TaxTMI 
TaxTMI 
1975 (4) TMI 143
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....ous grounds in the petitions, a validating statute by Parliament transforming them into Central legislation, as will be presently explained. The subject of the litigation is minor minerals and the right of the petitioners adversely affected by the impugned legislation, is to quarry stones etc., on the strength of leases granted to them by erstwhile proprietors whose ownership vested in the State by virtue of the Bihar Act. By the combined operation of the second proviso to Section 10(2) of the Bihar Act and Rule 20(2) (framed by the State Government) of the Bihar Miner Mineral Concession Rules, 1964 (hereinafter called the Rules) the petitioners were called upon to pay certain rents and royalties in respect of mining operations, but the power of the State, clothed by these provisions, was put in issue in the first round of litigation by lessees of quarries, which culminated disastrously against the State in Baij Nath Kedia v. State of Bihar [1970] 2 SCR 100. This Court, in that case, held that the Bihar Legislature had no jurisdiction to enact the second proviso to Section 10(2) of the Bihar Act, because it went further to hold that Section 15 of the Central Act, read with Section ....
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....1950), as amended by the Bihar Land Reforms (Amendment) Act, 1964 (Bihar Act IV of 1965) and by the Bihar Land Reforms (Amendment) Act, 1965 (Bihar Act VI of 1965), and two other sections, namely, Sections 10-A and 31, of the Bihar Land Reforms Act, 1950, as amended by the various amending Acts, are mentioned. Sub-rule (2) of Rule 20 of the Bihar Minor Mineral Concession Rules, 1964, as inserted by the Bihar Minor Mineral Concession (First Amendment) Rules, 1964, published under the Bihar Government Notification No. A/MM-109964 (pt.) 7700/M, dated the 19 December, 1964, in the Gazette of Bihar (Pt. II), dated the 30 December, 1964 is also mentioned therein. 2. The legal question canvassed before us is as to whether the Amending Act in question has been an exercise in futility because of an unconstitutional essay and foggy drafting or has achieved the purpose pet by Parliament which is transparent from the legislative history. Shri A. K. Sen, counsel for the petitioner, has turned the focus mainly on one or two deficiencies in the enactment of the Act by Parliament. Shri Sen's submission is that notwithstanding the validating measure the right claimed by the State to alter th....
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.... the delegate of Parliament. Faced with a demand form higher levy put forward by the State which had been armed by the amendment of the Land Reforms law and the rules under Section 15 of the Central Act, mineral prospectors and quarries moved petitions under Article 226 of the Constitution in the Patna High Court, Although those petitions were dismissed, appeals were carried to this Court which, as earlier stated, ended in success. It is important to note the reasons which weighed with this Court in striking down the two pieces of legislation, one amending the Bihar Act and the other, adding a Sub-rule under the Central Act, so that an insight into the infirmities of the said legislations may be gained and the need and object of the validation appreciated. 6. Hidayatullah, C. J. in Baij Nath Kedia [1970] 2 SCR 100, speaking for the Court, pointed out that the declaration contemplated by Entry 54 of List I was contained in Section 2 of Act 67/57 and thus the Central Government assumed control over regulation of mines and mineral development to the extent provided in the Central Act. Since Section 15 of the Central Act went on to state that the State Government may make rules for ....
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....rity may make interpretation surer if light from dependable sources were to beam in, the Court may seek such aid. What has been described as the sound system of construction, excluding all but the language of the text and the dictionary as the key, hardly holds the field especially if the enactment has a fiscal or other mission, its surrounding circumstances speak and its history unfolds the mischief to be remedied. The Court, in its comity with the Legislature, strives reasonably to give meaningful life and avoid cadaverous consequence. We have set out the story of the rebirth, as it were, of the law of minor mineral royalty levy to drive home the propriety of this method of approach. No doubt, there is some remissness in the drawing up of what professes to be a validating law and the neglected art of drafting bills is in part the reason for subtle length of submissions where better, skill could have make the sense of the statute luscious and its validity above-board. Informed by a realistic idea of shortfalls in legislative drafting and of the social perspective of the statute but guided primarily by what the Act has said explicitly or by necessary implication we will examine the....
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....principle which precludes either Parliament or a State legislature from adopting a law and the future amendments to the law passed respectively by a State legislature or Parliament and incorporating them in its legislation. At any rate, there can be no such prohibition when the adoption is not of the entire corpus of law on a subject but only of a provision and its future amendments and that for a special reason or purpose. 13. The kernel of Gwalior Rayon [1974] 94 ITR 204 (SC) is the ambit of delegation by Legislatures, and the reference to legislation by adoption or incorporation supports the competence and does not contradict the vires of such a process-not an unusual phenomenon in legislative systems nor counter to the plenitude of powers Constitutional law has in many jurisdictions conceded to such instrumentalities clothed with plenary authority. The Indian legislatures and courts have never accepted any inhibition against or limitation upon enactment by incorporation, as such. 14. The dispute is not whether Parliament can legislate into validity a State Act which is outside the State List. If Section 2 of the impugned Act merely validates invalid State law by Parliamen....
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....long provisions in respect of the recovery of the cess, it would be more convenient to make a compendious provision such as is contained in Section 3. The plain meaning of Section 3 is that the material and relevant provisions of notifications, orders and rules issued or made thereunder are included in Section 3 and shall be deemed to have been included at all material times in it. In other words, what Section 3 provides is that by its order and force, the respective cesses will be deemed to have been recovered because the provisions in relation to the recovery of the said cesses have been incorporated in the Act itself. The command under which the cesses would be deemed to have been recovered would, therefore, be the command of Parliament, because all the relevant sections, notifications, orders and rules have been adopted by the Parliamentary statute itself. 16. No Parliamentary omnipotence to re-draw Legislative Lists in the VII Schedule can be arrogated to confer on the State competence to enact on a topic where it is outside its Lists. But if Parliament has the power to legislate on the topic, it can make an Act on the topic by any drafting means, including by referential l....
