Supreme Court of India

DISTRICT MINING OFFICER AND ORS.versusTATA IRON AND STEEL CO. AND ANR.

Citation: 2001 INSC 324
Decided: 31 July 2001
Disposal: Disposed off
Bench: G B PATTANAIK

Holding

The Validation Act validates only the levy and collection already made under the invalid State laws and does not confer any right to levy, demand or collect fresh cess or taxes, even if the liability accrued before 4 April 1991.

Summary

The Supreme Court examined the Cess and Other Taxes on Minerals (Validation) Act, 1992 to determine whether it merely validated cess and tax already collected under invalid State laws or also authorised fresh levy and collection of amounts due up to 4 April 1991. The Court held that the Act validates only the levy and collection already made and does not confer any authority on the State to demand or collect fresh cess or taxes, even if the liability accrued before the cut‑off date. It overruled the earlier decision in P. Kannadasan v. State of Tamil Nadu, which had been interpreted to allow such fresh collection. The judgment emphasized the requirements of Article 265 of the Constitution that any tax must be levied and collected under a valid law, and noted that the Validation Act is a temporary statute without a saving clause. Consequently, the State's demand for additional cess was quashed and the High Court's decision was affirmed.

Issues considered

Whether the Cess and Other Taxes on Minerals (Validation) Act, 1992 authorises fresh levy and collection of cess or taxes on minerals up to 4 April 1991.
Whether the Act violates Article 265 of the Constitution by permitting levy or collection without authority of law after the expiry of the temporary statute.
Whether the Act should be treated as a temporary statute for purposes of the General Clauses Act, 1897.
Whether the earlier judgment in P. Kannadasan v. State of Tamil Nadu is correct in law.

Legislation cited

Constitution of Indias. Article 14, s. Article 265
General Clauses Act, 1897s. Section 6
Mines and Minerals (Regulation and Development) Act, 1957s. Section 2

Subjects

Validation ActMineral cessTax levyArticle 265Temporary statuteStatutory interpretationConstitutional lawRefund of taxesState revenue

Judgment

DISTRICT MINING OFFICER AND ORS. A
V.
TATA IRON AND STEEL CO. AND ANR.

JULY 31, 2001

[G.B. PATTANAIK, S.N. PHUKAN AND B.N. AGRAWAL, JJ.] B

Cess and Other Taxes on Minerals (Validation) Act, 1992:

Sections 2(1), 2(2) and 2(3)-Nature and scope of-Held, validated
only levy and collection of cess and other taxes imposed under the invalid C
state laws-But did not confer any right on state to levy, demand or collect
fresh cess collectable upto 4.4.1991-Recovery of dues even after 4.4.1991
would contravene provisions of Article 265 as it would amount to imposing
a tax without any authority of law-Duration of Validation Act being only for
a specified period and there being no saving clause, it is in the nature of D
temporary statute-Section 2(3) only provides a limited saving clause for
recovery of excess tax paid by assessee and does not confer a substantive
power to levy and collect cess even after expiry of 4. 4.1991--Constitution of
India, 1950 Article 265.

Constitution of India, 1950-Article 14 validation Act validating E
collection already made under the invalid state laws but not authorising fresh
collection and levy after 4.4.1991-Held, not violative of Article 14--Cess
and other Taxes on Minerals (Validation) Act, 1992.

General Clauses Act, 1897-Section 6-Applicability of-Held, not
applicable to temporary statutes-Cess and Other Taxes on Minerals F
(Validation) Act, 1992.

Interpretation of Statutes:

Legislative intent-Interpretation of-Held, a statute has to be construed
according to the intent of its makers-True and legal meaning ofan enactment
has to be derived by considering the meaning of the words used in the enactment G
in the light of the mischief which the enactment intends to remedy.

Words and Phrases:
"Imposition and collection" Meaning of in the context of the preamble
of the Cess and Other Taxes on Minerals (Validation) Act, 1992. H
147
148 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A In India Cement case and Orissa Cement case, this Court struck down
various State laws authorising levy on minerals as ultra vires on the ground
that the States were denuded of their power to levy tax on account of
,.
declaration made by the Parliament CQntained in Section 2 of the Mines and
Minerals (Regulation and Development) Act, 1957. In view of the said
B judgments, State Government became liable to refund cess and other taxes
causing serious impact on State revenues and to prevent liability of refund,
the Cess and Other Taxes on Minerals (Validation) Act, 1992 was passed by
Parliament. Several writ petitions were filed in different High Courts
challenging the constitutional validity of the said Validation Act Patna High
Court while upholding the constitutional validity of the Validation Act held
C that it authorised retention of cess and taxes already collected under the
invalid state laws but did not authorise fresh recovery of any tax or cess after
4.4.1991 even if the liability was incurred under the validation laws before
4.4.1991. Consequently, since the State was restrained from realising any
demands, the present appeal was filed on behalf of the State of Bihar.
However, this Court in Kannadasan case upheld the constitutional validity of
D the Validation Act as well as the right of the State to levy and demand cess
collectable upto 4.4.1991. Several High Courts following the judgment of this
Court in Kannadasan case, upheld the right of the State Government to levy,
demand and collect tax which was collectable upto 4.4.1991. The said
judgments were also assailed by the assessees in different SLPs and transfer
E petitions before this Court Review Petitions were also filed by the assessees
against the judgment of Kannadasan case which were to be disposed of after
the disposal of present SLPs.

On behalf of State of Bihar it was contended that the Validation Act
authorised the State Governments to levy and realise tax which were due up
F to the date of validation, namely 4.4.1991 and there should not be any embargo
on the State's power to realise the same notwithstanding the fact that the life
of the validation was only upto 4.4.1991; that the Validation Act could not be
held to be a temporary statute and remains as a valid piece of legislation,
conferring the right to collect and make the levy which would be collectable
G upto 4.4.1991 and the provisions of General Clauses Act would be applicable;
that there was no quarrel with the constitutional proposition engrafted in
Article 265 of the Constitution that levy and collection should be by authority
of law. But in respect of minerals extracted upto 4.4.1991, if any cess or tax
was to be levied and collected in accordance with the machinery provided
for the same, that right of the State would not get frustrated, merely because
H the legislation in question in the eye of law was effective till 4.4.1991.
DISTRICT MINING OFFICER v. TAT A IRON AND STEEL 149
On behalf of assessee it was contended that the Parliament in fact came A
forward with the Validation Act after different Cess Acts were struck down
on the ground of lack of legislative competence solely to ensure that the levies
collected are not required to be refunded by the States which would have a
serious impact on the State revenues of the concerned State Governments,
and therefore, in the absence of any law subsequent to 4.4.I 991 the authority B
to collect has disappeared and consequently the decision of this Court in
Kannadasam 's case holding that not only the taxes already collected need not
be refunded, but the taxes and cessess which have not already been collected
also be collected is not correct in law; that the right to levy and collect which
was there with the State having disappeared with effect from 4.4.1991, the
date on which the life of the Acts expires, unless there was any provision C
conferring the right upon the State to make levy or collect any levy, that
collection would be without the authority oflaw and would contravene Article
265 of the Constitution; that Section 2(2) of the Validation Act, on a plain
readings, would suggest, that it validates all the past Acts of collection but
has not conferred any right to make any fresh collection or levy any cess on
minerals; that the fact that Parliament did not provide ~aving clause is D
indicative of the true intention namely, the Parliament never permitted the
States to levy and collect the liabilities already accrued, but it only validated
the collection of cess already made under an invalid law which otherwise the
State would have been liable to refund; that the intention of the Parliament
in enacting the Validation A,_ct was only to save the State Governments from E
refunding the monies already collected under the Statutes declared void ab
initio by the Courts and it never intended to confer a right on the State to
make any fresh levy or collection in respect of the cess and taxes, which would
be collected upto 4.4.1991; that the deliberate and conscious omissions by
Parliament of a saving clause in the Validation Act, permitting levies or actions
after 4.4.1991 points to the only effect that Parliament did not intend any levy F
to be imposed or any collection to be made after 4.4.1991.

Disposing of the matters, the Court

HELD 1.1. The Cess and Other Taxes on Minerals (Validation) Act, G
1992 validated levy and collection of cess and other taxes on minerals imposed
under the invalid State laws but it did not confer any right on Stat,!'JO levy,
demand and collect fresh cess which would be collectable upto 4.4.1991. The
Validation Act does not authorise any fresh levy or collection in respect of
liabilities accrued prior to 4.4.1991 though it prohibits refund of the collection
already made prior to that date. 1187-Df H
150 SUPREME COURT REPORTS [2001) SUPP. I S.C.R.

A P. Kannadasan and Ors. v. State of Tamil Nadu and Ors.. [I996[ 5 SCC
670, overruled.

1.2. It is crystal clear from a plain reading of Section 2(I) of the Act
that it purports to validate certain State laws and actions taken and things
done thereunder, by providing that the provisions relating to cesses and other
B taxes on minerals fictionally must be held to have been enacted by the
Parliament and keeping those provisions alive till 4.4.1991. It may be borne
in mind that under the Validation Act, Parliament never re-enacted the I I
Acts mentioned in the Schedule, but merely provided the legislative
competence for those provisions in those Acts which related to cesses or taxes
C on minerals. The legislative history behind the enactment of the Validation
Act unequivocally points out to the fact that the State legislature had enacted
different statutes conferring right of levy and collection of cess and taxes on
minerals, and this Court came to the conclusion that the State legislature did
not have the right to make law conferring right to levy and collection on
minerals as the field had been occupied by the Union Legislature on the
D enactment of the Mines and Minerals Regulation and Development Act, I957.
The judgment of this Court in India Cement as well as in Orissa Cement
necessarily lead to a situation where under not only the I I Acts mentioned in
,;'
the Schedule of the ValidationiAct were declared null and void, but also the
collections made under such invalid law became refundable. Thus, Parliament
E came forward with a unique device of providing legislative competence in
respect of certain provisions of the State laws and that too only keeping the
Act alive upto 4.4.I99I, the date on which this Court delivered the judgment
in Orrisa Cement case. [174-G, H; 175-A-C, El

India Cement ltd. v. State a/Tamil Nadu. [199011 SCC 12 and Orissa
F Cement ltd. v. State of Orissa, [1991] Suppl. 1sec430, referred to.

2.1. A Statute has to be construed according to the intent of its makers
and the duty of the Court is to act upon the true intention of the legislature.
The function of the Courts is only to expound and not legislate. The process
of construction combines both literal and purposive approaches. In other
G words, the legislative intention i.e., the true or legal meaning of an enactment
is derived by considering the meaning of the words used in the enactment in
the light of any discernible purpose or object which comprehends the mischief
and its remedy to which the enactment is directed. It is also a cardinal principle
of construction that external aids are brought in by widening the concept of
context as including not only other enacting provisions of the same Statute but
H
DISTRICT MINING OFFICER v. TA TA IRON AND STEEL J 5J
its preamble, the existing state of law, other Statutes in pari materia and the A·
mischief which the Statutes was intended to remedy. [175-E, F, H; 176-C, El
State ofHimacha/ Pradesh v. Kai/ash Chand Mahajan, [19921Suppl2 SCC
351 and The Reserve Bank of India v. Pearless General Finance and Investment
Co., [1987] t SCC 424, relied on.
Attorney-Genera/ v. HRH Prince Ernest Augustus, (1957) I All ER 49, B
referred to.

