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1964 (3) TMI 12 - SUPREME COURTWhether condition would be satisfied whenever a terminal tax (without reference, either to the article on which it was levied or the rate) was being lawfully," levied by the municipality prior to the commencement of the Constitution and as in this case admittedly a terminal tax was being levied on certain, articles, that condition was satisfied? Held that:- The argument of Attorney-General has to be rejected as lacking any substance, for on no construction or narrow, of the expression " levy " in the pharse " continue to be levied " can such a case be comprehended. From the mere fact that a State enacrtnent has authorised a municipality to levy a tax it cannot said that a tax which had never been imposed was " being lawfully levied " by the municipality, not to speak of the tax, etc., collected being "applied to the same purposes" before the commencement of the Constitutions as contemplated by the concluding portion of the article. The last portion of article 277 uses the words " continue to be levied " and to be applied to the same purposes ". By reason of this collocation between the concept of the levy and of application of the proceeds of the tax, the Constitution makers obviously intended the word " levy " to be understood as including the collection of the tax, for it is only when a tax is collected that any question of its application to a particular purpose would arise. It is apparent that if the word " levied " were understood in the sense which Mr. Setalvad contends, there could be no " application " of the proceeds of the tax to the same purposes as at the commencement of the Constitution. For ex concessis at that date there were no proceeds to be applied. The decision of the High Court is, therefore, correct and the appeal fails.
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