Retrospective tax determination under sales tax law cannot disturb liability fixed by an earlier binding order for completed transactions.

Tax liability under Section 62 of the Gujarat Sales Tax Act is governed by the legal position in force when the transaction occurs. A determination order binds the department while it remains operative, so a later determination cannot be applied retrospectively to sales already completed under an earlier binding order. Section 62(2) supports this reading by indicating that subsequent determination does not disturb liability for prior transactions unless specifically directed. The court held that the earlier determination order governed the transactions in question, and the later order could not alter the assessee's liability for those completed sales.

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Issues: Whether, where two determination orders under Section 62 of the Gujarat Sales Tax Act, 1969 existed, the later determination order could govern a transaction that had taken place when the earlier determination order was in force.

Analysis: The liability to pay sales tax arises when the transaction or sale takes place, and the legal position prevailing on that date governs the liability. A determination order under Section 62 binds the department while it remains in force, and a subsequent determination cannot be applied retrospectively to transactions already completed. Section 62(2) also indicates that a later determination is not meant to disturb liability in respect of earlier sales unless specifically directed. Applying the later order to prior transactions would create undue hardship and unsettle transactions completed under the earlier binding determination.

Conclusion: The later determination order could not affect the tax liability for transactions completed before its date, and the earlier determination order held the field for those transactions. The question was answered in favour of the assessee.

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