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Issues: (i) whether the retrospective amendments to the Entry Tax Act could validly take away the exemption previously available on whole pulses later converted into split pulses and sold outside the State or in the course of inter-State trade or commerce; (ii) whether the levy was invalid because whole and split pulses were declared goods and the tax exceeded the ceiling under the Central Sales Tax Act, 1956; and (iii) whether assessments that had become final could be reopened in the light of the amended Entry Tax Act.
Issue (i): Whether the retrospective amendments to the Entry Tax Act could validly take away the exemption previously available on whole pulses later converted into split pulses and sold outside the State or in the course of inter-State trade or commerce.
Analysis: The amendments deleted the words linking the exemption clauses to section 50 of the Sales Tax Act and were given retrospective effect. The Court held that retrospective levy is not invalid merely because dealers may not be able to pass on the tax burden in past transactions. The levy under the Entry Tax Act is on entry of goods into a local area for consumption, use or sale therein, and not on the sale itself. Once the amended provisions removed the earlier linkage, the petitioners could no longer claim that whole pulses entering the local area and later converted into split pulses continued to enjoy the exemption.
Conclusion: The retrospective amendments were upheld and the exemption claim failed.
Issue (ii): Whether the levy was invalid because whole and split pulses were declared goods and the tax exceeded the ceiling under the Central Sales Tax Act, 1956.
Analysis: The Court held that sections 14 and 15 of the Central Sales Tax Act, 1956 could not be used to strike down the entry tax provisions because the levy was on entry of goods into a local area, not on sale or purchase. The earlier view treating whole and separated pulses as one commodity for exemption purposes depended on the unamended wording that linked the Entry Tax Act to section 50 of the Sales Tax Act. After the amendment, whole pulses converted within the local area into split pulses could not be treated as the same goods for claiming exemption. The ceiling on tax applicable to declared goods under the Central Sales Tax Act, 1956 did not invalidate the impugned entry tax provisions.
Conclusion: The challenge based on declared goods and the tax ceiling was rejected.
Issue (iii): Whether assessments that had become final could be reopened in the light of the amended Entry Tax Act.
Analysis: The Court found no reason why completed assessments could not be revised in accordance with the amended Entry Tax Act. The objection that final assessments barred further action under the relevant revisional provision was not accepted.
Conclusion: The challenge to reopening or revision of assessments was rejected.
Final Conclusion: The constitutional challenge to the retrospective entry tax amendments and the connected challenge to reassessment failed, and the levy was sustained in full.
Ratio Decidendi: Retrospective tax legislation is valid if within legislative competence, and the statutory character of an entry tax on entry of goods into a local area cannot be defeated by invoking declared-goods restrictions applicable to sales tax on sale or purchase.
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