# [1977] 3 S.C.R. 714

- **Citation:** [1977] 3 S.C.R. 714
- **Court:** Supreme Court of India
- **Decided:** 1977-05-02
- **Case number:** c. A. No. 1810 of 1971
- **Bench:** M. H. Beg, Y. V. Chandrachud, P. N. Bhagvati, V. R. Krishna !Yer, N.1 L. Untwalla, S. Murtaza Fazal Ali Anu P. S. Kailasam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1977-3-s-c-r-714-7241
- **Pages:** 7

## Headnote

Orissa 1axation (On goods carried by Roads or Inland Watenvays) Act 8
of 1968-Sections 3 and 27-Constitutlonaf validity of.
C
The Orissa Taxation (On goods carried by Roads or Inland Waterways)
Act 7 of 1959 and the Orissa Taxation (On Goods carried by Road or Inland Waterways) Validation Act 18 of 1962 were struck down by this Court
on 10-8~1967 as invalid and it was held that the respondents were not entitled
tQ recover any tax from the appellants under the &foresaid Acts.
On March
26, 1968, the Orissa Taxation (On Goods carried by Roads or Inland Waterways) Act 8 of 1968 was passed after obtaining the previous- sanction of
the President under Art. 304 of the Constitution to the moving of the Bill,
imposing the same levy which it had unsuccessfully ait:tempted to levy under
D
: the Act of 1959 and to validate under the Act of 1962.
By section 1(3) of
the 1968 Act, the Act was to be deemed to have come into force on April
27, 1959 being the date on which the Act of 1959 had come into force.
Section 27 ot the Act provides that notwithstanding the expiry of the Act
of 1959 <M.ld notwithstanding anything contained in any judgment decree or
order of any court, all assessments made, all taxes imposed or realised, any
liability incurred or any action taken under the Act of 1959 shall be deemed
to have been validly made, imposed, incurred or taken under the corresponding
provisions of the Act 1968.
The claims of some of the appellants who had
E
asked for refund of the tax collected under the Act of 1962 which was held
unconstitutiona.1, having been refused by the Government, they filed wTit petitions in the Orissa High Court challenging the validity of the 1968 Act. The
Hieb Court dismissed the writ petitions.
F
G
H
In appeal to this <;;curt by special leave, the Court,
HELD : (I) The· impugned enactment is a valid exercise of legislative power
and is in no sense a fraud on the Constitution.
Since it is well established
that the povver to legislate carries with it the power to legislate retrospectively
as much as prospectively, the circumstance that an enactment operates entirely in the past and has no prospective life cannot affect the competence
of the· Legislature; to pass the enactment if it falls with.in the list on which
that competence can operate.
As regards the power to pass a validating Act,
that power is essentially subsidi:M)' to the legislative competence to pass a law
under an appropriate entry of the relevant list. [718 B-E]
Khyerbar! Tea Co. Ltd. v.· State of Assam [1964] 5 S.C.R. 975, applied.
(2) In the instant case, the St:"lte Legislature passed an independent enactmen~ in 1968. after complying with. the l.'Onstitutional requirements, but it gave
, l
to that enactment retrospective effect from the date. that! the 1959 Act had
1\,
come into force and it created a legal fiction which was permissible for it
to do, that all attions taken under the Act of '1959 shall be deemed to
have been taken under the Act of 1968. [717 F-G]
Jawaharmal v. State of Rajasthan [1966] I SCR 890, not applicable.
(3) If the vice from which an enactment suffers is cured by due compliance with the legal or constitutional requirement, the Legislature has compe-
\·
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M. L. JAIN v. ORISSA (Chandrachud, J.)
715
tence to validate the enactment and such validation does not constitute an enA
croachment on the functions of the judiciary. The validity of a validating; taxing
law depends upon \vhether. the legislature possesses the competence over the
subject-matter of the· law; whether in making the validation it has removed the
•
defect from which the earlier enactment suffered and whether it has made due and
adequate provision in the validating law for a va•lid imposition
of
the
tax.
