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1961 (8) TMI 29 - SC - Indian LawsWhether a tax must be levied for the purpose of revenue and cannot be for purpose of control and that in the Mysore Act was really colourable legislation in that the impugned tax had been levied for the purpose of controlling prize competitions although it was given the form of a tax Whether the assessment was provisional which was not contemplated under the Act? Whether there should have been a fresh notification after the amendment of the Mysore Act? Whether at the time when the recovery proceedings were taken the tax had not become due as it was payable within a week which had not expired? Held that:- By passing the resolution the States did not surrender their power of taxation it cannot be said that clause (2) of Article 252 of the Constitution was violated by the amendment of the Mysore Act; nor can it be said that in reality to was a piece of colourable legislation by an indirect attempt to amend the Central Act and a new method of control was devised by imposing a penalty under the name of tax. We have already held that the tax imposed under the Mysore Act was not by way of penalty but was the exercise of the power which the legislature possessed of imposing tax under entry 62.The tax imposed under the Mysore Act was not by way of penalty but was the exercise of the power which the legislature possessed of imposing tax under entry 62. As the tax was not paid the provisions of the Revenue Recovery Act were resorted to. This cannot be said to be a provisional assessment. The return submitted by the appellants as far as it went was accepted and on that the tax was demanded which was not a case of provisional assessment at all but as was held by the High Court it must be taken to be a final assessment and if and when any further assessment or a revised assessment is made the question may become relevant. Its legality depends upon the constitutionality of amended section 12(1) (b) and if that is valid, as we have held it to be, the notification is equally valid. The notification was only in regard to the rate of taxation and had no reference to the obtaining or not obtaining of the licence. The notice of demand called upon the appellants to pay the sum therein specified and to produce the challan in token of payment within a week. It is not the case of the appellants that they had paid or were in a position to produce the challan within a week. It was not an order making the tax payable within a week. Appeal dismissed.
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