment. If the enactment is expressed in language which is fairly capable of either
interpretation, it ought to be construed as prospective only. The rule has, in fact, two
aspects, for it, "involves another and subordinate rule, to the effect that a statute is
not to be construed so as to have a greater retrospective operation than its language
renders necessary”.

The rule of beneficial construction requires that ex-post facto law should be applied
to reduce the rigorous sentence of the previous law on the same subject. Such a law
is not affected by Article 20(1). The principle is based upon the legal maxim “Salus
Populi Est Suprema Lex” which means the welfare of the people is the supreme for
the law. It is inspired by principles of justice, equity and good conscience.

In Francis Bennion's Statutory Interpretation, 2nd Edn, the statement of law is stated
as follows: "The essential idea of legal system is that current law should govern
current activities. Elsewhere in this work a particular Act is likened to a floodlight
switched on or off, and the general body of law to the circumambient air. Clumsy
though these images are, they show the inappropriateness of retrospective laws. If
we do something today, we feel that the law applying to it should be the law in force
today, not tomorrow's backward adjustment of it. Such, we believe, is the nature of
law. Dislike of ex-post facto law is enshrined in the United States Constitution and in
the Constitution of many American States, which forbid it. The true principle is that
lex prospicit non respicit (law looks forward not back). As Willes, J. said retrospective
legislation is 'contrary to the general principle that legislation by which the conduct of
mankind is to be regulated ought, when introduced for the first time, to deal with
future acts, and ought not to change the character of past transaction carried on
upon the faith of the then existing law."

In T. Baral Vs. Henry An Hoe a complaint was lodged against the respondent under
Sec.16(1)(a) on August 16, 1975 for having committed an offence punishable under
sec.16(1)(a) read with sec.7 of the Prevention of Food Adulteration Act as amended by
the amending Actof 1973. On the date of the commission of the alleged offence i.e.
Top
on 16th August 1975, the law in force in the State of West Bengal was the Amendment
Act which provided that such an offence would be punishable with imprisonment for
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p p p
life. On 1st April, 1976 enacted the Prevention of Food Adulteration (Amendment)
Act,1976 which reduced the maximum punishment of life imprisonment as provided
by the West Bengal Amendment Act to 3 years imprisonment. The question for
determination was whether the pending proceedings would be governed by the
procedure under sec.16-A as inserted by Central Amendment Act 34 of 1976. The
High Court held that the West Bengal Amendment would be deemed to have been
obliterated because of the central amendment. Confirming the decision of the
Supreme Court held:

“Nothing really turns on the language of Section 16(1)(a) because the Central
Amendment Act has not created a new offence thereby but dealt with the same
offence. It is only retroactive criminal legislation that is prohibited under Article 20(1).
It is quite clear that in so far as the central amendment Act creates new offences of
enhances punishment for a particular type of offence no person shall be convicted by
such ex-post facto law nor can the enhanced punishment prescribed by the
amendment be applicable. But in so far as the Central amendment Act reduces the
punishment for an offence punishable under section 16(1) (a) of the Act, there is no
reasons why the accused should not have the benefit of such reduced punishment.

The rule of beneficial construction requires that even ex-post facto law of such a type
should be applied to mitigate the rigour of the law. This principle is based both on
sound reason and common sense. This finds support in a passage that “A
retrospective Statute is different from an ex-post facto statute”.

In Garikapati Veeraya v. N. Subbiah Choudhry, the SC stated that "The golden rule of
construction is that, in the absence of anything in the enactment to show that it is to
have retrospective operation, it cannot be so construed as to have the effect of
altering the law applicable to a claim in litigation at the time when the Act was
passed."

In the American case Calder Vs. Bull , Chase,J., said “Every Ex-post facto law must
necessarily be retrospective, but every retrospective law is not an ex-post facto law”.

In R. Vs. Youle, Matin,B. said in the oft quoted passage: “ If a statute deals with a
particular clause of offences, and a subsequent Act is passed which deals with
precisely the same offences, and a different punishment is imposed by the later Act, I
think that, in effect, the legislature had declared that the new Act shall be substituted
for the earlier Act.

This rule is however subject to the limitation contained in Article 20(1) against ex-post
facto law providing for a greater punishment and has also no application where the
offence described in the later Act is not the same as in the earlier Act i.e. when the
essential ingredients of the two offences are different”.