(718 G·H]
Prithvi Cotton Mills v. Broach Borough Mu11icipality [1970] 1 SCR 388;
S
Tirc.th Rani Rajindra Nath v. State of U.P. A.LR. 1973 SC 405 and Govern·
nient of Andhra Pradesh v. Hindustan Mac/line Tools Ltd. (1975) Supp. SCR
394, referred to.
( 4) Jf any appe

## Text

714
A
•
SUPREME COURT REPORTS
MISRILAL JAIN ETC. ETC.
v .
STATE OF ORISSA & ANOTHER
May 2, 1977
(1977] 3 S.C.R.
B
[M. H. BEG, C.J., Y. V. CHANDRACHUD, P. N. BHAGVATI, V. R.
KRISHNA !YER, N.1 L. UNTWALLA, S. MURTAZA FAZAL ALI ANU P. S.
KAILASAM, JJ.}
Orissa 1axation (On goods carried by Roads or Inland Watenvays) Act 8
of 1968-Sections 3 and 27-Constitutlonaf validity of.
C
The Orissa Taxation (On goods carried by Roads or Inland Waterways)
Act 7 of 1959 and the Orissa Taxation (On Goods carried by Road or Inland Waterways) Validation Act 18 of 1962 were struck down by this Court
on 10-8~1967 as invalid and it was held that the respondents were not entitled
tQ recover any tax from the appellants under the &foresaid Acts.
On March
26, 1968, the Orissa Taxation (On Goods carried by Roads or Inland Waterways) Act 8 of 1968 was passed after obtaining the previous- sanction of
the President under Art. 304 of the Constitution to the moving of the Bill,
imposing the same levy which it had unsuccessfully ait:tempted to levy under
D
: the Act of 1959 and to validate under the Act of 1962.
By section 1(3) of
the 1968 Act, the Act was to be deemed to have come into force on April
27, 1959 being the date on which the Act of 1959 had come into force.
Section 27 ot the Act provides that notwithstanding the expiry of the Act
of 1959 <M.ld notwithstanding anything contained in any judgment decree or
order of any court, all assessments made, all taxes imposed or realised, any
liability incurred or any action taken under the Act of 1959 shall be deemed
to have been validly made, imposed, incurred or taken under the corresponding
provisions of the Act 1968.
The claims of some of the appellants who had
E
asked for refund of the tax collected under the Act of 1962 which was held
unconstitutiona.1, having been refused by the Government, they filed wTit petitions in the Orissa High Court challenging the validity of the 1968 Act. The
Hieb Court dismissed the writ petitions.
F
G
H
In appeal to this <;;curt by special leave, the Court,
HELD : (I) The· impugned enactment is a valid exercise of legislative power
and is in no sense a fraud on the Constitution.
Since it is well established
that the povver to legislate carries with it the power to legislate retrospectively
as much as prospectively, the circumstance that an enactment operates entirely in the past and has no prospective life cannot affect the competence
of the· Legislature; to pass the enactment if it falls with.in the list on which
that competence can operate.
As regards the power to pass a validating Act,
that power is essentially subsidi:M)' to the legislative competence to pass a law
under an appropriate entry of the relevant list. [718 B-E]
Khyerbar! Tea Co. Ltd. v.· State of Assam [1964] 5 S.C.R. 975, applied.
(2) In the instant case, the St:"lte Legislature passed an independent enactmen~ in 1968. after complying with. the l.'Onstitutional requirements, but it gave
, l
to that enactment retrospective effect from the date. that! the 1959 Act had
1\,
come into force and it created a legal fiction which was permissible for it
to do, that all attions taken under the Act of '1959 shall be deemed to
have been taken under the Act of 1968. [717 F-G]
Jawaharmal v. State of Rajasthan [1966] I SCR 890, not applicable.
(3) If the vice from which an enactment suffers is cured by due compliance with the legal or constitutional requirement, the Legislature has compe-
\·
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M. L. JAIN v. ORISSA (Chandrachud, J.)
715
tence to validate the enactment and such validation does not constitute an enA
croachment on the functions of the judiciary. The validity of a validating; taxing
law depends upon \vhether. the legislature possesses the competence over the
subject-matter of the· law; whether in making the validation it has removed the
•
defect from which the earlier enactment suffered and whether it has made due and
adequate provision in the validating law for a va•lid imposition
of
the
tax.
