Supreme Court upholds retro taxation - again
IN the latest case mentioned above (), there was also a challenge to the retrospective effect given to the Tax Entry by arguing that such a move is violative of Article 265 of the Constitution of India as subjecting the assessees to such a tax from retrospective effect is confiscatory in nature and, therefore, unconstitutional. The Supreme Court observed that the principle that legislature had the power to legislate with retrospective effect had been reiterated by the Supreme Court time and again. The Court mentioned a few orders:
1. National Agricultural Co-operative Marketing Federation of India Ltd. and Anr. v. Union of India - (),
2. Shri Prithvi Cotton Mills Ltd. and Anr. v. Broach Borough Municipality and Ors. - (),
3. Indian Aluminium Co. etc. etc. v. State of Kerala and others,
4. HiralalRattanlal etc. etc. v. State of U.P. and Anr. etc. etc. and
5. Union of India (UOI) and Anr. v. Raghubir Singh (Dead) by Lrs. Etc. ().
In Ujagar Prints v. Union of India, - , the Supreme Court held, "A competent legislature can always validate a law which has been declared by courts to be invalid, provided the infirmities and vitiating in factors noticed in the declaratory judgment are removed or cured. Such a validating law can also be made retrospective.
The Supreme Court had in another judgement observed, "the source of the legislative power to levy sales or purchase tax on goods is Entry 54 of the List II of the Constitution. It is well settled that subject to Constitutional restrictions a power to legislate includes a power to legislate prospectively as well as retrospectively. In this regard legislative power to impose tax also includes within itself the power to tax retrospectively."