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CASE NO.:

Appeal (civil) 4803 of 2001

Appeal (civil) 4808 of 2001

Special Leave Petition (civil) 13102 of 1996

Special Leave Petition (civil) 13107 of 1996

PETITIONER:

DISTRICT MINING OFFICER AND ORS.

Vs.

RESPONDENT:

TATA IRON & STEEL CO. & ANR.

DATE OF JUDGMENT: 31/07/2001

BENCH:

G.B.Pattanaik, S.N.Phukan, B.N.Agrawal

JUDGMENT:

PATTANAIK,J.

DELAY CONDONED.

LEAVE GRANTED IN ALL THE SLPS.

THIS BATCH OF CASES RELATE TO THE CESS AND OTHER TAXES

ON MINERALS (VALIDATION) ACT, 1992 [HEREINAFTER REFERRED TO AS

'THE ACT']. THE QUESTION FOR CONSIDERATION IS, BY THE

AFORESAID ACT, WHAT IN FACT HAS BEEN VALIDATED, IS IT ONLY THE

TAXES ON MINERALS ALREADY REALISED UNDER THE INVALID LAW OR

THE RIGHT TO LEVY TAX AND REALISE THE SAME, WHICH BECAME DUE

UPTO 4TH OF APRIL, 1991? SEVERAL CASES ARISING FROM DIFFERENT

STATES HAVE BEEN TAGGED ON TO THE MAIN MATTER ARISING OUT OF

THE JUDGMENT OF THE PATNA HIGH COURT, WERE LISTED TOGETHER,

BUT WE THINK IT APPROPRIATE TO DECIDE THE BIHAR MATTER, SO THAT

THE LAW LAID DOWN THEREIN WOULD BE FOLLOWED IN OTHER CASES.

INCIDENTLY, THE EARLIER JUDGMENT OF THIS COURT ARISING OUT OF

THE SAID VALIDATION ACT IN RELATION TO THE LEVY OF TAX ON

MINERALS IN THE STATE OF TAMIL NADU IN THE CASE OF

P. KANNADASAN AND ORS. VS. STATE OF TAMIL NADU AND

ORS., 1996(5) S.C.C. 670, IS REQUIRED TO BE RECONSIDERED AND

IT IS FOR THAT PURPOSE, THESE CASES HAVE BEEN REFERRED TO A THREE

JUDGE BENCH. IN THE CASE ARISING OUT OF THE JUDGMENT IN PATNA

HIGH COURT IN S.L.P.(CIVIL) NO. 13102-13107 OF 1996, THE

STATE THROUGH THE DISTRICT MINING OFFICER IS THE PETITIONER AND

BY THE IMPUGNED JUDGMENT, THE HIGH COURT THOUGH HAS

UPHELD THE VALIDITY OF THE VALIDATION ACT, BUT HAS HELD THAT

THE SAID VALIDATION ACT DOES NOT AUTHORISE THE RECOVERY OF

ANY TAX OR CESS AFTER 4.4.91, EVEN IF THE LIABILITY WAS INCURRED

UNDER THE VALIDATED LAWS BEFORE 4.4.1991 AND CONSEQUENTLY,

THE DEMAND RAISED BY THE STATE WERE QUASHED AND THE STATE

WAS RESTRAINED FROM TAKING ANY STEPS TO REALISE SUCH DEMAND.

BE IT BE STATED THAT A BATCH OF WRIT PETITIONS WERE FILED BY

SEVERAL ASSESSEES, ASSAILING THE LEGALITY OF THE DEMANDS RAISED

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BY THE MINING AUTHORITIES FOR PAYMENT OF CESS IN RESPECT OF

SUCH DUES, WHICH WOULD BE LEVIABLE TILL 4TH OF APRIL, 1991. IN

THE BATCH OF CASES RELATING TO STATE OF MADHYA PRADESH, AFTER

THE JUDGMENT OF THIS COURT IN KANNADASAN'S CASE, THE STATE

OF MADHYA PRADESH ISSUED NOTICE TO SEVERAL ASSESSEES, RAISING

THE DEMAND AND SUCH DEMAND WAS ASSAILED BY FILING WRIT

PETITIONS IN THE HIGH COURT. APPLICATIONS HAD BEEN FILED IN

THIS COURT FOR GETTING THOSE WRIT PETITIONS TRANSFERRED, BUT NO

ORDER OF TRANSFER HAS BEEN PASSED BY THIS COURT AND AS SUCH

THE WRIT PETITIONS ARE STILL PENDING BEFORE THE HIGH COURT OF

MADHYA PRADESH AND WE, THEREFORE, DO NOT PROPOSE TO DEAL

WITH THOSE MATTERS, SINCE THE HIGH COURT CAN WELL DISPOSE OF

THE SAME, ON THE BASIS OF OUR JUDGMENT IN THE BIHAR CASE.

CIVIL APPEAL NO. 9917 OF 1996, HOWEVER IS DIRECTED AGAINST

THE JUDGMENT OF MADHYA PRADESH HIGH COURT DATED

10.5.1995. BEFORE THE HIGH COURT, THE VALIDITY OF THE

ORDINANCE NO. 7 OF 1992 AS WELL AS CESS VALIDATION ACT 16 OF

1992 HAD BEEN ASSAILED. THE HIGH COURT, BY THE IMPUGNED

JUDGMENT UPHELD THE VALIDITY OF THE AFORESAID VALIDATION ACT.

WE ARE IN RESPECTFUL AGREEMENT WITH THE SAID CONCLUSION AND

HOLD THE VALIDATION ACT TO BE CONSTITUTIONALY VALID. HENCE NO

INTERFERENCE IS CALLED FOR IN THE CIVIL APPEAL. BUT THE DISPUTE,

WHETHER FRESH NOTICE COULD BE ISSUED FOR COLLECTION AND LEVY

OF DUES IN RESPECT OF LIABILITY ACCRUED TILL 4.4.91 IS THE SUBJECT

MATTER IN PENDING WRIT PETITIONS IN THE HIGH COURT. IN THE

CASES ARISING OUT OF THE JUDGMENT IN KARNATAKA HIGH COURT,

THE HIGH COURT HAS FOLLOWED THE JUDGMENT OF THIS COURT IN

KANNADASAN AND THUS UPHELD THE RIGHT OF THE STATE TO LEVY

DEMAND AND COLLECT, WHICH WAS COLLECTABLE UPTO 4.4.1991 AND

THE ASSESSEES ARE CHALLENGING THE SAID JUDGMENT IN THIS COURT.

SEVERAL WRIT PETITIONS WERE FILED UNDER ARTICLE 32,

CHALLENGING THE CONSTITUTIONAL VALIDITY OF THE VALIDATION ACT

AS WELL AS FOR QUASHING THE DEMAND NOTICES DATED 1.8.98 AND

2.9.98, ISSUED BY THE DEPARTMENT OF MINES AND ZOOLOGY IN

THE STATE OF KARNATAKA. IN THE CASES ARISING OUT OF JUDGMENT

OF ANDHRA PRADESH HIGH COURT, THE HIGH COURT FOLLOWED THE

JUDGMENT OF THIS COURT IN KANNADASAN AND UPHELD THE

CONSTITUTIONAL VALIDITY OF THE VALIDATION ACT AS WELL AS THE

RIGHT OF THE STATE TO MAKE THE DEMAND UPTO 4.4.1991 AND THIS

JUDGMENT OF THE ANDHRA PRADESH HIGH COURT IS BEING ASSAILED

BY THE ASSESSEES IN DIFFERENT SPECIAL LEAVE PETITIONS. IN

KANNADASAN'S CASE, WHICH ARISES OUT OF THE JUDGMENT OF

MADRAS HIGH COURT, AFTER THE JUDGMENT OF THIS COURT, REVIEW

PETITIONS WERE FILED BY THE ASSESSEES AND THIS COURT HAD

MERELY DIRECTED THOSE REVIEW PETITIONS TO BE TAGGED ON TO THE

SPECIAL LEAVE PETITIONS FILED AGAINST THE JUDGMENT OF PATNA

HIGH COURT, BUT IN THOSE PETITIONS, NO FORMAL NOTICE HAD BEEN

ISSUED TO THE STATE OF TAMIL NADU AND NECESSARILY THEREFORE,

THOSE REVIEW PETITIONS HAVE TO BE DE-LINKED AND ONLY AFTER

DISPOSAL OF THE SPECIAL LEAVE PETITIONS FILED, ARISING OUT OF THE

JUDGMENT OF PATNA HIGH COURT, THE REVIEW PETITIONS CAN BE

LISTED FOR OBSERVANCE OF FORMALITIES AND DISPOSAL.

THOUGH LARGE NUMBER OF COUNSEL ARGUED FOR DIFFERENT

SETS OF PERSONS, BUT BASICALLY TWO CONTENTIONS WERE ADVANCED.

ONE BY MR. RAKESH DWIVEDI, THE LEARNED SENIOR COUNSEL,

APPEARING FOR THE STATE OF BIHAR, CONTENDING THAT THE

VALIDATION ACT AUTHORISES THE STATE GOVERNMENTS TO LEVY AND

REALISE TAX WHICH WERE DUE UP TO THE DATE OF VALIDATION,

NAMELY, 4.4.1991 AND THERE SHOULD NOT BE ANY EMBARGO ON THE

STATE'S POWER TO REALISE THE SAME NOTWITHSTANDING THE FACT

THAT THE LIFE OF THE VALIDATION ACT WAS ONLY UPTO 4.4.1991.

THIS STAND OF MR. DWIVEDI, LEARNED SENIOR COUNSEL APPEARING

FOR THE STATE OF BIHAR WAS SUPPORTED BY MR. CHAUDHARY,

APPEARING FOR THE STATE OF MADHYA PRADESH, MR. SANJAY

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HEGDE, APPEARING FOR THE STATE OF KARNATAKA AS WELL AS MR.

MARIARPUTHAM, APPEARING FOR THE STATE OF TAMIL NADU.

ACCORDING TO MR. DWIVEDI, THE JUDGMENT OF THIS COURT IN

KANNADASAN'S CASE SQUARELY COVERS THE POINT AND HAS RIGHTLY

BEEN DECIDED AND THE SAME DOES NOT REQUIRE ANY RE-

CONSIDERATION. ON BEHALF OF DIFFERENT SETS OF ASSESSEES,

ARGUMENTS WERE ADVANCED BY DIFFERENT COUNSEL, PARTICULARLY

BY MR. SHANTI BHUSHAN, MR. PARASARAN, MR. KK VENUGOPAL,

DR. A.M. SINGHVI, MR. AK GANGULI AND MR. RANJIT KUMAR,

ALL SENIOR COUNSEL, AND THE ESSENTIAL CONTENTION WAS THAT THE

PARLIAMENT IN FACT CAME FORWARD WITH THE VALIDATION ACT

AFTER DIFFERENT CESS ACTS WERE STRUCK DOWN ON THE GROUND OF

LACK OF LEGISLATIVE COMPETENCE SOLELY TO ENSURE THAT THE LEVIES

COLLECTED ARE NOT REQUIRED TO BE REFUNDED BY THE STATES WHICH

WOULD HAVE A SERIOUS IMPACT ON THE STATE REVENUES OF THE

CONCERNED STATE GOVERNMENTS, AND THEREFORE, IN THE ABSENCE

OF ANY LAW SUBSEQUENT TO 4.4.1991 THE AUTHORITY TO COLLECT HAS

DISAPPEARED AND CONSEQUENTLY THE DECISION OF THIS COURT IN

KANNADASAN'S CASE HOLDING THAT NOT ONLY THE TAXES ALREADY

COLLECTED NEED NOT BE REFUNDED, BUT THE TAXES AND CESSES

WHICH HAVE NOT ALREADY BEEN COLLECTED ALSO BE COLLECTED IS NOT

CORRECT IN LAW. IT WAS ALSO FURTHER CONTENDED THAT THIS COURT

WHILE EXAMINING THE PROVISIONS OF THE VALIDATION ACT IN THE

LIGHT OF THE PURPOSE THAT WAS SOUGHT TO BE ACHIEVED BY THE

PARLIAMENT HAS NOT BORNE IN MIND THE VERY STATEMENT OF

OBJECTS AND REASONS AS WELL AS THE LANGUAGE OF SECTION 2 OF

THE VALIDATION ACT, AND THE ABSENCE OF A PROVISION IN THE

VALIDATION ACT, CORRESPONDING TO THE PROVISIONS CONTAINED IN

SECTION 6 OF THE GENERAL CLAUSES ACT. IT IS THE UNIFORM

CONTENTION OF ALL THE COUNSEL APPEARING FOR DIFFERENT SETS OF

ASSESSEES THAT THE JUDGMENT OF THIS COURT IN KANNADASAN

CONFERRING RIGHT ON THE STATE TO LEVY AND COLLECT THE TAXES ON

MINERALS, WHICH COULD BE LEVIABLE UNTIL 4TH APRIL, 1991, WOULD

RUN CONTRARY TO ARTICLE 265 OF THE CONSTITUTION AND WOULD

TRAVERSE BEYOND THE OBJECT OF THE VALIDATION ACT, AND

CONSEQUENTLY IT WOULD BE APPROPRIATE FOR THIS LARGER BENCH TO

RE-CONSIDER THE EARLIER JUDGMENT OF TWO JUDGE BENCH IN

KANNADASAN'S CASE.

BEFORE WE PROCEED FURTHER IN ENUMERATING AND

EXAMINING THE CONTENTIONS RAISED BY THE COUNSEL FOR THE

PARTIES, IT WOULD BE APPROPRIATE TO NOTICE THE HISTORY LEADING

TO THE ENACTMENT OF THE VALIDATION ACT. THE STATES OF ANDHRA

PRADESH, BIHAR, KARNATAKA, MADHYA PRADESH, TAMIL NADU,

MAHARASHTRA AND ORISSA HAD ENACTED SEVERAL LEGISLATIONS

AUTHORISING LEVY ON MINERALS. IN THE CASE OF INDIA CEMENT

LTD. VS. STATE OF TAMIL NADU - 1990 (1) SUPREME COURT

CASES 12, A SEVEN JUDGE BENCH OF THIS COURT CAME TO HOLD

THAT THE LEVY IN QUESTION IS ESSENTIALLY A LEVY ON MINERALS AND

IS RELATABLE TO ENTRIES 23 AND 50 OF LIST II, BUT ON ACCOUNT OF

DECLARATION MADE BY PARLIAMENT CONTAINED IN SECTION 2 OF

MINES AND MINERALS (REGULATION AND DEVELOPMENT) ACT,

1957, THE STATE LEGISLATURES HAVE BEEN DENUDED OF THE POWER

TO LEVY TAX ON MINERALS AND, AS SUCH, THE IMPOSITION OF TAX ON

MINERALS UNDER SECTION 115 OF THE TAMIL NADU PANCHAYAT

ACT, 1958 IS ULTRA VIRES. THIS COURT FURTHER HOLD THAT THE

EARLIER DECISION OF THIS COURT IN HRS MURTHY'S CASE - 1964

(6) SUPREME COURT REPORTS 666, HAS NOT BEEN CORRECTLY

DECIDED. SOMETIME THEREAFTER A THREE JUDGE BENCH OF THIS

COURT DECIDED THE CASE OF ORISSA CEMENT - 1991 SUPPL. (1)

SUPREME COURT CASES -430, AND FOLLOWING THE LARGER BENCH

DECISION OF THIS COURT IN INDIA CEMENT DECLARED IDENTICAL

LEVIES IMPOSED BY THE STATES OF ORISSA, BIHAR AND MADHYA

PRADESH TO BE INCOMPETENT AND VOID. THE COURT FURTHER HELD

THAT THE DECISION TO BE OPERATIVE PROSPECTIVELY WITH EFFECT

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FROM THE DATE OF THE JUDGMENT I.E. 4.4.1991 SO FAR AS THE STATE

OF BIHAR IS CONCERNED, AND 22.12.1989 SO FAR AS ORISSA WAS

CONCERNED, THE DATE ON WHICH THE ORISSA HIGH COURT STRUCK

DOWN THE LEVY, AND 28.3.1989 SO FAR AS MADHYA PRADESH WAS

CONCERNED, THE DATE ON WHICH THE MADHYA PRADESH HIGH

COURT STRUCK DOWN THE LEVY. IT IS AFTER THE AFORESAID TWO

JUDGMENTS THE PARLIAMENT CAME FORWARD INITIALLY BY

PROMULGATING AN ORDINANCE, CALLED THE CESS AND OTHER TAXES

ON MINERALS (VALIDATION) ORDINANCE, 1992, AND THEREAFTER BY

REPLACING THE SAME BY ACT 16 OF 1992 WHICH WAS PUBLISHED IN

THE GAZETTE OF INDIA ON 4.4.1992. UNDER SECTION 2 OF THE

VALIDATION ACT THE PARLIAMENT BY LEGAL FICTION PURPORTS TO

HAVE ENACTED THE PROVISIONS OF THE ACTS MENTIONED IN THE

SCHEDULE KEEPING THE PROVISIONS OF SUCH ACT TO HAVE

REMAINED IN FORCE UPTO 4TH APRIL, 1991. THE SCHEDULE

CONSISTS OF 11 DIFFERENT ACTS, WHICH ACTS HAD BEEN DECLARED

BY THIS COURT TO BE ULTRA VIRES AS THE STATE LEGISLATURES WERE

DENUDED OF THEIR POWERS TO MAKE THOSE LAWS IN VIEW OF

DECLARATION MADE BY THE PARLIAMENT CONTAINED IN SECTION 2 OF

MINES AND MINERALS (REGULATION AND DEVELOPMENT) ACT,

1957. IN THE EYE OF LAW, THEREFORE, THOSE 11 ACTS MUST BE

HELD TO HAVE BEEN ENACTED BY THE PARLIAMENT UPTO 4TH APRIL,

1991. AFTER THE ENACTMENT OF THE VALIDATION ACT WRIT

PETITIONS WERE FILED IN THE HIGH COURT CHALLENGING THE VALIDITY

OF THE SAID VALIDATION ACT. THOSE WRIT PETITIONS HAVING BEEN

DISMISSED BY THE HIGH COURT, THE MATTER WAS CARRIED TO THIS

COURT IN KANNADASAN'S CASE AND THE SAID CASE WAS DISPOSED

OF BY JUDGMENT DATED JULY 26, 1996, REPORTED IN 1996 (5)

SCC, 670. A TWO JUDGE BENCH OF THIS COURT CONSIDERED THE 7

CONTENTIONS RAISED BY THE ASSESSEE AND REJECTED ALL THE

CONTENTIONS AND HELD AS FOLLOWS:-

(I) THAT BY ENACTING THE VALIDATION ACT, THE

PARLIAMENT DOES NOT SEEK TO OVER-TURN THE

DECISION RENDERED BY THIS COURT.

(II) A PERUSAL OF SECTION 2 OF THE IMPUGNED

ENACTMENT AND SECTION 2 OF THE 1969

VALIDATION ACT CONSIDERED IN KRISHNA

CHANDRA GANGOPADHYAYA WOULD SHOW

THAT SECTION 2 OF THE IMPUGNED ENACTMENT

IS A FAITHFUL REPRODUCTION AND REPETITION OF

SECTION 2 OF THE 1969 VALIDATION ACT,

WORD TO WORD. THE ONLY ADDITIONAL WORDS

ARE IN SECTION 2(1), VIZ. 'AND SUCH

PROVISIONS SHALL BE DEEMED TO HAVE

REMAINED IN FORCE UPTO THE 4TH DAY OF

APRIL, 1991.'

