Retrospective tax amendment cannot justify direct demand notices without first rectifying the original assessment order.

A retrospective amendment to sales tax provisions did not permit assessing authorities to recover purchase tax on declared goods by issuing direct demand notices without first rectifying the existing assessment orders. Where the original assessment either omitted the levy or included a levy followed by refund, the assessment had to be brought into conformity with the amended law before recovery could be made. Even refund orders passed separately were treated as part of the original assessment for this purpose, so rectification remained necessary. The demand notices were therefore invalid and unenforceable without prior rectification.

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Issues: Whether, after retrospective amendment of the sales tax provisions, the assessing authorities could issue demand notices for purchase tax on declared goods without first rectifying the original assessment orders.

Analysis: The liability created by the amendments could be enforced only through an appropriate assessment process. Where the original assessment orders either contained no levy, or contained a levy coupled with refund, the demand could not be raised straightaway merely because the statute had been amended retrospectively. Even in cases where refund orders were passed separately after assessment, those refund orders were treated as part of the original assessment order, so rectification was still necessary before recovery could be made. The retrospective amendment did not dispense with the requirement of bringing the assessment orders into conformity with the amended law before issuing a demand.

Conclusion: The demand notices were invalid and liable to be quashed.

Final Conclusion: The petitioners succeeded, and the impugned demands could not be enforced without prior rectification of the assessment orders.

Ratio Decidendi: A tax liability introduced or altered by retrospective amendment cannot be recovered by a direct demand notice unless the existing assessment order is first rectified or otherwise brought into conformity with the amended law.

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