Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 10
PETITIONER:
M/s. S. K. G. SUGAR LTD.
Vs.
RESPONDENT:
STATE OF BIHAR AND ORS.
DATE OF JUDGMENT26/04/1974
BENCH:
SARKARIA, RANJIT SINGH
BENCH:
SARKARIA, RANJIT SINGH
RAY, A.N. (CJ)
MATHEW, KUTTYIL KURIEN
ALAGIRISWAMI, A.
GOSWAMI, P.K.
CITATION:
1974 AIR 1533 1975 SCR (1) 312
1974 SCC (4) 827
CITATOR INFO :
RF 1977 SC1361 (200)
RF 1980 SC1124 (18)
ACT:
The Bihar Sugar Factories Control Act, (7 of 1937)-
Provisions re : production, supply and distribution of
sugar held to be in conflict with provisions of Essential
Commodities Act (10 of 1955)-Validity of taxing provisions
of Bihar Act, if affected-President’s Act 8 of 1969-Effect
of.
HEADNOTE:
The Bihar Sugar Factories Control Act, (7 of 1937), was a
temporary Act the life of which was extended from time to
time and Bihar Act 7 of 1955 reenacted it permanently.
Bihar Act 17 of 1963 substituted in the Act, with re-
trospective effect from January 1, 1962, a new s. 29, which
empowered the State Government to impose by notification
cess and tax on sugarcane. The Constitutional validity of
the Act was challenged and the High Court held the Act un-
constitutional and invalid. When the matter came up on
appeal to this Court (A. K. Jain’s case ([1969] 2 S.C.C.
340) it was held that if Bihar Act of 1937 provides anything
contrary to rule 3(3) of the Sugar Cane (Control) Order,
1955, issued under the Essential Commodities Act 1955 it
must be held to have been altered as per Art. 372 of the
Constitution. In January, 1968, an Ordinance was pro-
mulgated by the Governor of Bihar, and s. 35 of the
Ordinance corresponded to s. 29 inserted by the 1963-Act.
Sec. 50 of the Ordinance revealed Bihar Act 7 of 1937, and
s. 50(2) contained a saving and validating provision with
regard to anything done, tax imposed or liability incurred
etc. under the Repealed Act. A notification under s. 35 of
the Ordinance imposing a tax was issued by the Government in
February, 1968. Successive Ordinances thereafter
promulgated by the Governor validated the provisions or
anything done thereunder. In August 1969, during the
President’s Rule, the Bihar Sugar Cane (Regulation of Supply
and Purchase) Act, (Presidents Act 8 of 1969) was Passed.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 10
Sec. 66(1) of the Act provided that notwithstanding any
judgment, decree or order by any court all cesses and taxes
imposed or collected under any State law before the com-
mencement of the Act shall be deemd to have been validly
imposed etc., as if the Act had been in force at all
material times.
With respect to certain purchases of sugar cane made by the
petitioner in January 1968 the respondent State sent
requisitions to the petitioner for realisation of cane cess
and purchase tax due under the notification under Bihar Act
7 of 1937. The petitioner challenged the imposition in a
petition under Art. 32, on the ground that the imposition
was without the authority of law.
Dismissing the petition,
HELD : The validity of the impugned notification and the
cess and tax imposed thereunder has to be judged with
reference to successive Ordinances and the President’s Act.
By virtue of the legal fiction introduced by the validating
provision in s. 66(1) of the President’s Act, the impugned
notification will be deemed to have been issued not
necessarily under the Ordinance of 1968 but under the
President’s Act itself deriving its legal force and validity
directly from the latter.
(1) The Bihar Ordinance of 1968 was within the competence
of the Governor under Art. 213 of the Constitution. The two
conditions required by that Article are satisfied in the
present case. The State legislature was not in session and
the Governor was satisfied as to the necessity of
promulgating the ordinance. The Governor is the sole judge
as to the existence of the necessary circumstances and his
satisfaction is not a justiciable matter.
State of Punjab v. Sat Pal Dang, [1969] 1 S.C.R. 633,
followed.
(2) (i) The taxing provisions of the Bihar Act of 1937
never lost their validity and continue,] to be in force.
