Judgment Case ID: 1240

Judgment:
No. 108 of 1961. Writ Petition under article 32 of the Constitution of India for the enforcement of Fundamental Rights. 2 M. C. Setalvad	 Attorney General of India	 Rameshwar Nath	 section N. Andley and P. L. Vohra	 for the petitioner. C. K. Daphtary	 Solicitor General of India	 K. L. Misra	 Advocate General	 U.P.	 K. B. Asthana and C. P. Lal	 for the respondents. April 17. The Judgment of the Court was delivered by VENKATARAMA AIYAR	 J. The petitioner is a company incorporated under the Indian Companies Act	 its registered office being at Kanpur in the State of Uttar Pradesh	 and it is carrying on business in the manufacture and sale of jute goods. By a notification dated March 31	 1956	 the State of Uttar Pradesh imposed a tax of one anna in the rupee on the sale proceeds of jute. Previously thereto	 the tax payable on sale of jute was six pies in the rupee. This notification having been struck down by the High Court of Allahabad as unauthorised and inoperative	 the State legislature enacted the U. P. Sales Tax (Validation) Act	. 1958 (U. P. Act XV of 1958)	 hereinafter referred to as the Validation Act	 validating the said notification as from March 31	 1956. In this petition filed under article 32 of the Constitution	 the petitioner contends that notwithstanding the Validation Act	 the notification in question continues to be void and inoperative	 because it has not in fact been validated	 and because the Act itself is ultra vires. The impugned notification was	 it may be mentioned	 superseded by a fresh notification on August 1	 1956	 and the present dispute relates only to the tax on sales effected between April 1	 1956	 and July 31	 1956. If the Validation Act is intro vires	 the tax payable by the petitioner would	 in accordance with the impugned notification	 be Rs. 1	26	529 3 0	 whereas if the said Act is ultra vires	 the tax would be reduced by half Though the point for decision is a simple one lying within a narrow compass	 to reach it one has to wade through a perfect morass of statutes	 notifications and judicial pronouncements. We begin with what has 4 been termed the "Principal Act" by which sales tax was imposed in the Province. That is the U. P. Sales Tax Act No. XV of 1948	 and that came into force on April 1	 1948. There were subsequent amendments to it in 1948	 1950 and 1952	 but they are not material for the present discussion. It is sufficient to refer to section 3 A as it stood on March 31	 1956	 when the notification in question was issued. This section ran as follows: "3 A. Single point taxation (1) Notwithstanding anything contained in Section 3	 the State Government may by notification in the official Gazette declare that the turnover in respect of any goods or class of goods shall not be liable to tax except at such single point in the series of sales by successive dealers as the State Government may specify. (2) If the State Government makes a declaration under sub section (1) of this section	 it may further declare that the turnover of the dealer	 who is liable to pay tax on the sale of such goods	 shall in respect of such sales	 be taxed at such rate as may be specified not exceeding one anna per rupee if the sale relates to goods specified below: (i) Motor vehicles including motor cars	 motor taxi cabs	 motor cycles and cycle combinations	 motor scooters	 motorettes	 motor omnibuses	 motor vans and motor lorries. Chassis of motor vehicles. Articles including rubber and other tires and tubes and batteries adapted for use as motor part and accessories of motor vehicles	 not being such arti cles as are ordinarily also used for other purposes than as parts of accessories of motor vehicles. (ii) Refrigerators and air conditioning plants. (iii) (a) Wireless reception instruments	 apparatus and component parts thereof	 including all electrical valves	 accumulators	 amplifiers and loudspeakers which are not specially designed for purposes other than wireless reception. (b) Radiogramophones. (iv) Cinematographic	 photographic and other cameras. projectors and enlargers and films	 plates	 papers and cloth required for use therewith. 