TMI Blog1938 (12) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The Court is much indebted to all the counsel engaged for the assistance which they have afforded it. 3. Notwithstanding the very wide terms in which the Special Reference is framed, the question to be determined lies essentially in a small compass. It has arisen in the following way. Section 3 (1), Provincial Act, to which it will be convenient to refer hereafter as the impugned Act, is in these terms: There shall be levied and collected from every retail dealer a tax on the retail sales of motor spirit and lubricants at the rate of five per cent on the value of such sales. Retail dealer is defined by Section 2 as any person who, on commission or otherwise, sells or keeps for sale motor spirit or lubricant for the purpose of consumption by the person by whom or on whose behalf it is or may be purchased, and retail sale is given a corresponding meaning. 4. Both motor spirit and lubricants are manufactured or produced (though not to any great extent) in India Motor spirit is subject to an excise duty imposed by the Motor Spirit (Duties) Act, 1917, an Act of the Central Legislature; no excise duty at present has been imposed on lubricants. 5. By Section 100 (1), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ante clause in Section 100(1), and a fortiori of that clause read with the opening words of Section 100(3), is to make the federal power prevail if federal and provincial legislatie powers overlap. The Provincial Government, on the other hand, deny that the two entries overlap and say that they are mutually exclusive. The Government of India raise a further point under Section 297, Constitution Act, but it will be more convenient to deal with this separately and at a later stage.I should add that it is common ground between the parties that if Section 3(1) of the impugned Act is held to be invalid, the rest of the Act must be invalid also, since it only provides the machinery for giving practical effect to the charging Section. 8. This is the first case of importance that has come before the Federal Court; and it is desirable, more particularly in view of some of the arguments addressed to us during the hearing, to refer briefly to certain principles which the Court will take for its guidance. It will adhere to canons of interpretation and construction which are now well known and established. It will seek to ascertain the meaning and intention of Parliament from the language of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the United States, as well as of numerous decisions on appeal by the Judicial Committee Many of these cases were cited in the course of the argument. The decisions of Canadian and Australian Courts are not binding upon us, and still less those of the United States, but, where they are relevant, they will always be listened to in this Court with attention and respect, as the judgments of eminent men accustomed to expound and illumine the principles of jurisprudence similar to our own and if this Court is so fortunate as to find itself in agreement with them, it will deem its own opinion to be strengthened and confirmed. But there are few subjects on which the decisions 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 word or a phrase may take a colour fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention that a conflict should exist and in order to prevent such a result, the two Sections must be read together and the language of one interpreted, and, where necessary, modified by that of the other. In this way it may, in most cases, be found possible to arrive at a reasonable and practical construction of the language of the Sections, so as to reconcile the respective powers they contain, and to give effect to all of them. In performing this difficult duty it will be a wise course for those on whom it is thrown, to decide each case which arises as best they can, without entering more largely upon an interpretation of the statute than is necessary for a decision of the particular question in hand. 15. The question before the Court admits of three possible solutions: (1) that the provincial entry covers the tax now challenged and that the federal entry does not; (2) that the federal entry covers it, but that the provincial entry does not; and (3) that the tax falls within both entries, so that there is a real overlapping of jurisdiction between the two. In the first case, the validity of the tax could not be questioned; in the second, the tax would be invalid as the invasi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfied that that is also its primary and fundamental meaning in India; and no one has suggested that it has any other meaning in Entry (45). 18. It was then contended on behalf of the Government of India that an excise duty is a duty which may be imposed upon home produced goods at any stage from production to consumption; and that therefore the federal legislative power extended to imposing excise duties at any stage. This is to confuse two things, the nature of excise duties and the extent of the federal legislative power to impose them. Authorities were cited to us, from Blackstone onwards, to prove that excise duties may be imposed at any stage; and if this means no more than that, instances are to be found where they have been so imposed, authority seems scarcely needed. It would perhaps not be easy without considerable research to ascertain how far Blackstone was justified at the time he wrote in saying that excise duties were an inland imposition, paid sometimes on the consumption of the commodity, and frequently on the retail sale. Blackstone's statement however is repeated, almost verbatim, in the latest edition of Stephen's Commentaries, and as a description of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be qualified by other express provisions in the same enactment, by the implications of the context, and even by considerations arising out of what appears to be the general scheme of the Act. 21. The question must next be asked whether such a tax as is imposed by the impugned Act, though described as a tax on the sale of goods, could in any circumstances be held to be a duty of excise; for it is common ground that the Courts are entitled to look at the real substance of the Act imposing it, at what it does and not merely at what it says, in order to ascertain the true nature of the tax Since writers on political economy are agreed that taxes on the sale of commodities are simply taxes on the commodities themselves, it is possible to regard a tax on the retail sale of motor spirit and lubricants as a tax on those commodities, and I will assume for the moment in favour of the Government of India that it is on that ground capable of being regarded as a duty of excise. 22. It appears then that the language in which the particular legislative powers which the Court is now considering have been granted to the Central and Provincial Legislatures respectively may be wide enough, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ittee have said, by having recourse to the context and scheme of the Act, and a reconciliation attempted between two apparently conflicting jurisdictions by reading the two entries together and by interpreting, and, where necessary, modifying, the language of the one by that of the other. If indeed such a reconciliation should prove impossible, then, and only then, will the non obstante clause operate and the federal power prevail: for the clause ought to be regarded as a last resource, a witness to the imperfections of human expression and the fallibility of legal draftsmanship. 