Additional sales tax for the pre-amendment period must be computed under the unamended turnover slab rule.

For the period before the 1 August 1996 amendment to the Tamil Nadu Additional Sales Tax Act, additional sales tax had to be computed under the unamended section 2(1)(a). The taxable turnover up to 31 July 1996 was required to be isolated, the first slab exemption applied, and tax levied only on the balance. The amended section 2(1)(aa) could not be used to reassess the earlier period unless the statutory threshold for the full financial year under the amended regime was met. The assessment was therefore to be recast on the turnover relatable to the pre-amendment period.

---

---

Issues: Whether, for the period prior to the amendment brought in by Act 31 of 1996, additional sales tax was to be computed under the unamended section 2(1)(a) of the Tamil Nadu Additional Sales Tax Act, 1970 by bifurcating the taxable turnover for the financial year.

Analysis: The governing principle was that the amendment effective from 1 August 1996 operated only from that date, and the liability for the earlier period had to be determined under the unamended provision. The taxable turnover up to 31 July 1996 had therefore to be isolated and the first slab exemption under section 2(1)(a) applied before levying tax on the balance. The amended provision in section 2(1)(aa) could not be used to reassess the earlier period unless the statutory threshold for the full financial year under the amended regime was attracted.

Conclusion: The tax liability had to be recalculated only on the turnover relatable to the period up to 31 July 1996 under the unamended provision, with the assessment made afresh accordingly.

---