CIT v. Vatika Township: how the Constitution Bench restated the presumption against retrospective taxation
On 15 September 2014, a five-judge Constitution Bench of the Supreme Court — R.M. Lodha C.J., J.S. Khehar J., J. Chelameswar J., A.K. Sikri J. and R.F. Nariman J. — unanimously held that the proviso to Section 113 of the Income-tax Act, 1961, imposing a surcharge on tax computed in block assessments and inserted by the Finance Act 2002 with effect from 1 June 2002, operates prospectively only and does not apply to block periods ending before that date; the bench overruled the contrary view in CIT v. Suresh N. Gupta (2008) that had treated the proviso as clarificatory. The judgment is the modern leading authority on the presumption against retrospective operation of tax statutes — particularly statutes that levy a new tax, increase a rate, or impose a surcharge. A digest of the bench, the statutory architecture, the doctrinal contribution on the substantive–clarificatory distinction, and the post-judgment arc through Sankaracharya University (2023) and the GST retrospective-amendment challenges now mounting in High Courts.