(718 G·H]
Prithvi Cotton Mills v. Broach Borough Mu11icipality [1970] 1 SCR 388;
S
Tirc.th Rani Rajindra Nath v. State of U.P. A.LR. 1973 SC 405 and Govern·
nient of Andhra Pradesh v. Hindustan Mac/line Tools Ltd. (1975) Supp. SCR
394, referred to.
( 4) Jf any appeal challenging an order of1 assessment is filed beyond the
period of lin1itation and the authority is satisfied that the apper.·1 could not
be filed "Within limitation for the reason that the Acts of 1959 and 1962
were held to be unconstitutional, the delay in filing the appeal can be con~
cloned under the second proviso to section 12 of the Act of 1968.
lf any
C
appeal fifed for challenging the order of <:-ssessment was withdrawn or not
pursued for the reason that the t"'O Acts were held unconstitutional, the
authority· concerned can pass appropriate orders reviving the appeal. [719 D-F]
Observation :
It is
hoped
that
Ari.
144A
introduced
by
the
42nd
Amendment wiJI engage the prompt attention of the Pz..rliament so that it may, by
so
that
it
may,
by
general
consensus,
be
so
amended
as
to
general consensus,
be
so amended
as
to
leave
to
the
court itself
])
the duty to decide how large a Bench should decide any particular
case.
A
court
which
has
large arrears
to
contend
with
has
now
to
undertake an unnecessary burden by 7 of its members assembling to
decide all sorts of oonsri.tutional questions, no matter what their weight or
worth.
Since Art. 13(3) (a) of the Constitution defines "law" to inc[ude
any Ordinance, Order, bye-law, rule, regulation, notification etc. having the
force of law, seven Judges of this C.Ourt may have to sit for detennining
any al)d every question as to the constitutional validity of even orders and
E·.
notifications issued by the Government, which have the force of l<JJW.
This
will inevitably cause great inconvenience and undue delay in
disposal
of
cases. f720' C-Dl
CIVIL APPELLATE JURISDICTION : c. A. No. 1810 of 1971.
(Appeal by Special Leave from the Judgment and Order dated 1.3.1971
ef the Orissa High Court in O.J.C. No. 1597 of 1968)
AND
Ii'
C. A. No. 1170 of 1972
(Appeal by Special Leave from the
Judgment
and Order
dated
8.3.1971 9f the Orissa High Court in 0. J.C. No. 316 of 1970)
AND
Civil Appeal No. 1981 of 1972
G
SAppeal by Special. Leav~ from
the
Judgment and Order dated
,:08.3.1971 of the Onssa High Court in 0. J. C. No. 1885 of 1968)
AND
Civil Appeal No. 1982 of 1972.
(Appeal by Special ~~ve !rom the Judgment and Order dated
28.6.1971 of the Onssa High Court in 0. J. C. No. 153 of 1971)
AND
Civil Appeal No. 1603 & 1604 of 1972
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716
SUPREME COURT REPORTS
[1977) 3 S.C.R.
(Appeal by Special Leave from the Judgment and Order dated
2.3.1971 of the Orissa High Court in O J C Nos 202 ·rnd 203 of
1969.)
. .
.
.
'
A. K. Se11, Bishamber Lal Khanna and Bishamber L"l for the
appellants in CA No: 1810/71.
B
A. K.Sen, (CA No. 40/72) H. R. Gokhale (CAs 1603-1604)
G?_bmd Das (CAs 1170, 198, 1982, SLPs and for the interveners)
B11oy Mohen(>', Mrs. Sunanda Bhandare, M. S. Narsimlwn,
A. K.
Mathur, A. K. Sharma and Miss Malini Poduval for the appellants in
CA Nos. 1170, 1981-1982, 1603-1604 of 1972 and CA No.
40172 and in the SLPs Nos. 305-310/72 and for the Interveners.
