Bifurcation of turnover for different exemption periods was required; binding circular had to be followed, and assessment was set aside.

An assessment for additional sales tax was held unsustainable where the assessing authority failed to consider bifurcation of turnover between two distinct periods in the same financial year carrying different exemption limits. The Commissioner's circular issued under section 28-A was treated as binding and could not be ignored by the assessing authority. The court also followed the later Division Bench view that a financial year may be split for working out tax liability when different rates or exemptions apply during different parts of the year. The assessment order was set aside and the matter remanded for fresh consideration in accordance with the binding circular and the applicable legal position.

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Issues: Whether the assessment order was liable to be set aside for failure to consider bifurcation of turnover between different periods in the same financial year and the statutory circular issued under section 28-A.

Analysis: The assessment concerned levy of additional sales tax and the petitioner's turnover covered two distinct periods within the same year attracting different exemption limits. The Court noted that the circular issued by the Commissioner in exercise of power under section 28-A was binding and could not be ignored by the assessing authority. The Court also relied on the later Division Bench view that the financial year could be split for the purpose of working out tax liability where different rates or exemptions applied during different parts of the year.

Conclusion: The assessment order was unsustainable and had to be set aside. The matter was remanded for fresh consideration in accordance with the binding circular and the applicable legal position.

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