Prospective amendment to dealer definition could not fasten liability on a past bank auction sale.

Explanation IV to section 2(1)(e) of the Andhra Pradesh General Sales Tax Act, 1957, which brought banks and similar institutions within the definition of "dealer" through a new deeming fiction, was prospective because it created liability for the first time and the Legislature fixed its commencement from 1 August 1996. It could not be applied to an auction sale of pledged ornaments completed in 1987, as the amendment did not merely clarify existing law but enlarged liability for future transactions only. The assessee-bank was therefore not liable under the amended definition for the pre-commencement sale.

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Issues: Whether Explanation IV to section 2(1)(e) of the Andhra Pradesh General Sales Tax Act, 1957, which included banks within the definition of "dealer", operated retrospectively so as to cover auction sales of pledged ornaments made before 1 August 1996.

Analysis: Explanation IV was inserted for the first time by the amending Act and introduced an in-built deeming fiction extending the scope of "dealer" to banks, financial institutions, insurance corporations and similar bodies. The amendment created a liability for the first time and therefore did not merely clarify an existing ambiguity. The Legislature itself provided that the amendment would come into force from 1 August 1996, which reinforced that it was prospective. As the disputed auction sale had taken place in 1987, the amended provision could not be applied to that completed past transaction.

Conclusion: Explanation IV was held to be prospective and not retrospective. It did not apply to the pre-1 August 1996 auction sale, and the assessee-bank was not liable under the amended definition for that transaction.

Final Conclusion: The appeal failed because the amendment enlarging the definition of "dealer" could operate only from its stated commencement date and not on past sales.

Ratio Decidendi: A statutory explanation that introduces a new deeming fiction and enlarges the scope of liability is prospective when the legislative text and commencement date indicate future operation only.

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