1965 (9) TMI 46 - HC - VAT and Sales Tax

Issues Involved:
1. Validity of the assessment under the Mysore Sales Tax Act, 1957.
2. Legislative competence of the State Legislature to enact retrospective amendments.
3. Impact of retrospective amendments on the High Court's jurisdiction under Article 226 of the Constitution.
4. Compliance with Article 245 of the Constitution.

Issue-wise Detailed Analysis:

1. Validity of the assessment under the Mysore Sales Tax Act, 1957:
The petitioner, dealing in cotton and groundnut seeds, was assessed to sales tax for the period from 24th October 1957 to 11th November 1958. He contended that the transactions were not taxable under section 5(4) read with Schedule 4 of the Mysore Sales Tax Act, 1957. His contention was based on section 7 of the Act, which stated that "The tax under this Act shall be levied on any transaction of sale or purchase deemed to take place inside the State under this Act or any other law for the time being in force." The Commercial Tax Officer, Haveri, rejected his contention. The petitioner then approached the High Court in Writ Petition No. 916 of 1961, where the Court had already ruled in C. Mallarappa & Sons v. The State of Mysore that the department was not competent to levy sales tax on purchase transactions. However, the Legislature amended section 7 by Act 32 of 1958 to include "sales or purchases," which was later given retrospective effect by Act 26 of 1962.

2. Legislative competence of the State Legislature to enact retrospective amendments:
The petitioner challenged the retrospective amendment under Act 26 of 1962, arguing that it was violative of Article 245 of the Constitution. The Court analyzed whether the Legislature had the competence to enact such a provision. It was established that the State Legislature has the legislative competence to enact laws relating to the levy of sales tax, including retrospective amendments. The Supreme Court in Rai Ramakrishna and Others v. State of Bihar observed that legislative power includes the ability to validate laws found invalid by courts, thus supporting the competence of the State Legislature to enact retrospective amendments.

3. Impact of retrospective amendments on the High Court's jurisdiction under Article 226 of the Constitution:
The petitioner argued that the retrospective amendment affected the High Court's jurisdiction under Article 226. The Court referred to previous rulings, including State of Uttar Pradesh v. Dr. Vijay Anand Maharaj, which clarified that the Legislature cannot enact laws that affect the High Court's powers under Article 226. However, the Court concluded that the impugned provision did not impair the High Court's jurisdiction or the right of an aggrieved party to approach the Court. The retrospective amendment only cured the defect in the law, making the earlier invalid assessments valid.

4. Compliance with Article 245 of the Constitution:
Article 245(1) states, "Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State." The Court held that the power of the State Legislature to make laws within its legislative field is subject to the Constitution's provisions, including Article 226. The Court found that the retrospective amendment did not violate Article 245(1) as it did not affect the High Court's powers but merely validated previous assessments.

Conclusion:
The Court dismissed the petition, holding that the retrospective amendment under Act 26 of 1962 was within the legislative competence of the State Legislature and did not impair the High Court's jurisdiction under Article 226. The petitioner's request for relief was denied, and the petition was dismissed without costs.

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