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Section 5 in the Central Sales Tax Act, 1956
the Central Sales Tax Act, 1956
Central Wines, Hyderabad Etc vs Special Commercial Tax Officer ... on 9 January, 1987
Section 4 in the Central Sales Tax Act, 1956
Section 3 in the Central Sales Tax Act, 1956

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Karnataka High Court
Kanthi Enterprises vs Deputy Commissioner Of ... on 2 September, 1999
Equivalent citations: 2001 121 STC 478 Kar
Bench: V Singhal, T Vallinayagam

ORDER

1. The controversy in all these petitions being the same they are disposed of by this common judgment.

Validity of the provisions of the explanation to Section 5(1-A) of the Karnataka Sales Tax Act, 1957 as inserted by Act No. 1 of 1996 with retrospective effect have been assailed in these petitions. The provisions of Section 5(1-A) provides levy of tax on purchases. Section 5 is the charging section for creating the liability of tax on first point on the taxable turnover. Section 5(1-A) was inserted by Act No. 15 of 1988 with effect from April 1, 1988 as under : "5(1-A) Notwithstanding anything contained in Sub-section (1), every dealer shall pay for each year tax on his taxable turnover of sale (at every point of sale) (other than the last sale in the State) relating to all kinds of alcoholic liquors for human consumption [other than toddy, arrack, (fenny, beer and wine)] at the rate of fifty per cent of such turnover : Provided that at any point of sale other than first point of sale and the last point of sale, the taxable turnover shall be arrived at by deducting the turnover of such goods on which tax has been levied under this sub-section at the immediately preceding point of sale."

2. In the case of Sri Vinayaka Agency v. State of Karnataka [1996] 102 STC 404 (Kar) clarification issued by the Commissioner of Commercial Taxes on the interpretation of first proviso to Section 5(1-A) of the Act came for consideration before this Court and it was interpreted that the amount collected by way of sales tax by the registered dealer and paid over to the State Government could be included by the registered dealer in the sale price of the goods sold and the amount was liable to be given deduction while arriving at the taxable turnover of the dealer. The expression "turnover" used in the first proviso to Section 5(1-A) was interpreted to include the amount of sales tax collected by selling dealer. This interpretation was given on August 18, 1995. By Act No. 1 of 1996 the following explanation was added beside the validation of the assessments already made : "Explanation.--For the purpose of this proviso 'turnover of such goods on which tax has been levied' means 'taxable turnover and shall not include tax'."

"5. Validation of assessments, etc.--(1) Notwithstanding anything contained in any judgment, decree or order of any court, Tribunal or other authority to the contrary any assessment, levy or collection of any tax made or purporting to have been made, any action, or thing taken or done (including any notices or orders issued or assessments made and all proceedings held for the levy and collection of tax or amount purported to have been collected by way of tax) in relation to such assessments, levy or collection under the provisions of the Karnataka Sales Tax Act, 1957 (Karnataka Act 25 of 1957) and the Karnataka Tax on Entry of Goods Act, 1979 (Karnataka Act 27 of 1957) (hereinafter referred to as the principal Acts) before the commencement of the Karnataka Taxation Laws (Amendment) Act, 1996 shall be and shall be deemed to be valid and effective as if such assessment, levy or collection or action or thing had been made, taken or done under the principal Acts as amended by Clause (i) of Sub-section (2) of Section 3 and Section 4 of this Act and accordingly,-- (a) all acts, proceedings or things taken or done by any authority in connection with the assessment, levy or collection of such tax shall, for all purposes be deemed to be and to have always been made, done or taken in accordance with law ; (b) no suit or other proceedings shall be maintained or continued in any court or Tribunal or before any authority for the refund of any such tax ; and

(c) no court shall enforce any decree or order directing the refund of any such tax.

(2) For the removal of doubts it is hereby declared that nothing in Sub-section (1) shall be construed as preventing any person,--

(a) from questioning the levy or collection of tax or any proceeding or thing in connection therewith in accordance with the provisions of the principal Acts as amended by Clause (i) of Sub-section (2) of Section 3 and Section 4 of this Act ; or (b) from claiming refund of any tax paid by him in excess of amount due from him by way of tax under the principal Acts as amended by Clause (i) of Sub-section (2) of Section 3 and Section 4 of this Act."

