Case: A.B. Abdulkadir & Others Vs. State of Kerala & Another

Wanchoo, J.1. These five appeals on certificates granted by the High Court of Kerala raise a common question of law and will be dealt with together. Two of them (appeals 89 and 90) are from what was formerly the Cochin area and the other three are from what was the Travancore area. They relate to a tax on tobacco in these areas. As the facts, laws and rules in the two areas are similar we propose to deal in detail with the appeals from the Cochin area.2. In 1909, Act VII of 1084 Was passed by the Maharaja of Cochin to consolidate and amend the law relating to tobacco and was called the Cochin Tobacco Act, VII of 1084 (hereinafter called the Cochin Act). Section 4 of the Cochin Act prohibited the possession for sale, transport, import or export, sale and cultivation of tobacco except as permitted under the Act or the Rules framed thereunder. Section 5 of the Act gave power to the Diwan to make rules from time to time consistent with the Act to permit absolutely or subject to any conditions, and also to regulate the possession for sale, transport, import or export, sale and cultivation of tabacoo as well as the form of duty leviable on the sale of tobacco by retail. The remaining provisions of the Act deal with offences, prosecutions, punishment, confiscation and other ancillary matters such as arrest and seizure, with which we are not concerned in the present appeals. Reference may however be made to S. 18 which provided that"no action shall lie against the Sirkar or against any officer of the Excise department for damages in any civil court for any act bona fide done or ordered to be done in pursuance of this Act, or of law for the time being in force relating to tobacco revenue".3. Rules were framed under the Cochin Act called the Tobacco Cultivation Rules, which, by the first rule provided that the cultivation of tobacco plant is prohibited except under a licence and shall be restricted to such parts or localities of the State, as may, from time to time, be fixed by the Diwan. . . . . . . . . . . ." Rule 3 provided for drying curing, manufacturing and storing of the tobacco , cultivated in the State, to be done under these supervision of an officer of the Excise Department in licensed manufacturing yards and store-houses. Rule 4 provided or licences for manufacturing yards and store-houses. Rule 5 laid down that the licences would be in force for one official year and were to be issued on payment of a fee of Rs. 50/- for each licence. Under R. 6, the tobacco crop could only be harvested after permission obtained from the Inspector of Excise and under R. 7 the harvesting was to be done by the licensed cultivator under the general superintendence of the Sub-inspector of the locality in which the area cultivated lay and the harvested crop was to be transported only under permits granted by him from such area to the manufacturing yard where alone manufacture was to be undertaken. Rule 8 provided for the maintenance of a stock book by a licensee of a storehouse or a manufacturing yard. Rule 13 provided that the licensed manufacturer and the storehouse keeper would sell or otherwise dispose of his stock only to licensed dealers and there was prohibition against the disposal or sale of tobacco to any person who had not the required licence to possess the same. Rule 15 made it an offence for anyone to cultivate, dry, cure, manufacture, store, transport, sell or otherwise dispose of tobacco in contravention of the Rules.4. In addition to these Rules, there were further Rules also framed under the Cochin Act with respect to import of tobacco into the State, and all import was prohibited except under the provisions of the Diwans notification prescribing the sale of tobacco shops and licences. Possession of tobacco for the purpose of sale was also prohibited except under the provisions for the sale of tobacco shops and licences. Export of tobacco was also prohibited except with the special sanction of the Commissioner of Excise.5. It further appears that the system in force for the collection of tobacco revenue up to August 1950 was to auction what were called A class and B class shops and the last of such auction was held under the notification dated May 30, 1949. In addition there were C class shops, the licence for which was granted either on the recommendation or in consultation with B class licencees at the discretion of the Excise Commissioner or any other officer authorised by him on payment of the prescribed fee. This system along with the Rules already referred to was in force on April 1, 1950.6. On April 1, 1950, after the Constitution had come into force and Travancore Cochin had become a Part B State thereunder, the Finance Act, No. XXV of 1950, extended the Central Excises and Salt Act, No. 1 of 1944 (hereinafter called the Central Act) to the Part B State of Travancore-Cochin by S. 11 thereof. Section 13(2) of the Finance Act, further provided that "if immediately