Judgment

RAMASWAMI, J.: This appeal is brought by certificate from the judgment of the Kerala High Court in O. P. No. 934 of 1964.

2. The respondents are dealers in tobacco and tobacco preparation and are doing business in Mattancherry in the name and style of A. S. Bava, Tobacconist. In the year 1909, Cochin Tobacco Act 7 of 1084 (M. E.) was enacted by the Maharaja of Cochin. Section 4 of the that Act prohibited the transport, import or export, sale and cultivation of tobacco except as permitted by the Act and Rules framed thereunder. Section 5 of the Act gave power to the Dewan to make rules from time to time consistent with the Act, to permit absolutely or subject to any condition the possession for sale, or cultivation of tobacco. In pursuance of the power given by this section the Dewan was making rules from time to time relating to the matters specified in the act Cochin State was integrated with Travancore on April 1, 1950 in order to form the new State of Travancore-Cochin. On that date, after the Constitution came into force the State of Travancore-Cochin. became a Part B State and by the Finance Act, 1950 the Central Excises and Salt Act 1 of 1944 was extended to the Travancore-Cochin State. Section 13 (2) of the Act provided that if immediately before the first day of April, 1950 there was 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Jammu and Kashmir a law corresponding to, but other than an Act referred to in sub-s. (1) or (2) of S. 11, such law was repealed with effect from such date. In consequence of this provision in the Finance Act, rules which were in force on April 1, 1950 were changed in Cochin and by a notification dated August 3, 1950 the system of auction sales of A and B Class shops was done away with and instead graded licence fees were introduced for various classes of licences including C class licences. The State of Travancore-Cochin was collecting licence fee from the respondents for the period from August 17, 1950 to December 31, 1957 on the strength of the said rules framed by the Travancore-Cochin State. In 1956 the respondents filed O. P. No. 70 of 1956 in the High Court of Kerala for the refund of the licence fee collected after April 1, 1950 on the ground that the Cochin Tobacco Act stood repealed by the Finance Act, 1950 because of the extension of the Central Excises and Salt Act 1 of 1944 to the Part B State of Travancore-Cochin and in consequence the notifications issued in August 1950 and January 1951 framing new rules for the issue of licences and prescribing fees therefor under the powers conferred by the Cochin and Travancore Acts were ab initio void because the Acts under which the notifications were purported to be issued stood repealed from April 1, 1950. The petition was opposed by the appellant on the ground that the Act and the rules were not repealed by the extension of the Central Excises and Salt Act 1 of 1944 to Travancore Cochin State. The High Court dismissed the writ petition holding that the tax levied by virtue of the rules framed under the Travancore Cochin Tobacco Acts was not a duty of excise coming within the Union List but it was a tax on luxuries coming within Entry 62 of that State List. The respondents took the matter in appeal to this Court which held that the rules framed under the Cochin Tobacco Act of 1084 (M. E.) and the Travancore Tobacco Regulation of 1087 (M.E.) requiring licences to be taken out for storage and sale of tobacco and for payment of licence fee in respect thereof were law corresponding to the provisions of the Central Excises and Salt Act, 1944 and hence were superseded on April 1, 1950 by virtue of S. 13 (2) of the Finance Act, 1950. Consequently, the new rules framed in August 1950 and January 1951 for the respective areas of Cochin and Travancore for the issue of licences and payment of fee for storage of tobacco were invalid ab initio. The Court did not consider it necessary to decide whether the Cochin and Travancore Acts were within the competen