Auguet 8.
230 SUPREME COURT REPORTS (1962) M/S. R. M.D. C. (MYSORE) PRIVATE LTD. x
(J. L. Karur, K. Suspna Rao, M. Hipavatun.au, J.C. Suan and RaGuusar Dayat, JJ.)
Prize Competitions— Slate enactment for control and lar on such competitions- Central enaciment for control and regulation of ¢ such competitions, adcpled by State—-Subsequent amendment of State enactment by Niate Legislature--Conetitutional validity — Mysore Lotteries und Lrize Competitions Control and Tax Act, 1952 (Mysore 27 of 1951), as amended by Act 26 of 1957,
88. 8, 12(1)(b), 14 Provtso— Prize Competitions Act, 1952 (42 of 1955), as. 4,5—Constitution of India, Arts. 252, 254, Seventh Schedule, List 11, entries 34, 62.
The Mysore Lotterics and Prize Competitions Contrck and Tax Act, 1951, was passed by the Mysore Legislature and «& came into force on February 1, 1952. Some of the States comprising the Union of India passed resolutions under Art. 252(1} of the Constitution of India authorising Parliament to legislate for the control and regulation of Prize Competitions, aud in pursuance thereof Parliament passed the Prize Competitions Act, 1955, which came into force on April 1, 1956. On February 23, 1956, the Mysore Legislature adopted the said Act by passing a resolution under Art. 252(1) that “for the purpose of securing uniformity in legislation...the control and regulationg of Prize Competitions and all other matters ancillary thereto should be regulated in the State of Mysore by the Prize Com. petitions Act, 1955”. The appellants who were conducting prize competitions in the State of Mysore since 1948 filed a petition under Art. 32 of the Constitution challenging the constitutional validity of the Act, and obtained a stay of the operation of the Act pending disposal of the petition. The judgment of the Supreme Court dismissing the petition was 4@ given on April 9, 1957, and on August 3!, 1957, an Ordinancé was issued, which later was enacted into an Act, Mysore Act 26 of 1957, by which the Mysore Act of 1951 was amended under which, inter alia, all prize competitions conducted between March 31, 1956, and August 31, 1957, were brought within the purview of the amended Act. As a result of this, the prize competitions which, as a result of the stay of the operation of the Central Act of 1955, were conducted by the appellants for the said period became liable for taxation. The appellants challenged the constitutional validity of the amendys ment on the grounds that (1) the Mysore Legislature by adopting the Central Act was no longer competent to pass any law in regard to prize competitions because the whole matter
3 S.c.R. SUPREME COURT REPORTS = 231 including the power of taxation was surrendered in favour of Parliament; (2) even if the whole power had not been surrendered the impugned Act ‘t.¢., the Mysore Act as amended violated Art. 252(2) inasmuch as it indirectly amended the Central Act by adding a new method of control by imposition of penalties of a monetary nature; (3) the Mysore Legislature could not amend an Act which stood repealed as a result of the enactment of the Central Act; (4) the Mysore Act as amended wasrepugnant to the Central Act and was, thercfore, to the extent of repugnancy, void under Art. 254(1) of the Constitution; and (5) it was colourable legislation inasmuch as the tax was imposed on the prize competitions with the object of controlling them.
Held: (1) that by the adoption of the words “control and regulation of prize competitions and all other matters ancillary thereto”’ in the resolution dated February 23, 1956, the Mysore Legislature did not surrender every matter and power connected with prize competitions including the power to tax:
R.M.D. Chamarbaugwala v. The Union of India, (1957) S.C.R, 930, relied on.
(2) that the subject of “betting and gambling” in entry 34 of List 11 of the Seventh Schedule to the Constitution of India and that of ‘taxes on betting and gambling” in entry 62 of List II have to be read separately as separate powers, and, therefore, when control and regulation of prize competi- tions was surrendered to Parliament by the resolution dated:
February 23, 1956, the power to tax could not be said to have been surrendered;
In re The Central Provinces & Berar Act No. XIV of 1938, (1939) F.C.R. 18 and State of Bombay v. k.M.D. Chamarbaugwala, (1957) S.C.R, 874, relied on.
(3) that the tax imposed under the Mysore Lotteries and Prize Competitions Control and Tax Act, 1951, was not by way of penalty but was in the exercise of the power which the State Legislature possessed of imposing tax under entry 62, and, consequently, the amendment of the Mysore Act of 1951 could not be said to be a new method of controlling prize competitions nor was it a piece of colourable legislation.