(III) THE PREAMBLE OF THE ACT STATING "TO

VALIDATE IMPOSITION AND COLLECTION OF

CESSES AND CERTAIN TAXES ON MINERALS

UNDER CERTAIN STATE LAWS" AS WELL AS THE

PROVISIONS OF THE VALIDATION ACT CREATE

THE LEVY AS WELL AS VALIDATE THE RECOVERY

ALREADY MADE AND THE EXPRESSION

'COLLECTION' DOES NOT MEAN WHAT IS

ALREADY COLLECTED ALONE BUT MEANS THE

FUTURE COLLECTION AS WELL. NEITHER THE

PREAMBLE NOR SECTION 2 SAY THAT WHAT HAS

ALREADY COLLECTED ALONE IS VALIDATED.

(IV) THE CONTENTION OF THE ASSESSEE THAT A

PARLIAMENTARY ENACTMENT WILL NOT PERMIT

THE LEVY OF TAXES AND CESSES AT DIFFERENT

RATES IN DIFFERENT STATES IN THE COUNTRY AS

THAT WOULD BE DISCRIMINATORY AND

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VALIDATION OF ARTICLE 14 OF THE

CONSTITUTION IS MISCONCEIVED AS

PARLIAMENT HAS INTERVENED AND BY

ENACTING THE IMPUGNED LAW IN EXERCISE OF

ITS UNDOUBTED POWER VALIDATED THE LEVY

AND ALL THAT FLOWS FROM IT.

(V) THE CONTENTION OF THE ASSESSEE THAT THE

DENUDATION OF THE POWER OF THE STATE

LEGISLATURE TO LEVY TAXES ON MINERALS IS NOT

AN ABSOLUTE AND UNLIMITED ONE, IS WHOLLY

MISCONCEIVED, PARTICULARLY IN VIEW OF THE

DECISIONS OF THIS COURT IN INDIA CEMENT

AND ORISSA CEMENT.

(VI) THE CONTENTION OF THE ASSESSEE THAT THE

TAXES REALISED BY VIRTUE OF THE VALIDATION

ACT CAN ONLY BE REALISED FOR THE PURPOSE

OF REGULATION OF MINES AND MINERALS

DEVELOPMENT IS ALSO BASED UPON A

MISCONCEPTION ABOUT THE LAW RELATING TO

TAXES AND WHAT IS LEVIED UNDER THE

IMPUGNED ENACTMENT IS A TAX/CESS AND NOT

A FEE AND AS SUCH, IT IS NOT NECESSARY THAT

ELEMENT OF QUID PRO QUO SHOULD BE

ESTABLISHED IN EACH AND EVERY CASE.

(VII) MERELY BECAUSE THE LEVY CREATED BY AN

ENACTMENT IS LIMITED TO A PARTICULAR

PERIOD, THE ACT ITSELF CANNOT BE SAID TO BE

A TEMPORARY STATUTE AND THE ACT VERY

MUCH CONTINUES IN FORCE AND WILL REMAIN

IN FORCE TILL PARLIAMENT CHOOSES TO REPEAL

IT AND, THEREFORE, SECTION 6 OF THE GENERAL

CLAUSES ACT SHOULD APPLY.

NOTWITHSTANDING THE CESSATION OF LEVY

CREATED BY SECTION 2(1) WITH 4TH DAY OF

APRIL, 1991, THE MACHINERY REQUISITE FOR

REALISING AND REFUNDING THE TAXES/CESSES

YET TO BE COLLECTED OR WRONGLY COLLECTED,

AS THE CASE MAY BE, IS KEPT ALIVE AND IT

CANNOT BE SUGGESTED WITH ANY

REASONABLENESS THAT THE SAID MACHINERY IS

KEPT ALIVE ONLY FOR THE PURPOSES OF

REFUNDING THE EXCESSIVELY COLLECTED TAXES

BUT NOT FOR COLLECTING/RECOVERING THE

UNCOLLECTED/UNRECOVERED TAXES AND CESSES.

WITH THE AFORESAID CONCLUSIONS THIS COURT DISMISSED THE

APPEALS PREFERRED BY THE ASSESSEE AGAINST THE JUDGMENT OF THE

MADRAS HIGH COURT.

THE PATNA HIGH COURT DISPOSED OF THE BATCH OF WRIT

PETITIONS ON 17TH JANUARY, 1996 BEFORE THE JUDGMENT OF THIS

COURT IN KANNADASAN'S CASE. IN THE IMPUGNED JUDGMENT THE

HIGH COURT HAS HELD THAT:

(A) THE PARLIAMENT HAS NOT ENACTED THE ENTIRE CESS ACT

OF 1880 BUT HAS MERELY RE-ENACTED THE PROVISIONS

CONTAINED THEREIN WHICH RELATE TO CESS AND OTHER

TAXES ON MINERALS;

(B) THE LAWS WHICH HAVE BEEN ENACTED BY THE STATE

LEGISLATURE ARE DEEMED TO HAVE BEEN ENACTED BY

THE PARLIAMENT.

(C) IT BECAME NECESSARY FOR THE PARLIAMENT TO

INTERVENE AND TO ENACT A LAW WITH A VIEW TO

PROTECT A STATE FROM THE CONSEQUENCES THAT

FOLLOWED DECLARATION MADE BY THE SUPREME COURT

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IN INDIA CEMENT AND ORISSA CEMENT.

(D) THE PARLIAMENT TOOK PRECAUTION TO ITSELF RE-

LEGISLATE ON THE SUBJECT MATTER IN EXERCISE OF ITS

LEGISLATIVE POWER AND IT CHOSE TO LEGISLATE BY

INCORPORATION , A METHOD OF LEGISLATION WELL

RECOGNISED BY LAW.

(E) THE LAWS ENACTED WERE DEEMED TO HAVE REMAINED

IN FORCE UPTO 4TH APRIL, 1991.

(F) THE STATUTE IN QUESTION CAN BE DESCRIBED AS

PROMULGATED A TEMPORARY LEGISLATION.

(G) THE SUBMISSION THAT PARLIAMENT DID NOT HAVE THE

COMPETENCE TO LEGISLATE ON THE SUBJECT MATTER FELL

WITHIN THE EXCLUSIVE JURISDICTION OF THE STATE

LEGISLATURE, PROCEEDS ON THE ERRONEOUS

ASSUMPTION THAT THE SUBJECT MATTER WITH WHICH THE

PARLIAMENT DEALT WITH IN THE VALIDATION ACT WAS A

STATE SUBJECT CONTAINED IN LIST II OF 7TH SCHEDULE.

(H) THE COMPETENCE OF PARLIAMENT TO MAKE ENACTMENT

IS BEYOND CHALLENGE.

(I) THE VALIDATION ACT CANNOT BE IMPUGNED ON THE

GROUND THAT IT SOUGHT TO RE-VALIDATE THE SAID ACT

WHICH WAS DECLARED UNCONSTITUTIONAL BY THE

SUPREME COURT. THE POWER OF THE PARLIAMENT TO

LEGISLATE RETROSPECTIVELY CANNOT BE DISPUTED.

CONSEQUENTLY THE PARLIAMENT HAD POWER TO

LEGISLATE ON THE TOPIC IT COULD MAKE AN ACT ON THE

TOPIC BY ANY DRAFTING MEANS INCLUDING BY

REFERENTIAL LEGISLATION.

(J) THERE IS NOTHING IN THE IMPUGNED ACT WITH REGARD

TO THE ASSIGNMENT OF THE TAXES COLLECTED OR ITS

DISTRIBUTION BETWEEN THE STATES. IT CANNOT

THEREFORE BE URGED THAT ANY PROVISION IN THE

IMPUGNED ACT RUNS CONTRARY TO THE CONSTITUTIONAL

SCHEME WITH REGARD TO THE ASSIGNMENT TO THE STATES

OF THE TAXES REALISED, OR THEIR DISTRIBUTION BETWEEN

THE STATES.

(K) CONSIDERING THE BACKGROUND, FACTS AND HAVING

REGARD TO THE PURPOSE FOR WHICH THE LAW WAS

PASSED AND THE OBJECTIVE SOUGHT TO BE ACHIEVED IT

CANNOT BE SAID THAT THE VALIDATION ACT WAS

DISCRIMINATORY MERELY BECAUSE DIFFERENT RATES OF

CESS ON ROYALTY WERE PRESCRIBED FOR DIFFERENT

STATES. THE DOMINANT OBJECTIVE OF THE ACT WAS TO

VALIDATE THE LEVIES ALREADY MADE, AND NOT TO

LEGISLATE ON THE SUBJECT BY NAMING A LAW IMPOSING

CESS ON ROYALTY. IT WAS BECAUSE OF THIS OBJECTIVE

WHICH THE LAW SOUGHT TO ACHIEVE, THAT THE LAW WAS

GIVEN A LIMITED LIFE I.E. TILL 4TH APRIL, 1991. THE

LEGISLATIVE HISTORY AND THE MARCH OF EVENTS, EARLIER

JUSTIFIED BY A SUPREME COURT JUDGMENT, COULD NOT

BE IGNORED BY THE PARLIAMENT AND, THEREFORE,

TAKING INTO ACCOUNT THE REALITY OF THE SITUATION, THE

PARLIAMENT WAS LEFT WITH NO OPTION BUT TO VALIDATE

THE LEVY OF CESS ON ROYALTY TILL 4TH APRIL, 1991, THE

DATE OF THE SUPREME COURT JUDGMENT IN ORISSA

CEMENT. ?THE LAW CEASES TO HAVE ANY EFFECT AFTER

THE DATE WHICH MAKES IT CLEAR THAT THE LEGISLATION

WAS NOT WITH A VIEW TO LEVY CESS ON ROYALTY, BUT

ONLY TO VALIDATE WHAT HAD HAPPENED IN THE PAST.

(L) SUB-SECTION (1) OF SECTION 2 OF THE ACT MAKES IT

CLEAR THAT THE IMPUGNED ACT DOES NOT ENACT BY

VALIDATION A PERPETUAL LAW BUT A TEMPORARY ACT.

(M) IN THE IMPUGNED ACT ADMITTEDLY THERE IS NO

PROVISION SIMILAR TO SECTION 6 OF GENERAL CLAUSES

ACT NOR IS THERE ANY SAVING CLAUSE WHICH MAY

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JUSTIFY THE APPLICATION OF PRINCIPLES CONTAINED IN

SECTION 6 OF GENERAL CLAUSES ACT.

(N) THE ACT WAS PROMULGATED FOR A LIMITED PURPOSE.

THE PARLIAMENT INTERVENED AND GRANTED SANCTITY TO

LAWS DECLARED VOID BY THE SUPREME COURT ONLY

WITH A VIEW TO ABSOLVE THE STATES OF THEIR LIABILITY

TO REFUND THE TAXES ILLEGALLY COLLECTED AS THAT

WOULD HAVE CAST HEAVY FINANCIAL BURDEN ON THE

STATE. IT ALSO PROVIDED FOR THE SAME CUT OFF DATE

INSTEAD OF DIFFERENT CUT OFF DATES. THE PARLIAMENT

DID NOT INTEND TO KEEP ALIVE AFTER 4.4.91, THE

OBLIGATIONS OR LIABILITIES ACCRUED OR INCURRED UNDER

THE TEMPORARY LAWS AND, THEREFORE, DID NOT PROVIDE

FOR THE ENFORCEMENT OF SUCH OBLIGATIONS OR

LIABILITIES IN FUTURE. AS A RESULT THE TAXES COLLECTED

BEFORE 4.4.91 ARE NOT REQUIRED TO BE REFUNDED, BUT

THE ACT DOES NOT SANCTION THE RECOVERY OF ANY TAX

AFTER 4.4.91.

WITH THE AFORESAID CONCLUSIONS, THE DEMANDS MADE BY

THE STATE HAVING BEEN QUASHED AND THE STATE HAVING BEEN

RESTRAINED FROM TAKING ANY STEPS TO REALISE THE DEMANDS THE

STATE THROUGH ITS MINING OFFICER IS IN APPEAL BEFORE THIS COURT.

MR. RAKESH DWIVEDI, THE LEARNED SENIOR COUNSEL

APPEARING FOR THE STATE OF BIHAR CONTENDED THAT THE LANGUAGE

OF SECTION 2(1) OF THE VALIDATION ACT IS UNAMBIGUOUS AND IS

SUSCEPTIBLE OF THE ONLY CONSTRUCTION THAT THE RELEVANT LAW

SPECIFIED IN THE SCHEDULE WAS ENACTED BY THE PARLIAMENT AND

REMAINED VALID UPTO 4TH OF APRIL, 1991 AND CONSEQUENTLY, THE

STATE IS ENTITLED TO COLLECT THE CESS OR TAXES ON MINERALS,

WHICH BECAME PAYABLE UPTO 4TH OF APRIL, 1991. ABSENCE OF

ANY LAW SUBSEQUENT TO 4TH OF APRIL, 1991 WOULD NOT STAND AS A

BAR ON LEVY AND COLLECTION OF THE CESS AND TAXES ON MINERALS

AND ANY TAX OR CESS, WHICH IS VALIDLY LEVIABLE UNDER A VALID

LAW COULD BE COLLECTED EVEN AFTER THE EXPIRY OF THE LAW IN

QUESTION. THE HIGH COURT, THEREFORE, WAS IN ERROR IN LIMITING

THE PROVISIONS OF SECTION 2(1) OF THE VALIDATION ACT BY

MAKING REFERENCE TO THE STATEMENT OF OBJECT AND REASONS.

MR. DWIVEDI FURTHER CONTENDED THAT THE PREAMBLE ALSO

UNEQUIVOCALLY INDICATES THAT THE ACT IS TO VALIDATE THE

IMPOSITION AND COLLECTION OF CESS AND CERTAIN OTHER TAXES ON

MINERALS UNDER CERTAIN STATE LAWS. NECESSARILY, THEREFORE, THE

RIGHT TO IMPOSE THE LEVY AND COLLECT THE SAME BY VIRTUE OF THE

VALIDATION ACT, CANNOT BE NULLIFIED OR TAKEN AWAY, MERELY

BECAUSE THE ACT HAD ITS LIFE TILL 4TH OF APRIL, 1991. MR.

DWIVEDI ALSO FURTHER CONTENDED THAT THE ACT ITSELF HAVING

BEEN ENACTED ON 4TH OF APRIL, 1992, THE DATE ON WHICH IT

RECEIVED THE ASSENT OF THE PRESIDENT AND WAS PUBLISHED IN THE

GAZETTE OF INDIA AND INDICATING THEREIN THAT THE ENACTMENT IN

QUESTION MUST BE DEEMED TO HAVE BEEN MADE BY PARLIAMENT

AND KEEPING THE PROVISIONS VALID UPTO 4TH OF APRIL, 1991 IS

CLEARLY SUGGESTIVE OF THE FACT THAT THE PARLIAMENT INTENDED TO

ENACT THE RELEVANT PROVISIONS OF THE STATE LAWS DEALING WITH

THE LEVY AND COLLECTION OF CESS AND TAXES ON MINERALS,

THEREBY, CONFERRING RIGHT UPON THE STATE TO MAKE THE LEVY AND

COLLECT THE SAME IN RESPECT OF THE MINERALS ON WHICH THE CESS

COULD BE LEVIABLE UPTO 4TH OF APRIL, 1991, AND UNLESS SUCH AN

INTERPRETATION IS GIVEN, THE VALIDATION ACT WOULD BE

MEANINGLESS AND WOULD NOT SUBSERVE THE PURPOSE FOR WHICH

PARLIAMENT BY DEEMING FICTION, LEGISLATE THE RELEVANT

PROVISIONS OF THE STATE ACTS, AS IF IT WAS AN ENACTMENT OF THE

PARLIAMENT. ADJUDGED FROM THIS STAND POINT, MR. DWIVEDI

CONTENDS THAT THE DECISION OF THIS COURT IN KANNADASAN'S

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CASE, DOES NOT REQUIRE ANY RE-CONSIDERATION AND THE COURT

RIGHTLY HELD THAT THE VALIDATION IN QUESTION IS NOT ONLY IN

RELATION TO THE CESS ALREADY COLLECTED UNDER AN INVALID LAW, BUT

ALSO IN RELATION TO THE RIGHT OF THE STATE TO LEVY, DEMAND AND

COLLECT, WHICH WOULD BE COLLECTABLE UPTO 4TH OF APRIL, 1991.

ACCORDING TO MR. DWIVEDI, THE TWO FICTIONS ENGRAFTED IN

SECTION 2(1) OF THE VALIDATION ACT, MUST BE GIVEN FULL PLAY

AND EFFECT AND, THEREFORE, IN THE EYE OF LAW, A VALID STATUTE

ENACTED BY THE PARLIAMENT HAVING LEGISLATIVE COMPETENCE FOR

THE SAME BEING OPERATIVE TILL 4TH OF APRIL, 1991, THERE IS NO

RHYME OR REASON TO DEBAR THE STATE FROM MAKING ANY DEMAND

OR COLLECT THE CESS, WHICH IS COLLECTABLE UPTO 4TH OF APRIL,

1991 ON THE MINERALS EXTRACTED. ACCORDING TO THE LEARNED

COUNSEL, THE IMPUGNED VALIDATION ACT IS A UNIQUE PIECE OF

LEGISLATION, BUT THE LEGISLATIVE INTENT IS APPARENT FROM THE

LANGUAGE USED AS WELL AS IN THE SETTINGS IN WHICH THE

ENACTMENT WAS MADE, CONFERRING THEREBY UPON THE STATE

GOVERNMENT, A RIGHT TO LEVY AND COLLECT TAXES IN RESPECT OF

THE PAST PERIOD, EVEN AFTER THE EXPIRATION OF 4TH OF APRIL, 1991.

MR. DWIVEDI URGED THAT IN CONSTRUING SUCH A UNIQUE PIECE OF

LEGISLATION, THE COURTS MUST ADOPT A DYNAMIC APPROACH AND IT

DOES NOT REQUIRE ANY ELABORATE ARGUMENT TO DISCOVER THE

LEGISLATIVE INTENT WHICH HAS BEEN WELL EXPRESSED IN THE

LANGUAGE USED IN THE STATUTE ITSELF. ACCORDING TO MR.

DWIVEDI, THE VALIDATION ACT CANNOT BE HELD TO BE A TEMPORARY

STATUTE AND REMAINS AS A VALID PIECE OF LEGISLATION, CONFERRING

THE RIGHT TO COLLECT AND MAKE THE LEVY, WHICH WOULD BE

COLLECTABLE UPTO 4TH OF APRIL, 1991 AND THE PROVISIONS OF

GENERAL CLAUSES ACT WOULD BE APPLICABLE. MR. DWIVEDI

URGED THAT THERE IS NO QUARREL WITH THE CONSTITUTIONAL

PROPOSITION ENGRAFTED IN ARTICLE 265 OF THE CONSTITUTION THAT

LEVY AND COLLECTION SHOULD BE BY AUTHORITY OF LAW. BUT IN

RESPECT OF MINERALS EXTRACTED UPTO 4TH OF APRIL, 1991, IF ANY

CESS OR TAX IS TO BE LEVIED AND COLLECTED IN ACCORDANCE WITH

THE MACHINERY PROVIDED FOR THE SAME, THAT RIGHT OF THE STATE

WILL NOT GET FRUSTRATED, MERELY BECAUSE THE LEGISLATION IN

QUESTION IN THE EYE OF LAW WAS EFFECTIVE TILL 4TH OF APRIL, 1991.

