High Court clarifies Sales Tax Act amendments, directs reassessment for additional tax liability calculation.

The High Court of Madras clarified the application of unamended and amended provisions of the Sales Tax Act, emphasizing that additional tax liability should be calculated based on the turnover up to July 31, 1996. The court set aside previous orders, directing the assessing officer to recalculate the tax at a rate of 1.5 percent and ensure revised assessment orders by August 10, 2010. The matter was remitted for fresh assessment in line with the judgment, and the tax case was disposed of without costs awarded.

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Issues involved: Interpretation of provisions u/s 2(1)(a) and 2(1)(aa) of the Tamil Nadu Additional Sales Tax Act, 1970 before and after the amendment by Act 31 of 1996.

Summary:
The High Court of Madras addressed the issue of bifurcation and application of unamended provisions u/s 2(1)(a) and amended provisions u/s 2(1)(aa) of the Sales Tax Act. The Division Bench's judgment clarified that for the period up to July 31, 1996, the additional tax liability should be calculated based on the taxable turnover. The court emphasized that the calculation of additional sales tax should consider the turnover up to July 31, 1996, and not beyond, as per the statutory provisions applicable at that time. The assessing authority's calculation of additional sales tax at two percent for the entire year was deemed incorrect since the turnover did not exceed one hundred crores during that financial year.

The court set aside the orders of the Tribunal and the appellate authority, directing the assessing officer to recalculate the tax based on the turnover up to July 31, 1996, at a rate of 1.5 percent. Additionally, the court instructed the assessing authority to ensure revised assessment orders are passed before the deadline of August 10, 2010, considering the Samadhan Scheme in force until August 15, 2010.

In conclusion, the matter was remitted back to the assessing officer for fresh assessment in accordance with the Division Bench judgment, and the tax case (revision) was disposed of without any costs being awarded.

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