K. C. Gajapati Narayan Deo v. The State of Orissa, (1954) S.C.R. 1, relied on.
(4) that the Prize Competitions Act, 1955, dealt with
“betting and gambling” in entry 34, whereas the taxing sec-.
tions of the Mysore Act related to “tax on betting and gambling”’ under entry 62 and, therefore, Art. 252(2) was not contravened by the amendment of the Mysore Act,
M/]s. R. M.D. O. (Mysore) Private Ltd,
Vv. The State of Myson
M/s. R. M. D.C. (Mysore) Private Lid.
232 SUPREMECOURT REPORTS [1902
State of Bombay v. R.M.D. Chamarbaugwala, (1937) S.C.R. 874, relied on.
(5) that there was no amendment of the Mysore Act which stood repealed nor was the retroactive operation of the amending Act affected by Art. 254(1) of the Constitution.
Deep Chand v. The State of Uttar Pradesh and Uthers (1959) Supp. 2S.C.R. 8, relied on.
Civi. APPELLATE JtRispicTion: Civil Appeal No. 517 of 1960.
Appeal from the Judgment and order dated November 20, 1958, of the Mysore High Court in Civil Writ Petition No. 234 of 1957.
Porus A. Mehta, J. R. Gagrat and G. Gopalakrishnan, for the appellants.
N.C. Chatterjee, G'. Channappa, R. Gopalakrishnan.
and 7'. HM. Sen, for the respondent.
1961. August 8. The Judgement of tho Court was deliverod by
Karur, J. This is an appeal against the judgment and order of the High Court of Mysore dismissing tho petition of the appellants mado undor Art. 226 of the Constitution. The appellants were conducting sinco the month of August 1948, what were called “prize competitions” in the State of Mysore with the permission of the Government of the erstwhile State of Mysore. An Act called the Mysore Lotteries and Prize Competitions Control and Tax Act, 1951 (Act 27 of 1951), hereinafter called the “Mysore Act” was passed by the Mysore Legislature and came into force as from June 21, 1951. Tho Rules mado thereunder came into force on February 1, 1952. Previous to that the Bombay Legislature had passed a similar Act called the Bombay Lotteries and Prize Competitions Control and Tax Act, 1948, which was amended in November 1952 by the Bombay Act 30 of 1952.. In December 1952 and January 1953 petitions under Art. 226 were filed in the High Court of Bombay challenging the Bombay Act. On January 12, 1985
‘
3S3.CR. SUPREME COURT REPORTS 233 the Bombay High Court held that the provisions of the Bombay Amendment Act above, referred to - were unconstitutional and that the taxes imposed under the provisions of that Act were hit by Art. 301 of the Constitution. The result of that judgment was that though prize competitions could be controlled by the -States within their respective borders, their ramifications beyond those borders could only. be dealt with by action under Art. 252(1) of the Constitution. It was for that reason that the States of Andhra, Bombay, Madras, U. P., Hyderabad, Madhya Bharat, Pepsu and Saurashtra passed resolutions under Art. 252(1) of the Constitution authorising Parliament to legislate for the control and regulation of prize competitions and in pursuance thereof Parliament passed the Prize Competitions Act (Act 42 of 1955) hereinafter called the “Central Act” which received the assent of the President on October 22, 1955, and came into force on April 1, 1956. On February 24, 1956, the Mysore Legislature passed a resolution adopting the said Act. The resolutions :passed by the various States and the resolution passed by the Mysore Legislature will be quoted in a later part of this judgment.
On April 7, 1956, the appellants filed a petition undor Art. 32 of the Constitution in the Supreme Court challenging the validity of the Central Act but that petition was dismissed and is reported as R.AP.D.C. Chamarbaugwala-v. The Union of India (‘). The appeal against the Bombay judgment declaring the’ Bombay Act to be ‘unconstitutional ‘was brought in this court and was allowed and that case is reported as State of Bombay v. R. M. D. Chamarbaugwala (?). During ‘the pendency of their petition under Art. 32, the appellants applied for and were granted a stay of the operation of the Central Act pending the disposal of the said writ petition. This was on April 16, 1956. The judgment of the Supreme ‘Court in that petition was given on April 9, 1957, On August 31, £957, the
(1) [1957] S.C.R. 830, 939) (2) [1954] S.C.R.'874, 9, °°
M/s. R. M. D, QO. (Mysore) Private Lid.
