TMI Blog1962 (3) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... he one with which we are concerned, includes only agricultural lands ; partly paddy fields and partly areca garden. A tax of ₹ 880 was levied on the petitioner therein by the Gift-tax Officer, Udipi, South Kanara, as per Assessment Proceedings No. G.T. 21/58-59 on his file. There is no dispute that the Act purports to bring within its reach gifts of all properties movable as well as immovables ; agricultural as well as non-agricultural properties. Section 2(xii) of the Act says : 'gift' means the transfer by one person to another of any existing movable or immovable property made voluntarily and without consideration in money or money's worth, and includes the transfer of any property deemed to be a gift under section 4; Property is defined in section 2(xxii) as that including any interest in property, movable or immovable. Section 3 is the charging section and that says : Subject to the other provisions contained in this Act, there shall be charged for every financial year commencing on and from the 1st day of April, 1958, a tax (hereinafter referred to as gift-tax) in respect of the gifts, if any, made by a person during the prev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lative practice may be admissible for cutting down the meaning of a word in order to reconcile two conflicting provisions in two legislative lists or to enlarge their ordinary meaning ; the cardinal rule of interpretation, however, is that words should be read in their ordinary, natural and grammatical meaning subject to this rider that in construing words in a constitutional enactment conferring legislative power the most liberal construction should be put upon the words so that the same may have effect in their widest amplitude: see Navinchandra Mafatlal v. Commissioner of Income-tax [1954] 26 ITR 758 (SC). To put it differently, in interpreting the scope of entries in the lists in Schedule VII, the widest possible amplitude should be given to the words used and each general word must be held to extend to ancillary or subsidiary matters which can fairly be said to be comprehended in it (Chaturbhai M. Patel v. Union of India [1960] 2 SCR 362). If there are two possible interpretations, it is the duty of the court to accept that one which is more reasonable, more consistent with ordinary practice and less likely to produce impracticable results (United Provinces v. Atiqa Begum [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries in the lists conferring powers to them. These entries though meant to be mutually exclusive are sometimes not really so. They occasionally overlap and are to be regarded as enumeratory simplex of broad categories. Where in an organic instrument there is a conflict between the rival lists, it is necessary to examine the impugned legislation in its pith and substance and only if that pith and substance falls substantially within an entry or entries conferring legislative powers, is the legislation valid, a slight transgression upon a rival list, notwithstanding: State of Rajasthan v. G. Chawla AIR 1959 SC 544. There is another rule of construction also well settled and that is the entries in two legislative lists must be construed if possible so as to avoid a conflict: Province of Madras v. Boddu Paidanna Sons AIR 1942 FC 33. It has been held in Sundararamier Co. v. State of Andhra Pradesh [1958] 9 STC 298; AIR 1958 SC 468 that despite the fact that an entry in the list should be widely read, the conferment of general legislative power conferred by any particular entry does not include within its fold the power to tax or levy fees. This conclusion was reached becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries are of no assistance to us. We must necessarily look to the entries relating to taxation and see whether we can reasonably locate that power in any of those entries. It is only if we cannot do so, then we should have recourse to entry 97 of List I. It was contended by Sri G.K. Govind Bhat, the learned counsel for the petitioners, that as a general rule, though not an invariable one, the powers of taxation are closely linked with powers of general legislation. If a field is reserved either to the States or to the centre for the purposes of general legislation, by and large power of taxation in respect of that field was also allocated to that unit to which the general powers of legislation were allocated. It was urged by him that the scheme adopted in the Constitution following the pattern set in the Government of India Act, 1935, was to divide the legislative field into three sectors : (1) that reserved for Parliament; (2) that reserved for the State Legislatures ; and (3) the concurrent field. As far as possible, it is said, the powers of taxation in respect of the field reserved for the centre in the matter of general legislation was assigned to the centre ; similarly the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eft to the discretion of the Governor-General and settled by him ad hoc on each occasion when the need for the legislation arises.' Again at para 232, they said dealing with the Lists as revised under their direction subsequent to the White Paper draft: 'We are convinced that the laborious and careful enumeration of both sets of subjects has secured, that in fact no material and unforeseen accretion of power, either to the Centre or Provinces would result from the elimination of one List or the other ; and we are satisfied that the process has reduced the residue to proportions so negligible that the apprehensions which have been felt on the one side or the other are without foundation.' The conclusion, therefore, that a subject of legislation which is of normal and ordinary occurrence has been omitted to be included in the Lists is not to be lightly reached. To hold that a topic falls within section 104 should be the last resort of a court of construction. These observations are equally applicable when we consider the scope of the entries in the Lists (in Schedule VII of the Constitution). The principles recognised-so far as they are relevant for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d employments; (17) Capitation taxes; (18) Taxes on luxuries, including entertainments, amusements, betting and gambling ; and (19) Stamp duty excepting to the extent it comes under List I. Fees in respect of any of the matters in List II but not including fees taken in any court. From the foregoing, it is seen that the scheme adopted by the Constitution makers is, first assign the field regarding general powers of legislation, then allocate powers of taxation in respect of that field. There appears to be a close connection between these two sets of powers. As far as possible a particular field of legislation was more or less completely allocated either to the Centre or to the States. This principle in the very nature of things cannot apply to the field covered by List III. Entry 18 in List II, which is a general entry, shows that the legislative jurisdiction of a State covers land including transfer and alienation of agricultural land. Transfer of non-agricultural land is provided in List III. That is probably the reason why it became necessary to give an artificial connotation to the word land in entry 18 of List II. Otherwise the word land would have brought within it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the pattern of legislation, unless that pattern is clear and unmistakable. The entries in several Lists have not been scientifically drawn up. There is a great deal of overlapping. The fact that in some cases alienations and transfers of properties were separately dealt with is not sufficient to conclude that as a rule power to legislate on transfers and alienations of properties is not included in the power to legislate on the property itself. It is well known that the sources of taxation allocated to the States are inelastic and the needs of the States are ever growing. Naturally we should be reluctant to place any further limitations on the taxation powers of the States by means of any strained construction. If the States are financially starved, the provincial autonomy, slender as it is, would be further impaired resulting in the collapse of the basic structure of our Federation. That could not have been the intention of the Constitution makers. The saying that he who pays the piper has a right to call for the tune is also true in the matter of relationship between the Centre and the States. Next Sri D.M. Chandrasekhar relied on the presumption of constitutionali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect to State legislation while lands other than agricultural lands lies within the sphere in which the provincial and the federal powers are concurrent. Thus, transfer and alienation of lands are distributed in Lists II and III assigning agricultural lands to List II and non-agricultural lands to List III. It is true 'Land' is a generic term and the words that follow, i.e., up to 'collection of rents', are explanatory and illustrative... Though it is an allied subject, it is not comprised in 'land'. If the word 'land' was intended to include transfer or alienation of agricultural land etc., the latter becomes redundant as that expression would have served the purpose. Further, transfer or alienation would not have been confined to agricultural lands. Again, item 6 of List III would conflict with item 18 if that interpretation were to be accepted. That being so, we find it difficult to import transfer and alienation of agricultural land into 'lands' in entry 49. The latter item concerns itself with an altogether different head of legislation, that is, tax on the ownership of property. The object of this item is the levy of a tax on the ow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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