5 (v) Scents and perfumes	 and nine pies per rupee if it relates to any other goods. " It was under this provision that the U. P. Government had issued a notification on June 8	 1948	 imposing a tax of six pies in the rupee on the sale of jute. In exercise of the power conferred by article 213(1) of the Constitution	 the Governor of Uttar Pradesh issued on March 31	 1956	 Ordinance No. IX of 1956	 and that was published in the Official Gazette on the same date. Under this Ordinance the whole of subsection (2) of section 3 A as it then stood was deleted and the following substituted: "(2) If the State Government makes a declaration under subsection (1)	 it may further declare that the turnover in respect of such goods shall be liable to tax at such rate not exceeding one anna per rupee as may be specified. " The effect of this provision was to exact one ceiling rate of one anna per rupee on the sale proceeds for all goods leaving it to the State to fix within the ceiling such rates of tax for such goods as it might determine. On the same date	 the Government published the following notification No. ST. 905/X on which the entire controversy has arisen. "In exercise of the power conferred by section 3 A of the U. P. Sales Tax Act	 1948	 as amended from time to time	 and in supersession of all previous notifications on the subject	 the Governor of Uttar Pradesh is hereby pleased to declare that the turnover in respect of the goods specified in the List below shall not with effect from April 1	 1956	 be liable to tax except (a) in the case of goods imported from outside	 Uttar Pradesh at the point of sale by importer; and (b) in the case of goods manufactured in Uttar Pradesh	 at the point of sale by the manufacturer; and the Governor is further pleased to declare that such turnover shall with effect from the said date be taxed at the rate of one anna per rupee. List 18. Jute goods" 6 In due course	 the U. P. Sales Tax Ordinance No. IX of 1956 was replaced by the U. P. Sales Tax (Amendment) Act XIX of 1956	 and that came into force on May 28	 1956. It merely reproduces the terms of the Ordinance No. IX of 1956 with this modification which is consequential	 that the amended section including section 3 A shall "be deemed to have effect on and from the first day of April	 1956". If notification No. ST. 905/X dated March 31	1956	 is valid there is no question that the petitioner would be liable to pay sales tax for the period in question at the rate of one anna per rupee on the sale proceeds. One of the dealers who had been assessed to sales tax in accordance with this notification filed an application under article 226 in the High Court of Allahabad calling in question its validity and this proved successful	 the court holding that there was no power in the State to issue the impugned notification under section 3 A on March 31	 1956	 as that section was itself to come into force only on April 1	 1956	 vide Adarsh Bhandar vs Sales Tax Officer (1). The correctness of this decision is not under challenge in these proceedings. We do not therefore desire to express any opinion on it. With a view to remove the defect pointed out in Adarsh Bhandar vs Sales Tax Officer (1)	 the State legislature passed the U. P. Sales Tax (Amendment) Act XXIV of 1957. That Act received the assent of the President on August 31	 1957	 and was published on September 3	 1957. It runs	 so far as is material	 as follows: "For sub section (2) of Section I of the U. P. Sales Tax (Amendment) Act	 1956	 the following shall be and be deemed to have always been substituted: 'This Section	 so much of Section 3	 as relates to the substitution of the second proviso to sub section (1) of Section 3 of the U. P. Sales Tax Act	 1948 (hereinafter called the principal Act) and section 4 shall have effect on and from the 31st day of March	 1956 '. " (1) A.I.R. 1957 All. 475. 7 The result of this amendment was that section 3 A was given retrospectively operation from March 31	 1956	 instead of April 1	 1956	 as originally enacted. The intention behind the legislation is obvious. If the impugned notification was	 as held in Adarsh Bhandar vs Sales Tax Officer (1)	 invalid	 because it was issued before section 3 A was in operation	 that objection could no longer hold good as that section would now operate from a point of time anterior to the issue of the notification. If the State thought that this legislation would give a quietus to the controversy	 they were sadly mistaken. After the Amendment Act of 1957 came into force	 another dealer who was sought to be assessed pursuant to the notification dated March 31	 1956	 filed a petition under article 226 before the Allahabad High Court and raised the contention that as the Amendment Act merely amended section 3 A and did not in terms validate the impugned notification	 no proceedings could validly be taken under that notification and that therefore the proposed levy was illegal. This contention was again upheld by a Full Bench in Firm Bangali Mal vs Sales Tax Officer (2)	 which held that there was a difference between the existence of a power and its actual exercise	 that while by reason of Act XXIV of 1957	 a power had been conferred on Government to issue a notification on March 