before the 1st day of April, 1950 there is in force in any State other than Jammu and Kashmir a law corresponding to, but other than, an Act referred to in sub-sec. (1) or (2) of S. 11, such law is hereby repealed with effect from the said date. . . . ." It seems that in consequence of this provision in the Finance Act, 1950 the Rules which were in force on April 1, 1950, were changed in the Cochin area by a notification dated August 3,1950 and the system of auction sales of A class and B class shops was done away with and instead graded licence fees were introduced for various classes of licensees, including C class lincenses. Similar change was made for the Travancore area by notification by these two notifications also did away with the control of cultivation, drying, curing, manufacturing and were housing which were in force under the earlier Rules, so that these new Rules were only concerned with licensing A, B and C class shops. A class lincensees under the new Rules were called stockists, B class licencees were wholesale sellers and C class licencees were retailers. The system for A class licensees was that they were to pay a minimum annual fee for a maximum quantity of tobacco or tobacco goods possessed by them and additional fees for further additional quantity. Thus, for example in the case of Jaffra tobacco it was provided that maximum annual fee would be Rs. 1,500/- for a minimum of 100 candies and further fee of Rs. 1,000/- for additional quantity of 100 candies or part thereof.7. The appellants of Cochin areas were tabacco dealers and holders at the time they filed their petitions in 1956 of A class licences. The main contention raised on their behalf in their petitions was that the Cochin Act. stood repealed by -the Finance Act, 1950 on the introduction of the Central Act hi the Part B State of Travancore-Cochin from April 1, 1950; in consequence, the notification which was issued on August 3, 1950 or on January 25, 19,51 framing new Rules for the issue of licences and prescribing rules the under the powers conferred under the Cochin Act or the similar Travancore Act were ab initio void, because the Acts under which the notifications were purported to be issued stood repealed from April 1, 1950. In addition, various other grounds were raised challenging the validity of the new Rules which, however, we do not think it necessary for the purposes of these appeals to set out here.8. The petitions were opposed on behalf of the State and it was contended that the Cochin Act or the similar Travancore Act did not stand repealed from April 1, 1950. In consequence it was urged that the State was competent to frame new Rules which it did under the Cochin Act or the similar Travancore Act. Further the case of the State was that the graded licence fee introduced after April 1, 1950 was a tax which was sustainable tinder item 60 or 62 of List II of the Seventh Schedule to the Constitution.9. The High Court dismissed the petitions holding that the laws under which the new Rules were framed were in force and were justifiable under item 62 of List II of the Seventh Schedule. Unfortunately, though the judgment of the High Court mentions the contention of the appellants that on the extension of the Central Act with effect from April 1, 1950 by the Finance Act, 1950 the Cochin Act as well as the similar Travancore Act ceased to be operative from that date, there is no discussion in the judgment with regard to this contention, and the High Court did not consider whether in view of S. 132. of the Finance Act, 1950, the Cochin Act as well as the similar Travancore Act stood repealed from April 1, 1950. If the effect of S. 13(2) of the Finance Act, 1950 was to repeal the Cochin Act as well as the similar Travancore Act from April 1, 1950, there will be no law in operation which would justify the framing of the new Rules either in August 1950 or in January 1951and it would then be unnecessary to consider whether a law containing provisions similar to those contained in the notifications would be within the competence of the State legislature under item 62 of list II of the Seventh Schedule. That question would only arise if the Cochin Act or the similar Travancore Act survived the repeal effected by S. 13(2) of the Finance Act.10. We have therefore to see what the provisions of the Finance Act are in this connection. As already indicated, S. ll(I) of the Finance Act extends the Central Act and the Rules and Orders made thereunder which were in force immediately after the commencement of the Finance Act to all Part B States except the State of Jammu and Kashmir. Consequently, the Central Act as well as the Rules and Orders made thereunder became applicable to the Part B State of Travancore-Cochin from April 1, 1950. Further S. 13(2) of the Finance Act specifically provides that from April 1, 1950 any law corresponding to the Central Act will be repealed from that date. The contention on behalf of the appellants is that the Cochin Act as well as