Case: Union Of India Vs. City Municipal Council, Bellary

the commencement of the Constitution is affected to the extent it contravenes or is repugnant to the said provision. The Act of 1941 creating the liability of the Railways to taxation by local authorities was passed by the then Central Legislature which was a Federal Legislature of India. The present Central Legislature, namely, the Parliament has not enacted any law after coming into force of the Constitution making any provision affecting the exemption of the property of the Union from all taxes imposed by a State or by any authority within a State. The 1941 Act is repugnant to clause (1) of Article 285. It is neither a law made by Parliament nor a law made by the Central Legislature after the advent of the Constitution. # In either view of the matter it is not a law covered by the phrase save in so far as Parliament may by law otherwise provide occurring in clause (1) of Article 285. There is an additional reason for rejecting the argument of Mr. Ramamurthi in this regard. If the contention as made were to hold good it will make clause (2) of Art. 285 almost nugatory. We, therefore, hold that the property in question is exempt from all taxes claimed by the Bellary Municipal Council under clause (1) of Article 285 unless the claim can be supported and sustained within the four corners of clause (2). 12. We respectfully agree with the High Court that some variation in the amounts of the tax as payable by the Railway in the pre-Constitution and post-Constitution periods will nott rob the tax of being the same tax within the meaning of the expression that tax occurring in clause (2) of Article 285. In support of this view, reliance was rightly placed upon the decision of the Calcutta High Court in Governor-General of India in Council v. Corporation of Calcutta, AIR 1948 Cal 116 (2) and that of the Allahabad High Court in Union of India through General Manager E.I. Rly. v. Municipal Board, Lucknow, AIR 1957 All 452 . The decision of this Court in the Town Municipal Committee, Amravati v. Ramchandra Vasudeo Chimote, (1964) 6 SCR 947 : (AIR 1964 SC 1166 ) was rightly distinguished. A question for consideration before this Court was with reference to Article 277 of the Constitution. The Amravati Municipality claimed to impose and levy new terminal taxes on silver jewellery, gold and gold jewellery and precious stones which it was not levying in the pre-Constitution days. Article 277 is a saying provision empowering, besides others, any Municipality in a State to continue to levy the tax in the post-Constitution era under certain circumstances until provision to the contrary was made by Parliament by law. It was held by this Court that article 277 was not intended to confer an unlimited legislative power to impose what in effect were new taxes though of the same type or nature as existed before the Constitution. 13. In our opinion the High Court is also right in saying that the mere fact that the tax was being levie and claimed previously under the Madras Act of 1920 and now the claim is founded upon the Mysore Act of 1933 will not make it a tax different from that tax within the meaning of clause (2) of Article 285. As rightly pointed out by Mr. Ramamurthi taking aid from S. 55 of the Andhra State Act, 1953 or even without it the reference to the Madras District Municipalities Act, 1920 in the Explanation appended to the notification dated the 18th June, 1945 issued under sub-section (1) of Sec. 3 of the Central Act of 1941 can by a rule of construction be read as referring to the Mysore Act of 1933 in the changed circumstances of the case. 14. But that is not all. The real difficulty in the way of the Municipal Council is presented by the expression that State occurring at the end of cl. (2) of Article 285. The plain and simple meaning which must be culled out from the said expression in the context of the other phraseology in clause (2) is that the local authority can claim protection under clause (2) if it is a local authority in the same State in which it was before the advent of the Constitution. There does not seem to be any ambiguity in this matter and there is, therefore, no. escape from the position that the Bellary Municipal Council in the city of Bellary which was a local authority within the State of Madras cannot take the advantage of clause (2) as at the time when it was making the claim for realization of the tax it was a part of the Mysore State. It is neither necessary nor advisable for us to speculate or hazard a surmise to find out a reason for making this distinction between the right of a local authority continuing to be a local authority in the same State and being part of the different States in the pre-Constitution and post-Constitution eras. As we have said above the ultimate authority lies with the Parliament either under Cl. (1) or Cl. (2). If it thinks that the distinction so made was without a difference it can by enacting a suitable law employer the Bellary Municipal Council to claim the municipal taxes retrospectively or prospectively from the Railway concerned in respect of its property situated within the limits of the Municipal Council. The amount of tax which the Municipal Council was getting from the Railway in respect of such property was quite considerable and was, perhaps, necessary for the funds of the Municipality. Such considerations are foreign and not germane for our purposes for deciding the constitutional point at issue. We are regretfully constrained to decide it against the Municipal Councol on a plain reading of the constitutional provision engrafted in Art. 285 (2). We accordingly hold that the respondents suit cannot be decreed against the appellant. 