2.2. Bearing in mind the rules of construction and examining the
provisions of the validation Act, conclusion is irresistible that the Parliament
adopted a unique device of providing the legislative competence to certain
provisions of different State legislations which have already been struck down C
for lack of legislative competence. As the Parliament thought that on account
of the judgments of the Supreme Court the State Governments would be liable
to make refund of cess and other taxes collected by them, which was likely to
have a serious impact on State revenue, and to prevent liability of refund,
the Parliament intended to validate collection of levies already made by the D
State Government upto 4.4.1991. This conclusion is based on, not only the
language used in Section 2(1) but also the statement of Objects and Reasons,
which clearly enunciates the same. (176-B, C, D(

3. The expression 'imposition and collection' occurring in the Preamble
of the Act would mean, imposition or collection already made under the E
relevant State laws and the preamble cannot be construed to mean to confer
a further right of imposition and collection of cesses on the minerals extracted
upto 4.4.1992. That apart, the very heading of Section 2(1), namely,
"Validation of certain State laws and actions taken and things done
thereunder." Would suggest that the Parliament by legal fiction injected
legislative competence to the laws enacted by the State legislature and gave F
life to such laws upto 4.4.1991, the date on which the judgment of the Supreme
Court in Orissa Cement case was delivered, for the purpose of validating the
actions taken, things done under such laws declared void by the Supreme
Court. Thus, neither the language of Section 2(1) nor the objects and Reasons
appended to the Validation Act, confers a right on State Government to levy G
and collect cess or taxes on mineral which were collected upto 4.4.1991. But
it merely validated the collections already made under the State laws so that
State will not be burdened with the liability of refunding the amount already
collected under void laws. [178-A, B, C, D, Fl

4.1. Under Article 265 of the Constitution, no tax shall be levied or H
152 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A collected except by authority of law. It is thus explicit that not only the levy,
but also the collection of a tax must be under the authority of some law. The
authority of law refers to a valid law which in turn would mean that the tax
proposed to be levied must be within the legislative competence of the ..
legislature, imposing the tax and the law must be validly enacted. It must not
B also contravene the specific provisions of the Constitution and the tax in
question must be authorised by such valid law. The expression "levy and
collection" are used in Article 265 in a comprehensive sense and are intended
to include the entire process of taxation commencing from taxing Statute to
taking away of the money from the citizen. What the Article enjoins is that
every stage in this entire process must be authorised by law.
C [178-H; 179-A, Bl

4.2. In the instant case, several tax legislations enumerated in the
Schedule to the Validation Act having been declared ultra vires, on the ground
that the State legislatures did not have the legislative competence to make
D the legislation, there existed no authority of law for making any levy or
collection of tax and cesses on minerals. The Parliamentary intervention was
by enacting the Validation Act and giving it retrospective effect and making
the law exist till 4.4.1991. What has been achieved is a valid and legal taxing
provision and then liy fiction, making the tax already collected to stand under
the re-enacted law. In the absence of any provisions in the Validation Act,
E the relevant provisions of the State laws, which stood expired on 4.4.1991, to
hold that the Validation Act authorises, imposing and collection of tax and
cesses on minerals, even after 4.4.1991, in respect of the minerals extracted
till 4.4.1991 on which the cess was collectable, would contravene Article 265
of the Constitution. 1179-C, D, El

F 5.1. A Statute can be said to be either perpetual or temporary. It is
1 perpetual when no time is fixed for its duration and such a Statute remains
in force until it is repealed which may be express or implied. But a Statute is
temporary when its duration is only for a specified time and such a Statute
expires on the expiry of the specified time, unless it is repealed earlier. The
G relevant provisions of the different State laws relating to cesses or taxes on
minerals having been deemed to have been enacted by Parliament and having
been deemed to have remained in force upto 4.4.1991 under the Validation
Act, those laws relating to cesses or taxes on minerals must be held to be
temporary Statute in the eye of law. Necessarily, therefore, its life expired
and it would be difficult to conceive that notwithstanding the expiry of the
H law itself, the collecting machinery under the law could be operated upon for
DISTRICT MINING OFFICER v. TATA IRON AND STEEL J53
making the collection of the cess or tax collectable upto 4.4.1991. A
[180-A, B, CJ

5.2. To a temporary Statute, the provisions of Section 6 of the General
Clauses Act, 1987 will have no application. Very often legislature enacts in
the temporary Statute a saving provision, similar in effect to Section 6 of the
General Clauses Act. But in the absence of such a provision in the Validation B
Act in question, the life of such State laws stood expired on 4.4.1991.
Consequently, there would be no residuary provision or authority of law
conferring a power on the state to make and levy or collection of cess ·or taxes
one minerals, after the expiry of the relevant laws. [180-D, El

5.3. When Parliament enacted the Validation Act and infused life into C
the void Acts for lack of legislative competence, it must be assumed that the
Parliament knew the constitutional position and was fully aware of the position
of law and the necessity of providing a saving clause, in the event the
Parliament intended to confer a right of collection as well as levy subsequent
to 4.4.1991. The deliberate and conscious omission of the saving clause by the D
Parliament is of considerable significance and cannot be lightly brushed aside.
Section 2(1) of the Validation Act, having used the expression "upto 4.4.1991",
unequivocally indicates that what is validated is the process of levy and
collection made upto that date and no further. This being the position and
the Validation Act not having provided any provision, permitting levy or
collection after 4.4.1991 the Act never conferred a right of levy or colloection E
after 4.4.1991. [185-D-HI

P. Kannadasan and Ors., v. State of Tamil Nadu and Ors., [199615 SCC
670, overruled.

Joura Sugar Mills Pvt. Ltd v. State of MP., (1996) l SCC 523, referred to.
F
State of Orissa v. Bhupendra Kumar Bose, AIR (1962) SC 945; RC. Jail
v. Union ofIndia, (19621 Supp. 3 SCR 436; Hansraj Moolji v. State ofBombay,
(19571 SCR 634 and T. Venkata Reddy and Ors. v. State of Andhra Pradesh,
(1985) 3 sec 198, held inapplicable.

Steavenson v. Oliver 1841 (151) ER 1024, referred to. G
6. It was erroneously held in Kannadasan 's case that Article 14 would
be attracted unless the provisions of the Validation Act is interpreted to mean
that it not only validates the collection made but also entitles fresh collection
and levy, even after 4.4.1991 of the dues which was collectable upto 4.4.1991.
(186-DI H
154 SUPREME COURT REPORTS [2001] SUPP. 1 S.C.R.

A P. Kannadasan and Ors., v. State of Tamil Nadu and Ors., 11996) 5 SCC
670, overruled.

Mafat Lal Industries ltd., v. Union of India, [1997) 5 SCC, followed.

7. It cannot be held that Section 2(3) of the Act confers a substantive
B power to levy and collect cess and other taxes on minerals even after expiry
4.4.1991. The said section which has been introduced for removal of difficulty
only provide a limited saving clause, conferring a right of refund on the
assessee, if such assessee has paid in excess of what is due and the said
provision cannot be invoked to give a wider interpretation of Section 2(1) or
C Section 2(2). [186-FJ

CIVIL APPELLATE JURISDICTION Civil Appeal Nos. 4803-
4808 of 2001.

From the Judgment and Order dated 17.1.96 of the Patna High Court
in C.W.J.C. Nos. 1280, 1507, 1639, 1702, 1711 and 1870 of 1992 (R)
D
WITH
C.A. Nos. 4809-4850/2001, R.P. (C) No.1432/97 in C.A. No. 9850/96
R.P. (C) No. 1460/97 in W.P. (C) No. 408/96, R.P. (C) No. 1423/97 in w:P.
(C) No. 518/95, C.A. Nos. 4851-93/2001, R.P. (C) No. 966/98 in C.A.No.
9917/96, C.A. Nos. 4894-4911/2001, T.P. (C) No. 708/98, R.P. (C) No.
E 1636/98 in C.A. No. 9914/96, R.P. (C) No. 1581/98 in C.A. No. 9915/96,
C.A. Nos. 4912-24/2001, W.P. (C) Nos. 594, 649/98, C.A. Nos. 4925-27/
2001, 1664-65, 1666-67, 1668-69/99, R.P. (C) No. 2363/98 in C.A. No.
9913/96, R.P. (C) No. 2364/98 in C.A. No. 9905196, R.P. (C) No. 2365/98
in C.A. No. 9912/96, C.A. Nos. 3883-87/99, T.P. (C) No. 452/99, W.P. (C)
F Nos. 156, 160, 161, 166, 408/99, T.P. (C) No. 771/99, C.A. Nos. 4928-29/
2001, T.P. (C) Nos. 471, 465, 483, 485/99, W.P. (C) No. 129/2000, T.P. (C)
Nos. 797/99, 172/2000, 173 and 173A/2000, W.P. (C) No. 403/2000, C.A.
No. 4930/2001, T.P. (C) No. 480/99, 390/2000 and C.A. No. 4931 of2001.

Rakesh Dwivedi, A.K. Ganguli, Ranjit Kumar, K. Parasaran, K.K.
-
G Venugopal, Dr. AM. Sighyim, M.L. Jaiswal, S.K. Gambhir, Shanti Bhushan,
N.N. Goswami, Anoop G. Choudhary, B.B.Singh, Ms. Binu Tamta,
Krishnamurthi Swami, Ajit Kumar Sinha, P.N. Gupta, Shahid Rizvi, Ms.
Gauri Rasgotra, Suman J. Khaitan, Mrs. Sarla Chandra, S.K. Kulkarni, D.L.
N. Rao, Ms. Sangeeta Kumar, Vijay Kumar, A.V. Rangam, A Ranganadhan,
Praveen Kumar, Anil Sharma, Avanish Sharma, Vivek Gambhir, U.A. Rana,
H Arvind Kumar, Ms. Shalini Mittal, K.V. Viswanathan, K.V. Venkataraman,
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PATTANAIK, J.] 155

Sudhir Kumar Gupta, Ms. Sheetal Sharma, S. Chakraborty, K.V. Sreekumar, A
Ramesh Babu M.R, T.N. Singh, Anip Sachthey, Ms. Sandhya Rajpal, Arijit
Prasad, Prakash Shrivastava, P.S. Narasimha, P. Sridhar, V.G. Pragasam,
Badri Prasad Singh, Ravinder Narain, A.K. Jain, Ms. Deepa Das, S.
Dukumaran, S. Ganesh, M.C. Dhingra, K.N. Srivastava, Ms. Gauri Rasgotra,
Suman Jyoti Khaitan, Dhruv Mehta, S.K. Mehta, C.L. Kalia, Ms. Shobha,
S.R. Ghosh. S.V. Bairam Das, Dinesh Kumar Garg, Ms. Sangeeta Manda!, B
Ms. Varsha Choudhary, Krishnanand Pandeya, Rakesh K. Sharma, Deba Prasad
; Mukherjee, B.K. Satija, Gopal Prasad, B.B. Singh, Mrs. Rekha Pandey, Mrs.
Sunita Sharma, A.S. Rawat, D.S. Mahra, N. Ganpathy, B. Partha Sarthy,
Satish, K. Agnihotri, R.M. Sharma, Rohit K. Singh, Anil Kumar Pandey,
Mrs. Arnita Gupta, Sakesh Kumar, Sanjay R. Hegde, Satya Mitra, A.
Mariarputham, Mrs. Aruna Mathur, T.V. Ratnam and K. Subba Rao, Advs. C
with them for the appearing parties.

The Judgment of the Court was delivered by

PATTANAIK, J. Delay condoned.
D
Leave granted in all the SLPs.

This batch of cases relate to the Cess and other Taxes of Minerals
(Validation) Act, 1992 [hereinafter referred to as 'the Act']. The question for
consideration is, by the aforesaid Act, what in fact has been validated, is it
only the taxes on minerals already realised under the invalid.law or the right E
to levy tax and realise the same, which became due upto 4th of April, 1991?
Several cases arising from different States have been tagged on to the main
matter arising out of the judgment of the Patna High Court, were listed
together, but we think it appropriate to decide the Bihar matter, so that the
law laid down therein would be followed in other cases. Incidently, the
earlier judgment of this Court arising out of the said Validation Act in relation F
to the levy of tax on minerals in the State of Tamil Nadu in the case of
• P. Kannadasan and Ors. v. State a/Tamil Nadu and Ors., (1996] 5 SCC 670,
is required to be reconsidered and it is for that purpose, these cases have been
referred to a three Judge Bench. In the case arising out of the judgment in
Patna High Court in S.L.P. (Civil) No. 13102-13107 of 1996, the State through G
the District Mining Officer is the petitioner and by the impugned judgment,
the High Court though has upheld the validity of the Validation Act, but has
held that the said Validation Act does not authorise the recovery of any tax
or cess after 4.4.91, even if the liability was incurred under the Validated
laws before 4.4.1991 and consequently, the demand raised ·by the State were
quashed and the State was restrained from taking any steps to realise such H
,
156 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A demand. Be it be stated that a batch of writ petitions were filed by several
assessees, assailing the legality of the demands raised by the Mining Authorities
for payment of cess in respect of such dues, which would be leviable till 4th
of April, 1991. In the batch of cases relating to State of Madhya ·Pradesh,
after the Judgment of this Court in Kannadasan 's case, the State of Madhya
B Pradesh issued notice to several asses~ees, raising the demand and such demand
was assailed by filing writ petitions in the High Court. Applications had been
filed in this Court for getting those writ petitions transferred, but no order of
transfer has been passed by this Court and as such the writ petitions are still
pending before the High Court of Madhya Pradesh and we, therefore, do not
propose to deal with those matters, since the High Court can well dispose of
C the same, on the basis of our judgment in the Bihar Case. Civil Appeal No.
9917 of 1996, however is directed against the judgment of Madhya Pradesh
High Court dated 10.5.1995. Before the High Court, the validity of the
Ordinance No. 7of1992 as well as Cess Validation Act 16of1992 had been
assailed. The High Court, by the impugned judgment upheld the validity of
the aforesaid Validation Act. We are in respectful agreement with the said
D conclusion and hold the Validation Act to be constitutionally valid. Hence no
interference is called for in the Civil Appeal. But the dispute, whether fresh
notice could be issued for collection and levy of dues in respect of liability
accrued till 4.4.91 is the subject matter in pending writ petitions in the High
Court. In the cases arising out of the judgment in Kamataka High Court, the
E High Court has followed the judgment of this Court in Kannadasan and thus
upheld the right of the State to levy demand and collect, which was collectable
upto 4.4.1991 and the assessees are challenging the said judgment in this
Court. Several Writ Petitions were filed under Article 32, challenging the
constitutional validity of the Validation Act as well as for quashing the demand
notices dated 1.8.98 and 2.9.98, issued by the Department of Mines and
F Zoology in the State of Kamataka. In the cases arising out of judgment of
Andhra Pradesh High Court, the High Court followed the judgment of this
Court in Kannadasan and upheld the Constitutional validity of the Validation •
Act as well as the right of the State of make the demand upto 4.4.1991 and
this judgment of the Andhra Pradesh High Court is being assailed by the
G assessees in different special leave petitions. In Kannadasan's case, which
arises out of the judgment of Madras High Court, after the judgment of this
CoJrt, review petitions were filed by the assessees and this Court had merely
directed those review petitions to be tagged on to the special leave petitions
filed against the judgment of Patna High Court, but in those petitions, no
fomtal notice had been issued to the State of Tamil Nadu and necessarily
H therefore, those review petitions have to be de-linked and only after disposal
'
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PATTANAIK, J.) 57

of the special leave petitions filed, arising out of the judgment of Patna High A
Court, the review petitions can be listed for observance of formalities and
disposal.