The notification issued under the Bihar Act
313
of 1937 and continued under the latter Acts imposing the
taxes or cesses also remained operative during the period in
question till it was replaced by another notification under
the Ordinance of 1968. It is therefore incorrect to say
that there was any period during which the tax was levied
without the authority of law. The taxing provisions of the
Bihar Act were neither rendered inoperative by Art. 254(1),
nor repealed or altered by the competent legislature within
the contemplation of Art. 372 of the Constitution. The Act
of 1937 dealt with two distinct and ,separate matters,
namely. (a) the regulation of production, supply and
distribution of sugar cane, and (b) imposition and
collection of cesses and taxes in respect of sugar cane.
Matter (a) was referable to Entry 33 of the Concurrent List
and matter (b) to Entry 52 of the State List. The Essential
Commodities Act (Central Act of 1955) related to matter (b)
only. In the light of Art. 372 the Bihar Act would be
deemed to have been repealed with effect from the date on
which the Central Act came into force (April 1, 1955) only
in so far as it controlled or authorised control of
production supply and distribution of, and trade and
commerce in sugar cane. The taxing provisions of the Bihar
Act were not in any way repugnant to the Central Act or any
other law passed by Parliament. [317C-318D; 319F]
(ii) The observations of_the High Court while striking down
the Act, though very widely expressed, must be confined to
the precise points for determination that arose before it.
The High Court was not concerned with the validity of the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 10
taxing provisions of the Bihar Act. The question before the
High Court was the conflict between the Essential
Commodities Act and the Sugar Control Order, 1955, issued
thereunder on the one hand, and the Bihar Act of 1937 on the
other, because the regulation of price of sugarcane was
expressly dealt with by the Bihar Act. Thus only that part
of the Bihar Act came out) for consideration which related
to Entry 13 of the Concurrent List and that part could be
said to be inconsistent with the Central Act, but no
question of the validity of the taxing provisions of the
Bihar Act arose before the High Court. [319A-D]
(iii) The matters relatable to Entry 33 of the
Concurrent List in the Act were severable from the other
provisions of the Act. There was no competition or
collision between the taxing provisions of the Bihar Act and
those of the Central Act. The two existed side by side and
each remains operative in its own distinct field without
interfering with the other. [319D-E]
(iv) A Legislature has the power to make a law imposing a
tax retrospectively or validate defective laws by subsequent
legislation or even past unlawful collections, the power of
validation being ancillary to and included in the power to
legislate on a particular subject. [320C]
(vi) The language of the validating provisions of the
President’s Act are of wide amplitude, and even if it is
assumed that the Essential Commodities Act had cast any
doubt on or introduced any infirmity in the taxing
provisions of the State Act, the same had been removed or
cured by s. 66(1) of the President’s Act which not only
nullify the effect if any, of the judgment of the High Court
on the taxing provisions of the Act of 1937 but also
validates the imposition, assessment or collection of all
cesses and taxes imposed under any State with retrospective
effect as if the President’s Act had been in force at all
material times including the period in question, that is
January, 1968. [320D-E]
JUDGMENT:
ORIGINAL JURISDICTION : Writ Petition No. 370 of 1969.
Under Article 32 of the Constitution of India.
P. K. Chatterjee, N. H. Hingorani and Rathin Das, for the
appellant.
L. N. Sinha, Solicitor General, R. K. Garg, S. C. Agarwal
and S. S.
Bhatnagar, for respondent no. 1
The Judgment of the Court was delivered by
SARKARIA, J.-In this petition under Article 32 of the
Constitution, the petitioner, a Private Ltd. Company,
challenges the validity of the
314
Cane Cess and Purchase tax levied on it for the month of
January, 1968. Respondents 1, 2 and 3 are the State of
Bihar, Certificate Officer and the Collector of Champaran,
respectively.
The facts are these
There was in force in the State of Bihar a pre-Constitution
law known as Bihar Sugar Factories Control Act, 1937 (Act 7
of 1937). By notification issued under s. 29 of that Act,
cane cess and purchase tax were being levied in respect of
sugar cane intended to be used or used in a sugar factory.