15.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]The Act of 1941 creating the liability of the Railways to taxation by local authorities was passed by the then Central Legislature which was a Federal Legislature of India. The present Central Legislature, namely, the Parliament has not enacted any law after coming into force of the Constitution making any provision affecting the exemption of the property of the Union from all taxes imposed by a State or by any authority within a State. The 1941 Act is repugnant to clause (1) of Article285.It is neithera law made by Parliament nor a law made by the Central Legislature after the advent of the Constitution. # In either view of the matter it is not a law covered by the phrase save in so far as Parliament may by law otherwise provide occurring in clause (1) of Article285.There is an additional reason for rejecting the argument of Mr. Ramamurthi in this regard. If the contention as made were to hold good it will make clause (2) of Art. 285 almost nugatory. We, therefore, hold that the property in question is exempt from all taxes claimed by the Bellary Municipal Council under clause (1) of Article 285 unless the claim can be supported and sustained within the four corners of clause (2)We respectfully agree with the High Court that some variation in the amounts of the tax as payable by the Railway in the pre-Constitution and post-Constitution periods will nott rob the tax of being the same tax within the meaning of the expression that tax occurring in clause (2) of Article285.In support of this view, reliance was rightly placed upon the decision of the Calcutta High Court in Governor-General of India in Council v. Corporation of Calcutta, AIR 1948 Cal 116  (2) and that of the Allahabad High Court in Union of India through General Manager E.I. Rly. v. Municipal Board, Lucknow, AIR 1957 All 452 . The decision of this Court in the Town Municipal Committee, Amravati v. Ramchandra Vasudeo Chimote, (1964) 6 SCR 947  : (AIR 1964 SC 1166 ) was rightly distinguished. A question for consideration before this Court was with reference to Article 277 of the Constitution. The Amravati Municipality claimed to impose and levy new terminal taxes on silver jewellery, gold and gold jewellery and precious stones which it was not levying in the pre-Constitution days. Article 277 is a saying provision empowering, besides others, any Municipality in a State to continue to levy the tax in the post-Constitution era under certain circumstances until provision to the contrary was made by Parliament by law. It was held by this Court that article 277 was not intended to confer an unlimited legislative power to impose what in effect were new taxes though of the same type or nature as existed before the ConstitutionIn our opinion the High Court is also right in saying that the mere fact that the tax was being levie and claimed previously under the Madras Act of 1920 and now the claim is founded upon the Mysore Act of 1933 will not make it a tax different from that tax within the meaning of clause (2) of Article285.As rightly pointed out by Mr. Ramamurthi taking aid from S. 55 of the Andhra State Act, 1953 or even without it the reference to the Madras District Municipalities Act, 1920 in the Explanation appended to the notification dated the 18th June, 1945 issued under sub-section (1) of Sec. 3 of the Central Act of 1941 can by a rule of construction be read as referring to the Mysore Act of 1933 in the changed circumstances of the caseAs we have said above the ultimate authority lies with the Parliament either under Cl. (1) or Cl. (2). If it thinks that the distinction so made was without a difference it can by enacting a suitable law employer the Bellary Municipal Council to claim the municipal taxes retrospectively or prospectively from the Railway concerned in respect of its property situated within the limits of the Municipal Council. The amount of tax which the Municipal Council was getting from the Railway in respect of such property was quite considerable and was, perhaps, necessary for the funds of the Municipality. Such considerations are foreign and not germane for our purposes for deciding the constitutional point at issue. We are regretfully constrained to decide it against the Municipal Councol on a plain reading of the constitutional provision engrafted in Art. 285 (2). We accordingly hold that the respondents suit cannot be decreed against the appellant.