Retrospective tax amendment upheld where Legislature cured the defect in the manufacture definition and validated revenue collection.

The retrospective amendment to the definition of "manufacture" in section 2(17) of the Bombay Sales Tax Act was upheld because the Legislature could validly amend the charging provision retrospectively and cure the defect identified by the earlier interpretation excluding lacquering of polyester film. A validating amendment is not an unconstitutional legislative overruling where it alters the statutory basis of the prior decision and removes the flaw on which that decision rested. In the absence of constitutional prohibition or want of legislative competence, retrospective taxing legislation is permissible. The challenge to the amendment therefore failed.

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Issues: Whether the retrospective amendment to the definition of "manufacture" in section 2(17) of the Bombay Sales Tax Act, 1959, by Maharashtra Act No. 9 of 1997, was invalid as an impermissible legislative overruling of an earlier judicial decision and as beyond the Legislature's power to enact retrospective taxing law.

Analysis: The amendment was made after the court had held that lacquering of polyester film was not manufacture within the unamended definition. The Legislature was competent to amend the charging definition retrospectively and to remove the flaw that had led to that interpretation. A validating amendment does not amount to an unconstitutional reversal of a judicial decision if the legislative basis of the earlier decision is altered and the defect in the law is cured. Retrospective operation is permissible in the absence of constitutional prohibition or lack of legislative competence. The amendment was enacted to protect the revenue already collected and to bring lacquering of polyester film expressly within the statutory definition of manufacture.

Conclusion: The retrospective amendment was upheld and the challenge failed; the petition was dismissed.

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