Case: M/S. R. M. D. C. (Mysore) Private Ltd Vs. The State Of Mysore

SCR 8, at pp 24, 42 : (AIR 1959 SC 648 at pp. 657, 665). 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. S. 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 became void and not the rest. Therefore by the omission of words "for which a licence had been obtained," under S. 8, the rest of the clause would be valid. The effect of the amending Act is that the abovementioned words were deemed to have been omitted as from April 1, 1956 and the rest of cl,. (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 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 5 in the Central Act but that portion which deals with taxation cannot be held to be void because as a result 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 1959 Supp (2) SCR 8; (AIR 1959 SC 648 ) i.e. the doctrine of eclipse could be invoked in the case of a Law which was valid when made but was rendered invalid by a supervening constitutional inconsistency. This disposes of the challenge to the constitutionality of the Mysore Act on the five points set out above. Therefore the law may be summed up as follows :(1) By passing the resolutions as to control and regulation the power to tax had not been surrendered to Parliament.(2) The amending Act was not a new method of controlling prize competitions nor was it a piece of colourable legislation.(3) There was no amendment of an Act which stood repealed nor was the retroactive operation of the Amending Act affected by Art. 254 (1) of the Constitution.17. The next three objections to the legality of the assessment were : (1) that the assessment was provisional which was not contemplated under the Act; (2) there should have been a fresh notification after the amendment of the Mysore Act and (3) at the time when the recovery 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 competitions and three days were given to comply with that notice. Their reply was that the Ordinance under which the notice was issued was unconstitutional and illegal 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. 26,47,147-5-9, there was the following endorsement:-"The above figures of collections are verified partly with available bank statements and partly with the books of accounts and are subject to reconciliation between the amount as per ledger and that as above. The commission 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.(Sd.) ....,.............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 to the 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 all but as was held 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.18. The next question as to the necessity of a fresh notification, on 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.19. 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 within a week. It is not 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.

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

Explanation:
0[ds]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 scheme if 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 bemay 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 ofif the 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 grounduse the language of Gwyer C. J., in 1939 FCR 18 ; (AIR 1939 FC 1)is not 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 itsthe 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 tax on betting and gambling under Entry 62. It is also instructive to note that Venkatarama Ayyar J., in 1957 SCR 930   : (S) AIR 1957 SC 628  ), 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.15. 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 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 and a new method 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 Entryby the omission of words "for which a licence had been obtained," under S. 8, the rest of the clause would be valid. The effect of the amending Act is that the abovementioned words were deemed to have been omitted as from April 1, 1956 and the rest of cl,. (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 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 5 in the Central Act but that portion which deals with taxation cannot be held to be void because as a result 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 1959 Supp (2) SCR 8; (AIR 1959 SC 648  ) i.e. the doctrine of eclipse could be invoked in the case of a Law which was valid when made but was rendered invalid by a supervening constitutional inconsistency. This disposes of the challenge to the constitutionality of the Mysore Act on the five points set outthe law may be summed up as follows :(1) By passing the resolutions as to control and regulation the power to tax had not been surrendered to Parliament.(2) The amending Act was not a new method of controlling prize competitions nor was it a piece of colourable legislation.(3) There was no amendment of an Act which stood repealed nor was the retroactive operation of the Amending Act affected by Art. 254 (1) of thelegality 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 thewe 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 within a week. It is not 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.