It was a temporary enactment. Originally, it was to remain
in force until June 30, 1941. But its life was extended
from time to time by different amending Acts. The last
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 10
extension was made by Bihar Act 6 of 1950 upto January 30,
1955, which came into force on January 9, 1950 when it was
published in the Bihar Government Gazette. Thereafter,
Bihar Act 7 of 1955 which came into force on March 30, 1955,
amended s. 1(3) of Act 6 of 1950 extending the life of Act 7
of 1937, indefinitely beyond June 30, 1955. In the mean-
time, the Essential Commodities Act No. 10 of 1955
(hereinafter called the Central Act) was enacted by
Parliament. After the assent of the President, it came into
force on April 1, 1955. Section 16(1) (b) of the Central
Act expressly repealed "any other law in force in any State
immediately before the commencement of this Act in so far as
such law controls or authorises the control of the
production, supply and distribution of, and trade and
commerce in, any essential commodity."
Bihar Act 17 of 1963 substituted in Act 7 of 1937 with
retrospective effect from January 1, 1962, this new Section
29 :
"Cess and tax on cane-The State Government may
by notification impose-
(a) a cess not exceeding fifty-one naya
paise per quintal on the entry of sugarcane
into a local area, specified in such
notification, for consumption, use or sale
therein;
(b) a tax not exceeding fifty-one naya paise
per quintal on the purchase of sugarcane by or
on behalf of the occupier of a factory;
Provided that such tax shall not be payable in
respect of sugarcane for which a cess imposed
under clause (a) is payable."
The Government of Bihar, acting under this Section, issued
and published a notification on October 21, 1963, in the
Gazette whereby cane cess and purchase tax at certain rates
were levied in the local areas specified in the
notification.
The constitutional validity of Bihar Act 7 of 1937 and the
rules framed thereunder was challenged by a writ petition in
the High Court of Patna which by its judgment, dated July 4,
1966, in A. K. Jain and anr. v. Union of India,(1) held Act
7 of 1937 and the rules framed thereunder to be
unconstitutional and invalid. On appeal against that
(1) 1968 Pat. Law Journal Reports p. 179
315
judgment this Court in A. K. Jain and others v. Union of
India and ors.(1) held that if the Bihar Act 7 of 1937
provides anything contrary to Rule 3(3) of the Sugarcane
(Control) Order 1955, issued under the Central Act, it must
be held to have been altered in view of Art. 372 of the
Constitution. The Patna High Court followed its earlier
decision in A. K. Jain’s case, in Sugauli Sugar Works Pvt.
Ltd. v. Cooperative Development and Cane Marketing Union(2)
and in Belsand Sugar Co. Ltd. v. Thakur Girja Nandan
Singh(3).
After Bihar Act 7 of 1937 was struck down by the High Court,
no legislative measures were taken until January 12, 1968
when Ordinance No. 3 was promulgated by the Governor of
Bihar with instructions of the President.
Section 35 of the Ordinance corresponded to s.29 inserted in
Act 7 of 1937 by the Amending Act of 1963, excepting that
the maximum rate of the cess/tax leviable was fixed at 67
paise per quintal.
Section 50 of the Ordinance repealed the Bihar Act 7 of
1937. Its sub-section (2) contained a saving and validating
provision with regard to anything done, tax imposed or
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 10
liability incurred etc. under the Repealed Act 7 of 1937.
A notification under s. 35 imposing a tax under this
Ordinance 3 of 1968, however, was issued by the Government
on February 16, 1968. Ordinance No. 3 lapsed on February
28, 1968, on which date, another Ordinance (No. 6 of 1968)
was promulgated. Sub-sections (1) ’and (2) of s. 35 of this
Ordinance were the same as those of the preceding Ordinance
excepting that a second proviso to sub-s.(1) was added in
these terms :
"Provided further that any tax imposed by the
State Government in respect of the crushing
year 1967-68 under the provisions of t
he Bihar
Sugarcane (Regulation of supply and purchase)
Ordinance 1968 (Bihar Ordinance No. 3 of 1968)
shall be deemed to have been effectively
imposed " from the date of enforcement of the
Ordinance.
By s. 35(3) Ordinance 3 of 1968 was repealed. But s. 50
saved and validated everything done under Act 7 of 1937 and
the repealed Ordinance.
On July 4, 1968, the Governor promulgated Bihar Ordinance 4
of 1969. It provided that except its ss. 1 and 52 which
came into force at once, the remaining provisions "shall be
deemed to have come into force from the 25th June 1969".
Section 49 reproduced the taxing provisions contained in its
preceding Ordinance. Section 66 contained validating
provisions analogous to those found in the preceding
Ordinance :
Notwithstanding any judgment, decree or order
of any court, all cesses and taxes
imposed, assessed or collected
(1) [1969] 2 S.C.C. 340.
