Technova Imaging Systems Ltd. Vs. State of Maharashtra and ors. - Court Judgment

Excerpt:
- section 10: [swatanter kumar, c.j., a.p. deshpande & smt. nishita mhatre, jj] admission to professional colleges - technical courses - publication of brochure on basis of which candidates seek admission to various institution keeping in mind their merit and preference of colleges held, for ensuring adherence to proper appreciation of an academic course, it is essential that the method of admission is just, fair and transparent. the first step in this direction would be publication of a brochure on the basis of which the applicants are supposed to aspire for admission to various institution keeping in mind their merit and preference of college. brochure, firstly has to be in conformity with law and the statutory scheme notified by the competent authority. it is a complete and composite document as it deals with the scheme for conducting their entrance examinations, declaration of results, general instructions and method of admission, etc. this brochure is binding on the applicants as well as the authorities. this brochure or admission notification issued by the state or other competent authority cannot be altered at a subsequent stage particularly once the process of admission has begun. there is hardly any exception to this accepted rule of law. section 10: [swatanter kumar, c.j., a.p. deshpande & smt. nishita mhatre,jj] admission to professional colleges - technical courses - approval to additional seats or to start new course - cut off dates held, the settled principle of law is that merit of the applicant is the primary criteria which would determine his rank as well as the college where he would be entitled to admission. this rule should not be frustrated as it will tantamount to entirely upsetting the object of admissions based on merit oriented method and would cast cloud on the fairness and transparency of the method of admission. one of the ways in which merit can be defeated is allowing increase in the intake strength or commencement if new colleges beyond cut-off date and admissions beyond the last date specified in the notification/calendar issued by the concerned authorities. this can be illustrated by giving an example. college a which is running a professional course like engineering or mba etc. has an intake capacity of 60 seats which has duly been notified in the information brochure. however, after the cut-off date, approval is granted by the aicte and thereafter, the process is taken up by the state and the intake capacity of the college is increased by 30 more seats. these seats would obviously, not be notified in the information brochure and the candidate who are meritorious and for whom college a; be the college of reference could not get seats or give preference as the seats were limited. none had the proper knowledge about the increase in intake of seats though at a much subsequent stage and may be even after the last date of admission is over either by themselves or under the order of the court even it is put on the internet or given in the newspaper, the candidates of higher rank or meritorious candidates would not be able to avail of that benefit because they have already submitted the testimonial, have paid their fees and the courses have commenced. in that situation, for variety of reasons, they may not be able to take admission in the institution of their higher preference while the candidates of much lower merit will be admitted to that course. besides defeating the merit, it has been commonly noticed that the late admissions made by the colleges directly effect notified candidates who have questioned it more than often as their admission process is not so just, fair and transparent which has given rise to the litigation. it is also a kind of back door entry method. another serious consequence that result from such admissions is shortening of the academic courses in an undesirable manner. it is expected of other candidate selected to a professional course that he or she would complete the course in its entirety and not by missing more than a month or so in joining the said course. this results in lowering the excellence of education as well as harms the academic standard of professional education. admission to professional colleges: [swatanter kumar, c.j., a.p. deshpande & smt. nishita mhatre, jj] technical courses - held, in process of admission to professional colleges relating to technical courses, primarily three institutional bodies are involved. (i) all india technical council for technical education, (ii) state of maharashtra through director of technical education and (iii) university to which such institution is affiliated the role of all these institutions in distinct and different but for a common object. primary of the rule of all india council for technical education (aicte) is now well settled but that certainly does not mean that role of the state government and for that matter the university is without any purpose or of no importance. the council is the authority constituted under the central act with the responsibility of maintaining education standards and judging upon the infra-structure and facilities available for imparting such professional education. its opinion is of utmost importance and shall take precedence over views of the state as well as that of the university. the concerned department of the state and the affiliating university has a role to pay but it is limited in its application. they cannot lay down any guidelines or policies which would be in conflict with the central statute or the students laid down a by the central body. state can frame its policy for admission to such professional courses