Prospective overruling in lottery tax assessment bars recovery where later Supreme Court law governs pending proceedings.

A judicial declaration of law applies to pending and unconcluded proceedings, but where the Supreme Court limits its ruling by prospective overruling, a contrary assessment cannot be sustained against the assessee. The Madras HC held that the later declaration in Sunrise Associates governed the pending lottery-ticket assessment and that the tax demand could not survive in the challenged proceedings. The impugned assessment was therefore quashed, and the levy on sale of lottery tickets was not recoverable on the basis of that order.

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Issues: Whether the assessment order taxing sale of lottery tickets could stand after the Supreme Court declared the governing law on lottery tickets and limited the operation of that declaration prospectively.

Analysis: The assessment was challenged as illegal and as having been made without following the procedure under Section 12 of the Tamil Nadu General Sales Tax Act. The controlling question, however, was whether the later declaration of law by the Supreme Court in Sunrise Associates applied to the pending assessment. The Court treated that declaration as stating the true position of law, and applied the principle of prospective overruling as explained by the Supreme Court. On that basis, a tax demand could not be sustained for the pending proceedings, and the impugned assessment could not survive.

Conclusion: The assessment order was set aside and the levy on sale of lottery tickets was held not recoverable against the petitioner in the pending proceedings.

Final Conclusion: The writ petition succeeded and the impugned assessment was quashed, leaving no tax demand enforceable against the assessee on the basis of the challenged order.

Ratio Decidendi: A judicial declaration of law applies to pending and unconcluded proceedings, and where the Supreme Court limits its ruling by prospective overruling, the pre-existing assessment or demand cannot be sustained contrary to that declaration.

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