C
G. Rath, Adv. General Orissa and G. S. Chatterjee and R. K. Mehta
D
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for respondents in CAs 1810, 1170, 1981 1982, 1603-1604 and 40)
The Judgment. of the court was delivered by
CHANDRACHUD, J.-In 1959, the Orissa Legislature
enacted
the
Orissa Taxation (on Goods carried by Roads or Inland Waterways)
Act, 7 of 1959,_ the constitutionality of which was challenged by the
appellants on the ground that· the Bill leading to the Act was moved
without the previous sanction of the President of India, as required
by the proviso to Art. 304 of the Constitution. During the pendency
of the writ petitions filed by the appellants in the Orissa High Court,
the Orissa Legislature passed the Orissa Taxation (on Goods carrieu
by Roads or Inland Waterways) Validation Act, 18 of 1962, validating
the Act of 1959.
The High Court accepted the appellants' contention
that the Act of 1959 was unconstitutional but it dismissed
the Writ
petitions on the ground that the appellants were not entitled to any
relief as they had not challenged the Act of 1962 which had validated
the Act of 1959.
After the decision of the High Court, respondent
No. 2, the Tax Officer, assessed tax in varying amounts for different
quarters on the goods carried by the appellants by road.
The appellants then filed fresh writ petitions under Art. 226 of the Constitution
challenging the Act of 1962.
Those petitions were dismissed by the
High Court but in appeal, the judgment of the High Court was
set
aside by this Court ·On August 10, 1967.
It was held by this Court
that the Validating Act of 1962 did not cure the defect from which the
Act of 1959 suffered and therefore, respondents were not ·entitled to
recover any tax from the appellants under the aforesaid Acts.
On March 25, 1968 the Orissa Legislature, having obtained the
previous sanction of the President to the moving of the Bill, passed
the Orissa Taxation (on_ Goods carried by Roads or Inland Waterways) Act, 8 of 1968, imposing the same levy which it had unsuccessfully attempted to levy under th~ Act of 1959 and to validate under the
Act of 1962.
Some of the appellants from whom the State Government had recovered taxes after the Act of 1962 was upheld by the
High Court asked for refund thereof after th~t Act was declared unconstitutional by this Court.
The refund havmg been refused by the
Governments, the appellants filed writ petitions in the High
Court
' '
M. L. JAIN v. ORISSA (Chandrachud, J.)
717
challenging the validity of the 1968 Act.
The dismissal of those writ
petitions has given rise to these appeals by special leave.
There is no substance in any of the contentions raised on behalf
of the appellants regarding the constitutionality of the Act of 1 %8.
The bill which matured into the impugned Act was introduced by the
·Orrrisa Legislature after. obtaining the previous sanction of the President under the Proviso to Art. 304 of the Coustituti(jn. As shown by
the Preamble, the Act was passed in order to provide for the lev)1 of
tax on certain goods carried by roads or inland waterways in the State
of Orissa and to validate certain taxes imposed on such goods.
By
s. ) ( 3), the Act was to be deemed to have come into force on Aprll
27, 1959 being the date on which the Act of 1959 had come into
force.
Section 3 of the Act which contains the charging provision
provides that there shall be levied a tax on goods of the descriptio11
mentioned in the section and carried by means specified therein.
Section 27 of the Act provides in so far as material that notwithstanding
the expiry of the Act of 1959 and notwithstanding anything contained
in any judgment, decree or order of any Court, all assessments made;
all taxes imposed or realised, any liability incurred or any action taken
under the Act of 1959 shall be deemed to have been validly
mad~,
imposed, realised, incurred or taken under the corresponding provisions
of the Act of 1968.
These provisions of the Act of 1968 show that
what the State Legislature did thereby was to enact, with retrospective
effect, a fresh piece of taxing statute after complying with the constitutional mandate contained in the proviso to Art. 304 that no Bill tor
the purposes of clause (b) of the Article sha 11 be introduced or moved
in the Legislature of a State without the previous
sanction of the
President.
·
The reliance of the appellants on the judgment of this Court in
Jawaharmal v. State of Rajasthan (')
is wholly
misconceived.
