The retrospective operation of a law that imposes a new tax or liability on transactions that were not subject to tax or liability at the time they were entered into may be held to be unconstitutional as violative of the fundamental rights guaranteed under Articles 19 (1) (f) and (g) and Article 20 of the Constitution of India.

( 1 ) THE petitioner is the karta of a joint Hindu mitakshara family consisting of his sons and other descendants. The said joint family carries on business under the trade name of "goenka Coal Company" (hereinafter referred to as the said firm ). The said firm owns a colliery known as "goenka Kajora Colliery" situated at P. O. Ukhra; District. Burdwan. The said firm is a registered dealer under the Bengal Finance (Sales Tax) Act, 1941 (hereinafter referred to as the said Act ). The said firm is also a registered dealer under the Central Sales Tax Act, 1956. It is stated that for the raising of coal, the said firm had installed several machineries and equipments and used such machineries and equipments and other stores for raising coal from the said colliery. The machineries and equipments so installed at the said colliery and the stores are occasionally sold or disposed of when they become old and unserviceable. It is stated that the sales of such old and discarded machineries, equipments and stores do not form any part of the business activities of the said firm, which consisted mainly of raising of coal from the said colliery and selling the same. It is further stated that such sales of the old and discarded machineries, equipments and stores are occasional and the said firm does not deal in and/or purchases any old or discarded machineries, equipments and/or stores for the purpose of selling them with any intention of making any profit or gain thereby. It is stated that the firm does not carry on any business of selling such old machineries equipments and/or stores.

( 2 ) DURING the year 1964 the said firm sold old and discarded machineries, equipments and stores and realised a sum of Rs. 44,240. Out of the said sum of Rs. 44,240, a sum of Rs. 26,140 is stated to represent the sale of iron scrap. For the four quarters ending on Kartick Badi 15,2021, which corresponded roughly the four quarters of the year 1964, the Commercial Tax Officer, Asansol Charge, being respondent No. 1, made an assessment under the Act and included in the taxable turnover the said sum of Rs. 44,240 in view of the amendment in Section 2 of the Act by inserting the definition of business. The said sales were treated by respondent No. 1 as ancillary or incidental to the business and hence constitute business within the meaning of the amended provisions of the Act. The petitioner preferred an appeal before the Assistant Commissioner of Commercial Taxes, who also by his order made under Section 20 (1) of the Act upheld the said inclusion in view of the insertion of the new definition of business in the Act. Aggrieved by the said order the petitioner has challenged the inclusion of the said sum in its taxable turnover and obtained a rule nisi.

( 3 ) THE learned counsel for the petitioner has confined his argument mainly to the validity of the retrospective operation of the West Bengal Taxation Laws (Amendment) Act, (hereinafter referred to as the amending Act ). It is contended that Section 4 of the amending Act in so far as it introduces the definition of business by inserting Section 2 (1a) in the Act with retrospective operation from the inception of the Act offends Article 19 (1) (f) and (g) of the Constitution.

( 4 ) IN order to examine the validity of this contention it is necessary to trace the circumstances which led to the introduction of the amending Act and to note the various legislative amendments made from time to time in this respect. By an Ordinance known as the West Bengal Taxation Laws (Amendment) Ordinance, 1967, promulgated by the Governor of West Bengal, several provisions of, inter alia, the Act were amended By Clause 4 of the said Ordinance, a definition of the word "business was for the first time incorporated in Section 2 of the Act by inserting Sub-section (1a) in Section 2 of the Act. It was further provided by Clause 4 of the said Ordinance that the new Sub-section (1a) of Section 2 of the Act defining t