Though large number of counsel argued for different sets of persons,
but basically two contentions were advanced. One by Mr. Rakesh Dwivedi,
the learned senior counsel, appearing for the State of Bihar, contending that B
the Validation Act authorises the State Governments to levy and realise tax
which were due up to the date of validation, namely, 4.4.1991 and there
should not be any embargo on the State's power to realise the same
notwithstanding the fact that the life of the Validation Act was only upto
4.4.1991. This stand of Mr. Dwivedi, learned senior counsel appearing for C
the State of Bihar was supported by Mr. Chaudhary, appearing for the State
of Madhya Pradesh, Mr. Sanjay Hegde, appearing for the State of Karnataka
as well as Mr. Mariarputham, appearing for the State of Tamil Nadu. According
to Mr. Dwivedi, the judgment of this Court in Kannadasan's case squarely
covers the point and has rightly been decided and the same does not require
any reconsideration. On behalf of different sets of assessees, arguments were D
advanced by different counsel, particularly by Mr. Shanti Bhushan, Mr.
Parasaran, Mr. KK Venugopal, Dr. A.M. Singhvi, Mr. AK Ganguli and Mr.
Ranjit Kumar, all senior counsel, and the essential contention was that the
Parliament in fact came forward with the Validation Act after different Cess
Acts were struck down on the ground of lack of legislative competence solely E
to ensure that the levies collected are not required to be refunded by the State
which would have a serious impact on the State revenues of the concerned
State Governments, and therefore, in the absence of any law subsequent to
4.4.1991 the authority to collect has disappeared and consequently the decision
of this Court in Kannadasan's case holding that not only the taxes already
collected need not be refunded, but the taxes and cesses which have not F
already been collected also be collected is not correct in law. It was also
further contended that this Court while examining the provisions of the
Validation Act in the light of the purpose that was sought to be achieved by
the Parliament has not borne in mind the very Statement of Objects and
Reasons as well as the language of Section 2 of the Validation Act, and the G
absence of a provision in the Validation Act, corresponding to the provisions
contained in Section 6 of the General Clauses Act. It is the uniform contention
of all the counsel appearing for different sets of assessees that the judgment
of this Court in Kannadasan conferring right on the State to levy and collect
the taxes on minerals, which could be leviable until 4th April, 1991, would
run contrary to Article 265 of the Constitution and would traverse beyond the H
158 SUPREME COURT REPORTS [2001) SUPP. I S.C.R.

A object of the Validation Act, and consequently it would be appropriate for
this larger Bench to re-consider the earlier judgment of two Judge Bench in
Kannadasan's case.

Before we proceed further in enumerating and examining the contentions
raised by the counsel for the parties, it would be appropriate to notice the
B history leading to the enactment of the Validation Act. The States of Andhra
Pradesh, Bihar, Karnataka, Madhya Pradesh, Tamil Nadu, Maharashtra and
Orissa had enacted several legislations authorising levy on minerals. In the
case of India Cement ltd. v. State of Tamil Nadu, (1990] I Supreme Court
Cases 12, a Seven Judge Bench of this Court came to hold that the levy in
C question is essentially a levy on minerals and is relatable to Entries 23 and
50 of List II, but on account of declaration made by Parliament contained in
Section 2 of Mines and Minerals (Regulation and Development) Act, 1957,
the State Legislatures have been denuded of the power to levy tax on minerals
and, as such, the imposition of tax on minerals under Section 115 of the
Tamil Nadu Panchayat Act, 1958 is ultra vires. This Court further hold that
D the earlier decision of this Court in HRS Murthy's case-[ 1964] 6 Supreme
Court Reports 666, has not been correctly decided. Sometime thereafter a
Three Judge Bench of this Court decided the case of Orissa Cement,-[1991]
Suppl. 1 Supreme Court Cases 430, and following the larger Bench decision
of this Court in India Cement declared identical levies imposed by the States
E of Orissa, Bihar and Madhya Pradesh to be incompetent and void. The Court
further held that the decision to be operative prospectively with effect from
the date of the judgment i.e. 4.4.1991 so far as the State of Bihar is concerned,
and 22.12.1989 so far as Orissa was concerned, the date on which the Orissa
High Court struck down the levy, and 28.3.1989 so far as Madhya Pradesh
was concerned, the date on which the Madhya Pradesh High Court struck
F down the levy. It is after the aforesaid two judgment the Parliament came
forward initially by promulgating an Ordinance, called the Cess and other .
Taxes on Minerals (Validation) Ordinance, 1992, and thereafter by replacing
the same by Act 16 of 1992 which was published in the Gazette of India on
4.4.1992. Under Section 2 of the Validation Act the Parliament by legal
G fiction purports to have enacted the provisions of the Acts mentioned in the
Schedule keeping the provisions of such Act to have remained in force upto
4th April, 1991. The Schedule consists of 11 different Acts, which Acts had
been declared by this Court to be ultra vires as the State Legislatures were
denuded of their powers to make those laws in view of declaration made by
the Parliament contained in Section 2 of Mines and Minerals (Regulation and
H Development) Act, 1957. In the eye of law, therefore, those 11 Acts must be
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PATTANAIK, J.J ]59

held to have been enacted by the Parliament upto 4th April, 1991. After the A
enactment of the Validation Act Writ Petitions were filed in the High Court
challenging the Validity of the said Validation Act. Those Writ Petitions
having been dismissed by the High Court, the matter was carried to this
Court in Kannadasan 's case and the said case was disposed of by judgment
dated July 26, 1996, reported in [1996] 5 sec, 670. A two judge Bench of B
· this Court considered the 7 contentions raised by the assessee and rejected all
the contentions and held as follows:-

(i) That by enacting the Validation Act, the Parliament does not seek
to over-turn the decision rendered by this Court.

(ii) A perusal of Section 2 of the impugned enactment and Section 2 c
of the 1969 Validation Act considered in Krishna Chandra
Gangopadhyaya would show that Section 2 of the impugned
enactment is a faithful reproduction and repetition of Section 2 of
the 1969 Validation Act, word to word. The only additional words
are in Section 2(1 ), viz. 'and such provisions shall be deemed to
have remained in force upto the 4th day of April, 1991. D
(iii) The preamble of the Act stating "to validate imposition and
collection of cesses and certain taxes on minerals under certain
State laws" as well as the provisions of the Validation Act create
the levy as well as validate the recovery already made and the
expression 'collection' does not mean what is already collected E
alone but means the future collection as well. Neither the preamble
nor Section 2 say that what has already collected alone is validated.
(iv) The contention of the assessee that a Parliamentary enactment
will not permit the levy of taxes and cesses at different rates in
different States in the country as that would be discriminatory F
and validation of Article 14 of the Constitution is misconceived
as Parliament has intervened and by enacting the impugned law
in exercise of its undoubted power validated the levy and all that
flows from it.
(v) The contention of the assessee that the denudation of the power G
of the State legislature to levy taxes on minerals is not an absolute
and unlimited one, is wholly misconceived, particularly in view
of the decision of this Court in India Cement and Orissa Cement.
(vi) The contention of the assessee that the taxes realised by virtue of
the Validation Act can only be realised for the purpose of H
160 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A Regulation of Mines and Minerals Development is also based
upon a misconception about the law relating to taxes and what is
levied under the impugned enactment is a tax/cess and not a fee
and as such, it is not necessary that element of quid pro quo
should be established in each and every case.

B (vii) Merely because the levy created by an enactment is limited to a
particular period, the Act itself cannot be said to be a temporary
Statute and the Act very much continues in force and will remain
in force till Parliament chooses to repeal it and, therefore, Section
6 of the General Clauses Act should apply. Notwithstanding the
cessation of levy created by Section 2(1) with 4th day of April,
c 1991, the machinery requisite for realising and refunding the taxes/
cesses yet to be collected or wrongly collected, as the case may
be, is kept alive and it cannot be suggested with any reasonableness
that the said machinery is kept alive only for the purposes of
refunding the excessively collected taxes but not for collecting/
D recovering the uncollected/unrecovered taxes and cesses.

With the aforesaid conclusions this Court dismissed the appeals preferred
by the assessee against the judgment of the Madras High Court.

The Patna High Court disposed of the batch of Writ Petitions on 17th
E January, 1996 before the judgment of this Court in Kannadasan's case. In the
impugned judgment the High Court has held that:

(a) the Parliament has not enacted the entire Cess Act of 1880 but
has merely re-enacted the provisions contained therein which relate
to cess and other taxes on minerals;
F (b) The laws which have been enacted by the State Legislature are
deemed to have been enacted by the Parliament.
(c) It became necessary for the Parliament to intervene and to enact
a law with a view to protect a State frol)l the consequences that
followed declaration made by the Supreme Court in India Cement
G and Orissa Cement.
(d) The Parliament took precaution to itself re-legislate on the subject
matter in exercise of its legislative power and it chose to legislate
by incorporation, a method of legislation well recognised by law.

H (e) The laws enacted were deemed to have remained in force upto
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PATTANAIK, J.J 161

4th April, 1991. A
(f) The Statute in question can be described as promulgated a
temporary legislation.

(g) The submission that Parliament did not have the competence to
legislate on the subject matter fell within the exclusive jurisdiction
of the State Legislature, proceeds on the erroneous assumption B
that the subject matter with which the Parliament dealt with in the
Validation Act was a State subject contained in List II of 7th
Schedule.

(h) The competence of Parliament to make enactment is beyond
challenge. C
(i) The Validation Act cannot be impugned on the ground that it
sought to re-validate the said Act which was declared
unconstitutional by the Supreme Court. The power of the
Parliament to legislate retrospectively cannot be disputed.
Consequently the Parliament had power to legislate on the topic D
it could make an Act on the topic by any drafting means including
by referential legislation.
U) There is nothing in the impugned Act with regard to the assignment
of the taxes collected or its distribution between the States. It
cannot therefore be urged that any provision in the impugned Act E
runs contrary to the constitutional scheme with regard to the
assignment to the States of the taxes realised, or their distribution
between the States.
(k) Considering the background, facts and having regard to the purpose
for which the law was passed and the ?bjective sought to be F
achieved it cannot be said that the Validation Act was
discriminatory merely because different rates of cess on royalty
were prescribed for different States. The dominant objective of
the Act was to validate the levies already made, and not to legislate
on the subject by naming a law imposing cess on royalty. It was G
because of this objective which the law sought to achieve, that
t~e law was given a limited life i.e. till 4th April, 1991. The
legislative history and the march of events, earlier justified by a
Supreme Court judgment, could not be ignored by the Parliament
and, therefore, taking into account the reality of the situation, the
Parliament was left with no option but to validate the levy of cess H
162 SUPREME COURT REPORTS [2001] SUPP. 1 S.C.R.

