Retrospective sales tax levy on textiles upheld where goods were not declared goods during the relevant period.

The Supreme Court held that the Mysore Legislature had competence to validate and apply substituted section 5(5A) retrospectively so as to levy sales tax on textile turnover for a past period when textiles were not declared goods. Section 15 of the Central Sales Tax Act did not restrict the levy during that assessment period because the constitutional limitation applied only once the goods acquired declared-goods status. The later change in the legal character of textiles did not nullify the State's power to impose a retrospective tax for the earlier period. The retrospective levy was therefore valid, and the tax demand was confirmed.

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Issues: Whether the Mysore Legislature had competence to validate and apply the substituted section 5(5A) retrospectively so as to levy sales tax on textile turnover for the period when textiles were not declared goods, notwithstanding the restrictions in section 15 of the Central Sales Tax Act.

Analysis: The substituted provision was enacted to operate retrospectively and to levy tax on sales of textiles held in stock during the relevant assessment period. The constitutional restriction in section 15 of the Central Sales Tax Act applied only when the goods had acquired the status of declared goods. During the assessment period in question, textiles were not declared goods, and the State Legislature was competent to impose tax at the rates specified in the State Schedule. The later change in the legal character of textiles did not destroy the Legislature's power to enact a retrospective levy for the earlier period.

Conclusion: The retrospective levy under section 5(5A) was within legislative competence and was not invalid on the ground urged by the appellant.

Final Conclusion: The appeals failed, and the tax demand as sustained below stood confirmed.

Ratio Decidendi: A Legislature's power to enact a retrospective tax measure is tested by its competence to tax the relevant past period, and a later change in the goods' legal status does not invalidate a retrospective levy for a period when the goods were not subject to the later restriction.

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