Prospective operation of tax amendments prevents retrospective application of altered turnover-threshold consequences to earlier assessment years.

Amendments that alter the tax consequence of crossing a turnover threshold operate prospectively from their effective date unless the legislature expressly provides retrospective effect. On that basis, the amended form of Section 3(4) of the Tamil Nadu Value Added Tax Act, 2006 could not be applied to assessment year 2007-08 because it came into force only on 18.06.2008. The assessment, having been made without considering objections and without personal hearing, required fresh consideration after giving the assessee an opportunity to be heard.

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Issues: Whether the amended form of Section 3(4) of the Tamil Nadu Value Added Tax Act, 2006 could be applied to the assessment year 2007-08 and whether the assessment order, passed without considering the assessee's objections and without personal hearing, could be sustained.

Analysis: The assessment year in question preceded the amendment introduced by Tamil Nadu Ordinance No. 1 of 2008 with effect from 18.06.2008. The amended provision imposed a requirement to intimate the Assessing Authority within seven days after crossing the turnover threshold and altered the tax consequence on crossing that limit. As the amendment came into force only from 18.06.2008, it could not govern the earlier assessment period. The impugned order was therefore unsustainable on the basis adopted by the Assessing Authority. At the same time, since there was a dispute as to the exact manner in which the assessee had filed returns and paid tax, the matter required reconsideration after hearing the assessee.

Conclusion: The amended Section 3(4) could not be applied to the assessment year 2007-08, and the assessment order could not be sustained on that basis. The matter was remanded for fresh consideration after affording the assessee an opportunity of personal hearing.

Final Conclusion: The assessee obtained relief against the impugned assessment, but the tax liability was left open for fresh adjudication by the Assessing Authority in accordance with the pre-amendment provision and after hearing the assessee.

Ratio Decidendi: An amendment enhancing or altering the statutory tax consequence for crossing a turnover threshold operates prospectively from its effective date and cannot be applied to an earlier assessment period in the absence of express retrospective operation.

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