the similar Travancore Act was a low corresponding to the Central Act and therefore stood repealed as from April 1, 1950 under S. 13 (2) of the Act and it is this contention that we have to examine.11. It was pointed out by this Court in Custodian of Evacuee Property v. Abdul Shakoor, AIR 1961 SC 1087 , that where the Act repealed provides substantially for all matters contained in the Act effecting the repeal there is correspondence between the two Acts and the earlier Act would thus stand repealed; it is not necessary that there should be complete identity between the repealing Act and the Act repealed in every respect. Therefore, when S.13(2) of the Finance Act provides that on the extension of the Central Act from April 1,1950 to the Part B State of Travancore-Cochin, any law corresponding to the Centra1 Act is repealed with effect from that date, all that we have to see is whether the law repealed substantially provided for the same matters as the Central Act, even though it may not be identical in all respects.12. Let us therefore turn to the Cochin Act and the Rules framed thereunder to see if it substantially provides for the same matters with which the Central Act and the Rules and Orders made thereunder deal. The main contention on behalf of the respondent in this connection is that the Central Act is an Act imposing a duty of excise on tobacco under item 45 of List I of the Seventh Schedule to the Government of India Act, 1935 (now corresponding to item 84 of List I of the Seventh Schedule to the Constitution) and such duty of excise is a duty on goods manufactured or produced in India. Thus according to the respondent the main feature of the Central Act is the imposition of a tax on goods produced or manufactured in India and unless the Cochin Act or the similar Travancore Act also imposes a tax on goods produced or manufactured in what was formerly Cochin or Travancore State there would be no question of correspondence between the Central Act and the Cochin Act or the similar Travancore Act. Reference was also made to In Re Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938, 1939 FCR 18: (AIR 1939 FC 1), Province of Madras v. Messrs. Boddu Paidanna and Sons,1942 FCR 90 : (AIR 1942 FC 33) and Governor-General in Council v. Province of Madras, 72 Ind App 91 : (AIR 1945 PC 98 ) where the nature of a duty of excise was considered, in the first case it was held that the primary meaning of "excise duty" was of a tax on articles produced or manufactured in the taxing country (see p.40 of FCR): (p. 6 of AIR). It was also observed in that case that it could not be denied that laws were to be found which impose a duty of excise at stages subsequent to the manufacture or production, in the second case it was held that duties of excise were duties levied on the manufacturer or producer of the commodity taxed. In the third case, the Privy Council approved of the view of the Federal Court as to the nature of the duty of excise. It may therefore be accepted that a duty of excise is a tax on goods produced or manufactured in the taxing country. It may also be accepted that generally speaking the tax is on the manufacturer or the producer, though it cannot be denied that laws are to be found which impose a duty of excise at stages subsequent to the manufacture or production. We cannot however forget that the Cochin Act or the similar Travancore Act was passed by States in which there were no such constitutional provisions as are to be found in the Government of India Act and its legislative Lists and this aspect will have to be borne in mind when judging the question of correspondence between the Central Act and the Cochin Act or the similar Travancore Act.13. Now the Central Act provides by S. 3 for the levy and collection of duties of excise on all excisable goods other than salt which are produced or manufactured in India and also a duty on salt manufactured in or imported by land into any part of India. Further S. 6 of the Central Act gives power to the Central Government to issue licences and prohibits any person from engaging in the wholesale purchase or sale whether on his own account or as a broker or commission agent or the storage of any excisable goods except under the authority and in accordance with the terms and conditions of a licence granted under the Central Act. In Chaturbhai M. Patel v. The Union of India, 1960-2 SCR 362 : (AIR 1960 SC 424 ) where the various provisions of the Central Act (including S. 6) and the Rules framed thereunder were attacked on the ground that they had nothing to do with the levy and collection of duties of excise, this Court held that the various provisions of the Central Act and the Rules made thereunder were essentially connected with levying and collection of excise duty and in its true nature and character the Central Act remained one under item 45 of List I and that the incidental trenching upon the provincial field would not affect its constitutionality. The nature of the Rules