Retrospective validating legislation governs pending tax appeals where the law is deemed operative at appellate decision time.

Retrospective validating legislation can govern a pending assessment dispute where the appeal has not been finally determined. The validating regulations deemed the Finance Act, 1939 to have come into force from earlier specified dates, so the appellate authorities had to decide the matter according to the law as retrospectively extended to the partially excluded area. The original income-tax order being made before the extension did not invalidate the later appellate determination. The assessment was therefore treated as legally valid, and the challenge to the validating regulations failed.

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Issues: Whether the assessment was valid in view of the Bihar Validating Regulations that retrospectively extended the Finance Act, 1939, to the partially excluded area, so as to govern an assessment and appeals that were pending when the validating legislation was enacted.

Analysis: The assessment proceedings had not concluded when the validating regulations were made, because the assessee had carried the matter in appeal and the dispute remained pending before appellate authorities. A tribunal deciding a pending appeal must apply the law in force at the time of its decision. The validating regulation expressly provided that the relevant Acts were to be deemed to have come into force from the specified earlier dates, with the result that the Finance Act, 1939, was treated as operative in the area when the appellate authorities dealt with the matter. The fact that the income-tax officer's original order pre-dated the extension of the Act did not render the later appellate determination invalid.

Conclusion: The assessment was held to be legally valid and the appellant's challenge to the validating regulations failed.

Ratio Decidendi: Where retrospective validating legislation is in force before the final appellate determination of a pending assessment dispute, the appellate court must decide the matter according to the law as retrospectively deemed to have been in operation.

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