2021 (9) TMI 1534 - SCH - VAT and Sales Tax

Whether the amended provision can be given prospective effect only? - HELD THAT - The State is under statutory obligation to conclude the assessment process for the period prior to 01.07.2017 on the basis of unamended rules; and commence the assessment for the subsequent period as per the new regime which has come into force from 01.07.2017. The department is free to proceed with the assessment on the basis of unamended rules which however will be subject to challenge as may be available in law to the assessees before the appropriate Forum. The special leave petitions are disposed of accordingly.

Summary

Issues:
1. Interpretation of amended provision for prospective effect.
2. Validity of assessment based on unamended rules.
3. Obligation of the State for assessment process pre and post 01.07.2017.

Analysis:
1. The Supreme Court addressed the issue of the interpretation of the amended provision and its prospective effect. The Court agreed with the conclusion of the High Court that the amended provision can be given prospective effect only. The direction in question was based on the High Court's conclusion, and the Court found no need for further consideration on this matter.

2. The Court considered the validity of assessments conducted based on unamended rules. The petitioners argued that the department could continue assessments using the unamended rules, even without reference to the amended provision. The Court noted that this argument was not raised before the High Court. It was clarified that if the department has the legal provision to complete assessments using unamended rules, they are permitted to do so. However, any such action can be challenged by the concerned assessee before the appropriate forum, leaving all contentions open for both sides.

3. The Court highlighted the statutory obligation of the State regarding the assessment process before and after 01.07.2017. It was pointed out that the State is obligated to conclude assessments for the period before 01.07.2017 based on unamended rules, while assessments for the subsequent period should follow the new regime effective from 01.07.2017. The Court reiterated that the department is free to proceed with assessments using unamended rules, subject to challenge by the assessees before the appropriate forum. The special leave petitions were disposed of accordingly, and pending applications were also disposed of by the Court.