LexUJAGAR PRINTS ETC. versus UNION OF INDIA & ORS. ETC.
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A UJAGAR PRINTS ETC. v. UNION OF INDIA & ORS. ETC. NOVEMBER 4, 1988 B [R.S. PATHAK, CJ., SABYASACHI MUKHARJI, S. NATARAJAN, M.N. VENKATACHALIAH AND S. RANGANATHAN, JJ.] Central Excises and Salt Act, 1944-Sections 2(f), 4 and Schedule Items 19 and 22-'Manufacture' meaning of-Processors carry out C operations on 'grey fabrics' on job work basis-Whether 'manufac- ture'-Central Excise and Salt Additional Duties Excise (Amendment) Act, 1980--Effect of. Taxation-Under the Act is the rule-Benefit and exemption- The exception-Excise duty of goods-Levied upon manufacturer- D Imposed on production/manufacture/producer in accordance with the relevant rules. Constitution of India, 1950, Article 245, 246 and Schedule VII Lists I Entries 84, 97, Lists II and III-"With respect to"-Inter- pretation of-'Manufacture'-Concept of Entries in legislative lists- £ Not sources of legislative power-Merely topics or fields of legislation- , Legislation co•ild be 'composite legislation'-'Rag-bag' legislation-- Familiar in taxation-Competent legislature can always validate law-- Retroactivity of legislation-Test of validity how applied. Statutory Interpretation-Referential legislation-Types of- F Effect of-Legislation could be composite legislation-'Rag-bag' legislation-What is-Competent legislature can always validate a law. Words and phrases-'Manufacture'-'In respect of-Meaning of. ' O Section 2(0 of the Central Excise Act defines 'manufacture', to include any process incidental or ancillary to the completion of a manufactured product. The President of India promulgated an Ordinance called the Central Excises and Salt and Additional Duties of Excise (Amendment) H Ordinance 1979, which was later replaced by Central Act VI of 1980, ' 770 UJAGAR PRINTS v. U.0.1. 771 called the Central Excises and Salt and Additional Duties of Excise (Amendment) Act, 1980. The Amending Act became effective from 24th February, 1979. By section 2 of the Amending Act, Section 2(0 of the Excise Act was amended by adding three sub-items in the definition of 'manufacture' so as to include activities like bleaching, dyeing, printing etc. which were held not covered by two decisions of the Gujarat High Court. Similar amendments were made in items 19 and 22 of the First Schedule with retrospective effect. Section 5(2)(b) of the Amending Act provided that no suit or other proceedings shall be maintained or con- tinued in any other Court for the refund of the duty collected and no enforcement shall be made by any Court of any decree or order direct- ing the refund of such duties of excise which have been collected and which may have been collected, as if the provisions of Section 5 of the Act had been in force on and from the appointed day as defined in the Act. A B c Prior to the Amending Act, !980, the levy on the processors was challenged before the Gujarat High Court in the case of Vijay Textiles Mills v. Union of India and Real Honest Textile v. Union of India, D [1979] 4 E.L.E.J. 181. The Gujarat High Court held that cotton fabric subjected to bleaching, dyeing and printing could not be subjected to excise duty under items 19 and 22 of the First Schednle to the Central Excises and Salt Act, 1944, and that processors were liable to pay duties under tariff-entry 68 only on the value added by the processor. Follow- ing this judgment a large number of similar claims of processing-houses E were allowed by the High Court by its judgment dated 13.3.1979. How- ever, the Bombay High Court, took a different view and held that even under the concept of 'manufacture' envisaged in section 2(0 even prior to its amendment, the operations carried on by the processors amounted to 'manufacture' and that, at all events, the matter was placed beyond any controversy by the Amending Act of 1980. F The judgment of the Gujarat High Court in the case of Vijay Textiles and Real Honest Textiles was considered by a Bench consisting of three judges of this Court in Empire Industries v. Union of India, [ 1985] Supp. l SCR 292 and it was held not to have been decided · correctly. The view taken by the Bombay High Court in New Shakti G Dye Works Pvt. Ltd. v. Union of India & Anr., [I98J) ELT 1736, was approved. The present appeals, by special leave, preferred against the judg- ments of. the High Court of Gujarat and the High Court of Bombay, and the batch of writ petitions under Article 32 of the Constitution of India, H
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