In Ratan Lal Vs.State of Punjab, a boy of 16 years was convicted for committing an
offence of house-trespass and outraging the modesty of a girl aged 7 years. The
magistrate sentenced him for six months rigorous imprisonment and also imposed
fine. After the judgment of magistrate, the Probation of Offenders Act, 1958 came
into force. It provided that a person below 21 years of age should not ordinarily be
sentenced to imprisonment. The Supreme Court by a majority of 2 to 1 held that the
rule of beneficial interpretation required that ex-post facto could be applied to reduce
the punishment. So an ex-post facto law which beneficial to the accused is not
prohibited by clause (1) of Article 20. Top

I t t J di i l D i i
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Important Judicial Decisions:
In K. S. Paripoornan v. State of Kerala, this Court while considering the effect of
amendment in the Land Acquisition Act in pending proceedings held thus in Para 47
thereof as: ''...In the instant case we are concerned with the application of the
provisions of Sub-sec. (1-A) of S.23 as introduced by the Amending Act to acquisition
proceedings which were pending on the date of commencement of the Amending
Act. In relation pending proceedings, the approach of the Courts in England is that the
same are unaffected by the changes in the law so far as they relate to the
determination of the substantive rights and in the absence of a clear indication of a
contrary intention in an amending enactment, the substantive rights of the parties to
an action fall to be determined by the law as it existed when the fiction was
commenced and this is so whether the law is change before the hearing of the case at
the first instance or while an appeal is pending"

In State of M.P. and another, vs.. G.S. Dall & Flour Mills, The Apex Court in Para 21 of
the judgment the Apex Court has observed that "the notification of 3/71187
amending the 1981 notification with retrospective effect so as to exclude what may
be described in brief as 'traditional industries' though, like Rule 14 of the deferment
rules, the exclusion extends' even to certain other non-traditional units operating in
certain situations. Though this notification purports to be retrospective, it cannot be
given such effect for a simple reason. We have held that the 1981 notification clearly
envisages no exclusion of any industry which fulfils the terms of the notification from
availing of the exemption granted under it. In view of this interpretation, the 1987
amendment has the effect of rescinding the exemption granted by the 1981
notification in respect of the industries mentioned by it. S. 12 is clear that, while a
notification under it.”

In Hitendra Vishnu Thakur v. State of Maharashtra,it was stated that the ambit and
scope of an amending Act and its retrospective operation as follows :

"(i) A statute which affects substantive rights is presumed to be prospective in


operation unless made retrospective, either expressly or by necessary intendment,
whereas a statute which merely affects procedure, unless such a construction is
textually impossible, is presumed to be retrospective in its application, should not be
given an extended meaning and should be strictly confined to its clearly defined
limits.

(ii) Law relating to forum and limitation is procedural in nature, whereas law relating
to right of action and right of appeal even though remedial is substantive in nature.

(iii) Every litigant has a vested right in substantive law but no such right exists in
procedural law.

(iv) A procedural statute should not generally speaking be applied retrospectively


where the result would be to create new disabilities or obligations or to impose new
duties in respect of transactions already accomplished.

(v) A statute which not only changes the procedure but also creates new rights and
liabilities shall be construed to be prospective in Operation unless otherwise
provided, either expressly or by necessary implication."

Conclusion:
The Cardinal Principle of construction of a statute is that every statute was prima facie Top
a prospective “unless it is expressly or by necessary implication made to have
retrospective operation”. When a procedural law is considered it is always retroactive
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retrospective operation . When a procedural law is considered it is always retroactive
i.e. came into effect from past date so the question of retrospective operation shall
arise in substantive laws only. Also a criminal law shall always have retroactive
operation whereas the civil law may have retrospective or retroactive operation. So by
observing the different opinions of jurists and experts in India on retrospective and
retroactive laws, a conclusion may be drawn in such a way that only substantive civil
laws can be operated retrospectively if the statute specifically prescribes it or there
exists large interest of the public as whole otherwise all statutes shall be operated
retroactively.