A on royalty till 4th April, 1991, the date of the Supreme Court
judgment in Orissa Cement. ? The law ceases to have any effect
after the date which makes it clear that the legislation was not
with a view to levy cess on royalty, but only to validate what had
happened in the past.
B (I) Sub-section (l) of Section 2 of the Act makes it clear that the
impugned Act does not enact by validation a perpetual law but a
temporary Act.
(m) In the impugned Act admittedly there is no provision similar to
Section 6 of General Clauses Act nor is there any saving Clauses
C which may justify the application of principles contained in Section
6 of General Clauses Act.
(n) The Act was promulgated for a limited purpose. The Parliament
intervened and granted sanctity to laws declared void by the
Supreme Court only with a view to absolve the States of their
D liability to refund the taxes illegally collected as that would have
cast heavy financial burden on the State. It also provided for the
same cut off date instead of different cut off dates. The Parliament
did not intend to keep alive after 4.4.91, the obligations or liabilities
accrued or incurred under the temporary laws and, therefore, did
not provide for the enforcement of such obligations or liabilities
E in future. As a result the taxes collected before 4.4.91 are not
required to be refunded, but the Act does not sanction the recovery
of any tax after 4.4.9 l.

With the aforesaid conclusions, the demands made by the State having
been quashed and the State having been restrained from taking any steps to
F realise the demands the State through its mining officer is in appeal before
this Court.

Mr. Rakesh Dwivedi, the learned senior counsel appearing for the State
of Bihar contended that the language of Section 2(1) of the Validation Act
G is unambiguous and is susceptible of the only construction that the relevant
law specified in the schedule was enacted by the Parliament and remained
valid upto 4th of April, 1991 and consequently, the State is entitled to collect
the cess or taxes on minerals, which became payable upto 4th of April, 199 l.
Absence of any law subsequent to 4th of April, 1991 would not stand as a
bar on levy and collection of the cess and taxes on minerals and any tax or
H cess, which is validly leviable under a valid law could be collected even after
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PATTANAIK, J.) 163

the expiry of the law in question, The High Court, therefore, was in error in A
limiting the provisions of Section 2(1) of the Validation Act by making
reference to the Statement of Object and Reasons. Mr. Dwivedi further
contended that the preamble also unequivocally indicates that the Act is to
validate the imposition and collection of cess and certain other taxes on
minerals under certain State laws. Necessarily, therefore, the right to impose B
the levy and collect the same by virtue of the Validation Act, cannot be
nullified or taken away, merely because the Act had its life till 4th of April,
1991. Mr. Dwivedi also further contended that the Act itself having been
enacted on 4th of April, 1992, the date on which it received the assent of the
President and was published in the Gazette of India and indicating therein
that the enactment in question must be deemed to have been made by C
Parliament and keeping the provisions valid upto 4th of April, 1991 is clearly
suggestive of the fact that the Parliament intended to enact the relevant
provisions of the State laws dealing with the levy and collection of cess and
taxes on minerals, thereby, conferring right upon the State to make the levy
and collect the same in respect of the minerals on which the cess could be
leviable upto 4th of April, 1991, and unless such an interpretation is given, D
the Validation Act would be meaningless and would not subserve the purpose
for which Parliament by deeming fiction, legislate the relevant provisions of
the State Acts, as if it was an enactment of the Parliament. Adjudged from
this stand point, Mr. Dwivedi contends that the decision of this Court in
Kannadassan 's case, does not require any re-consideration and the Court E
rightly held that the validation in question is not only in relation to the cess
already collected under an invalid law, but also in relation to the right of the
State to levy, demand and collect, which would be collectable upto 4th of
April, 1991. According to Mr. Dwivedi, the two fictions engrafted in Section
2(1) of the V;;lidation Act, must be given full play and effect and, therefore,
in the eye of law, a valid statute enacted by the Parliament having legislative F
competence for the same being operative till 4th of April, 1991, there is no
rhyme or reason to debar the State from making any demand or collect the ·
cess, which is collectable upto 4th of April, 1991 on the minerals extracted.
According to the learned counsel, the impugned Validation Act is a unique
piece of legislation, but the legislative intent is apparent from the language G
used as well as in the settings in which the enactment was made, conferring
thereby upon the State Government, a right to levy and collect taxes in
respect of the past period, even after the expiration of 4th of April, 1991. Mr.
Dwivedi urged that in construing such a unique piece of legislation, the
Courts must adopt a dynamic approach and it does not require any elaborate
argument to discover the legislative intent which has been well expressed in H
164 SUPREME COURT REPORTS (2001] SUPP. 1 S.C.R.

A the language used in the Statute itself. According to Mr. Dwivedi, the
Validation Act cannot be held to be a temporary statue and remains as a valid
piece of legislation, conferring the right to collect and make the levy which
would be collectable upto 4th April, 1991 and the provisions of General
Clauses Act would be applicable. Mr. Dwivedi urged that there is no quarrel
-
B with the constitutional proposition engrafted in Article 265 of the Constitution
that levy and collection should be by authority of law. But in respect of
minerals extracted upto 4th of April, 1991, if any cess or tax is to be levied
and collected in accordance with the machinery provided for the same, that
right of the State will not get frustrated, merely because the legislation in
question in the eye of law was effective till 4th of April, 199 I. The counsel
C urged that what the Parliament intended, is that the State could levy and
collect cess on minerals extracted till 4th of April, 1991, but would not be
entitled to make any levy or collect cess on minerals extracted subsequent to
4th of April 1991. According to Mr. Dwivedi, even while the relevant Act
was struck down by the judgment of this Court in Orissa Cement's case, in
the very judgment, it was indicated that there would be no liability on the
D part of the State to refund the cess already collected till the date of the
judgment i.e. 4.4.1991, and it was unnecessary for the Parliament to include
that Act in the schedule and validate the provisions of the Act by a deeming
fiction of enactment by the Parliament merely for the purpose of absolving
the State from the liability of refunding the cess already collected as such a
E direction was part of the judgment of this Court in Orissa Cement case. It
cannot be assumed that the Parliament enacted the provisions of the relevant
Act upto 4th of April, 1991 without any purpose or object. It would, therefore,
be rational to construe that the purpose of the enactment in question was to
have a valid law till 4th of April, 1991, thereby, conferring the State the right
to levy and collect all cess and taxes on minerals, which was collectable upto
F the 4th of April, 1991. The construction put-forth by the Patna High Court
in the impugned judgment is, therefore, erroneous. With reference to the
Press Note that was issued on 17.2.1992, Mr. Dwivedi contends that the
expression "that the Government has decided to validate the collection of
cesses and other levies upto 4.4.91" would unequivocally indicate that the
G collection already made as well as the collection to be made in respect of the
collectable dues upto 4.4.91 was intended to be validated. It is the contention
of the learned counsel that all levies which would be validily impossible upto
4.4.91 could be collected by the State and that was the object for which the .
Parliament made the enactment. It was also urged that if the language used
in Section 2(2) is read in juxtaposition to language used in Section 2( I), it
H would be apparent that Section 2(1) was not confined to the validation of the
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PATTANAIK, J.] 165

levy that has already been collected, but it was a valid law, making the State A
entitled to collect the cess realisable upto 4.4.91. In response to the conclusions
of the High Court on the question of a Saving Clause, Mr. Dwivedi contends
that the said absence of a saving clause is not decisive and even if the Act
is held to be a temporary Act, if the liability is of an enduring nature, the
same would survive even after the expiry of the Act itself, as was held by this B
Court in the case of Bhupendra Bose, [ 1962] Supp. 2 SCR. 3 80. According
to Mr. Dwivedi, by process of re-enactment of the State legislations by the
Parliaments itself, the Parliament was in fact balancing between the Public
Interest involved in the matter of direction of refund by the Supreme Court
and as such wanted to place all the States uniformly by making the legislation
enacted till 4th of April, 1991. In the matter of balancing such Public Interest, C
it would be unreasonable to hold that persons from whom tax could not be
collected would be in a better position than the persons from whom the tax
had already been collected. On the other hand, it would be more logical to
hold that liability to pay the tax on the minerals extracted upto 4th of April,
1991 would be uniformly applied and therefore, the State would have the
right to make the levy and collect the same. With reference to the various D
Validating Acts and the pattern of validation, as demonstrated by the assessees,
Mr. Dwivedi contends that while construing the provisions of a particular
Statute, the language used in that statute is of paramount consideration
inasmush the intention of the legislature is well expressed in the language
used. Further the decision of this Court in Joura Sugar Mills, [1996] I SCR E
523, and the ratio therein would squarely apply to the case in hand and,
therefore, it would be only reasonable to construe that the State could recover
all the cess and tax on minerals, which would be found due upto 4.4.91 and
there should not be any fetter on the power of the State to collect such dues
merely because the life of the Act has expired on 4.4.91. According to Mr.
Dwivedi, this Court while deciding the true import and effect of the Validation F
Act in Kannadasan's case, borne in mind the backdrop of a special historical
situation where cess and taxes on minerals were being collected by different
States under their laws at different rates over a long period, which laws were
struck down by the Supreme Court, on the ground of lack of legislative
competence. The decision rendered by this Court in Kannadasan's case, G
therefore, must be held to be correct and does not require any reconsideration.

Mr. Chaudhary, learned counsel appearing for the State of Madhya
Pradesh in the transferred applications supported the arguments advanced by
Mr. Rakesh Dwivedi, appearing for the State of Bihar and further contended
that the purpose of the Validation Act is to provide the legislative competence H
166 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A for the enactment in question up to 4th April, 1991. The consequences flowing
there from would confer an unfettered right on the State Government to
impose and collect cess and taxes on minerals which was imposable up to 4th
April, 1991, and that right cannot be nullified merely because the Act remained
in force till 4th April, 1991. Mr. Chaudhary contended that the amplitude of
B the substantive provision contained in Section 2(1) of the Validation Act
-
cannot curtailed by looking to the objects and reasons of the legislation, and
judged from this stand point the conclusion is irresistible, as was held by this
Court in Kannadasan's case, that it permits both levy and collection even
after 4.4.1991 in respect of the liabilities accrued until 4th April, 1991. In
support of this contention he placed reliance on the decision of this Court in
C the case of Mis. Burrakur Coal Co. Ltd v. The Union of India and Ors.,
[ 1962] 1 SCR 44. Mr. Sanjay Hegde, learned counsel appearing for the State
of Karnataka adopted the arguments advanced by Mr. Rakesh Dwivedi,
appearing for the State of Bihar. Mr. N.N. Goswami, learned senior counsel,
appearing for the Union of India, submitted that to avoid any discrimination
between the group of persons from whom the cess and tax on minerals have
D been collected, and the others from whom it has not been collected though
they are liable, the legislation in question even though goes beyond the
object, must be construed to hold that it permits levy and collection of the
dues which would be collectable upto 4.4.1991.

E Mr. Shanti Bhushan, learned senior counsel appearing for the assessee
in Bihar case contended that Article 265 of the Constitution puts an embargo
that no tax could be levied or collected except by an authority of law, and
if, law in question never remained in force after 4.4.1991 then the question
of conferring right upon the State to levy or collection does not arise. The
right to levy and collection, which was there with the State having disappeared
F with effect from 4.4.1991, the date on which the life of the Act expires,
unless there is any provision conferring the right upon the State to make levy
or collect any levy, that collection would be without the authority of law and
would contravene Article 265 of the Constitution. According to Mr. Shanti
Bhushan, Section 2(1) of the Validation Act cannot be held to be an enactment
G and repeal, as contended by Mr. Dwivedi, appearing for the State of Bihar.
The learn counsel urged that it is true that in view of the judgment this Court
in Orissa Cement's case it was not necessary for the Parliament to make the
enactment, but merely because it was so enacted it cannot be construed
which is not apparent in the Act itself. According to the learned counsel the
Validation Act was enacted only for preventing any refund of the tax, already
H collected, as it would have got serious repercussions on the State revenue,
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PATTANAIK, J.J ]67

and that is also explicit from the objects and reasons of the Validation Act, A
as well as the Press Note issued, and therefore, the High Court under the

- impugned judgment was fully justified in coming to the conclusion that because
of the Validation Act, the State cannot be said to have been conferred any
right to levy and collect dues, which was collectable upto 4.4.1991. Mr.
Shanti Bhushan contends that Section 2(2) of the Validation Act, on a plain B
reading, would suggest, that it validates all the past Acts of collection but has
not conferred any right to make any fresh collection or levy cess on minerals.
Mr. Shanti Bhushan contended that in Kannadasan's case this Court considered
from a wrong premise, in as much as, what was necessary for consideration
is as to whether the relevant statute which lack legislative competence and
was enacted is a temporary legislation or not ? And as such, the fact that C
Parliament did not provide saving clause is indicative of the true intention,
namely, the Parliament never permitted the States to levy and collect the
liabilities already accrued, but it only validated the collection and levy already
made under an invalid law which otherwise the State would have been liable
to refund. Mr. Shanti Bhushan also referred to the judgment of this Court in
Joura Sugar Mills' case [1996] 1 SCR 523 and pointed out the difference in D
the Validation Act which would clinch the issue.

