The amendment to Section 2MB, Explanation 1 clarified the ambiguity in the original provision regarding the levy of interest on income and did not violate Article 20(1) of the Constitution.

Jawahar Lal Gupta, J.

1. Is the provision of Section 2MB, Explanation 1, as amended by the Finance Act, 2001, ultra vires ? This is the short question that arises for consideration in this case.

2. The original provision was in the following terms :

"Explanation I--In this section, assessed tax means,-- (a) for the purposes of computing the interest payable under Section 140A, the tax on the total income as declared in the return referred to in that section;

(b) in any other case, the tax on the total income determined under Sub-section (1) of Section 143 or on regular assessment, as reduced by the amount of tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income."

3. By the Finance Act, 2001, the above provision stands substituted by the following provision with effect from April 1, 1989 :

"Explanation 1. --In this section, assessed tax means the tax on the total income determined under Sub-section (1) of Section 143 or on regular assessment as reduced by the amount of tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income.

(b) in Sub-section (3), for the words one and one-half per cent,, the words one and one-fourth per cent, shall be substituted with effect from the 1st day of June, 2001."

4. A fact which deserves mention at the outset is that nothing has been pointed out to show that the petitioner is even an assessee or that he has any cause of action. It appears that the challenge is wholly academic. The petitioner has not been served with any notice. No demand has been raised. No penalty has been proposed. No threat of conviction has been given. Thus, no cause of action is made out.

5. Irrespective of the above, we have considered the matter. A comparison of the two provisions shows that under the original provision interest was leviable on the income as declared in the return filed by the assessee. By the amended provision, the interest is leviable on the income as determined by the assessing authority minus the income on which the tax has been paid or deducted. The amendment is only calculated to clarify the ambiguity that was felt in the original provision. It is not arbitrary or unreasonable.

6. Mr. Sandhu contends that the provision having been enforced retrospectively, it violates Article 20(1) of the Constitution. The impugned amendment provides for conviction for violation of a law which was not in force at the time of the alleged commission of the offence, However, on consideration of the matter, we find that it does not provide for any penalty. It only regulates the levy of interest. Thus, no violation of Article 20 is involved.

7. No other point has been raised.

8. In view of the above, we find no merit in this petition. It is, consequently, dismissed in limine.