Retrospective validating tax law applied to pending appeals, sustaining levy on circumstances and property despite constitutional challenge.

A retrospective validating statute that expressly barred challenges to the levy, refund claims, and enforcement of contrary decrees was treated as applicable to pending appeals, so the appellate court could give effect to the amended law and reverse a decree correct when passed. The tax on circumstances and property under the District Boards Act was also found not to be invalid under the limitation on professions, trades, callings or employments, because the validating amendment excluded such levies and the constitutional challenge under Article 276(2) failed. The challenge under the freedom to carry on trade or business likewise failed, as the levy was treated as indirect and reasonable on the facts.

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Issues: (i) Whether the appellate court could apply the retrospective amendment made by the Professions' Tax Limitation (Amendment and Validation) Act, 1949 to a pending appeal and thereby reverse a decree that was correct when passed. (ii) Whether the tax on circumstances and property levied under the District Boards Act was hit by the statutory limitation on professions, trades, callings or employments, by Article 276(2), or by Article 19(1)(g) of the Constitution of India.

Issue (i): Whether the appellate court could apply the retrospective amendment made by the Professions' Tax Limitation (Amendment and Validation) Act, 1949 to a pending appeal and thereby reverse a decree that was correct when passed.

Analysis: The amended Act was treated as having been inserted into the principal Act from the date of its original enactment. The court held that the legislative intent was to validate the levy retrospectively and to operate upon pending proceedings as well as concluded matters, because the Act expressly barred challenges to validity and claims for refund and directed that no decree or order for refund on the covered ground be enforced. The appellate jurisdiction under the Code of Civil Procedure was treated as wide enough to take account of such a change in law, and the appeal was regarded as a continuation of the suit in which the decree of the trial court was superseded by the appellate decree.

Conclusion: The retrospective validating amendment applied to the pending appeal, and the trial court's decree could be reversed on that basis.

Issue (ii): Whether the tax on circumstances and property levied under the District Boards Act was hit by the statutory limitation on professions, trades, callings or employments, by Article 276(2), or by Article 19(1)(g) of the Constitution of India.

Analysis: The tax was held to fall within the scope of the validating amendment, which excluded taxes on circumstances and property from the operation of the limitation in the Professions Tax Limitation Act, 1941. The constitutional challenge under Article 276(2) failed because the levy was covered by the proviso preserving earlier higher taxes. The challenge under the freedom to carry on trade or business also failed because the incidence of the tax was considered indirect and reasonable on the facts and the statutory restrictions governing the levy.

Conclusion: The tax was not invalid on any of the grounds urged, and the levy was upheld.

Final Conclusion: The appeal succeeded, the decree in favour of the plaintiff was set aside, and the suit stood dismissed with the tax levy sustained.

Ratio Decidendi: A retrospective validating statute that expressly negates challenges to the levy and refund claims may be applied by an appellate court to pending proceedings, and the appellate court may give effect to the law as amended when determining the relief to be granted.

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