2009 (7) TMI 1156

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....first petitioner (hereinafter referred to as, "the petitioner") is engaged in the business of buying polyester films and selling it after subjecting it to a process of "lacquering". In a proceeding under section 52 of the Sales Tax Act, the Deputy Commissioner of Sales Tax held that the chemical process of lacquering of the polyester film done by the petitioner amounted to a manufacture as defined under section 2(17) of the Sales Tax Act and therefore attracts sales tax. An appeal filed against the said order was dismissed. However, on a reference to this court, by an order dated February 2, 1995 See [1995] 99 STC 77 (Bom)., this court held that lacquering of a polyester film does not amount to manufacture within the meaning of section 2(17....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Maharashtra Act No. 9 of 1997, the Legislature added clause (d) to section 2(17) of the Sales Tax Act with retrospective effect from July 1, 1981. Clause (d) reads as under: "(d) Lacquering of polyester film." The petitioner has no grievance to the adding of clause (d). The petitioner challenges section 28 of the Maharashtra Act No. 9 of 1997 amending with retrospective effect section 2(17) of the Sales Tax Act, two grounds; viz., (i) the effect of amendment of section 2(17) of the Sales Tax Act is to give a go-by or to overrule a decision of the court rendered in S.T. Reference No. 42 of 1990 (Technova Graphic Systems Private Limited v. Commissioner of Sales Tax) on February 2, 1995 See [1995] 99 STC 77 (Bom). whereby this court has spe....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....been required to be refunded. In order to protect the Revenue and the tax collected which had already been spent on welfare activities of the State, the Legislature amended the definition of "manufacture" by amending section 2(17) of the Sales Tax Act. The Legislature did not overrule or reverse the decision of the court by amending section 2(17) of the Sales Tax Act. The Legislature only removed the flaw in the definition of "manufacture", on account of which lacquering of polyester films was held to be "not manufacture" by this court. It is settled principle of law that the Legislature cannot reverse or overrule a decision given by a court, but can amend the law so as to remove a flaw or lacuna in an Act which leads to a particular interp....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... court holds a tax to be invalidly imposed because the power to tax is wanting or the statute or the rules or both are invalid or do not sufficiently create the jurisdiction. Validation of a tax so declared illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are in fact removed and the tax thus made legal. Sometimes this is done by providing for jurisdiction where jurisdiction has not been properly invested before. Sometimes this is done by re-enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already collected to stand under the re-enacted law. Sometimes the Legislature gives it own meaning and interpretation of the law under which the tax was col....