JUDGMENT The judgment of the Court was delivered by M. L. PENDSE, J. - The petitioner No. 1 is a company carrying on business as manufacturers of motor vehicles and spare parts. The company is registered as a recognised dealer under the Bombay Sales Tax Act, 1959 and is liable to pay tax under the Act. While assessing the tax payable under section 33 of the Act, it is necessary to take into account the drawback, set-off, refund, etc., provided under section 42 of the Act. Section 74 confers power upon the State Government to make rules for carrying out the purposes of the Act and sub-section (2) of section 74 provides that rules may provide for any of the matters specified in section 42. Sub-section (4) of section 74 requires that the rules made shall be subject to the condition of previous publication. The proviso to sub-section (4) enables the State Government to dispense with the previous publication if satisfied that circumstances exist which render it necessary to take immediate action. In exercise of powers conferred by section 74, the Government of Maharashtra had made rules known as the Bombay Sales Tax Rules, 1959. Rule 41D deals with drawback, set-off, etc., of tax paid by a manufacturer in respect of purchases made on or after the notified day. Sub-rule (1) of rule 41D provides that in assessing the amount of tax payable in respect-of any period by a registered dealer, the Commissioner shall grant him subject to the reduction specified in sub-rule (3), a drawback, set-off or as the case may be, a refund of aggregate of the sums determined in accordance with the provisions of rule 44D. Sub-rule (3) of rule 41D reads as follows : "(3) The aggregate of the sum referred to in sub-rule (1) shall be reduced by - (a) 5 per cent of the purchase price representing the sums in respect of the goods which are despatched in the manner referred to in clause (iii) of sub-rule (2). Sub-rule (3) of rule 41D reads as follows : "(3) The aggregate of the sum referred to in sub-rule (1) shall be reduced by - (a) 5 per cent of the purchase price representing the sums in respect of the goods which are despatched in the manner referred to in clause (iii) of sub-rule (2). (Provided that with effect from the 1st day of July, 1982, the aggregate of such sum shall be reduced by 6 per cent of such purchase price) and (b) 4 per cent of the purchase price representing the said sums in all other cases." It is required to be stated at this juncture that the proviso to sub-rule 3(a) was added by Government Notification dated August 10, 1983. The plain reading of the proviso makes it clear that the aggregate of the sum is reduced by 6 per cent of the purchase price instead of 5 per cent as prescribed earlier. 2. The challenge in this petition filed under article 226 of the Constitution is extremely narrow and the contention of Shri Setalwad, learned counsel appearing on behalf of the petitioners, is that it is not permissible for the State Government or the rule making authority to prescribe by the proviso that the aggregate of the sum shall be reduced by 6 per cent of such purchase price with effect from July 1, 1982. The grievance is that the rule was amended on August 10, 1983, after the draft rule was published on April 22, 1983, inviting objections and the petitioners claim that the proviso can take effect only from the date of publication of notification on August 10, 1983 and not with retrospective effect from July 1, 1982. Shri Setalwad submitted that the State Government which is a rule making authority had neither specific nor implicit power to make rules with retrospective effect and impose additional liability on the assessee. In answer to the petition, Rajendrakumar Vig, Sales Tax Officer, has filed return sworn on March 30, 1992. The respondents claim that the provisions of section 13A and section 14 of the Act were amended with effect from July 1, 1982 by amending Act, being Maharashtra Act No. 16 of 1982. The return claims that in view of the amendments, it was necessary to carry out the consequential amendments in the rules so as to determine the drawback or set-off available to the assessee. The return claims that in view of the amendments, it was necessary to carry out the consequential amendments in the rules so as to determine the drawback or set-off available to the assessee. The reduction by way of set-off in respect of branch transfers has to be in consonance with the provisions of sections 13 and 14 of the Act and therefore the proviso was inserted in sub-rule (3) of rule 41D with retrospective effect. The respondents also claim that the liability to pay tax is not altered due to the retrospective applicability of the proviso because the liability arises under section 6 of the Act and what is done by amendment of the rule is in the words of the return "the payability gets reduced because of the provisions, of set-off". 