196]
Alfa. ROM. DLC. (Mf yzore) Private Ltd.
v.
Aaper J.
234 SUPREME COURT REPORTS — * [1962]
Mysore Lotteries & Prize Competitions Control and Tax (Amendment) Ordinance, 1957 (Ord. 6 of 1957) was issued by the Governor of Mysore and thus for the period of about. 16 months the appellants carried on prize competitions as before.
The Ordinance was enacted into an Act on September 28, 1957, which is Mysore Act 26 of 1957. Certain amendments were made by this in the Mysore Act 1s originally passed in 1951. As a result of this amendment the definition of prize cumpetition was omended the definition as given in the Central Act was adopted and ss. $ & 9 of the Mysore Act. were omitted with retrospective effect from April 1, 1956; cl.(b) of sub-s. (1) of 8.12 was amended and certain words referring to licences under 8.8 were retrospectively omitted and retrospective effect was given to the Mysore Act as amended. By adding a proviso to s.15 of the Mysore Act all prize competitions conducted between March 31,1956, aud August 31 1957, were brought within the purview of the amended Act. Thus the prize competitions which as a result of the stay of the operation of the Central.Act were conducted by the appellants became subject to the operation of the Mysore Act as amended. The appellants on September 10, 1957, were called upon to file their returns but at their request for extension of time, they were given another 15 days in which to file their return. They filed their return but under protest. The gross collections were ofa sum of Rs. 26,47,147-5-9 and on that the appellants were «called upen to pay up provisionally” a sum of Rs. 3,30,893-7-0. As the money was not paid within tho time specified proccedings were taken under s. 6 (1) of the Revenue Recovery Act, 1890 (Central Act 1 of 1890), and certain properties moveable and immoveable were attached and one of the properties was soid and tho price so realised was deposited in the Government treasury.
The Mysore amending Act was challenged in the High Court of Mysore by @ petition under Art. 226 which wae dismissed on November 20, 1958
3S.C.R. SUPREME COURT REPORTS 285 and against that judgment and: order this appoal has been brought pursu: nt to a certificate of the High Court under Art. 132 (1) of the Constitution. The Certificate was confined to the interpretation of Art. 252 of the Constitution. The respondent in the present appeal is the State of Mysore. '
The challenge to the constitutionality of the Mysore Act was on the ground that (1) the Mysore Legislature by adopting the Central Act was no longer competent to pass any law in regard to prize competitions because the whole matter including the power of taxation was surrendered in’ favour of Parliament. (2) Even if the whole power had not been surrendered the impugned Act z.e. the Mysore Act as amended violated Art.252(2) of the Constitution inasmuch as it indirectly amends the Central Act by adding a new method of control by imposition of penalties of a monetary nature. (38) The Mysore Legislature could not amend an Act which stood repealed as a result of the enactment of the Central Act. (4). The Mysore Act as amended was repugnant to the Central Act and is therefore, to the extent of repugnancy, void under Art. 254 (1) of the Constitution and (5) it was colorable legislati ion inasmuch as the tax was imposed on the prize competitions, with the object of controlling them. Certain other questions relating to the legality of the imposition of the tax and the proceedings for the recovery of the tax were also raised but on all these points the High Court found against t the appellants :
_ The first question raised before us is the effect of the resolution passed by the legislatures of the States above mentioned and of the resolution passed by the Mysore legislature adopting the Central Act. The resolution passed by the Statés was in the following terms. ‘
“This Assembly do resolve that it is desirable ‘that control and regulation of Prize a rahe
Mjs. R. M.D. (Mysore) Private Lid,
236 SUPREMECOURT REPORTS — [1962]
_» 4961 Puzzle competitions. and all other matters Mje.R.M.D.¢. |. . consequential and incidental . thereto’ insofar pityserd _-., ag these matters are matters with respect to patch Parliament has no power to make - laws - for'the States should be regulated by Parlia- KapurJ. ~~~ ment by law.”
; — The two Houses of ‘the - 1 Mysore Legislature passed joo." y the” following” resolution’ on February 23, 1956 _ and February 21, 1956,,respectively :— ee | Resolution passed by the Mysore Legislative a re Assembly on 23rd, February, 1956.
