Case: Shetkari Sahakari Sakhar Karkhana Limited, Sangli, Maharashtra Vs. Collector of Sangli and Others

of the Central Act did not merely validate what the State authorities had al ready done under the Bombay Act but actually re-enacted the provisions of the Bombay Act by virtue of the authority vested in Parliament under Entry 97 in List I of the Seventh Schedule to the Constitution of India so that the Bombay Act became fully alive and operative as an enactment of Parliament as soon as the Central Act was promulgated and the authorities named in the Act were invested with full power to assess and recover the cess not under the Bombay Act but under the Central Act into which the provisions of the Bombay Act and the rules framed as well as the notifications issued thereunder became incorporated.11. The only other contention put forward by Mr. Sen (which was reiterated by Mr. Shanti Bhushan on behalf of the appellant in Civil Appeal No. 39 of 1969) was that the assessments having been made under statutory provisions which were invalid because of lack of legislative competence on the part of the Bombay Legislature, Parliament could not pass a law retrospectively validating those assessments by converting their character from assessments under the State statutes to those made under its own statute operating retrospectively. This contention also was repelled by this Court in Jaora Sugar Mills case (supra) with the following observations:"So, the crucial question is: if collections are made under statutory provisions which are invalid because they deal with a topic outside the legislative competence of the St ate legislatures, can Parliament, in exercise of its undoubted legislative competence, pass a law retrospectively validating the said collections by converting their character from collections made under the Stat e statutes to that of collections made under its own statute operating retrospectively ? In our opinion, the answer to this question has to be in the affirmative, because to hold otherwise would be to cut down the width and amplitude of the legislative competence conferred on Parliament by Art. 248 read with Entry 97 in List I of the Seventh Schedule. Whether or not retrospective operation of such a law is reasonable, may fall to be considered in certain cases; but that consideration has not been raised before us and in the circumstances of this case, it cannot validity be raised either. We must, therefore, hold that the High Court was right in rejecting the appellants case that the Act was invalid, and hence no demands could be made under its provisions either for a cess or for commission."With the greatest respect, we find no reason at all to differ.12. Article 265 of the Constitution of India was pressed into service by Mr. Shanti Bhushan in support of the proposition that no tax could be levied or collected except by authority of law. The proposition is unexceptionable but we fail to see in what manner Parliament lacked the authority of law while enacting the Central Act and incorporating into it the provisions of the Bombay Act. As pointed out above, Entry 97 in List I of the Seventh Schedule to the Constitution of India provide s full legislative competence to Parliament in relation to the Central Act inasmuch as it vests all residuary powers of legislation in Parliament. The contention based on alleged lack of authority of law in Parliament is therefore repelled.13. The submissions made by Mr. Patel appearing for the appellants in Civil Appeals No. 1925 and 1926 of 1972 alone now remain to be considered. He put forward two points. The first one was that section 4 of the Bombay Act was discriminatory, that the power conferred by it was unguided and uncanalised and that therefore it was hit by article 14 of the Constitution of India. When asked as to whether the point had been raised before the High Court, Mr. Patels answer was in the negative and it transpired that no foundation for the point had been laid even in the pleadings submitted to the High Court. It was therefore not allowed to be raised by us at this late stage.14. Mr. Patels second point was that in view of the proviso to clause (4) of section 2 of the Bombay Act, the managing agents of the factories in question would alone be liable and that the assessed cess could not be recovered from his clients who were owners of the concerned factories. The point is wholly without substance and that for two reasons. For one thing, no managing agent is involved in the two appeals in which Mr. Patel has put in appearance. Secondly, clause (4) of section 2 merely defines the term occupier and ha s nothing to say about the person on whom the cess is to be imposed or from whom it is to be recovered. There are no doubt other provisions in the Bombay Act [section 6, sub-section (1) of section 7 and section 8] which indicate that the authorities assessing or recovering the tax are primarily to deal with the occupier but those provisions have obviously been enacted as a matter of convenience both for the said authorities and the assessees so that an absent owner may not be unduly harassed nor proceedings delayed by reason of his absence and not for limiting to the occupier alone the liability to pay the cess. In fact sub- section (2) of section 7 which is in the following terms would indicate that the liability o f the owner of the concerned factory is not excluded:"7. (1)........................(2) If the occupier fails to furnish in due time the return referred to in section 6 or furnishes a return which in the opinion of the prescribed authority is incorrect or defective, the prescribed authority shall assess the amount payable by him in such manner as may be prescribed and the provisions of sub-section (1) shall apply as if such assessment has been made on the basis of a return furnished by the owner...."Both the submissions made by Mr. Patel are therefore repelled.15.

