Retrospective tax validation on processed foodgrains restored purchase tax liability and overrode the earlier contrary interpretation.

Retrospective validation under the Uttar Pradesh Sales Tax (Amendment and Validation) Act, 1980 restored purchase tax liability on split or processed foodgrains, including broken dal, under section 3-D of the Uttar Pradesh Sales Tax Act, 1948. By renumbering the earlier explanation and reintroducing Explanation II for the relevant assessment period, the Legislature deemed processed and unprocessed foodgrains to be distinct commodities and removed the basis of the contrary judicial view. The effect was to affirm taxability at the first purchase point and negate the earlier position that such processed goods had ceased to be taxable.

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Issues: Whether split or processed foodgrains, including broken dal, were liable to purchase tax under section 3-D of the Uttar Pradesh Sales Tax Act, 1948 in view of the retrospective re-introduction of Explanation II by the Uttar Pradesh Sales Tax (Amendment and Validation) Act, 1980.

Analysis: The controversy turned on the effect of the successive amendments to section 3-D and, in particular, the retrospective validation enacted in 1980. The earlier view that the explanation supporting taxability had ceased to operate was displaced by the later amendment, which expressly renumbered the existing explanation and reinserted Explanation II for the relevant assessment period. By retrospectively declaring split or processed foodgrains to be different from unsplit or unprocessed foodgrains, the Legislature removed the basis of the contrary view and restored taxability at the first purchase point.

Conclusion: The split or processed dal purchased by the respondent was liable to purchase tax and the contrary view taken by the High Court could not stand.

Final Conclusion: The appeal succeeded, the impugned order was set aside, and the taxability of the processed foodgrains for the relevant period was affirmed on the basis of the validating amendment.

Ratio Decidendi: A Legislature may retrospectively validate tax liability by removing the basis of an earlier judicial interpretation and by deeming processed goods to be distinct from their unprocessed form for the relevant period.

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