M/S. KRISHNAMURTHI & CO. ETC. versus STATE OF MADRAS & ANR.

Citation: [1973] 2 S.C.R. 54 · Decided: 05-09-1972 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Dismissed

Cited by 4 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

54 
M/S. KRISHNAMURTHI & CO. ETC. 
v. 
STATE OF MADRAS & ANR. 
September 5, 1972 
[K. S. HEGDE, P. JAGANMDHAN REDDY AND H. R. KHANNA, JJ.] 
Madras Genent/ Sales Tax (Third Amendment) Act, 190 Entry 47 
and 47-A of the First Schedule-Whether invalid as they seek to impose 
Sales 1"ax lvith retrospective effect. 
· 
A 
B 
Under Entry 47 of the First Schedule of the Madras General Salt:• 
Tax Act, 1959, the sale of 'lubricating oil and greases' was liable to sales 
ta~ at the point of first sale in the State at 6 per cent. With effect from 
c 
April 1, 1964, Entry 47 was amended and instead of the words "lubricat-
ing oils and greases,'" 
"lubricating oils, all kinds of mineral oils (not 
otherwise provided 'for in this Act) quencing oils and greases," were in-
cluded. 
Till September 30, 1965, the assessments wore made on the assump· 
tioll that the amendment of entry 47 had made no difference to sale of 
furnace oil. 
The dealers paid and collected the tax on that basis and tbe 
D 
department accepted it. Thereafter, according 
to a resolution 
of the 
Board of Revenue, tluo dealers started charging tax on furnace oil from 
September 14, 1965 at the rate of 6 per oent although furnace oil was a 
non-lubricating mineral oil, and the assesisment orders were made accord-
ingly. 
The view expressed by the Board of Revenue that entry 47 
as 
amended included furnace oil was challenged before the High Court by a 
writ and the High Court held that entry 4 7 as amended did not include 
furnace oil. 
Appeal against the said jtJdgment is pending before 
the 
E 
Supreme Court. 
Thereafter, Madras General Sales Tax Act woo again amended (Third 
Amendment) by which all kinds of mineral oils including furnace oil 
were included in entry 47 and Sales Tax would be payable durin2 the 
period from April l, 1964 to November 30, 1965 at the rate of 6% and 
the rate from December 1, 1965 to June 17, 1967, had been fixed at 6t% 
F 
and with effect from June 18. 1967, the rate had been fixed at 7 per cent 
and Sec. 4 validated all taxes levied and collected before the passing of 
the amending Act and no suit lay for the refund of any tax paid or 
collected. 
T-he appellants tvho are dealers in mineral oils including_ furnace oils 
filed writ petitions challenging the retrospective 
imposition of a single 
point tax on furnace oil and other non-lubricating oils for the period prio.-
G 
to January 5, 1968, as violative of Art. 14 and 19 of the Constitution. 
The High Court, however, dismissed the writ petitions. Dismissing 
the 
appeals, 
HELD: (i) The legislative power conferred on the appropriate legis-
latures to enact Jaws in respect df topics covered by the several entries in 
the three lists can be exercised both prospectively 
and retrospectively. 
The legislative power, in addition, includes 
the subsidiary or auxiliary 
H 
power to validate laws which have been .found to be invalid. If a law pass-
ed by a legislature is struck down by the Court as being invalid for one 
infirmity or another, it would be competent to the appropriate legislature 
A 
B 
c 
D 
E 
F 
G 
H 
KlllSHNAMURTH! "' co. v. MADRAS (Khanna, J.) 
55 
to cure the said infumity and pa$ a validating law so as to· mak~ the 
provisions of the said oarlier law effective from the date when 11 was 
passed. [59B] 
Rai Ramkrishna & Ors. v. The State of Bihar, (1964); S.C.R. 897, re-
ferred to. 
(ii) In the present case, the amending Act was intended to cure an 
infirmity as revealed by the judgment of the Madras High Court and to 
validate the past levy and collection of tax in respect of all kinds of non-
lubricating mineral oils, including furnace oils, with effect from April !, 
1964. 
For this purpose, the legislature split the or:ginal entry 47 into 
two entries 47 and 47-A whereby, the sale of all kinds of mineral oils were 
me.de liable to tax. 
It is axiomatic that the Government needs revenue 
to carry on the administration 
and fulfil its obligation 
to the citizens. 
Further amending and validating Act to make "small repairs" :s a per-
missible mode of legislation and is frequently resorted to in fiscal en-.ict-
ments. [61BJ 
Therefore, the impugned provisions of the Amending Act are a \alid 
piece of legislation and do not contrav~ne Art. 19 of the Constitution. 
Enari Chinna Krishana Moorthy v. State of Ori.rnt [1964] 7 S.C'.R. 
185; M/s. J. K. Jwe Mills Co. Ud. v. The State of U.P. ctnd Anr. [1962] 
2 S.C.R. l; The Union of India v. Madan Gof"'I Kahr11, (1954] 
S

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