In Brief
The Union of India challenged a lower court decision striking down a statutory clause in the Income Tax Act, 1961, as amended by the Finance Act 2001 (Section 43B/145), on constitutional grounds. The respondent Exide Industries had argued the clause violated Articles 14 and 245, citing non-disclosure of legislative intent, inconsistency with other provisions, and alleged intent to overturn a prior Supreme Court judgment. The Court held that merely declaring a provision arbitrary or unconscionable is insufficient to invalidate it constitutionally; respondents failed to demonstrate actual constitutional infirmity. The Court affirmed that once validly enacted, such provisions remain valid regardless of their origin or apparent motive, and prior judgments cannot be invalidated by subsequent legislation. The appeal was allowed."
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