.M/S. HINDUSTAN GUM & CEEMICALS LTD. vs STAIE OF HARYANA & ORS.

The Supreme Court held that the Punjab Municipal (Haryana Amendment & Validation) Act 1971, which amended Section 5(4) of the Act to include 'notification' with retrospective effect, validated the levy and collection of octroi in extended municipal areas. The Court ruled that it is permissible for the legislature to pass retrospective legislation to overcome judicial decisions that set aside tax impositions. Consequently, the earlier decision in Atlas Cycle Industries Ltd. was neutralized, and the appeal was dismissed, affirming the validity of the octroi levy.