In
that case, s. 4 of the impugned Act of 1964 in truth and substance
provided that the failure to comply with the constitutiona I mandate of
Presidential sanction shall not invalidate the Finance Acts of 1961 and
1962. It wa1s held by this Court that it was not competent to
the
legislature to pass an Act providing that an earlier Act shal] be deemed
to be valid even though it did not comp:y with the requirements of the
Constitution.
In the instant case, the State
Legislature passed
an
independent enactment in 1968 after complying with the constitutional
requirement but it gave to that enactment retrospetive effect from the
date that the 1959 Act had come into force and it created a legal
fiction, which was permissible for it to do, that all actions taken under
the Act of 1959 shall be deemed to have been taken under the Act ot
1968.
Mr. Gobind Das, appearing on behalf of some of the apocllants
rnised P?int~ commonly associated with high constitutional concepts',
but lackmg m substance.
He urged that the Act of 1968 is a piece
-of co'.ourable legislation, that it constitutes a flagrant encroachment on
(I)
[1966] l S.C.R. 890
A
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D
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F
G
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718
SUPREME COURT REPORTS,
(1977] 3 S.C.R.
the functions of the judiciary and that since the Act has no operation
in futuro and operates only on the dead past, it is void as lacking in
legislative competence.
Leame~ counsel also employed the not unfamiliar phrase that the Act is a fraud on the Constitution.
Happily
all of these attacks, in so far as they at all require an .answer, -can be
n:iet effectively in a brief compass.
In Khyerbari Tea Co. Ltd.
v.
State of Assam('), it was held by this Court that Art. 304(b) of the
Constitution does not require that Jaws passed under it must always be
prospective.
Nor was it correct to say that once the State Legislature passes an Act without recourse lo that Article and that Act is
struck down, the Legislature cannot re-enact, that Act under that article and give it retrospective effect.
The Court further held in Khyerbari (supra) that the mere fact that a validating taking statute has
retrospective operation does not change the character of the tax nor
can it justify the Act being branded as a colourable piece of legislation in any sense.
We may only add that since it is well-settled that
the power to legislate carries with it .the power to legislate retrospectively as much as prospectively, the circumstance that an enactment
operates entirely in the past and has no prospective .Jife cannot effect
the competence of the legislature to pass the enactment, if it falls within the list on which that competence can operate.
As regards the
power to pass a validating Act, that power is essentially subsidiary to
the legislative competence to pass a law under an appropriate entry
of the relevant list.
Thus the impugned enactment is a valid exercise
of legislative power and is in no sense a fraud on the Constitution.
As regards the alleged encroachment by the legislature on fields
judicial, the argument overlooks ·that the Act of 1968 does not, like
the Act under consideration in Jawaharmal( 2 ), declare that an invalid
Act shall be deemed to be valid. It cures the constitutional vice from
which the Act of 1959 suffered by obtaining the requisite sanction
of -the President and thus armed, it imposes a new tax, though with
retrospective effect. Imposition of taxes or validation of action ta1<en
under void laws is not the function of the judiciary and therefore, by
taking these steps the legislature cannot be accused of trespassing on
the preserve of the judiciary.
Courts have to be vigilant to ensure
that the nice balance of power so thoughtfully conceived by our Constitution is not allowed to be upset but the concern for safeguarding
the judicial power does not justify conjuring up trespasses for invalidating laws.
There is a large volume of authority showing that
if
the vice from which an enactment suffers is cured by due compliance
with the legal or constitutional requirements, the legislature has the
competence to validate the enactment and such validati<Jn does
not
constitute an encroachment on the functions of the judiciary. The
validity of a validating taxing law depends upon whether the legislature
possesses the competence over the subject-matter of the law, whetl1er
in making the validation it has removed the defect from which the earlier i;nactment suffered and whether it has made due and adequate provision in the validating .Jaw for a valid imposition of tlie tax. ( See, for
example Prithvi Cotton Mills
v._ Broach Borough Municipality('!;
(1)
[19641 5 S.C.R. 975
(3)
[1970] 1 S.C.R. 388.
