Later sales tax amendment cannot apply retrospectively; turnover deletion failed without findings on the underlying transaction.

The later deeming amendment inserting Explanation (1) to Section 2(n) of the Tamil Nadu General Sales Tax Act did not apply to assessment year 1979-80 because it came into force only on 29 May 1984. On the turnover of wattle extract, the Tribunal could not delete the assessment without first finding the essential facts: whether the goods were imported under the association's or the assessee's licence, and whether the payments were service charges or the value of goods. Because the nature of the transaction and possible sale or purchase was not properly ascertained, the turnover issue required fresh factual reconsideration.

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Issues: (i) Whether the amendment introducing Explanation (1) to Section 2(n) of the Tamil Nadu General Sales Tax Act, 1959 applied to the assessment year 1979-80. (ii) Whether the Tribunal could delete the turnover of wattle extract without first ascertaining the nature of the transaction between the association and its members.

Issue (i): Whether the amendment introducing Explanation (1) to Section 2(n) of the Tamil Nadu General Sales Tax Act, 1959 applied to the assessment year 1979-80.

Analysis: The assessment year in question was 1979-80, while the amendment introducing the deeming provision came into force only on 29 May 1984. The temporal scope of the amendment therefore did not extend to the assessment year involved in the case.

Conclusion: The amendment was inapplicable to the assessment year 1979-80.

Issue (ii): Whether the Tribunal could delete the turnover of wattle extract without first ascertaining the nature of the transaction between the association and its members.

Analysis: The record did not establish whether the association had imported the goods on its own licence or on the licence of the assessee and other members, nor whether the assessee had paid only service charges or had paid the value of the goods. In the absence of these basic facts, it was not possible to determine whether there had been a transfer amounting to sale or purchase for tax purposes. The Tribunal had deleted the turnover without a proper factual inquiry.

Conclusion: The Tribunal's order could not stand and the matter had to be remitted for fresh decision on merits.

Final Conclusion: The matter required factual reconsideration by the Tribunal, and the deletion of the turnover was set aside pending a fresh adjudication in accordance with law.

Ratio Decidendi: A tax dispute involving an alleged sale or deemed sale cannot be finally decided without determining the essential facts showing the nature of the transfer, consideration, and legal relationship between the parties; an inapplicable later amendment cannot govern an earlier assessment year.

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