24. It has been shown that if each legislative power is given its widest meaning, there is a common territory shared between them and an overlapping of jurisdictions is the inevitable result and this can only be avoided if it is reasonably possible to adopt such an interpretation as would assign what would otherwise be common territory to one or the other. To do this it is necessary to construe this legislative power defined or described by one entry or the other in a more restricted sense than, as already pointed out, it can theoretically possess. I mention, only to dismiss, the argument that the new a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x which includes nearly every type of transaction in the line of goods and services. Comstock, ibid., page 113. And again: The tax (i.e. the sales or turnover tax) may be general, as in France or Germany, or retail transactions may be excluded,as in Belgium. It maybe, as is common in the States of the American Union, confined to retail transactions. It may be imposed, as in Canada and Australia, as a producers' or manufacturers' tax, and it may be on classified industries or trades only. It may be levied on nearly all goods and services, as in Germany. It may exempt certain sales, as in France, where the sales of farmers are exempted unless carrying on manufacture as well as agriculture. Findlay Shirras, ibid., page 610. 26. Thus the expression sales tax may comprehend a good deal more than would be understood by tax on the sale of goods in the ordinary and natural meaning of those words and the expression turnover tax seems to be in some directions wider and in others narrower. Tax on the sale of goods at any rate seems to include some varieties of turnover tax, but it seems also to include more than a turnover tax in the stricter sense could reasonably be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or in connexion with, manufacture or production, and that it extends no further. I think that this is an interpretation reasonable in itself, more consonant than any other with the context and general scheme of the Act, and supported by other considerations to which I shall refer. 28. I have said that it seems to me impossible, without straining the language of the Act, to construe a power to impose taxes on the sale of goods as a power to impose only turnover taxes. To construe the power to impose duties of excise, as I think it ought to be construed, involves no straining of language at all. The expression duties of excise, taken by itself, conveys no suggestion with regard to the time or place of their collection. Only the context in which, the expression is used can tell us whether any reference to the time or manner of collection is to be implied. It is not denied that laws are to be found which impose duties of excise at stages subsequent to manufacture or production; but, so far as I am aware, in none of the cases in which any question with regard to such a law has arisen was it necessary to consider the existence of a competing legislative power, such as appears in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction or manufacture, but not including any purchaser who subsequently sold it. It was argued that this was in substance a duty of excise which under the Constitution only the Commonwealth had the right to impose, and that contention prevailed. It might at first sight appear that this decision supported the Government of India's case for, as already pointed out, the taxing power of the Australian States is unlimited, save in so far as the Constitution reserves the right of imposing certain specified taxes to the Commonwealth and indirectly limits the power of the States by giving the Commonwealth power to regulate inter State trade and commerce. But a closer examination of the judgments delivered shows that the majority of the Judges took the view that the duty on the first sale of the commodity was in fact a tax on the producer and for that reason a duty of excise without doubt. The case is no authority at all for the proposition that a tax on retail sales must necessarily be a duty of excise. 31. It cannot be too strongly emphasized that the question now before the Court is one of possible limitations On a legislative power, and not possible limitations on the meaning of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Provincial Legislatures; and they summed up the matter thus: The question they [the Committee] have to answer is whether the one body or the other has power to make a given law. If they find that on ' the due construction of the Act the legislative power falls within Section 92, it would be quite wrong of them to deny its existence because by some possibility it may be abused, or may limit the range which would otherwise be open to the Dominion Parliament. 32. This is not to ignore the non obstante clause, still less to bring into existence, as it were, a non obstante clause in favour of the Provinces; for if the two legislative powers are read together in the manner suggested above, there will be a separation into two mutually exclusive spheres, and there will be no overlapping between them. Thus, the Central Legislature will have the power to impose duties on excisable articles before they become part of the general stock of the Province, that is to say at the stage of manufacture or production, and the Provincial Legislature an exclusive power to impose a tax on sales thereafter. 33. In discussing the possible overlapping of the federal and provincial jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislative powers. If however the facts in (1901) 184 U S 6089 had been such as to make the decision turn upon the distinction between the two kinds of tax mentioned above, it seems probable that the special duty there imposed would still have been held to be a duty of excise, because it was an attempt, as it were, to relate the duty back to the stage of production, even though the person made liable for payment was not (and indeed could seldom have been) the original producer himself. In the present case it could not be suggested that the tax on retail sales has any connexion with production; it is also imposed indifferently on all motor spirit and lubricants, whether produced or manufactured in India or not. I do not say that this is conclusive, but it is to be taken into consideration. And I think that the distinction drawn by the learned Judge corresponds in substance with the distinction which it seems to me ought to be drawn in the case of the federal and provincial spheres in India, that is, between the taxation of goods at the stage of manufacture or production and their taxation by the provincial taxing authority (as in Australia by the State) after they have become part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise duties in force in India at the date of the passing of the Constitution Act, imposed respectively upon motor spirit, kerosene, silver, sugar, matches, mechanical lighters, and iron and steel. In all the Acts Motor Spirit (Duties) Act (No. II of 1917), extended to kerosene by Indian Finance Act (No. XII of 1922); Silver Excise Duty Act ' (No. XVIII of 1930); Sugar (Excise Duty) Act (No. XIV of 1934); Matches (Excise Duty) Act (No. XVI of 1934); Mechanical Lighters (Excise Duty) Act (No. XXIII of 1934), Iron Steel Duties Act (No. XXXI of 1934)by which these duties were imposed it is provided (and substantially by the same words) that the duty is to be paid by the manufacturer or producer,and on the issue of the excisable article from the place of manufacture or production.The Acts which imposed the cotton excise, now repealed, were in the same form Cotton Duties Act (No. XVII of 1894); Cotton Duties Act (No. II of 1896). 