1966 Supreme(MP) 127

High Court Of Madhya Pradesh
P. V. Dixit, C. J. and R. J. Bhave, J.
DEVKUMARSINGHJI KASTURCHANDJI - Appellant
Versus
STATE OF MADHYA PRADESH - Respondents
Misc. Petn. 6 Of 1966
Decided On : 10/13/1966

Headnote:(1) Nagriya Sthawar Sampatti Kar Adhiniyam, 1964 (M P.) - S. 4 - Constitution of India -Seventh Schedule, List I, Entries 82 & 86. List II, Entry 49 - tax imposed by the Act- is not a tax on income nor a tax on capital value of assets-it is a tax on lands and buildings and is covered by Entry 49 of List- II - State Legislature competent to levy the tax-is not a colourable enactment-motive of the legislation is not relevant-what is colourable legislation.

       The tax imposed by the charging section of the Act, that in section 4, is neither a tax on income nor a tax on capital value of assets covered by entries 82 and 86 of List I. It is a tax on lands and buildings covered by entry 49 of List II and the State Legislature was competent to enact the Act. AIR 1949 FC 81 relied on. AIR 1940 Bom. 65 (FB) & 1901 AC 26 referred to, AIR 1963 SC 1742 distinguished. [Paras 5, 6 & 7]

       The Act is not of a colourable character. It is now well settled that if an enactment is within the legislative competence of the State Legislature, then the motives which impelled it to act are really irrelevent and have no bearing on the question whether the Act is or is not a piece of colourable legislation. AIR 1953 SC 375, AIR 1959 SC 308 & AIR 1962 SC 458 relied on.

       In this Act there is no attempt to encroach or trespass upon the powers of Parliament, orany patent, manifest, direct, disguised, covert or indirect transgression of the limits of legislative authority of the State Legislature, and hence the objection that the Act is a piece of colourable legislation must fail. [Para 8]

       (2) Nagriya Sthawar Samipatti Kar Adhiniyam, 1964 (M. P.) - S. 4 - Municipal Corporation Act, 1956 (M.P.) - S. 132 - Constitution of India - Art. 246(3), Seventh Schedule, State List, Entry 5, List II, Entry 49 -source and purpose of the Corporation Act- nature of delegation of power - State Legislature can delegate the flower under Entry 44 - State Legislature can impose lax on lands and buildings for purposes of general revenue and can also authorize local bodies to levy such tax for their purposes-the two taxes can validly co-exist -attack on resources of Corporation by the State may not be proper but it is not invalid-double taxation permissible.

       M. P. Municipal Corporation Act, 1956, has been enacted by the State Legislature in exercise of its powers under Art. 246 (3), read with Entry 5 of the State List of the Seventh Schedule. When the State Legislature has this power to constitute local bodies and vest them with power and jurisdiction, then in the creation of local authorities by a statute and in investing them with power of taxation, there is no 'delegation of power' in the strict sense of the expression, that is to say, in the sense of the Legislature completely abdicating its functions.

       There are no words in Entry 49 to suggest that a tax on lands and buildings is to be levied only for the purposes of local Government as explained in Entry 5 of List II. The State Legislature can empower the local bodies to impose tax on lands and buildings for the purposes of the Act creating the local bodies, and also levy a tax itself for the purposes of general revenue. 1963 JLJ 5 (FB) relied on. [Para 10]

       Section 132 (4) of the M. P. Corporation Act, 1956, read with section 4(3) of the impugned Act, show that the taxes imposed by the two Acts can validly co-exist.

       [Para 11]

       It may not be proper for the State Government to appropriate the income by taxation which should go to the local bodies, but that does not render the Act invalid. On the theory and principles of sound taxation, double taxation of property may be open to objection if the two taxes together imposed on property constitute a burden greater than it can or ought to bear. But if both the State Legislature and the local or Municipal authority possess the power to levy the tax, then the Constitution does not prevent the same person or property being subjected to both the State and Municipal taxation. 2 MPLC 49, AIR 1954 Bom. 261 & AIR 1959 SC 582 relied on. [Para 12]

       (3) Constitution of India - Arts. 19 & 352 - taxation Act-when may be confiscatory -the question of invalidity on this ground cannot be examined till the Declaration of Emergency continues- Nagriya Sthawar Sampatti Kar Adhiniyam, 1964 (M.P.) - S. 4.

       There are no doubt limits to taxation. If those limits are crossed, then apart from the evils flowing in the field of economics and public finance, a tax may become invalid in law because of its confiscatory character and effect. AIR 1939 PC 53, AIR 1959 SC 894 & AIR 1961 SC 552 relied on.

       But this contention cannot be examined because of the Declaration of Emergency by the President under Article 352 suspending the protection of Art. 19. AIR 1964 SC 381 relied on. [Para 14]

       (4) Constitution of India - Arcs. 14 & 19, Seventh Schedule, List II, Entry 49 - tax not invalid- Nagriya Sthawar Sampatti Kar Adhiniyam, 1964 (M. P.) - S.4.

       As Entry 49 of List II is not so worded as to suggest that a tax imposed by virtue of that Entry is to be paid only by the occupier, or by the owner and occupier both, and not by the owner alone, and as the impugned Act received the assent of the President, it cannot be urged that section 4(4) of the Act is ultra vires the powers of the State Legislature and, therefore, invalid. [Para 13]

       The Act is not discriminatory and does not violate Art. 14. [Para 15]

       (5) Words & phrases-delegation-meaning of.

       The word 'delegation' as generally used, does not imply a parting with powers by a person who grants delegation, but points rather to the conferring of an authority to do things which otherwise that person would have to do himself. 1963 JLJ 5 (FB) relied on.

       (6) Words & phrases-phrase 'any other enactment for the time being in force' -meaning of.

       (7) Municipal Corporation Act, 1956 (M.P.) - S. 132(1)(a) - phrase 'any enactment for the time being in force' – import of.

       The expression "any other enactment for the time being in force" does not mean an enactment which was already in force at the time when the Act came into force, but means any Act, whether enacted before or after the provision containing this phrase. The general scope of the phrase is that of time indefinite, and refers to indefinite state of facts which will arise in future and which may vary from time to time. 31 LJ 867 relied on.

       This phrase in section 132(1)(a) of the M. P. Municiple Corporation Act, 1956, includes any legislation enacted", whether before or after the imposition of the tax by the Corporation. [Para 11]