3. Validity of the said explanation was considered by this Court in Amaravathi Wines v. Deputy Commissioner of Commercial Taxes , where the competence of the State Legislature to enact the law with retrospective effect was examined and objection raised were found of no substance and accordingly the writ petitions were dismissed.

4. Before us the competence of the State Legislature to make changes in the charging section is not challenged but it is submitted that the explanation has the effect of levying the tax on the tax element which is part of turnover and it is not a case of omission or filling up any lacuna pointed out by this Court but it is a fresh levy. It is further submitted that the amendment is unreasonable and in any case, the Legislature should have given the relief to those dealers who have not collected the tax from the date of the decision of this Court dated August 18, 1995 (Sri Vinayaka Agency v. State of Karnataka [1996] 102 STC 404) till the legislative change was made by Act No. 1 of 1996.

5. Learned counsel for the appellant have relied on the decision given in the case of Bengal Paper Mill Co. Ltd. v. Commercial Tax Officer, Calcutta [1976] 38 STC 163 (Cal) and Shew Bhagwan Goenka v. Commercial Tax Officer [1973] 32 STC 368 (Cal), where the amendment to definition of "business" retrospectively in the Bengal Finance (Sales Tax) Act, 1941, without any limitation of time, of fresh taxes, which could not be recovered by the dealer from his buyers would make an appreciable impact on his finances and imposes unreasonable restrictions on the fundamental rights guaranteed by Article 19(1)(f) and (g) of the Constitution were struck down.

6. It is submitted that in D. Cawasji & Co. v. State of Mysore [1985] 58 STC 1 (SC), imposition of enhanced rate of tax with retrospective effect was struck down as the defect or lacuna pointed out by the High Court were not even sought to be remedied and without removing the illegality the earlier assessment orders were sought to be validated. It was observed that with the removal of the defect or lacuna resulting in the validation of any Act held invalid by a competent court, the Act may become valid, if the validating Act is lawfully enacted.

7. It is submitted that the amending and validating Act is the permissible mode of legislation and is frequently resorted to in fiscal enactments. Reliance is placed on the decision given in the case of Krishnamurthi and Co. v. State of Madras . The dispute in that case was whether the lubricating oil and greases would include furnace oil. The entry was amended and the words "lubricating oils, all kinds of mineral oils (not otherwise provided for in this Act), quenching oils and greases", were substituted. The High Court held that all kinds of mineral oils had only a limited meaning, namely mineral oils which were lubricants and furnace oil was not included in it. In Burmah Shell Oil Storage and Distributing Company of India Limited, Madras v. State of Madras [1968] 21 STC 227 (Mad) (date of disposal August 2, 1967), it was observed that in construing an enactment, particularly an amending provision, it is permissible to have regard, and sometimes it may be necessary to do so, to the history of the amendment and the reasons which led to its enactment. It would then be pertinent to see what was the evil or mischief that existed before and had to be cured, and how the cure or remedy has been provided. By Act No. 19 of 1967 the Madras Act was amended with retrospective effect. This amendment Act received the assent of the Government on December 29, 1967 and has increased the rate of tax retrospectively. It was found that the object of the Act is to remove the defect in phraseology or lacuna of the nature pointed out by the court and also to validate the proceedings including realisation of tax which have taken place in pursuance of the earlier enactment which have been found by the court to be vitiated by an infirmity. Such an amending and validating Act in the very nature of thing has a retrospective operation. For "small repairs", 73 Harvard Law Review 692 at page 705 was referred and it was observed : "It is necessary that the Legislature should be able to cure inadvertent defects in statutes or their administration by making what has been aptly called 'small repairs'. Moreover, the individual who claims that a vested right has arisen from the defect is seeking a windfall since had the legislature's or administrator's action had the effect it was intended to and could have had, no such right would have arisen. Thus, the interest in the retroactive curing of such a defect in the administration of Government outweighs the individual's interest in benefiting from the defect.......The court has been extremely reluctant to override the legislative judgment as to the necessity for retrospective taxation, not only because of the paramount Governmental interest in obtaining adequate revenues, but also because taxes are not in the nature of a penalty or a contractual obligation but rather a means of apportioning the costs of Government among those who benefit from it."