31	 1956	 the notification actually issued on that date could not be referred to that power	 that it was in exercise of the power supposed to have been conferred by section 3 A as it stood on March 31	 1956	 and that in consequence the impugned notification was not saved by the new Act. This decision set the legislature again on the move and that brings us to what may be said to be the final round in the game. The State legislature enacted a fresh legislation for the purpose of effectuating the impugned notification. That was U. P. Sales Tax Validation Act XV of 1958. It received the assent of the President on May 3	 1958	 and was published in the Official Gazette on May 6	 1958. The preamble to the Act states that "it is expedient to provide for (1) A.I.R. 1957 All. 475. (2) A.I.R. 1958 All	 478. 8 the validation of certain notifications issued under the U. P. Sales Tax Act	 1948	 (U. P. Act XV of 1948) and any action taken in pursuance thereof". Section 3 of the Act which deals with the present matter runs as follows: "3. Validation of certain notifications and action taken in pursuance thereof. (1) Notwithstanding any judgment	 decree or order of any court	 the notifications specified in Part A	 Part B and Part C of the Schedule shall be deemed to have been issued in exercise of the powers conferred respectively by section 3	 section 3 A and section 4 of the U. P. Sales Tax Act	 1948	 as if the said sections were in force on the date on which the notifications were issued in the form in which they were in force immediately before the commencement of this Act and all the said notifications shall be valid and shall be deemed always to have been valid and shall continue in force until amended	 varied or rescinded by any notification issued under any of the said section. (2) Anything done or any action taken (including any order made	 proceeding taken	 direction issued	 jurisdiction exercised	 assessment made or tax levied or collected) purporting to have been done or taken in pursuance of any of the notifications specified in the Schedule shall be deemed to be and to have been validly and lawfully done or taken." In Part B are set out the notifications issued in exercise of the powers conferred by section 3A of the U.P. Sales Tax Act	 1948	 and one of them is the impugned notification No. ST. 905/X. If this legislation is valid	 the impugned notification stands validated and the petitioner would be liable to pay tax in accordance therewith. But the petitioner contends that the Validation Act has not brought about any change in the situation and that the notification dated March 31	 1956	 continues to be null and void now as before the Act. Two grounds have been urged in support of this contention that on its true construction the Act does not in fact validate the impugned notification and that it is not a 9 law which the State legislature was competent to enact and it is therefore a nullity. We must now examine these contentions. As regards the first contention	 the argument in support of it is that the words	 "in the form in which they were in force immediately before the commencement of this Act" in section 3 must	 in their setting	 be read as qualifying the word	 "notifications" and not the word "sections"	 and in that view the notification in question is subject to the same infirmity which attached to it when it was published on March 31.	 1956. We are wholly unable to appreciate this contention. The object of the legislation as stated in the long title and in the preamble to the Act was to validate the impugned notification in relation to the amended section. Schedule B to the Act expressly mentions that notification. And if we are now to accede to the contention of the petitioner	 we must hold that though the legislature set about avowedly to validate the notification dated March 31	 1956	 it failed to achieve that object. A construction which will lead to such a result must	 if that is possible	 be avoided. The words	 "in the form in which they were in force immediately before the commencement of this Act"	 no doubt occur after the word	 "notifications". But then the words	 "in the form" can have no reference to the impugned notification	 because it had never changed form	 whereas they were quite appropriate to section 3A	 because it had been amended. It should further be noted that the Validation Act was published both in Hindi and in English	 and both of them were authorised versions. The words in the Hindi version make it clear beyond all doubt that the words	 "in the form in which they were in force immediately before the commencement of this Act" qualify the word "sections" and not the word "notifications". That is