THE COUNSEL URGED THAT WHAT THE PARLIAMENT INTENDED, IS THAT

THE STATE COULD LEVY AND COLLECT CESS ON MINERALS EXTRACTED TILL

4TH OF APRIL, 1991, BUT WOULD NOT BE ENTITLED TO MAKE ANY LEVY

OR COLLECT CESS ON MINERALS EXTRACTED SUBSEQUENT TO 4TH OF

APRIL, 1991. ACCORDING TO MR. DWIVEDI, EVEN WHILE THE

RELEVANT ACT WAS STRUCK DOWN BY THE JUDGMENT OF THIS COURT

IN ORISSA CEMENT'S'CASE, IN THE VERY JUDGMENT, IT WAS

INDICATED THAT THERE WOULD BE NO LIABILITY ON THE PART OF THE

STATE TO REFUND THE CESS ALREADY COLLECTED TILL THE DATE OF THE

JUDGMENT I.E. 4.4.1991, AND IT WAS UNNECESSARY FOR THE

PARLIAMENT TO INCLUDE THAT ACT IN THE SCHEDULE AND VALIDATE

THE PROVISIONS OF THE ACT BY A DEEMING FICTION OF ENACTMENT

BY THE PARLIAMENT MERELY FOR THE PURPOSE OF ABSOLVING THE

STATE FROM THE LIABILITY OF REFUNDING THE CESS ALREADY

COLLECTED, AS SUCH A DIRECTION WAS PART OF THE JUDGMENT OF THIS

COURT IN ORISSA CEMENT CASE. IT CANNOT BE ASSUMED THAT

THE PARLIAMENT ENACTED THE PROVISIONS OF THE RELEVANT ACT UPTO

4TH OF APRIL, 1991 WITHOUT ANY PURPOSE OR OBJECT. IT WOULD,

THEREFORE, BE RATIONAL TO CONSTRUE THAT THE PURPOSE OF THE

ENACTMENT IN QUESTION WAS TO HAVE A VALID LAW TILL 4TH OF APRIL,

1991, THEREBY, CONFERRING THE STATE THE RIGHT TO LEVY AND

COLLECT ALL CESS AND TAXES ON MINERALS, WHICH WAS COLLECTABLE

UPTO THE 4TH OF APRIL, 1991. THE CONSTRUCTION PUT-FORTH BY THE

PATNA HIGH COURT IN THE IMPUGNED JUDGMENT IS, THEREFORE,

ERRONEOUS. WITH REFERENCE TO THE PRESS NOTE THAT WAS ISSUED

ON 17.2.1992, MR. DWIVEDI CONTENDS THAT THE EXPRESSION "THAT

THE GOVERNMENT HAS DECIDED TO VALIDATE THE COLLECTION OF

CESSES AND OTHER LEVIES UPTO 4.4.91" WOULD UNEQUIVOCALLY

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INDICATE THAT THE COLLECTION ALREADY MADE AS WELL AS THE

COLLECTION TO BE MADE IN RESPECT OF THE COLLECTABLE DUES UPTO

4.4.91 WAS INTENDED TO BE VALIDATED. IT IS THE CONTENTION OF

THE LEARNED COUNSEL THAT ALL LEVIES WHICH WOULD BE VALIDLY

IMPOSABLE UPTO 4.4.91 COULD BE COLLECTED BY THE STATE AND

THAT WAS THE OBJECT FOR WHICH THE PARLIAMENT MADE THE

ENACTMENT. IT WAS ALSO URGED THAT IF THE LANGUAGE USED IN

SECTION 2(2) IS READ IN JUXTAPOSITION TO LANGUAGE USED IN

SECTION 2(1), IT WOULD BE APPARENT THAT SECTION 2(1) WAS NOT

CONFINED TO THE VALIDATION OF THE LEVY THAT HAS ALREADY BEEN

COLLECTED, BUT IT WAS A VALID LAW, MAKING THE STATE ENTITLED TO

COLLECT THE CESS REALISABLE UPTO 4.4.91. IN RESPONSE TO THE

CONCLUSIONS OF THE HIGH COURT ON THE QUESTION OF A SAVING

CLAUSE, MR. DWIVEDI CONTENDS THAT THE SAID ABSENCE OF A

SAVING CLAUSE IS NOT DECISIVE AND EVEN IF THE ACT IS HELD TO BE

A TEMPORARY ACT, IF THE LIABILITY IS OF AN ENDURING NATURE, THE

SAME WOULD SURVIVE EVEN AFTER THE EXPIRY OF THE ACT ITSELF, AS

WAS HELD BY THIS COURT IN THE CASE OF BHUPENDRA BOSE, 1962

SUPP. (2) S.C.R. 380. ACCORDING TO MR. DWIVEDI, BY

PROCESS OF RE-ENACTMENT OF THE STATE LEGISLATIONS BY THE

PARLIAMENTS ITSELF, THE PARLIAMENT WAS IN FACT BALANCING

BETWEEN THE PUBLIC INTEREST INVOLVED IN THE MATTER OF

DIRECTION OF REFUND BY THE SUPREME COURT AND AS SUCH WANTED

TO PLACE ALL THE STATES UNIFORMLY BY MAKING THE LEGISLATION

ENACTED TILL 4TH OF APRIL, 1991. IN THE MATTER OF BALANCING

SUCH PUBLIC INTEREST, IT WOULD BE UNREASONABLE TO HOLD THAT

PERSONS FROM WHOM TAX COULD NOT BE COLLECTED WOULD BE IN A

BETTER POSITION THAN THE PERSONS FROM WHOM THE TAX HAD

ALREADY BEEN COLLECTED. ON THE OTHER HAND, IT WOULD BE MORE

LOGICAL TO HOLD THAT LIABILITY TO PAY THE TAX ON THE MINERALS

EXTRACTED UPTO 4TH OF APRIL, 1991 WOULD BE UNIFORMLY APPLIED

AND, THEREFORE, THE STATE WOULD HAVE THE RIGHT TO MAKE THE

LEVY AND COLLECT THE SAME. WITH REFERENCE TO THE VARIOUS

VALIDATING ACTS AND THE PATTERN OF VALIDATION, AS

DEMONSTRATED BY THE ASSESSEES, MR. DWIVEDI CONTENDS THAT

WHILE CONSTRUING THE PROVISIONS OF A PARTICULAR STATUTE, THE

LANGUAGE USED IN THAT STATUTE IS OF PARAMOUNT CONSIDERATION

INASMUCH THE INTENTION OF THE LEGISLATURE IS WELL EXPRESSED IN

THE LANGUAGE USED. FURTHER THE DECISION OF THIS COURT IN

JOURA SUGAR MILLS, 1966(1) S.C.R. 523, AND THE RATIO

THEREIN WOULD SQUARELY APPLY TO THE CASE IN HAND AND,

THEREFORE, IT WOULD BE ONLY REASONABLE TO CONSTRUE THAT THE

STATE COULD RECOVER ALL THE CESS AND TAX ON MINERALS, WHICH

WOULD BE FOUND DUE UPTO 4.4.91 AND THERE SHOULD NOT BE ANY

FETTER ON THE POWER OF THE STATE TO COLLECT SUCH DUES MERELY

BECAUSE THE LIFE OF THE ACT HAS EXPIRED ON 4.4.91. ACCORDING

TO MR. DWIVEDI, THIS COURT WHILE DECIDING THE TRUE IMPORT AND

EFFECT OF THE VALIDATION ACT IN KANNADASAN'S CASE, BORNE IN

MIND THE BACKDROP OF A SPECIAL HISTORICAL SITUATION WHERE CESS

AND TAXES ON MINERALS WERE BEING COLLECTED BY DIFFERENT

STATES UNDER THEIR LAWS AT DIFFERENT RATES OVER A LONG PERIOD,

WHICH LAWS WERE STRUCK DOWN BY THE SUPREME COURT, ON THE

GROUND OF LACK OF LEGISLATIVE COMPETENCE. THE DECISION

RENDERED BY THIS COURT IN KANNADASAN'S CASE, THEREFORE,

MUST BE HELD TO BE CORRECT AND DOES NOT REQUIRE ANY

RECONSIDERATION.

MR. CHAUDHARY, LEARNED COUNSEL APPEARING FOR THE STATE

OF MADHYA PRADESH IN THE TRANSFERRED APPLICATIONS SUPPORTED

THE ARGUMENTS ADVANCED BY MR. RAKESH DWIVEDI, APPEARING

FOR THE STATE OF BIHAR AND FURTHER CONTENDED THAT THE PURPOSE

OF THE VALIDATION ACT IS TO PROVIDE THE LEGISLATIVE COMPETENCE

FOR THE ENACTMENT IN QUESTION UP TO 4TH APRIL, 1991. THE

CONSEQUENCES FLOWING THEREFROM WOULD CONFER AN UNFETTERED

RIGHT ON THE STATE GOVERNMENT TO IMPOSE AND COLLECT CESS AND

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TAXES ON MINERALS WHICH WAS IMPOSABLE UP TO 4TH APRIL,

1991, AND THAT RIGHT CANNOT BE NULLIFIED MERELY BECAUSE THE

ACT REMAINED IN FORCE TILL 4TH APRIL, 1991. MR. CHAUDHARY

CONTENDED THAT THE AMPLITUDE OF THE SUBSTANTIVE PROVISION

CONTAINED IN SECTION 2(1) OF THE VALIDATION ACT CANNOT BE

CURTAILED BY LOOKING TO THE OBJECTS AND REASONS OF THE

LEGISLATION, AND JUDGED FROM THIS STAND POINT THE CONCLUSION

IS IRRESISTIBLE, AS WAS HELD BY THIS COURT IN KANNADASAN'S

CASE, THAT IT PERMITS BOTH LEVY AND COLLECTION EVEN AFTER

4.4.1991 IN RESPECT OF THE LIABILITIES ACCRUED UNTIL 4TH APRIL,

1991. IN SUPPORT OF THIS CONTENTION HE PLACED RELIANCE ON THE

DECISION OF THIS COURT IN THE CASE OF M/S. BURRAKUR COAL

CO. LTD. VS. THE UNION OF INDIA AND OTHERS - 1962 (1) SCR

44. MR. SANJAY HEGDE, LEARNED COUNSEL APPEARING FOR THE

STATE OF KARNATAKA ADOPTED THE ARGUMENTS ADVANCED BY MR.

RAKESH DWIVEDI, APPEARING FOR THE STATE OF BIHAR. MR. N.N.

GOSWAMI, LEARNED SENIOR COUNSEL, APPEARING FOR THE UNION OF

INDIA, SUBMITTED THAT TO AVOID ANY DISCRIMINATION BETWEEN THE

GROUP OF PERSONS FROM WHOM THE CESS AND TAX ON MINERALS

HAVE BEEN COLLECTED, AND THE OTHERS FROM WHOM IT HAS NOT

BEEN COLLECTED THOUGH THEY ARE LIABLE, THE LEGISLATION IN

QUESTION EVEN THOUGH GOES BEYOND THE OBJECT, MUST BE

CONSTRUED TO HOLD THAT IT PERMITS LEVY AND COLLECTION OF THE

DUES WHICH WOULD BE COLLECTABLE UPTO 4.4.1991.

MR. SHANTI BHUSHAN, LEARNED SENIOR COUNSEL APPEARING

FOR THE ASSESSEE IN BIHAR CASE CONTENDED THAT ARTICLE 265 OF

THE CONSTITUTION PUTS AN EMBARGO THAT NO TAX COULD BE LEVIED

OR COLLECTED EXCEPT BY AN AUTHORITY OF LAW, AND IF, LAW IN

QUESTION NEVER REMAINED IN FORCE AFTER 4.4.1991 THEN THE

QUESTION OF CONFERRING RIGHT UPON THE STATE TO LEVY OR

COLLECTION DOES NOT ARISE. THE RIGHT TO LEVY AND COLLECTION,

WHICH WAS THERE WITH THE STATE HAVING DISAPPEARED WITH

EFFECT FROM 4.4.1991, THE DATE ON WHICH THE LIFE OF THE ACT

EXPIRES, UNLESS THERE IS ANY PROVISION CONFERRING THE RIGHT

UPON THE STATE TO MAKE LEVY OR COLLECT ANY LEVY, THAT

COLLECTION WOULD BE WITHOUT THE AUTHORITY OF LAW AND WOULD

CONTRAVENE ARTICLE 265 OF THE CONSTITUTION. ACCORDING TO MR.

SHANTI BHUSHAN, SECTION 2(1) OF THE VALIDATION ACT CANNOT BE

HELD TO BE AN ENACTMENT AND REPEAL, AS CONTENDED BY MR.

DWIVEDI, APPEARING FOR THE STATE OF BIHAR. THE LEARNED

COUNSEL URGED THAT IT IS TRUE THAT IN VIEW OF THE JUDGMENT OF

THIS COURT IN ORISSA CEMENT'S CASE IT WAS NOT NECESSARY FOR

THE PARLIAMENT TO MAKE THE ENACTMENT, BUT MERELY BECAUSE IT

WAS SO ENACTED IT CANNOT BE CONSTRUED WHICH IS NOT APPARENT

IN THE ACT ITSELF. ACCORDING TO THE LEARNED COUNSEL THE

VALIDATION ACT WAS ENACTED ONLY FOR PREVENTING ANY REFUND OF

THE TAX, ALREADY COLLECTED, AS IT WOULD HAVE GOT SERIOUS

REPERCUSSIONS ON THE STATE REVENUE, AND THAT IS ALSO EXPLICIT

FROM THE OBJECTS AND REASONS OF THE VALIDATION ACT, AS WELL

AS THE PRESS NOTE ISSUED, AND THEREFORE, THE HIGH COURT UNDER

THE IMPUGNED JUDGMENT WAS FULLY JUSTIFIED IN COMING TO THE

CONCLUSION THAT BECAUSE OF THE VALIDATION ACT, THE STATE

CANNOT BE SAID TO HAVE BEEN CONFERRED ANY RIGHT TO LEVY AND

COLLECT DUES, WHICH WAS COLLECTABLE UPTO 4.4.1991. MR.

SHANTI BHUSHAN CONTENDS THAT SECTION 2(2) OF THE VALIDATION

ACT, ON A PLAIN READING, WOULD SUGGEST, THAT IT VALIDATES ALL THE

PAST ACTS OF COLLECTION BUT HAS NOT CONFERRED ANY RIGHT TO

MAKE ANY FRESH COLLECTION OR LEVY ANY CESS ON MINERALS. MR.

SHANTI BHUSHAN CONTENDED THAT IN KANNADASAN'S CASE THIS

COURT CONSIDERED FROM A WRONG PREMISE, IN AS MUCH AS, WHAT

WAS NECESSARY FOR CONSIDERATION IS AS TO WHETHER THE RELEVANT

STATUTE WHICH LACK LEGISLATIVE COMPETENCE AND WAS ENACTED IS

A TEMPORARY LEGISLATION OR NOT? AND AS SUCH, THE FACT THAT

PARLIAMENT DID NOT PROVIDE SAVING CLAUSE IS INDICATIVE OF THE

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TRUE INTENTION, NAMELY, THE PARLIAMENT NEVER PERMITTED THE

STATES TO LEVY AND COLLECT THE LIABILITIES ALREADY ACCRUED, BUT

IT ONLY VALIDATED THE COLLECTION AND LEVY ALREADY MADE UNDER

AN INVALID LAW WHICH OTHERWISE THE STATE WOULD HAVE BEEN

LIABLE TO REFUND. MR. SHANTI BHUSHAN ALSO REFERRED TO THE

JUDGMENT OF THIS COURT IN JOURA SUGAR MILLS' CASE- 1996 (1)

SCR- 523 AND POINTED OUT THE DIFFERENCE IN THE VALIDATION

ACT WHICH WOULD CLINCH THE ISSUE.

MR. PARASARAN, THE LEARNED SENIOR COUNSEL APPEARING FOR

THE RESPONDENTS IN SOME OF THE SPECIAL LEAVE APPLICATIONS,

ARISING OUT OF THE JUDGMENT OF THE PATNA HIGH COURT,

CONTENDED, THAT AS SEVERAL STATE LEGISLATIONS WERE BEING GIVEN

LIFE THROUGH PARLIAMENTARY ENACTMENT, THE PARLIAMENT THOUGHT

IT FIT TO PUT UP THE COMMON DATE FOR ALL THE STATE LAWS TILL THE

DATE OF THE JUDGMENT IN ORISSA CEMENT CASE, 4TH APRIL, 1991,

WITH THE SOLE OBJECT THAT NONE OF THE COLLECTION MADE WOULD

BE REQUIRED TO BE REFUNDED. BUT IN THE ABSENCE OF ANY

PROVISION IN THE VALIDATING ACT PROVIDING FOR A RIGHT TO MAKE

LEVY AND COLLECTION BEYOND THE DATE AND SINCE SECTION 6 OF THE

GENERAL CLAUSES ACT HAS NO APPLICATION IT WOULD BE WHOLLY

ILLEGAL TO HOLD THAT THE STATE CAN MAKE LEVY AND COLLECT TAX

EVEN AFTER 4.4.1991 IN RESPECT OF THE DUES WHICH WERE

COLLECTABLE UPTO THAT DATE. ACCORDING TO MR. PARASARAN, THE

PARLIAMENT CAME FORWARD BY FICTIONALLY ENACTING PROVISIONS

OF DIFFERENT STATE LAWS DEALING WITH THE TAX AND CESS ON

MINERALS AS AN ACT OF BALANCING PUBLIC INTEREST, AS OTHERWISE IT

WAS FELT THAT IT WOULD BE A SEVERE BLOW ON THE STATE REVENUE IF

THE STATE IS REQUIRED TO REFUND THE TAXES AND CESS ALREADY

COLLECTED. IT IS THUS CONTENDED BY MR. PARASARAN THAT THE

JUDGMENT OF THIS COURT IN KANNADASAN IS ERRONEOUS AND IT

MUST BE HELD THAT BY THE VALIDATION ACT, STATE WOULD NOT BE

LIABLE TO REFUND THE CESS ALREADY COLLECTED BUT NO RIGHT CAN BE

SAID TO HAVE BEEN CONFERRED UPON THE STATE TO MAKE ANY

FURTHER LEVY OR COLLECTION IN RESPECT OF DUES COLLECTABLE UP TO

4.4.91, AS WAS HELD IN KANNADASAN'S CASE.

MR. K.K. VENUGOPAL, LEARNED SENIOR COUNSEL APPEARING

FOR THE RESPONDENT HINDALCO IN SPECIAL LEAVE PETITION NO.