there considered will appear from the following observations at p. 371 (of SCR) : (at p. 429 of AIR) :"It (the Central Act) is a fiscal measure to levy and realise duty on tobacco. The method of realising duty, must be left to the wisdom of the legislature taking each individual trade and peculiarities and difficulties which arise in that matter, Various provisions of the Act and the Rules show that the authorities are on the track of the movement of tobacco from the time it is grown to the time it is manufactured and sold in the market and the various provisions of the Act and the Rules made thereunder have been considered necessary for effectuating the purpose of the Act."It is true that the Central Act provides for the levy of excise duty under S. 3 but in order to carry out that purpose it has provided for licences under S. 6. The Rules also provide in Chap. III for levy and refund of duty, in Chap. V for manufactured goods other than salt, in Chap. VII for warehousing, in Chap. VIII for licensing. Thus in order to levy excise duty under the Central Act, there are provisions in the Rules which start in the case of tobacco from the stage of cultivation and continue right up to the time the finished product reaches the hand of the retailer and thus becomes a part of the common stock for purposes of sale to the consumers. We have also seen that the Cochin Act similarly provides for control on tobacco from the stage at which it is grown to the stage till it reaches C class licensees who sell it in retail to the consumers. The Cochin Rules may not be so detailed as the Rules under the Central Act but their main object and purpose is the same, namely, to keep a check on tobacco from the time it is grown to the time it reaches the C class licensee who eventually sells it to the consumer. Further if one looks at the Rules under the similar Travancore Act in Vol II of the Travancore Excise Manual which were in force on April 1, 1950, in relation to tobacco it will be found that there are elaborate rules in Part III from pp. 257 to 325 dealing with all aspects of control relating to tobacco. Chap. IV deals with bonding and issue; Chap. V with licences for sales, Chap. VI with transport and possession. Further there are rules at p. 296 for cultivation, curing and warehousing. Then at p. 314 are rules for the manufacture or cigars, che-roots and snuff in bond. It will thus be clear that the Cochin as well as the Travancore Rules provided for similar control of tobacco as under the Central Act and show that the authorities in Travancore and Cochin were also on the track of the movement of tobacco from the time it was grown and manufactured to the time it was sold in the market. It would therefore follow that the Cochin Act as well as the similar Travancore Act along with the Rules corresponded to the Central Act substantially and would thus be repealed by S. 13 (2) of the Finance Act, 1950.14. But it is urged on behalf of the State that there is no provision for charging duty in the Cochin Act or the similar Travancore Act and therefore all these provisions in the Rules for control from the time of cultivation to the time of the final stage of sale to the consumer, even though they are similar to the Rules under the Central Act, would not make the Cochin Act or the similar Travancore Act a corresponding Act to the Central Act. There is no doubt that there is no provision corresponding to S. 3 of the Central Act in the Cochin Act or in the similar Travancore Act. Under the Cochin Act the tax was levied by virtue of the power conferred on the Diwan under S. 5 to make rules for the purpose. Under the similar Travancore Act, the provision is contained in S. 31 which provides that the Diwan may with the sanction of the Ruler make rules permitting absolutely or subject to the payment of any duty or fee or to any other conditions, and regulating within the whole or any specified part of Travancore, the cultivation manufacture, possession, transport, import and sale of tobacco. So in both the former States, the Act did not contain a charging section and the duty was levied by the Rules framed by the Diwan under the powers conferred on him by the Act. In essence, therefore, the provision for charging the tax was made in the Rules. Further it is true that the method by which the tobacco revenue was realised was through auction sales of the right to possess and sell tobacco. But we must not forget that the Cochin Act as well as the similar Travancore Act was passed by a Ruler who was not trammelled by a Constitution like the Government of India Act, 1935 and its Legislative Lists. The method evolved for realising tobacco revenue was to auction the right to possess and sell tobacco and the amounts received at such auctions would cover what would be duty under S. 3 of the Central Act and licence fee under S. 6 thereof. It is urged however that this does not amount to duty on goods produced, nor is the duty in such a case paid by the manufacturer or producer