37. The only provincial excise duty in force was that on alcoholic liquor and intoxicating drugs. The Devolution Rules, 1920, which were made under Section 45-A of the then Government of India Act, for the purpose of distinguishing the functions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he excisable articles from the place of manufacture or production. This also may not be conclusive in itself, but it seems a not unreasonable inference that Parliament intended the expression duties of excise in the Constitution Act to be understood in the sense in which up to that time it had always in fact been used in India, where indeed excise duties of any other kind were unknown. Nor indeed are excise duties properly so called often to be found at the present day which are not collected at the stage of production or manufacture, whatever may have been the case in Black stone's time, and whatever may have been the reasons for Johnson's definition of Excise in the first edition of his Dictionary (1755) as a hateful tax levied on commodities and adjudged not by the common Judges of property but wretches hired by those to whom the excise is paid. 40. Patton v. Brady (1901) 184 U S 608. was obviously a very special case. The United Kingdom Finance Act 1922, Section 9, to which we were referred, seems to me to impose a duty more properly classified as a privilege tax on clubs than as an excise duty in the ordinary sense, though I agree that it is called by the latter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve, the interpretation of the Act is clear; though it might be an element to take into consideration if there were real ambiguity or doubt. But I do not think there is either ambiguity or doubt, if the two entries are read together and interpreted in the light of one another. The difficulty with which the Government of India may be faced is of a kind which must inevitably arise from time to time in the working of a Federal Constitution, where a number of taxing authorities compete for the privilege of taxing the same taxpayer. In the present case, the result may well, be that the Central Government will find itself unable to make such a distribution of the proceeds of excise duties under Section 140 of the Act as it might otherwise desire to do; but these are not matters for this Court, and they must be left for adjustment by the interest concerned in a spirit of reasonableness and commonsense, qualities which I do not doubt are to be found in India as in other Federations. 42. The view which I have taken makes it unnecessary for me to consider the difficult question of the interpretation of Section 297(1)(b), and I express no opinion upon it. 43. I am of opinion that for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 47. Economists' definition of 'excise' cannot be conclusive. But there are even some economists who think that an excise duty does not include sales to consumers. Find lay Shirras in his Science of Public Finance, Vol. II (Edn. 3), p. 652, has defined 'excise' as ordinarily meaning: A tax or duty on home produced goods, either in the process of their manufacture or before their sale to consumers, especially on spirits, beverages, gasoline, sugar, and tobacco. It includes also certain licences, commodities, and licences to conduct certain trades. It is usual to exclude from excise or excises sales or turnover taxes. 48. At p. 653 he has again remarked, it is, in short, the general rule to exclude sales or turnover taxes from excises. In the Encyclopaedia of the Social Sciences by Seligman and Johnson, Vol. 5, page 669, 'excise' is defined as: A tax on commodities of domestic manufacture levied either at some stage of production or before the sale to home consumers. At page 670 it is remarked: The excise tax may be levied on the raw material or the finished article or it may attach to an intermediate stage of the production process. 49. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in this country. They are directly opposite in their nature to the Customs duties, for they are an inland imposition,paid sometimes on the consumption of the commodities, frequently upon the retail sale. 55. This was apparently based on the fact that about the middle of the 17th century there were excise duties laid on the makers and vendors of ale, etc. It does not however appear that their Lordships of the Privy Council have in any Dominion case adopted Blackstone's definition of 'excise'. 56. In the Encyclopaedia Britannica, Vol.8, p.955 (Edn.14) it is pointed out that in modern times however the term generally connotes a tax on articles of home manufacture in contradistinction to customs duties which are levied on certain articles imported. 57. Thus the term has assumed a more restricted meaning since Stephen's adoption of Blackstone's definition. 58. In Halsbury's Laws of England (Hail sham Edition), Vol.28, p.330, Note (a), the dictionary meaning has been adopted and excise duties taken to be duties payable on goods produced at home, whereas customs duties are duties on goods imported into this country from abroad... Excise duties now ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as certain licenses. 61. There are several reasons why the wider English meaning may be inapplicable to the Indian Constitution,(1) There are no historical reasons for applying excise duty to all inland impositions in contrast with customs only. (2) Unlike England, where there can be no conflict of legislative powers, the Indian Constitution is a federal one and the Federation need not necessarily as against the Provinces have power to impose duties up to the stage of consumption. (3) In the Indian Act, the Federal and the Provincial Legislative Lists are separate and have to be read together and reconciled as far as possible. (4) The power to impose taxes on the sale of goods has been assigned exclusively to the Provinces, and the excise duties assigned to the Federation may not presumably include it. (5) In the Indian Act, the word used is not merely excise but duties of excise on goods manufactured or produced in India , which may exclude licenses, contrary to the English practice of including within excise everything that is collected by Excise Commissioners. (6) The words also show that the duty is connected with manufacture or production. (7) In the Provincial List ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision) that the tax was not a direct tax but an excise duty and also that an additional tax was not illegal. This conclusion was of course, obvious. The general tendency of the duty was to be passed on to the consumer, and it could not possibly be regarded as direct taxation. Further, the duty was on tobacco manufactured (or imported) and removed from factory (or customs house). It was intended to be one tax in relation to both manufacture and removal, and not two taxes in relation to manufacture and removal separately. It was in reality a tax on the manufacture and removal of tobacco, and was assessed at a subsequent stage, simply because it had not been paid previously at the time of the removal from the factory. The observations of the learned Judge however went a little further. He quoted with approval the definition of excise as laid down by Black stone and Stephen, and also as given in two standard dictionaries that it applied to internal or inland impositions, levied sometimes upon the consumption of a commodity, sometimes upon the retail sale of it and sometimes upon the manufacture of it, applied to internal or inland impositions, levied sometimes upon the consumptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation was solely of academic or scientific importance. Until the Act of 1867 was passed, the division of taxation into direct and indirect belonged solely to the province of political economy so far as taxation in Great Britain, Ireland or any of the Colonies was concerned, and there was no recognized definition of either class universally accepted. But it became from that moment essential for Courts for the purposes of that statute to ascertain and define the meaning of the phrase 'direct taxation as used in such legislation: Per Lord Moulton in Cotton v. Rex (1914) A.C. 176 at p. 190. 68. According to the rule first laid down in Attorney-General for Quebec v. Walter Reed (1884) 10 A.C. 141 one had to look, following John Stuart Mill to the ultimate incidence of the taxation as compared with the moment of time at which it is to be paid, a direct tax being one demanded from the very persons who it is intended or desired should pay it: p.143. 69. The best general rule is to look to the time of payment; and if at the time the ultimate incidence is uncertain, then it cannot, in this view, be called direct taxation: p. 144 per Earl of Selbourne L. C. 70. Later in Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of gain, the owner being deemed to be the occupier where property was let to the Crown or any person exempt from taxation, Viscount Cave laid down, taxes on property or income were everywhere treated as direct taxes and that Mill's formula could not alter their classification. 