Urgent

I have a client who failed to file his ST return for FY 07-08, subsequently he filed his return in current year. Consequently penalty charged for delay filling on the basis of current year provision by govt. exchequer.In this case what penal provision will be applicable?

 1.On the basis of current year provision or,              

 2.On the basis of respective provision for FY - 07-08.

 Is there any case law / Circulars in this regard. Please reply me as early as possible.