Additional sales tax liability must be computed on full-year turnover, with pre- and post-amendment periods assessed under their respective regimes.

Additional sales tax for assessment year 1996-97 had to be computed on the basis of the taxable turnover for the entire year, while applying the unamended provision to turnover up to 31 July 1996 and the amended provision under Section 2(1)(aa) thereafter. The Court followed its earlier ruling in State of Tamil Nadu v. National Time Company and held that liability must be determined with reference to the law in force during each part of the year, even though the threshold for additional tax is examined on the yearly turnover as a whole. The Tribunal's order was set aside and the matter remanded for recomputation on that basis.

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Issues: Whether additional sales tax for the assessment year 1996-97 had to be computed on the basis of the taxable turnover for the entire year, with the turnover up to 31 July 1996 governed by the unamended provision and the turnover thereafter governed by the amended provision under Section 2(1)(aa) of the Additional Sales Tax Act, 1970.

Analysis: The issue was treated as covered by the earlier decision of the Court in State of Tamil Nadu v. National Time Company. The governing principle applied was that the taxable turnover for the whole year must be taken into account, but the period up to the date of amendment has to be assessed with reference to the rate and liability applicable during that period. After the amendment, liability had to be determined under the amended provision, including the consequence of the turnover crossing the prescribed threshold for the year as a whole.

Conclusion: The Tribunal's order was set aside and the matter was remanded to the Assessing Officer to recompute liability in accordance with the above principle.

Ratio Decidendi: In an assessment year straddling an amendment, liability to additional sales tax must be worked out on the basis of the entire year's turnover, while applying the pre-amendment regime to the period before amendment and the amended regime thereafter.

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