Retrospective sales tax on furnace oil and non-lubricating mineral oils: validity of retrospective validating amendment upheld, relief denied.

Validity of retrospective imposition of a single-point sales tax on furnace oil and other non-lubricating mineral oils is examined as a corrective validating measure. The doctrine that an amending statute may operate retrospectively to rectify drafting defects and validate prior tax collections is applied; legislative competence to validate past collections is affirmed. The retrospective validation was held to be a legislative policy choice not infringing equal protection or freedom guarantees as challenged, and the impugned retrospective provisions were upheld as a valid exercise of power.

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Issues: Whether sections 2 and 4 of the Madras General Sales Tax (Third Amendment) Act, 1967, which recast entries in the First Schedule and validate past collections with retrospective effect, are invalid as imposing an unreasonable restriction on the right to carry on trade under Article 19(1)(g) of the Constitution and/or exceed legislative competence.

Analysis: The amendment split the original entry into items covering lubricating oils and a separate entry for other mineral oils, and retrospectively validated tax levied from 1 April 1964. Legislative power permits prospective and retrospective taxation and includes the subsidiary power to validate earlier collections by remedial legislation. Authorities and precedents establish that retrospective validating enactments intended to cure defects in phraseology or to preserve revenue are permissible where they do not alter the essential character of the tax so as to take it outside the legislative entry. Short periods of differing administrative practice do not necessarily create vested rights preventing validation. Policy considerations concerning revenue and the limited nature of the amendment (described as a curative or "small repairs" measure) support validity, and prior decisions cited uphold retrospective validation of tax statutes absent unreasonableness in violation of Article 19(1)(g).

Conclusion: The impugned provisions are valid and do not contravene Article 19(1)(g) or the legislative competence; the validation of past tax collections is upheld in favour of the Revenue.

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