but such policy again has to be in conformity with the directives issued by the central body. while the state grants its approval and university its affiliation for increased intake of seats or commencement for a new course/college, its directions should not offend and be repugnant to what has been laid down in the condition of approval granted by the central authority or council. what is most important is that all these authorities have to work ad idem as they all have a common object to achieve i.e. of proper imparting of education an ensuring maintenance of proper standards of education, examination and ensuring proper infrastructure for betterment of educational system. only if all these authorities work in a co-ordinated manner and with co-operation they would be able to achieve the very object for which all these entities exist admission to professional courses: [swatanter kumar, c.j.,a.p. deshpande & smt. nishita mhatre, jj] admission schedule - interference by courts held, all the expert bodies viz. aicte as well as directorate of education in consultation with the departments of the state regulating the process of admission and maintenance of standards of education had notified a legal binding document specifying dates and schedule for various matters in relation to admission of students and commencement of courses. there has to be so compelling circumstances and grounds before the court to interfere with the prescribed schedule. it is neither so arbitrary nor so perverse, keeping in view the essential features relating to imparting education to professional courses that it should invite judicial chastisement to the extent of laying down entirely new schedule. merely because there has been some delay on the part of either of these authorities to timely grant of either of these authorities to timely grant or decline approval and permission to commence a course per se would not be sufficient ground for disturbing the notified schedule and timely commencement of courses. - the petitioner has therefore challenged the ordinance as well as the amending act. it is also a settled principle of law that such amendment can be made with retrospective effect unless it is specifically prohibited by a provision of the constitution (like article 20 of the constitution which prohibits a criminal law to be retrospective) or where the legislature lacks the legislative competence. when a legislature sets out to validate a tax declared by a court to be illegally collected under an ineffective or invalid law, the cause for ineffectiveness or invalidity must be removed before validation can be said to take place effectively.d.g. karnik, j.1. by this petition, the petitioner prays that the amendment to the definition of 'manufacture' in section 2(17) of the bombay sales tax act, 1959 (for short 'the sales tax act') made by the maharashtra act no. ix of 1996, be struck down to the extent of its retrospectivity with effect from 1st july 1981.2. the challenge to the amendment arises under the following circumstances.3. the 1st petitioner (hereinafter referred to as 'the petitioner') is engaged in the business of buying polyester films and selling it after subjecting it to a process of 'lacquering'. in a proceeding under section 52 of the sales tax act, the deputy commissioner of sales tax held that the chemical process of lacquering of the polyester film done by the petitioner amounted to a manufacture as defined under section 2(17) of the sales tax act and therefore attracts sales tax. an appeal filed against the said order was dismissed. however, on a reference to this court, by an order dated 2nd february 1995, this court held that lacquering of a polyester film does not amount to manufacture within the meaning of section 2(17) of the sales tax act. the governor of maharashtra thereafter issued an ordinance bearing ordinance no. xii of 1996 dated 4th september 1996 retrospectively amending the definition of 'manufacture' appearing in section 2(17) of the act by adding clause (d) thereto. the ordinance has been replaced by the legislature of bombay by passing act no. ix of 1996. the effect of the amending definition of 'manufacture' appearing in section 2(17) of the sales tax act is to bring the process of lacquering of polyester film within the definition of 'manufacture'. consequently, the petitioner would be liable to pay sales tax retrospectively on the lacquered polyester films sold by it. the petitioner has therefore challenged the ordinance as well as the amending act.4. section 2(17) of the sales tax act prior to its amendment read as under:2. definitions.- in this act, unless the context otherwise requires.-(17) 'manufacture', with all its grammatical variations and cognate expressions, include,-(a) producing, making, extracting, altering, ornamenting, finishing or otherwise processing treating, or adapting any goods, or using or applying any such process, as the state government may, having regard to the impact thereof on any goods or to the extent of alteration in the nature, character or utility of any goods brought about by such process by notification in the official gazette, specify(b) cutting, saving, shaping, sizing or hewing of timber, and(c) refining of oilby maharashtra act no. ix of 1996, the legislature added clause (d) to section 2(17) of the sales tax act with retrospective effect from 1st july 1981. clause (d) reads as under:(d) lacquering of polyester film.5. the petitioner has no grievance to the adding of clause (d). the petitioner challenges section 28 of maharashtra act no. ix of 1996 amending with retrospective effect section 2(17) of the sales tax act, two grounds; viz. (i) the effect of amendment of section 2(17) of the sales