Retrospective tax levy upheld where backward effect alone did not make the sales tax amendment unconstitutional.

A retrospective sales tax levy on exercise-books was challenged as unreasonable and discriminatory because it operated from an earlier date, but the SC held that a tax measure is not invalid merely for having backward effect. The Court found retrospective taxation to have been upheld in prior decisions and saw no constitutional infirmity in the U.P. Sales Tax (Amendment and Validation) Act, 1976 on that ground. The challenge to the validity of the amended levy therefore failed, and the validation of sales tax on exercise-books was upheld.

---

---

Issues: (i) Whether the retrospective levy of sales tax on exercise-books under the U.P. Sales Tax (Amendment and Validation) Act, 1976 was unreasonable or discriminatory.

Analysis: The retrospective levy was challenged as unconstitutional on the ground that it imposed tax with effect from an earlier date and operated harshly on dealers. The Court noted that retrospective levy of tax has been upheld in several decisions and found no merit in the contention that the impugned amendment was invalid on this ground.

Conclusion: The challenge to the validity of the retrospective sales tax levy failed and was rejected.

Final Conclusion: The appeals were dismissed, and the validation of the levy of sales tax on exercise-books was upheld.

Ratio Decidendi: A retrospective tax levy is not invalid merely because it operates with backward effect, and its validity will be sustained where the legislative measure is otherwise within power and not shown to be unconstitutional.

---