(2) Misc. J. Case No. 1344 of 1964 decided by Patna High
Court on July 29, 1966.
(3) AIR 1969 Pat. 8.
31 6
.lm15
or purporting to have been imposed, assessed or collected
under any State Law, before the 25th June, 1968, shall be
deemed to have been validly imposed, assessed or collected
in accordance with law as if this Ordinance had been in
force at all material times when such cess or tax was
imposed, assessed or collected, and accordingly....
On August 31, 1969 during the President’s Rule, Bihar
Sugarcane (Regulation of Supply and Purchase) Act, 1969
(President’s Act 8 of 1969) was passed. Section 66(1) of
that Act provided :
"Notwithstanding any judgment, decree or order
of any court, all cesses and taxes imposed,
assessed or collected or purporting to have
been imposed, assessed or collected under any
State law, before the commencement of this
Act, shall be deemed to have been validly
imposed, assessed or collected in a
ccordance
with law as if this Act had been in force at
all material times when such cess or tax was
imposed, assessed or collected and
accordingly...."
In January 1968, the petitioner purchased sugarcane for
production of sugar in its factory from the sugarcane
growers of the area allotted to its factory on payment of
the price fixed by the State Government. Respondent 1 sent
four requisitions for realization of cane cess and purchase
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 10
tax said to be due under the Bihar Act 7 of 1937. The
demand notices were issued under s.5 of the Bihar and Orissa
Public Demands Recovery Act 4 of 1914. One of such notices
was a demand of Rs. 1,71,543/56P. alleged to be
cess/purchase tax dues for January, 1968.
The petitioner challenges these impositions and consequent
requisitions and demands on several grounds out of which the
following have been canvassed before us :
(1) Bihar Act 7 of 1937 and Act 7 of 1955
which attempted to make it permanent and the
notification issued thereunder imposing the
cess and tax in question, were declared
unconstitutional and invalid by the Patna High
Court in A. K. Jain’s case (supra) on July
4, 1966 and that decision was affirmed by this
Court in appeal. There was no law in force
authorising the levy of the cess/tax till
January 12, 1968 when Bihar Ordinance 6 of
1968 was promulgated;
(2) The 2nd proviso to s.35 of Bihar
Ordinance 6 of 1968 is invalid. Section 35 of
Ordinance 3 and 6 of 1968 per se did not
impose any tax. It only empowered the State
Government to do so by notification, and that
too prospectively. The second proviso cannot
operate to give retrospective effect to the
notification, dated February 16, 1968.
Reference has been made to Hukam Chand etc. v.
Union of India and ors.(1)
(1) [1973] 1 S.C.R. 896.
317
(3) The second proviso to s.35 of Ordinance
6 of 1968 antedated the imposition of tax from
January 12, 1968, the date of promulgation of
the first Ordinance 3 of 1968. Assuming this
proviso to be valid, there was no notification
imposing the tax, in existence for the period
from January 1, 1968 to January 11, 1968. Any
tax or cess levied for this uncovered period
was without the authority of law :
(4) The Bihar Ordinance 3 of 1968 was beyond
the competence of the Governor under Article
213 of the Constitution because there was no
urgency for, the promulgation of the Ordinance
and the power was exercised malafide-.
We shall take the last contention first. Barring those
cases where the Governor has to obtain previous instruction
from the President, the Governor’s power to promulgate
Ordinances under Art. 213 is subject to two conditions,
namely :
(a)that the house or houses, as the case may
be, of the State Legislature must not be in
session when the Ordinance is issued; and (b)
the Governor must be satisfied as to the
existence of circumstances which render it
necessary for him take immediate action.
There is no dispute with regard to the satisfaction of the
first condition. Existence of condition (b) only is
questioned. It is however well-settled that the necessity
of immediate action and of promulgating an Ordinance is a
matter purely for the subjective satisfaction of the
Governor. He is the sole Judge as to the existence of the
circumstances necessitating the making of. an Ordinance.
His satisfaction is not a justiciable matter. It cannot be
questioned on ground of error of judgment or otherwise in
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 10
court-see State of Punjab v. Sat Pal Dang(1) The contention
is devoid of merit. Moreover, after the coming into force
of the President’s Act 8 of 1969, this question had become
merely academic.