8. It is submitted that the amending Act has created unexpected fresh burden and therefore cannot be given retrospectivity. Reliance is placed on the decision given in the case of Mega Traders v. State of Kerala [1991] 83 STC 59 (Ker). The retrospectivity which was given in this matter was for five years and four months which was struck down and it was observed that the tax may be imposed retrospectively but they should not create any unreasonable restriction on the right to carry on the business.

9. A contention is raised that the sales tax charged to purchaser in bill and shown separately is part of the turnover. Reliance is placed on the judgment given in the case of Central Wines v. Special Commercial Tax Officer [1987] 65 STC 48 (SC) this decision is not relevant for the controversy which has to be decided as here we have to see the scope of explanation.

10. In S. Sundaram Pillai v. V.R. Pattabiraman , the definition of explanation was considered and it was observed as under :

"52. Thus, from a conspectus of the authorities referred to above, it is manifest that the object of an Explanation to a statutory provision is--

(a) to explain the meaning and intendment of the Act itself,

(b) where there is any obscurity or vagueness in the main enactment, to clarify the same so as to make it consistent with the dominant object which it seems to subserve,

(c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful,

(d) an Explanation cannot in any way interfere with or change the enactment or any part thereof but where some gap is left which is relevant for the purpose of the Explanation, in order to suppress the mischief and advance the object of the Act it can help or assist the court in interpreting the true purport and intendment of the enactment, and (e) it cannot, however, take away a statutory right with which any person under a statute has been clothed or set at naught the working of an Act by becoming an hindrance in the interpretation of the same."

11. In Rai Ramkrishna v. State of Bihar , a contention was raised that the date when a particular Act was declared ultra vires on December 12, 1960 and subsequently an Ordinance is brought to validate the actions on August 1, 1961. It was observed by the apex Court that it must be realised that in such a situation there would be some time lag between the date when the particular Act is struck down as unconstitutional and the date on which a retrospective validating Act is passed. About the period to be covered, by the validating Act, it was observed that : "We do not think that such a mechanical test can be applied in determining the validity of the retrospective operation of the Act. It is conceivable that cases may arise in which the retrospective operation of a taxing or other statute may introduce such an element of unreasonableness that the restrictions imposed by it may be open to serious challenge as unconstitutional ; but the test of the length of time covered by the retrospective operation cannot, by itself, necessarily be a decisive test. We may have a statute whose retrospective operation covers a comparatively short period and yet it is possible that the nature of the restriction imposed by it may be of such a character as to introduce a serious infirmity in the retrospective operation. On the other hand, we may get cases where the period covered by the retrospective operation of the statute, though long, will not introduce any such infirmity. Take the case of a validating Act. If a statute passed by the Legislature is challenged in proceedings before a court and the challenge is ultimately sustained and the statute is struck down, it is not unlikely that the judicial proceedings may occupy a fairly long period and the Legislature may well decide to await the final decision in the said proceedings before it uses its legislative power to cure the alleged infirmity in the earlier Act. In such a case, if after the final judicial verdict is pronounced in the matter the Legislature passes a validating Act, it may well cover a long period taken by the judicial proceedings in court and yet it would be inappropriate to hold that because the retrospective operation covers a long period, therefore, the restriction imposed by it is unreasonable. That is why we think the test of the length of time covered by the retrospective operation cannot by itself be treated as a decisive test."

12. Retrospective amendment of definition of "manufacture" to include the process of bleaching, dyeing, and printing as also the validity of the Act was challenged in Empire Industries Limited v. Union of India wherein it was observed as follows : "Imposition of tax by legislation makes the subjects pay taxes. It is well-recognised that tax may be imposed retrospectively. It is also well-settled that that by itself would not be unreasonable restriction on the right to carry on business. It was urged, however, that unreasonable restrictions would be there because of the retrospectivity. The power of the Parliament to make retrospective legislation including fiscal legislation are well-settled. [See Krishnamurthi and Co. v. State of Madras ]. Such legislation per se is not unreasonable. There is no particular feature of this legislation which can be said to create any unreasonable restriction upon the petitioners."

