Retrospective tax amendment failed where the widened business definition lacked clear retrospective effect for earlier turnover.

The amended definition of "business" in the Madras General Sales Tax (Second Amendment) Act, 1964 was held not to operate retrospectively, because the validating provision did not itself supply a retrospective legal basis and the amending Act contained no clear language extending the wider definition to earlier periods. The original definition in the 1959 Act therefore continued to govern the assessment year in question, with the result that turnover from the fair price shop and canteen could not be included in the taxable turnover for 1960-61. A validation clause can cure a levy only when the defect is removed by retrospective legislation, which was absent here.

---

---

Issues: Whether the amended definition of "business" in the Madras General Sales Tax (Second Amendment) Act, 1964 operated retrospectively so as to bring the turnover from the fair price shop and canteen within the taxable turnover for the assessment year 1960-61.

Analysis: The original definition of "business" in Section 2(d) of the Madras General Sales Tax Act, 1959 covered trade, commerce, manufacture, or an adventure or concern in the nature of trade, commerce or manufacture. The Second Amendment Act, 1964 substituted a wider definition and a validating provision in Section 9. The validating provision did not, by itself, make the substituted definition retrospective. The substantive definition was amended only prospectively, and no language in the amending Act showed that the new definition was intended to operate retrospectively. A validation clause can save a levy only where the defect is removed by a retrospective legal basis, which was absent here.

Conclusion: The amended definition of "business" did not apply retrospectively, and the turnover from the fair price shop and canteen could not be included in the taxable turnover for the period in question.

---