This takes us to the other contentions. They are
interlinked. To us, none of them appears to be well-
founded.
The first question is, whether after the commencement of the
Central Act on April 1, 1955, the whole of Act 7 of 1937
became ’void’ and inoperative ? The question further
resolves itself into the issue : To what extent this pre-
Constitution Act 7 of 1937 was repugnant to the Central Act,
and, in consequence stood repealed or altered ?
Act 7 of 1937 dealt with two distinct and separate matters
viz., (a) the regulation of production, supply and
distribution of sugar-cane, and (b) imposition and
collection of cesses and taxes in respect of sugarcane.
Matter (a) was referable to Entry 33 of the Concurrent List
(III) and matter (b) to Entry 52 of the State List (11) in
the 7th Schedule of the Constitution which corresponds to
Entry 49 of the Provincial Legislative List (List II) of the
Government of India Act, 1935. The Central Act 10 of 1955
related to matter (b) only. ]Bihar Act 7 of
(1) [1969] 1 S.C.R. 633.
318
1937 and Bihar Act 7 of 1955 which purported to reenact the
former permanently, in so far as it provided for regulation
of production, supply and distribution of sugarcane a matter
falling under Entry 33 of the Concurrent List- was repugnant
to the Central Act 10 of 1955, and, in view of Article 254
of the Constitution, to the extent of that repugnancy or
inconsistency would be void. In the light of Article 372 of
the Constitution read with s. 16(1) (b) of the Central Act,
the Bihar Act would be deemed to have been repealed with
effect from April 1, 1955, only in so far as, it controlled
or authorised the control of the production, supply and
distribution of, and trade and commerce in sugar-cane. The
taxing provisions of the Bihar Act were not in any way
repugnant to the Central Act or any other law passed by
Parliament. Those taxing provisions, as already noticed,
fall under Entry 52, List II and that was why s.16 of the
Central Act confined the repeal only to those provisions
which were covered by Entry 33, list Ill. The taxing
provisions of the Bihar Act, therefore, never lost their
validity and continued to be in force. The notification
issued under the Bihar Acts of 1937, (and continued under
the Acts of 1955 and 1963), imposing the tax or cess, also
remained operative during the period in question,. till it
was replaced by another notification issued on January 12,
1968 under the Ordinance 3 of 1968. It is therefore,
incorrect to say that there was any period, much less in
January 1968, during which the tax. was levied without the
authority of law.
Mr. Chatterjee, however, contended that the Patna High Court
had in A. K. Jain’s case (supra) struck down the Bihar Act 7
of 1937 in its entirety and that decision was affirmed in
appeal by this Court. In this connection he has invited our
attention to the observations of the High Court in A. K.
Jain’s case and in Belsand Sugar Company’s case (supra).
The observations in question in A. K. Jain’s case are
"Assuming here that Bihar Act 7 of 1937 ’is
severable and can be bifurcated into two
parts, one dealing with the control of sugar
industry, a topic falling under Entry 52 of
List I and the other dealing with sugarcane, a
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 10
topic, as held by me above, falling under
Entry 33 of List III, it follows that the
Central Parliament was competent under Article
246 to repeal law in relation to sugarcane and
thus the Bihar Act and the Rules in relation
to sugarcane stood repealed and became
unenforceable in accordance with the
provisions of Article 372 of the
Constitution."
The above remarks were reechoed by the same
High Court Belsand Sugar Co’s case thus :
"The State Legislature.......... was not
competent to enact...... and. to extend the
life of even the severable part of Bihar Act 7
of 1937, without taking recourse to the proce-
dure prescribed in clause (2) of Article 254
of the Constitution, but, unfortunately, Bihar
Act 7 of 1955 did not receive the assent of
the President, and, therefore, being repugnant
to certain provisions of the Central Act, it
could not have any effect, and it was void on
this ground as well."
319
The observations extracted above, though very widely
expressed, must be confined to, the precise points for
determination that had arisen in those cases. These
observations were apparently made in the context of those
matters in the Bihar Act which were either referable to
Entry 52, Union List or Entry 33, Concurrent List. In
neither of those cases, the High Court, was concerned with
the validity of the taxing provisions of the Bihar Act,
covered by Entry 52 of the State List. In A. K. Jain’s case
(supra), the only question that fell for determination was,
whether Sections 3 and 7 of the Central Act IO of 1955, and
Clause 3 (iii) of the Sugar Control Order 1955 issued under
that Act, were valid and within the legislative competence
of Parliament. It was contended that the regulation of
price of sugarcane was expressly dealt with by Bihar Act 7
of 1937 and the action taken against the petitioners by the
police and the Magistrate was without jurisdiction being in
contravention of Bihar Act and the rules framed thereunder.
