TMI Blog1961 (8) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1956. On February 24, 1956, the Mysore Legislature passed a resolution adopting the said Act. The resolutions passed by the various States and the resolution passed by the Mysore Legislature will be quoted in a later part of this judgment.On April 7, 1956, the appellants filed a petition under Article 32 of the Constitution in the Supreme Court challenging the validity of the Central Act but that petition was dismissed and is reported as R. M. D. C. Chamarbaugwala v. The Union of India ( 1957 SCR 930, 939). The appeal against the Bombay judgment declaring the Bombay Act to be unconstitution was brought in this court and was allowed and that case is reported as State of Bombay v. R. M. D. Chamarbaugwala ( 1957 SCR 874, 929). During the pendency of their petition under Article 32, the appellants applied for and were granted a stay of the operation of the Central Act pending the disposal of the said writ petition. This was on April 16, 1956. The judgment of the Supreme Court in that petition was given on April 9, 1957. On August 31, 1957, the Mysore Lotteries Prize Competitions Control and Tax (Amendment) Ordinance, 1957 (Ord. 6 of 1957) was issued by the Governor of Mysore and thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to prize competitions because the whole matter including the power of taxation was surrendered in favour of Parliament. (2) Even if the whole power had not been surrendered the impugned Act i. e. the Mysore Act as amended violated Article 252(2) of the Constitution inasmuch as it indirectly amends the Central Act by adding a new method of control by imposition of penalties of a monetary nature. (3) The Mysore Legislature could not amend an Act which stood repealed as a result of the enactment of the Central Act. (4) The Mysore Act as amended was repugnant to the Central Act and is therefore, to the extent of repugnancy, void under Article 254(1) of the Constitution and (5) it was colourable legislation inasmuch as the tax was imposed on the prize competitions with the object of controlling them. Certain other questions relating to the legality of the imposition of the tax and the proceedings for the recovery of the tax were also raised but on all these points the High Court found against the appellants : The first question raised before us is the effect of the resolution passed by the legislatures of the States above mentioned and of the resolution passed by the Mysore legis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by an Act of the Legislature of that State. The result of the passing of a resolution under Article 252(1) is that any matter with respect to which Parliament has no power to enact laws becomes a matter for the regulation of which Parliament becomes empowered to pass any Act, and such Act, if passed by the Parliament, becomes applicable to the States passing the resolution or adopting that Act. Sub-clause (2) of that Article provides that any such Act may be amended or repealed by an Act of Parliament in the like manner i. e. in the manner provided in clause (1) and it cannot be amended or repealed by the Legislature of the State or States passing the resolution. The question then arises do the resolutions as passed and particularly the words control and regulation of prize puzzle competitions and all other matters ancillary thereto surrender the whole subject of prize competitions to the Central Parliament i. e. every matter and power connected therewith including the power tax. The argument raised was that the language of the resolutions was wide enough to comprise the legislative power under entries 34 and 62 of List II, the former dealing with betting and gamblin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State could impose a tax on that portion of interstate commerce which is involved in the transportation of persons and property whatever be the instrumentality by which it is carried on. The tax there was levied upon receiving and landing of passengers and freight which was held to be a tax on transportation i. e., upon commerce between the two States involved in such transportation. The following passage in the judgment of Field, J., at p. 162 was relied upon by counsel for the appellants :- The power to regulate that commerce, as well as commerce with foreign nations, vested in Congress is the power to prescribe the rules by which it shall be governed - that is, the conditions upon which it shall be conducted; to determine when it shall be free, and when subject to duties or other exactions. But these observations were made in a different context, i. e., whether the tax could be levied upon transportation made in ferry boats which passed between States every hour of the day and as this transportation was within the commerce clause no tax could be levied by the States. Reference was next made to certain observations made in the State of Bombay v. R. M. D. Chamarbaugwala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Act the power of legislation is distributed between the Union and the States and the subjects on which the respective Legislatures can legislate are enumerated in the three Lists and in the Articles of the Constitution, provision is made as to what is to happen if there is a conflict between the Statutes passed by Parliament and the Legislatures of the States. The peculiar nature of the India Constitution is regard to the enumeration of powers in the entries in the Lists were emphasised by Gwyer, C. J., in re The Central Provinces Berar Act No. XIV of 1938 ( 1939 FCR 18, 38, 73, 74) at p. 38 and by Sulaiman, J., at pp. 73 and 74. Gwyer, C. J., said :- But there are few subjects on which the decision of other Courts require to be treated with greater caution than that of federal and provincial powers, for in the last analysis the decision must depend upon the words of the Constitution which the Court is interpreting; and since no two Constitutions are in identical terms, it is extremely unsafe to assume that a decision on one of them can be applied without qualification to another. This may be so even where the words or expressions used are the same in both cases; for a w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tives of Parliament. To use the language of Gwyer, C. J., in re The Central Provinces and Berar Act No. XIV of 1938 (1939 FCR 18, 38, 73, 74) : It is not for the Court to express, or indeed to entertain, any opinion on the expediency of a particular piece of legislation, if it is satisfied that it was within the competence of the Legislature which enacted it; nor will it allow itself to be influenced by any considerations of policy, for these lie wholly outside its sphere. Similar observations in regard to the doctrine of colourable legislation were made by Mukherjea, J., (as he then was), in K. C. Gajapati Narayan Deo Others v. The State of Orissa ( 1954 SCR 1, 10), where it was observed : It may be made clear at the outset that the doctrine of colourable legislation does not involve any question of bona fides or mala fides on the part of the legislature. The whole doctrine resolves itself into the question of competency of a particular legislature to enact a particular law. If the legislature is competent to pass a particular law, the motives which impelled it to act are really irrelevant. On the other hand, if the legislature lacks competency, the question of moti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Act, Section 12(1) (b) of the Mysore Act became void because of the provisions of Article 254(1) of the Constitution which provides : Article 254(1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2) the law made by Parliament whether passed before or after the law made by the Legislature of such State or as the case may be, the existing law shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void. It was contended that because of the repugnancy between the Central Act and the Mysore Act in regard to licensing all provisions which had any reference to licensing became void under Article 254(1) and if they were void they could not be amended. On behalf of the State it was submitted that Article 252(1) was a complete code by itself and Article 254 was inapplicable because the latter Article like its predecessor, section 107 of the Government of India Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had not been surrendered to Parliament. (2) The amending Act was not a new method of controlling prize competitions nor was it a piece of colourable legislation. (3) There was no amendment of an Act which stood repealed nor was the retroactive operation of the Amending Act affected by Article 254(1) of the Constitution. The next three objections to the legality of the assessment were : (1) that the assessment was provisional which was not contemplated under the Act; (2) there should have been a fresh notification after the amendment of the Mysore Act and (3) 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. On September 10, 1957, the Deputy Commissioner, Bangalore, called upon the appellants to produce accounts in respect of prize competitions conducted as from April 1, 1956, up to the date of the closure of the competitions and three days were given to comply with that notice. Their reply was that the Ordinance under which the notice was issued was unconstitutional and illegal and they also asked for thirty days in which to prepare their statements but they were granted a period of fifte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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