TMI Blog1965 (9) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... AH, J.C.SHAH AND S.M. SIKRI, JJ. JUDGMENT The Judgment of the Court was delivered by Gajendragadkar C.J. - The petitioner, Jawaharinal, carries on business of plying his motor buses on four routes under the Stage Carriage Permits granted to him under the relevant provisions of the Motor Vehicles Act, 1939. The three respondents to his petition respectively are : The State of Rajasthan, the Deputy Commissioner, Excise and Taxation (Appeals), Jaipur, and the Taxation Officer, (The Rajasthan Motor Vehicles) Sikar, State of Rajasthan. It appears that respondent No. 3 passed several :assessment orders imposing different amounts of tax against his five vehicles which were running on the four routes in question. The periods for which these assessment orders were passed differed from vehicle to vehicle; but, on the whole, they covered the period between the 1st April, 1962 and the 30th September, 1964. The total amount of tax imposed in respect of these vehicles by the assessment orders in question is Rs. 19,062-93P. These orders have been passed under section 2 of the Rajasthan Passengers and Goods Taxation (Validation) Ordinance, 1964 (Ordinance No. 4 of 1964). This Ordinance wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own as the Rajasthan Passengers and Goods Taxation Act, 1959 (hereinafter called the principal Act'). This Act received the assent of the President on April 2, 1959; was published in the Rajasthan Gazette on April 30, 1959, and came into force on May 1, 1959. The validity of this Act has been upheld by this Court in M/s Sainik Motors, Jodhpur Ors. v. The State of Rajasthan([1962] 1 S.C.R. 517.). Section 3 of the, principal Act authorised the State Government to levy, charge and collect tax on all fares and freights in respect of all passengers carried and goods transported by motor vehicles in Rajas- than. The said section further provided that the rate of the tax shall not exceed 1/8th of the value of fare or freight in the case of cemented, tarred, asphalted, metalled, gravel and kankar roads, and shall not exceed 1/12 of such value in other cases as may be notified by the State Government from time to time. Section 21 of the principal Act authorised the Government of Rajasthan to frame rules consistent with the said Act for securing the payment of tax and generally for the purposes of carrying into effect its provisions. Accordingly, the Government of Rajasthan framed suitab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petitions filed by them before the Rajasthan High Court under Art. 26 of the Constitution. During the pendency of these writ petitions, the Rajasthan Ordinance No. 4 of 1964 was promulgated. Later, the said Ordinance was repealed and replaced by the Act with which we are concerned in the present proceedings. This Act came into force on the 9th September, 1964, having received the assent of the President on the 8th September, 1964. The writ petitions filed by the other bus operators were decided by the said High Court on the 30th November, 1964 vide Vijai Singh and another v. Deputy Commissioner, Excise Taxation (Appeals), Ajmer and Kotah Divisions, Jaipur other(1). In substance, the High Court has held in that case that the earlier Finance Acts of 1961 and 1962 suffered from the infirmity that they did not comply with the requirements of Art. 255 of the Constitution. It, however, did not think it necessary to finally determine the question as to whether by reason of the said infirmity, the said earlier Acts were void or not, because in its opinion, the Act of 1964 "is not merely an amending and a curative Act in that limited sense, but it is really an Act which virtually ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement in the present proceedings and they urged that the petitioners challenge to the validity of the relevant provisions of the Act should not be sustained. According to them, the Act is constitutionally valid and the impugned orders of assessment are fully justified by the said provisions. That is how the main question which falls to be considered in the present writ petition is whether the relevant provisions of the Act are valid or not. Let us therefore proceed to refer to the provisions of the Act enquire whether the petitioner is justified in challenging their validity. The Act consists of five sections. Section 1 gives its tile; s. 2 amends s. 3 of the principal Act; s. 3 deals with validation of certain lump sum payments in lieu of tax s. 4 purports to validate certain sections of the Rajasthan Acts 14 of 1961, 11 of 1962 and 13 of 1963; it also purports to validate the tax levied, paid or payable and action taken or things done during the period between the 9th day of March, 1961 and the date of commencement of this Act. The last section 5 repeals Ordinance No. 4 of 1964. In the present proceedings we are not concerned with lump sum payments; and so, s. 3 does not fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d always to have been validly levied, paid, payable, taken or done in accordance with law and the aforesaid enactments shall be, and be deemed always to have been, validly enacted, notwithstanding the aforesaid defects, and accordingly. (a) no suit or other proceeding shall be instituted, maintained or continued in any court for the refund of any tax or fee so paid or for any other relief on the ground of invalidity of the said sections of the Acts aforesaid; and (b) no court shall enforce any decree or order directing any such refund or relief". Mr. Tiwari for the petitioner contends that ss. 2 and 4 pur- port to validate the earlier invalid Finance Acts of 1961 and 1962. He argues that the failure of the Legislature to comply with the provisions of Art. 255 of the Constitution renders the said Acts void ab initio and as such, they cannot be validated by subsequent legislation. Mr. tiwari also urges that the ,aid earlier Acts have been held to be invalid by the Rajasthan High Court in the case of Vijai Singh((1965) I.L.R. 15 Raj. 285. ) and it would be incompetent to the State Legislature to validate the said Acts in spite of the decision of a court of competent jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent proceedings to consider when such a law becomes enforceable, whether subsequent assent makes it enforceable from the date when the said law purported to come into force, or whether it becomes enforceable from the date of its subsequent assent. Besides, it is plain that the Legislature may, in a suitable case, adopt the course of passing a subsequent law re- introducing the provisions of the earlier law which had not received the assent of the President, and obtaining his assent thereto as prescribed by the Constitution. We see no substance in the argument that an Act which has not complied with the provisions of