Shtenf v. La~sf.mi !cl F•clory

Appeals from that judgment and decree dated April 13, l!l5!i, of th" former "Xagpur High Court in Civil Suits Nos. :i, ·1, fl and 10 of l!J:i5 (Original Nos. :u.c.c. 194, 195, 2no and 202 of I9!il).· Al. C, Sehl1.'£td, Atwrney·General for India, A. V. Vis1i~1nathri Sastri, .J. V. ,fokatdar and /. N. Shroff, for the appellant (in C. A. No. 188 of 56). H. N. S11nynl, .Additional Solicitm General of lnditJ, and G. C. Afrithur, for tho respondent(in C. A. · No. 188 of 56) . .! . .V. l. N. Shroff, for the .Takritd'1r ancl appellants (in C. As. ~ os. 189 to 191 of :i6). S. T. Desai and G. C. Mathur, for the respon dent (in C. A. No. 190 of liG). G. C. Mathur, for the respondent (in C. As. l\ os. 180 and 191 of :jG). 19G2. February 7. The .Judgment of the Court was delivered by ~1)a:itgar ./. A YYANGAR, J. -Section 143(2) of the Govern ment of India Act, IH35 enacted. "143(2). Any taxes, duties, cesses or fees immc, diately before the commence which, ment of Part HI of this Act, were being lawfully }o\'icd by any Provincinl Govern menf, municipality or other !or.al authority or body for the purposes of tho Province, municipality, dialrict. or 0thcr local area under a law i11 force on th!' first <lay of .Janu ary, 11inetee11 hundrerl rincl thirt.y-five, may, taxes, duties, notwithstanding cesHes or fee~ a~e mcntionecl in the Federal Legislative List, continue to be levied and to be applied to the same purposes until provision to the contrary is maclo by the Federal Legi:-l:iture." that. The precise import, significance ai1<l effect of tq~ 1962 Rama Kri.shna Ramanath v. The J anpad Sabha, Gandia Ayyangar J. .. • 3 S.C.R. SUPREME COURT REPORTS 73 words "continue to be levied and 'to be applied to the same purposes until provision to the contrary is made by the Federal Legislature" is the common question which arises in these four appeals which come before us by virtue of certificates under Art. 132 of the Constitution granted by the High Court of Madhya Pradesh at Nagpur. Section 51 of the Central Provinces and Bcrar Local Self Government Act, 1920 enacted : "51. (l)· Subject to the provisions of any law or enactment for the time being i'n force a District Council may, by a resolution passed by a majority of not less than two. thirds of the members present at a special meeting convened for the purpose, impose any tax, toll or rate other than those specified in sec tions 24, 48, 49, and 50. (2) ................................................... . (3) ................................................ " By virtue of the power thus conferred the District Council of Bhandara which was "a local authority" constituted under this Act of 1920 imposed a tax on the export of bidis and bidi-leaves by rail out of the Bhandara district by a resolution dated May 14, 1925, as amended by another dated April 18, 1926. The tax was at the rate of 4 annas per maund on bidis and 2 annas per maund on bidi· leaves. The Local Government framed rules for the collection of the tax under s. 79 of the Act of 1920, and the said tax was being collected by this local authority on April l, 19:!7, when Part III of the Government of India Act came into force. It is now common ground that the tax thus levied and collected was "a terminal tax on goods carried by railway" covered by entry 58 in the Federal Legislative List-List I-in the Seventh Schedule to the Government of India Act of 1935. The result of this tax being in the Federal Legislative List, jt js ~anifest~ is that tqe ]>rovincial Le~islatur(J 1962 Rama Krishna Rama11ath Y. ?'he Ja11paJ Sabf.a, Gondi:J 74 SUPREME COURT REPORTS (1962] SUPP. could not thereafter freshly impose such a tax under its legislativo power. By reason of the pro· vision however of s. 143 (2) of the Government of India Act, 1935, extracted Parlier, the local autho rity continued to retain the authority to levy and collect the 8aid tax and tho tax continued to be collected by the District Council even after April I, HJ37 when Part III of the Government of India Act came into force. While so, the Central Pro vinces :ind Berar Local Self Government Act, 1920, was repealed and was replaced by tho Central Provinces and Berar Local Government Act, 1948, which came into force on June 11, 1948. District CouncilH which were the units of local government a<lminiHtration under the Act of I 920 were replaeecl by .Janpr1ds which comprised smaller areas and as a result the an•a which was under the jurisdiction of the District Council of Bhandara under the Local Self Government A<·t of 1920, came to be constituted those of Gondia, Bhandara and S;Lkoli-these being the three Tahsils comprised in the district and tho thrco Janpa<ls were adminiRtered .Janpad ~abhas former! under the Ad of .1 !)48. There were provisions in the later cna<·tment providing for continuity in the powers to be exercised by the Di.~trict Couneils whom the former replaced. But what is of relevance to the points arisin~ in thn present appeals arc those containl'd ins. 192 of the Act of l!l48 which, as originally enacted, ran : three .Janpads, viz., h~· three "On and from d~te on which this Act comes into force, the Centrnl ProYinceH and Rerar Local Self GoYcinmP11t. Act, 1920, shall be rt'pealcd : Provided that-- (a) all local authorities constituted under the said Act shall continue to function there· . 4nder for such ti!lle till the constitution of . . . . • 1962 -Rama Kria/ma Ramanath v. The Janpad Sabha, Gondia Ayyangar J. 3 S.C.R. SUPREME COURT REPORTS

