Retrospective works contract tax amendment applies to subsisting contracts, but not to completed pre-notification work orders.

A retrospective amendment deeming transfer of property in goods under works contracts as a sale may validly enlarge tax liability, but its operation must remain just and practicable. It could not be applied to completed contracts under work orders issued before the amendment was notified, because the contractor could not have adjusted the agreed consideration or foreseen the enhanced burden. However, for works contracts still subsisting after the amendment came into force, the higher tax rate could apply to the taxable turnover for the continuing period, with reimbursement of the additional tax payable from the awarding authority.

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Issues: Whether the amended section 3A of the Tripura Sales Tax Act, given retrospective effect by the Fourth Amendment Act, could be applied to works contracts covered by work orders issued before the amendment was published, and whether tax on contracts subsisting after the amendment could be recovered with reimbursement of the enhanced burden.

Analysis: The amended provision treated transfer of property in goods involved in execution of works contracts as a deemed sale and was made retrospective from 12 July 1984, though the amendment was published later. Retrospective fiscal legislation is permissible, but its operation must remain just and practicable. The liability under such an amendment cannot be imposed in an impracticable manner on contracts already completed before the amendment became known, because the contractor could not have adjusted the agreed consideration or anticipated the enhanced tax burden. At the same time, where a works contract was still subsisting after the amendment came into force, the higher rate could operate on the taxable turnover for the period during which the contract continued, and the contractor would be entitled to reimbursement of the additional tax from the authority awarding the work.

Conclusion: The retrospective amendment could not be applied to completed works contracts covered by pre-notification work orders, but it could apply to subsisting contracts after the amendment, with reimbursement of the enhanced tax burden.

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