of the goods. We have already indicated that the essence of the duty of excise as held by the Federal Court and the Privy Council is that it is a duty on the goods manufactured or produced in the taxing country. Further as generally the duty is on the goods produced or manufactured it is paid by the producer or manufacturer, though as in the case of all indirect taxes it is passed on eventually to the consumer in the shape of being included in the price and is thus really borne by the consumer. Further the cases on which reliance has been placed on behalf of the State also show that laws are to be found which impose duty of excise at stages subsequent to manufacture or production. As a matter of fact, even in British India before l935 there used to be public auctions of the right to possess and sell excisable goods like country liquor, ganja and bhang and the amount realised was excise revenue. It is also obvious that this system of auction is not a system of levying sales tax because it has nothing to do with the levy on each sale, which is the essence of a sales tax. It seems that in the former States of Travancore and Cochin, auction system continued right up to the time the Constitution came into force and even for sometime thereafter. It seems under the circumstances that the auction system which was in force was only a method of realising duty through the grant of licences to those who made the highest bid at the auctions. The fact therefore that this system was used instead of the system of charging of duty as provided in S. 3 of the Central Act would not in our opinion make any difference to the nature of the impost which was in force on the relevant date, namely, April 1, 1950.It was however urged that under this system even tobacco which was not produced or manufactured in the State but was imported from outside was included for the purpose of licences granted under it. That is undoubtedly so. But from the Rules which were in force regarding cultivation, curing, manufacturing and so on of tobacco within the State it would not be unreasonable to infer that the substantial part of the income from auctions was still in the nature of excise duty. Even in the case of imported tobacco, only with respect to that part of it which was eventually sold to the consumer as it was imported without any processing or treatment in the State, it can be said that the impost which fell on it was not in the nature of excise duty. However, there is no way of differentiating this part of the revenue from the rest and considering the elaborate provisions as to the control of tobacco trade from the grower right up to the time that the goods were sold to the public in retail sale it would in our opinion be not unreasonable to hold that the Cocbin Act as well as the Travancore Act was in substance an Act corresponding to the Central Act. Therefore when the Central Act was extended to the Part B State of Travancore-Cochin by S. 11 (1) of the Finance Act and the Finance Act specifically provided by S. 13(2) for the repeal of corresponding law, the result was that the Cochin Act as well as the similar Travancore Act stood repealed. There would be no power in the State Government thereafter to frame new Rules either in August 1950 or in January 1951 for there would be no law to support the new Rules and without such law the new Rules could not impose a tax as that would clearly offend Art. 265 of the Constitution. Further as soon as the Cochin Act as well as the similar Travancore Act stood reported on April 1, 1950 by virtue of S. 13(2) of the Finance Act there could be no question of their being sustained under item 62 of List II of the Seventh Schedule for that would only arise if these were not repealed as corresponding law by S. 13(2).15. Turning now to the three Travancore appeals it is enough to say that they stand on the same footing as the two Cochin appeals. If anything the Travancore Act as well as the Travancore Rules which were in force on April 1, 1950 are more elaborate than the Cochin Act and the Cochin Rules. Further the Travancore Act by S. 31 actually refers to manufacture also. The Cochin Act did not refer to manufacture in the Act itself though there was provision for manufacture in the Rules framed under the Act. What applies therefore to the Cochin Act and the Rules framed thereunder applies in greater force to the Travancore Act and the Rules framed thereunder and there is no doubt that the Travancore Act and the Rules framed thereunder were also a law corresponding to the Central Act and the Rules framed thereunder. The Travancore Act therefore also stood repealed from April 1, 1950. There would thus be no law to support the Rules framed by the State Government in January 1951 and therefore the Rules must fall.16. It appears that these new Rules have been abrogated as from January 1958. So it was urged on behalf of the State that this Court should not grant a mere declaration as to the invalidity of the Rules, when they are no longer in existence. This argument in our opinion has no force because we must look to the situation as it was when the petitions were presented. The Cochin petitions were presented in 1956 and the Travancore petitions were presented in 1955 and at that time the Rules were in force and they continued in force till December 1957. Therefore the petitioners would be entitled to a declaration that the Rule were invalid because at any rate that would give them relief so far as the period after their petitions is concerned while the Rules remained in force

