Case: Bhubaneshwar Singh Vs. Union Of India

declared by a court to be illegally collected under an ineffective or an invalid law, the cause for ineffectiveness or invalidity must be removed before validation can be said to take place effectively. The most important condition, of course, is that the legislature must possess the power to impose the tax, for, if it does not, the action must ever remain ineffective and illegal. Granted legislative competence, it is not sufficient to declare merely that the decision of the court shall not bind for that is tantamount to reversing the decision in exercise of judicial power which the legislature does not possess or exercise. A courts decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. Ordinarily, a court holds a tax to be invalidly imposed because the power to tax is wanting or the statue or the rules or both are invalid or do not sufficiently create the jurisdiction. Validation of a tax so declared illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are in fact removed and the tax thus made legal. Sometimes this is done by providing for jurisdiction where jurisdiction had not been properly invested before. Sometimes this is done by re-enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already collected to stand under the re-enacted law. Sometimes the legislature gives its own meaning and interpretation of the law under which the tax was collected and by legislative fiat makes the new meaning binding upon courts. The legislature may follow any one method or all of them and while it does so it may neutralise the effect of the earlier decision of the court which becomes ineffective after the change of the law." * The same view has been expressed in the cases of West Ramnad Electric Distribution Co. Ltd. v. State of Madras Udai Ram Sharma v. Union of India , Tirath Ram Rajindra Nath v. State of U.P., Krishna Chandra Gangopadhyaya v. Union of India, Hindustan Gum & Chemicals Ltd. v. State of Haryana and Utkal Contractors and Joinery (P) Ltd. v. State of Orissa 13. In the present case as already pointed out above, if sub-section (2) as introduced by the Coal Mines Nationalisation Laws (Amendment) Act, 1986 in Section 10 had existed since the very inception, there was no occasion for the High Court or this Court to issue a direction for taking into account the price which was payable for the stock of coke lying on the date before the appointed day. The authority to introduce sub-section (2) in Section 10 of the aforesaid Act with retrospective effect cannot be questioned. Once the amendment has been introduced retrospectively, courts have to act on the basis that such provision was there since the beginning. The role of the deeming provision need not be emphasised in view of series of judgments of this Courts. Hence reading sub-section (2) of Section 10 along with Section 10, it has to be held that respondents are not required to take into account the stock of coke lying on the date prior to the appointed day, for the purpose of accounting during the period when the mine in question was under the management of the Central Government, because it shall be deemed that the compensation awarded to the petitioner included the price for such coal lying in stock on the date prior to the appointed day. Neither any compensation is to be paid for such stock of coal nor the price thereof is to be taken into account for the purpose of sub-section (1) of Section 22 of the Coking Coal Mines (Nationalisation) Act, 1972. It need not be pointed out that sub-section (1) of Section 22 shall be applicable where the statement of accounts is to be prepared in respect of each coking coal mine taking into account the expenditure incurred in raising the coal and the price of the coal raised during the period when such coking coal mine was under the management of the Central Government or the government company. In view of the aforesaid sub-section (2) introduced in Section 10 of the Coking Coal Mines (Nationalisation) Act, 1972 and Section 19 of the Coal Mines Nationalisation Laws (Amendment) Act, 1972, it shall be deemed that the compensation has been paid even for the stock of coal lying on the date prior to the appointed day 14. On behalf of the petitioner, reference was made to the case of D. Cawasji & Co. v. State of Mysore. In that case, it was held that Section 3 of the Mysore Sales Tax (Amendment) Act, 1969 was unreasonable insofar as it sought to nullify the High Court judgment which had become final and binding on parties. From a bare reference to the aforesaid judgment it shall appear that this Court pointed out that the amendment did not proceed to cure the defect or to remove the lacuna pointed out in the earlier judgment by bringing in an amendment. As such it was not a Validating Act and it could not nullify the judgment of the High Court, because the defect had not been removed by the said Act. In other words, the Validating Act had not served its purpose. In the present case, the lacuna or defect has been removed by introduction of sub-section (2) in Section 10 of the Act with retrospective effect. Sub-section (2) of Section 10 as well as Section 19, both have specified that the amount which is to be paid as compensation mentioned in the schedule shall be deemed to include and deemed always to have included, the amount required to be paid to such owner in respect of all coal in stock on the date immediately before the appointed day. As such the earlier judgment of this Court is of no help to the petitioner