13106 OF 1996, CONTENDED WITH VEHEMENCE, THAT IN INDIA

CEMENT'S CASE AS WELL AS IN ORISSA CEMENT'S CASE THE

QUESTION FOR CONSIDERATION WAS WHETHER THE STATE LEGISLATURE

CAN MAKE ANY LAW/TAX ON MINERALS AND THIS COURT IN NO

UNCERTAIN TERMS HELD THAT THE STATE LEGISLATURE DID NOT HAVE THE

LEGISLATIVE COMPETENCE. BUT HAVING HELD SO THE COURT

INNOVATED THE DEVICE OF PROSPECTIVE OVER RULING FOLLOWING THE

PRINCIPLE ENUNCIATED IN GOLAKNATH'S CASE. THE TRUE IMPORT IS

THAT THE PROSPECTIVE INVALIDATION WAS POSTPONED TILL 4.4.1991,

BUT THERE BEING NO LEGISLATION AFTER 4.4.1991 NOTWITHSTANDING

THE RE-ENACTMENT OF THE STATE LAWS BY THE PARLIAMENT UP TO

THAT DATE THERE CANNOT BE ANY AUTHORITY OF LAW TO MAKE ANY

DEMAND BY THE STATE OF ANY TAX OR CESS ON MINERALS.

ACCORDING TO MR. VENUGOPAL, THE LAWS HAVING MET A NATURAL

DEATH ON 4.4.1991 AND ONLY PAST ACTIONS HAVING BEEN SOUGHT

TO BE VALIDATED BY VIRTUE OF THE VALIDATION ACT NO POWER CAN

BE SAID TO HAVE BEEN CONFERRED ON THE STATES TO COLLECT THE

PAST LIABILITY INCURRED, BUT WHICH ARE NOT COLLECTED. EVEN IF

THERE HAS BEEN A LEVY BUT NOT COLLECTED PRIOR TO 4.4.1991

CANNOT BE PERMITTED TO BE COLLECTED IN THE ABSENCE OF ANY

VALID LAW, AS IN THAT EVENT IT WOULD CONTRAVENE ARTICLE 265.

ACCORDING TO MR. VENUGOPAL, IF THERE IS NO AUTHORITY OF LAW

AFTER 4.4.1991 THEN THERE WOULD BE NO QUESTION OF EITHER

IMPOSING LEVY OR COLLECTING LEVY, WHICH MIGHT HAVE BEEN

IMPOSED, AND JUDGED FROM THIS ANGLE THE JUDGMENT OF THIS

COURT IN KANNADASAN'S CASE MUST BE HELD TO BE WRONGLY

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DECIDED.

DR. A.M. SINGHVI, THE LEARNED SENIOR COUNSEL, APPEARING

FOR THE ASSESSEE-RESPONDENT IN S.L.P.(CIVIL) NO. 13106/96

AND S.L.P.(CIVIL) NO. 15442-15443/98 CONTENDED THAT THE

INTENTION OF THE PARLIAMENT IN ENACTING THE VALIDATION ACT

WAS ONLY TO SAVE THE STATE GOVERNMENTS FROM REFUNDING THE

MONIES ALREADY COLLECTED UNDER STATUTES DECLARED VOID AB-

INITIO BY THE COURTS AND IT NEVER INTENDED TO CONFER A RIGHT

ON THE STATE TO MAKE ANY FRESH LEVY OR COLLECTION IN RESPECT OF

THE CESS AND TAXES, WHICH COULD BE COLLECTED UPTO 4.4.91, AS

CONTENDED BY MR. DWIVEDI, APPEARING FOR THE STATE OF BIHAR.

ACCORDING TO DR. SINGHVI, WHEN THIS COURT IN ORISSA

CEMENT'S CASE, FOLLOWING THE EARLIER JUDGMENT OF THE COURT

IN INDIA CEMENT, INVALIDATED LEVIES MADE UNDER DIFFERENT

STATUTES ENACTED BY THE STATES OF ORISSA, MADHYA PRADESH AND

BIHAR AND ISSUED A MANDAMUS, DIRECTING REFUND OF THE

MONIES COLLECTED UNDER SUCH VOID STATUTES, THE STATE

GOVERNMENTS WOULD HAVE BEEN UNDER A CONSTITUTIONAL

OBLIGATION TO CARRY OUT THE DIRECTIONS ISSUED AND WERE BOUND

TO REFUND THE MONIES COLLECTED FROM THE RESPECTIVE STATES

FROM THE DATE OF THE JUDGMENT OF THE HIGH COURT, WHICH

WOULD HAVE RUINOUS CONSEQUENCES ON THE STATES' ECONOMY.

WHEN THE STATE GOVERNMENTS APPRISED THESE PROBLEMS TO THE

CENTRAL GOVERNMENT, THE PARLIAMENT INTERVENED AND TO SAVE

THE STATE GOVERNMENTS FROM REFUNDING THE MONIES COLLECTED,

ENACTED THE CESS AND OTHER TAXES ON MINERALS (VALIDATION)

ACT, 1992 TO VALIDATE IMPOSITION AND COLLECTION OF SUCH LEVIES

UNDER THE STATE LAWS WHICH WERE DECLARED VOID BY THE COURT.

THE STATEMENT OF OBJECT AND REASONS OF THE VALIDATION ACT

UNEQUIVOCALLY PROCLAIMS THAT THE ACT WAS PROMULGATED TO

VALIDATE COLLECTION OF SUCH LEVIES BY THE STATE GOVERNMENTS

UPTO 4TH OF APRIL, 1991. THE DATE 4.4.91 WAS CHOSEN BECAUSE

ON THAT DATE, THE SUPREME COURT DELIVERED THE JUDGMENT IN

ORISSA CEMENT CASE. TO BRING ABOUT THE UNIFORMITY AMONG

ALL THE STATES, THE CUT OFF DATE WAS SELECTED IN THE VALIDATION

ACT AS 4.4.91. PARLIAMENT ALSO CONSCIOUSLY DID NOT DESIRE OR

CHOOSE TO PRESCRIBE DIFFERENT DATES FOR DIFFERENT STATES IN THE

SCHEDULE TO VALIDATION ACT CONTAINING 11 ENACTMENTS IN

RESPECT OF 7 STATES. THE PARLIAMENT, THUS DEVISED THE METHOD

OF PROSPECTIVE OVERRULING AND THE LANGUAGE USED IN SUB-

SECTION (2) OF SECTION 2 OF THE VALIDATION ACT MAKES THE

INTENTION MORE EXPLICIT, AND AS SUCH IT MUST BE HELD THAT IT

ALLOWED THE STATES TO RETAIN THE AMOUNT OF CESS ALREADY

COLLECTED BUT DID NOT AUTHORISE TO MAKE ANY FRESH COLLECTION

WHICH HAS NOT BEEN COLLECTED UPTO 4.4.91. DR. SINGHVI

FURTHER CONTENDS THAT THE DELIBERATE AND CONSCIOUS OMISSIONS

BY PARLIAMENT OF A SAVING CLAUSE IN THE VALIDATION ACT,

PERMITTING LEVIES OR ACTIONS AFTER 4.4.91 POINTS TO THE ONLY

EFFECT THAT PARLIAMENT DID NOT INTEND ANY LEVY TO BE IMPOSED

OR ANY COLLECTION TO BE MADE AFTER 4.4.1991. HAD IT BEEN THE

INTENTION, THEN A SPECIFIC AND UNAMBIGUOUS SAVING CLAUSE

COULD HAVE BEEN PROVIDED AS WAS DONE IN JOARA SUGAR MILLS'

CASE 1966(1) S.C.R. 523 AND PRITHVI COTTON MILLS LTD.

CASE- 1969(2) S.C.C. 283. A BARE PERUSAL OF THE VALIDATION

ACT IN JOARA SUGAR MILLS' CASE AND THE VALIDATION ACT IN THE

PRESENT CASE WOULD UNEQUIVOCALLY INDICATE THAT IN THE CASE IN

HAND, THE PARLIAMENT NEVER INTENDED TO CONFER A RIGHT ON THE

STATES TO COLLECT AND IMPOSE ANY LEVY SUBSEQUENT TO 4.4.91

AND ON THE OTHER HAND MERELY ALLOWED THE STATE TO RETAIN THE

COLLECTION ALREADY MADE. ACCORDING TO DR. SINGHVI IN

KANNADASAN'S CASE, THIS COURT DREW WRONG ANALOGY FROM

GANGOPADHAYAYA'S CASE AND HELD THAT THE PROVISIONS THEREIN

WERE IDENTICAL TO THE PROVISIONS IN THE VALIDATION ACT, WHICH

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WAS UNDER CONSIDERATION. DR. SINGHVI FURTHER URGED THAT THIS

COURT IN KANNADASAN'S CASE, HAS NOT APPRECIATED THE FACT

THAT PARLIAMENT DELIBERATELY AND CONSCIOUSLY OMITTED TO

INCORPORATE A SAVING CLAUSE IN THE VALIDATION ACT. DR.

SINGHVI URGED THAT BY THE VALIDATION ACT LIFE WAS INFUSED INTO

VOID STATE STATUTES ONLY UPTO 4.4.91 AND CONSEQUENTLY, THE

LEVIES WHICH MAY HAVE ACCRUED PRIOR TO 4.4.91 COULD NOT BE

PERMITTED TO BE COLLECTED AFTER 4.4.91. WITH REFERENCE TO

ARTICLE 265 OF THE CONSTITUTION, THE LEARNED COUNSEL URGED

THAT THE CONSTITUTION OF INDIA IMPOSES A LIMITATION ON THE

TAXING POWER OF THE STATE IN SO FAR AS IT PROVIDES THAT NO TAX

CAN BE LEVIED OR COLLECTED EXCEPT BY AUTHORITY OF LAW. THUS,

NOT ONLY THE LEVY, BUT ALSO THE COLLECTION MUST BE ONLY BY

AUTHORITY OF LAW. THE EXPRESSION "AUTHORITY OF LAW" WOULD

MEAN THAT THERE SHOULD BE IN EXISTENCE, A LAWFUL ENACTMENT,

WHICH AUTHORISES THE LEVY OR COLLECTION OF A TAX. AFTER 4.4.91,

THERE BEING NO VALID LAW IN EXISTENCE, WHICH COULD AUTHORISE

COLLECTION OF THE LEVY OF CESS AND TAXES ON MINERALS, IT IS

DIFFICULT TO COMPREHEND HOW THE STATE COULD BE PERMITTED TO

MAKE THE LEVY AND COLLECTION OF THE DUES SUBSEQUENT TO

4.4.91. ACCORDING TO DR. SINGHVI, ANY INTERPRETATION OF THE

PROVISIONS OF THE VALIDATION ACT, AUTHORISING REALISATION OF

LEVY AFTER 4.4.91 FOR THE PAST PERIOD WOULD BE CONTRARY TO

EQUITY, JUSTICE AND FAIR-PLAY.

MR. GANGULI, THE LEARNED SENIOR COUNSEL, APPEARING FOR

THE INDIAN ALUMINIUM CO. LTD., RESPONDENT IN SLP(CIVIL) NO.

13104 OF 1996 AS WELL AS INTERVENOR INDIA CEMENT,

CONTENDED THAT THE JUDGMENT IN KANNADASAN'S CASE IS

ERRONEOUS IN THE TEETH OF THE PROVISIONS OF SECTION 2(2) OF THE

VALIDATION ACT WHICH VALIDATES ONLY "CESSES OR OTHER TAXES

ON MINERALS REALISED UNDER ANY SUCH LAWS". ACCORDING TO MR.

GANGULI, THE JUDGMENT IN KANNADASAN, RUNS CONTRARY TO THE

PURPOSE AND INTENT OF THE VALIDATION ACT, AS INDICATED IN THE

STATEMENT OF OBJECTS AND REASONS AND THE LIMITED PURPOSE OF

THE VALIDATION ACT IS TO DECLARE THAT ENACTMENTS MENTIONED IN

THE SCHEDULE THERETO BE DEEMED TO HAVE BEEN ENACTED BY THE

PARLIAMENT AND BE DEEMED ALWAYS TO HAVE BEEN VALID, AS

REGARDS THE PROVISIONS RELATING TO CESSES AND OTHER TAXES ON

MINERALS ARE CONCERNED AND DECLARE THAT THE PROVISIONS

CONTAINED IN THE SAID ENACTMENTS BE DEEMED TO HAVE REMAINED

IN FORCE UPTO 4.4.91, THE DATE ON WHICH THIS COURT DELIVERED

THE JUDGMENT IN ORISSA CEMENT CASE. ACCORDING TO MR.

GANGULI, THE VALIDATION ACT MERELY DECLARES THAT THE LAWS

SPECIFIED IN THE SCHEDULE TO THE ACT SHALL BE DEEMED ALWAYS

TO HAVE BEEN AS VALID, AS IF THE PROVISIONS CONTAINED THEREIN

RELATING TO CESS AND OTHER TAXES ON MINERALS HAD BEEN ENACTED

BY THE PARLIAMENT, AND SUCH PROVISIONS SHALL BE DEEMED TO

HAVE BEEN REMAINED IN FORCE TILL 4TH OF APRIL, 1991. THUS ON

15TH OF FEBRUARY, 1992, THE PARLIAMENT MERELY DECLARED THAT IT

HAD ENACTED THE LAWS IN QUESTION IN THE PAST, AND THAT ALL THE

SAID LAWS STOOD EXPIRED EVEN BEFORE THE VALIDATION ACT ITSELF

CAME INTO FORCE. IN SUB-SECTION (1) OF SECTION 2, PARLIAMENT

DID NOT MAKE ANY FURTHER PROVISION, EXCEPT MAKING THE

AFORESAID DECLARATION. IN SUB-SECTION (2) OF SECTION 2, THE

PARLIAMENT DECLARED THAT ALL ACTIONS TAKEN, THINGS DONE, CESSES

AND OTHER TAXES ON MINERALS REALISED IN ANY OF THE STATE LAWS

SHALL BE DEEMED TO HAVE BEEN TAKEN OR REALISED AS IF SECTION 2

HAVE BEEN IN FORCE, WHEN SUCH ACTIONS WERE TAKEN, THINGS

DONE OR CESSES AND OTHER TAXES WERE REALISED, NOTWITHSTANDING

ANY JUDGMENT, DECREE OR ORDER OF ANY COURT. SUB-SECTION (2)

OF SECTION FURTHER PROVIDES THAT NO SUIT OR OTHER PROCEEDINGS

SHALL BE MAINTAINED OR CONTINUED IN ANY COURT FOR THE REFUND

OF CESSES AND OTHER TAXES REALISED UNDER ANY SUCH LAWS. THUS,

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WHILE THE FIRST PART OF THE DECLARATION IN SUB-SECTION (2)

ENTIRELY RELATES TO THE PAST ACTIONS, THE SECOND PART OF THE

DECLARATION ALSO RELATES TO PAST ACTIONS NAMELY CESSES AND

OTHER TAXES REALISED BUT THE EFFECT OF THE DECLARATION OPERATES

AS ON THE DATE OF COMING INTO FORCE THE ACT I.E. 15.2.1992.

SUB-SECTION (3) OF SECTION 2 INCORPORATES THE CONSTITUTIONAL

MANDATE IN ARTICLE 265 AND, THEREFORE, ANY AMOUNT PAID

WITHOUT THE AUTHORITY OF LAW BECOMES REFUNDABLE TO THE

ASSESSEE AND COULD NOT BE RETAINED BY THE STATE. SUB-SECTION

(3), THUS WAS ENACTED TO CLARIFY THAT ONLY TO A LIMITED EXTENT

SUCH PROCEEDINGS FOR REFUND OF TAXES COULD BE MAINTAINED,

AND IT INCORPORATES A LIMITED SAVING CLAUSE AND IS A SPECIAL

PROVISION REGARDING SAVING. PARLIAMENT, THUS DID NOT WISH

THAT THE GENERAL PRINCIPLES CONTAINED IN SECTION 6 OF THE

GENERAL CLAUSES ACT BE MADE APPLICABLE TO THE VALIDATION

ACT AND HENCE CHOSE TO ENACT A LIMITED SAVING CLAUSE, AS

CONTAINED IN SUB-SECTION (3) OF SECTION 2. THIS BEING THE

POSITION, THE PATNA HIGH COURT WAS FULLY JUSTIFIED IN

INTERPRETING THE PROVISIONS OF THE VALIDATION ACT AND IN

HOLDING THAT THERE IS NO RIGHT IN THE STATE TO MAKE ANY FRESH

LEVY OR COLLECTION AND ONLY THE LEVIES ALREADY COLLECTED WOULD

NOT BE REFUNDED. ACCORDING TO MR. GANGULI, THE ENACTMENTS

MENTIONED IN THE SCHEDULE REMAINED IN FORCE ONLY UPTO 4TH OF

APRIL, 1991 AND, THEREFORE, NEITHER THERE WOULD BE ANY

CHARGING PROVISION, NOR MACHINERY UNDER THE ACT MENTIONED

IN THE SCHEDULE AFTER 4TH OF APRIL, 1991, WHICH WOULD

AUTHORISE THE STATE TO MAKE ANY LEVY OR COLLECTION OF TAX

REFERABLE TO THE PERIOD PRIOR TO 4TH OF APRIL, 1991. ACCORDING

TO MR. GANGULI, THE DECISION OF THIS COURT IN KANNADASAN,

RELYING UPON THE CONSTITUTION BENCH DECISION IN JAORA SUGAR

MILLS' CASE, MUST BE HELD TO BE ERRONEOUS, AS SPECIFIC

PROVISIONS CONTAINED IN SECTION 3 OF THE ACT IN JAORA SUGAR

MILLS' CASE HAVE NOT BEEN PROPERLY APPRECIATED. WITH

REFERENCE TO SUB-SECTION (3) OF SECTION 2, MR. GANGULI

CONTENDS THAT THE SAME IS AN EXCEPTION TO THE SUBSTANTIVE

PROVISION CONTAINED IN SUB-SECTION(2) OF SECTION 2. IT IS CLEAR

FROM THE WORDINGS OF SUB-SECTION(3). ALL THAT SUB-SECTION (3)

PROVIDES IS THAT IF AN ASSESSEE HAD MADE AN APPLICATION FOR

REFUND WITHIN THE TIME PRESCRIBED BY THE STATE ENACTMENT, BUT

THE SAME HAD NOT BEEN REFUNDED, THEN THE EXCESS TAX PAID WILL

HAVE TO BE REFUNDED, EVEN THOUGH THE STATE ENACTMENT IN THE

EYE OF LAW REMAINED VALID TILL 4TH OF APRIL, 1991. ACCORDING

TO THE LEARNED COUNSEL, THE PROVISIONS OF SECTION 6 OF THE

GENERAL CLAUSES ACT WOULD HAVE NO APPLICATION AND COULD NOT

BE INVOKED TO WIDEN THE LIMITED SAVING PROVISIONS IN SECTION

2(3). IN SUPPORT OF THE CONTENTION THAT NO FRESH TAX BEYOND

THE LIFE OF THE STATUTE BE PERMISSIBLE, THE COUNSEL RELIES UPON

THE DECISION OF THE COURT IN ROYALA CORPORATION 1970(1)

S.C.R. 639. MR. GANGULI URGED THAT THE ACT COULD NOT BE

INTERPRETED TO BE AN AUTHORISATION FOR IMPOSITION OF A FRESH

LEVY AND COLLECTION THEREOF, AFTER 4.4.1991, PERTAINING TO A

PERIOD PRIOR THERETO, SPECIALLY WHEN THERE IS NO EXPRESS

PROVISION TO THAT EFFECT IN THE IMPUGNED ACT.

