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TMI Blog1964 (3) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... the first respondent's petition under articles 226 and 227 of the Constitution.The Municipal Committee of Amravati has been established under the C.P. and Berar Municipalities Act, 1922 C.P. and Berar Act II of 1922), hereinafter referred to as the Act. Chapter IX of the Act deals with the imposition, assessment and collection of taxes which might be imposed by the Municipal Committee. Section 66 specifies the taxes which, subject to the provisions of the Chapter, the Committee may from time to time impose. Its first sub-section specifies in its several clauses 15 varieties of taxes and among them is clause (0) which reads : "The terminal tax on goods or animals imported into or exported from the limits the of the municipality provided that terminal tax under this clause and an octroi under clause (e) shall not be in force in any municipality at the same time." The other sub-clauses which are relevant for the consideration of the question arising in the appeal are sub-clauses (2), (3) and (4) of section 66 and they read : "(2) The State Government may, by rules made under this Act, regulatae the imposition of taxes under this section, and impose maximum amounts of rates for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osal and all objections received thereto into consideration at a special meeting, and may modify the proposals as it may think fit, and may pass a final resolution on the proposal. (6) If the proposal requires the previous sanction of the State Government under the provisions of section 66, sub-section (4) or sub-section the committee shall forward it to the State Government and it shall be dealt with in the manner provided in section 67, sub-sections and (6) ...... (9) The publication in the manner prescribed of the abolition or variation of any tax under this section shall be conclusive proof that such abolition or variation has been made in accordance with the provisions of this Act." From even before the constitution of the municipality under the Act and at a time when the municipal committee was governed by the Berar Municipal Law of 1886, which was in force prior to the Act and whose taxation provisions were continued by the Act of 1922, a terminal tax on goods imported by road or rail had been imposed by the municipality by virtue of a notification dated August 10, 1916, on several specified kinds of goods. This notification exempted silver, bullion and coin from the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ones on the ground of legislative incompetency which had not been saved by article 277 of the Constitution, in a petition under article 226. The learned judges of the High Court by a majority accepted the contention raised by the respondent and allowed the petition but granted a certificate of fitness and hence this appeal. The facts of other two appeals are nearly similar but we shall refer to them after dealing with the common question which arises in these appeals. It is common ground that the right to levy a terminal tax is now vested in the Union Parliament under entry 89 of the Union List which reads : " Terminal taxes on goods or passengers carried by railway, sea or air; taxes on railway fares and freights" so that if the levy by the appellant of the terminal tax on the newly added items and the same principle would apply to an increase in the rate of the duty, had to rest on the independent taxing power of the State, the game would have to be struck down for want of legislative competence. Besides, it is necessary to add that whereas under the notifications in force prior to 1st April, 1937--when Part III of the Government of India Act was brought into force articles imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be read as meaning a tax or duty under a specified legislative entry, and if such a tax or duty was being leved before the commencement of the Constitution other duties of the same type or falling wihtin the same category might be imposed after the constitution notwithstanding that such duties or taxes were mentioned in the Union List by reason of the words " shall continue to be levied. Secondly, he said that the word " levy " meant not merely the ascertainment i.e. assessment and collection of the tax, but included its imposition, i.e also the charging, and if that expression were understood in that wide sense it would comprehend a case where other items than those originally specified were brought into the fold of the taxing provision. The learned Attorney-General who appeared for the State and supported Mr. Setalvad, however went a step further and submitted that it was not even necessarythat a terminal tax should be actually imposed and was being collected prior to the Constitution, but that it was sufficient if the State enactment had unicipality a power to levy such a tax. The argument of Attorney-General has to be rejected as lacking any substance, for on no construction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the proper construction of section 143(2) of the Government of India Act, 1935, which is for all practical purposes identical with article 277, came up for consideration before this court in Ram Krishna Ramanath v. Janpad Sabha, Gondia. There it was submitted on behalf of the respondent local authority that, by virtue of section 143(2) of the Government of India Act, the provincial legislature was vested with a plenary power to legislate in respect of every tax which was being lawfully levied by local authorities prior to the commencement of the Government of India Act. This court rejected that contention and observed : " Section 143(2) which is a saving clause and obviously designed to prevent a dislocation of the finances of Local Governments and of local authorities by reason of the coming into force of the provisions of the Government of India Act distributing heads of taxation on lines different from those which prevailed before that date, cannot be construed as one conferring a plenary power to legislate on those topics till such time as the Central Legislature intervened. Such a construction would necessarily involve a power in the Provincial Legislature to enhance the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. Dealing next with the import of the words "may continue to be levied" the same was summarised in these terms : (1) The tax must be one which was lawfully levied by a local authority for the purpose of a local area, (2) the identity of the body that collects the tax, the area for whose benefit the tax is to be utilised and the purposes for which the utilization is to take place continue to be the same, and (3) the rate of the tax is not enhanced nor its incidence in any manner altered, so that it continues to be the same tax. It is obvious that if these tests were applied the submission on behalf of the appellant cannot be accepted. But authority apart, we cannot, even if this decision were put aside, accede to the construction for which Mr. Setalvad contends. It is not disputed that in ultimate analysis the answer to the question raised should turn on the meaning of the word " levied " in the phrase " continue to be levied " which is the operative word conferring a power. Mr. Setalvad submits that " levied " is a word of wide and varying import and includes in its denotation not merely the actual collection of the tax, but the imposition in the sense of the creation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision in Chuttilal v. Bagmal and Balwantrai, where the relationship between the levy and the application of the tax has been referred to as an aid to the construction of the expression " continue to be levied " in article 277. We find ourselves in agreement with the views there expressed. The decision of the High Court is, therefore, correct and the appeal fails. Civil Appeal No. 695 of 1962. In this appeal a notification was issued under sub-sections (5) and (7) of section 67 of the C.P. and Berar Municipalities Act, 1922, on December 9, 1960, imposing a terminal tax on gun-powder imported into or exported out of the municipal area by rail. It is admitted that previous to the Constitution there was no tax imposed on gun-powder. The position in this case is, therefore, identical with that in Civil Appeal No. 598 of 1962 which we have just disposed of and it follows that this appeal also fails and should be dismissed. Civil Appeal No. 700 of 1962. In Civil Appeal No. 700 of 1962 the original notification imposing terminal taxes in respect of goods coming into or going out of the municipal area by rail was one dated March 17, 1926, which was operative from April 1, 1926. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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