Clarificatory tax amendment and change of opinion cannot reopen finalized assessments under the sales tax scheme.

The proviso to section 5-C of the Karnataka Sales Tax Act was treated as clarificatory because it cured an obvious omission and aligned with the statute's existing scheme, so it operated retrospectively from 1 April 1986. The proviso provided that no tax would be levied where the goods transferred under a right to use had already suffered tax under section 5, and the legislative context confirmed that no new burden was intended. A later departmental circular could not justify reopening finalised assessments on a mere change of opinion, so reassessment on that basis was impermissible.

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Issues: Whether the proviso to section 5-C of the Karnataka Sales Tax Act, 1957 was clarificatory and operated retrospectively from 1 April 1986, and whether the later circular could justify reopening completed assessments on a mere change of opinion.

Analysis: The proviso to section 5-C stated that no tax shall be levied if the goods in respect of which the right to use is transferred had already suffered tax under section 5. The language, the budget speech, and the surrounding statutory context showed that the amendment was intended to remove an obvious omission and to clarify the existing position rather than to create a new burden. A proviso inserted to remedy unintended consequences or supply an obvious omission is treated as retrospective when the legislative intent is clear. The earlier circular of 12 April 1996 had guided the department and assessments were completed on that basis. The later circular of 23 October 1999 was only a revised view and could not permit reopening of finalised assessments merely because the Commissioner changed his opinion. Such reopening was not supported by the statutory scheme.

Conclusion: The proviso was held to be clarificatory and retrospective from 1 April 1986, and reassessment based on the later circular and a mere change of opinion was impermissible.

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