“Whereas. for the purpose of securing
_uniformity.in legislation, it is desirable that the control and regulation of Prize Compe- .
- titions and all other matters ancillary thereto
__ should be regulatéd in the State of Mysore by to. the Prize Competitions, Act, .1955 (Central Act 42 of.1955) passed by Parliament ;
| — -..1°... Now, therefore, in pursuance of Clause (1) * i. of Article .252..0f. the Constitution, this : ‘Assembly resolves that the . Act aforesaid be 7 - adopted by the State of Mysore.”
| It. was contended that by these resolutions the legis. latures of the various States -had‘ surrendered their | power of legislation ‘in regard to the “control and - regulation of prize puzzle eompetitions and all other matters consequential and ,incidental’ thereto -and -_.,~- | had thus no legislative power left in regard ‘to that - \ - . matter. including~ the ’ Power: to tax, Article 252 | |
The State of Mysore -. -
. provides : —_—
“Art. 25 21) “TE it appears to the legislature
7 of two or more.States to be desirable that any
_' | of the matters with respect’ to’ which” Parliaout 2 +, ment has-no power to make Jaws for tho ~ - -“" * States except as provided in articles 249 and
~ 250 should; be regulated -in ‘such’ States ‘by _/.sj.s3, Parliament by law, and -if resolutions to that. .-po ort. , effect are passed; by all the Houses of the © | . _\. legislatures of those States, it- shall be lawful —
3S.CR.° SUPREMECOURT REPORTS 237 for Parliament to pass an Act for regulating rr that matter accordingly, and any Act so mje R.AI.D.C.
passed shall apply to'such States and to. any - other State by,which it is adopted afterwards
+
(Mysore) Private Lid. v.
by. resolution passed in that behalf by the The State of Mysore
. House or, where there are two-Houses, by each of the Houses of the Legislature of that
(2) Any Act so’ passed by Parliament may be amended. or repealed by an’ Act of Parliament passed or adopted in like manner but shall not, as respects any State to which it applies, be amended or repealed by. an _
Act of the Legislature of that State.”
The result of the passing, of ‘a resolution under | . Art. 252(1) is that any matter with respect to. which -
Parliament has no power to enact- laws becomes a matter for the regulation of which Parliament becomes empowered to pass any Act, and such Act, if passed by the Parliament, becomes applicable to the States passing the resolution or adopting that Act. Sub-clause (2) of that Article provides that any such Act may be amended or repealed by an
Act of Parliament in the like. manner i.e. in the .manner provided in cl. (1) and it: cannot be amended’ or repealed by the Legislature of the State or States passing the resolution. The question then arises do the resolutions as passed and ‘particularly the words “control and regulation of prize-puzzle competitions and all other matters ancillary thereto” -
~<surrender the -whole subject of prize competitions to the Central Parliament i.e. every matter and | - power connected therewith including the power to tax. . The argument raised was that the language of the resolutions was wide enough to comprise the legislative power under entries 34 and 62 of List
II, the former dealing with ‘betting and gambling” — and the latter with taxation’ of luxuries including
“betting and gambling’. One of the methods of control and regulations, it was submitted, is by.
~ 238 | SUPREME COURT REPORTS [1962]
ir - taxation and ; as the power to contro]: and regulate Ms. B.M.D.Cc. and all powers ancillary to the subject were surrenpier? 1 dered the power to- tax being included therein was v: also. surrendered. In -support of this argument The State of Mysore. reliance was placed on certain judgments of the Kaur J. . ‘American -Supreme Court. The first case relied upon was Rudolph Helwig v. United States (?). In .---—~~“that case the question was about the jurisdiction ~ of. the ‘United . States District. Court which depended upon . the nature of.the imposition of | jan .additional duty.-i.e.. whether. it -was penalty / - orynot... The imposition was held :to. bea _penalty as. it..was. not: imposed for. the purpose of - revenue but was based upon the particular act of the importer 7. e. his. undervaluation of the goods imported ; in other words this additional sum was a penalty for undervaluation whether innocently done _or not and whether jt was ‘called a further sum or ‘an additional duty the amount: imposed was not a _ duty upon : imported * article. -but a _ penalty and a nothing else. mor The next case relied upon was J. W. Bailey v v. Drexel - Furniture Company (?).. That- was. a ae ease of: colorable exercise of . legislative power. Under the Child Labour Tax Law a tax of 10% of the net profits of the year could -be. imposed upon an emplover and knowingly during any portion. of the taxable: petiod . employed «children within _certain age limits irrespective of whether only one _ child was employed or several, _ This was - held not _.to-be..a’. valid. exercise by Congress of power. of taxation but an unconstitutional regulation’ by the use of the tax asa penalty for -the employment of child labour in the States: which was exclusively a State function. . That case was,one in which'the “Congress: exercised its. power of. regulation by --imposing a: tax by. way. of penalty. i in. order to prevent ithe employment. of. child labour and’ thus by
“the exercise of the power. which it possessed 7. 4.€.0f
LAYS 41903) 188 U.S. 605: 47 L. Ed. 614.- FQ). (1922) 259 US, 33 :, 817, ya
38.0.R. SUPREME COURT REPORTS 239 taxation it tried to regulate a subject over which it had no jurisdiction and that really was the matter which was decided by the American Supreme Court.