Thus only that part of the Bihar Act came up for
consideration which related to Entry 33 of the Concurrent
List and which only could be said to be inconsistent with
the Central Act. No question of the validity of the taxing
provisions of the Bihar Act arose in that case.
Even the High Court found that the matters relatable to
Entry 33, Concurrent List were severable from the other
provisions of the Act. Before us also, it has not been
seriously urged that the taxing provisions of the Bihar Act
were so interwoven and inextricably connected with the
provisions referable to Entry 33 List III, that the whole
Act would stand or fall together. There was no competition
or collision between the taxing provisions of the Bihar Act
and, those of the Central Act. The two exist side by side
and each remains operative in its own distinct field without
interfering with the other.
It will bear repetition that the taxing provisions of the
Bihar Act were advisedly kept out of the purview of s. 16(1)
(b) of the Central Act which repealed the State laws only in
so far as they controlled or authorised control of the
production, supply and distribution of sugarcane. The
taking provisions of the Bihar Act therefore were neither
rendered inoperative by Article 254(1), nor repealed or
altered by the competent Legislature within the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 10
contemplation of Article 372 of the Constitution.
It is important to recall that when A. K. Jain’s case came
up in appeal, this Court, did not endorse the sweeping
proposition sought to be spelled out by the petitioners from
the wide language used by the High Court in the extracts
above. The only reference to the Bihar Act, made by this
Court, was as follows
"..... Sub-rule (3) of Rule (3) specifically
provides that unless there is an I agreement
in writing to the contrary between the parties
the purchaser shall pay to the seller the
price of the sugarcane purchased within 14
days from the date of the delivery of the
sugarcane. This is a specific mandate. If
the Bihar Act provides anything to the
contrary the same must be held to have been
altered in view of Article 372 of the
Constitution (emphasis added)
320
Since the taxing provisions of the Bihar Act do not contain
"anything contrary" to the Central Act, they could not in
the light of the observations of this Court, be held to have
been altered in view of Article 372. Indeed, as pointed out
already, the Court in that case was not at all concerned
with the taxing provisions of the Bihar Act.
In view of the above discussion the conclusion is
inescapable that the taxing provisions of the Bihar Act 7 of
1937, as re-enacted permanently by Bihar Act 7 of 1955,
continued to be operative and validly in force at all
material times, even after the enactment of the Central Act.
Further, the successive Ordinances promulgated by the
Governor validated by way of abundant caution those taxing
provisions or anything done thereunder.
It is well-settled that within its competence, a Legislature
has the, power to make a law imposing a tax retrospectively
or validate defective laws by subsequent legislation, or
even past unlawful collections, the power of validation
being ancillary to and included in the power to legislate on
a particular subject.
We have extracted earlier in this judgment, such validating
provisions in s. 66 of the Bihar Ordinance 4 of 1969 and s.
66(1) of the President’s Act 8 of 1969. The language of
these provisions is of the widest amplitude; and, even if it
is assumed that the Central Act had cast any doubt on or
introduced any infirmity in the taxing provisions of the
State Act, the same had been removed or cured by s. 66(1) of
the President’s Act which not only nullifies the effect, if
any, of the judgment of the High Court on the taxing
provisions of the Bihar Act 7 of 1937, but also validates
the imposition, assessment or collection of all cesses and
taxes imposed under any state law with retrospective effect
as if the President’s Act had been in force at all material
times including the period in question i.e. of January 1968.
The validity of the impugned notification and the cess and
tax imposed thereunder has to be judged with reference to
the successive Ordinances and finally to the President’s
Act. By virtue of the legal fiction introduced by the
validating provision in s. 66(1), the impugned notification
will be deemed to have been issued not necessarily under the
Ordinance No. 3 of 1968 but under the President’s Act,
itself, deriving its legal force and validity directly from
the latter.
For the foregoing reasons, we negative the contentions of
the petitioners and dismiss this petition with costs.
V.P.S. Petition dismissed.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 10
321