Case: M/S. S. K. G. Sugar Ltd Vs. State Of Bihar And Ors

1955 did not receive the assent of the President, and, therefore, being repugnant to certain provisions of the Central Act, it could not have any effect, and it was void on this ground as well."20. The observations extracted above, though very widely expressed, must be confined to the precise points for determination that had arisen in those cases. These observations were apparently made in the context of those matters in the Bihar Act which were either referable to Entry 52, Union List or Entry 33, Concurrent List. In neither of those case, the High Court, was concerned with the validity of the taxing provisions of the Bihar Act, covered by Entry 52 of the State List. In A. K. Jains case (supra), 1968 Pat LJR 179 the only question that fell for determination was, whether Sections 3 and 7 of the Central Act 10 of 1955 and Clause 3 (iii) of the Sugar Control Order 1955 issued under that Act, were valid and within the legislative competence of Parliament. It was contended that the regulation of price of sugarcane was expressly dealt with by Bihar Act 7 of 1937 and the action taken against the petitioners by the police and the Magistrate was without jurisdiction being in contravention of Bihar Act and the rules framed thereunder. Thus only that part of the Bihar Act came up for consideration which related to Entry 33 of the Concurrent List, and which only could be said to be inconsistent with the Central Act. No question of the validity of the taxing provisions of the Bihar Act arose in that case.21. Even the High Court found that the matters relatable to Entry 33, Concurrent List were severable from the other provisions of the Act. Before us also it has not been seriously urged that the taxing provisions of the Bihar Act were so interwoven and inextricably connected with the provisions referable to Entry 33 List III, that the whole Act would stand or fall together. There was no competition or collision between the taxing provisions of the Bihar Act and those of the Central Act. The two exist side by side and each remains operative in its own distinct field without interfering with the other.22.It will bear repetition that the taxing provisions of the Bihar Act were advisely kept out of the purview of S. 16(1)(b) of the Central Act which repealed the State laws only in so far as they controlled or authorised control of the production, supply and distribution of sugarcane. The taxing provisions of the Bihar Act therefore were neither rendered inoperative by Article 254 (1), nor repealed or altered by the competent Legislature within the contemplation of Art. 372 of the Constitution.23. It is important to recall that when A. K. Jains case came up in appeal, this Court, did not endorse the sweeping proposition sought to be spelled out by the petitioners from the wide language used by the High Court in the extracts above. The only reference to the Bihar Act, made by this Court, was as follows :".... Sub-rule (3) of Rule (3) specifically provides that unless there is an agreement in writing to the contrary between the parties the purchaser shall pay to the seller the price of the sugarcane purchased within 14 days from the date of the delivery of the sugarcane. This is specific mandate. If the Bihar Act providesanything to the contrary,the same must be held to have been altered in view of Article 372 of the Constitution ..."(Emphasis added)24. Since the taxing provisions of the Bihar Act do not contain "anything contrary" to the Central Act, they could not in the light of the observations of this Court, be held to have been altered in view of Art. 372. Indeed, as pointed out already, the Court in that case was not at all concerned with the taxing provisions of the Bihar Act.25.In view of the above discussion the conclusion is inescapable that the taxing provisions of the Bihar Act 7 of 1937, as re-enacted permanently by Bihar Act 7 of 1955, continued to be operative and validity in force at all material times, even after the enactment of the Central Act. Further, the successive Ordinance promulgated by the Governor validated by way of abundant caution those taxing provisions or anything done thereunder.26. It is well settled that within its competence, a Legislature has the power to make a law imposing a tax retrospectively or validate defective laws by subsequent legislation, or even past unlawful collections, the power of validation being ancillary to and included in the power to legislate on a particular subject.27. We have extracted earlier in this judgment, such validating provisions in S. 66 of the Bihar Ordinance 4 of 1969 and S. 66 (1) of the Presidents Act 8 of 1969. The language of these provisions is of the widest amplitude; and, even if it is assumed that the Central Act had cast any doubt on or introduced any infirmity in the taxing provisions of the State Act, the same had been removed or cured by Section66(1) of the Presidents Act which not only nullifies the effect, if any, of the judgment of the High Court on the taxing provisions of the Bihar Act 7 of 1937, but also validates the imposition, assessment or collection of all cesses and taxes imposed under any State law with retrospective effect as if the Presidents Act had been in force at all material times including the period in question i.e. of January, 1968.28. The validity of the impugned notification and the cess and tax imposed thereunder has to be judged with reference to the successive Ordinances and finally to the Presidents Act. By virtue of the legal fiction introduced by the validating provision in S. 66 (1), the impugned notification will be deemed to have been issued not necessarily under the Ordinance No. 3 of 1968 but under the Presidents Act, itself, deriving its legal force and validity directly from the latter.29.