3. In view of this rival contention, the short question which falls for determination is whether it was permissible for the State Government to amend sub-rule (3)(a) of rule 41D by inserting a proviso with retrospective effect from July 1, 1982. The principle as to whether the rule making authority has power to enact provisions with retrospective operation is well-settled by the decision of the Supreme Court. A reference can be usefully made to a decision reported in [1970] 75 ITR 174; AIR 1970 SC 385 (Income-tax Officer v. M. C. Ponnoose) where it was observed that : "....... It is open to a sovereign Legislature to enact laws which have retrospective operation .............. The courts will not, therefore, ascribe retrospectivity to new laws affecting rights unless by express words or necessary implication it appears that such was the intention of the Legislature. Parliament can delegate its legislative power within the recognised limits. Where any rule or regulation is made by any person or authority to whom such powers have been delegated by the Legislature it may or may not be possible to make the same so as to give retrospective operation. It will depend on the language employed in the statutory provision which may in express terms or by necessary implication empower the authority concerned to make a rule or regulation with retrospective effect. It will depend on the language employed in the statutory provision which may in express terms or by necessary implication empower the authority concerned to make a rule or regulation with retrospective effect. But where no such language is to be found it has been held by the courts that the person or authority exercising subordinate legislative functions cannot make a rule, regulation or bye-law which can operate with retrospective effect." In a subsequent decision reported in (1980) 4 SCC 597 ; AIR 1980 SC 1872 [Regional Transport Officer v. Associated Transport, Madras (P) Ltd.], Justice Krishna lyer speaking for the Bench observed that the Legislature has a plenary power in the matter of enactment of statutes and can itself make retrospective laws, but a delegate cannot exercise the same power unless there is special conferment thereof to be spelled out from the express words of the delegation or by compelling implication. In the case before the Supreme Court, the impugned rule was framed under the Andhra Pradesh Motor Vehicles (Taxation of Passengers and Goods) Act, 1952 and it was contended that the rule was framed in pursuance of the resolution passed by the Legislature. The contention was turned down with observation that the State Government should have been more careful in giving effect to the resolution and should not have relied upon its delegated power which did not carry with it the power to make retrospective rules. The two decisions of the Supreme Court clearly support submission of Shri Setalwad that unless power either specific or by implication is available to the delegated authority, it is not permissible to frame rules imposing liability with retrospective effect. As mentioned hereinabove, section 74 of the Act confers power upon the Government to make rules for carrying out the purposes of the Act. It was open for the State Government to amend the rules as soon as the provisions of the Act were amended with effect from July 1, 1982. The State Government did not choose to do so but decided to resort to sub-section (4) of section 74 and published draft amendment of rules on April 22, 1983 inviting objections. The State Government published Notification on August 10, 1983, but prescribed that the proviso to sub-rule (3) of rule 41D will come into operation with retrospective effect, i.e., July 1, 1982. The State Government published Notification on August 10, 1983, but prescribed that the proviso to sub-rule (3) of rule 41D will come into operation with retrospective effect, i.e., July 1, 1982. Shri Setalwad is right in his submission that neither section 42 which enables the State Government to provide by rules for drawback, set-off or refund, etc., nor section 74 either specifically or by implication confers power to make rules with retrospective effect. 4. Mrs. Bhagalia, learned counsel appearing on behalf of the respondents, submitted that it is open for the State Government to make rules with retrospective effect and in support of submission relied upon the decision of the Supreme Court reported in [1965] 57 ITR 149 (Narayan Row v. Ishwarlal Bhagwandas). The submission is entirely misconceived. In the case before the Supreme Court, rule 48 of the Indian Income-tax Rules, 1922, prescribing the cases in which and the circumstances in which the discretion of the Income-tax Officer to reduce interest payable to the assessee under the fifth proviso of section 15A(6) of the Indian Income-tax Act framed in December 1953 came up for consideration. The Supreme Court, by taking into consideration the purpose for which the rule was framed, held that the rule becomes effective retrospectively from April 1, 1952. The amendment authorising the Income-tax Officer to reduce or waive interest was given retrospective operation from April 1, 1952, even though the Act came into force from May 24, 1953 and the case in which the discretion can be exercised was prescribed by the Central Government by rule 48 in December, 1953. The Supreme Court, in peculiar facts where an advantage is conferred on the assessee, upheld the retrospective operation of the powers of the Income-tax Commissioner to reduce or waive interest payable by the assessee. This decision, in our judgment, cannot entitle the State Government to claim that in the absence of power either specific or by implication, the delegated authority can frame rules imposing fiscal liability on the assessee with retrospective effect. In our judgment, the proviso to sub-rule (3)(a) of rule 41D can come into force only from the date of publication of Government Notification dated August 10, 1983. 5. In our judgment, the proviso to sub-rule (3)(a) of rule 41D can come into force only from the date of publication of Government Notification dated August 10, 1983. 5. Accordingly, the petition succeeds and it is declared that though the proviso to sub-rule (3)(a) of rule 41D of the Bombay Sales Tax Rules, 1959, is valid, the operation of the proviso can come into force only with effect from August 10, 1983. In the circumstances of the case, there will be no order as to costs. Writ petition allowed.