76. In Attorney-General for British Columbia v.Canadian Pacific Ry. Co. (1927) A.C. 934 the Provincial Fuel Oil Tax Act, 1923, enacted that every person who purchases within the Province fuel oil sold for the first time after its manufacture in or importation into the Province should pay for Provincial purposes a tax equal to one half cent per gallon on the oil so purchased. Purchaser (who was to pay the tax) was defined as a person who within the Province purchases fuel oil when sold for the first time after its manufacture in or importation into the Province and vendor (who was to levy, collect and pay it to Government) was to mean any person who within the Province sells fuel oil for the first time after its manufacture or an importation into the Province. There was also a liability on every person who had in his possession for use or consumption fuel oil on which tax had not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no justification for the suggestion that the tax is truly imposed in respect, of the transaction by which the tax payer acquired the property in the fuel-oil, nor in respect of any contract or arrangement under which the oil is consumed, though it is, of course, possible that individual taxpayers may recoup themselves by such a contract or arrangement. It was further held that except that the Act taxes persons in respect of a commercial commodity, which is not produced in its raw state within the Province, there is nothing in the Act to suggest that its purpose was the regulation of trade or commerce. His Lordship laid down at page 57: The ultimate incidence of the tax in the sense of the political economist is to be disregarded when the tax is imposed in respect of a transaction, the taxing authority being indifferent as to which of the parties to the transaction ultimately bears the burden...there the tax is imposed in respect of some dealing with commodities, such as their import or sale or production for sale, the tax is not a peculiar contribution upon the one of the parties trading in the particular commodity, who is selected as the taxpayer. 80. It must therefore be n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no way depends on the quantity of beer manufactured, and there is no expectation or intention that the person paying it should indemnify himself by passing it on. Rejecting the larger view, it was held that the basic principle of excise duties was that they were taxes on the production and manufacture of articles which could not be taxed through the Customs House (page 508), the fundamental conception of the term (excise) is that of a tax on articles produced or manufactured in a country; and that the conclusion is almost inevitable that whenever it is used, it is intended to mean a duty analogous to a customs duty imposed upon goods either in relation to quantity or value when produced or manufactured and not in the sense of a direct tax or personal tax (page 509). It was further remarked that the term duties of excise in the Constitution was limited to taxes imposed upon goods in process of manufacture. 85. Notwithstanding the modern tendency in England to use the word excise as including all kinds of inland revenue taxation which come under the control of the Commissioners, the license fee was not a duty of excise, even though it was a kind of an inland revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quantity, irrespective of quality or value. (2) The tax on imported goods before they had become part of the general mass of property of the State, first sale taking place mostly while the spirit was still contained in the original tins and cases, would be in the nature of an impost levied on imports. (3) The tax on the first sales of the goods after production, refinement, manufacture or compounding was bound to be added on to the price and passed on to the vendee and ultimately to the consumer, and therefore was not a direct tax, but an excise duty. (4) Constitutional prohibition does not cease the moment the goods entered the State, and the tax on first sales though imposed after entry was as effectual in the way of hampering commerce between State and State as a tax imposed on entry. It is clear that the decision went in favour of the Commonwealth, because the tax was on first sales. The majority of the learned Judges held it to be an excise duty not merely because it was a tax on sales but because it was a tax on first sales. Knox C J, with whom Powers J., agreed, said: In effect, the tax is payable by every producer in the State of motor spirit on all spirit produced by hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 623-4). 93. There is thus no doubt whatsoever that in Australia a tax imposed on first sales being connected with either import or manufacture or production of goods is outside the competence of a State. But not a single Australian case has been cited where a tax on retail sale has been held to be an excise duty. 94. Fortunately in India it is not necessary to revive the fine niceties of distinction between direct and indirect taxation, as no such division exists in the Act. Indeed, there are several taxes like taxes on luxuries or trade which can be indirect; and some taxes like succession duties (and even excise) have in parts been assigned to both. The ultimate incidence of the tax is certainly not a crucial test under the Indian Constitution. There is no justification for adopting any such principle as that certain classes of duties which are to be regarded as direct have been assigned to the Provinces, and other classes regarded as indirect have been reserved for the Federation. 95. The rules of interpretation are perfectly clear. It was observed by the Lord Chancellor in Brophy v. Attorney-General for Manitoba (1895) A.C. 202 at page 215, that the function of a tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ext succeeding sub-sections . Whereas a Provincial Legisture also has power to make laws with regard to matters in List III subject to the first sub-section and has power to make laws with respect to matters in List II subject to the two preceding sections . It follows that in the case of an inevitable conflict between the powers of the Federal and the Provincial Legislatures the former would prevail in respect of Lists I and III, Section 100 being the last refuge. 100. As two separate Lists exist, the Imperial Parliament should be presumed to have intended to keep the Federal and Provincial Lists mutually exclusive as far as possible. It should certainly be our earnest endeavour to avoid a conflict between two apparently competing entries. Too liberal an interpretation given to both of them would; simply create a conflict. As it is a Provincial Act which is challenged, the proper way of approach is to see whether the taxation imposed falls within the Provincial Entry, and then to see whether it is in any way cut down or restricted. 101. In The Queen v. Burah (1878) 3 A.C. 889 Lord Selbourne remarked : The established Courts of Justice, when a question arises whether th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of such goods the wider English sense is necessarily excluded. And the word 'goods' has been used in the widest possible sense, for under Section 311 goods includes all materials, commodities and articles. 105. It can hardly be disputed that if there were nothing else in the Act, tax on retail sale of motor spirits and lubricants would fall within the scope of the express words tax on the sale of goods used in List II, Entry No. 48. The main question in the present case therefore is whether the tax on retail sales also comes within the category duties of excise on goods manufactured or produced in India so far at any rate as concerns goods manufactured or produced in this country. 