Mr. Parasaran, the learned senior counsel appearing for the respondents
in some of the Special Leave Applications, arising out of the judgment of the
Patna High Court contended, that as several State legislations were being E
given life through Parliamentary enactment, the Parliament though if fit to
put up the common date for all the State laws till the date of the judgment
in Orissa Cement case, 4th April, 1991, with the sole object that none of the
collection made would be required to be refunded. But in the absence of any
provision in the validating Act providing for a right to take levy and collection
beyond the date and since Section 6 of the General Clauses Act has no F
application it would be wholly illegal to hold that the State can make levy
and collect tax even after 4.4.1991 in respect of the dues which were collectable
upto that date. According to Mr. Parasaran, the Parliament came forward by
fictionally enacting provisions of different State laws dealing with the tax
and cess on minerals as an act of balancing public interest, as otherwise it G
was felt that it would be a severe blow on the State revenue if the State is
required to refund the taxes and cess already collected. It is thus contended
by Mr. Parasaran that the judgment of this Court in Kannadasan is erroneous
I
and it must be held that by the Validation Act, State would not be liable to
•efund the cess already collected but no right can be said to have been
conferred upon the State to make any further levy or collection in respect of H
168 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A dues collectable up to 4.4.91, as was held in Kannadasan's case.

Mr. K.K. Venugopal, learned senior counsel appearing for the respondent
Hindalco in Special Leave Petition No. 13106 of 1996, contended with
vehemence, that in India Cement's case as well as in Orissa Cement's case
the question for consideration was whether the State legislature can make any
B law/tax on minerals and this Court in no uncertain terms held that the State
legislature did not have the legislative competence. But having held so the
Court innovated the device of prospective over ruling following the principle
enunciated in Golaknath's case. The true import is that the prospective
invalidation was postponed till 4.. 4.1991 but there being no legislation after
C 4.4.1991 notwithstanding the re-enactment of the State laws by the Parliament
up to that date there cannot be any authority of law to make any demand by
the State of any tax or cess on minerals. According to Mr. Venugopal, the
laws having met a natural death on 4.4.1991 and only past actions having
been sought to be validated by virtue of the Validation Act no power can be
said to have been conferred on the State to collect the past liability incurred,
D but which are not collected. Even if there has been a levy but not collected
prior to 4.4.1991 cannot be permitted to be collected in the absence of any
valid law, as in that event it would contravene Article 265. According to Mr.
Venugopal, if there is no authority of law after 4.4.1001 then there would be
no question of either imposing levy or collecting levy, which might have
E been imposed, and judged from this angle the judgment of this Court in
Kannadasan's case must be held to be wrongly decided.

Dr. A.M. Singhvi, the learned senior counsel, appearing for the assessee-
respondent in S.L.P. (Civil) No. 13106/96 and S.L.P. (Civil) No. 15442-
15443/98 contended that the intention of the Parliament in enacting the
F Validation Act was only to save the State Governments from refunding the
monies already collected under Statutes declared void ab-initio by the Courts
and it never intended to confer a right on the State to make any fresh levy
or collection in respect of the cess and taxes, which could be collected upto
4.4.91, as contended by Mr. Dwivedi, appearing for the State of Bihar.
G According to Dr. Singhvi, when this Court in Orissa Cement's case, following
the earlier judgment of the Court in India Cement, invalidated levies made
under different Statutes enacted by the States of Orissa, Madhya Pradesh and
Bihar and issued a mandamus, directing refund of the monies collected under
such void Statutes, the State Governments would have been under a
constitutional obligation to carry out tbe directions issued and were bound to
H refund the monies collected from the resoective States from the date of the
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PATTANAIK, J.J 169

Judgment of the High Court, which would have ruinous consequences on the A
States' economy. When the State Governments apprised these problems to the
Central Government, the Parliament intervened and to save the State
Oovernments from refunding the monies collected, enacted the Cess and
Other Taxes on Minerals (Validation Act, 1992 to validate imposition and
collection of such levies under the State laws which were declared void by B
the Court. The Statement of Object and Reasons of the Validation Act
unequivocally proclaims that the Act was promulgated to validate collection
of such levies by the State Governments upto 4th of April, 1991. The date
4.4.92 was chosen because on that date, the Supreme Court delivered the
judgment in Orissa Cement case. To bring about the uniformity among all
the States, the cut off date was selected in the Validation Act as 4.4.91. C
Parliament also consciously did not desire or choose to prescribe different
dates for different States in the schedule to Validation Act containing 11
enactments in respect of 7 States. The Parliament, thus devised the method
of prospective overruling and the language used in sub-section (2) of Section
2 of the Validation Act makes the intention more explicit, and as such it must
be held that it allowed the States to retain the amount of cess already collected D
but did not authorise to make any fresh collection which has not been collected
upto 4.4.91. Dr. Singhvi further contends that the deliberate and conscious
omissions by Parliament of a saving clause in the Validation Act, permitting
levies or actions after 4.4.91 points to the only effect that Parliament did not
intend and levy to be imposed or any collection to be made after 4.4.1991. E
Had it been the intention a specific and unambiguous saving clause could
have been provided as was done in Joura Sugar Mills' case [1966] 1 SCR
523 and Prithvi Cotton Mills ltd., case [1969] 2 SCC 283. A bare persual of
the Validation Act in Joura Sugar Mills' case and the Validation Act in the
present case would unequivocally indicate that in the case in hand, the
Parliament never intended to confer a right on the States to collect and F
impose any levy subsequent to 4.4. 91 and on the other hand merely allowed
· the State to retain the collection already made. According to Dr. Singhvi in
Kannadasan's case, this Court drew wrong analogy from Gangopadhayaya's
case and held that the provisions therein were identical to the provisions in
the Validation Act, which was under consideration. Dr. Singhvi further urged G
that this Court in Kannadasan's case, has not appreciated the fact that
Parliament deliberately and consciously omitted to incorporate a saving clause
in the Validation Act. Dr. Singhvi urged that. by the Validation Act life was
infused into void State Statutes only upto 4.4.91 and consequently, the levies
which may have accrued prior to 4.4.9 l could not be permitted to be collected
after 4.4.91. With reference to Article 265 of the Constitution, the learned H
170 SUPREME COURT REPORTS [2001) SUPP. I S.C.R.

A counsel urged that the Constitution of India imposes a limitation on the
taxing power of the State in so far as it provides that no tax can be levied
or collected except by authority of law. Thus, not only the levy, but also the
collection must be only by authority of law. The expression "authority of
law" would mean that there should be in existence, a lawful enactment,
B which authorises the levy or collection ofa tax. After 4.4.91, there being no
valid law in existence, which could authorise collection of the levy of cess
and· taxes on minerals, it is difficult to comprehend how the State could be
permitted to make the levy and collection of the dues subsequent to 4.4.91.
According to Dr. Singhvi, any interpretation of the provisions of the Validation
Act, authorising realisation of levy after 4.4.91 for the past period would be
C contrary to equity, justice and fair-play.

Mr. Ganguli, the learned senior counsel, appearing for the Indian
Aluminium Co. Ltd., respondent in SLP (Civil) No. 13104 of 1996 as well
as intervenor India Cement, contended that the judgment in Kannadasan's
case is erroneous in the teeth of the provisions of Section 2(2) of the Validation
D Act which validates only "Cesses or other taxes on minerals realised under
any such laws". According to Mr. Ganguli, the Judgment in Kannadasan,
runs contrary to the purpose and intent of the Validation Act, as indicated in
the Statement of Objects and Reasons and the limited purpose of the Validation
Act is to declare that enactments mentioned in the Schedule thereto be deemed
E to have been enacted by the Parliament and be deemed always to have been
valid, as regards the provisions relating to cesses and other taxes on minerals
are concerned and declare that the provisions contained in the said enactments
be deemed to have remained in force upto 4.4.91, the date on which this
Court delivered the judgment in Orissa Cement case. According to Mr.
Ganguli, the Validation Act merely declares that the laws specified in the
F Schedule to the Act shall be deemed always to have been as valid, as if the
provisions contained therein relating to cess and other taxes on minerals had
been enacted by the Parliament, and such provisions shall be deemed to have
been remained in force till 4th of April, 1991. Thus on 15th of February,
1992, the Parliament merely declared that it had enacted the laws in question
G in the past, and that all the said laws stood expired even before the Validation
Act itself came into force. In sub-section (I) of Section 2, Parliament did not
make any further provision, except making the aforesaid declaration. In Sub-
section (2) of Section 2, the Parliament declared that all actions taken, things
done, cesses and other taxes on minerals realised in any of the State laws
shall be deemed to have been taken or realised as if Section 2 have been in
H force, when such actions were taken, things done or cesses and other taxes
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PATTANAIK, J.J] 7]

were realised, notwithstanding any judgment, decree or order of any Court. A
Sub-section (2) of Section 2 further provides that no suit or other proceedings
shall be maintained or continued in any Court for the refund of cesses and
other taxes realised under any such laws. Thus, while the first part of the
. declaration in sub-section (2) entirely relates to the past actions, the second
part of the declaration also relates to past actions namely cesses and other B
taxes realised but the effect of the declaration operates as on the date of
coming into force the Act i.e. 15.2.1992. Sub-section (3) of Section 2
incorporates the constitutional mandate in Article 265 and, therefore, any
amount paid without the authority of law becomes refundable to the assessee
and could not be retained by the State. Sub-section (3), thus was enacted to
clarify that only to a limited extent such proceedings for refund of taxes C
could be maintained, and it incorporates a limited saving clause and is a
special provision regarding saving. Parliament thus did not wish that the
general principles contained in Section 6 of the General Clauses Act be made
applicable to the Validation Act and hence chose to enact a limited saving
clause, as contained in sub-section (3) of Section 2. This being the position,
the Patna High Court was fully justified in interpreting the provisions of the D
Validation Act and in holding that there is no right in the State to make any
fresh levy or collection and only the levies already collected would not be
refunded. According to Mr. Ganguli, the enactments mentioned in the Schedule
remained in force only upto 4th of April, 1991 and, therefore, neither there
would be any charging provision, nor machinery under the Act mentioned in E
the Schedule after 4th of April, 1991, which would authorise the State to
make any levy or collection of tax referable to the period prior to 4th of
April, 1991. According to Mr. Ganguli, the decision of this Court in
Kannadasan, relying upon the Constitution Bench decision in Joura Sugar
Mills' case, must be held to be erroneous, as specific provisions contained in
Section 3 of the Act in Joura Sugar Mills' case have not been properly F
appreciated. With reference to Sub-section (3) of Section 2, Mr. Ganguli
contends that the same is an exception to the substantive provision contained
in Sub-section(2) of Section 2. It is clear from the wordings of Sub-section(3).
All that sub-section provides is that if an assessee had made an application
for refund within the time prescribed by the State enactment, but the same G
had not been refunded, then the excess tax paid will have to be refunded,
even though the State enactment in the eye of law remained valid till 4th of
April, 1991. According to the learned counsel, the provisions of Section 6 of
the General Clauses Act would have no application and could not be invoked
to widen the limited saving provisions in Section 2(3). In support of the
contention that no fresh tax beyond the life of the Statute be permissible, the H
172 SUPREME COURT REPORTS [2001) SUPP. I S.C.R.

A counsel relies upon the decision of the Court in Royal a Corporation [1970]
I SOR 639. Mr. Ganguli urged that the Act could not be interpreted to be an
authorisation for imposition of a fresh levy and collection thereof, after
4.4.1991, pertaining to a period prior thereto, special by when there is no
express provision to that effect in the impugned Act.

