Continuing tax liability under amended turnover threshold: prior liability persisted despite turnover falling below the revised limit.

The amendment raising the registration threshold under the Orissa Sales Tax Act, 1947 did not end an assessee's existing tax liability for the relevant quarters where liability had already attached. Section 4(3) was applied to confirm that, once a dealer becomes liable to pay tax, that liability continues until the statutory period expires during which the prescribed turnover is not exceeded. A prior decision under the same scheme was followed, and a later fall in turnover below the revised limit did not terminate liability for the period in question. The annulment of the assessment on the ground that turnover had not exceeded the enhanced threshold was therefore not justified.

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Issues: Whether the assessee's liability to pay tax continued for the quarters in question notwithstanding that its turnover did not exceed the enhanced threshold of Rs. 25,000 after the amendment to section 4 of the Orissa Sales Tax Act, 1947.

Analysis: The reference turned on the effect of the amendment increasing the registration threshold and on the operation of section 4(3), which provides that once a dealer has become liable to pay tax, that liability continues until the expiry of the statutory period during which the prescribed turnover is not exceeded. The earlier decision on the same statutory scheme was applied, and the reduction of turnover below the revised limit after the amendment did not terminate the existing liability during the relevant period.

Conclusion: The assessee's liability did continue for the period in question, and the annulment of the assessment on the ground that turnover had not exceeded Rs. 25,000 was not justified.

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