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of <h1>Retrospective sales tax on furnace oil and non-lubricating mineral oils: validity of retrospective validating amendment upheld, relief denied.</h1> Validity of retrospective imposition of a single-point sales tax on furnace oil and other non-lubricating mineral oils is examined as a corrective ... Validity to impose sales tax with retrospective effect - retrospective imposition of a single point tax on furnace oil and other non-lubricating oils for the period prior to January 5, 1968 - violated articles 14 and 19 of the Constitution - Whether the provisions of the Madras General Sales Tax (Third Amendment) Act, 1967 (Act No. 19 of 1967) are invalid on the ground that they seek to impose sales tax with retrospective effect in an unreasonable manner? Held that:- The tax levied by entry 47-A, in our opinion, was not a fresh tax. It seems, as mentioned earlier, that the Legislature had intended as a result of the change made in entry 47 by Act 7 of 1964 to levy tax on sale of mineral oils of all kinds, including non-lubricants, at the rate mentioned in that entry. As the language used by the Legislature in that entry was found by the High Court to be not appropriate for levying tax on sale of non-lubricant mineral oils, the amending Act was passed by the Legislature to rectify and remove the defect in the language found by the High Court, so that the tax on sale of non-lubricant mineral oils might be levied at the rate specified in entry 47 from April 1, 1964, when Act 7 of 1964 came into force. It is axiomatic that the Government needs revenue to carry on the administration and fulfil its obligation to the citizens. For that purpose it resorts to taxation. The object of such an enactment is to remove and rectify the defect in phraseology or lacuna of other nature and also to validate the proceedings, including realisation of tax, which have taken place in pursuance of the earlier enactment which has been found by the court to be vitiated by an infirmity. Such an amending and validating Act in the very nature of things has a retrospective operation. The fact that a dealer is not in a position to pass on the sales tax to others does not affect the competence of the Legislature to enact a law imposing sales tax retrospectively because that is a matter of legislative policy. The attack on the validity of section 3 of that Act was repelled and it was held that the Parliament could, in exercise of its legislative competence, pass a law retrospectively validating the collections made under the State statutes. The present case is on a stronger footing from the point of view of the respondents because we are dealing in this case with retrospective legislation made by the same Legislature which had enacted the earlier law. We are, therefore, of the opinion that the impugned provisions are a valid piece of legislation and do not contravene article 19 of the Constitution. 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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