Retrospective tax substitution requires fresh assessment where the original turnover addition rested on an invalid rule.

An assessment sustained on the basis of rule 6-B of the Tamil Nadu General Sales Tax Rules, 1959 could not stand after that rule was struck down. With section 3-B of the Tamil Nadu General Sales Tax Act, 1959 introduced retrospectively, the turnover addition had to be reconsidered under the substituted statutory provision and in light of the later court ruling on the same subject. The Tribunal's order was set aside and the matter remitted to the assessing authority for fresh assessment under section 3-B.

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Issues: Whether the addition made to the turnover on the basis of rule 6-B of the Tamil Nadu General Sales Tax Rules, 1959 could be sustained after the said rule had been struck down and section 3-B of the Tamil Nadu General Sales Tax Act, 1959 had been introduced with retrospective effect.

Analysis: The assessment had been sustained by the Tribunal on the footing of rule 6-B, but that rule had later been held invalid. In view of the retrospective introduction of section 3-B, the assessment required reconsideration under the substituted statutory provision and in the light of the later decision of the Court on the same subject.

Conclusion: The Tribunal's order was set aside and the matter was remitted to the assessing authority to redo the assessment under section 3-B.

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