106. In the same List IT there are two separate categories. Entry No. 40 refers to duties of excise on certain specified goods and Entry No. 48 to taxes on the sale of goods . The Imperial Parliament presumably intended these categories to be separate and distinct, and not that sale of the specified goods be included in the duties of excise on them. Similarly it should be presumed that when duties of excise were assigned to the Federation and taxes on the sale of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the entries now under consideration, and then to speculate why the phraseologies were changed. If the removal of the words 'on the production and manufacture' in the old Entry No. 36 of List I would support one view, then the deletion of the word 'turn over' from the old Entry No. 10 of List II might strongly support the other. It would not, strictly speaking, have been correct to use the words duty of excise on manufacture or production of goods,' unless the duty were intended to be levied on the processes of manufacture or production, irrespective of the quantity manufactured or produced. Those words would also have necessarily excluded first sales. If the intention is to impose the duty on the goods themselves provided they are manufactured or produced in India, then the only correct way to express the idea is to say 'duty of excise on goods manufactured or produced in India'. Opinions expressed by Committees, prior even to the Joint Committee, are all the more irrelevant. 108. There is really nothing absolutely irreconcilable between excise duty mentioned in Entry No. 45 of List I and tax on retail sales included in Entry No. 48 of List II. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction of sale. 112. The object of the taxation is not to impose any special burden on goods manufactured or produced in India. The principal object is to recover revenue on all sales irrespective of the origin of the goods. The amount assessed depends exclusively on the sale price and on nothing else. A tax on the sale of goods, whether originally imported or locally produced or manufactured in a Province, which have become mixed up with the general mass of property in that Province about to pass into the hands of the consumer has hardly any resemblance to an import duty or even an excise duty on manufacture or production. In its nature, it is a purely domestic transaction with which the other Provinces or India as a whole cannot be concerned. When last sales are taxed, the imposition is simply on goods as an existing substance in the Province, no longer subject to all India considerations and sold in the Province to local consumers for consumption or use. Such sales being a purely provincial operation ought to be within the power of the Province to tax them. 113. Some petrol is admittedly produced in Attock in the Punjab; but the vast bulk of petrol consumed in this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the retail tax in question is indirect. But that is not a conclusive test under the Indian Act. The fact that it is an indirect taxation does not exhaust the whole question, as it would not necessarily follow that the tax is an excise duty within the meaning of Entry No. 45. 115. A clear distinction exists between the first sale and the last sale, as the latter is not intimately connected with the manufacturer or the producer and cannot come within the scope of excise duty. In the Commonwealth Oil Refineries case,11 the observation of Isaacs J. at p. 426 already quoted supports the view that if the tax is unconnected with production or manufacture, then it is not an excise duty. His observation was not confined to licenses only but expressly referred to a tax on the sale'. In that case most of the learned Judges took the view that ordinarily a tax on first sale of home products is connected with production and manufacture and is therefore a tax on production and manufacture and as such an excise duty. They had not to consider and therefore did not deal with retail sales at all; nor could their reasoning have applied to the last retail sale to the consumer. 116. Taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is true that in some cases the first sale in the Province may itself be a retail sale to the consumer, for instance a sale by a manufacturing retailer. This would not ordinarily be so where the goods are manufactured or produced outside the Province, except in the very special case where a consumer orders goods direct from an outside manufacturer or producer, and under the terms of the contract between them, the transaction of sale is completed within the Province. But an Act cannot be invalidated merely on account of its peculiar operation in special individual cases, and must be judged by its ordinary effect. 120. The Legislature cannot possibly have meant to give a power of taxation valid or invalid according to its actual results in particular cases. It must have contemplated some tangible dividing line referable to and ascertainable by the general tendencies of the tax and the common understanding of men as to those tendencies: per Lord Hobhouse in Bank of Toranto v. Lambe (1887) 12 A.C. 575 at page 581. 121. When the Centre may never impose excise duty except on a few selected classes of articles there seems to be no good reason for depriving the Provinces of their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on every possible kind of home commodities is wholly outside the legislative competence of the Provinces, then practically the only power which would remain under Entry No.48 would be to impose a tax on the sales of imported goods, which might in extreme cases conflict with Section 297 (1)(a). 122. The learned Advocate-General of India is forced to admit that if his contention prevails, then the only taxes that would not amount to excise duty and would be left over for the Provinces to impose under Entry No.48 would be certain licence fees and certain turnover taxes. 123. As regards licence fees, if we leave aside the wide meaning that has been given to the word 'excise' in England owing to historical reasons and convenience of collection, such fees can hardly be regarded as in themselves being a tax on the sale of goods , and can come in only impliedly within that power. 124. It can also hardly be suggested that the words taxes on the sale of goods are the exact equivalent of 'sales tax or turnover tax . In the first place, it is dangerous to substitute for the words actually used in an Act new colloquial expressions which have come to connote a definite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of services by public utilities and to admissions, in addition to sales of tangible property. 128. In the Encyclopaedia of the Social Sciences by Seligman and Johnson, Vol.13,page 516, it is stated: The sales tax is a levy imposed upon the sales of commodities or services. The tax may be levied upon sales: in general, as in Germany; in general, except at retail, as in Belgium; in general, with other special taxes, as in France; of classified enterprises, as in Washington; of producers, as in Canada; or of retailers, as in Kentucky. At page 517 it is also stated: Sales taxes may be imposed upon total receipts, with deductions for returns, allowances and possibly other items; upon the individual transaction: upon the privilege of conducting business, which is supposedly measured by sales; upon sales in general; or upon specified types of sales... Customarily the vendor rather than the vendee is liable for taxation, although both may be held responsible for proper payment of the tax. 129. A. Comstock in his Taxation in the Modern State page 113 has observed : The scope of sales and turnover taxes have varied greatly. Some extended to all transactions, both wholesale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven such a wide scope as to include a particular provision. If there is no help, then only the power of the Federation overrides that of the Provinces. The tax in question comes within the special and specific provision taxes on the sale of goods and can only by defining and enlarging the meaning of the words duties of excise on goods manufactured or produced in India, be brought within the scope of the latter. The special provision, even from this point of view, should be considered to be exclusive of the other. 