The next case relied upon was Gloucester Perry Company v. Commonwealth of Pennsylvania ('). That was a case of interstate commerce and it was held that no State could impose a tax on that portion of interstate commerce which is involved in the transportation of persons and-property whatever be the instrumentality by which it is carried on. The tax there was levied upon receiving and landing of passengers and freight which was held to bs a tax on transportation 7.e., upon commerce between the two States involved in such transportation. The following passage in the judgment of Field, J., at p. 162 was relied upon by counsel for the appellants :—
“The power to regulate that commerce, “as well as commerce with foreign nations, vested in Congress is the power to prescribe the rules by which it shall be governed—that is, the conditions upen which it shall be conducted ; to determine when it shall be free, and when subject to duties or other exactions.”
But these observations were made in a different context, i.e., Whother the tax could be levied upon transportation made in ferry boats which passed between States every hour of the day and as this transportation was within the commerce clause no ° tax could be levied by the States.
Reference was next made to certain observations made in the State of Bombay v. R.M.D. Chamarbougwala (?) which was an appeal against the judgment of the Bombay High Court. Das, C. J., observed at p. 926 :—
“The fact that regulatory provisions have been enacted to control gambling by issuing (1) (1885) 114 U.S. 196 : 29 L. Ed. 188. (2) [1957] S.C.R. 874, 929.
Mjs. R. M.D, C. (Mysore) Private Lid.
v. The Stat? of Mye re
196!
Mis. R. M. D.C. (Mysore) Private Ltd.
v.
The State of Mysore Kapur J,
240 SUPREME COURT REPORTS _ [1962]
licences and by imposing taxes ¢oes not in any way alter the nature of gambling which -is inherently vicious and pernicious.”
In that case no question as to the meaning of the word “control and regulation” arose nor whether those words included the power of taxation. All that the Court was called upon to decide was whether prize competitions were trade, commerce ar business or were anti-social activities.
It was then argued that it was because of the decision by the Bombay High Court in State of Bombay v. R. M.D. Chamarbaugwala (}) whereby the tax imposed on prize competitions was struck down as contravening Art. 304(b), that the various States combined together and passed the resolution under Art. 252(1) of the Constitution. The object of the resolutions, it was submitted, was to get over the unconstitutionality pointed out by the Bombay High Court and therefore the resolutions were passed in the language used therein, te., for the control and regulation of prize competitions which power was transferred and surrendered to Parliament along with the powers incidental and ancillary thereto which must include taxation. It was further argued that as Parliament had failed to impose any tax it implied that it had refused todo so. In support of this argument reliance was placed on Sabine Robbins v. Taxing District of Shelby County, Tennessee (*). It was there held that where the power of the Legislature is exclusive its
- failure to make express regulation indicated its will that the subject shall be left free from any restriction or imposition. The pivot of the appellants’ argnment is that the words “control and regulation” and “incidental and ancillary thereto” included power of taxation but this argument is not well founded. The power in regard to betting and gambling is contained in entry 34 of the State List which ‘sas follows ; Entry 34: “Betting and gambling”. “L.R. [1955] Bom. 680. (2) 30 L. Ed. 694.
38.CR. SUPREMECOURT REPORTS 241
The power of taxation is contained in entry 62 which is as under :—
Entry 62 : “Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling.”
