Court validates Act, affirms 'manufacture' in bleaching/dyeing/printing processes. Parliament's amendments valid, no fundamental rights violation.

The court upheld the validity of the impugned Act, dismissing the writ petitions and civil appeals challenging it. The processes of bleaching, dyeing, and printing were held to constitute 'manufacture,' and the legislative amendments were found to be within the competence of Parliament. The retrospective application of the Act was also deemed not to violate the petitioners' fundamental rights. The judgments of the Bombay High Court were affirmed, while the judgments of the Gujarat High Court were overturned.

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Issues Involved:
1. Whether the processes conducted by the petitioner company amount to 'manufacture' under the Central Excises and Salt Act, 1944 prior to the 1980 amendment.
2. Whether the impugned Act is intra vires entry 84 of List I of the Seventh Schedule to the Constitution and, if not, whether it can be validated under entry 97 of List I.
3. Whether the impugned Act violates Article 14 or Article 19(1)(g) of the Constitution.

Detailed Analysis:

1. Whether the processes conducted by the petitioner company amount to 'manufacture' under the Central Excises and Salt Act, 1944 prior to the 1980 amendment.
The court examined whether the processes of bleaching, mercerising, dyeing, printing, and other processes carried out by the petitioner company on cotton and man-made fabrics amounted to 'manufacture' before the 1980 amendment. The petitioners argued that these processes did not bring into existence different and distinct goods commercially known as such and therefore did not constitute 'manufacture.' They relied on previous judgments including Union of India v. Delhi Cloth & General Mills, which defined 'manufacture' as bringing into existence a new substance with a distinctive name, character, or use. The court, however, found that processes like bleaching, dyeing, and printing indeed transformed the fabric into a commercially different article, thus amounting to 'manufacture.'

2. Whether the impugned Act is intra vires entry 84 of List I of the Seventh Schedule to the Constitution and, if not, whether it can be validated under entry 97 of List I.
The court examined the legislative competence of Parliament to enact the impugned Act under entry 84 of List I of the Seventh Schedule, which deals with duties of excise on tobacco and other goods manufactured or produced in India. The petitioners contended that the processes included in the definition of 'manufacture' by the impugned Act were not manufacturing processes and thus beyond the scope of entry 84. The court, however, held that the processes of bleaching, dyeing, and printing were not so alien to the concept of 'manufacture' that they could not be included within it. Additionally, the court opined that even if the impugned Act was not covered by entry 84, it would be valid under entry 97 of List I, which provides a residual power to legislate on matters not enumerated in any of the three lists.

3. Whether the impugned Act violates Article 14 or Article 19(1)(g) of the Constitution.
The petitioners argued that the retrospective effect of the impugned Act imposed unreasonable restrictions on their fundamental rights under Articles 14 and 19(1)(g). The court noted that retrospective taxation is a well-recognized legislative power and does not per se constitute an unreasonable restriction. The court also emphasized that the petitioners had already collected excise duties from consumers and that the retrospective effect was a means to cure inadvertent defects in the statute, which is permissible. The court found no particular feature of the legislation that created an unreasonable restriction on the petitioners' rights.

Conclusion:
The court upheld the validity of the impugned Act, dismissing the writ petitions and civil appeals challenging it. The processes of bleaching, dyeing, and printing were held to constitute 'manufacture,' and the legislative amendments were found to be within the competence of Parliament. The retrospective application of the Act was also deemed not to violate the petitioners' fundamental rights. The judgments of the Bombay High Court were affirmed, while the judgments of the Gujarat High Court were overturned.

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