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....t even though Article 255 may not have been complied with by the earlier Finance Acts, it is competent to pass Section 4 whereby it will prescribe that the failure to comply with Article 255 does not really matter, and the assent of the President to the Act amounts to this that the President also agrees that the Legislature is empowered to day. that the infirmity resulting from non-compliance with Article 255 does not matter. In our opinion, the Legislature is incompetent to declare that the failure to comply with Article 255 is of no consequence; and, with respect, the assent of the President to such declaration also does not serve the purpose which subsequent assent by the President can serve under Article 255.... x x x ...we have tried Section 4 as favourably as we can while appreciating the argument of the learned Advocate its own legislative process, the infirmity resulting from the non-compliance with Article 255 when it passed the earlier Finance Acts in question, and it was probably advised that such a legislative declaration would be valid and effective provided it received the assent of the President. In our opinion, the approach adopted by the Legislatu....
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....thin the competence of Parliament it seeks to do-validation by incorporation of a legislation on a topic within its purview. The device adopted of reenacting by validation is familiar to the Indian draftsman as to his Anglo-American counterpart. We have no doubt that incorporation of Acts is permissible in the absence of other disabling factors. It is one thing to say that retroactive validation by a competent legislature is impermissible; it is another to contend that there has not been a valid execution of this process or rather Parliament has not, in the present case, done what the draftsman ought to have done to effectuate the ostensible purpose of creating a new power to levy royalty and to alter the terms of the mining leases and then to give such newly created liability anterior effect. 23. The controversy now shifts to the effectiveness or otherwise of the legislative device in achieving retroactive validation. We have already noticed that the second proviso to Section 10(2) of the Bihar Act and Sub-rule (2) of Rule 20 of the Mineral Concession Rules, 1964 were void, as held by this Court. We have therefore to treat them as non est. We have already held that the Bihar Ac....
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.... withdrawn and confided to Parliament for legislation, the validating Act cannot fail for incompetence. But before a levy export facto is made, the legislation must first create the fiscal liability and then project it retrospectively. This is the broad trend of Sri A. K. Sen's submission. He relies heavily on Kamrup [1968] 1 SCR 561 to urge that a legislation cannot by a simple 'deeming device render valid what is unconstitutional. 26. The following observations were emphasized by counsel (p. 580 of the report): It is to be seen that the core of Assam Act 21 of 1960 is the deeming provision of Section 2 under which certain lands are deemed to be acquired under the earlier Act. As this deeming provision is invalid, all the other ancillary provisions fall to the ground along with it. The later Act is entirely dependent upon the continuing existence and validity of the earlier Act. As the earlier Act is unconstitutional and has no legal existence, the provisions of Act No. 21 of 1960 are incapable of enforcement and are invalid. 27. The ratio is apt to be misunderstood for, in its essence, the judgment merely holds that where the later Act is entirely dependent....
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.... under the earlier Act. The affected appellant assailed the new Act to the extent to which it purported to validate acts done under the earlier Act of 1949 which had been declared inoperative by the Court. The facet of that decision which relates to the point under discussion before us establishes that validation, with retrospectivity super-added, is perfectly competent for the Legislature. Gajendragadkar, J. (as he then was), observed: The argument is that there is no specific or express provision in the Act which makes the Act retrospective and so, Section 24, even if it is valid, is ineffective for the purpose of sustaining the impugned order by which possession of the appellant concern was obtained by the respondent: x x x Before dealing with this argument, it would be necessary to examine the broad features of the Act and understand its general scheme. The Act was passed because the Madras Legislature thought it expedient to provide for the acquisition of undertakings other than those belonging to and under the control of the State Electricity Board constituted under Section 5 of the Electricity (Supply) Act, 1948 in the State of Madras engaged in th....
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....validating provision and it clearly intends to validate actions taken under the relevant provisions of the earlier Act which was invalid from the start. The fact that Section 24 does not use the usual phraseology that the notifications issued under the earlier Act shall be deemed to have been issued under the Act, does not alter the position that the second part of the section has and is intended to have the same effect. x x x We have no doubt that Section 24 was intended to validate actions taken under the earlier Act and on its fair and reasonable construction, it must be held that the intention has been carried out by the legislature by enacting the said section. Therefore, the argument that Section 24 even if valid, cannot effectively validate the impugned notification, cannot succeed. 31. The ratio of West Ramnad (supra) is clear. The Legislature can retrospectively validate what otherwise was inoperative law or action. Unhappy wording, infelicitous expression or imperfect or inartistic drafting may not necessarily defeat, for that reason alone, the obvious object of the validating law and its retrospective content. 32. In fairness to counsel for the ap....
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.... 36. The first of these decisions Jawaharmal (supta) seemingly supports Mr. Sen's proposition, although the others fall wide off the mark. In West Ramnad (supra), referred to by counsel this Court made some observations which have relevance to the topic under discussion. There a legislative validation, retrospective in operation, was challenged. The latter legislation used the expression 'hereby declared'. The observations made by this Court in that connection are instructive and may be extracted: The second part of the section provides that the notifications covered by the first part are declared by this Act to have been validly issued ; the expression 'hereby declared' clearly means 'declared by this Act' and that shows that the notifications covered by the first part would be treated as issued under the relevant provisions of the Act and would be treated as validly issued under the said provisions. The third part of the section provides that the statutory declaration about the validity of the issue of the notification would be subject to this exception that the said notification should not be inconsistent with or repugnant to the provisions o....