In the Indian Constitution as it was in the Government of India Act the power of legislation is distributed between the Union and the States and the subjects on which the respective Legislatures can legislate are enumerated in the three Lists and in the Articles of the Constitution, provision is made as to what is to happen if there is a conflict between the Statutes passed by Parliament and the Legislatures of the States. The peculiar nature of the Indian Constitution in regard to the enumeration of powers in the entries in the Lists was emphasised by Gwyer, C.J., inre The Central Provinces & Berar Act No. XIV of 1938 (‘) at p. 38 and by Sulaiman, J., at pp. 73 and 74. Gwyer, C.J., said:—
“But there are few subjects on which the decision 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 from its context and bear different senses accordingly.”
(1) [1939] F.C.R. 18, 38, 73, 74.
M/s. R. M.D. CG. (Mysore) Private Lid. v. The State of Mysore
(Adyare) Private Lid. Vv. The State of Mysore Kepur J.
At p. 74 Sulaiman, J., observed :
“The heads have been separately specified in great detail ; and a special head “taxes on the sale of goods” has been assigned to the Provinces, which did not at all find a separate and distinct place in the State or Provincial List of any of the Dominions. This peculiarity is a unique feature of the Indian Constitution, having an important bearing on _ the present case, aa taxcs on sales have been adopted as a post-war measure in most countries.”
The entries in the Lists have to be read in accordanoe with the words employed and it will be wholly unjustified in forcing into them a meaning which they cannot reasonably bear. See Brophy v. Att. Gen. of Manitoba {'). Similar observations were made by Lord Wright, M. R. in James v. Commonwealth of Australia (*?) and both these cases were quoted with approval in re The Central Provinces and Berar Act No. XIV of 1938 (*) by Sulaiman, J. Thus the subject of “betting and gambling” given in entry 34 of List II and the taxes on betting and gambling as given in entry 62 of List II have to be read separately as separate powers and therefore when control and regulation of prize competitions was surrendered to Parliament by the resolutions above quoted the power to tax under entry 62 of List II, which is a soparate head, cannot be said to have been surrendered. See the observations of Das, C. J., in State of Bombay v. R. M. D. Chamarbaugwala quoted a little later in this judgment.
The scheme of the Indian Constitution and distribution of powers under it are entirely different from what it is in America and therefore the construction of the entries in the manner contended for by the appellants would be erroneous. °
It was then contended that a tax must be
(1) [1895] A.C. 202,215. (2) [1936] A.C. 578, 613.
38.C.R. SUPREME COURT REPORTS ~— 243 levied for the purpose of revenue and cannot be for purpose of control and that in the Mysore Act was really colourable legislation in that the impugned tax had been levied for the purpose of controlling prize competitions although it was given the form ofatax. It may be remarked that the Court in construing and interpreting the Constitution or provisions of an enactment has to
_ ascertain the meaning and intention of Parliament from the language used in the statute itself and it is not concerned with the motives of Parliament. To use the language of Gwyer, C.J., in re The Central Provinces and Berar Act No XIV of 1938 (+):
“It isnot for the Court to express, or indeed to entertain, any opinion on the expediency of a particular piece of legislation, if it is satisfied that it was within the competence of the Legislature which enacted it ; nor will it allow itself to be influenced by any considerations of policy, for these lie wholly outside its sphere.”
Similar observations in regard to the doctrine of colourable legislation were made by Mukherjea, J., (as he then was), in K.C. Gajapati Narayan Deo & Others v. The State of Orissa (*), where it was observed :
“Tt may be made clear at the outset that the doctrine of colourable legislation does not involve any question of bona fides or mala fides on the part of the legislature. The whole doctrine resolves itself into the question of competency of a particular legislature to enact a particular law. If the legislature is competent to pass a particular law, the motives which impelled it to act are really irrelevant. On the other hand, if the legislature lacks competency, the question of motive does not arise at all. Whether a
(1) [1939] F.C.R. 18, 38, 73, 74. (2). [1954] S.C.R, 1, 10.
Mis. R. M. D.C. (Mysore) Private Lid.
v. ¢ The State of Mysor
———
Af/s. R. AL D, C. {Mysore) Private Lid.
statue is constitutional or not is thus always a question of power.”