tax act is to give a go-by or to over-rule a decision of the court rendered in s.t. reference no. 42 of 1990 (technova graphic systems pvt. ltd. v. commissioner of sales tax) on 2nd february 1995 whereby this court has specifically held that lacquering of polyester films does not amount to manufacture. counsel for the petitioner submitted that the legislature cannot amend the law so as to overrule a decision of the court and any attempt by the legislature to over-rule or reverse the decision of the court is unconstitutional. (ii) the petitioner contends that in any event, the amendment to section 2(17) of the sales tax act could not have been made with retrospective effect. the petitioner was not liable to pay tax on sale of lacquered polyester films as this court held by lacquering of polyester films, no new commodity was brought into existence and the process of lacquering did not involve manufacture. by amending the definition of 'manufacture' with retrospective effect, the petitioner has been brought to tax retrospectively from 1st july 1981. the legislature is not competent to make the taxing law with retrospective effect.6. in our view, none of the contentions of the petitioner has any merit. by its decision dated 2nd february 1995, this court held that process of lacquering of polyester film did not amount to manufacture within the meaning of section 2(17) of the sales tax act. section 2(17) of the sales tax act was therefore amended retrospectively by including the process of lacquering of polyester film in the definition of 'manufacture'. but for this amendment, the tax which was previously collected by the state on sale of lacquered polyester films would have been required to be refunded. in order to protect the revenue and the tax collected which had already been spent on welfare activities of the state, the legislature amended the definition of 'manufacture' by amending section 2(17) of the sales tax act. the legislature did not over-rule or reverse the decision of the court by amending section 2(17) of the sales tax act. the legislature only removed the flaw in the definition of 'manufacture', on account of which lacquering of polyester films was held 'not to be manufacture' by this court. it is settled principle of law that the legislature cannot reverse or over-rule a decision given by a court, but can amend the law so as to remove a flaw or lacuna in an act which leads to a particular interpretation at the hands of the court. it is possible for the legislature to alter the premise or the basis on which a decision is based and this is not impermissible under the constitution. it is also a settled principle of law that such amendment can be made with retrospective effect unless it is specifically prohibited by a provision of the constitution (like article 20 of the constitution which prohibits a criminal law to be retrospective) or where the legislature lacks the legislative competence.7. in shri prithvi cotton mills ltd. v. broach borough municipality : (1969) 2 scc 283, the supreme court has held thus:when a legislature sets out to validate a tax declared by a court to be illegally collected under an ineffective or invalid law, the cause for ineffectiveness or invalidity must be removed before validation can be said to take place effectively. the most important condition is that the legislature must possess the power to impose the tax, for if it does not, the action must ever remain ineffective and illegal. granted legislative competence it is not sufficient to declare merely that the decision of the court shall not bind, for that is tantamount to reversing the decision in exercise of judicial power which the legislature does not possess or exercise. a court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. ordinarily, a court holds a tax to be invalidly imposed because the power to tax is wanting or the statute or the 'rules or both are invalid or do not sufficiently create jurisdiction. validation of a tax so declared illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are in fact removed and the tax thus made legal. sometimes this is done by providing for jurisdiction where jurisdiction has not been properly invested before. sometimes this is done by re-enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already collected to stand under the re-enacted law. sometimes the legislature gives it own meaning and interpretation of the law under which the tax was collected and by legislative flat makes the new meaning binding on courts. the legislature may follow any one method or all of them and while it does so it may neutralise the effect of the earlier decision of the court which becomes ineffective after the change of the law. whichever method is adopted it must be within the competence of the legislature and legal and adequate to attain the object of validation. if the legislature has the power over the subject-matter and competence to make a valid law, it can at, any time make such a valid law and make it retrospectively so as to bind even past transaction. the validity of a validating law, therefore, depends upon whether the legislature possesses the competence which it claims over the subject-matter and whether in making the validation it removes the defect which the courts had found in the existing law and makes adequate provisions in validating law for a valid imposition of the tax.this decision has been followed by the supreme court in its recent decision in itw signode india ltd. v. collector of central excise : 2003 (158) e.l.t. 403 (para 41).8. the passage quoted above is a complete answer to the challenge raised in this petition.9. for these reasons, there is no merit in the petition which is hereby dismissed.