the view expressed by a Bench of the Allahabad High Court in H. L. M. Biri Works vs Sales Tax Officer (1)	 on a comparison of the two versions	 and we are in agreement with it. There would have been no scope for this argument if transposing the 'words	 the section read	 "as if the said (1) A.I.R. 1959 All. 2 10 sections were	 in the form in which they were in force immediately before the commencement of this Act	 in force on the date on which the notifications were issued. " But even in its present setting that is the meaning of the section	 and the impugned notification must be held to be within the saving of the Validation Act. We now proceed to examine the second contention of the petitioner that the validation Act is itself invalid as being ultra vires the powers of the State legislature under the Constitution. The argument of the learned Attorney General in support of this contention may thus be stated. The State legislature derives its authority to enact a law with respect to tax on the sale of goods under entry 54 in List II of the Seventh Schedule to the Constitution. It has been held that a sale for the purpose of the entry must be what in law is recognised as sale. Likewise	 a law imposing tax on sales of goods must	 to be intra vires	 possess certain well defined characteristics associated with such laws. In The Province of Madras vs Boddu Paidanna and Sons (1) it has been held that sales tax is a tax on the occasion of sale. In the present case	 the sales sought to be taxed took place between April 1	 1956 and July 31	 1956	 whereas the Validation Act	 by force of which the tax becomes payable	 came into force in 1958. It is therefore not a tax on the occasion of sale. Moreover a sales tax is an indirect tax which can be passed on by the seller to the purchaser. The Sales Tax Acts passed by the legislatures of several States provide for the seller collecting the tax from the purchaser as does the U. P. Sales Tax Act XV of 1948	 vide section 8A. That could be done only if the tax was levied before the sale took place. Therefore by the very nature of it there could be no retrospective legislation in respect of sales tax. And finally it is argued that the imposition of a tax retrospectively would be inconsistent with the provisions of the U.P. Sales Tax Act	 1948	 and could not have been contemplated by that Act. Such for example are the provisions of section 8A which provide for the registration of dealers for (1) 11 the assessment years	 the deposit into Treasury of sales tax collected from the purchasers in certain contingencies	 section 14 of the Act which imposes penalty for non registration under section 8A	 and rule 63 which provides for the deposit of the sales tax collected under section 8A(4) within thirty days of the expiry of the month in which the amount is charged. It is accordingly contended that whether we have regard to the true features of the sales tax legislation or the provisions of the U.P. Sales Tax Act	 the Validation Act could not be held to be one with respect to sales tax	 that it is therefore not within entry 54	 and as there is no other entry in List II or List III of the Seventh Schedule to the Constitution	 under which the legislation could be justified	 it must be held to be ultra vires. So ran the argument. The point for decision.	 stating it succinctly	 is whether the Validation Act is within the ambit of entry 54 in List II of the Seventh Schedule to the Constitution. That entry confers on the States authority to enact a law with respect to tax on sales of goods. Now what is the extent of that authority? There must be in fact a sale as recognised by law. It is only then that a tax could be imposed. But if the transaction sought to be taxed is not a sale	 a law which seeks to tax it	 treating it as a	 sale	 would be ultra vires. Thus in The Sales Tax Officer vs Messrs. Budh Prakash Jai Prakash (1) a tax on agreement to sell was held to be not authorised by the entry	 and in The State of Madras vs Gannon Dunkerley & Co.	 (Madras) Ltd. (2)	 a tax on the supply of materials in a contract for the construction of works simpliciter	 on the footing of a sale was held to be outside the entry	 and the legislation which imposed such a tax was struck down as ultra vires. But where the transaction is one of sale of goods as known to law	 the power of the State to impose a tax thereon is plenary and unrestricted subject only to any limitation which the Constitution might impose	 and in the exercise of that power	 it will be competent to the legislature to impose a tax (1) ; (2) ; 12 on sales	which had taken	 place prior to the enactment of the legislation. But it is urged on the strength of certain observations in The Province of Madras vs Boddu Paidanna and Sons (1) that a sales tax is a tax on the occasion of sale	 and that therefore it could not be imposed with retrospective operation. This contention is	 in our judgment	 wholly without substance. Now	 the point for decision in that case was whether a tax imposed by a Provincial legislature on the sale of oil by a person who manufactured it was bad on the ground that it was in essence an excise duty. While a sales tax could be imposed by a Provincial legislature	 an excise duty could be imposed only by the Federal legislature. In holding that the tax in question was a sales tax and not an excise duty	 the court observed as follows: "The duties of excise which the Constitution Act assigns exclusively to the Central Legislature are	 according to the Central Provinces Case	 duties levied upon the manufacturer or producer in respect of the manufacture or production of the commodity taxed. The tax on the sale of goods	 which the Act assigns exclusively to the Provincial Legislatures	 is a tax levied on the occasion of the sale of the goods. Plainly a tax levied on the first sale must in the nature of things be a tax on the sale by the manu facturer or producer; but it is levied upon him qua seller and not qua manufacturer or producer." (P. 101). In the context	 the words	 "on the occasion of the sale" have reference to the character of the transaction and not to the point of time at which the duty becomes leviable	 and they have no bearing on the question as to when such a tax could be imposed. And then it is argued that a sales tax being an indirect tax	 the seller who pays that tax has the right to pass it on to the consumer	 that a law which imposes a sales tax long after the sales had taken place deprives him of that right	 that retrospective operation is	 in consequence	 an incident inconsistent with the true character of a sales tax law	 and that the Validation Act is therefore not a law in respect of tax on the (1) 13 sale of goods	 as recognised	 and it is ultra vires entry 54. We see no force in this contention. It is no doubt true that a sales tax is	 according to accepted notions	 intended to be passed on to the buyer	 and provisions authorising and regulating the collection of sales tax by the seller from the purchaser are a usual feature of sales tax legislation. But it is not an essential characteristic of a sales tax that the seller must have the right to pass it on to the consumer	 nor is the power of the legislature to impose a tax on sales conditional on its making a provision for sellers to collect the tax from the purchasers. Whether a law should be enacted	 imposing a sales tax	 or validating the imposition of sales tax	 when the seller is not in a position to pass it on to the consumer	 is a matter of policy and does not affect the competence of the legislature. This question is concluded by the decision of this Court in The Tata Iron & Steel Co.	 Ltd. vs The State of Bihar (1). The following observations of Das	 C. J.	 bearing on this question might be quoted: " Under the 1947 Act the primary liability to pay the sales tax	 so far as the State is concerned	 is on the seller. Indeed before the amendment of the 1947 Act by the amending Act the sellers had no authority to collect the sales tax as such from the purchaser. The seller could undoubtedly have put up the price so as to include the sales tax	 which he would have to pay but he could not realise any sales tax as such from the purchaser. That circum stance could not prevent the sales tax imposed on the seller to be any the less sales tax on the sale of goods. The circumstance that the 1947 Act	 after the amendment	 permitted the seller who was a registered dealer to collect the sales tax as a tax from the purchaser does not do away with the primary liability of the seller to pay the sales tax. This is further made clear by the fact that the registered dealer need not	 if he so pleases or chooses	 collect the tax from the purchaser and some times by reason of competition with other registered dealers he may find it profitable to sell his goods (1) ; 14 and to retain his old customers even at the sacrifice of the sales tax. This also makes it clear that the sales tax need not be passed on to the purchasers and this fact does not alter the real nature of the tax which	 by the express provisions of the law	 is cast upon the seller. The buyer is under no liability to pay sales tax in addition to the agreed sale price unless the contract specifically provides otherwise. See Love vs Norman Wright (Builders) Ltd. If that be the true view of sales tax then the Bihar Legislature acting within its own legislative