MR. RANJIT KUMAR, APPEARING FOR THE PETITIONER INDIA

CEMENT LIMITED IN S.L.P.(CIVIL) NOS. 12994-12995 OF 1998,

SUBMITTED THAT WHAT HAS BEEN VALIDATED UNDER THE

PARLIAMENTARY ENACTMENT IS WHAT HAS BEEN ALREADY COLLECTED,

SO THAT THE STATE GOVERNMENTS WILL NOT BE LIABLE FOR ANY

REFUND AND IT NEVER AUTHORISED ANY IMPOSITION OR COLLECTION OF

THE LEVY AFTER 4.4.1991 EVEN FOR THE EARLIER PERIOD. ACCORDING

TO MR. RANJIT KUMAR, THE VERY LANGUAGE OF THE VALIDATION ACT

WHEN READ WITH THE STATEMENT OF OBJECTS AND REASONS, WOULD

MAKE IT EXPLICITLY CLEAR THAT IT DOES NOT AUTHORISE ANY FRESH

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IMPOSITION OR COLLECTION FOR AN ANTERIOR PERIOD, IF THERE HAS

BEEN NO SUCH COLLECTION PRIOR TO 4.4.1991. IN OTHER WORDS, THE

ACT ONLY VALIDATES WHAT HAD BEEN ILLEGALLY COLLECTED AND THE

LACK OF LEGISLATIVE COMPETENCE WAS CURED BY THE PARLIAMENT

STEPPING IN, FOR ENSURING THAT THE STATES WHICH WERE AFFECTED

BY THE JUDGMENT OF THIS COURT IN INDIA CEMENT CASE AND

ORISSA CEMENT CASE WOULD NOT BE REQUIRED TO REFUND.

ACCORDING TO MR. RANJIT KUMAR, THE STATEMENT OF OBJECTS

AND REASONS CAN BE WELL LOOKED INTO FOR ASCERTAINING THE

INTENTION OF THE PARLIAMENT IN ENACTING THE VALIDATION ACT AND

THE SAID STATEMENT OF OBJECTS AND REASONS ARE CATEGORICAL IN

TERMS AND ONLY REFERS TO WHAT HAD ALREADY BEEN COLLECTED,

WOULD NOT BE REQUIRED TO BE REFUNDED. ACCORDING TO THE

LEARNED COUNSEL, THE RELEVANT STATE LAWS, WHICH BECAME THE

CENTRAL LAW BY VIRTUE OF FICTIONAL RE-ENACTMENT, UNDOUBTEDLY

ARE TEMPORARY ACT AND AFTER THE EXPIRY DOES NOT ALLOW ANY

FURTHER ACTION UNDER THE EXPIRED ACT. IN SUPPORT OF THIS

CONTENTION, THE LEARNED COUNSEL PLACED RELIANCE ON THE

STATUTORY INTERPRETATION BY FRANCIS BENNION, FIRST EDITION,

PARAGRAPH 178 AS WELL AS CRAIES ON STATUTE LAW AT PAGES 407-

409. WITH REFERENCE TO THE OBSERVATIONS MADE BY THIS COURT

IN KANNADASAN THAT THE ACT MUST BE HELD TO BE AN ACT BY

INCORPORATION, MR. RANJIT KUMAR SUBMITTED THAT THE

LEGISLATION BY INCORPORATION OF PROVISIONS IN THE ACT HAS BEEN

HELD TO BE ARCHIVAL DRAFTING IN THE WORDS OF FRANCIS BENNION,

WHERE THE LEARNED AUTHOR STATES: "THE TECHNIQUE OF

INCORPORATION HAS RECEIVED SO MUCH JUDICIAL AND OTHER

CRITICISM THAT IT IS SELDOM USED TODAY". THE LEARNED AUTHOR

FURTHER STATES : "THE TECHNIQUE MAY BE CALLED ARCHIVAL

DRAFTING BECAUSE IT REQUIRES PERSONS APPLYING THE ACT AFTER A

CONSIDERABLE PERIOD HAS ELAPSED SINCE THE RELEVANT DATE TO

ENGAGE IN HISTORICAL RESEARCH IN ORDER TO FIND OUT WHAT THE LAW

THUS IMPORTED AMOUNTS TO". MR. RANJIT KUMAR ALSO PLACED

RELIANCE ON THE OBSERVATIONS MADE BY CRAIES ON STATUTE LAW,

7TH EDITION AT PAGE 29, TO THE EFFECT :- "LEGISLATION BY

REFERENCE, WHICH WAS INCREASING IN 1875, WAS DESCRIBED BY

THE SELECT COMMITTEE OF THAT YEAR AS MAKING AN ACT SO

AMBIGUOUS, SO OBSCURE AND SO DIFFICULT, THAT THE JUDGES

THEMSELVES CAN HARDLY ASSIGN A MEANING TO IT, AND THE

ORDINARY CITIZEN CANNOT UNDERSTAND TO IT, WITHOUT LEGAL ADVICE.

WITH THIS PARLIAMENTARY CRITICISM JUDICIAL OPINION COINCIDES".

ACCORDING TO MR. RANJIT KUMAR, THE ENHANCEMENT OF ROYALTY

BY ISSUANCE OF A NOTIFICATION BY THE CENTRAL GOVERNMENT

UNDER SECTION 9 OF THE MINES AND MINERALS (REGULATION &

DEVELOPMENT) ACT, 1957, AS NOTICED IN THE DECISION OF THIS

COURT IN THE CASE OF STATE OF MADHYA PRADESH VS.

MAHALAXMI FABRICS, 1995 SUPP.(1) S.C.C. 642, AND THE

OBSERVATIONS MADE BY THIS COURT IN THE SAID CASE THAT THE

AFORESAID NOTIFICATION WAS FOR THE PURPOSE OF ADEQUATELY

COMPENSATING THE STATES FOR THE LOSS THAT THEY HAVE SUSTAINED

ON ACCOUNT OF THE DECLARATION OF LAW MADE BY THIS COURT IN

INDIA CEMENT CASE AND ORISSA CEMENT CASE, AND THE

NOTIFICATION WAS HELD TO BE VALID, PROTECTING THE STATE

GOVERNMENTS FROM THE LOSS OF REVENUE IN THE FUTURE AND THE

VALIDATION ACT PROTECTING THE STATE GOVERNMENTS IN RESPECT

OF THE COLLECTION ALREADY MADE. CONSEQUENTLY, BY VIRTUE OF

THE VALIDATION ACT, THE STATE GOVERNMENTS WOULD RETAIN WHAT

HAD ALREADY BEEN COLLECTED BUT CANNOT CLAIM TO HAVE A RIGHT TO

MAKE ANY FRESH LEVY OR COLLECTION SUBSEQUENT TO 4.4.1991.

MR. RANJIT KUMAR ALSO URGED THAT THE INDIA CEMENT LIMITED

HAD CHALLENGED THE LEVY OF CESS, RIGHT FROM THE DATE OF

INCEPTION OF THE LEVY UNDER THE TAMIL NADU ACT AND THE HIGH

COURT HAD GRANTED STAY OF THE OPERATION OF THE ACT. EVEN

AFTER THE JUDGMENT OF THE HIGH COURT, WHILE THE MATTER WAS

PENDING IN THIS COURT IN APPEAL, THE STAY ORDER WAS OPERATING

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AND THE ASSESSE, THEREFORE, NEVER PASSED ON THE CESS LEVIED TO

ANY CONSUMER NOR COULD IT DO SO BECAUSE THE COMMODITY WAS

A CONTROLLED COMMODITY AND THE LITIGATION ENDED WITH A

JUDGMENT IN FAVOUR OF THE ASSESSE. TO RE-OPEN SUCH CASES IN

THE GARB OF THE VALIDATION ACT AND SEEKING TO IMPOSE LEVY

AND COLLECTION FROM THE YEAR 1964 WOULD NOT ONLY BE

UNREASONABLE, BUT ALSO WOULD BE CONTRARY TO THE VERY

JUDGMENT PASSED INTER-PARTIES AND THE COURT HAVING STAYED

THE OPERATION OF THE ACT IN FAVOUR OF THE ASSESSEE. ACCORDING

TO MR. RANJIT KUMAR, THE ASSESSEE HAVING NOT COLLECTED THE

CESS FROM THE END USER, WOULD BE REQUIRED TO PAY THE SAME, IN

VIEW OF THE INTERPRETATION GIVEN BY THIS COURT IN

KANNADASAN'S CASE, AND SUCH A VIEW WILL BE WHOLLY

UNREASONABLE AND WOULD BE BEYOND THE OBJECT FOR WHICH THE

PARLIAMENT INTERVENED AND VALIDATED, TO SAVE THE STATE

GOVERNMENTS FROM A DIFFICULT FINANCIAL SITUATION. MR. RANJIT

KUMAR, LASTLY SUBMITTED THAT THE JUDGMENT OF THIS COURT IN

KANNADASAN MUST BE HELD TO BE WRONGLY DECIDED AND MUST

HAVE TO BE RECONSIDERED.

MR. AJIT KUMAR SINHA, APPEARING FOR BHARAT COKING

COAL LIMITED, PETITIONER IN SLP(CIVIL) NO. 7555 OF 1998,

SUBMITTED THAT THE VALIDATION ACT WAS TO CONFER THE AUTHORITY

OF LAW TO MEET THE REQUIREMENT OF ARTICLE 265 OF THE

CONSTITUTION . THE SAID NEED AROSE AS THE STATE WAS DENUDED

OF ITS COMPETENCE AND JURISDICTION TO LEVY CESS ON ROYALTY IN

THE OCCUPIED FIELD UNDER THE MMRD ACT, 1957. HE ALSO

BROUGHT TO OUR NOTICE THE FACT THAT WITH EFFECT FROM THE DATE OF

THE JUDGMENT OF THE HIGH COURT ON 6.11.90, THE PETITIONER

COMPANY STOPPED THE COLLECTION OF CESS FROM THE CONSUMERS

AND THE ORDER/JUDGMENT OF THE HIGH COURT DATED 6.11.90 WAS

ASSAILED BY THE STATE OF BIHAR IN CIVIL APPEAL NO. 3010-3024

OF 1991. THE COURT HAD PASSED AN ORDER TO THE FOLLOWING

EFFECT:-

"IN THE MEANTIME, WE HOLD THAT THE STATE

GOVERNMENT IS BOUND TO COMPLY WITH THE

JUDGMENT OF THIS COURT AND REFUND ALL AMOUNT

COLLECTED ON OR AFTER 4.4.1991. IF THERE IS ANY

DELAY BEYOND AUGUST, 1991 IN MAKING THE REFUNDS,

THE AMOUNT OF REFUNDS WILL BEAR INTEREST OF 18%

FROM 4.4.1991 TILL THE REFUND IS MADE."

NOTWITHSTANDING THE AFORESAID ORDERS, THE STATE GOVERNMENT

STARTED RAISING DEMAND BECAUSE OF THE VALIDATION ACT AND

WHEN THE COMPANY RAISED THE DEMAND AGAINST THE CONSUMERS,

THE CONSUMERS CHALLENGED THE SAME AND OBTAINED STAY ORDERS

FROM THE CALCUTTA HIGH COURT AS WELL AS THE RANCHI BENCH OF

PATNA HIGH COURT AND, THEREFORE, NO DEMAND COULD BE REALISED

IN VIEW OF THE ORDERS OF THE COURT. NOW UNDER SUCH SITUATION

IF THE PROVISIONS OF THE VALIDATION ACT ARE INTERPRETED IN THE

MANNER AS CONTENDED BY STATE OF BIHAR, AND IF THE JUDGMENT

OF THIS COURT IN KANNADASAN IS UPHELD, THEN THE PETITIONER-

COMPANY WOULD BE GROSSLY PREJUDICED, AS IT WOULD BE LIABLE

TO PAY CESS TO THE STATE GOVERNMENT AND YET COULD NOT COLLECT

THE SAME FROM THE CONSUMERS. ACCORDING TO THE LEARNED

COUNSEL, SECTION 2 OF THE IMPUGNED VALIDATION ACT DOES NOT

CREATE ANY FRESH LEVIES AND, THEREFORE, WHAT PURPORTS TO HAVE

BEEN VALIDATED IS THE COLLECTION ALREADY MADE AND BY NO

STRETCH OF IMAGINATION, A FRESH RIGHT TO MAKE ANY LEVY OR

COLLECTION.

IN THE CONTEXT OF THE SUBMISSIONS MADE BY THE COUNSEL

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FOR DIFFERENT PARTIES, NOTED ABOVE, THE CRUTIAL QUESTION THAT

ARISES FOR CONSIDERATION IS WHAT REALLY PARLIAMENT INTENDED TO

VALIDATE BY ENACTING THE VALIDATION ACT? ON A PLAIN READING

OF SECTION 2(1) OF THE SAID ACT IT IS CRYSTAL CLEAR, THAT IT

PURPORTS TO VALIDATE CERTAIN STATE LAWS AND ACTIONS TAKEN AND

THINGS DONE THEREUNDER, BY PROVIDING THAT THE PROVISIONS

RELATING TO CESSES AND OTHER TAXES ON MINERALS FICTIONALLY MUST

BE HELD TO HAVE BEEN ENACTED BY THE PARLIAMENT, AND KEEPING

THOSE PROVISIONS ALIVE TILL 4TH APRIL, 1991. IT MAY BE BORNE IN

MIND THAT UNDER THE VALIDATION ACT PARLIAMENT NEVER RE-

ENACTED THE 11 ACTS MENTIONED IN THE SCHEDULE, BUT MERELY

PROVIDED THE LEGISLATIVE COMPETENCE FOR THOSE PROVISIONS IN

THOSE ACTS WHICH RELATED TO CESSES OR TAXES ON MINERALS. THE

LEGISLATIVE HISTORY BEHIND THE ENACTMENT OF THE AFORESAID

VALIDATION ACT UNEQUIVOCALLY POINTS OUT TO THE FACT THAT THE

STATE LEGISLATURE HAD ENACTED DIFFERENT STATUTES CONFERRING

RIGHT OF LEVY AND COLLECTION OF CESS AND TAXES ON MINERALS, AND

THE SUPREME COURT CAME TO THE CONCLUSION THAT THE STATE

LEGISLATURE DID NOT HAVE THE RIGHT TO MAKE LAW CONFERRING RIGHT

TO LEVY AND COLLECTION ON MINERALS AS THE FIELD HAD BEEN

OCCUPIED BY THE UNION LEGISLATURE ON THE ENACTMENT OF THE

MINES AND MINERALS REGULATION AND DEVELOPMENT ACT, 1957.

THE JUDGMENT OF THIS COURT IN INDIA CEMENT AS WELL AS IN

ORISSA CEMENT NECESSARILY LEAD TO A SITUATION WHEREUNDER NOT

ONLY THE 11 ACTS MENTIONED IN THE SCHEDULE OF THE VALIDATION

ACT WERE DECLARED NULL AND VOID, BUT ALSO THE COLLECTIONS

MADE UNDER SUCH INVALID LAW BECAME REFUNDABLE. IT IS NO

DOUBT TRUE, THAT IN ORISSA CEMENT CASE THE SUPREME COURT

BORNE IN MIND THE PRINCIPLE OF PROSPECTIVE OVER-RULING, AS HAD

BEEN DONE IN GOLAKNATH'S CASE, INDICATED THE DATES WITH EFFECT

FROM WHICH THE JUDGMENT WOULD OPERATE BUT THE ACTS HAVING

BEEN DECLARED NULL AND VOID THE STATE GOVERNMENTS BECAME

APPREHENSIVE THAT A HUGE AMOUNT OF TAX, ALREADY COLLECTED

UNDER LAWS, FOR WHICH STATE LEGISLATURES DID NOT HAVE THE

COMPETENCE TO LEGISLATE WOULD BE REQUIRED TO BE REFUNDED.

THE PARLIAMENT ALSO WAS OF THE SAME OPINION, AS WOULD

APPEAR FROM THE STATEMENTS OF OBJECTS AND REASONS OF THE

VALIDATION ACT AND THE PARLIAMENT CAME FORWARD BY A UNIQUE

DEVICE OF PROVIDING LEGISLATIVE COMPETENCE IN RESPECT OF

CERTAIN PROVISIONS OF THE STATE LAWS AND THAT TOO ONLY KEEPING

THE ACT ALIVE UPTO 4TH APRIL, 1991, THE DATE ON WHICH THE

SUPREME COURT DELIVERED THE JUDGMENT IN ORISSA CEMENT

CASE. IT IS IN THIS CONTEXT THE PROVISIONS OF THE VALIDATION ACT

AS WELL AS THE OBJECT FOR WHICH THE ACT WAS ENACTED WILL HAVE

TO BE ASCERTAINED. A STATUTE IS AN EDICT OF THE LEGISLATURE AND

IN CONSTRUING A STATUTE, IT IS NECESSARY, TO SEEK THE INTENTION OF

ITS MAKER. A STATUTE HAS TO BE CONSTRUED ACCORDING TO THE

INTENT OF THEM THAT MAKE IT AND THE DUTY OF THE COURT IS TO ACT

UPON THE TRUE INTENTION OF THE LEGISLATURE. IF A STATUTORY

PROVISION IS OPEN TO MORE THAN ONE INTERPRETATION THE COURT

HAS TO CHOOSE THAT INTERPRETATION WHICH REPRESENTS THE TRUE

INTENTION OF THE LEGISLATURE. THIS TASK VERY OFTEN RAISES THE

DIFFICULTIES BECAUSE OF VARIOUS REASONS, IN AS MUCH AS THE

WORDS USED MAY NOT BE SCIENTIFIC SYMBOLS HAVING ANY PRECISE

OR DEFINITE MEANING AND THE LANGUAGE MAY BE AN IMPERFECT

MEDIUM TO CONVEY ONE'S THOUGHT OR THAT THE ASSEMBLY OF

LEGISLATURES CONSISTING OF PERSONS OF VARIOUS SHADES OF

OPINION PURPORT TO CONVEY A MEANING WHICH MAY BE OBSCURE.

IT IS IMPOSSIBLE EVEN FOR THE MOST IMAGINATIVE LEGISLATURE TO

FORESTALL EXHAUSTIVELY SITUATIONS AND CIRCUMSTANCES THAT MAY

EMERGE AFTER ENACTING A STATUTE WHERE ITS APPLICATION MAY BE

CALLED FOR. NONETHELESS, THE FUNCTION OF THE COURTS IS ONLY TO

EXPOUND AND NOT TO LEGISLATE. LEGISLATION IN A MODERN STATE IS

ACTUATED WITH SOME POLICY TO CURB SOME PUBLIC EVIL OR TO

EFFECTUATE SOME PUBLIC BENEFIT. THE LEGISLATION IS PRIMARILY

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DIRECTED TO THE PROBLEMS BEFORE THE LEGISLATURE BASED ON

INFORMATION DERIVED FROM PAST AND PRESENT EXPERIENCE. IT

MAY ALSO BE DESIGNED BY USE OF GENERAL WORDS TO COVER

SIMILAR PROBLEMS ARISING IN FUTURE. BUT, FROM THE VERY NATURE

OF THINGS, IT IS IMPOSSIBLE TO ANTICIPATE FULLY THE VARIED

SITUATIONS ARISING IN FUTURE IN WHICH THE APPLICATION OF THE

LEGISLATION IN HAND MAY BE CALLED FOR, AND, WORDS CHOSEN TO

COMMUNICATE SUCH INDEFINITE REFERENTS ARE BOUND TO BE IN

MANY CASES LACKING IN CLARITY AND PRECISION AND THUS GIVING

RISE TO CONTROVERSIAL QUESTIONS OF CONSTRUCTION. THE PROCESS

OF CONSTRUCTION COMBINES BOTH LITERAL AND PURPOSIVE

APPROACHES. IN OTHER WORDS THE LEGISLATIVE INTENTION I.E., THE

TRUE OR LEGAL MEANING OF AN ENACTMENT IS DERIVED BY

CONSIDERING THE MEANING OF THE WORDS USED IN THE ENACTMENT

IN THE LIGHT OF ANY DISCERNIBLE PURPOSE OR OBJECT WHICH

COMPREHENDS THE MISCHIEF AND ITS REMEDY TO WHICH THE

ENACTMENT IS DIRECTED. THE AFORESAID PRINCIPLE WAS

ENUNCIATED AND APPLIED BY THIS COURT IN THE CASE OF STATE OF

HIMACHAL PRADESH VS. KAILASH CHAND MAHAJAN - 1992

SUPPL. (2) SCC 351. LORD SOMERVELL IN THE CASE OF

ATTORNEY-GENERAL VS. HRH PRINCE ERNEST AUGUSTUS

(1957) 1 ALL ER 49 HAS STATED "THE MISCHIEF AGAINST WHICH

THE STATUTE IS DIRECTED AND, PERHAPS THOUGH TO AN UNDEFINED

EXTENT THE SURROUNDING CIRCUMSTANCES CAN BE CONSIDERED.