132. Another principle which emerges from the Dominion cases is that in a Federal Constitution, Provincial Legislatures are independent within the spheres allowed to them and within the prescribed limits. They are co-ordinate Governments and possess full legislative power and capacity to pass laws, so far as matters assigned to the Provinces exclusively are concerned. The Provinces are entrusted with the exclusive authority in certain specified matters, not of an all India concern, but of Provincial interest. Subject to certain restrictions each Province retains its independence and autonomy and is not under the control of the Federal Legislature : Within these l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary ingredient in this sub-section; it would be quite sufficient if the provisions result in discrimination. The power to tax is not taken away; only preference is prohibited. The second part also is probably inapplicable inasmuch as there is no discrimination at all between goods manufactured or produced in one locality and those in another locality. The word locality may mean a local area, i.e. some part of India, and may not refer to countries outside India, or it may possibly have a wider application. To hold that the taxation is wholly invalid we would have to hold that it is both an excise duty and an import duty, according to the respective origin of the goods sold. The nature and character of the taxation would then depend on particular goods sold, and not merely on the sales of goods of a particular class. These matters can be considered when it becomes necessary to decide the point. 135. Reliance has been placed on the observation in E. R. Croft v. Sylvester Dunphy (1933) A.C. 156 that : When a power is conferred to legislate on a particular topic it is important, in determining the scope of the power to have regard to what is ordinarily treated as embraced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of the factory. Provisions for rebate on exported goods would not establish that an excise duty must always be one imposed on consumption only. 140. Our attention has not been drawn to any Provincial enactment, which might have imposed any excise duty on the retail sale of motor spirits and lubricants, or for the matter of that on the retail sale of any other goods. In particular, the Central Provinces Excise Act 2 of 1915 did not do that. Under Section 17 a license is required for sales. Section 18 only provides that the Local Government may lease out the right among others of selling by wholesale or retail on the grant of a lease or license, but neither the premium (or monopoly price) nor the license fee can be regarded as a tax on the sale of goods itself. Under Section 25 duty is leviable on all excisable articles imported, exported, transported, manufactured, cultivated or collected. But that too is not an excise duty on the sale of goods. Under Section 26 duty is leviable on spirit or beer manufactured in any distillery, and on payment made upon the issue of excisable article for sale from a warehouse.' Here too retail sale is left out. The Provincial Excise Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. In India the absence can only show that it was not in point of fact known that excise duty would include taxes on retail sales as well. The fact is that neither any Central nor Provincial Excise Act imposed a duty on retail sales, because apparently this postwar fiscal measure had not been introduced in India till 1935. The previous Legislative practice can certainly not help the Centre. 143. There is, of course, a remote danger that a Province may impose an almost prohibitive duty on the sale of articles, which are not produced within the Province nor are manufactured or produced in other Provinces of India, with the result that the sale of such articles would be almost prevented, and the duty in such circumstances may amount to a restriction on imports of these articles. For example, if motor cars and radio sets are not manufactured in India, an extremely heavy duty on their sales may seriously handicap business dealings. In such cases, an imposition even after entry may be as effectual in the way of hampering commerce and trade as a direct import duty, unless the goods have become incorporated and mixed up with the mass of the property in the Province so as to be treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, to seek to impose indirect taxation, nothing that their Lordships have decided or said in the present case would fetter any tribunal that might have to deal with such a case if it should ever arise. 148. We must therefore consider the Act as it stands, unperturbed by the possibility of any drastic consequences following if authority is held to be vested in any particular Legislature. Much less should our conclusion be affected by any consideration of the financial loss suffered by the Centre or the Provinces if one or the other view were to be accepted. 149. Nor am I able to apply the principle that where a particular power comes within both of two mutually exclusive jurisdictions, as in Canada, it should be regarded as an exception to the general rule. An exception falls within and not outside a general provision. The essence of the principle is that a particular exception restricts a general provision, although covered by it. In the Indian Constitution there is a definite provision in the case of an overlapping, and where such an overlapping is inevitable, the general power of the Centre would override even a particular power of a Province. 150. The Privy Council ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 155. Without in any way attempting to give an exhaustive definition of 'duties of excise,' but giving to the words taxes on the sale of goods as used in the Provincial Legislative List, entry No.48, their ordinary and natural meaning, and comparing them with the words duties of excise on goods manufactured or produced in India as used in the Federal List, entry No.45, my conclusion is that the tax on the retail sales to the consumers is in pith and substance not an excise duty, and that therefore the Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938, and all the provisions thereof are not ultra vires of the Legislature of the Central Provinces and Berar. 156. As this Eeference was made with mutual consent, the parties should bear their own costs. The Advocates-General, who on their own applications under Order 36, Rule 2, F.C.R. were permitted to appear and were heard, should also bear their own costs. Jayakar J. 157. The material facts connected with this Eeference are stated in the opinion of the Chief Justice and I need not repeat them. 158. Cases of conflict between the jurisdiction of the Parliament of a Dominion and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith matters falling within these classes of subjects (mentioned in the Central and Provincial Lists) exists in each Legislature and to define, in the particular case before them, the limits of their respective powers. It could not have been the intention that a conflict should exist; and, in order to prevent such a result, the two Sections must be read together, and the language of one interpreted, and, where necessary, modified by that of the other. In this way, it may, in most cases, be found possible to arrive at a reasonable and practical construction of the language of the Sections so as to reconcile the respective powers they contain and give effect to all of them. In performing this difficult duty, it will be a wise course for those on whom it is thrown to decide each case which arises as best they can, without entering more largely upon an interpretation of the statute than is necessary for the decision of the particular question in hand: Citizen Insurance Co. v. Parsons (1882) 7 A.C. 96 at pages 108 and 109. (5) In the interpretation of a completely self governing constitution founded upon a written organic instrument (such as the Government of India Act of 1935) if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso with reference to the same commodities manufactured out of India, under the provisions against discrimination in Section 297 (1)(b), Government of India Act, 1935? The last question I propose to leave out of consideration for the present. 163. The material provision of the Central Provinces Act is Section 3 which enacts that: There shall bo levied and collected from every retail dealer a tax on the retail sales of motor spirit and lubricants at the rate of five per cent, on the value of such sales. 164. Lubricant is defined in Section 2(b) as meaning any form of oil, grease or other lubricating substance ordinarily used for lubricating the internal machinery of motor vehicles. 