Case: Bangalore Woollen, Cotton And Silk Mills Co. Ltd Vs. The Corporation Of The City Of Bangalore By Its

has been defined in Art. 366, clause (10), to mean,""Existing law" means any law, Ordinance, order, bye-law or regulation passed or made before the commencement of this Constitution by any Legislature, authority or person having power to make such a law, Ordinance, order, bye-law, rule or regulation;"and by Art. 372 all, laws in force in the territory of India immediately before the commencement of the Constitution shall continue to be in force until altered or repealed or amended by a competent legislature. It was these provisions which were relied upon as an answer to the question of the applicability of Art. 301. But the learned Attorney General argued that the action taken by the Municipal Corporation was after the coming into force of the Constitution, being a levy imposed as from January, 1955, that the imposition of the tax was subordinate legislation which could not be saved under Art. 305 and that the tax could only be imposed by resorting to the provisions of Art. 304 (b) which provides :10. Art. 304. "Notwithstanding anything in Article 301 or Article 303, the Legislature of a State may by law-(a) ..................................(b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest:Provided that no Bill or amendment for the purpose of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President." The argument therefore was this that the Act being an "existing law" might be saved under Art. 305 but that would operate on and save the taxes on articles specified in Schedule III of Part V, item18, i.e., octroi on animals and goods set out in classes I to VII of that Part but would not save the octroi on other articles under class VIII imposed after the Constitution because that would be an addition of a bye-law, rule or order and would not fall within the term "existing law". The impugned tax was levied under class VIII set out in part V which is as follows :Octroi Maximum rateClass VIII-Other articles which are not specified above and which may be approved by the Corporation by an order in this behalf. .......Rs. 2-0-0 percent ad valorem.Octroi is to be levied by reference to S. 130 of the Act which provides :-S. 130. "If the corporation by a resolution determines that an octroi should be levied on animals or goods brought within the octroi limits of the city, such octroi shall be levied on such articles or goods specified in Part V of Schedule III at such rates not exceeding those laid down in the said Part in such manner as may be determined by the corporation."11. Therefore under this section if the corporation resolved to levy octroi on animals or goods brought within the octroi limits of the city then this octroi was to be levied at rates not exceeding those laid down in that section. This, it was submitted, was subordinate legislation and therefore was not saved by Art. 305 because "existing law" as defined means any law, ordinance, order, by-law, rule or regulation passed before the Constitution and as the impugned tax was a new regulation passed after the Constitution it was not saved by Art. 305. In support of this reliance was placed on the observations of this Court in Hamdard Dawakhana v. Union of India, AIR 1960 SC 554 but as was observed by the Divisional Bench that case does not apply to the facts of the present case.12. For the respondent it was argued that (1) goods and animals were specified in the Act and therefore there was not making or passing of new regulations and (2) it is not a case of delegated legislation but is a case of conditional legislation. It was firstly submitted that there is sufficient specification in the Act itself of the articles on which the octroi duty could be levied. Section 97 of the Act gives the power to levy octroi duty on animals or goods without any exception which are brought within the octroi limits. Sections 98 and 130 lay down the procedure for the levying of taxes and impose a limitation on the extent of the tax to be levied and classes I to VII make certain articles taxable and class VIII makes other articles and goods taxable if they are approved by the Corporation. This approach to the subject has the support of a decision of this Court in Anwarkhan Mahboob Co. v. State of Bombay, AIR 1961 SC 213 where the facts were that the assessee was subjected to a purchase tax under S. 14(6) of the Bombay Sales Tax Act, 1953 (Act III of 1953). The contention of the assessee was that the goods had not been specified in the Sales Tax Act. In that Act in the Schedule were mentioned the goods the sale or purchase of which was subject to tax and the last entry was of "all goods other than those specified from time to time in Schedule A (and Section 7A) and in the preceding entries". The question for decision was whether that entry amounted to specification of goods for the purposes of Sales Tax and it was held that it was. This case was sought to be distinguished on the ground that the words there were "all goods other than.... ............" and those words would comprise every article which was not specifically mentioned in the Schedule. We are unable to accept this distinction because even though the words used in the present statute are different the combined effect of Ss. 97 and 130 and Part V of Schedule III including class VIII which have been set out above is that the words are of very general nature and would have the same effect as if, all articles were intended to be and were included. In view of this it is unnecessary to discuss the second contention.13.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]3. It is unnecessary in this case to discuss the relevance of marginal notes in the construction of S. 38(1) (b) because in our opinion the language is unambiguous and clear and it validates any defect in any act done or proceedings taken under the Act and makes it immune from being questioned on the ground of any defect or irregularity in such act or proceedings not affecting the merits of the case and merely because it is in a chapter dealing with Municipal Authorities or other parts of the section dealing with another subject is no reason for confining its operation to the defects contended for by thehistory of these taxes therefore shows that in the Devolution Rules underthe Government of India Act, 1915, octroi, terminal tax and taxes on professions and callings were three distinct heads of taxation. Similarly inthe Government of India Act, 1935, and in the Constitution the two entries are separate. Therefore when S. 142-A was added inthe Government of India Act, 1935, its operation was limited to entry 46 of List II and had no reference to entry 49 which deals with cesses on entry of goods. The position under the Constitution is exactly the same and therefore neither S. 142-A ofthe Government of India Act, 1935 nor Art. 276 has any effect on entry 49 inthe Government of India Act, 1935 or entry 52 in the Constitution. The learned Attorney General in support of his argument that the impugned tax is a tax on trade, relied upon three judgments: Municipality of Chopda v. Motilal Manekchand, ILR (1958) Bom 483 : (AIR 1958 Bom 487  ), Gajadhar Hiralal Firm v. Municipal Committee, Washim, ILR (1958) Bom 625  : (AIR 1958 Bom 378  ) and Municipal Committee Karanja v. New East India Press Co. Ltd., Bombay, AIR 1949 Nag 215.None of these cases has any applicability to the tax now impugned because the facts were different and the imposition was of a different character. The attack on the constitutionality of the impugned tax on the ground of contravention of Art. 276 is therefore not sustainable and must beunder this section if the corporation resolved to levy octroi on animals or goods brought within the octroi limits of the city then this octroi was to be levied at rates not exceeding those laid down in that section. This, it was submitted, was subordinate legislation and therefore was not saved by Art. 305 because "existing law" as defined means any law, ordinance, order, by-law, rule or regulation passed before the Constitution and as the impugned tax was a new regulation passed after the Constitution it was not saved by Art. 305. In support of this reliance was placed on the observations of this Court in Hamdard Dawakhana v. Union of India, AIR 1960 SC 554   but as was observed by the Divisional Bench that case does not apply to the facts of the presentare unable to accept this distinction because even though the words used in the present statute are different the combined effect of Ss. 97 and 130 and Part V of Schedule III including class VIII which have been set out above is that the words are of very general nature and would have the same effect as if, all articles were intended to be and were included. In view of this it is unnecessary to discuss the second contention.