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]on (2) has been introduced in Section 10 of the Nationalisation Act with retrospective effect, it shall be deemed to have been there sincethe day the Coking Coal Mines (Nationalisation) Act, 1972 came into force. The saidprovides and declares that the amount specified in the fifth column of the First Schedule against any coking coal mine specified in the said schedule which was required to be given by the Central Government to its owner under(1) shall be deemed to include, and deemed always to have included "the amount required to be paid to such owner in respect of all coke in stock or other assets referred to in clause (b) of Section 3 on the date immediately before the appointed day and no further amount shall be payable to the owner in respect of such coke or other assets". It cannot be disputed that if(2) was in existence on the date the writ application had been filed on behalf of the petitioner, there would have been no occasion for the High Court or this Court to direct that the account be taken also of the stock of coke lying on the date immediately before the appointed day because the amount which is payable to the petitioner shall be deemed to have included the payment even in respect of suchis well settled that Parliament and State Legislatures have plenary powers of legislation on the subjects within their field. They can legislate on the said subjects prospectively as well as retrospectively. If the intention of the legislature is clearly expressed that it purports to introduce the legislation or to amend an existing legislation retrospectively, then subject to the legislative competence and the exercise being not in violation of any of the provisions of the Constitution, such power cannot be questioned,(2) of Section 1 of the Coal Mines Nationalisation Laws (Amendment) Act, 1986 clearly and specifically says that the said amendment to the Coking Coal Mines (Nationalisation) Act, 1972 shall be deemed to have come into force onn (2) of Section 10 which has been introduced with retrospective effect says that the amount which has been mentioned in the schedule to be payable to the owner shall be deemed to include and deemed always to have included the amount required to be paid to such owner in respect of all coke in stock on the date immediately before the appointed day. The amount which is to be paid as compensation for acquisition of right, title and interest of the petitioner in the coking coal mine in question, shall include the compensation for all coke in stock on the date immediately before the appointed day. It can therefore be said that the amendments which have been introduced retrospectively, have taken away the substratum of the claim made on behalf of the petitioner, in respect of the price of the stock of coke lying on the date immediately before the appointedexercise of rendering ineffective the judgments or orders of competent courts by changing the very basis by legislation is adevice of validating legislation. This Court has repeatedly pointed out that such validating legislation which removes the cause of the invalidity cannot be considered to be an encroachment on judicial power. At the same time, any action in exercise of the power under any enactment which has been declared to be invalid by a court cannot be made valid by a Validating Act by merely saying so unless the defect which has been pointed out by the court is removed with retrospective effect. The validating legislation must remove the cause of invalidity. Till such defect or the lack of authority pointed out by the court under a statute is removed by the subsequent enactment with retrospective effect, the binding nature of the judgment of the court cannot beIn the present case as already pointed out above, if(2) as introduced by the Coal Mines Nationalisation Laws (Amendment) Act, 1986 in Section 10 had existed since the very inception, there was no occasion for the High Court or this Court to issue a direction for taking into account the price which was payable for the stock of coke lying on the date before the appointed day. The authority to introduce(2) in Section 10 of the aforesaid Act with retrospective effect cannot be questioned. Once the amendment has been introduced retrospectively, courts have to act on the basis that such provision was there since the beginning. The role of the deeming provision need not be emphasised in view of series of judgments of this Courts. Hence reading(2) of Section 10 along with Section 10, it has to be held that respondents are not required to take into account the stock of coke lying on the date prior to the appointed day, for the purpose of accounting during the period when the mine in question was under the management of the Central Government, because it shall be deemed that the compensation awarded to the petitioner included the price for such coal lying in stock on the date prior to the appointed day. Neither any compensation is to be paid for such stock of coal nor the price thereof is to be taken into account for the purpose of(1) of Section 22 of the Coking Coal Mines (Nationalisation) Act, 1972. It need not be pointed out that(1) of Section 22 shall be applicable where the statement of accounts is to be prepared in respect of each coking coal mine taking into account the expenditure incurred in raising the coal and the price of the coal raised during the period when such coking coal mine was under the management of the Central Government or the government company. In view of the aforesaid(2) introduced in Section 10 of the Coking Coal Mines (Nationalisation) Act, 1972 and Section 19 of the Coal Mines Nationalisation Laws (Amendment) Act, 1972, it shall be deemed that the compensation has been paid even for the stock of coal lying on the date prior to the appointedthe present case, the lacuna or defect has been removedby introduction of(2) in Section 10 of the Act with retrospective effect.(2) of Section 10 as well as Section 19, both have specified that the amount which is to be paid as compensation mentioned in the schedule shall be deemed to include and deemed always to have included, the amount required to be paid to such owner in respect of all coal in stock on the date immediately before the appointed day. As such the earlier judgment of this Court is of no help to the petitioner