Therefore if tho Mysore Legislature had the power, which in our opinion, it had and it had not surrendered its power to Parliament which, in our opinion, it had not then it cannot be said that the imposition of the tax is a piece of colourable legislation and is on that ground unconstitutional. It will be opposite to quote at this stage the observations of Das, C.J., in the Stele of Bombay v. RMD. Chamarbaugwale (1) :—
“For the reasons stated above, we havo come to the conclusion that the impugned law is a law with respect to betting and gambling under entry 34 and the impugned taxing section is a law with respect to a tax on betting and gambling under entry 62 and that it was within tho legislative competence of tho State legislature to havo enacted it. Thero is sufficient territorial nexus to entitle the State legislature to collect the tax from the petitioners who carry on the prize competitions through the medium of a newspaper printed and published outside the State of Bombay.” —
Thus the Central Act is with respect to betting and gambling under entry 34 of List II and the taxing sections of the Mysore Act are with respect to a tax on betting and gambling under entry 62. It is algo instructive to note that Vonkatarame Ayyar, J., in R. M.D. Chamarbaugwala v. The Union of india (?) in construing the language of the resolution was of the opinion that the use of the word “control and regulation” was requisite in the case of gambling and as regards regulation of competitions involving skill mere regulation would have been sufficient.
In view of our finding that by passing the resolution the States did not surrender their power of taxation it cannot be said that cl. (2) of Art. 252 (1) [1957] S.C.R. 874, 929. (2) [1957] S.C.R. 930, 939.
W a
38.C.R. SUPREME COURT REPORTS — 245 of the Constitution was violated by the amendment of the Mysore Act ; nor can it be said that in reality it was a piece of colourable legislation by an indirect attempt to amend the Central Act anda new inethod of control was devised by imposing a penalty under the name of tax. We have already held that the tax imposed under the Mysore Act was not by way of penalty but was the exercise of the power which the legislature possessed of imposing tax under entry 62.
The next contention raised was that after the passing of the Central Act, s.12(1)(b) of the Mysore Act became void because of the provisions of Art. 254(1) of the Constitution which provides :
Art. 254(1) “If any provision of a law made by the Legislature of a State is repugnant to any provision of a luw made by Parliament which Parliament is competent to enact or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2) the law made by Parliament whether passed before or after the law made by the Legislature of such State or as the case may be, the existing law shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.”
It was contended that because of the repugnancy between the Central Act and the Mysore Act in regard to licensing all provisions which had any reference to licensing became void under Art, 254(1) and if they were void they could not be amended. On behalf of the State it was submitted that Art. 252(1) was a complete code by itself and Art. 254 was inapplicable because the latter Article like its predecessor, 8.107 of the Government of India Act, 1935, applied where the repugnancy arose under List III of the Constitution +.¢., the
Mle. R. M. D.C. (Mysore) Private Ltd,
Mie RB. M.D. C. (Mysore) Private Lid. v
Concurrent List. It is not necessury to decide this latter contention or to refer to cases which have been . relied upon i.e. Megh Raj v. Allah Rakhia (') or Deep Chand v. The State of Uttar Pradesh & Others (?), The inconsistency would operate on that portion of the Mysore Act which became repugnant to ss. 4 and 5 of the Central Act as to prohibition of prize competitions and licensing of prize competitions e.g., 8.8 of the Mysore Act and consequently that. portion of s.12(1)(b) which deals with taxes in respect of prize competitions for which a licence had been obtained under s.8 might be said to have become void and not the rest. Therefore by the omission’ of words “for which a licence had been obtained”, under 8.8, the rest of the clause would be valid. The effect of the amending Act is that the above mentioned words were deemed to have been omitted as from April 1, 1956, and the rest of clause (b) is not repugnant to any of the provisions of the Central Act. Article 254(1) therefore did not make s,12(1)(b) wholly void. All that it did was that the portion which refers to licensing became repugnant but it did not affect the rest of the section. At the time when the Mysore Act was passed it was within the legislative power of the Mysore Legislature and it may be that it was rendered unconstitutional by reason of ss. 4 and 5in the Central Act but that portion which deals with taxation cannot be held to be void because 4s a reswt of the Amending Act the words which were repugnant to the provisions of the Central Act were subsequently declared by the Mysore Legislature to be deemed to have been omitted as from April 1, 1956, the day when the Central Act came into force. This is in accord with the view taken in Deep Chand v. The State of Uttar Pradesh and Others(), i.e. the doctrine of eclipse could be invoked in the case ofa law which was valid when made but was rendered invalid by a supervening constitutional inconsistency. This
(1) (1947) L.R. 74 LA. 12,19. (2) [1959] Supp. 2 S.C. R. 8, 24, 42.