OTHER STATUTES IN PARI MATERIA AND THE STATE OF THE LAW AT THE

TIME ARE ADMISSIBLE." IT IS ALSO A CARDINAL PRINCIPLE OF

CONSTRUCTION THAT EXTERNAL AIDS ARE BROUGHT IN BY WIDENING THE

CONCEPT OF CONTEXT AS INCLUDING NOT ONLY OTHER ENACTING

PROVISIONS OF THE SAME STATUTE, BUT ITS PREMBLE, THE EXISTING

STATE OF LAW, OTHER STATUTES IN PARI MATERIA AND THE MISCHIEF

WHICH THE STATUTE WAS INTENDED TO REMEDY. CHINNAPPA

REDDY, J. IN THE RESERVE BANK OF INDIA VS. PEARLESS

GENERAL FINANCE AND INVESTMENT CO. - (1987) 1 SCC 424,

HAD OBSERVED , "INTERPRETATION MUST DEPEND ON THE TEXT AND

THE CONTEXT. THEY ARE THE BASES OF INTERPRETATION. ONE MAY

WELL SAY IF THE TEXT IS THE TEXTURE, CONTEXT IS WHAT GIVES

COLOUR. NEITHER CAN BE IGNORED. BOTH ARE IMPORTANT. THAT

INTERPRETATION IS BEST WHICH MAKES THE TEXTUAL INTERPRETATION

MATCH THE CONTEXTUAL. A STATUTE IS BEST INTERPRETED WHEN WE

KNOW WHY IT WAS ENACTED. MOST FAIR AND RATIONAL METHOD FOR

INTERPRETING A STATUTE IS BY EXPLORING THE INTENTION OF THE

LEGISLATURE THROUGH THE MOST NATURAL AND PROBABLE SIGNS WHICH

ARE 'EITHER THE WORDS, THE CONTEXT, THE SUBJECT MATTER, THE

EFFECTS AND CONSEQUENCES, OR THE SPIRIT AND REASON OF THE LAW.

IN THE COURT OF LAW WHAT THE LEGISLATURE INTENDED TO BE DONE OR

NOT TO BE DONE CAN ONLY BE LEGITIMATELY ASCERTAINED FROM THAT

WHAT IT HAS CHOSEN TO ENACT, EITHER IN EXPRESS WORDS OR BY

REASONABLE AND NECESSARY IMPLICATION. BUT THE WHOLE OF WHAT

IS ENACTED 'BY NECESSARY IMPLICATION' CAN HARDLY BE

DETERMINED WITHOUT KEEPING IN MIND THE PURPOSE OR OBJECT OF

THE STATUTE. A BARE MECHANICAL INTERPRETATION OF THE WORDS

AND APPLICATION OF LEGISLATIVE INTENT DEVOID OF CONCEPT OR

PURPOSE WILL REDUCE MOST OF THE REMEDIAL AND BENEFICENT

LEGISLATION TO FUTILITY. THE COURTS, HOWEVER, ARE ALWAYS

WARNED THAT THEY ARE NOT ENTITLED TO USURP LEGISLATIVE FUNCTION

UNDER THE DISGUISE OF INTERPRETATION AND THAT THEY MUST AVOID

THE DANGER OF DETERMINATION OF THE MEANING OF A PROVISION

BASED ON THEIR OWN PRECONCEIVED NOTIONS OF IDEOLOGICAL

STRUCTURE OR SCHEME INTO WHICH THE PROVISION TO BE INTERPRETED

IS SOMEHOW FITTED. BEARING IN MIND THE AFORESAID RULES OF

CONSTRUCTION AND EXAMINING THE PROVISIONS OF THE VALIDATION

ACT, THE CONCLUSION IS IRRESISTIBLE THAT THE PARLIAMENT ADOPTED

A UNIQUE DEVICE OF PROVIDING THE LEGISLATIVE COMPETENCE TO

CERTAIN PROVISIONS OF DIFFERENT STATE LEGISLATIONS WHICH

LEGISLATIONS HAVE ALREADY BEEN STRUCK DOWN FOR LACK OF

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LEGISLATIVE COMPETENCE. AS THE PARLIAMENT THOUGHT THAT ON

ACCOUNT OF THE JUDGMENTS OF THE SUPREME COURT THE STATE

GOVERNMENTS WOULD BE LIABLE TO MAKE REFUND, OF CESS AND

OTHER TAXES COLLECTED BY THEM, WHICH WAS LIKELY TO HAVE A

SERIOUS IMPACT ON STATE REVENUE, AND TO PREVENT THE LIABILITY

OF REFUND, THE PARLIAMENT INTENDED TO VALIDATE COLLECTION OF

LEVIES ALREADY MADE BY THE STATE GOVERNMENTS UP TO 4TH APRIL,

1991. THIS CONCLUSION OF OURS IS BASED ON, NOT ONLY THE

LANGUAGE USED IN SECTION 2(1) BUT ALSO THE STATEMENT OF

OBJECTS AND REASONS, WHICH CLEARLY ENUNCIATES THE SAME.

THE STATEMENTS OF OBJECTS OF REASONS IS EXTRACTED

HEREINBELOW IN EXTENSO:-

"STATEMENT OF OBJECTS AND REASONS.-CERTAIN

STATE ACTS IMPOSING CESSES AND OTHER TAXES ON

MINERALS HAD BEEN STRUCK DOWN BY COURTS

INCLUDING THE SUPREME COURT OF INDIA IN DIFFERENT

CASES. AS A RESULT OF JUDGMENTS IN THESE CASES,

STATE GOVERNMENT BECAME LIABLE TO REFUND CESSES

AND OTHER TAXES COLLECTED BY THEM. SINCE REFUND

WAS LIKELY TO HAVE A SERIOUS IMPACT ON STATE

REVENUES OF THE CONCERNED STATE GOVERNMENTS AND

HAVING REGARD TO THE FACT THAT IT IS EXTREMELY

DIFFICULT TO ENSURE THAT THE LEVIES COLLECTED ARE

REFUNDED TO THE LARGE NUMBER OF END USERS OF

MINERALS WHO HAVE ACTUALLY BORNE THE BURDEN OF

SUCH LEVIES, THE CESS AND OTHER TAXES ON MINERALS

(VALIDATION) ORDINANCE, 1992 (ORD. 7 OF 1992)

WAS PROMULGATED BY THE PRESIDENT ON THE 15TH

FEBRUARY, 1992, TO VALIDATE COLLECTION OF SUCH

LEVIES B BY STATE GOVERNMENTS UP TO THE 4TH DAY OF

APRIL, 1991."

THOUGH MR. DWIVEDI, THE LEARNED SENIOR COUNSEL, APPEARING

FOR THE STATE OF BIHAR, CONTENDED THAT THE PREAMBLE TO THE

EFFECT, "AN ACT TO VALIDATE THE IMPOSITION AND COLLECTION OF

CESSES AND CERTAIN OTHER TAXES ON MINERALS UNDER CERTAIN STATE

LAWS" IS MUCH WIDER THAN THE STATEMENT OF OBJECTS AND

REASONS AND IS IN CONSONANCE WITH THE LANGUAGE USED IN

SECTION 2(1) OF THE ACT. BUT, WE ARE OF THE CONSIDERED

OPINION, THAT THE EXPRESSION 'IMPOSITION AND COLLECTION'

WOULD MEAN, IMPOSITION ALREADY MADE OR COLLECTION ALREADY

MADE UNDER CERTAIN STATE LAWS AND THE PREAMBLE CANNOT BE

CONSTRUED TO MEAN TO CONFER A FURTHER RIGHT OF IMPOSITION AND

COLLECTION OF CESSES ON THE MINERALS EXTRACTED UP TO 4TH APRIL,

1991. THAT APART, THE VERY HEADING OF SECTION 2(1), NAMELY,

"VALIDATION OF CERTAIN STATE LAWS AND ACTIONS TAKEN AND

THINGS DONE THEREUNDER", WOULD SUGGEST THAT THE PARLIAMENT

BY LEGAL FICTION INJECTED LEGISLATIVE COMPETENCE TO THE LAWS

ENACTED BY THE STATE LEGISLATURE AND GAVE LIFE TO SUCH LAWS

UPTO 4TH APRIL, 1991, THE DATE ON WHICH THE JUDGMENT OF THE

SUPREME COURT IN ORISSA CEMENT CASE WAS DELIVERED, FOR

THE PURPOSE OF VALIDATING THE ACTIONS TAKEN, THINGS DONE

UNDER SUCH LAWS DECLARED VOID BY THE SUPREME COURT. IT IS

NO DOUBT TRUE, THAT IN KANNADASAN'S CASE, A BENCH OF TWO

LEARNED JUDGES OF THIS COURT INTERPRETED THE PROVISIONS AND

HELD THAT THE EFFECT OF VALIDATION WOULD CONFER A RIGHT ON THE

STATE GOVERNMENT TO MAKE FRESH LEVY AND COLLECTION OF DUES

WHICH WAS COLLECTABLE UPTO 4TH APRIL, 1991, BUT WE ARE IN

RESPECTFUL DISAGREEMENT WITH THE AFORESAID CONCLUSION, AS IN

OUR CONSIDERED OPINION, NEITHER THE LANGUAGE OF SECTION 2(1)

NOR THE OBJECTS AND REASONS APPENDED TO THE VALIDATION ACT,

AS PREFATORY NOTE, STIPULATES THAT TO BE THE OBJECT, NOR EVEN

THE PARLIAMENT THOUGHT IT FIT TO HAVE A SAVING CLAUSE IN THE

VALIDATION ACT, AS WAS DONE IN JOARA SUGAR MILLS CASE. ON

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A CONSTRUCTION OF THE PROVISIONS OF THE VALIDATION ACT, AND

BEARING IN MIND THE SITUATION UNDER WHICH THE ACT WAS

ENACTED AND A VOID ACT WAS GIVEN LIFE UPTO A PARTICULAR

PERIOD BY DRAFTING LEGISLATIVE COMPETENCE FOR THE SAME IN THE

TEETH OF THE PROVISIONS CONTAINED IN ARTICLE 265 OF THE

CONSTITUTION, WE ARE PERSUADED TO ACCEPT THE ARGUMENTS

ADVANCED BY THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE

IN DIFFERENT CASES, MR. SHANTI BHUSHAN, MR. KK VENUGOPAL,

MR. PARASARAN, DR. SINGHVI, MR. RANJIT KUMAR, AND OTHERS

THAT THE SAID VALIDATION ACT CANNOT BE CONSTRUED TO HAVE

CONFERRED A RIGHT TO MAKE LEVY AND COLLECTION OF CESS OR TAXES

ON MINERALS WHICH WAS COLLECTABLE UP TO 4TH APRIL, 1991, AS

WAS HELD IN KANNADASAN'S CASE, BUT IT MERELY VALIDATED THE

COLLECTIONS ALREADY MADE SO THAT THE STATE WILL NOT BE

BURDENED WITH THE LIABILITY OF REFUNDING THE AMOUNT, ALREADY

COLLECTED UNDER VOID LAW. IN OUR CONSIDERED OPINION,

THEREFORE, THE EARLIER DECISION IN KANNADASAN'S CASE TO THE

CONTRARY MUST BE HELD TO HAVE BEEN NOT CORRECTLY DECIDED.

AT THIS STAGE IT WOULD BE APPROPRIATE TO DISCUSS THE

PROVISIONS OF ARTICLE 265 OF THE CONSTITUTION AND ITS IMPACT

ON THE INTERPRETATION OF THE VALIDATION ACT. UNDER ARTICLE

265 OF THE CONSTITUTION, NO TAX SHALL BE LEVIED OR COLLECTED

EXCEPT BY AUTHORITY OF LAW. IT IS THUS EXPLICIT THAT NOT ONLY

THE LEVY, BUT ALSO THE COLLECTION OF A TAX MUST BE UNDER THE

AUTHORITY OF SOME LAW. THE AUTHORITY OF LAW REFERS TO A VALID

LAW WHICH IN TURN WOULD MEAN THAT THE TAX PROPOSED TO BE

LEVIED MUST BE WITHIN THE LEGISLATIVE COMPETENCE OF THE

LEGISLATURE, IMPOSING THE TAX AND THE LAW MUST BE VALIDLY

ENACTED. IT MUST NOT ALSO CONTRAVENE THE SPECIFIC PROVISIONS

OF THE CONSTITUTION AND THE TAX IN QUESTION MUST BE

AUTHORISED BY SUCH VALID LAW. THE EXPRESSION "LEVY AND

COLLECTION" ARE USED IN ARTICLE 265 IN A COMPREHENSIVE SENSE

AND ARE INTENDED TO INCLUDE THE ENTIRE PROCESS OF TAXATION

COMMENCING FROM TAXING STATUTE TO THE TAKING AWAY OF THE

MONEY FROM THE CITIZEN. WHAT THE ARTICLE ENJOINS IS THAT

EVERY STAGE IN THIS ENTIRE PROCESS MUST BE AUTHORISED BY THE

LAW. THIS BEING THE POSITION, IN THE CASE IN HAND, SEVERAL

TAX LEGISLATIONS ENUMERATED IN THE SCHEDULE TO THE VALDIATION

ACT HAVING BEEN DECLARED ULTRA VIRES, ON THE GROUND THAT THE

STATE LEGISLATURE HAD NOT THE LEGISLATIVE COMPETENCE TO

MAKE THE LEGISLATION, THERE EXISTED NO AUTHORITY OF LAW FOR

MAKING ANY LEVY OR COLLECTION OF TAX AND CESSES ON MINERALS.

THE PARLIAMENTARY INTERVENTION BY ENACTING THE VALIDATION

ACT AND GIVING IT RETROSPECTIVE EFFECT AND MAKING THE LAW

EXISTED TILL 4.4.91. WHAT HAS BEEN ACHIEVED IS A VALID AND

LEGAL TAXING PROVISION AND THEN BY FICTION, MAKING THE TAX

ALREADY COLLECTED TO STAND UNDER THE RE-ENACTED LAW. IN THE

ABSENCE OF ANY PROVISIONS IN THE VALIDATION ACT, THE RELEVANT

PROVISIONS OF THE STATE LAWS, WHICH STOOD EXPIRED ON

4.4.1991, TO HOLD THAT THE VALIDATION ACT AUTHORISES,

IMPOSING AND COLLECTION OF TAX AND CESSES ON MINERALS, EVEN

AFTER 4.4.1991, IN RESPECT OF THE MINERALS EXTRACTED TILL 4TH OF

APRIL, 1991, ON WHICH THE CESS WAS COLLECTABLE, WOULD

CONTRAVENE ARTICLE 265 OF THE CONSTITUTION, INASMUCH AS

THERE DID NOT EXIST ANY VALID PROVISION OR AUTHORITY OF LAW FOR

MAKING SUCH COLLECTION. IN THIS VIEW OF THE MATTER, WE ARE

PERSUADED TO AGREE WITH THE SUBMISSION MADE BY MR. SHANTI

BHUSHAN ON THIS QUESTION THAT THE PARLIAMENT NEVER INTENDED

TO CONFER AN AUTHORITY ON THE STATE GOVERNMENT TO MAKE ANY

FRESH LEVY AND COLLECTION OF THE CESS AND TAXES ON MINERALS,

WHICH WAS COLLECTABLE UPTO 4TH OF APRIL, 1991 UNDER THE

VALIDATION ACT AND THE JUDGMENT OF THIS COURT IN

KANNADASAN'S CASE, MUST, THEREFORE, BE HELD NOT TO HAVE

BEEN CORRECTLY DECIDED.

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LET US NOW EXAMINE THE QUESTION, AS TO WHETHER THE

STATUTE IS A TEMPORARY STATUTE OR NOT? WHEN WE EXAMINE THIS

QUESTION IN THE CASE IN HAND, WE ARE NOT EXAMINING THE

VALIDATION ACT, BUT WE ARE REQUIRED TO EXAMINE THE RELEVANT

PROVISIONS OF THE DIFFERENT STATE LAWS, INCLUDED IN THE

SCHEDULE TO THE VALIDATION ACT, WHICH LAWS HAD BEEN

DECLARED ULTRA VIRES BY THIS COURT IN THE DECISION OF INDIA

CEMENT AND ORISSA CEMENT, ON THE GROUND OF LACK OF

LEGISLATIVE COMPETENCE AND THAT LEGISLATIVE COMPETENCE HAS

BEEN PURPORTED TO HAVE BEEN CONFERRED BY VIRTUE OF A

DEEMING ENACTMENT BY PARLIAMENT AND FURTHER ENACTING THAT

SUCH PROVISIONS SHALL BE DEEMED TO HAVE BEEN REMAINED IN

FORCE UPTO THE 4TH DAY OF APRIL, 1991. A STATUTE CAN BE SAID

TO BE EITHER PERPETUAL OR TEMPORARY. IT IS PERPETUAL WHEN NO

TIME IS FIXED FOR ITS DURATION AND SUCH A STATUTE REMAINS IN

FORCE UNTIL ITS REPEAL WHICH MAY BE EXPRESS OR IMPLIED. BUT A

STATUTE IS TEMPORARY WHEN ITS DURATION IS ONLY FOR A SPECIFIED

TIME AND SUCH A STATUTE EXPIRES ON THE EXPIRY OF THE SPECIFIED

TIME, UNLESS IT IS REPEALED EARLIER. THE RELEVANT PROVISIONS OF

THE DIFFERENT STATE LAWS RELATING TO CESSES OR TAXES ON

MINERALS HAVING BEEN DEEMED TO HAVE BEEN ENACTED BY

PARLIAMENT AND HAVING BEEN DEEMED TO HAVE REMAINED IN

FORCE UPTO 4TH DAY OF APRIL, 1991 UNDER THE VALIDATION ACT,

THOSE LAWS RELATING TO CESSES OR TAXES ON MINERALS MUST BE

HELD TO BE TEMPORARY STATUTE IN THE EYE OF LAW. NECESSARILY,

THEREFORE, ITS LIFE EXPIRED AND IT WOULD BE DIFFICULT TO

CONCEIVE THAT NOTWITHSTANDING THE EXPIRY OF THE LAW ITSELF,

THE COLLECTING MACHINERY UNDER THE LAW COULD BE OPERATED

UPON FOR MAKING THE COLLECTION OF THE CESS OR TAX COLLECTABLE

UPTO 4.4.1991. ADMITTEDLY, TO A TEMPORARY STATUTE, THE

PROVISIONS OF SECTION 6 OF THE GENERAL CLAUSES ACT, 1897

WILL HAVE NO APPLICATION. VERY OFTEN LEGISLATURE ENACTS IN THE

TEMPORARY STATUTE A SAVING PROVISION, SIMILAR IN EFFECT TO

SECTION 6 OF THE GENERAL CLAUSES ACT, AS WAS DONE IN JOURA

SUGAR MILLS, 1966(1) S.C.R. 523. BUT IN THE ABSENCE OF

SUCH A PROVISION IN THE VALIDATION ACT IN QUESTION, WHICH HAS

PURPORTED TO HAVE CONFERRED THE LEGISLATIVE COMPETENCE IN

RESPECT OF THE SEVERAL STATE LAWS MENTIONED IN THE SCHEDULE

AND KEPT IT ALIVE TILL 4.4.91, AND NOT BEYOND THAT DATE, THE LIFE

OF SUCH STATE LAWS STOOD EXPIRED ON 4TH OF APRIL, 1991.

