TMI Blog1971 (4) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... e-laws framed thereunder. The respondents filed petitions under Art. 226 of the Constitution challenging the validity of the levy of cess. The High Court quashed the demand on the ground that what was being really demanded was the payment of sales tax and since the maximum rate of sales tax authorised by s. 15 of the Central Sales Tax Act 1956 read with s. 5(4) of the Mysore Sales Tax Act 1957 had already been imposed the Market Committee could not make any further or additional levy. A direction was also made for refund of the cess collected during a period of three years preceding the date of the presentation of the writ petition. For the purpose of determination of the points which have been raised it is necessary to set out the background and the history of legislation insofar as it is relevant concerning Bellary district. By the Andhra State Act 1953 (Central Act 30 of 1953) a part A State to be known as Andhra came into existence. By s. 4 of that Act there was added to the State of Mysore the territory which immediately before the appointed was comprised in the Taluks of Bellary district other than Alur, Adoni and Rayadrug in the State of Mysore and the said territories the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f that Act contained a provision similar to s. 53 of the Central Act 30 of 1953. :The laws operating in the State of Madras became applicable to areas which were formerly in that State. Thus s. 11 of the Act as amended, in the year 1955 by the legislature, of the State of Madras continued to apply to the South Kanara district of the State of, Mysore. The situation: on that date was that in the district of Bellary which became part of the former State of Mysore s.11 of the Act was in force as it stood before its amendment in 1955 by the Madras legislature. But s. 11, as amended, was in force in the district of South Kanara. In 1958 a Bill was introduced in the Mysore Legislature to amend the Act as in force in the Madras area. In the statement of objects and reasons it was mentioned that s. 11 of the Act, as amended by the Madras Legislature in 1955 and as in force in South Kanara district, empowered the South Kanara Market Committee to levy a cess by way of sales tax on any commercial crop bought and sold in the notified area at such rates as the Government might determine. No notification as contemplated by the section was issued by the Government of the erstwhile State of Madr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confined to the above territories only. The Mysore General Clauses Act 1899, after the adaptations made, contained the definition of Madras area in clause 47 of s. 3 confining it to the territories specified in clause (d) of sub-s. (1) of s. 7 of the States Reorganisation Act 1956. This meant that it did not include that part of Bellary district which had been incorporated in the State of Mysore by the Central Act 30 of 1953. Therefore under s. 3 of the Mysore General Clauses Act in any of the Mysore Acts made after its commencement unless there was anything repugnant in the subject or context Madras area was to mean the territory which was incorporated in Mysore by the States Reorganisation Act 1956 and which did not include the Bellary district with which we are concerned in the present appeals. The Mysore Agricultural Produce Marketing (Regulation) Act, 1966 (Mysore Act 27 of 1966) was published in the Mysore Gazette on September 15, 1966. S. 154 of that Act which relates to Repeal and Savings is as follows : 154. Repeal and savings. (1) The Madras Commercial Crops Market Act, 1938 (Madras Act XX of 1933) as in force in Bellary District, the Madras Commercial Crops M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 958 when it was introduced in the Mysore legislature there was mention only of the Act as amended by the Madras legislature in 1955 being in force in South Kanara district. The entire reading of the statement shows that whatever changes in law and the validation provisions which were being made were confined only to the levy of a cess by way of sales tax by the South Kanara I Market Committee. (2) The Amending Act of 1958 was made applicable only to what was called the Madras Area . This area could have reference only to the South Kanara district with the exception of the specified areas which was a, part of the State of Madras immediately before the States Reorganisation Act of 1956. It would be stretching the language too far to include in it the Bellary district which had ceased to be a part of the state of madras much earlier in 1953. The adaptation made in the Mysore General clauses. Act 1899 by virtue of the provisions contained in the states Organisation Act 1956 defined' Madras Area to mean the territory specified in clause (d) of sub-s (1) of S. 7 of that Act. That would, as stated before comprise only the territory of South Kanara district with the exception of spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Act of 1958 seem to show that Arecanut and Coconut are the main or the principal commodities in the Madras Area and these commodities, according to the byelaws, are confined to South Kanara district and are not included as commercial crops in the Bellary district at all. Once it is held that the Mysore Amending Act of 1958 did not apply to the Bellary district only fee could levied under S. 11(1) of the Act as it originally stood. Under bye-law 19 the rate specified for groundnut seeds was 9 paise per kilogram. The notice sent by the Market Committee making the demand from the respondents employed the word cess but that cannot stand in the way of it being held that the demand related to a fee which alone could be levied under S. 11(1) of the Act. The finding of the High Court was that the cess demanded was a sales tax since it was levied under S. 11 (1) of the Act as amended by the Amending Act of 1958. It was observed that if it was not a tax the question that remained to be considered was whether the cess demanded was a fee and if so whether the levy of the fee was open to criticism that it was not correlated to the services rendered. As it has been determined by us th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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