TMI Blog1961 (1) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent is a cloth mill located in Krishnagarh in District Jaipur in the State of Rajasthan. It had a stock of manufactured cloth on April 1, 1949, and also manufactured cloth during the period, April 1, 1949, and March 31, 1950. In respect of such cloth an excise duty became payable under the Rajasthan Excise Duties Ordinance, 1949 (XXV of 1949), at rates set forth in the schedule to the Ordinance. The sum of ₹ 1,56,291 odd became payable on that account out of which only a sum of ₹ 19,739 odd was paid to the Government of Rajasthan, thus leaving the sum of ₹ 1,36,551 odd outstanding against the respondent. After the Indian Constitution came into effect, the Central Excise and Salt Act, 1944, and the rules framed there under were extended to the State of Rajasthan by Section 11 of the Finance Act of 1950. Hence, the duty became payable in respect of the cloth manufactured on and from April 1, 1950, under the provisions of that Act. The appellant claimed that as a result of the agreement between the Government of India and the State of Rajasthan, to be noticed hereinafter in detail, and of the Constitution, the Union of India became entitled to realise the arre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement with the Rajpramukh of Rajasthan on February 25, 1950, whereby the parties agreed to accept the recommendations of the Indian States Finance Enquiry Committee, 1948-49, contained in part I of its report, read with chapters I, II and III of part II of its report, in so far as they applied to the State of Rajasthan together with the recommendations contained in Chapter VIII of part II of the said report. By virtue of the said agreement the Union of India became entitled to claim and recover all excise duties, whether assessed or unassessed, which the State of Rajasthan was entitled to recover from the respondent as from April 1, 1949, before the Central Excise and Salt Act, 1944, was extended to the State of Rajasthan, as aforesaid. 4. The matter was first heard by a Bench consisting of Ranawat and Sharma, JJ., which, in view of the importance of the points involved in the case, referred the following two points for decision by a larger Bench by its judgment dated November 5, 1951 : 1. Whether by virtue of Articles 278, 279 and 295 of the Constitution of India and the agreement entered into between the President of India and the Rajpramukh of Rajasthan on the 25th of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench was thus answered in favour of the petitioner in the High Court. The second question relating to the publication and authentication of the Excise Rules was also answered in favour of the petitioner, now respondent. The High Court held that the Hindi Gazette relied upon on behalf of the Government did not contain any authentication of the Rules and did not show by whose authority they had been published. This conclusion was based on the ground that the contention raised on behalf of the Government that the publication in the Gazette and the authentication therein did not only apply to the Ordinance but covered the Rules also, was not correct. The answers given by the Full Bench to the questions referred to it by the Division Bench were returned to the Bench concerned and the Bench, in pursuance of the opinion of the Full Bench, ordered by its judgment dated September 29, 1953, that a direction be issued against the opposite party not to recover from the petitioner the amount of ₹ 1,36,551-12 as per their notice of demand of the 16th of February, 1950. The petitioner shall get costs of this petition from the respondents. The Union of India applied for and obtained the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purports to have been authenticated by the Law Secretary, Sanyukta Rajasthan Sarkar. Under that authentication follows the Ordinance, XXV of 1949, dated September 5, 1949. The Ordinance goes to the end of page 169 and from the next page 170 ending with page 172 appear the Rules. They begin with the declaration which may be translated as follows : In exercise of the powers conferred under Sections 5 and 26 of the Rajasthan Excise Duties Ordinance of 1949 the Rajasthan Government orders that till new Rules are framed under the said Ordinance, the Rules framed under the Jaipur Excise Duties Act, 1945 known as the Jaipur Excise Duty Rules, 1945 will be in force throughout the whole of Rajasthan with necessary modifications and for this purpose will be treated as made under the Rajasthan Ordinance. 7. It would thus appear that the authentication by the Law Secretary appearing on the first page of the Gazette as aforesaid was intended to govern not only the Ordinance in question but also the Rules which had been promulgated there under Apparently, s. 28 of the Ordinance which ran - All rules made and notifications issued under this Ordinance shall be made and issued by pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 278, 291, 295 and 306 of the Constitution of India for certain matters to be governed by agreements between the Government of India and the Government of a State specified in Part B of the First Schedule to the Constitution......... Now, therefore, the President of India and the Rajpramukh of Rajasthan have entered into the following agreement, namely :- The recommendations of the Indian States finance Enquiry Committee, 1948-49 (hereafter referred to as the Committee) contained in Part I of its Report read with Chapters I, II and III of Part II of its Report in so far as they apply to the State of Rajasthan (hereafter referred to as the State) together with the recommendations contained in Chapter VIII of Part II of the Report, are accepted by the Parties hereto, subject to the following modifications, namely,........... 9. The modification are not material to this case. The agreement thus incorporates as terms of the agreement the report of the Committee, the relevant portion of which is in these terms :- With effect from the prescribed date, the center will take over all 'federal' sources of Revenue and all 'federal' items of expenditure in St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment of India and the Government of a State in Part B in respect of such taxes or duties, etc. The provision to the contrary contemplated by Art. 277 was made by the Finance Act, XXV of 1950, s. 11, which extended the Central Excise and Salt Act, 1944, along with other Acts to the whole of India except the State of Jammu and Kashmir. But that section has effect only from April 1, 1950, and therefore does not apply to the arrears of duty of excise now in controversy. The agreement envisaged by Art. 278 was entered into as aforesaid on February 25, 1950. That agreement conceded to the center the right to levy and collect the arrears of the duty in question. The reasons given by the High Court for the conclusion that in spite of Art. 278 read with the agreement aforesaid, the Union Government was not entitled to realise the arrears are - (1) that the agreement does not contain any specific provision about levy and collection of cotton excise duty in Rajasthan, (2) that the mere approval in the agreement of the principles set out in the report is not enough in view of Art. 277 which made a distinctly different provision from that contemplated in the report and (3) that the agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X
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