field had the powers of a sovereign legislature and could make its law prospectively as well as retrospectively." (pp. 1378 1379). The decision of this Court in Buchirajalingam vs State of Hyderabad (1) is also to the same effect. The power of a legislature to enact a law with reference to a topic entrusted to it	 is	 as already stated	 unqualified subject only to any limitation imposed by the Constitution. In the exercise of such a power	 it will be competent for the legislature to enact a law	 which is either prospective or retrospective. In The Union of India vs Madan Gopal(2) it was held by this Court that the power to impose tax on income under entry 82 of List I in Schedule VII to the Constitution	 comprehended the power to impose income tax with retrospective operation even for a period prior to the Constitution. The position will be the same as regards laws imposing tax on sale of goods. In M. P. V. Sundararamier & Co. vs The State of Andhra Pradesh (3)	 this Court had occasion to consider the validity of a law enacted by Parliament giving retrospective operation to laws passed by the State legislatures imposing a tax on certain sales in the course of inter State trade. One of the contentions raised against the validity of this legislation was that	 having regard to the terms of article 286(2)	 the retrospective legislation was not within the competence of Parliament. In rejecting this contention	 the Court observed: (1) A.I. R. 	 759 60. (2) ; (3) ; 15 "Article 286(2) merely provides that no law of a State shall impose tax on inter State sales 'except in so far as Parliament may by law otherwise provide '. It places no restrictions on the nature of the law to be passed by Parliament. On the other hand	 the words 'in so far as ' clearly leave it to Parliament to decide on the form and nature of the law to be enacted by it. What is material to observe is that the power conferred on Parliament under article 286(2) is a legislative power	 and such a power conferred on a Sovereign Legislature carries with it authority to enact a law either prospectively or retrospectively	 unless there can be found in the Constitution itself a limitation on that power." (p. 1460). And it was held that the law was within the competence of the legislature. We must therefore hold that the Validation Act is not ultra vires the powers of the legislature under entry 54	 for the reason that it operates retrospectively. It was finally urged on the basis of sections 8 A	 14 and rule 23 of the U. P. Sales Tax Act that they contemplated only a prospective legislation and that those sections would be impossible of compliance under the present legislation. This is a consideration which is wholly foreign to the present question. The point which we have got to decide is whether the Validation Act is ultra vires. That has to be determined solely on the construction of entry 54 in List II in the Seventh Schedule	 and any other provisions of the Constitution bearing on the question. Even assuming that the provisions of the U. P. Sales Tax Act XV of 1948 contemplate a levy of tax in future	 that does not affect the power of the legislature under entry 54 to enact a law with retrospective operation. It can only result in those provisions being unenforceable as regards the levy under the impugned notification. Dealing with a similar contention in M. P. V. Sundararamier & Co. vs The State of Andhra Pradesh (1)	 this Court observed: "It is also contended that under the Sales Tax (1) ; 16 Acts	 the levy of tax is annual and the rules contemplate submission of quarterly returns and payment of taxes every quarter on the admitted turnover	 and that a conditional legislation under which payment of tax will become enforceable in fururo would be inconsistent with the scheme of the Act and the rules. But this argument	 when examined	 comes to no more than this that the existing rules do not provide a machinery for the levy and the collection of taxes which might become payable in future	 when Parliament lifts the ban. Assuming that is the true position	 that does not affect the factum of the imposition	 which is the only point with which we are now concerned. That the States will have to frame rules for realising the tax which becomes now payable is not a ground for holding that there is	 in fact	 no imposition of tax." (p. 1454). None of the grounds urged by the petitioner in support of the contention that the Validation Act is ultra vires can be sustained. In the result we must hold that the Validation Act is intra vires	 and the impugned notification dated March 31	 1956	 stands validated by it. This petition must therefore be dismissed with costs. Petition dismissed.