Art. 255, cannot be validated by subsequent legislation even where such subsequent Act complies with Art. 255 and obtains the requisite assent of the President as prescribed by the Constitution. Whether the infirmity in the Act which has failed to comply with the provisions of Art. 255, should be cured by obtaining the subsequent assent of the President or by passing a subsequent Act re-enacting the provisions of the earlier law and securing the assent of the President to such Act, is a matter which the Legislature can decide in the circumstances of a given case. Leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easy to understand why it was thought necessary to refer to this period by the said retrospective amendment. The second period had been attempted to be covered by Finance Act 14 of 1961 and the notification issued thereunder. In order to make the provisions of the-said notification effective, the Legislature has adopted the legitimate expedient it of making the said provisions a part of the amendment which has been introduced to s. 3 (1) of the principal Act; and so, the rates prescribed by clause (b) can be validly imposed during the said retrospective amendment. The second period had been the Finance Act 11 of 1962 and the notification issued under it has not been included in the retrospective amendment introduced by s. 2; this period ranges between 26th March, 1962 and the 9th September, 1964; and so, the rates prescribed by the notification issued under the, relevant provisions of the said Finance Act are not re- enacted by the amendment made by s. 2. In other words, s.2 does not purport to re-enact, by retrospective amendment, the rates prescribed by the notification issued under the Finance Act 11 of 1962. We are inclined to take the view that the draftsmen of the Act have r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that the Legislature is empowered to say that the infirmity resulting from the non- compliance with Art. 255 doe,; not matter. In our opinion, the Legislature is incompetent to declare that the failure to comply with Art. 255 is of no consequence and, with respect, the assent of the President to such declaration also does not serve the purpose which subsequent assent by the President can serve under Art. 255. The learned Advocate-General has strenuously contended before us that we should look at the substance of the matter and not decide the validity of s. 4 merely because the words used in it may not be happy or appropriate. We agree that questions of this character must be judged on considerations of substance and not merely of form, and we have tried to read s. 4 as favourably as we can while appreciating the argument of the learned Advocate General; but the words used in all the three parts of s. 4 are clear and unambiguous; they indicate that the Legislature thought that it was competent to it to cure, by its own legislative process, the infirmity resulting from the non-compliance with Art. 255 When it passed the earlier Finance Acts in question, and it was probably advise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of s. 4, we see no escape from the conclusion that in enacting it, the Legislature appears to have clearly assumed that it can by itself cure the infirmity resulting from the non-compliance with Art. 255 and all that it has to do in such a case is to obtain the a,-,sent of the President to its own view about its power to cure such an infirmity. We are satisfied that it is necessary that the true position in regard to the scope and effect of Art. 255 must be ,clearly brought out in order to avoid any misapprehension in future. In support of his argument that the form adopted by the Legislature in enacting s. 4 is not inappropriate, the learned Advocate General has referred us to a decision of this Court in M.P.V. Sundararamier Co. v. The State of Andhra Pradesh and Another(1). It is true that in that case, s. 2 of the Sales Tax Laws Validation Act, 1956 (No. 7 of 1956), which is a Central Act, used phraseology which is similar to the phraseology adopted by s. 4 of the Act; but it would be fallacious to compare the said provision with s. 4, because the ban which s. 2 of the said Act intended to lift could validly be Iifted by a Parliamentary statute. Art. 286(2) of the Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me that notwithstanding the proclamation of emergency issued by the President under Art. 352, the constitutional bar created by Art. 358 does not operate against the petitioner inasmuch as he relies upon the contravention of his fundamental right prior to the date, of the proclamation. It is on that assumption that we wish to deal with the contention raised by Mr. Tiwari. In our opinion, the said contention is plainly unsound. We have already stated that the power to make laws involves the power to make them effective prospectively as well as retrospectively, and tax laws are no exception to this rule. So, it would be idle to contend that merely because a taxing statute purports to operate retrospectively, the retrospective operation per se involves contravention of the fundamental right of the citizen taxed under Art. 19(1) (f) or (1). It is true that Cases may conceivably occur where the Court may have to consider the question as to whether excessive retrospective operation prescribed by a taxing statute amounts to the contravention of the citizens' fundamental right; and in dealing with such a question, the Court may have to take into account all the relevant and surrounding fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is invalid, and that the taxing authorities concerned will have to levy the tax at the rates prescribed by the notification issued on the 30th April, 1959 under s. 3 of the principal Act as it originally stood. It is true that this result sounds very anomalous, because for the period immedeately preceding the period in question, the tax is validly recoverable at the enhanced rates, whereas for the period in question, it has to be recovered at a lower Tate; but, for this anomaly, the defective drafting of S. 2 and s. 4 of the Act is entirely responsible. Before we part with this petition, we would like to refer briefly to two decisions of this Court to which --reference was made during the course of the argument, before us. 'in Rai Ramkrishna Others v. The State of Bihar([1964] 1 S.C.R. 897), the validity of the Bihar Taxation on Passengers and Goods (Carried by Public Service Motor Vehicles) Act, 1961 (No. 17 of 1961) was challenged on the ground that it sought to validate taxes already recovered under an invalid Finance Act. Rejecting the argument that such retrospective validation of tax illegally recovered amounts to the contravention of the citizens' fundamental right under A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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