Decision reasoning: 1[ds]It is true that the Central Act provides for the levy of excise duty under S. 3 but in order to carry out that purpose it has provided for licences under S. 6. The Rules also provide in Chap. III for levy and refund of duty, in Chap. V for manufactured goods other than salt, in Chap. VII for warehousing, in Chap. VIII for licensing. Thus in order to levy excise duty under the Central Act, there are provisions in the Rules which start in the case of tobacco from the stage of cultivation and continue right up to the time the finished product reaches the hand of the retailer and thus becomes a part of the common stock for purposes of sale to the consumers. We have also seen that the Cochin Act similarly provides for control on tobacco from the stage at which it is grown to the stage till it reaches C class licensees who sell it in retail to the consumers. The Cochin Rules may not be so detailed as the Rules under the Central Act but their main object and purpose is the same, namely, to keep a check on tobacco from the time it is grown to the time it reaches the C class licensee who eventually sells it to the consumer. Further if one looks at the Rules under the similar Travancore Act in Vol II of the Travancore Excise Manual which were in force on April 1, 1950, in relation to tobacco it will be found that there are elaborate rules in Part III from pp. 257 to 325 dealing with all aspects of control relating to tobacco. Chap. IV deals with bonding and issue; Chap. V with licences for sales, Chap. VI with transport and possession. Further there are rules at p. 296 for cultivation, curing and warehousing. Then at p. 314 are rules for the manufacture or cigars, che-roots and snuff in bond. It will thus be clear that the Cochin as well as the Travancore Rules provided for similar control of tobacco as under the Central Act and show that the authorities in Travancore and Cochin were also on the track of the movement of tobacco from the time it was grown and manufactured to the time it was sold in the market. It would therefore follow that the Cochin Act as well as the similar Travancore Act along with the Rules corresponded to the Central Act substantially and would thus be repealed by S. 13 (2) of the Finance Act,is no doubt that there is no provision corresponding to S. 3 of the Central Act in the Cochin Act or in the similar Travancore Act. Under the Cochin Act the tax was levied by virtue of the power conferred on the Diwan under S. 5 to make rules for the purpose. Under the similar Travancore Act, the provision is contained in S. 31 which provides that the Diwan may with the sanction of the Ruler make rules permitting absolutely or subject to the payment of any duty or fee or to any other conditions, and regulating within the whole or any specified part of Travancore, the cultivation manufacture, possession, transport, import and sale of tobacco. So in both the former States, the Act did not contain a charging section and the duty was levied by the Rules framed by the Diwan under the powers conferred on him by the Act. In essence, therefore, the provision for charging the tax was made in the Rules. Further it is true that the method by which the tobacco revenue was realised was through auction sales of the right to possess and sell tobacco. But we must not forget that the Cochin Act as well as the similar Travancore Act was passed by a Ruler who was not trammelled by a Constitution likethe Government of India Act, 1935 and its Legislative Lists. The method evolved for realising tobacco revenue was to auction the right to possess and sell tobacco and the amounts received at such auctions would cover what would be duty under S. 3 of the Central Act and licence fee under S. 6 thereof. It is urged however that this does not amount to duty on goods produced, nor is the duty in such a case paid by the manufacturer or producer of the goods. We have already indicated that the essence of the duty of excise as held by the Federal Court and the Privy Council is that it is a duty on the goods manufactured or produced in the taxing country. Further as generally the duty is on the goods produced or manufactured it is paid by the producer or manufacturer, though as in the case of all indirect taxes it is passed on eventually to the consumer in the shape of being included in the price and is thus really borne by the consumer. Further the cases on which reliance has been placed