Retrospective tax amendment invalid for past transactions; assessments must be reconsidered under the Supreme Court's prospective-only ruling.

Section 19(20) of the Tamil Nadu Value Added Tax Act, 2006 could not sustain assessments based on retrospective application to past transactions because the Supreme Court held the amendment valid only prospectively. The assessments therefore had to be reconsidered by excluding any retrospective burden, and the orders were liable to be set aside for fresh consideration in line with that ruling. A fiscal amendment imposing a new liability cannot impair vested rights through retrospective operation unless the legislature clearly and validly authorises it.

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Issues: Whether the assessment orders founded on the application of Section 19(20) of the Tamil Nadu Value Added Tax Act, 2006 could be sustained in view of the Supreme Court holding that the amendment operates only prospectively.

Analysis: The assessments were based on the applicability of Section 19(20) to past transactions. The Supreme Court had upheld the validity of the provision but struck down the retrospective operation given to it from 01.01.2007, holding that the amendment could apply only prospectively. In view of that binding ruling, the assessments required reconsideration by excluding the retrospective application of the amendment.

Conclusion: The assessment orders could not be sustained in their present form and were liable to be set aside for fresh consideration in accordance with the Supreme Court's decision.

Ratio Decidendi: A fiscal amendment creating a new burden cannot be applied retrospectively so as to impair vested rights unless the legislature clearly and validly authorises such retrospective operation.

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