38.CR. SUPREME COURT REPORTS O47
‘disposes of the challenge to the : ‘gonatitutionality of the Mysore'Act on the “five” points set out, above. ‘Theréfore the law may’ ‘be summed up as follows : $
Pe ay’ By passing ‘the resolutions as to con-'
“trol and regulation the.power to tax had not "been surrendered to Parliament. 7
:*(2) The: ‘amending ‘Act was not a new ~ method ‘of controlling prize competitions nor an of was it a-piece of colourable legislation: *
Mis. R. M. D.C. (Mysore) ~ Private Lid. ve i The State of Mysor
| Kapur J.
— (3)-There ‘was .no amendment of an J Act ~ io ple stood repealed,.nor,was the.retroactive —
~ Gperation of. the . Amending: Act affected by .
_, Art. 254(1) of the, Constitution. nter fos
The next’ three’ ‘objections, to the “legality of.
the assessment. were :'(1) that the‘ assessment was provisional which was not contemplated .under the
“Act's (2) there should have been a fresh notification ._-
‘after the‘ amendment of the Mysore’ Act and (3) at
‘the time when the récovery proceedings were’ taken — |
‘the tax'had not become due as it was payable within a' week which‘had - not expired. On September 10, 1957, the Deputy Commissioner, - Bangalore, ‘called
‘upon the appellants to ‘produce accounts in respect:
of prize competitions conducted ‘as from’ April 1, 1956, up'to the’ date of the closure of the competi- tions and three days were given tocomply with that. . - notice.: Their reply. was that the Ordinance under which the notice was issued was unconstitutional and —
‘Hlegal and they also .asked for thirty days in which to prepare their-statements but they were granted a period of:fifteen days.only. They.agreed.to file their statements within: the time. allowed. though under protest. .- ‘These ..statements- were submitted: on ©
October 9, 1957, and at the -end of.:the statements which showed a gross collection of Rs. 26,47, 147-6. 9, ‘there was the following « endorsement :— © x, es fied. partly ‘with available bank statements and : _-partly with, the ‘books of: accounts - and are
“The above figures of colléétions : are veri-
Mjal RM. D.C. (Mysore) Pripate Lid.
v. The State of 3fusore
248 SUPREME COURTREPORTS [1962]
subject to reconciliation between the amount as per ledger and that as above. The commis-~ sion and expenses deducted by Collectors are accepted as per certificate of the Management and the State Account. Collections are verified only with the Collection Register.
(SAL) v.cccccceecssseveccsesseeseecens
Chartered Accountants.”
Under this the Deputy Commissioner wrote a letter on October 16,1957, in which it was said : —
“You are hereby called upon to pay up provisionally a sum of Rs. 3,30,893-7-0 towards tax amount tothe Reserve Bank of India and forward the challan in token of payment to this office within a week.”
As the tax was not paid the provisions of the Revenue Recovery Act were resorted to. This cannot be said to be a provisional assessment. The return submitted by the appellants as far as it went was accepted and on'that the tax was demanded which was not a case of provisional] assessment at al] but as was hold by the High Court it must be taken to be a final assessment and if and when any further assessment or a revised assessment is made the question may become relevant.
The next question as to the necessity ofa fresh notification, the submission is equally unsubstantial. Its legality depends upon the constitutionality of amended s.12(1)(b) and if that is valid, as we have held it to be, the notification is equally valid. The notification was only in regard to the rate of taxation and had no reference to the obtaining or not obtaining of the licence.
The last point raised was that the tax was payable within a week which had not expired. As we have pointed out the notice of demand called upon the appellants to pay the sum therein specified and to produce the challan in token of payment
“~y at lial
38.C.R. SUPREME COURT REPORTS 249 within a week. It isnot the case of the appellants that they had paid or were in a position to produce the challan within a week. It was not an order making the tax payable within a week. These objections, in our opinion, are without substance and are therefore overruled.
In the result this appeal fails and is dismissed with costs.
Appeal dismissed.
— ee
Mis. R. V4. D. C.. ( Uysore) Private Lid.
v. The State of Uysor
—_—_—_—