13. In Federation of Hotel & Restaurant Association of India v. Union of India it was observed that it is trite that the true nature and character of the legislation must be determined with reference to the power of the Legislature. The consequence and effects of the legislation are not the same thing as the legislative subject-matter. It is the true nature and character of the legislation and not its ultimate economic result that matters.

14. In Venkateshwara Theatre v. State of Andhra Pradesh change in measure of tax from percentage of actual payments for admission to percentage of gross collection capacity does not alter nature of tax and levy of tax was held within the competence of State Legislature. It was observed that the tax has two distinct elements, viz., subject of the tax and the measure of the tax. The subject of the tax is the person, thing or activity on which the tax is imposed, and the measure of the tax is the standard by which the amount of tax is measured. The competence of the Legislature to enact a law imposing a tax under a particular head of the legislative List has to be examined in the context of the subject of the tax.-If the subject of the tax falls within the ambit of the legislative power conferred by the head of the legislative entry, it would be within the competence of the Legislature to impose such a tax.

15. It is true that the scope of the provisions cannot be enlarged by the circular as held in Aphali Pharmaceuticals Ltd. v. State of Maharashtra, [1991] 81 STC 113 (SC) ; AIR 1989 SC 2227.

16. In Misrilal Jain v. State of Orissa , it was observed that it is well-settled that the power to legislate carries with it the power to legislate retrospectively as much as prospectively, the circumstance that an enactment operates entirely in the past and has no prospective life cannot affect the competence of the Legislature to pass the enactment, if it falls within the list on which that competence can operate. As regards the power to pass a validating Act, that power is essentially subsidiary to the legislative competence to pass a law under an appropriate entry of the relevant List.

17. In Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality validation after removing the cause of ineffectiveness or invalidity was held within the competence of the Legislature.

18. In Epari Chinna Krishna Moorthy v. State of Orissa , validity of the Orissa Sales Tax Validation Act, 1961 withdrawing the exemption retrospectively was assailed. It was 'held that merely because the retrospective operation operates harshly in some cases it cannot be declared that it is ultra vires the provisions of Article 19(1)(g).

19. At the time of the budget speech when the provisions of Section 5(1-A) were inserted in the Act it was stated as follows :

"43. Indian-made liquor (other than beer) is presently taxed at the rate of 45 per cent at its first sale and at 5 per cent at its last sale. The sale price of these goods at the point of first sale is much less than the sale price at subsequent sales which are presently exempt from tax (except the last sale). In order to plug this loophole, it is proposed to levy tax at every sale at the rate of 35 per cent except the last sale and to give a set-off of the tax paid on the previous sale. Levy of last sale point tax at the rate of 5 per cent will continue."

20. It is submitted by Sri Subramanyam, the learned counsel for the appellant in W.A. No. 2906 of 1997, that the provisions of Section 5(1-A) are arbitrary and causing hardship and entry to the appellant because they relate back to the year commencing from April 1, 1988. The appellant were not able to collect the tax which they were entitled to realise under Section 18 of the KST Act. Reliance is placed on the judgment given in the case of Maneka Gandhi v. Union of India , Tata Cellular v. Union of India . It is submitted that the principles enunciated in the case of Meeruth Development Authority v. Satbir Singh and Indian Aluminium Co. v. State of Kerala (1996) 2 JT SC 85, have not been followed. The collection of the tax being an integral part with the scheme of the KST Act, it cannot be divorced from by inserting Section 5(1-A) with retrospective effect. The provisions of Article 14 of the Constitution are also violated as the rights of the appellant have been infringed by the disproportionate imposition of tax and ignoring the prevailing conditions at the time and judicial verdict was given. Reliance is placed on the judgment given in the case of Love v. Norman Wright (Builders) Ltd. [1944] 1 All ER 618, where it was observed :

"Where an article is taxed, whether by purchase tax, customs duty, or excise duty, the tax becomes part of the price which ordinarily the buyer will have to pay. The price of an ounce of tobacco is what it is because of the rate of tax, but on a sale, there is only one consideration though made up of cost plus profit plus tax. So, if a seller offers goods for sale, it is for him to quote a price which includes the tax if he desires to pass it on to the buyer. If the buyer agrees to the price, it is not for him to consider how it is made up or whether the seller has included tax or not.......whenever a sale attracts purchase tax, that tax presumably affects the price which the seller who is liable to pay the tax demands, but it does not cease to be the price which the buyer has to pay even if the price is expressed to be x plus purchases tax. Love v. Norman Wright (Builders) Ltd. (1944) 113 LJKB 442 ; (1944) 1 KB 484 ; 170 LT 346 ; [1944] 1 All ER 618 (court of appeal)."

