Retrospective tax amendment applied as clarificatory correction to cure statutory anomaly in pending assessments.

An amendment enacted to cure an unintended anomaly in Section 3(4)(b) of the Tamil Nadu Value Added Tax Act, 2006 was treated as clarificatory and therefore retrospective. The court accepted the legislative object and prior judicial view that the revised provision could not be confined to prospective operation from 01.04.2012. The assessment order applying the amendment prospectively was not sustained, the impugned assessment was set aside, and the matter was remitted for fresh consideration in accordance with the declared legal position.

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Issues: Whether the amendment to Section 3(4)(b) of the Tamil Nadu Value Added Tax Act, 2006 had retrospective operation so as to render the revised assessment order, which applied the provision prospectively from 01.04.2012, unsustainable.

Analysis: The challenge turned on the nature of the amendment to Section 3(4)(b) and whether it merely corrected an unintended anomaly in the earlier provision. The amended provision was treated as clarificatory, with the legislative object indicating that the amendment was intended to rectify the difficulty created by the earlier formulation. The Court relied on the prior judicial view that the amendment should apply retrospectively and accepted that the revised assessment could not be confined to a prospective operation from 01.04.2012.

Conclusion: The amendment was held to have retrospective effect, and the assessment order applying it prospectively was not sustained.

Final Conclusion: The impugned assessment was set aside and the matter was remitted for fresh consideration in accordance with the legal position declared in the order.

Ratio Decidendi: Where an amendment is enacted to cure an unintended anomaly or clarify an existing statutory scheme, it may be treated as retrospective and applied to pending assessments.

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