on behalf of the State also show that laws are to be found which impose duty of excise at stages subsequent to manufacture or production. As a matter of fact, even in British India before l935 there used to be public auctions of the right to possess and sell excisable goods like country liquor, ganja and bhang and the amount realised was excise revenue. It is also obvious that this system of auction is not a system of levying sales tax because it has nothing to do with the levy on each sale, which is the essence of a sales tax. It seems that in the former States of Travancore and Cochin, auction system continued right up to the time the Constitution came into force and even for sometime thereafter. It seems under the circumstances that the auction system which was in force was only a method of realising duty through the grant of licences to those who made the highest bid at the auctions. The fact therefore that this system was used instead of the system of charging of duty as provided in S. 3 of the Central Act would not in our opinion make any difference to the nature of the impost which was in force on the relevant date, namely, April 1, 1950.It was however urged that under this system even tobacco which was not produced or manufactured in the State but was imported from outside was included for the purpose of licences granted under it. That is undoubtedly so. But from the Rules which were in force regarding cultivation, curing, manufacturing and so on of tobacco within the State it would not be unreasonable to infer that the substantial part of the income from auctions was still in the nature of excise duty. Even in the case of imported tobacco, only with respect to that part of it which was eventually sold to the consumer as it was imported without any processing or treatment in the State, it can be said that the impost which fell on it was not in the nature of excise duty. However, there is no way of differentiating this part of the revenue from the rest and considering the elaborate provisions as to the control of tobacco trade from the grower right up to the time that the goods were sold to the public in retail sale it would in our opinion be not unreasonable to hold that the Cocbin Act as well as the Travancore Act was in substance an Act corresponding to the Central Act. Therefore when the Central Act was extended to the Part B State of Travancore-Cochin by S. 11 (1) of the Finance Act and the Finance Act specifically provided by S. 13(2) for the repeal of corresponding law, the result was that the Cochin Act as well as the similar Travancore Act stood repealed. There would be no power in the State Government thereafter to frame new Rules either in August 1950 or in January 1951 for there would be no law to support the new Rules and without such law the new Rules could not impose a tax as that would clearly offend Art. 265 of the Constitution. Further as soon as the Cochin Act as well as the similar Travancore Act stood reported on April 1, 1950 by virtue of S. 13(2) of the Finance Act there could be no question of their being sustained under item 62 of List II of the Seventh Schedule for that would only arise if these were not repealed as corresponding law by S. 13(2).15. Turning now to the three Travancore appeals it is enough to say that they stand on the same footing as the two Cochin appeals. If anything the Travancore Act as well as the Travancore Rules which were in force on April 1, 1950 are more elaborate than the Cochin Act and the Cochin Rules. Further the Travancore Act by S. 31 actually refers to manufacture also. The Cochin Act did not refer to manufacture in the Act itself though there was provision for manufacture in the Rules framed under the Act. What applies therefore to the Cochin Act and the Rules framed thereunder applies in greater force to the Travancore Act and the Rules framed thereunder and there is no doubt that the Travancore Act and the Rules framed thereunder were also a law corresponding to the Central Act and the Rules framed thereunder. The Travancore Act therefore also stood repealed from April 1, 1950. There would thus be no law to support the Rules framed by the State Government in January 1951 and therefore the Rules must fall.It appears that these new Rules have been abrogated as from January 1958. So it was urged on behalf of the State that this Court should not grant a mere declaration as to the invalidity of the Rules, when they are no longer in existence. This argument in our opinion has no force because we must look to the situation as it was when the petitions were presented. The Cochin petitions were presented in 1956 and the Travancore petitions were presented in 1955 and at that time the Rules were in force and they continued in force till December 1957. Therefore the petitioners would be entitled to a declaration that the Rule were invalid because at any rate that would give them relief so far as the period after their petitions is concerned while the Rules remained in force