V.M. Sahai, J.

1. The Petitioner is a foreign company based in Canada and has set up a project office in India with the permission of Reserve Bank of India. The Petitioner is subject to income tax in India in accordance with the provisions of the Income Tax laws in India. The Petitioner is engaged in exploration, development and production of mineral oil and natural gas. The Petitioner has been awarded the right to explore, develop and produce mineral oil in various blocks. For this purpose, the Petitioner has entered into what is known as “Production Sharing Contract” (for short the PSC) with the Government of India for exploration, development and production of “mineral oil”. The PSC specifies the area over which the Petitioner has been given such rights. PSC defines the Contract Area as a Block. One such PSC was entered into on 23rd September, 1994 and another on 17th July, 2001 for the exploration, development and production of mineral oil in the Hazira and Surat block respectively. The Petitioner has been producing crude oil and natural gas from such Blocks.

2. The Petitioner has been claiming benefit of deduction of 100% of the profits and gains from the production of mineral oil and natural gas under Section 80-IB(9) as it stood prior to an amendment to Section 80-IB(9) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) which was introduced by the Finance (No. 2) Act 2009. In these proceedings the constitutional validity of the amendment to sub-Section (9) of Section 80-IB and Explanation added to it under the Act by the Finance (No. 2) Act, 2009, has been challenged.

3. The relevant portion of the amendment in the present proceedings read as under:-

“37. In Section 80-IB of the Income-tax Act,-

(a) for sub-Section (9), the following sub-Section shall be substituted and shall be deemed to have been substituted with effect from the 1st day of April, 2000, namely:-

‘(9) The amount of deduction to an undertaking shall be hundred per cent, of the profits, for a period of seven consecutive assessment years, including the initial assessment year, if such undertaking fulfills any of the following, namely:-

(i) is located in North-Eastern Region and has begun or begins commercial production of mineral oil before the 1st day of April, 1997;

(ii) is located in any part of India and has begun or begins commercial production of mineral oil on or after the 1st day of April, 1997;

(iii) is engaged in refining of mineral oil and begins such refining on or after the 1st day of October, 1998.

Explanation.-- For the purposes of claiming deduction under this sub-Section, all blocks licensed under a single contract, which has been awarded under the New Exploration Licensing Policy announced by the Government of India vide Resolution No. O- 19018/22/95-ONG.DO.VL dated 10th February, 1999 or has been awarded in pursuance of any law for the time being in force or has been awarded by Central or a State Government in any other manner, shall be treated as a single “undertaking”.’:

(a) in sub-Section (9), as so substituted,-

(A) in clause (iii), after the words, figures and letters “the 1st day of October, 1998”, the words, figures and letters “but not later than the 31st day of March, 2012” shall be inserted;

(B) after clause (iii), the following clause shall be inserted with effect from the 1st day of April, 2010, namely:--

‘(iv) is engaged in commercial production of natural gas in blocks licensed under the VIII Round of bidding for award of exploration contracts (hereafter referred to as “NELP-VIII”) under the New Exploration Licensing Policy announced by the Government of India vide Resolution No. 0-190l8/22/95-ONG.DO.VL dated 10 t h February, 1999 and begins commercial production of natural gas on or after the 1st day of April, 2009;

(Emphasis supplied by us)

4. We are concerned with the amendments which have been highlighted above. The relevant amendments in question are in two parts.

5. The first part is the insertion of the Explan