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

Explanation:
0[ds]It is however well settled that the necessity of immediate action and of promulgating an Ordinance is a matter purely for the subjective satisfaction of the Governor. He is the sole Judge as to the existence of the circumstances necessitating the making of an Ordinance. His satisfaction is not a justiciable matter. It cannot be questioned on ground of error of judgment or otherwise in court - see State of Punjab v. Sat Pal Dang (1969) 1 SCR 478   = (AIR 1969 SC 903  ). The contention is devoid of merit. Moreover, after the coming into force of the Presidents Act 8 of 1969, this question had become merely academic.Matter (a) was referable to Entry 33 of the Concurrent List (III) and matter (b) to Entry 52 of the State List (II) in the 7th Schedule of the Constitution which corresponds to Entry 49 of the Provincial Legislative List (List II) of the Government of India Act, 1935. The Central Act 10 of 1955 related to matter (b) only. Bihar Act 7 of 1937 and Bihar Act 7 of 1955 which purposed to reenact the former permanently, in so far as it provided for regulation of production, supply and distribution of sugarcane - a matter falling under Entry 33 of the Concurrent List - was repugnant to the Central Act 10 of 1955, and, in view of Article 254 of the Constitution, to the extent of that repugnancy or inconsistency would be void. In the light of Article 372 of the Constitution read with S. 16 (1)(b) of the Central Act, the Bihar Act would be deemed to have been repealed with effect from April 1, 1955, only in so far as, it controlled or authorised the control of the production, supply and distribution of, and trade and commerce in sugarcane. The taxing provisions of the Bihar Act were not in any way repugnant to the Central Act or any other law passed by Parliament. Those taxing provisions, as already noticed, fall under Entry 52, List II and that was why Section 16 of the Central Act confined the repeal only to those provisions which were covered by Entry 33, List III. The taxing provisions of the Bihar Act, therefore, never lost their validity and continued to be in force. The notification issued under the Bihar Acts of 1937, (and continued under the Acts of 1955 and 1963), imposing the tax or cess, also remained operative during the period in question, till it was replaced by another notification issued on January 12, 1968 under the Ordinance 3 of 1968. It is therefore, incorrect to say that there was any period, much less in January 1968, during which the tax was levied without the authority of law.Even the High Court found that the matters relatable to Entry 33, Concurrent List were severable from the other provisions of the Act. Before us also it has not been seriously urged that the taxing provisions of the Bihar Act were so interwoven and inextricably connected with the provisions referable to Entry 33 List III, that the whole Act would stand or fall together. There was no competition or collision between the taxing provisions of the Bihar Act and those of the Central Act. The two exist side by side and each remains operative in its own distinct field without interfering with thewill bear repetition that the taxing provisions of the Bihar Act were advisely kept out of the purview of S. 16(1)(b) of the Central Act which repealed the State laws only in so far as they controlled or authorised control of the production, supply and distribution of sugarcane. The taxing provisions of the Bihar Act therefore were neither rendered inoperative by Article 254 (1), nor repealed or altered by the competent Legislature within the contemplation of Art. 372 of the Constitution.Since the taxing provisions of the Bihar Act do not contain "anything contrary" to the Central Act, they could not in the light of the observations of this Court, be held to have been altered in view of Art. 372. Indeed, as pointed out already, the Court in that case was not at all concerned with the taxing provisions of the Biharview of the above discussion the conclusion is inescapable that the taxing provisions of the Bihar Act 7 of 1937, as re-enacted permanently by Bihar Act 7 of 1955, continued to be operative and validity in force at all material times, even after the enactment of the Central Act. Further, the successive Ordinance promulgated by the Governor validated by way of abundant caution those taxing provisions or anything done thereunder.It is well settled that within its competence, a Legislature has the power to make a law imposing a tax retrospectively or validate defective laws by subsequent legislation, or even past unlawful collections, the power of validation being ancillary to and included in the power to legislate on a particular subject.The validity of the impugned notification and the cess and tax imposed thereunder has to be judged with reference to the successive Ordinances and finally to the Presidents Act. By virtue of the legal fiction introduced by the validating provision in S. 66 (1), the impugned notification will be deemed to have been issued not necessarily under the Ordinance No. 3 of 1968 but under the Presidents Act, itself, deriving its legal force and validity directly from the latter.