B Mr. Ranjit Kumar, appearing for the Petitioner India Cement Limited
in S.L.P. (Civil) Nos. 12994-12995 of 1998, submitted that what has been
validated under the parliamentary enactment is what has been already collected,
so that the State Governments will not be liable for any refund and it never
authorised any imposition or collection of the levy after 4.4. I 991 even for the
C earlier period. According to Mr. Ranjit Kumar, the very language of the
Validation Act when read with the Statement of Objects and Reasons, would
make it explicitly clear that it does not author.ise any fresh imposition or
collection for an anterior period, if there has be~n no such collection prior to
4.4.1991. In other words, the Act only validates what had been illegally
collected and the lack of legislative competence was cured by the Parliament
D stepping in, for ensuring that the States which were affected by the judgment
of this Court in India Cement case and Orissa Cement case would not be
required to refund. According to Mr. Ranjit Kumar, the Statement of Objects
and Reasons can be well looked into for ascertaining the intention of the
Parliament in enacting the Validation Act and the said Statement of Objects
E and Reasons are categorical in terms and only refers to what had already
been collected, would not be required to be refunded. According to the learned
counsel, the relevant State laws, which became the Central law by virtue of
fictional re-enactment, undoubtedly are temporary Act and after the expiry
does not allow any further action under the expired Act. In support of th is
contention, the learned counsel placed reliance on the Statutory interpretation
F by Francis Bennion, First Edition, paragraph 178 as well as Craies on Statute
law at pages 407-409. With reference to the observations made by this Court
in Kannadasan that the Act must be held to be an Act by incorporation, Mr.
Ranjit Kumar submitted that the legislation by incorporation of provisions in
.the Act has been held to be archival drafting in the words of Francis Bennion,
G wnere the learned author states: "The technique of incorporation has received
so much judicial and other criticism that it is seldom used today". The learned
author further states : "The technique may be called archival drafting because
it requires persons applying the Act after a considerable period has elapsed
since the relevant date to engage in historical research in order to find out
what the law thus imported amounts to". Mr. Ranjit Kumar also placed reliance
H on the observations made by Craies on Statute law, 7th Edition at Page 29,
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PATTANAJK, J.J J73

to the effect:- "Legislation by reference, which was increasing in 1875, was A
described by the Select Committee of that year as making an Act so ambiguous,
so obscure and so difficult, that judges themselves can hardly assign a meaning
to it, and the ordinary citizen cannot understand to it, without legal advice.
With this parliamentary criticism judicial opinion coincides". According to
Mr. Ranjit Kumar, the enhancement of royalty by issuance of a notification B
by the Central Government under Section 9 of the Mines and Minerals
(Regulation & Development) Act, 1957, as noticed in the decision of this
Court in the case of State of Madhya Pradesh v. Mahalaxmi Fabrics, [1995]
Supp. I SCC 642, and the observations made by this Court in the said case
that the aforesaid notification was for the purpose of adequately compensating
the States for the loss that they have sustained on account of the declaration C
of law made by this Court in India Cement case and Orissa Cement case, and
the notification was held to be valid, protecting the State Governments from
the loss of revenue in the future and the Validation Act protecting the State
Governments in respect of the collection already made. Consequently, by
virtue of the Validation Act, the State Governments would retain what had
already been collected but cannot claim to have a right to make any fresh D
levy or collection subsequent to 4.4.1991. Mr. Ranjit Kumar also urged that
the India Cement Limited had challenged the levy of cess, right from the date
of inception of the levy under the Tamil Nadu Act and the High Court had
granted stay of the operation of the Act. Even after the judgment of the High
Court, while the matter was pending in this Court in appeal, the stay order E
was operating and the assesse, therefore, never passed on the cess levied to
any consumer nor could it do so because the commodity was a controlled
commodity and the litigation ended with a judgment in favour of the assesse.
To re-open such cases in the garb of the Validation Act and seeking to
impose levy and collection from the year 1964 would not only be unreasonable,
but also would be contrary to the very judgment passed inter-parties and the F
Court having stayed the operation of the Act in favour of the assessee.
According to Mr. Ranjit Kumar, the assessee having not collected cess from
the end user, would be required to pay the same, in view of the interpretation
given by this Court in Kannadasan 's case, and such a view will be wholly
unreasonable and would be beyond the object for which the Parliament G
intervened and validated, to save the State Governments from a difficult
.. financial situation. Mr. Ranjit Kumar, lastly submitted that the judgment of
this Court in Kannadasan must be held to be wrongly decided and must have
to be reconsidered.

Mr. Ajit Kumar Sinha, appearing for Bharat Coking Coal Limited, H
174 SUPREME COURT REPORTS (2001] SUPP. I S.C.R.

A petitioner in SLP(Civil) No. 7555 of 1998, submitted that the Validation Act
was to confer the authority of law to meet the requirement of Article 265 of
the Constitution. The said need arose as the State was denuded of its
competence and jurisdiction to levy cess on royalty in the occupied field
under the MMRD Act, 1957. He also.brought to our notice the fact that with
effect from the date of the judgment of the High Court on 6.11.90, the
B petitioner company stopped the collection of cess from the consumers and
the order/judgment of the High Court dated 6.11.90 was assailed by the State
of Bihar in Civil Appeal No. 3010-3024 of 1991. The Court had passed an
order to the following effect:-

"In the meantime, we hold that the State Government is bound to
c comply with the judgment of this Court and refund all amount collected
on or after 4.4.1991. If there is any delay beyond August, 1991 in
making the refunds, the amount of refunds will bear interest of 18%
from 4.4.I99I till the refund is made."

D Notwithstanding the aforesaid orders, the State Government started raising
demand because of the Validation Act and when the company raised the
demand against the consumers, the consumers challenged the same and
obtained stay orders from the Calcutta High Court as well as the Ranchi
Bench of Patna High Court and, therefore, no demand could be realised in
view of the orders of the Court. Now under such situation if the provisions
E of the Validation Act are interpreted in the manner as contended by State of
Bihar, and if the judgment of this Court in Kannadasan is upheld, then the
petitioner-company would be grossly prejudiced, as it would be liable to pay
cess to the State Government and yet could not collect the same from the
consumers. According to the learned counsel, Section 2 of the impugned
F Validation Act does not create any fresh levies and, therefore, what purports
to have been validated is the collection already made and by no stretch of
imagination, a fresh right to make any levy or collection.

In the context of the submissions made by the counsel for different
parties, noted above, the crucial question that arises for consideration is what
G really Parliament intended to validate by enacting the Validation Act? On a
plain reading of Section 2(1) of the said Act it is crystal clear, that it purports
to validate certain State laws and actions taken and things done thereunder,
by providing that the provisions relating to cesses and other taxes on minerals
fictionally must be held to have been enacted by the Parliament, and keeping
those provisions alive till 4th April, 1991. It may be borne in mind that under
H the Validation Act Parliament never re-enacted the 11 Acts mentioned in the
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PATTANAIK, J] J 75

Schedule, but merely provided the legislative competence for those provisions A
in those Acts which related to cesses or taxes on minerals. The legislative
history behind the enactement of the aforesaid Validation Act unequivocally
points out to the fact that the State Legislature had enacted different Statutes
conferring right of levy and collection of cess and taxes on minerals, and the
Supreme Court came to the conclusion that the State legislature did not have
the right to make law conferring right to levy and collection on minerals as B
the field had been occupied by !he Union Legislature on the enactment of the
Mines and Minerals Regulation and Development Act, 1957. The judgment
of this Court in India Cement as well as in Orissa Cement necessarily lead
to a situation whereunder not only the 11 Acts mentioned in the Schedule of
the Validation Act were declared null and void, but also the collections made C
under such invalid law became refundable. It is no doubt true, that in Orissa
Cement case the Supreme Court borne in mind the principle of prospective
over-ruling, as had been done in Go!aknath's case, indicated the dates with
effect from which the judgment would operate but the Acts having been
declared null and void the State Governments became apprehensive that a
huge amount of tax, already collected under laws, for which State legislatures D
did not have the competence to legislate would be required to be refunded.
The Parliament also was of the same opinion, as would appear from the
Statements of Objects and Reasons of the Validation Act and the Parliament
came forward by a unique device of providing legislative competence in
respect of certain provisions of the State laws and that too only keeping the E
Act alive upto 4th April, 1991, the date on which the Supreme Court delivered
the judgment in Orissa Cement case. It is in this context the provisions of the
Validation Act as well as the object for which the Act was enacted will have
to be ascertained. A statute is an edict of the legislature and in construing a
statute, it is necessary, to seek the intention of its maker. A statute has to be
construed according to the intent of them that make it and the duty of the F
Court is to act upon the true intention of the legislature. If a statutory provision
is open to more than one interpretation the Court has to choose that
interpretation which represents the true intention of the legislature. This task
very often raises the difficulties because of various reasons, in as much as the
words used may not be scientific symbols having any precise or definite G
meaning and the language may be an imperfect medium to convey one's
thought or that the assembly of legislatures consisting of persons of various
shades of opinion purport to convey a meaning which may be obscure. It is
impossible even for the most imaginative legislature to forestall exhaustively
situations and circumstances that may emerge after enacting a statute where
its application may be called for. Nonetheless, the function of the Courts is H
176 SUPREME COURT REPORTS [2001) SUPP. I S.C.R.

A only to expound and not .to legislate. Legislation in a modern State is actuated
with some policy to curb some public evil or to effectuate some public
benefit. The legislation is primarily directed to the problems before the
legislature based on information derived from past and present experience. It
may also be designed by use of general words to cover similar problems
arising in future. But, from the very nature of things, it is impossible to
B anticipate fully the varied situations arising in future in which the application
of the legislation in hand may be called for, and, words chosen to communicate
such indefinite referents are bound to be in many cases lacking in clarity and
precision and thus giving rise to controversial questions of construction. The
process of construction combines both literal and purposive approaches. In
C other words the legislative intention i.e., the true or legal meaning of an
enactment is derived by considering the meaning of the words used in the
enactment in the light of any discernible purpose or object which comprehends
the mischief and its remedy to which the enactment is directed. The aforesaid
principle was enunciated and applied by this Court in the case of State of
Himachal Pradesh v. Kai/ash Chand Mahajan, (1992] Suppl. 2 SCC 351.
D Lord Somervell in the case of Attorney-General v. HRH Prince Ernest
Augustus, (1957) I All ER 49 has stated "The mischief against which the
statute is directed and, perhaps though to an undefined extent the surrounding
circumstances can be considered. Other statutes in pari materia and the state
of the law at the time are admissible." It is also a cardinal principle of
E construction that external aids are brought in by widening the concept of
context as including not only other enacting provisions of the same statute,
but its preamble, the existing state of law, other statutes in pari materia and
the mischief which the statute was intended to remedy. Chinnappa Reddy, J.
in The Reserve Bank of India v. Pear/ess General Finance and Investment
Co., (1987] I SCC 424, had observed, "Interpretation must depend on the
F text and the context. They are the bases of interpretation. One may well say
if the text is the texture, context is what gives colour. Neither can be ignored.
Both are important. That interpretation is best which makes the textual
interpretation match the contextual. A statute is best interpreted when we
know why it was enacted. Most fair and rational method for interpreting a
G statute is by exploring the intention of the legislature through the most natural
and probable signs which are 'either the words, ihe context, the subject matter,
the effects and consequences, or the spirit and reason of the law. In the court
of law what the legislature intended to be done or not to be done can only
be legitimately ascertained from that what it has chosen to enact, either in
express words or by reasonable and necessary implication. But the whole of
H what is enacted 'by necessary implication' can hardly be determined without
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. (PATTANAIK, J.] 177

keeping in mind the purpose or object of the statute. A bare mechanical A
interpretation of the words and application of legislative intent devoid of
concept or purpose will reduce most of the remedial and beneficent legislation
to futility. The Courts, however, are always warned that they are not entitled
to usurp legislative function under the disguise of interpretation and that they
must avoid the danger of determination of the meaning of a provision based B
on their own preconceived notions of ideological structure or scheme into
which the provision to be interpreted is somehow fitted. Bearing in mind the
aforesaid rules of construction and examining the provisions of the Validation
Act, the conclusion is irresistible that the Parliament adopted a unique device
of providing the legislative competence to certain provisions of different
State legislations which legislations have already been stuck down for lack C
of legislative competence. As the Parliament thought that on account of the
judgments of the Supreme Court the State Governments would be liable to
make refund, of cess and other taxes collected by them, which was likely to
have a serious impact on State revenue, and to prevent the liability of refund,
the Parliament intended to validate collection of levies already made by the
State Governments up to 4th April, 1991. This conclusion of ours is based D
on, not only the language used in Section 2( I) but also the Statement of
Objects and Reasons, which clearly enunciates the same. The Statements of
Objects of Reasons is extracted herein below in extenso:-

"Statement of Objects and Reasons-Certain State Acts imposing E
cesses and other taxes on minerals had been struck down by Courts
including the Supreme Court of India in different cases. As a result
of judgments in these cases, State Government became liable to refund
cesses and other taxes collected by them. Since refund was likely to
have a serious impact on State revenues of the concerned State
Governments and having regard to the fact that it is extremely difficult F
to ensure that the levies collected are refunded to the large number
of end users of minerals who have actually borne the burden of such
levies, the Cess and Other Taxes on Minerals (Validation) Ordinance,
1992 (Ord. 7 of 1992) was promulgated by the President on the 15th
February, 1992, to validate collection of such levies by State G
Governments up to the 4th day of April, 1991."

