Judgment

R. F. Nariman, J.

An interesting question is raised in this appeal which arises out of two judgments of this Court, namely, 'Buxa Dooars Tea Company Ltd. and others v. State of West Bengal and others' [(1989) 3 SCC 211] and 'Goodricke Group Ltd. and others v. State of W.B. and others' [1995 Supp. (1) SCC 707]. In the present appeal, we are concerned with The West Bengal Rural Employment and Production Act, 1976 and The West Bengal Primary Education Act, 1973. The High Court has found, based on a reading of the interim orders passed in both Buxa Dooars Tea Company Ltd.'s case and Goodricke Group Ltd.'s case, that for the period prior to the Amendment Act of 1989, the respondent herein is entitled to a refund of the cess paid by it together with interest at 12 per cent per annum, and has further found that insofar as interest is payable after the Amendment Act is concerned, such interest would only be payable after assessment orders are passed (which on facts here, we are informed, were passed on 27.07.1993 and thereafter).

By an interim order dated 16.06.1983 in the Buxa Dooars Tea Company Ltd.'s case, this court held as hereunder:-

“Rule NISI. There will be no order on stay application but if the petitioner succeeds in the writ petition, the State of West Bengal will refund the amount of cess collected with interest thereon @ 12% per annum from the date of collection.”

By the judgment delivered in Buxa Dooars Tea Company Ltd.'s case in 1989, this Court held that the charging sections under both the aforesaid Acts were invalid both on the ground of legislative competence as well as violation of Article 301 inasmuch as the impugned legislative measures were outside Entry 49 in List II of the Seventh Schedule of the Constitution, which speaks of “taxes of lands and buildings”; and it was further held that the levy being on movement of goods, Article 301 of the Constitution would be attracted and these levies are not saved under Article 304(b) as no Presidential assent has been taken on either of these legislative measures.

The West Bengal legislature was swift to act after the judgment of this court. By the West Bengal Taxation Laws (Second Amendment) Act of 1989 amending the provisions of both the aforesaid Acts, the charging sections were substituted with retrospective effect, and the levy of the rural employment cess and education cess (which was levied under the earlier principal Acts on the basis of despatch of manufactured tea) was now levied on the basis of production of tea leaves. A challenge to this Amendment Act was made before this Court which challenge failed in the second judgment referred to hereinabove (in Goodricke Group Ltd.'s case). The 1989 Amendment Act was upheld in the following terms:

“Lastly, the learned counsel for the petitioners questioned the validity of the retrospective effect given to the impugned enactment. We fail to see any substance in this submission. If the Act is good, it is good both prospectively and retrospectively. Retrospective effect is given for the period covered by the anterior provisions which were struck down in Buxa Dooars. Once we hold that the defect pointed out in Buxa Dooars is rectified and remedied in the impugned enactment, it can certainly be given retrospective effect to cover the period covered by the earlier enactment which is not only a well-known but a frequently adopted measure by all the legislatures.

For the above reasons, the writ petitions fail and are accordingly dismissed. The interim orders made in these writ petitions shall also come to an end. The petitioners shall pay the cesses stayed by the orders of this Court along with interest @ 12% p.a. There shall no order as to costs.”

It is a little important to note that before the final judgment in Goodricke Group Ltd.'s case, an interim order was passed dated 25.01.1990 in the following terms:

“Issue notice. In the meantime the assessment may be made as usual but there will be no enforcement of demand under the