'Motor spirit' is defined in Section 2(c) as meaning any inflammable hydrocarbon...which is ordinarily used for providing reasonably efficient motive power for any form of motor vehicle. Retail dealer is defined in Section 2(e) as meaning any person who, on commission or otherwise, sells, or keeps for sale, motor spirit or lubricant for the purpose of consumption by the person by whom or on whose behalf it is or may be purchased. Retail sale is defined in Section 2(f) as meaning a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the one or other of them unmeaning, superffuous or nugatory. As both sides have addressed us a detailed argument on this question, I shall discuss it in some detail. 166. The contention of the Government of India is that the expression duties of excise in Item 45 (List I) means an indirect tax on the consumption of indigenous goods, levied and collected at any stage between their production and manufacture on the one hand and the time when they reach the consumer on the other. Fortunately, we are not here troubled with the distinction, observed in some cases, between a duty and a tax , for according to Section 311, Government of India Act, 1935, taxation includes the imposition of any tax, whether general or local or special, and tax shall be construed accordingly. 167. The Advocate-General of the Central Provinces, on the other hand, defines an excise duty in Item 45 (List I) as a tax on the manufacture and production of indigenous goods, which can be levied up to, but not inclusive of, the stage of their first sale, and that a tax levied from and after that stage cannot be an excise duty . The Advocate-General of Madras, when he at a later stage came in to reinf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing this item as the background of the Government of India Act, 1935, as we are entitled to do, it could be urged with fairness that, the word excise meant and included, in the said Item 16, the control of the excisable commodity (alcoholic liquor, etc.) from the stage of production and manufacture up to sale. The first part of this clause may relate only to the administrative power of control of the Provincial Government over the several stages from manufacture up to sale of the said com. modity. Then follow the words the levying of excise duties...on or in relation to such articles, that is alcoholic liquor and intoxicating drugs. This part of the clause clearly relates to the power of the Provincial Legislature to levy excise duties on the same commodity. It would not be unfair to infer from this juxtaposition that the power of control enjoyed by the Provincial administration under the first part of the item is co-extensive with the power enjoyed by the Legislature of the same Province of levying excise duties mentioned in the second half of the item. For, it could hardly have been intended that the power of control of the Provincial Government was to be of a different r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with the same commodity, one through the medium of administrative control and the other by taxation. 174. I see no escape from the conclusion that the term excise duties in the latter half of Item 16 of the Devolution Rules and also the expression duties of excise in Item 40 (List II) of the present Act bear a wide signification, and include all duties levied on the consumption of the excisable commodity in the Province at any stage from production to sale. If this is so, I see no reason for withholding from that term the same signification in Item 45 (List I), taking that item as if it stood by itself and Item 48 (List II) did not exist. 175. There is no definition of the words ' excise duty in the Act and one has therefore to find out its meaning from such indications as the above, which the Act itself provides, or from the definitions of that term occurring in recognized textbooks, or from circumstances throwing light on what the Legislature had in mind at the time of passing the Act. I have already commented upon the glossary which the Act itself provides, and I proceed now to the definitions given by textbook writers. 176. Stephen, in his Commentaries on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxation and indirect taxation. See these cases referred to in Attorney-General for British Columbia v. Kingcome Navigation Co. Ltd. (1934) A.C. 45 at pp.51 to 53. Their Lordships' view appears to be that the definitions given by eminent textbook writers, like Mill, have a value even in the elucidation of legal questions, because such definitions embody the common understanding of those who knew the subject and were therefore to that extent, likely to have been present to the minds of those who passed the Federation Act. 180. The answer of the Provinces to the definition of excise duties, as given above, is as follows: in Item 45 (List I) the words show that the duty mentioned in it is on manufacture or production. I find some difficulty in accepting this contention, for looking only to the words of Item 45, the duty is on the goods and the words manufactured or produced in India are descriptive of the goods only. In the corresponding Item 40 in List II, the same grouping appears, namely duties on goods manufactured or produced in the Province. Belying therefore on the words only, it is clear that the duty is not on the manufacture or production, but on the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. An instance of an excise duty pursuing a commodity through several stages, for instance, of increase, decrease or remission, is to be found in Section 10, Indian Tariff Act, 1934. 183. If it is pertinent to refer to the draft item which was historically the predecessor of Item 45 (List I) before the Joint Committee on Indian Constitutional Beforms, 1933-34, (and I think it is permissible to do so, as it is a part of the history of the legislation), I may state that the item, in the form in which it was placed before the Committee, was worded as follows Duties of excise on the manufacture and production of tobacco and other articles , etc. The wording of this draft was subsequently changed to its present form, and it is not unfair to infer that the alteration was made in order to include in Item 45 all duties 07i the goods (provided that they were duties of excise and the goods were manufactured or produced in India) and not only those which were levied at the stage of their manufacture or production. 184. And this, in my opinion, is as it should be, for if the proper import of an excise duty is that it is a tax on consumption, there is no reason why the State should not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Act then under operation were satisfied; the price was paid, documents executed, goods removed and the entire tax due on them under the Act, then current was paid. In the next month in June 1898, before the goods were consumed or exported, the Congress imposed a fresh tax on tobacco to meet war expenditure, and under Section 3 of the new Act, an increased taxation was placed on all tobacco manufactured, sold and removed before the Act. This tax was said to be in lieu of the previous tax. Brady, the Collector of Internal Revenue, demanded the new tax, in addition to what had been paid only a month before on the entire quantity of the tobacco. The fresh tax was paid by the plaintiff under protest, and later an action was brought, asking for its refund, on the ground that the charging Section 3 under which the tax was levied was invalid and that the tax was not an excise. Brewer J. 186. Went into the nature of the tax and defined an excise tax in terms which I find no difficulty in accepting. After going through several authorities, he defines excise as a tax on an article indigenously manufactured for consumption and imposed at a period intermediate the commencemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t place, whether this will be a good rule of interpretation, but apart from it, I think that whatever utility such legislative practices may have in the case of other Constitutions enacted under different circumstances, it is considerably weakened by the fact that the Government of India Act, 1935, is not so intimately connected with its predecessors, by the nature of the Constitution which it establishes, as to receive much guidance from legislative practices operative during the time of its predecessors. As is well known, the Government of India Acts previously to 1935 were all enacted as parts or instalments of an evolutionary or progressive scheme of unitary government, under which the Government of India were supreme except in such administrative and legislative matters as were given to the Provinces by devolution. The residuary powers mostly remained with the Government of India, which had the ultimate power of control and superintendence over Provincial Governments. This scheme of things was radically altered by the Act of 1935, which, in effect, replaced the previous unitary government by a form of Federal Government, under which it could not be said, as previously, that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch factory, according to the terms of the Section. Under the Iron and Steel Duties Act, Section 4, the duty is levied, at a certain rate mentioned in the Section, on all steel ingots produced in British India after the commencement of that Act and shall be payable by the manufacturer thereof. 