An amendment to a statute that expands the power of the assessing authority to reopen assessments cannot be applied retrospectively to assessments that have already become final, unless the amendment expressly provides for retrospective operation.

The judgment of the Court was delivered by

Y. V. ANJANEYULU, J. - These two tax revision cases were filed by the State and the respondent is the same in both the cases. The two cases relate to the sales tax assessment years 1974-75 and 1975-76. A common question arises for consideration in both the cases and it will be convenient to dispose of those together.

2. The assessee carries on business in wheat products. In accordance with the licence issued by the Director of Civil Supplies, the assessee was under an obligation to sell atta, maida and other wheat products to the person nominated by the Director. During the financial year 1974-75, the assessee supplied wheat products of the value of Rs. 45,11,740 to the persons nominated by the Director of Civil Supplies; for the assessment years 1975-76 the assessee likewise supplied wheat products of the value of Rs. 79,61,310 to the nominees of the Director. In connection with the sales tax assessments for these two years the assessee claimed that the supplies of wheat products made to the persons nominated by the Director of Civil Supplies cannot be regarded as "sales" within the meaning of section 2(n) of the A.P. General Sales Tax Act, 1957 ("the Act", for short), as these "sales" were not made at the volition of the assessee. It was claimed that the supply of goods to the nominees of the Director was compulsory under the terms of the licence and consequently the ingredients of a sale were lacking in the supplies so made to the nominees of the Director. The assessing authority accepted the above contention of the assessee and completed the assessments for the two years without including the value of supplies made by the assessee of wheat products to the nominees of the Director. The assessment for the year 1974-75 was completed on 31st March, 1976. The assessing authority determined the gross turnover at Rs. 1,39,10,795 and allowed what the assessing authority called "exemption", to the extent of Rs. 45,11,740. As already pointed out the so-called exemption was in relation to the wheat products supplied by the assessee to the nominees of the Director. For the assessment year 1975-76, the assessing authority completed the assessment on 14th June, 1977 determining the gross turnover at Rs. 1,46,63,952. As in the assessment year 1974-75 the assessing authority granted "exemption" from the levy of sales tax in respect of Rs. 79,61,310 representing the supplies of wheat products by the assessee to the persons nominated by the Director.

3. For the assessment year 1974-75 the assessing authority issued a notice on 1st March, 1979 under section 14(4)(cc) of the Act requiring the assessee to show cause as to why the exemption from the levy of sales tax allowed in respect of wheat products supplied to the nominees of the Director should not be withdrawn in view of the judgment of the Andhra Pradesh High Court in T.R.C. Nos. 27 and 66 of 1975 dated 11th February, 1976 (Sri Vijayalakshmi Rice Mill Contractors Company v. State of A.P. [1976] 38 STC 19). A similar show cause notice was issued for the assessment year 1975-76 on 22nd June, 1979. The show cause notices issued for both the assessment years referred to the "exemption" granted by the assessing authority for the two assessment years in question, and it was proposed to withdrawn such exemption acting under section 14(4)(cc) of the Act. Eventually the assessee's objections were considered and an order was passed by the assessing authority on 9th March, 1979 withdrawing the exemption for the assessment year 1974-75. For the assessment year 1975-76 an order withdrawing exemption was passed by the assessing authority on 4th July, 1979. The orders withdrawing exemption for these two assessment years categorically state that the exemption was withdrawn invoking the provisions contained in section 14(4)(cc) of the Act.

4. The assessee appealed against the assessments made by the assessing authority which were confirmed by the Assis