Tax validation cannot override court orders: reassessment may cure defects, but refund withholding without lawful basis is unconstitutional.

Section 152A of the Bombay Provincial Municipal Corporations Act was construed as a validating and reassessment provision: it allowed reassessment of earlier property tax periods and adjustment of tax already collected against the lawful amount found due, but it did not authorise retention of sums illegally collected under assessments already set aside without first making a valid reassessment. The amended sub-section (3), which required withholding refunds notwithstanding any court judgment or order, was held unconstitutional because the legislature cannot nullify judicial decisions by command; it must cure the defect in the taxing law through a valid retrospective amendment within its competence. The challenged refund-withholding provision was struck down and refund ordered.

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Issues: (i) Whether section 152A of the Bombay Provincial Municipal Corporations Act, 1949 authorised the Municipal Corporation to retain amounts illegally collected as property tax pending reassessment. (ii) Whether sub-section (3) of section 152A, introduced by the Ordinance, was constitutionally valid.

Issue (i): Whether section 152A of the Bombay Provincial Municipal Corporations Act, 1949 authorised the Municipal Corporation to retain amounts illegally collected as property tax pending reassessment.

Analysis: The provision was construed as a validating and reassessment measure. It enabled reassessment of property tax for earlier years under the amended law and permitted adjustment of tax already collected against the amount lawfully found payable on reassessment. It did not, by itself, confer a general power to retain sums collected under assessments already struck down by court orders without first making a lawful reassessment.

Conclusion: Section 152A did not authorise retention of the illegally collected tax amounts.

Issue (ii): Whether sub-section (3) of section 152A, introduced by the Ordinance, was constitutionally valid.

Analysis: The new sub-section directed withholding of refund notwithstanding any judgment, decree or order of a court. That was treated as a direct attempt to neutralise judicial decisions rather than to remove the legal basis of those decisions by a valid retrospective amendment. A legislature may validate tax only by curing the defect and re-enacting the law within its competence, not by commanding disobedience to court orders. The provision was also seen as authorising collection of forced loans, which was impermissible.

Conclusion: Sub-section (3) of section 152A was unconstitutional and was struck down.

Final Conclusion: The challenged refund-withholding provision could not stand, and the taxpayers were entitled to refund with costs.

Ratio Decidendi: A legislature may validate an invalid tax only by removing the defect in the taxing law and re-enacting it retrospectively within legislative competence; it cannot simply declare that a court's judgment shall be ineffective or direct the State instrumentality to disregard it.

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