Prospective tax amendment and split assessment year principle apply each completed sale under the rate in force at completion.

A substituted proviso to section 5(1) of the Andhra Pradesh General Sales Tax Act was treated as prospective because the amending text contained no indication of retrospective operation and the change affected substantive tax liability. Liability arose when each taxable sale was completed, so transactions completed before 1 August 1963 remained governed by the unamended proviso. The assessment year could still be split for quantification, allowing sales completed after that date to be taxed under the substituted proviso and earlier sales under the old proviso. The stated result was restoration of the assessment on that basis.

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Issues: (i) Whether the substituted proviso to section 5(1) of the Andhra Pradesh General Sales Tax Act, which came into force on 1 August 1963, was prospective and applied only to sales completed on or after that date. (ii) Whether, for a single assessment year, the turnover could be split into two periods so that the old proviso governed sales completed before 1 August 1963 and the substituted proviso governed sales completed thereafter.

Issue (i): Whether the substituted proviso to section 5(1) of the Andhra Pradesh General Sales Tax Act, which came into force on 1 August 1963, was prospective and applied only to sales completed on or after that date.

Analysis: The amendment altered the rate structure and the manner of applying the tax. No language in the amending Act indicated retrospective operation. In a taxing statute, a change affecting substantive liability is ordinarily prospective unless the legislature clearly provides otherwise. The liability to sales tax arises when each taxable sale is completed, while assessment and collection are later processes. The substituted proviso therefore could not govern transactions completed before it came into force.

Conclusion: The substituted proviso was prospective and did not apply to sales completed before 1 August 1963.

Issue (ii): Whether, for a single assessment year, the turnover could be split into two periods so that the old proviso governed sales completed before 1 August 1963 and the substituted proviso governed sales completed thereafter.

Analysis: The scheme of the Act makes the taxable event the completed sale, though the turnover is quantified annually. Where the rate changes during the year without retrospective effect, the year may be divided for the purpose of applying the correct rate to transactions falling within each period. The words "for the year" in the charging provision do not make the later rate applicable to earlier completed sales. The first period remained governed by the old proviso and the later period by the substituted proviso.

Conclusion: The assessment year could be split for quantification, and the old and substituted provisos applied to their respective periods.

Final Conclusion: The revision succeeded, the Tribunal's order was set aside, and the assessment made by the taxing authority was restored because the earlier transactions had to be taxed under the unamended proviso and the later transactions under the amended proviso.

Ratio Decidendi: Where a taxing amendment changing rates or the manner of levy is prospective, liability is governed by the law in force when each taxable transaction is completed, and an assessment year may be split for quantification so that each period is taxed under the rate lawfully applicable to it.

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