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

Explanation:
0[ds]The contention is without force and in this connection we need do no more than refer to the language of clause (c) above extr acted which specifically authorizes both assessment and recovery of the cess after the commencement of the Central Act, and to two earlier decisions of this Court in which an identical argument was made andrespect, we also fully agree with the view expressed in Jaora Sugar Mills case (supra). It is thus plain that section 3 of the Central Act did not merely validate what the State authorities had al ready done under the Bombay Act but actually re-enacted the provisions of the Bombay Act by virtue of the authority vested in Parliament under Entry 97 in List I of the Seventh Schedule to the Constitution of India so that the Bombay Act became fully alive and operative as an enactment of Parliament as soon as the Central Act was promulgated and the authorities named in the Act were invested with full power to assess and recover the cess not under the Bombay Act but under the Central Act into which the provisions of the Bombay Act and the rules framed as well as the notifications issued thereunder becamecontention also was repelled by this Court in Jaora Sugar Mills case (supra) with the followingthe crucial question is: if collections are made under statutory provisions which are invalid because they deal with a topic outside the legislative competence of the St ate legislatures, can Parliament, in exercise of its undoubted legislative competence, pass a law retrospectively validating the said collections by converting their character from collections made under the Stat e statutes to that of collections made under its own statute operating retrospectively ? In our opinion, the answer to this question has to be in the affirmative, because to hold otherwise would be to cut down the width and amplitude of the legislative competence conferred on Parliament by Art. 248 read with Entry 97 in List I of the Seventh Schedule. Whether or not retrospective operation of such a law is reasonable, may fall to be considered in certain cases; but that consideration has not been raised before us and in the circumstances of this case, it cannot validity be raised either. We must, therefore, hold that the High Court was right in rejecting the appellants case that the Act was invalid, and hence no demands could be made under its provisions either for a cess or forthe greatest respect, we find no reason at all toproposition is unexceptionable but we fail to see in what manner Parliament lacked the authority of law while enacting the Central Act and incorporating into it the provisions of the Bombay Act. As pointed out above, Entry 97 in List I of the Seventh Schedule to the Constitution of India provide s full legislative competence to Parliament in relation to the Central Act inasmuch as it vests all residuary powers of legislation in Parliament. The contention based on alleged lack of authority of law in Parliament is therefore repelled.e submissions made by Mr. Patel appearing for the appellants in Civil Appeals No. 1925 and 1926 of 1972 alone now remain to be considered. He put forward two points. The first one was that section 4 of the Bombay Act was discriminatory, that the power conferred by it was unguided and uncanalised and that therefore it was hit by article 14 of the Constitution of India.When asked as to whether the point had been raised before the High Court, Mr. Patels answer was in the negative and it transpired that no foundation for the point had been laid even in the pleadings submitted to the High Court. It was therefore not allowed to be raised by us at this latepoint is wholly without substance and that for two reasons. For one thing, no managing agent is involved in the two appeals in which Mr. Patel has put in appearance. Secondly, clause (4) of section 2 merely defines the term occupier and ha s nothing to say about the person on whom the cess is to be imposed or from whom it is to be recovered. There are no doubt other provisions in the Bombay Act [section 6, sub-section (1) of section 7 and section 8] which indicate that the authorities assessing or recovering the tax are primarily to deal with the occupier but those provisions have obviously been enacted as a matter of convenience both for the said authorities and the assessees so that an absent owner may not be unduly harassed nor proceedings delayed by reason of his absence and not for limiting to the occupier alone the liability to pay thethe submissions made by Mr. Patel are therefore repelled.