Transitional accounting year rules cannot enlarge tax liability where separate assessments are required for distinct accounting periods.

Section 33A of the Bombay Sales Tax Act applied only where a dealer genuinely adopted a transitional accounting year longer than the earlier accounting year to align with the Income-tax Act. Because the dealer continued its normal year up to 30 June 1988 and then closed accounts for a shorter period ending 31 March 1989, the 21-month span could not be treated as one transitional accounting year. The court held that assessment had to be made separately for the regular year and the subsequent part-year period. Section 33A was procedural and could not enlarge tax liability or alter the charging scheme, including the turnover tax threshold under section 9.

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Issues: Whether the dealer had adopted a transitional accounting year so as to attract a single assessment for 21 months under section 33A of the Bombay Sales Tax Act, 1959, and whether the assessment ought instead to have been made separately for the regular year and the short period following the change in accounting year.

Analysis: The statutory scheme required assessment of tax separately for each year during which liability subsisted, with a limited power to assess a part of a year under section 33(1). The definition of "year" in section 2(37) covered the financial year or the dealer's ordinary accounting year, while section 33A applied only where, in order to comply with the Income-tax Act, 1961, the dealer had changed the accounting year and adopted a transitional accounting year longer than the earlier accounting year. On the facts, the dealer continued its normal accounting year up to 30 June 1988 and only thereafter closed accounts for a shorter period ending 31 March 1989. That situation did not justify treating the entire 21-month span as one transitional accounting year. Section 33A was also procedural and could not enlarge tax liability or alter the operation of the charging provisions, including the turnover tax threshold under section 9.

Conclusion: The Tribunal was not justified in holding that the assessee had adopted a transitional accounting year warranting a single assessment for 21 months; separate assessments were required for the full year and the subsequent part-year period.

Final Conclusion: The reference was answered against the revenue position and the assessee succeeded on the substantive question of law.

Ratio Decidendi: Section 33A applies only where the dealer has genuinely adopted a transitional accounting year longer than the earlier accounting year, and a procedural provision for assessment cannot be used to enlarge the dealer's tax liability beyond the charging scheme of the Act.

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