Summary:
In exercise of the power conferred by section 3A(2) of the U.P. Sales Tax Act	 1948	 which enabled the State Government	 by notification	 to fix the rate of the tax to be levied on the sales of goods specified in the section not exceeding nine pies per rupee	 the Government issued at notification dated June 8	 1948 imposing a tax of six pies in the rupee on sales of jute. On March 31	 1956	 the Governor of Uttar Pradesh issued an Ordinance	 inter alia	 amending section 3A(2) of the Act	 the effect of which was to enact one ceiling rate of one anna per rupee on the sale proceeds for all goods leaving it to the State to fix within the ceiling such rates of tax for such goods as it might determine. On the same date the Government issued a notification by which sales on jute were liable to pay sales tax at the rate of one anna per rupee on the sale proceeds. The Ordinance was replaced by U.P. Sales Tax (Amendment) Act	 1956	 under which the amended section shall "be deemed to have effect on and from April 1	 1956". One of the dealers who had been assessed to sales tax in accordance with the notification filed an application under article 226 of the Constitution of India	 calling in question its validity	 and the High Court of Allahabad held that there was no power in the State to issue the notification under section 3A(2) on March 31	 1956	 as that section was itself to come into force only on April 1	 1956. With a view to remove the defect pointed out in said decision	 the State Legislature passed the U.P. Sales Tax (Amendment) Act	 957	 but this in turn having been declared by the Allahabad High Court not being effective in saving the notification	 the legislature ultimately enacted the U.P. Sales Tax (Validation) Act	 1958. Section 3 of this Act provided that notwithstanding any judgment of any court the notification dated March 31	 1956	 shall be deemed to have been issued in exercise of the powers conferred by section 3A of the U.P. Sales Tax Act	 1948	 as if the said section was in force on the date on 2 which the notification was issued in the form in which it was in force immediately before the commencement of this Act. The petitioner who was carrying on business in the manufacture and sale of jute goods filed an application under article 32 of the Constitution and contended that the Validation Act of 1958	 had not brought about any change in the situation on the grounds (1) that the words "in the form in which it was in force immediately before the commencement of this Act" in section 3 must be read as qualifying the word "notification" and not the word "section" and in that view the notification in question was subject to the same infirmity which attached to it when it was published on March 31	 1956	 and (2) that the State Legislature was not competent to enact a law imposing sales tax retrospectively and therefore the Validation Act was ultra vires. Held: (1) that on its proper construction	 the words "in the form in which it was in force immediately before the commencement of this Act" in section 3 of the U.P. Sales Tax (Validation) Act	 1958	 qualify the word "section" and not the word "notification"	 and that on that view the impugned notification was within the saving clause of the Validation Act. H. L. M. Biri Works vs Sales Tax Officer	 A.I.R. 1959 All. 208	 approved. (2) that the power of a legislature to enact a law with re ference to a topic entrusted to it is unqualified and that in the exercise of such a power it will be competent for the legislature to enact a law which is either prospective or retrospective. Accordingly	 the Validation Act is not ultra vires the powers of the legislature under entry 54 in List II of the Seventh Schedule to the Constitution	 for the reason that it operates retrospectively. The fact that the seller is not in a position to pass the sales tax on to the consumer does not affect the competence of the legislature to enact a law imposing a sales tax retrospectively as that is a matter of policy. The Province of Madras vs Boddu Paidanna and Sons	 [1942] F.C.R. go	 explained. The Tata Iron & Steel Co.	 Ltd. vs The State of Bihar	 ; 	 Buchirajalingam vs State of Bihar	 A.I.R. 1958 S.C. 756 and M.P.V. Sundararamier & Co. vs The State of Andhya Pradesh	 ; 	 followed. The Union of India vs Madan Gopal Kabra	 ; 	 relied on.