Hathi Singh Manufacturing Co. Vs.Union of India, A.I.R. 1960 SC 923


Sundaramier and Co. Vs. State of A.P., AIR 1958 SC 468.
AIR 1966 SC 1423 PARA 10
Chief Inspector of mines Vs.K.C.Thapper AIR 1961 SC 883
AIR 1952 Bom. 1.
AIR 1967 Ker. 155.
Shiv Bahadur Singh Vs. State of Vindhya Pradesh, AIR 1963 SC 394; Venkataraman Vs.
Union of India, AIR 1954 SC 375; Union Of India Vs. Sukumar Pyne, AIR 1966 SC 1206.
Prahalad Krishna Vs. State of Bombay, AIR 1955 Bom. 1.
State of Bihar Vs. Shailbala, AIR 1952 SC 329.
Darshan Singh Vs. Ram Pal Singh 1992 Supp (1) SCC 191
AIR 1953 sc 404
ITA No.s 2551, 2552 and 2553/Del/2006 dated July 11, 2008.
103 ITR 123 SC
254 ITR 772 SC
243 ITR 48 SC
256 ITR 673
1983 1 scc 177
The Craies on Statute Law, 7th Edition, at pp.388-89.
AIR 1957 SC 540 (PARA 25)
1 L .Ed. 648.
(1861) 158 ER 311.
AIR 1965 SC 444.
AIR 1994 5 SCC 593 at P.636
Halsbury’s Laws of England Vol.44 para 922
AIR 1991 SC 772
(1994) 4 SCC 602; 1994 AIR SCW 3699; AIR 1994 SC 2623; 1995 Cr.L.J.

BIBILOGRAPHY:
1. Constitution of India by J.N.Pandey.
2. Maxwell Interpretation of Statutes, 12th Edition.
3. Francis Bennion’s Statutory Interpretation, 2nd Edition.
4. Interpretation of Statutes by Vepa P. Sarathi.
5. www.legalservicesindia.com
The author can be reached at: rubyplp@legalserviceindia.com

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ISBN No: 978-81-928510-1-3
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Author Bio:   Laasya Priya Ponnada LL.M. First Year Student

Email:   rubyplp@legalserviceindia.com Website:   http://www.
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208 Comments Sort by Top


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Add a comment...

Kartik Bagchi · Symbiosis College of Arts & Commerce


The Union Cabinet is all poised to table an amendment to the marriage laws, which, in the event of a
divorce, would give the wife an equal share of not only the property acquired by the husband during or
before the marriage, but also his inherited or inheritable property. This proposed amendment is already
creating a furore.
Like · Reply · 10 · 4y

Mallikarjuna Sharma · Hyderabad


That is quite insane proposal. Self-acquired property can be disposed of at will - is the established
law and this contradicts it. Even if elements of social or public interest are there, those should not
totally drown the established law. The maintenance provisions should be made more stringent and
adequate by reform but not such divesting of property for a song.
Like · Reply · 2 · 1y

Tukaram Gaude · Accountant at Mahavir plastic ind - corlim goa


hi
Like · Reply · 3 · 4y

Angel Vijayvidya · Chennai, India


Can anyone help me.i am suffering from dowry harassment.i am mentally have depressed from my
husband.
Like · Reply · 4y

Nilesh Pawar · Works at Self-employed


Go to Police Station and file Section 498A of IPC
if getting Physical harrasment you can file Domestice Violence in the appropriate Court and get
Protection from Husand & relatives of husband
Like · Reply · 1y

Abhinav Vishnu · Siddarth Law College Vijayawada


What's ur actual problem, u r not mentioned facts here
Like · Reply · 1 · 48w

Abhinav Vishnu · Siddarth Law College Vijayawada


Is it belongs to dowry ,or, cruelty,or , harrassment, domestic violence,or ,adultry,or, desertion, what
is ur actual problem
Like · Reply · 1 · 48w

Show 2 more replies in this thread

Anita Rao · Professor at Gitam School of International Business


Top
India being democratic country and having protective laws for women , its high time to have special courts
for women to try cases exclusively women cases only
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5/15/2018 Prospective Vs. Retrospective
for women to try cases exclusively women cases only...........
Like · Reply · 7 · 4y

Sharon Chatterjee
woman courts is no solution it fact we need capable judges who are not appointed politically
Like · Reply · 6 · 2y

Aparna Singh · Delhi, India


Sharon Chatterjee Right
Like · Reply · 1 · 1w

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