21. In Tata Cellular v. Union of India , scope of judicial review in respect of administrative and contractual matters has been considered and it was observed as under :

"85. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.

86. Judicial quest in administrative matters has been to find the right balance between the administrative discretion to decide matters whether contractual or political in nature or issues of social policy ; thus they are not essentially justiciable and the need to remedy any unfairness. Such an unfairness is set right by judicial review.

87. Lord Scarman in Nottinghamshire County Council v. Secretary of State for the Entertainment 1986 AC 240 at 251 proclaimed :

`judicial review' is a great weapon in the hands of the Judges ; but the Judges must observe the constitutional limits set by our parliamentary system upon the exercise of this beneficient power." After considering the various judgments it was observed that as under :

"113. The principles deducible from the above are :

(1) The modern trend points to judicial restraint in administrative action.

(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.

(3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fairplay in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."

22. Similarly reliance placed on the decision given in the case of Maneka Gandhi v. Union of India has no relevance because it was observed that the test of reason and justice cannot be abstract. They cannot be divorced from the needs of the nation. The tests have to be pragmatic. Otherwise, they would cease to be reasonable. The discretion left to the authority to impound a passport in public interest cannot invalidate the law itself. The court cannot out of fear that such power will be misused, refuse to permit Parliament to entrust even such power to executive authorities as may be absolutely necessary to carry out the purpose of a validly exercisable power. These observations cannot be considered putting any fetter on the jurisdiction of the Legislature.

23. In Indian Aluminium Co. v. State of Kerala (1996) 2 JT SC 85 for judging the validity of the validating Act after considering the various judgments it was observed at para 56 that the following principles emerge and those are : "(1) The adjudication of the rights of the parties is the essential judicial function. Legislature has to lay down the norms of conduct or rules which will govern the parties and the transactions and require the court to give effect to them ; (2) The Constitution delineated delicate balance in the exercise of the sovereign power by the Legislature, Executive and Judiciary ;

(3) In a democracy governed by rule of law, the Legislature exercises the power under Articles 245 and 246 and other companion articles read with the entries in the respective Lists in the Seventh Schedule to make the law which includes power to amend the law ; (4) Courts in their concern and endeavour to preserve judicial power equally must be guarded to maintain the delicate balance devised by the Constitution between the three sovereign functionaries. In order that rule of law permeates to fulfil constitutional objectives of establishing an egalitarian social order, the respective sovereign functionaries need free-play in their joints so that the march of social progress and order remain unimpeded. The smooth balance built with delicacy must always be maintained. (5) In its anxiety to safeguard judicial power, it is unnecessary to be overzealous and conjure up incursion into the judicial preserve invalidating the valid law competently made ;

