Judgment

KHANNA, J. :- This judgment would dispose of four civil appeals Nos. 471 to 474 of 1969 which have been filed on certificate granted by the Madras High Court and are directed against the common judgment of that court, whereby petitions under Article 226 of the Constitution of India filed by the appellants were dismissed. The crucial question which arises for determination in these appeals is whether the provisions of Madras General Sales Tax (Third Amendment) Act. 1967 (Act No. 19 of 1967) are invalid on the ground that they seek to impose sales tax with retrospective effect in an unreasonable manner.

2. According to entry 47 of First Schedule to the Madras General Sales Tax Act, 1959 (Madras Act 1 of 1959) (hereinafter referred to as the principal Act), the sale of "lubricating oils and greases" was liable to sales tax at the point of first sale in the State at 6 per cent. With effect from April 1, 1964 entry 47 was amended by Madras Act 7 of 1964 and instead of the words "lubricating oil and greases" in that entry the following words were substituted :

"Lubricating oils, all kinds of mineral oils (not otherwise provided for in this Act) quenching oils and greases."

Till September 30, 1965, it is stated, the assessments were made on the assumption that the amendment of entry 47 had made no difference to sales of furnance oil and they were liable to multipoint tax at 2 per cent. The dealers paid and collected tax on that basis and the department accepted it. The Boards of Revenue, on being moved by a dealer, passed a resolution on August 28, 1965 wherein it expressed the view that entry 47, as amended, included furnance oil and transformer oil. The dealers thereafter from September 14, 1965 started charging tax on furnace oils at the rate of 6 per cent on the first sale of those oils and the assessment orders were made accordingly. Furnance oil, it my be stated, is a non-lubricating mineral oil. The view expressed by the Board of Revenue that entry 47 as amended included furnance oil was challenged in a writ petition before the Madras High Court. The High Court gave its decision on August 2, 1967. The title of the case is Burmah Shell Oil Storage and Distributing Co. of India Ltd. Madras v. State of Madras, and it is reported in (1968) 21 S.T.C. 227 (Mad). The High Court held that having regard to the objects and reasons appended to Madras Act 7 of 1964 and the association of words which preceded and followed the words "all kinds of mineral oils" the words "all kinds of mineral oils" had only a limited meaning namely, mineral oils which were lubricants. Entry 47 as amended was, therefore, held not to include furnace oil. Appeal against the said judgment, we have been told, is pending in this Court.

3. The above decision of the Madras High Court led to the enactment of the Madras General Sales Tax (Third Amendment) Act, 1967 (Act No. 19 of 1967) (hereinafter referred to as the amending Act). The amending Act received the assent of the Governor on December 29, 1967 and was published in the Fort St. George Gazette, Extraordinary on January 5, 1968. Section 2 of the amending Act has recast entry 47 in the First Schedule to the principal Act and has also inserted a new entry 47-A. Section 2 reads as under :

"2. Amendment of First Schedule to Madras Act 1 of 1959.

In the first Schedule to the Madras General Sales Tax Act, 1959 (Madras Act 1 of 1959) (hereinafter referred to as the principal Act), -

(a) during the period commencing on the 1st April 1964 and ending with the 30th November 1965, for item 47 and the entries relating thereto, the following shall be deemed to have been substituted, namely:

"47 Lubricating oils (not otherwise provided for in this Act), quenching oils and greases. Do 6

47-A All kinds of mineral oils (other than those falling under item 47 and not otherwise provided for in this Act) including furnace oil. Do 6";

(b) during the period commencing on the 1st December 1965 and ending with the 17th June 1967, for