CONSEQUENTLY, THERE WOULD BE NO RESIDUARY PROVISION OR

AUTHORITY OF LAW CONFERRING A POWER ON THE STATE TO MAKE ANY

LEVY OR COLLECTION OF CESS OR TAXES ON MINERALS, AFTER THE

EXPIRY OF THE RELEVANT LAWS. A TEMPORARY STATUTE EVEN IN THE

ABSENCE OF A SAVING PROVISION LIKE SECTION 6 OF THE GENERAL

CLAUSES ACT MAY NOT BE CONSTRUED DEAD FOR ALL PURPOSES AND

THE EFFECT OF EXPIRY IS ESSENTIALLY ONE OF THE CONSTRUCTION OF

THE ACT. THE LEADING AUTHORITY ON THE POINT IS THE CASE OF

STEAVENSON VS. OLIVER (1841) 151 ER, 1024. THESE

PRINCIPLES HAVE BEEN APPLIED BY THIS COURT IN THE CASE OF

STATE OF ORISSA VS. BHUPENDRA KUMAR BOSE AIR

1962(SC) PAGE 945, AND IT IS IN THIS CONTEXT, THE ARGUMENT

OF MR. DWIVEDI, REGARDING LAW OF AN ENDURING NATURE

REQUIRES CONSIDERATION. IN STATE OF ORISSA VS. BHUPENDRA

KUMAR BOSE, ON WHICH MR. DWIVEDI HEAVILY RELIED UPON,

WHAT AROSE FOR CONSIDERATION BEFORE THIS COURT, IS WHETHER

THE ELECTORAL ROLLS WERE IMPROPERLY PREPARED, AND THE COURT

HAVING DECLARED THE ELECTIONS INVALID AND VALIDATING THE

ORDINANCE, WHICH HAD BEEN PROMULGATED VALIDATING THE

ELECTIONS TO THE MUNICIPALITY AS WELL AS VALIDATING THE

ELECTORAL ROLLS PREPARED IN RESPECT OF OTHER MUNICIPALITIES.

WHEN THE VALIDITY OF THE ORDINANCE WAS ASSAILED BEFORE THE

HIGH COURT, THE HIGH COURT STRUCK DOWN THE ORDINANCE AS

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HAVING CONTRAVENED ARTICLE 14 AND IT WAS HELD TO HAVE

OFFENDED ARTICLE 254(1) OF THE CONSTITUTION. ON APPEAL, THIS

COURT HELD THAT THE ORDINANCE DID NOT OFFEND ARTICLE 14 OF THE

CONSTITUTION AND THAT IT EFFECTIVELY REMOVED THE DEFECTS IN

THE ELECTORAL ROLLS FOUND BY THE FIRST JUDGMENT OF THE HIGH

COURT. WHEN ARGUMENTS WERE ADVANCED THAT THE INVALIDITY OF

THE ELECTORAL ROLLS AND THE ELECTIONS TO THE MUNICIPALITY DID

NOT REVIVE ON THE EXPIRY OF THE ORDINANCE, THAT WAS REPELLED

BY THIS COURT, THAT THE RIGHT THAT HAD BEEN CREATED BY THE

STATUTE NAMELY THE VALIDATING ORDINANCE, IS OF AN ENDURING

CHARACTER AND HAS VESTED IN THE PERSON CONCERNED, NAMELY THE

VOTERS, A RIGHT TO VOTE AS WELL AS THE ELECTED COUNCILORS. THAT

RIGHT CANNOT BE TAKEN AWAY MERELY BECAUSE THE ORDINANCE HAS

LAPSED, SINCE THE OBJECT OF THE ORDINANCE WAS TO REMOVE THE

INVALIDITY PERMANENTLY. IT IS IN THAT CONTEXT THE COURT

OBSERVED THAT IF THE RIGHT CREATED BY A STATUTE IS OF AN

ENDURING NATURE AND HAS VESTED IN THE PERSON, THAT RIGHT

CANNOT BE TAKEN AWAY, BECAUSE THE STATUTE BY WHICH IT

CREATED HAS EXPIRED. IN APPLYING THAT PRINCIPLES TO THE FACTS

OF THAT CASE, THE COURT OBSERVED:

"IN OUR OPINION, HAVING REGARD TO THE OBJECT

OF THE ORDINANCE AND TO THE RIGHTS CREATED BY THE

VALIDATING PROVISIONS, IT WOULD BE DIFFICULT TO

ACCEPT THE CONTENTION THAT AS SOON AS THE ORDINANCE

EXPIRED THE VALIDITY OF THE ELECTIONS CAME TO AN END

AND THEIR INVALIDITY WAS REVIVED. THE RIGHTS

CREATED BY THIS ORDINANCE ARE, IN OUR OPINION, VERY

SIMILAR TO THE RIGHTS WITH WHICH THE COURT WAS

DEALING IN THE CASE OF STEAVENSON AND THEY MUST BE

HELD TO ENDURE AND LAST EVEN AFTER THE EXPIRY OF THE

ORDINANCE."

APPLYING THE RATIO OF THE AFORESAID CASE TO THE CASE IN HAND

AND IN VIEW OF OUR CONCLUSION EARLIER AS TO THE TRUE OBJECT AND

IMPORT FOR WHICH THE VALIDATION ACT HAD BEEN ENACTED BY THE

PARLIAMENT, GIVING THE LIFE TO A STATE LAW TILL 4TH OF APRIL,

1991, IT IS NOT POSSIBLE FOR US TO HOLD THAT ANY RIGHT CAN BE

SAID TO HAVE BEEN CREATED IN FAVOUR OF THE STATE OF AN

ENDURING NATURE, WHICH COULD BE ENFORCED EVEN AFTER THE

EXPIRY OF THE LIFE OF THE ACT ITSELF. THE PARLIAMENT HAD

STEPPED IN AND HAD FICTIONALLY ENACTED CERTAIN PROVISIONS OF

THE STATE LAWS BEING CONFRONTED WITH THE SITUATION THAT THE

LIABILITY TO REFUND THE TAXES, ILLEGALLY COLLECTED WOULD HAVE A

DISASTROUS EFFECT ON THE STATE ECONOMY. IT WAS INDICATED ALSO

THAT A VALIDATION ORDINANCE HAD BEEN PROMULGATED BY THE

PRESIDENT TO VALIDATE COLLECTION OF SUCH LEVIES BY THE STATE

GOVERNMENT UPTO THE 4TH OF APRIL, 1991. IN THE CONTEXT, IT

OBVIOUSLY REFERS TO THE COLLECTION OF LEVIES ALREADY MADE AND

WOULD NEVER RELATE TO ANY COLLECTION TO BE MADE THEREAFTER. IN

THIS VIEW OF THE MATTER, WE ARE NOT IN A POSITION TO ACCEPT THE

SUBMISSION OF MR. DWIVEDI, APPEARING FOR THE STATE OF BIHAR

THAT ON ACCOUNT OF THE VALIDATION ACT, THE RELEVANT PROVISIONS

OF THE CESS ACT OF 1880, AS APPLICABLE IN THE STATE OF BIHAR,

CONFERRED AN INDEFEASIBLE RIGHT ON THE STATE GOVERNMENT TO

MAKE LEVY AND COLLECT CESS OR TAXES ON MINERALS, WHICH WAS

COLLECTABLE UPTO 4TH OF APRIL, 1991, EVEN AFTER THE EXPIRY OF

THE VERY LAW ITSELF. IN OUR CONSIDERED OPINION, THE DECISION OF

THIS COURT IN STATE OF ORISSA VS. BHUPENDRA KUMAR BOSE

CASE, WILL HAVE NO APPLICATION TO THE FACTS OF THE PRESENT CASE.

THE NEXT CASE, MR. DWIVEDI RELIED UPON WAS THE CASE OF R.C.

JALL VS. UNION OF INDIA, 1962 SUPP.(3) S.C.R., 436. IN THAT

CASE, AN ORDINANCE HAD BEEN PROMULGATED ON 26TH AUGUST,

1944 IN EXERCISE OF POWERS VESTED IN THE GOVERNOR GENERAL OF

INDIA UNDER SECTION 72 OF THE NINTH SCHEDULE TO THE

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GOVERNMENT OF INDIA ACT, 1935 READ WITH INDIA AND BURMA

(EMERGENCY PROVISIONS) ACT, 1940, CALLED THE COAL

PRODUCTION FUND ORDINANCE, 1944, FOR CONSTITUTING A FUND FOR

FINANCING OF ACTIVITIES FOR THE IMPROVEMENT OF PRODUCTION,

MARKETING AND DISTRIBUTION OF COAL AND COKE. THE SAID

ORDINANCE WAS A PERMANENT ONE AND WAS TO BE CONTINUED TO

BE IN FORCE TILL REPEALED, AS IS APPARENT FROM THE JUDGMENT OF

THIS COURT IN HANSRAJ MOOLJI'S CASE, 1957 S.C.R. 634. A

SECOND ORDINANCE WAS PROMULGATED, REPEALING THE EARLIER ONE

ON 26TH OF APRIL, 1947 AND IN THE REPEALING ORDINANCE, AN

EXPRESS TERM WAS THERE, MAKING THE PROVISIONS OF SECTION 6 OF

THE GENERAL CLAUSES ACT, SHALL APPLY IN RESPECT OF THE REPEAL.

THE QUESTION AROSE WHETHER AFTER EXPIRY OF THE LIFE OF THE

REPEALING ORDINANCE ON NOVEMBER 01, 1947, WHAT WOULD BE

ITS EFFECT IN RESPECT OF THE LIABILITY CONTINUED IN RESPECT OF THE

PAST TRANSACTIONS? THIS COURT HELD THAT THE REPEALING

ORDINANCE HAD CONTINUED THE LIFE OF THE ORIGINAL , WHICH WAS A

PERMANENT ONE, IN RESPECT OF PAST TRANSACTIONS AND, THEREFORE,

THE EXPIRY OF ITS LIFE(LIFE OF REPEALING ORDINANCE) COULD NOT

HAVE ANY EFFECT ON THAT LAW TO THE EXTENT SAVED, AND,

THEREFORE, IT MUST BE HELD TO HAVE CONTINUED TO HAVE FORCE

UNDER ARTICLE 372 OF THE CONSTITUTION, UNTIL IT WAS ALTERED,

REPEALED OR AMENDED BY COMPETENT LEGISLATURE, AND

CONSEQUENTLY, IT CANNOT BE SAID THAT THE COAL CESS WAS LEVIED

OR COLLECTED WITHOUT THE AUTHORITY OF LAW. WE FAIL TO

UNDERSTAND HOW THIS DECISION WILL BE OF ANY ASSISTANCE TO THE

CASE IN HAND, WHERE THE ORIGINAL LAW NAMELY THE CESS ACT OF

1880, AS APPLICABLE IN THE STATE OF BIHAR, DID NOT HAVE THE

LEGISLATIVE COMPETENCE AND AS SUCH WAS DECLARED VOID. BY

THE VALIDATION ACT, PARLIAMENT FICTIONALLY AND BY A DEEMING

PROVISION, ENACTED THE PROVISIONS OF THE INVALID LAW IN

RELATION TO CESS OR TAXES ON MINERALS AND THAT ALSO TILL 4TH OF

APRIL, 1991. THUS, THERE WAS NO PERMANENT LAW, AUTHORISING

THE LEVY WHICH WAS BEING VALIDATED BUT ON THE OTHER HAND BY

A FICTIONAL ENACTMENT, A LAW PERMITTING COLLECTION MADE UPTO

4TH OF APRIL, 1991 WAS ALLOWED TO BE RETAINED. AS HAS BEEN

OBSERVED EARLIER IN THE VALIDATION ACT, NO PROVISION HAS BEEN

MADE, CORRESPONDING TO THE PROVISION CONTAINED IN SECTION 6

OF THE GENERAL CLAUSES ACT, AND THEREFORE, AFTER THE EXPIRY OF

THE LIFE OF THE LAW THAT IS AFTER 4.4.1991, THERE CANNOT BE ANY

AUTHORITY OF LAW FOR MAKING ANY LEVY OR COLLECTION OF THE CESS

AND TAXES ON MINERALS. THIS DECISION ALSO WILL HAVE NO

APPLICATION TO THE CASE IN HAND. THE OTHER DECISION OF THIS

COURT RELIED UPON BY MR. DWIVEDI IS THE CASE OF M/S. VELJI

LAKHAMSI AND CO. AND OTHERS VS. M/S. BENETT COLEMAN

AND CO. AND OTHERS - 1977 (3) SCC 160. IN THIS CASE THE

QUESTION FOR CONSIDERATION WAS WHETHER THE MUNICIPAL

COMMISSIONER COULD ORDER DEMOLITION OF A BUILDING IN

EXERCISE OF POWER UNDER THE PROVISIONS OF CITY OF BOMBAY (

BUILDING WORKS RESTRICTION) ACT, 1944, AFTER THE EXPIRY OF THE

SAID ACT, WHICH WAS A TEMPORARY STATUTE? THIS COURT IN THE

AFORESAID CASE HELD THAT QUESTION WHETHER THE RESTRICTIONS,

RIGHTS AND OBLIGATIONS FLOWING FROM THE PROVISIONS OF A

TEMPORARY STATUTE WHICH CAME TO AN AUTOMATIC END BY EFFLUX

OF TIME EXPIRE WITH THE EXPIRY OF THE STATUTE OR WHETHER THEY

ENDURE AND SURVIVE AFTER THE EXPIRY OF THE STATUTE DEPENDS

UPON THE CONSTRUCTION OF THE STATUTE AND THE NATURE AND

CHARACTER OF THE RIGHTS, RESTRICTIONS AND OBLIGATIONS AND NO

RIGID AND INFLEXIBLE RULE CAN BE LAID DOWN IN THIS BEHALF. IT IS

IN THAT CONTEXT, THE COURT ALSO FURTHER OBSERVED THAT THE

TRANSACTIONS WHICH ARE CONCLUDED AND COMPLETED UNDER THE

TEMPORARY STATUTE WHILE THE SAME WAS IN FORCE OFTEN ENDURE

AND CONTINUE IN BEING DESPITE THE EXPIRY OF THE STATUTE AND SO

DO THE RIGHTS OR OBLIGATIONS ACQUIRED OR INCURRED THEREUNDER

DEPENDING UPON THE PROVISIONS OF THE STATUTE AND NATURE AND

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CHARACTER OF THE RIGHTS AND LIABILITIES. APPLYING THE AFORESAID

RATIO TO THE CASE IN HAND, IT IS DIFFICULT FOR US TO HOLD THAT THE

STATE LAWS WHICH INFUSED LIFE INTO IT UNDER THE VALIDATION ACT

BY A FICTIONAL ENACTMENT OF THE LAWS BY PARLIAMENT AND

KEEPING IT ALIVE TILL 4TH APRIL, 1991, CAN AT ALL BE SAID TO HAVE

CREATED ANY RIGHT ON THE STATE TO LEVY AND COLLECT THE CESS AND

TAX ON MINERALS WHICH CAN BE HELD TO BE OF ENDURING NATURE SO

AS TO ENABLE THE STATE TO LEVY AND COLLECT EVEN AFTER THE EXPIRY

OF THE STATE LAWS IN QUESTION. CONSEQUENTLY, THE AFORESAID

DECISION IS ALSO OF NO ASSISTANCE TO THE STATE OF BIHAR. THE

ONLY OTHER CASE RELIED UPON BY MR. DWIVEDI IS THE CASE OF

T.VENKATA REDDY AND OTHERS VS. STATE OF ANDHRA PRADESH

- 1985 (3) SCC 198. IN THIS CASE BY VIRTUE OF PROMULGATION

OF AN ORDINANCE CERTAIN POSTS WERE ABOLISHED, BUT THE

ORDINANCE COULD NOT BE MADE AN ACT AS THE STATE LEGISLATURE

DID NOT APPROVE OF THE SAME. THE QUESTION FOR CONSIDERATION

WAS WHETHER AFTER THE EXPIRY OF THE LIFE OF AN ORDINANCE, THE

POST WHICH STOOD ABOLISHED CAN BE SAID TO HAVE BEEN REVIVED?

THIS COURT, ON EXAMINING THE PROVISIONS OF SECTION 3 OF THE

ORDINANCE ITSELF CAME TO HOLD THAT THE POST OF PART-TIME

VILLAGE OFFICERS STOOD ABOLISHED ON 6TH JANUARY, 1984 AND THE

EMPLOYEES CEASED TO BE EMPLOYEES OF THE STATE GOVERNMENT.