(2) [196611 S.C.R. 890-
•
M. L. JAIN v. ORISSA (Chandrachud, J.)
719
Tira th Ram Rajindra Nath v. State of U.P. ('); Government of Andhra
Pradesh v. Hindustan Machine Tools Ltd.('). The passage from
Cooley's Constitutional Limitations' (Ed. 1927, Vol. I, p. 183) that a
legislative act is a "pre--Oetermination of what the law shall be for the
regulation of all future cases falling under its provisions" does not bear
upon the power of the ·legislature to pass laws which are exclusively
retrospective. Mr. Gobind Das's reliance on that passage cannot therefore further his contention.
Mr. Gokhalc, who appears on. behalf of some of the appellant~,
attempted to challenge the Act of 1968 on the ground of unreasonableness but he did not pursue that argument.
But he made another
point which requires some attention.
The appellants, or some
of
them, did not challenge the orders of assessment passed against them
as the Acts of 1959 and 1962 were held unconstitutional.
Counsel's
apprehension is that any appeal filed hereafter for'thallenging the assessment made under the earLer Acts would be barred by litnltation and
the appellants would be deprived of their statutory right to question the
correctness of the assessment.
This apprehension is unfounded
because the 2nd proviso to s. 12 of the Act of 1968 empowers the appro-
. priate authority to admit an appeal after the period of limitation is
over if it is satisfied that the dealer had sufficient cause for not preferring the appeal within the said period. Sub-section (3) confers on
the Commissioner the power of revision and sub-section ( 4) of s. 12
confers the power of review subject to the rules made under the Act.
We have no doubt that if any appeal challenging an order of assessment is filed beyond the period of limitation and the authority is satisfied that the appeal could not be filed within limitation for the reason
that the Acts of 1959 and 1962 were held to be unconstitutional, the
delay in filing the appeal would be condoned.
We are eqnally confident that if any appeal filed for challenging an order of assessment
was withdrawn or not pursued for the reason that the two Acts were
held nnconstitutional, the authority concerned would pass appropriate
orders reviving the appeal.
We are happy to note the assurance of
the learned Advocate-General of the State of Orissa that the State wiU
not· oopose in such cases the condonation of delay or the revival of
appeals. For these reasons we dismiss the appeals but there will be
no order as to costs.
The Special Leave Petitions which were kept
pending to await the decision of these appeals are hereby dismissed.
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We may take this opportunity to dwell njlon
the inconvenience
G
resulting from the enactment of art. 144A which
was
introduced
by the 42nd Amendment to the Constitntion.
That article reads
thus :
" "Special provisions as to disposal of questions relating
to Constitutional validity of laws.
(I), A.I.R. (1973) S.C. 405.
(2) (!975] S•ipp S.C.R. 394.
H
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720
SUPREME COURT REPORTS
[1977] 3 S.C.R.
"144A (1) The minimum number of Judges of the Supreme
Court who shall sit for the purpose of determining any question as to the Constitutional validity of auy central law or
State law shall be seven.
(2) A Central law or a State law shall not be declared to be
coustitiltionally invalid by the Supreme Court unless. a majority of not less than two-thirds of the Judges sitting for the
purposes of determining the question as to the constitutional
validity of such law hold it to be constitutionally invalid." "
The points raised in these appeals undoubtedly involve the determination of questions as to the constitutional validity of a State law but
they are so utterly devoid of substance that Mr. Asoke Sen and Mr.
Gokhale who appear for the appellants could say nothing in support
of their contentions beyond barely stating them. Were it not for the
valiant, though vain, attempt of Mr. Gobind Das to pursue his points,
the appeals would have taken lesser time to dispose of than for a
Court of seven to assemble.
Article 13(3) (a) of the Constitution
defines "hw" to include any Ordinance, Order, bye-law, rule, regulation, notification etc. having the force of law with the result that seven
D
judges of this Court may have to sit for determining any and every
· question is to. the constitutional validity of even orders and notifications issued by the Government, which have the force of Jaw.
A
Court which has large arrears to contend with has now to undertake
an unnecessary burden by seven of its members assembling to decide
all sorts of constitutional questions, no matter what their weight or
worth. It is hoped that Art. 144A will engage he prompt attention
E
of the Parliament so that it may, be general consensus, be so amended
as to leave to the Court itself the duty to decide how large a Bench
should decide any particular case.
S.R.
Appeals dismissed.