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Issues: (i) Whether section 26(1) of the Bengal Finance (Sales Tax) Act, 1941, as amended to authorise rules with retrospective effect, was unconstitutional on the ground of excessive delegation or infringement of fundamental rights; (ii) Whether the amendment of rule 80(5)(ii) of the Bengal Sales Tax Rules, 1941, by notification dated 30th March, 1974, could validly operate retrospectively; (iii) Whether the retrospective amendment could revive the power to reopen assessments which had already become barred under the unamended rule.
Issue (i): Whether section 26(1) of the Bengal Finance (Sales Tax) Act, 1941, as amended to authorise rules with retrospective effect, was unconstitutional on the ground of excessive delegation or infringement of fundamental rights.
Analysis: The power to legislate retrospectively is within legislative competence, and vested rights may be affected by a valid enactment. The challenge based on article 19 was rejected because no fundamental right to evade tax can be claimed. The conferment of power on the State Government to make rules with retrospective effect was held to be express and clear, and therefore not an excessive delegation.
Conclusion: The amendment conferring retrospective rule-making power was upheld and the challenge failed.
Issue (ii): Whether the amendment of rule 80(5)(ii) of the Bengal Sales Tax Rules, 1941, by notification dated 30th March, 1974, could validly operate retrospectively.
Analysis: Subordinate legislation can operate retrospectively only if the parent statute expressly or by necessary implication authorises such operation. Section 26(1), as substituted, expressly empowered the State Government to make rules with retrospective effect, and the amendment was issued under that authority.
Conclusion: The retrospective amendment of rule 80(5)(ii) was held to be valid.
Issue (iii): Whether the retrospective amendment could revive the power to reopen assessments which had already become barred under the unamended rule.
Analysis: A retrospective amendment does not, by itself, revive a remedy that had already become time-barred unless the statute clearly so provides. Applying the principle against revival of barred proceedings, the amendment was construed as enlarging the revision period for assessments still open under the law, but not as reopening matters already barred when the notification was issued.
Conclusion: The notices seeking to reopen the assessments were invalid, and the assessee succeeded on this ground.
Final Conclusion: The court held that although retrospective rule-making power existed and the amendment to the rule was valid, it did not revive a barred right of revision, so the impugned reassessment notices could not stand.
Ratio Decidendi: A retrospective amendment to a taxing rule will not revive a power to reassess or revise where that power had already become barred under the unamended law, unless such revival is stated expressly or follows by necessary implication.
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