THESE MATTERS BECAME ACCOMPLISHED ON THAT DATE AND WERE

COMPLETED EVENTS AND CONSEQUENTLY EVEN IF THE ORDINANCE IS

ASSUMED TO HAVE CEASED TO OPERATE FROM A SUBSEQUENT DATE THE

EFFECT OF SECTION 3 OF THE ORDINANCE WAS IRREVERSIBLE EXCEPT

BY EXPRESS LEGISLATION. IN OUR CONSIDERED OPINION, THIS

DECISION IS ALSO OF NO ASSISTANCE TO SUPPORT THE CONTENTION OF

MR. DWIVEDI, APPEARING FOR THE STATE OF BIHAR, IN AS MUCH AS

WHILE INFUSING LIFE INTO THE VOID STATE LAWS BY FICTIONAL

PARLIAMENTARY ENACTMENT UNDER THE VALIDATION ACT AND

KEEPING IT ALIVE TILL 4TH APRIL, 1991, THE PARLIAMENT NEVER

CONFERRED ANY RIGHT UPON THE STATE GOVERNMENT TO MAKE ANY

LEVY OR COLLECT CESS WHICH HAVE NOT BEEN COLLECTED THOUGH

COLLECTABLE UPTO 4.4.1991. THE PARLIAMENT MERELY CONFERRED

THE LIFE TO THE VOID STATUTE BY FICTIONAL RE-ENACTMENT AND

GRANTING LEGISLATIVE COMPETENCE FOR LIMITED PURPOSE SO THAT

THE STATE WOULD NOT BE CALLED UPON TO REFUND THE CESS ALREADY

COLLECTED UNDER SUCH VOID LAW. IN THE AFORESAID PREMISES, WE

DO NOT FIND MUCH FORCE IN THE CONTENTION OF MR. DWIVEDI

ABOUT THE ENDURING NATURE OF THE LAW IN QUESTION AND WE HOLD

THAT RELEVANT PROVISIONS OF THE STATE LAWS WHICH WERE

VALIDATED UNDER THE VALIDATION ACT AND WERE ALIVE TILL

4.4.1991 HAVING EXPIRED ON THAT DATE THERE IS NO AUTHORITY OF

LAW UNDER WHICH THE STATE WOULD RAISE ANY DEMAND OR MAKE

ANY COLLECTION OF CESS AND TAX ON MINERALS UNDER THE EXPIRED

PROVISIONS OF THE STATE LAWS. THE CONCLUSION OF THIS COURT IN

KANNADASAN'S CASE TO THE CONTRARY, THEREFORE, MUST BE HELD

TO BE NOT CORRECT IN LAW. IN ORISSA CEMENT CASE, THIS

COURT THOUGH DECLARED THE LEVY OF CESS TO BE UNCONSTITUTIONAL,

BUT FURTHER DIRECTED THAT THERE SHALL BE NO DIRECTION TO REFUND

TO THE ASSESSEE OF ANY AMOUNTS OF CESS COLLECTED UNTIL THE DATE

ON WHICH THE LEVY IN QUESTION HAS BEEN DECLARED

UNCONSTITUTIONAL. THIS DATE SO FAR AS BIHAR WAS CONCERNED,

WAS THE DATE OF THE JUDGMENT I.E. 4.4.91, IN CASE OF ORISSA, THE

DATE WAS 22ND DECEMBER, 1989 AND IN CASE OF MADHYA

PRADESH, THE DATE WAS 28TH OF MARCH, 1986. IT WAS HELD THAT

ANY CESS COLLECTED AFTER THE AFORESAID DATES BY THE RESPECTIVE

STATES HAS TO BE REFUNDED AND THE STATES CANNOT BE PERMITTED

TO RETAIN THE CESS COLLECTED. IT IS TO OBVIATE THE AFORESAID

DIFFICULTY, PARTICULARLY IN CASE OF STATES OF ORISSA AND MADHYA

PRADESH, THOUGH SUCH DIFFICULTY WAS NOT THERE IN CASE OF

BIHAR, THE PARLIAMENT CAME FORWARD WITH THE VALIDATION ACT.

IT IS TRUE, AS MR. DWIVEDI CONTENDED THAT THERE WAS NO

NECESSITY FOR INCLUDING THE BIHAR ACT IN THE SCHEDULE, SINCE

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THE PARLIAMENT WAS ENACTING THE ACT ONLY TILL 4.4.1991, BUT

SINCE SEVERAL STATE LAWS WERE BEING RE-ENACTED AND 4.4.91

WAS THE LAST DATE OF THE JUDGMENT OF THIS COURT IN ORISSA

CEMENT, IT WAS THOUGHT FIT TO HAVE THE LEGISLATION EFFECTIVE

TILL 4.4.91 BUT FOR THE LIMITED PURPOSE, SO THAT THE STATE WOULD

NOT BE LIABLE TO REFUND ANY CESS WHICH IT MIGHT HAVE COLLECTED

EVEN SUBSEQUENT TO THE RELEVANT STATE LAWS HAVING BEEN

DECLARED UNCONSTITUTIONAL. WE FIND SUFFICIENT FORCE ALSO IN

THE CONTENTION OF MR. K.K. VENUGOPAL THAT THE LAW NEVER

EXISTED AFTER 4.4.1991 AND CONSEQUENTLY, THERE CANNOT BE ANY

RIGHT WITH THE STATE TO MAKE ANY LEVY OR COLLECTION OF THE CESS,

WHICH WAS COLLECTABLE UPTO 4.4.91. MR. VENUGOPAL IS RIGHT

IN HIS SUBMISSION THAT UNDER THE VALIDATION ACT, ONLY PAST

ACTIONS HAVE BEEN SOUGHT TO BE VALIDATED AND THAT TOO BY A

FICTIONAL ENACTMENT OF THE STATE LAWS BY THE PARLIAMENT,

KEEPING IT ALIVE TILL 4.4.91. THERE IS ALSO SOME FORCE IN THE

CONTENTION OF MR. VENUGOPAL THAT EVEN IF THERE MIGHT HAVE

BEEN AN IMPOSITION OF LEVY BUT NOT COLLECTED, THE SAME CANNOT

BE COLLECTED AFTER 4.4.91, AS THE MACHINERY FOR COLLECTION

WOULD NOT BE AVAILABLE AND PERMITTING ANY SUCH COLLECTION

BEYOND THAT DATE WOULD CONTRAVENE ARTICLE 265 AND SUCH AN

ACTION MAY BE VIOLATIVE OF ARTICLE 300A OF THE CONSTITUTION.

THE EXPRESSION "LAW" IN THE CONTEXT OF ARTICLE 300A MUST

MEAN AN ACT OF PARLIAMENT OR OF A STATE LEGISLATURE, A RULE OR

A STATUTORY ORDER HAVING THE FORCE OF LAW, AS HAS BEEN HELD BY

THIS COURT IN BISHAMBHAR DAYAL, 1982(1) SCC 39.

CONSEQUENTLY, IN THE ABSENCE OF ANY SUCH LAW AFTER 4.4.91

BEING IN FORCE, THE STATE CANNOT BE CONFERRED A RIGHT TO LEVY OR

COLLECTION AFTER 4.4.91.

WHEN PARLIAMENT ENACTED THE VALIDATION ACT AND

INFUSED LIFE INTO THE VOID ACT FOR LACK OF LEGISLATIVE

COMPETENCE, IT MUST BE ASSUMED THAT THE PARLIAMENT KNEW THE

CONSTITUTIONAL POSITION AND WAS FULLY AWARE OF THE POSITION OF

LAW AND THE NECESSITY OF PROVIDING A SAVING CLAUSE, IN THE

EVENT, THE PARLIAMENT INTENDED TO CONFER A RIGHT OF COLLECTION

AS WELL AS LEVY SUBSEQUENT TO 4.4.91. THE DELIBERATE AND

CONSCIOUS OMISSION OF THE SAVING CLAUSE BY THE PARLIAMENT, AS

CONTENDED BY DR. A.M. SINGHVI, IS OF CONSIDERABLE

SIGNIFICANCE AND CANNOT BE LIGHTLY BRUSHED ASIDE, AS

CONTENDED BY MR. DWIVEDI, APPEARING FOR THE STATE OF BIHAR.

IT IS TRUE THAT THE PATTERN OF VALIDATION, AS INDICATED BY MR.

PARASARAN, MAY NOT BE A CLINCHING FACTOR IN CONSTRUING THE

PROVISIONS OF THE ACT, BUT AT THE SAME TIME THE FACT THAT IN

JOARA SUGAR MILLS CASE AS WELL AS IN SOME OTHER CASES,

WHILE VALIDATING, LAWS HAVE BEEN ENACTED AND SAVING CLAUSE

HAS BEEN PROVIDED WHICH ARE IN PARI MATERIA WITH SECTION 6 OF

THE GENERAL CLAUSES ACT AND ABSENCE OF SUCH A PROVISION IN

THE PRESENT VALIDATION ACT IS IN CONSONANCE WITH THE VERY

OBJECT AND REASONS, AS APPENDED TO THE ACT. THE SAID OBJECT

BEING TO VALIDATE THE CESS AND TAXES ON MINERALS, ALREADY

COLLECTED UNDER A VOID LAW. DR. SINGHVI IS ALSO RIGHT IN HIS

SUBMISSION THAT THIS COURT IN KANNADASAN'S CASE DREW

WRONG ANALOGY FROM GANGOPADHYAY'S CASE AND ERRONEOUSLY

HELD THAT PROVISIONS THEREIN WERE IDENTICAL TO THE PROVISIONS

OF THE VALIDATION ACT OF 1992. SECTION 2(1) OF THE VALIDATION

ACT HAVING USED THE EXPRESSION "UPTO 4.4.91", IT

UNEQUIVOCALLY INDICATES THAT WHAT IS VALIDATED IS THE PROCESS

OF LEVY AND COLLECTION MADE UPTO THAT DATE AND NO FURTHER.

THIS BEING THE POSITION AND THE VALIDATION ACT NOT HAVING

PROVIDED ANY PROVISION, PERMITTING LEVY OR COLLECTION AFTER

4.4.91, WE ARE OF THE OPINION THAT THE ACT NEVER CONFERRED A

RIGHT OF LEVY OR COLLECTION AFTER 4.4.91. THE JUDGMENT OF

PATNA HIGH COURT, THEREFORE, MUST BE HELD TO BE IN ACCORDANCE

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WITH LAW AND THE JUDGMENT OF THIS COURT IN KANNADASAN'S

CASE MUST BE HELD TO HAVE BEEN WRONGLY DECIDED.

IN KANNADASAN'S CASE, THIS COURT WHILE INTERPRETING

THE VALIDATION ACT, HELD THAT THE ACT AUTHORISES LEVY AND

COLLECTION EVEN AFTER 4.4.91, AS OTHERWISE, IT WILL BE HELD TO BE

DISCRIMINATORY AND VIOLATIVE OF ARTICLE 14 INASMUCH AS IF TWO

PERSONS WOULD BE EQUALLY LIABLE TO PAY, THE PERSON WHO HAS

PAID THE TAX WOULD BE AT THE DISADVANTAGE, THAN THE PERSON,

WHO DID NOT PAY AND CHALLENGE THE DEMAND THIS REASONING

OF THE COURT IN KANNADASAN RUNS CONTRARY TO THE

OBSERVATIONS OF THIS COURT IN MAFATLAL INDUSTRIES, 1997(5)

SCC 536, WHILE THIS COURT DEALING WITH THE PRINCIPLE OF

UNJUST ENRICHMENT, CATEGORICALLY STATED THAT A PERSON WHO HAS

NOT PAID AND HAS SUCCESSFULLY CHALLENGED THE DEMAND IN A

COURT OF LAW STANDS ON A DIFFERENT FOOTING FROM A PERSON WHO

HAS CHOSEN TO PAY AND HAS NOT CHALLENGED THE SAME. WE ARE,

THEREFORE, OF THE CONSIDERED OPINION THAT THIS COURT

ERRONEOUSLY HELD THAT ARTICLE 14 WOULD BE ATTRACTED UNLESS THE

PROVISION OF THE VALIDATION ACT IS INTERPRETED TO MEAN THAT IT

NOT ONLY VALIDATES THE COLLECTION MADE BUT ALSO ENTITLES FRESH

COLLECTION AND LEVY, EVEN AFTER 4.4.91 OF THE DUES WHICH WAS

COLLECTABLE UPTO 4.4.91.

THE CONTENTION ADVANCED BY THE STATE WITH REFERENCE TO

SECTION 2(3) OF THE VALIDATION ACT TO THE EFFECT THAT IT IS

INDICATIVE TO CONFER A SUBSTANTIVE POWER TO LEVY AND COLLECT

CESS AND OTHER TAXES ON MINERALS, IS IN OUR OPINION, WHOLLY

MISCONCEIVED. ALL THAT SUB-SECTION (3) OF SECTION 2 MEANS,

WHICH HAS BEEN INTRODUCED FOR REMOVAL OF DIFFICULTY IS THAT

NOTWITHSTANDING THE FACT THAT THE STATE LAW REMAINED IN FORCE

TILL APRIL, 1991, IF AN ASSESSEE HAS PAID MORE THAN WHAT HE IS

LEGALLY LIABLE TO PAY AND AN APPLICATION FOR REFUND HAD ALREADY

BEEN MADE, THEN HE WOULD HAVE THE RIGHT TO GET REFUND OF THE

EXCESS TAX PAID, EVEN THOUGH THE LIFE OF THE ACT EXPIRES ON

APRIL 04, 1991. THIS CAN BE HELD TO BE A LIMITED SAVING

CLAUSE, CONFERRING A RIGHT OF REFUND ON THE ASSESSEE, IF SUCH

ASSESSEE HAS PAID IN EXCESS OF WHAT IS DUE AND THE SAID

PROVISION CANNOT BE INVOKED TO GIVE A WIDER INTERPRETATION OF

SECTION 2(1) OR SECTION 2(2). IN THIS CONTEXT, WE ARE

PERSUADED TO ACCEPT THE SUBMISSION OF MR. GANGULI THAT THE

REMOVAL OF DIFFICULTY CLAUSE, ENGRAFTED IN SECTION 2(3) OF THE

VALIDATION ACT IS OF A LIMITED APPLICATION, DEALING WITH THE

RIGHT OF THE ASSESSEE TO GET REFUND OF THE EXCESS TAX PAID AND

BY NO STRETCH OF IMAGINATION COULD BE CONSTRUED TO HOLD THAT IT

CONCEIVES OF BOTH LEVY AND COLLECTION OF CESS AND TAXES ON

MINERALS BY THE STATE EVEN AFTER EXPIRY OF 4.4.1991.

IT WILL BE APPROPRIATE TO NOTICE ONE OF THE CONTENTIONS

RAISED BY MR. RANJIT KUMAR, APPEARING FOR INDIA CEMENT

LIMITED IN S.L.P.(CIVIL) NOS. 12993-12995 OF 1998 TO THE

EFFECT THAT NOTWITHSTANDING THE PROMULGATION OF THE TAMIL

NADU ACT, THE ASSESSEE CHALLENGED THE LEVY AND THE HIGH

COURT HAD GRANTED STAY OF THE LEVY AND COLLECTION OF CESS.

EVEN AFTER THE JUDGMENT OF THE HIGH COURT, WHILE THE APPEAL

WAS PENDING IN THIS COURT, THE STAY ORDER WAS OPERATING AND

THE ASSESSEE NEVER PASSED ON THE CESS COMPONENT TO THE

CONSUMER OR END USER, AND ALSO COULD NOT HAVE PASSED ON THE

SAME, AS THE COMMODITY WAS A CONTROLLED COMMODITY. IF

AFTER THIS LENGTH OF TIME, THE VALIDATION ACT IS INTERPRETED TO

MEAN A RIGHT BEING CONFERRED UPON THE STATE TO IMPOSE THE

LEVY AND COLLECTION OF THE SAME FROM 1964, IT WOULD WORK

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OUT GROSS INJUSTICE TO THE ASSESSEE AND EVEN WOULD RUN

CONTRARY TO THE VERY JUDGMENT OF THE COURT INTER-PARTIES.

THOUGH THIS CONTENTION MAY NOT BE A CLINCHING ISSUE IN

INTERPRETING THE PROVISIONS OF THE VALIDATION ACT, BUT IT

CANNOT BE TOTALLY LOST SIGHT OF, AND IF ANY OTHER INTERPRETATION

IS PERMISSIBLE, THEN THE SAME MUST BE ADHERED TO, PARTICULARLY,

IN RELATION TO A TAXING STATUTE. WE DO FIND CONSIDERABLE FORCE

IN THE AFORESAID SUBMISSION, AS IN OUR VIEW, THE INTERPRETATION,

WE HAVE ALREADY GIVEN TO THE VALIDATION ACT WAS THE REAL

INTENTION OF THE PARLIAMENT AND IT NEVER INTENDED TO CONFER A

RIGHT OF COLLECTION OF CESS. IN AGREEMENT WITH THE CONCLUSION

ARRIVED AT BY PATNA HIGH COURT, WE HOLD THE VALIDATION ACT TO

BE VALID, BUT SUCH VALIDATED ACTS DO NOT AUTHORISE ANY FRESH

LEVY OR COLLECTION IN RESPECT OF LIABILITIES ACCRUED PRIOR TO

4.4.91, THOUGH IT PROHIBITS REFUND OF THE COLLECTION ALREADY

MADE PRIOR TO THAT DATE.

IN VIEW OF OUR CONCLUSIONS, AS AFORESAID, WE DO NOT FIND

ANY INFIRMITY WITH THE CONCLUSION OF THE DIVISION BENCH OF

PATNA HIGH COURT REQUIRING OUR INTERFERENCE WITH THE SAME.

THE SAID JUDGMENT OF THE DIVISION BENCH OF PATNA HIGH

COURT IS ACCORDINGLY UPHELD. C.A. NOS. 13102-13107 STAND

DISMISSED. THE BATCH OF CASES FROM THE JUDGMENT OF

KARNATAKA HIGH COURT ARE ALLOWED AND THE JUDGMENT OF

KARNATAKA HIGH COURT FOLLOWING THE DECISION OF THIS COURT IN

KANNADASAN'S CASE IS SET ASIDE. THE BATCH OF CASES ARISING

OUT OF THE JUDGMENT OF ANDHRA PRADESH HIGH COURT FOR THE

SELF SAME REASON ARE ALLOWED AND THE JUDGMENT OF ANDHRA

PRADESH HIGH COURT IS SET ASIDE. THE REVIEW PETITIONS FILED

IN THIS COURT FOR REVIEWING THE JUDGMENT OF KANNADASAN'S

CASE AT THE BEHEST OF THE ASSESSEES CANNOT BE DISPOSED OF,

NOTWITHSTANDING OUR CONCLUSION THAT THE DECISION OF THIS COURT

IN KANNADASAN'S CASE IS NOT CORRECT IN LAW IN AS MUCH AS NO

FORMAL NOTICE HAD BEEN ISSUED TO THE STATE OF TAMIL NADU.

NOTICE MAY, THEREFORE, BE ISSUED TO THE STATE OF TAMIL NADU

IN THOSE REVIEW PETITIONS WHEREAFTER THE REVIEW PETITIONS

COULD BE POSTED FOR DISPOSAL. SO FAR AS THE BATCH OF CASES

WHICH ARE PENDING BEFORE MADHYA PRADESH HIGH COURT,

THOUGH APPLICATION UNDER ARTICLE 139(A) HAD BEEN FILED FOR

GETTING WRIT PETITIONS TRANSFERRED, BUT NO ORDER OF TRANSFER HAD

BEEN PASSED AND, AS SUCH, THE WRIT PETITIONS ARE STILL PENDING

BEFORE THE HIGH COURT OF MADHYA PRADESH. IN THESE

CIRCUMSTANCES, THE TRANSFER APPLICATIONS FILED STAND DISPOSED

OF WITH THE DIRECTION THAT THE HIGH COURT WILL DISPOSE OF THE

PENDING WRIT PETITION IN THE LIGHT OF OUR JUDGMENT IN BIHAR

CASE. BUT CIVIL APPEAL NO. 9917/96 AGAINST THE JUDGMENT OF

MADHYA PRADESH HIGH COURT, DIRECTED AGAINST THE JUDGMENT OF

THE SAID COURT DATED 10.5.95, STANDS DISPOSED OF. SIMILARLY,

REVIEW PETITIONS NOS. 2363, 2364 AND 2365 OF 1998, FILED IN

CIVIL APPEAL NOS. 9913 OF 1996, 9912 OF 1996 AND 9905 OF

1996 ALSO STAND DISPOSED OF.

ALL THESE APPEALS AND APPLICATIONS STAND DISPOSED OF

ACCORDINGLY. THERE WILL BE NO ORDER AS TO COSTS.

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