Though Mr. Dwivedi, the learned senior counsel, appearing for the State of
Bihar, contended that the preamble to the effect, "an Act to validate the
imposition and collection of cesses and certain other taxes on minerals under
certain State laws" is much wider than the Statement of Objects and Reasons H
178 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A and is in consonance with the language used in Section 2( 1) of the Act. But,
we are of the considered opinion, that the expression "imposition and
collection" would mean, imposition already made or collection already made
under certain State laws and the preamble cannot be construed to mean to
confer a further right of imposition and collection of cesses on the minerals
B extracted up to 4th April, 1991. That apart, the very heading of Section 2(1 ),
-
namely "Validation of certain State laws and actions taken and things done
thereunder", would suggest that the Parliament by legal fiction injected
legislative competence to the laws enacted by the State legislature and gave
life to such laws upto 4th April, 1991, the date on which the judgment of the
Supreme Court in Orissa Cement case was delivered, for the purpose of
C validating the actions taken, things done under such laws declared void by
the Supreme Court. It is no doubt true, that in Kannadasan's case, a Bench
of two learned judges of this Court interpreted the provisions and held that
the effect of validation would confer a right on the State Government to
make fresh levy and collection of dues which was collectable upto 4th April,
1991, but we are in respectful disagreement with the aforesaid conclusion, as
D in our considered opinion, neither the language of Section 2( 1) nor the Objects
and Reasons appended to the Validation Act, as Prefatory Note, stipulates
that to be the object, nor even the Parliament thought it fit of have a saving
clause in the Validation Act, as was done in Joura Sugar Mills case. On a
construction of the provisions of the Validation Act, and bearing in mind the
E situation under which the Act was enacted and a void Act was given life upto
a particular period by drafting legislative competence for the same in the
teeth of the provisions contained in Article 265 of the Consititution, we are
persuaded to accept the arguments advanced by the learned counsel appearing
for the assessee in different cases, Mr. Shanti Bhushan, Mr. KK Venugopal,
Mr. Parasaran, Dr. Singhvi, Mr. Ranjit Kumar, and others that the said
F Validation Act cannot be construed to have conferred a right to make levy
and collection of cess or taxes on minerals which was collectable up to 4th
April, 1991, as was held in Kannadasan's case, but it merely validated the
collections already made so that the State will not be burdened with the
liability of refunding the amount, already collected under void law. In our
G considered opinion, therefore, the earlier decision in Kannadasan's case to
the contrary must be held to have been not correctly decided.

At this stage it would be appropriate to discuss the provisions of Article
265 of the Constitution and its impact on the interpretation of the Validation
Act. Under Article 265 of the Constitution, no tax shall be levied or collected
H except by authority of law. It is thus explicit that not only the levy, but also
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PA TT ANAIK, J.] J 79

the collection of a tax must be under the authority of some law. The authority A
of law refers to a valid law which in turn would mean that the tax proposed
to be levied must be within the legislative competence of the legislature,
imposing the tax and the law must be validly enacted. It must not also
contravene the specific provisions of the Constitution and the tax in question
must be authorised by such valid law. The expression "levy and collection" B
are used in Article 265 in a comprehensive sense and are intended to include
the entire process of taxation commencing from taxing statute to the taking
away of the money from the citizen. What the Article enjoins is that every
stage in this entire process must be authorised by the law. This being the
position, in the case in hand, several tax legislations enumerated in the Schedule
to the Validation Act having been declared ultra vires, on the ground that the C
State Legislature had not the legislative competence to make the legislation,
there existed no authority of law for making any levy or collection of tax and
cesses on minerals. The Parliamentary intervention by enacting the Validation
Act and giving it retrospective effect and making the law existed till 4.4.91.
What has been achieved is a valid and legal taxing provision and then by
fiction, making the tax already collected to stand under the re-enacted law. D
In the absence of any provisions in the Validation Act, the relevant provisions
of the State laws, which stood expired on 4.4.1991, to hold that the Validation
Act authorises, imposing and collection of tax and cesses on minerals, even
after 4.4.1991, in respect of the minerals extracted till 4th of April, 1991, on
which the cess was collectable, would contravene Article 265 of the E
Constitution, inasmuch as there did not exist any valid provision or authority
of law for making such collection. In this view of the matter, we are persuaded
to agree with the submission made by Mr. Shanti Bhushan on this question
that the Parliament never intended to confer an authority on the State
Government to make any fresh levy and collection of the cess and taxes on
minerals, which was collectable upto 4th of April, 1991 under the Validation F
Act and the judgment of this Court in Kannadasan's case, must, therefore, be
held not to have been correctly decided.

Let us now examine the question, as to whether the Statute is a temporary
Statute or not? When we examine this question in the case in hand, we are G
not examining the Validation Act, but we are required to examine the relevant
provisions of the different State laws, included in the Schedule to the Validation
Act, which laws had been declared ultra vires by this Court in the decision
of India Cement and Orissa Cement, on the ground of lack of legislative
competence and that legislative competence has been purported to have been
conferred by virtue of a deeming enactment by Parliament and further enacting H
180 SUPREME COURT REPORTS [2001] SUPP. I S.CR.

A that such provisions shall be deemed to have been remained in force upto the
4th day of April, 1991. A Statute can be said to be either perpetual or
temporary. It is perpetual when no time is fixed for its duration and such a
statute remains in force until its repeal which may be express or implied. But
a Statute is temporary when its duration is only for a specified time and such
a Statute expires on the expiry of the specified time, unless it is repealed
B earlier. The relevant provisions of the different State laws relating to cesses
or taxes on minerals having been deemed to have been enacted by Parliament
and having been deemed to have remained in force upto 4th day of April,
l 99 l under the Validation Act, thr:>se laws relating to cesses or taxes on
minerals must be held to be temporary Statute in the eye of law. Necessarily,
C therefore, its life expired and it would be difficult to conceive that
notwithstanding the expiry of the law itself, the collecting machinery under
the law cou Id be operated upon for making the collection of the cess or tax
collectable upto 4.4. 1991. Admittedly, to a temporary Statute, the provisions
of Section 6 of the General Clauses Act, l 897 will have no application. Very
often legislature enacts in the temporary Statute a saving provision, similar
D in effect to Section 6 of the General Clauses Act, as was done in Joura Sugar
Mills, (J 966] l S.C.R. 523. But in the absence of such a provision in the
Validation Act in question, which has purported to have conferred the
legislative competence in respect of the several State Laws mentioned in the
Schedule and kept it alive till 4.4.91, and not beyond that date, the life of
E such State laws stood expired on 4th of April, 1991. Consequently, there
would be no residuary provision or authority of law conferring a power on
the State to make any levy or collection of cess or taxes on minerals, after
the expiry of the relevant laws. A temporary Statute even in the absence of
a saving provision like Section 6 of the General Clauses Act may not be
construed dead for all purposes and the effect of expiry is essentially one of
F the construction of the Act. The leading authority on the point is the case of
Steavenson v. Oliver, (1841) 151ER.1024. These principles have been applied
by this Court in the case of State of Orissa v. Bhupendra Kumar Bose, AIR
( l 962) SC Page 945, and it is in this context, the argument of Mr. Dwivedi,
regarding law of an enduring nature requires consideration. In State of Orissa
G v. Bhupendra Kumar Bose, on which Mr. Dwivedi heavily relied upon, what
arose for consideration before this court, is whether the electoral rolls were
improperly prepared, and the Court having declared the elections invalid and
validating the Ordinance, which had been promulgated validating the elections
to the municipality as well as validating the electoral rolls prepared in respect
of other municipalities. When the validity of the ordinance was assailed
H before the High Court, the High Court struck down the ordinance as having
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PATTANAIK, J.J 181

contravened Article 14 and it was held to have offended Article 254( I) of the A
Constitution. On appeal, this Court held that the ordinance did not offend
Article 14 of the Constitution and that it effectively removed the defects in
the electoral rolls found by the first Judgment of the High Court. When
arguments were advanced that the invalidity of the electoral rolls and the
elections to the municipality did not revive on the expiry of the Ordinance, B
that was repelled by this Court, that the right that had been created by the
Statute namely the validating ordinance, is of an enduring character and has
vested in the person concerned namely the voters, a right to vote as well as
the elected councillors. That right cannot be taken away merely because the
ordinance has lapsed, since the object of the ordinance was to remove the
invalidity permanently. It is in that context the Court observed that if the C
right created by a Statute is of an enduring nature and has vested in the
person, that right cannot be taken away, because the Statute by which it
created has expired. In applying that principles to the facts of that case, the
Court observed:

"In our opinion, having regard to the object of the Ordinance and D
to the rights created by the validating provisions, it would be difficult
to accept the contention that as soon as the Ordinance expired the
validity of the elections came to an end and their invalidity was
revived. The rights created by this Ordinance are, in our opinion,
very similar to the rights with which the Court was dealing in the E
case of Steavenson and they must be held to endure and last even
after the expiry of the Ordinance."

Applying the ratio of the aforesaid case to the case in hand and in view of
our conclusion earlier as to the true object and import for which the Validation
Act had been enacted by the Parliament, giving the life to a State law till 4th F
of April, 1991, it is not possible for us to hold that any right can be said to
have been created in favour of the State of an enduring nature, which could
be enforced even after the expiry of the life of the Act itself. The Parliament
had stepped in and had fictionally enacted certain provisions of the State laws
being confronted with the situation that the liability to refund the taxes, G
illegally collected would have a disastrous effect on the State economy. It
was indicated also that a Validation Ordinance had been promulgated by the
President to validate collection of such levies by the State Government upto
the 4th of April, 1991. In the context, it obviously refers to the collection of
levies already made and would never relate to any collection to be made
thereafter. In this view of the matter, we are not in a position to accept the H
182 SUPREME COURT REPORTS (2001] SUPP. I S.C.R.

A submission of Mr. Dwivedi, appearing for the State of Bihar that on account
of the Validation Act, the relevant provisions of the Cess Act of 1880, as
applicable in the State of Bihar, conferred an indefeasible right on the State
Government to make levy and collect cess or taxes on minerals, which was
collectable upto 4th of April, 1991, even after the expiry of the very law
B itself. In our considered opinion, the decision of this Court in State of Orissa
v. Bhupendra Kumar Bose case, will have no application to the facts of the
present case. The next case, Mr. Dwivedi relied upon was the case of R. C.
Jal/ v. Union of India, [1962] Supp. 3 SCR 436. In that case, an Ordinance
had been promulgated on 26th August, 1944 in exercise of powers vested in
the Governor General of India under Section 72 of the Ninth Schedule to the
C Government of India Act, 1935 read with India and Burma (Emergency
Provisions) Act, 1940, called the Coal Production Fund Ordinance, 1944, for
constituting a fund for financing of activities for the improvement of
production, marketing and distribution of coal and coke. The said Ordinance
was a permanent one and was to be continued to be in force till repealed, as
in apparent from the judgment of this Court in Hansraj Moolji's case, [1957]
D SCR 634. A second Ordinance was promulgated repealing the earlier one on
26th of April, 1947 and in the repealing Ordinance, an express tenn was
there, making the provisions of Section 6 of the General Clauses Act, shall
apply in respect of the repeal. The question arose whether after expiry of the
life of the repealing Ordinance on November 01, 1947, what would be its
E effect in respect of the liability continued in respect of the past transactions?
This Court held that the repealing Ordinance had continued the life of the
original, which was a pennanent one, respect of past transactions and, therefore,
the expiry of its life (life of repealing Ordinance) Could not have any effect
on that law to the extent saved, and, therefore, it must be held to have
continued to have force under Article 3 72 of the Constitution, until it was
F altered, repealed or amended by competent Legislature, and consequently, it
cannot be said that the coal cess was levied or collected without the authority
of law. We fail to understand how this decision will be of any assistance to
the case in hand, where the original law namely the Cess Act of 1880, as
applicable in the State of Bihar, did not have the legislative competence and
G as such was declared void. By the Validation Act, Parliament fictionally and
by a deeming provision, enacted the provisions of the invalid law in relation
to cess or taxes on minerals and that also t;ll 4th of April, 1991. Thus, there
was no permanent law, authorising the levy which was being validated but
on the other hand by a fictional enactment, a law permitting collection made
upto 4th of April, 1991 was allowed to be retained. As has been observed
H earlier in the Validation Act, no provision has been made, corresponding to
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PATTANAIK, J.J 183