192. After carefully considering this argument, I am inclined to hold that the mode in which the several duties have been charged under the various Sections of these Acts cannot be regarded as furnishing a glossary of the word excise as used in the new Act. To me, these several modes merely indicate that, having regard to the exigencies of the State in the days of the passing of those Acts and having regard also to the nature of the commodity, the mode of its manufacture, consumption, and transport, and also the possibility of the evasion of the tax, the Legislature thought, in these several instances, that the most effective way of levying and collecting the duty, so as to protect the fiscal interests of the State, was to charge it at the several initial stages mentioned in the said Acts. I am not inclined to attach a greater significance to the modes of'charging under these Acts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be found in more recent works. 196. In Constitutional Law of the United States by Hugh Evander Willis (1936 Edition, page 372), excise is defined as an inland tax laid upon the manufacture, sale, or consummodities within a country. 197. In the Encyclopaedia of the Social Sciences edited by Edwin E.A.Seligman, Vol.V, p.669, the following observations occur : Excise is a tax on commodities of domestic manufacture levied either at some stage of production or before the sale to home consumers. 198. In commenting on the power of the State to levy an excise tax at any convenient stage according to the requirements of the case, the editors say (page 670) : The excise tax may be levied on the raw material or the finished article or it may attach to an intermediate stage of the production process... a raw material tax is disadvantageous to producers inasmuch as it is collected at the very beginning of the production process, long before the manufacturer has the opportunity to recover it by selling the finished product...The manufacturer may also resort to storing the goods in bonded warehouses, thus postponing the payment of the tax until the commodities are withdra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st I). Item 45, taken by itself, would, as I have shown above, include all duties from production up to and inclusive of sale. Item 48 (List II) would include all taxes on the sale of the same goods. There will thus, be a conflict and unless it is removed by a proper reconciliation between the two,. Item 45 (List I) would practically absorb Item 48 (List II) and render it completely nugatory. Consequently, an interpretation has to be placed upon the two items which must conform with the presumption that Parliament could not have intended that the powers exclusively assigned to the Provincial Legislature under Item 48 (List II) should be absorbed in those given to the Central Legislature in Item 45 (List I). The item therefore has to be reconciled with Item 48 and the reconciliation must be such as will not do violence to the words contained in the item. It could not have been the intention of the Legislature that a conflict should exist between that item and Item 45, and, in order to prevent such a result, the two items must be read together and the language of the one interpreted, and, where necessary, modified by that of the other. I will add that the reconciliation to be mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the residuary powers, if any, of levying and collecting excise duties on those goods (save on their sales as aforesaid) will remain exclusively within the competence of the Central Legislature. 207. I am further fortified in this view by the juxtaposition of Items 48, 49 and 50 (List II). On reading them together, it appears that the intention of the Legislature was that taxes on consumption of excisable goods within a Province, even when such goods fell under Item 45 (List I), should be given exclusively to the Provinces. Item 49 (List II) is particularly significant and throws light on Item 48 (List II). It relates to cesses on the entry of goods into a local area for consumption, use or sale therein. The word goods in that item includes, under Section 311, Government of India Act, 1935, all materials, commodities and articles. The expression is therefore wide enough to include goods which fall under Item 45 of List I. If so, cesses on commodities ordinarily excisable by the Centre under Item 45 (List I) would be within the exclusive competence of the Provincial Legislature, if levied on the entry of the goods into the local area for the purpose of consumption, use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ization of a marriage in the Province operated by way of exception to the exclusive jurisdiction as to its validity conferred upon the Dominion Parliament. 209. It is difficult to accept the contention of the Advocate-General of India, that the expression tax on the sale of goods in Item 48 (List II) means only a turnover tax and nothing more. Assuming, as he contends, that a tax on the sale of goods is only another expression for a ' sales tax which became popular after the War, there is authority for the view that sales taxes include turnover taxes and something more. It is difficult to understand why, if Parliament intended only turnover taxes to be included in Item 48, they did not use that expression, which was certainly clearer than the somewhat inappropriate formula taxes on the sale of goods. The interpretation of Item 48 (List II), at which I have arrived independently, may receive some support from the wording of the draft of Item 48, as it appeared in the White Paper and before the Joint Committee on Indian Constitutional Reform (1933-34). (See Item 10 at page 118 of the Proposals for Indian Constitutional Reform presented to Parliament in March 1933, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or produced in India. I confess however that I feel impressed with the argument of the Advocate-General of Madras that if it is found by this Court that the Central Provinces have no power to tax motor spirit manufactured or produced in India, then they can only tax foreign motor spirit, and that since that is the only power which the Central Provinces will in that event possess, its exercise cannot amount to discrimination. No case of discrimination, he argued, can arise except where there is a power in the Legislature to tax two sets of goods, and it has deliberately exercised the power in favour of one in preference to the other. It was also argued that there must be an intention to discriminate, which cannot exist in a case where the Legislature has no power to tax one of the two sets of goods. These are all interesting questions, the solution of which is not without difficulty. But I do not wish to go into them on this occasion, because in my view of the case the question does not arise. 214. I am therefore of opinion that the Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938, is not ultra vires the Legislature of the Central Provinces an ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
