Amended sales tax provision during assessment year requires split computation by pre-amendment and amended rates

Where a sales tax provision is amended during the assessment year, liability must be computed on the taxable turnover for the entire year, with turnover up to the amendment date assessed at the pre-amendment rate and the remaining turnover worked out under the amended provision according to the statutory threshold. Applying the earlier decision in National Time Company, the HC held that the levy for assessment year 1996-97 had to be recomputed on that basis. The Tribunal's order was set aside and the matter remanded to the Assessing Officer for fresh computation.

---

---

Issues: Whether additional sales tax for assessment year 1996-97 was to be computed by taking the taxable turnover for the entire year and applying the pre-amendment rate up to 31 July 1996 and the amended provision thereafter.

Analysis: The issue was treated as covered by the earlier decision of the Court in National Time Company. It was held that, for assessment year 1996-97, the taxable turnover for the whole year had to be taken into account, while the turnover up to the date of amendment had to be assessed at the rate applicable for that period, and the balance had to be worked out under the amended provision depending upon whether the taxable turnover for the entire year crossed the statutory threshold.

Conclusion: The levy was to be worked out on the above basis, and the Tribunal's order was set aside with a remand to the Assessing Officer for recomputation.

Ratio Decidendi: Where a tax provision is amended during the assessment year, liability may be determined by applying the pre-amendment rate to turnover up to the date of amendment and the amended provision to the remaining turnover for the full year, in accordance with the statutory threshold.

---