the provision contained in Section 6 of the General Clauses Act, and therefore, A
after the expiry of the life of the law that is after 4.4.1991, there cannot be
any authority of law for making any levy or collection of the cess and taxes
· on minerals. This decision also will have no application to the case in hand.
The other decision of this Court relied upon by Mr. Dwivedi is the case of
.- Mis. Velji Lakshmi and Co. and Ors. v. Mis. Benett Coleman and Co. and B
Ors., [1977] 3 SCC 160. In this case the question for consideration was
· whether the Municipal Commissioner could order demolition of a building in
exercise of power under the provision of City of Bombay (Building Works
Restriction) Act, 1944, after the expiry of the said Act, which was a temporary
Statute? This Court in the aforesaid case held that question whether the
restrictions, rights and obligations flowing from the
\
provisions of a temporary C
statute which came to an automatic end by efflux of time expire with the
expiry of the statute or whether they endure and survive after the expiry of
the statute depends upon the construction of the statute and the nature and
character of the rights, restrictions and obligations and no rigid and inflexible
rule can be laid down in this behalf. It is in that context, the Court also
further observed that the transactions which are concluded and completed D
under the temporary statute while the same was in force often endure and
continue in being despite the expiry of the statute and so do the rights or
obligations acquired or incurred thereunder depending upon the provisions of
the statute and nature and character of the rights and liabilities. Applying the
aforesaid ratio to the case in hand, it is difficult for us to hold that the State E
laws which infused life into it under the Validation Act by a fictional enactment
of the laws by Parliament and keeping it alive till 4th April, 1991, can at all
be said to have created any right on the State to levy and collect the cess and
tax on minerals which can be held to be of enduring nature so as to enable
the State to levy and collect even after the expiry of the State laws in question.
Consequently, the aforesaid decision is also of no assistance to the State of F
Bihar. The only other case relied upon by Mr. Dwivedi is the case of T.
Venkata Reddy and Ors. v. State of Andhra Pradesh, (1985] 3 SCC 198. In
this case by virtue of promulgation of an Ordinance certain posts were
abolished, but the Ordinance could not be made an Act as the State Legislature
did not approve of the same. The question for consideration was whether G
after the expiry of the life of an Ordinance, the post which stood abolished
can be said to have been revived? This Court, on examining the provisions
of Section 3 of the Ordinance itself came to hold that the post of part-time
village officers stood abolished on 6th January, 1984 and the employees
ceased to be employees of the State Government. These matters became
accomplished on that date and were completed events and consequently even H
184 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A if the Ordinance is assumed to have ceased to operate from a subsequent date
the effect of Section 3 of the Ordinance was irreversible except by express
legislation. In our considered opinion, this decision is also of no assistance
to support the contention of Mr. Dwivedi, appearing for the State of Bihar,
in as much as while infusing life into the void State laws by fictional
B Parliamentary enactment under the Validation Act and keeping it alive till
4th April, 1991, the Parliament never conferred any right upon the State
Government to make any levy or collect cess which have not been collected
though collectable upto 4.4.1991. The parliament merely conferred the life to
the void statute by fictional re-enactment and granting legislative competence
for limited purpose so that the State would not be called upon to refund the
C cess already collected under such void law. In the aforesaid premises, we do
not find much force in the contention of Mr. Dwivedi about the enduring
nature of the law in question and we hold that relevant provisions of the State
laws which were validated under the Validation Act and were alive till 4.4.1991
having expired on that date there is no authority of law under which the State
would raise any demand or make any collection of cess and tax on minerals
D under the expired provisions of the State laws. The conclusion of this Court
in Kannadas_an's case to the contrary, therefore, must be held to be not
correct in law. In Orissa Cement Case, this Court though declared the levy
of cess to be unconstitutional, but further directed that there shall be no
direction to refund to the assessee of any amounts of cess collected until the
E date on which the levy in question has been declared unconstitutional. This
date so far as Bihar was concerned, was the date of judgment i.e. 4.4.91, in
case of Orissa, the State was 22nd December, 1989 and in case of Madhya
Pradesh, the date was 28th of March, 1986. It was held that any cess collected
after the aforesaid dates by the respective States has to be refunded and the
States cannot be permitted to retain the cess collected. It is to obviate the
F aforesaid difficulty, particularly in case of States of Orissa and Madhya
Pradesh, though such difficulty was not there in case of Bihar, the Parliament
came forward with the Validation Act. It is true, as Mr. Dwivedi contended
that there was no necessity for including the Bihar Act in the Schedule, since
the Parliament was enacting the Act only till 4.4.1991, but since several State
G laws were being re-enacted and 4.4.91 was the last date of the judgment of
this Court in Orissa Cement, it was thought fit to have the legislation effective
till 4.4.91 but for the limited purpose, so that the State would not be liable
to refund any cess which it might have collected even subsequent to the
relevant State laws having been declared unconstitutional. We find sufficient
force also in the contention of Mr. K.K. Venugopal that the law never existed
H after 4.4.1991 and consequently, there cannot be any right with the State to
DISTRICT MINING OFFICER v. TATA IRON AND STEEL CO. [PATTANAIK, J.J J 85

make any levy or collection of the cess, which was collectable upto 4.4.91. A
Mr. Venugopal is right in his submission that under the Validation Act, only
past actions have been sought to be validated and that too by a fictional
enactment of the State laws by the Parliament, keeping it alive till 4.4.91.
There is also some force in the contention of Mr. Venugopal that even if
' there might have been an imposition of levy but not collected the same
cannot be collected after 4.4.9 l, as the machinery for collection would not be
B
available and permitting any such collection beyond that date would contravene
Article 265 and such an action may be violative of Article 300A of the
Constitution. The expression "law" in the context of Article 300A must mean
an Act of Parliament or of a State legislature, a rule or a statutory order
having the force of law, as has been held by this Court in Bishambhar Dayal, c
[1982] 1 SCC 39. Consequently, in the absence of any such law after 4.4.91
being in force, the State cannot be conferred a right to levy or collection after
4.4.91.

When Parliament enacted the Validation Act and infused life into the
'Void Act for lack of legislative competence, it must be assumed that the D
Parliament knew the constitutional position and was fully aware of the position
of law and the necessity of providing a saving Clause, in the event, the
Parliament intended to confer a right of collection as well as levy subsequent
to 4.4.91. The deliberate and conscious ommission of the saving clause by
the Parliament, as contended by Dr. A.M. Singhvi, is of considerable
E
significance and cannot be lightly brushed aside, as contended by Mr. Dwivedi,
appearing for the State of Bihar. It is true that the pattern of validation, as
indicated by Mr. Parasaran, may not be a clinching factor in construing the
provisions of the Act, but at the same time the fact that in Joura Sugar Mills
case as well as in some other cases, while validating, laws have been enacted
and saving clause has been provided which are in pari materia with Section F
6 of the General Clauses Act and absence of such a provision in the present
Validation Act is in consonance with the very object and reasons, as appended
to the Act. The said object being to validate the cess and taxes on minerals,

.. already collected under a void law. Dr. Singhvi is also right in his submissit'n
that this Court in Kannadasan's case drew wrong analogy from
G
Gangopadhyay's case and erroneously held that provisions therein were
identical to the provisions of the Validation Act of 1992. Section 2(1) of the
Validation Act having used the expression "upto 4.4.91 ", it unequivocally
indicates that what is validated is the process of levy and collection made
upto that date and no further. This being the position and the Validation Act
not having provided any provision, permitting levy or collection after 4.4.91, H
186 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A we are of the opinion that the Act never conferred right of levy or collection
after 4.4.91. The Judgment of Patna High Court, therefore, must be held to
be in accordance with law and the judgment of this Court in Kannadasan's
case must be held to have been wrongly decided ..

In Kannadasan's case, this Court while interpreting the Validation Act,
B held that the Act authorised levy and collection even after 4.4.91, as otherwise
it will be held to be discriminatory and violative of Article 14 inasmuch as
if two persons would be equally liable to pay, the person who has P<\id the
tax would be at the disadvantage, than the person, who did not pay and
challenge the demand. This reasoning of the Court in Kannadasan runs
C contrary to the observations of this Court in Ma/at/al Industries, (1977] 5
SCC 536, while this Court dealing with the principle of unjust enrichment,
categorically stated that a person who has not paid and has successfully
challenged the demand in a Court of law stands on a different footing from
a person who has chosen to pay and has not challenged the same. We are,
therefore, of the considered opinion that this Court erroneously held that
D Article 14 would be attracted unless the provision of the Validation At is
interpreted to mean that it not only validates the collection made but also
entitles fresh collection and levy, even after 4.4.91 of the dues which was
collectable upto 4.4.91.

The contention advanced by the State with reference to Section 2(3) of
E the Validation Act to the effect that it is indicative to confer a substantive
power to levy-and collect cess and other taxes on minerals, is in our opinion,
wholly misconceived. All that sub-section (3) of Section 2 means, which has
been introduced for removal of difficulty is that notwithstanding the fact that
the State law remained in force till April, 1991, if an assessee has paid more
F than what he is legally liable to pay and an application for refund had already
been made, then he would have the right .to get refund of the excess tax paid,
even though the life of the Act expires on April 04, 1991. This can be held
to be a limited saving clause, conferring a right of refund on the assessee, if
such assessee has paid in excess of what is due and the said provision cannot
G be invoked to give a wider interpretation of Section 2(1) or Section 2(2). In
this context, we are persuaded to accept the submission of Mr. Ganguli that
the removal of difficulty clause, engrafted in Section 2(3) of the Validation
Act is of a limited application, dealing with the right of the assessee to get
refund of the excess tax paid and by no stretch of imagination could be
construed to hold that it conceives of both levy and collection of cess and
H taxes on minerals by the State even after expiry of 4.4.1991.
DISTRICT MININGOHICER v. TATA IRON AND STEEL CO. [PATTANAIK, J.J J87

It will be appropriate to notice one of the contentions raised by Mr. A
Ranjit Kumar, appearing for India Cement Limited in S.L.P. (Civil) Nos.
12993-12995 of 1998 to the effect that notwithstanding the promulgation of
the Tamil Nadu Act, the assessee challenged the levy and the High Court had
granted stay of the levy and collection of cess. Even after the judgment of
the High Court, while the appeal was pending in this Court, the stay order B
was operating and the assessee never passed on the cess component to the
consumer or end user, and also could not have passed on the same, as the
commodity was a controlled commodity. If after this length of time, the
Validation Act is interpreted to mean a right being conferred upon the State
to impose the levy and collection of the same from 1964, it would work out
gross injustice to the assessee and even would run contrary to the very C
judgment of the Court inter-parties. Though this contention may not be a
clinching· issue in interpreting the provisions of the Validation Act, but it
cannot be totally lost sight of, and if any other interpretation is permissible
then the same must be adhered to particularly, in relation to a taxing Statute.
We do find considerable force in the aforesaid submission, as in our view,
the interpretation, we have already given to the Validation Act was the real D
intention of the Parliament and it never intended to confer a right of collection
of cess. In agreement with the conclusion arrived at by Patna High Courf, we
hold the Validation Act to be valid but such validated Acts do not authorise
any fresh levy of collection in respect of liabilities accrued prior to 4.4.91,
though it prohibits refund of the collection already made prior to that date. E

In view of our conclusions, as aforesaid, we do not find any infirmity
with the conclusion of the Division Bench of Patna High Court requiring our
interference with the same. The said judgment of the Division Bench of Patna
High Court is accordingly upheld. C.A. as arising out & S.L.P. (c) Nos.
13102-13107 stand dismissed. The batch of cases from the judgment of F
Kamataka High Court are allowed and the judgment of Kamataka High
Court following the decision of this Court in Kannadasan 's case is set aside.
The batch of cases arising out of the judgment of Andhra Pradesh High Court
for the self same reason are allowed and the judgment of Andhra Pradesh
High Court is set aside. The Review Petitions filed in this Court for Reviewing G
the judgment of Kannadasan's case at the behest of the assessees cannot be
disposed of notwithstanding our conclusion that the decision of this Court in
Kannadasan's case is not correct in law in as much as no formal notice had
been issued to the State of Tamil Nadu. Notice may, therefore, be issued to
the State of Tam ii Nadu in those Review Petitions whereafter the Review
Petitions could be posted for disposal. So far as the batch of cases which are H
188 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A pending before Madhya Pradesh High Court, though application under Article
139(a) had been filed for getting Writ Petitions transferred, but no order of
transfer had been passed and, as such, the Writ Petitions are still pending
before the High Court of Madhya Pradesh. In these circumstances, the Transfer
Applications filed stand disposed of with the direction that the High Court
B will dispose of the pending Writ Petition in the light of our judgment in Bihar
case. But Civil Appeal No. 9917 /96 against the judgment of Madhya Pradesh
High Court, directed against the judgment of the said Court dated I0.5.95,
stands disposed of. Similarly, Review Petitions Nos. 2363, 2364 and 2365 of
1998, filed in Civil Appeal Nos. 9913 of 1996, 9912 of 1996 and 9905 of
1996 also stand disposed of.
c All these appeals and applications stand disposed of accordingly. There
will be no order as to cost~.

S.V.K. Matters disposed of.

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