A law imposing royalty on bricks is not a law corresponding to the Central Excises and Salt Act, 1944, and is, therefore, not repealed by S. 13(2) of the Indian Finance Act, 1950.

Judgement

HIDAYATULLAH, J. : The only question in this appeal with certificate under Art. 133 (1) (c) of the Constitution, against the judgment and decree of the High Court of Patiala and East Punjab States Union, is whether the levy of royalty at Rs. 50 per one lakh bricks under a Robkar issued by the Ijlas-i-Khas (Council of Regency), Patiala State on February 6, 1919 is valid.

2. The appeal arises out of a suit filed by the present appellants in the Court of the Subordinate Judge, Faridkot, for declaration and injunction. The suit was dismissed by the trial Judge, but on appeal to the District Court, the decision was reversed. On Further appeal to the High Court, the decision of the Additional District Judge was set aside, and that of the trial Judge restored.

3. In this appeal, the only point argued is whether the order of the Ijlas-i-Khas continues to be effective, after the enactment of the Indian Finance Act 1950. The suit was filed on May 13, 1952, for injunction against notices of demand issued to the appellants from the Tehsil Office, Faridkot on or about April 20, 1951. The learned Solicitor-General concedes that the appellants claim must be confined to the period after April 1, 1950, from which date the Indian Finance Act, 1950 began to operate. He states that prior to that date the law could not be considered to be invalid because of Art. 277, which saved taxes, duties, cesses or fees which were being levied in any State prior to the commencement of the Constitution. He also concedes that the Finance Act, 1950 could not operate before April 1, 1950, and the question, therefore, is, what is the effect of the Indian Finance Act, 1950 on the order impugned? It may also be pointed out that the authority of the Regency Council to issue the impugned order and the validity of that order, unless affected by any Indian Law, are not called in question.

4. The Indian Finance Act, 1950 was passed to give effect to the financial proposals for the year commencing on April 1, 1950. Section 11 of that Act extended, amongst others, the Central Excises and Salt act, 1944, to the whole of India including Part B States, except the State of Jammu and Kashmir. By S. 13 (2), it was provided, inter alia, as follows :

"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-s. (1) or (2) of S. 11, such law is hereby repealed with effect from the said date . . . ."

It is contended that by the extension of the Central Excises and Salt Act, 1944 there was repeal of any law imposing excise duty on the manufacture of any class of goods. Attention is, therefore, drawn to the provisions of the Robkar, where the royalty is charged as follows :

Mehsul (Royalty) at the rate of Rs. 50 per lac bricks be charged from all the kilnowner irrespective of the fact where they construct brick-kilns on the land belonging to Government or not. In case they construct brick-kilns on the land belonging to Government, cost (of the land) or damages thereof be charged (from them) in addition to the Mehsul (Royalty). . . . ."

5. The provisions of S. 13 (2) of the Indian Finance Act, 1950 clearly show that only a law corresponding to the Central Excises and Salt Act, 1944, was intended to be repealed. If the law did not correspond to the Indian statute, it would be saved by virtue of Art. 277. We have thus to determine in this case whether the Robkar of the Ijlas-i-Khas, imposing a royalty on bricks can be said to be a law corresponding to the Central Excises and Salt Act, 1944, which was extended on April 1, 1950.

6. The argument of Mr. Daphtary proceeds on the assumption that the royalty is in the nature of an excise duty, and the Robkar is thus a law corresponding to the Indian statute. That, however, does not determine the question, because the words of sub-s. (2) of S. 13 of the Finance Act, 1950 are that the law repealed must be a law corresponding to th