Retrospective validating tax legislation upheld where the municipal levy fell outside the statutory ceiling and defects were cured.

The Provincial Legislature and the Governor acting as a legislature could enact retrospective validating legislation, and the Khandwa Municipality (Validation of Tax) Act, 1941 was within that power. Section 142-A of the Government of India Act, 1935 did not invalidate the measure, because it only imposed a ceiling of fifty rupees per annum on amounts payable after 31 March 1939 and the impugned tax related to a period ending on 31 March 1938. The Act validly cured the defect in the earlier municipal levy, and the requisite assent and concurrence were obtained, so the challenge to the tax failed.

---

---

Issues: Whether the Khandwa Municipality (Validation of Tax) Act, 1941 was within the legislative competence of the Governor and validly retrospectively validated the municipal tax despite section 142-A of the Government of India Act, 1935.

Analysis: The constitutional scheme preserved the plenary power of the Provincial Legislature and of the Governor acting as a legislature to enact retrospective and validating laws. Section 142-A of the Government of India Act, 1935 prevented provincial laws on professions, trades, callings and employments from being invalid merely because they related to income-tax, and it imposed a ceiling of fifty rupees per annum only in respect of amounts payable after 31 March 1939. The impugned validating Act operated on a tax period ending on 31 March 1938 and therefore did not offend the statutory limit. The Act merely cured the defect in the earlier levy and was enacted with the requisite assent and concurrence.

Conclusion: The validating Act was held to be within power and valid, and the challenge to the tax failed.

---