Retrospective taxing law upheld where a fresh enactment cured the constitutional defect and validated prior collections.

The Supreme Court upheld the constitutional validity of the Orissa Taxation on Goods carried by Roads or Inland Waterways Act, 1968. It held that a legislature competent on the subject may enact a retrospective taxing law and may validate prior assessments and collections once the constitutional defect is cured by a fresh enactment. The 1968 Act was treated as a new taxing statute with retrospective effect, not a mere declaration that an invalid law was valid. Its retrospective operation did not amount to colourable legislation or an impermissible exercise of judicial power, and the levy and validation were sustained.

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Issues: Whether the Orissa Taxation (on Goods carried by Roads or Inland Waterways) Act, 1968 was constitutionally valid, including whether retrospective levy and validation were permissible after obtaining Presidential sanction under the Constitution, and whether the enactment amounted to colourable legislation or an encroachment on judicial power.

Analysis: The Act of 1968 was introduced after obtaining the previous sanction of the President and was enacted as a fresh taxing statute with retrospective effect. The charging provision imposed the tax anew, while the validating provision deemed prior assessments and collections under the earlier enactment to be valid under the 1968 Act. A legislature competent to legislate on the subject may enact retrospective law and may also validate earlier actions once the constitutional defect has been cured. The Act did not merely declare an invalid law to be valid; it removed the defect and created a fresh legal basis for the levy. The retrospective operation of the statute did not make it colourable, nor did it amount to an impermissible exercise of judicial power.

Conclusion: The challenge to the constitutional validity of the 1968 Act failed, and the levy and validation under that Act were upheld against the assessee.

Final Conclusion: The retrospective taxing enactment was sustained as a valid exercise of legislative power, and the appeals were dismissed.

Ratio Decidendi: A legislature competent on the subject may enact a retrospective taxing law and validate earlier transactions or assessments if the constitutional defect is cured and a fresh legal basis for the levy is created; such validation does not, by itself, constitute colourable legislation or judicial encroachment.

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