(6) The court, therefore, need to carefully scan the law to find out : (a) whether the vice pointed out by the court and invalidity suffered by previous law is cured complying with the legal and constitutional requirements ; (b) whether the Legislature has competence to validate the law ; (c) whether such validation is consistent with the rights guaranteed in Part III of the Constitution. (7) The court does not have the power to validate an invalid law or to legalise impost of tax illegally made and collected or to remove the norm of invalidation or provide a remedy. These are not judicial functions but the exclusive province of the Legislature. Therefore, they are not the encroachment on judicial power. (8) In exercising legislative power, the Legislature by mere declaration, without anything more, cannot directly overrule, revise or override a judicial decision. It can render judicial decision ineffective by enacting valid law on the topic within its legislative field fundamentally altering or changing its character retrospectively. The changed or altered conditions are such that the previous decision would not have been rendered by the court, if those conditions had existed at the time of declaring the law as invalid. It is also empowered to give effect to retrospective legislation with a deeming date or with effect from a particular date. The Legislature can change the character of the tax or duty from impermissible to permissible tax but the tax or levy should answer such character and the Legislature is competent to recover the invalid tax validating such a tax or removing the invalid base for recovery from the subject or render the recovery from the State ineffectual. It is competent for the Legislature to enact the law with retrospective effect and authorise its agencies to levy and collect the tax on that basis, make the imposition of levy collected and recovery of the tax made valid, notwithstanding the declaration by the court or the direction given for recovery thereof. (9) The consistent thread that runs through all the decisions of this Court is that the Legislature cannot directly overrule the decision or make a direction as not binding on it but has power to make the decision ineffective by removing the base on which the decision was rendered, consistent with the law of the Constitution and the Legislature must have competence to do the same." It was observed that the validity of the validating Act is to be judged by the following tests : (i) whether the legislation enacting the validating Act has competence over the subject-matter ; (ii) whether by validation, the Legislature has removed the defect which the court had found in the previous law ; (iii) whether the validating law is inconsistent with the provisions of chapter III of the Constitution. If these tests are satisfied, the Act can confer jurisdiction upon the court with retrospective effect and validate the past transactions which were declared to be unconstitutional. The Legislature cannot assume power of adjudicating a case by virtue of its enactment of the law without leaving it to the judiciary to decide it with reference to the law in force.

24. In Meeruth Development Authority v. Satbir Singh , validity of the Act during the pendency of the appeal before the Supreme Court was held not invalid.

25. This Court in the case of Amaravathi Wines v. Deputy Commissioner of Commercial Taxes examined the effect of explanation added to the provisions to nullify the court's interpretation and held that retrospectivity could be given. It has not merely added the explanation but by specific proviso retrospectivity has been given and therefore even the scope of the explanation is not to be examined.

26. The purpose of framing this legislation, i.e., 5(1-A) was to levy the tax on every sale and to give a set-off of the tax paid on previous sale. This Court has taken the interpretation that the set-off of the tax paid also on the previous sale is permissible. By the amendment it is sought to be made clear that set-off to the extent of tax paid will not be permissible. It cannot be disputed that the Legislature has plenary powers to define the turnover or the taxable turnover or even the computation thereof. The constitutional provision authorises levy of tax on sales as well as purchases. Tax could be levied on sale at single point, multiple point or last point. Even in a case of multiple point of taxation, the Legislature may give the credit of the tax amount already paid or may not give. The provisions of Section 5(1-A) therefore do not suffer from any incompetency in the State Legislature. Once it is considered that the Legislature is competent then that proviso can be made prospectively or retrospectively as held in Nandumal Girdharlal v. State of Uttar Pradesh (1993) Suppl 1 SCC 348 and various other decisions of the apex Court. Even the question that an assessee cannot pass over the burden is not relevant for a retrospective legislation. The amendment was brought because of the interpretation of this Court and if retrospective effect is given it cannot be considered a fresh levy. In Ujagar Prints v. Union of India [1989] 74 STC 401 (SC) ; [1989] 179 ITR 317, the definition of "manufacture" was amended in the Central Excises and Salt Act, 1944 and Additional Duties of Excise (Amendment) Act, 1980 with retrospective effect so as to include processing. It was held that it is not an unreasonable restriction on the fundamental right of the processor under Article 19(1)(g) of the Constitution. It is not a case of fresh taxation. Retrospectivity has not been given before the, insertion of the provision. The validating proviso by this amendment is only to validate the assessment after removing the defect and lacuna which was pointed out by this Court. The validating Act has validated the actions taken by the assessing authority in framing the assessment. The retrospective operation of the validating Act was within the legislative competence. Whether the exemption should have been given from the date of the decision of this Court till the date the validating Act came into force was the matter of legislative discretion and the courts have no say and as observed above in view of the law laid down by the apex Court, there is bound to be some gap and if the tax is levied for that period it cannot be considered to be beyond the competence of the Legislature. It was because of the judgment given by this Court it had become necessary for the Legislature to intervene and remove the defect pointed out and simply because there was no proviso in force during the period August 18, 1993 to March 5, 1996 the provisions of Section 5(1-A) cannot be considered to be ultra vires the Constitution. Appeals are accordingly dismissed.