#75. the Sabhas as the Provincial Government may, by notification, specify; (b) all rules and byelaws made, all noti fications published, all orders issued and all licences and permissions granted under the said Act and in force immediately before the commencement . of this Act shall, so far as they are consistent with this Act, be deemed to have been respectively made, published, issued and granted thereunder; ( c) all rates, taxes and cesses due to the district Council or Local Board shall be deem ed to be due to the Sabha to whose area they pertain; and (d) all references made in any Act of the Provincial Legislature to the said Act shall be read as if made to this Act or to the corres ponding provision thereof." Pausing here, two matters which figured largely in the arguments require to be notieed in the provi· sions of this section. The first is that there was an exprcs,; repeal of the Loc11l Self Government Act of 1920 effected by the main part of the section. Th~ second is that the repeal was not absolute and unconditional but was modified by a saving which continued the operation of certain of the provisions of the repealed Act. But the terms in which the 1ight to collect the rates, taxes and cesses was continued in favour of the Janpad Sabhas which replaced ·the District Councils under cl. (c) was capable of being construed as not enabling the imposition of the rate, cess etc, by the future ,Janpad i'abhas. The scope and mPaning of this clause which is one of the principal matters to be considered in these appeals we shall reserve for later consideration but at this stage it might be mentioned that the clause is certainly capable of bein$ understoocj as tranaferrin~ to the Sabhas onlr • 1~62 Rama Krishna Ramonatll v. · Tiu Janpad Sabha, Gmidi4 AyyangarJ. 76 SUPREME COURT REPORTS [1962] SOPP. J_ the right to collect the rntes, tiixes or ceases which had accrued due to the District Councils which had remained unpaid on the date when by virtue of the first part of s. 192 the Act of 1920 stood repealed and the District Councils ceased to exist. If this were the propPr meaning of this clause it is obvious longer levy the that the .Tanparl Sa bhas could no terminal tax on bidis and bidi-lcaves where export was effected on or after June 11, 1948, on which date by virtue of the Act of 1948, coming into force tho earlier Act of 1920, stood repealed. The Janpad Sabbas wert>, however, continuing the levy and the Provincial Legislature sought to put the matter beyond doubt by an amending Act of 1949 by which cl. (b) of the proviso to s. Hl2 was replaced by a new clause reading : "All rules and byclaws and orders made, notifications and notices issued, licences and pcrmiti:i granted, taxes imposed or assessed, cc88cs (other than additional cesses imposed in accordance with section 49 of the said Act), fees, tolls or rates levied, contracts entered int-0 and suits instituted and proceedings taken under the said Act and in force immediately before the commencement of this Act shall continue to be in force and in so for as they n.re not inconsistent with thiR Act, they shall ho deome<l to have bee11 respectively made, issued, granted, imposed or aHscose<l, levied, entered into, instituted and taken under this Act until new provisions are made under the appropriate provisions of this Act." and bys. 39 cf the Amending Act this amendment was given retrospective effect from I.he commence ment of the LoP-al Government Act of 19l8. It was not in dispute that if the terms of cl. (bl as amended by the Act of I94!l bad found n. place in the Local Government Act of 1948 when originally enacted, ~he levr of this tax: br the J&npad Sabh¥ woul<l • Rama K1ishna Ramaiiath 1962 •• Tkt J anpad Sabha, Gondia A7yangarJ.

38.d.R. siJPR:EM:E coti:kr RE:Po:Rifs 77 have been valid. It is only necessary to add that if this tax had been lawfully levied by the Janpad · Sabhas immediately before January '.l6, 1950, they could continue to be levied after Constitution came into force nothwithstanding the repeal of the Government of India Act by the Constitution and notwithstanding solely leviable by the Union List in Sch. VII) by reason of the provision containrd in Art. 277 of the Constitution reading : taxes being a terminal "277. Any taxes, duties, · cesses or fees which, immediately before the commencement of this Constitution, were being lawfully levied by the Government of ?UY State or by any municipality or ,other local authority or body for the purposes of the State, municipa lity, district or other local area may, notwith standing that those taxes, duties, ceases or fees are mentioned in the Union List, continue to be levied and to be appliecl to the same purposes until provision to the contrary is made by Parliament by law." It would thus be seen that in order to sustain the claim of the respective Janpad Sabhas who are the respondents in these four appeals to continue to lawfully levy the terminal tax it should be establi shed either that cl. (c) to the proviso to s. 192 enabled them to do so or that the amendment effected to proviso (b) to s. 192 of the Act of 1948 was validly enacted. · Before considering this question it would be of advantage if we set out the facts of the cases under appeal. It is sufficient to ref.Jr to the facts in Civil Appeal 188 of J 956 because, except for the identity of the appellants and the amounts involved, the matter in controversy is exactly similar, Rama Krishna Ramanath-appellant in Civil AppPal 188 is a proprietary concern carrying on business, inwr alia., in manufacturing and selling bidis. In the - J !Jli2 Uania K1iJhna Ra111a11ath v. Tl;t .lm1pad Sabh1, Gnndia -1.>'1011gar J. ~~ SUPREME COVRT REPOR'l's [l!i62] SUPP. The course of that business they export bid is to various places outside the territo1 ial limits of the ,Janpad Sabha, Gondia. .Jar1p:id ~abha, Gondia demanded and collected taxes whrn th<' c'xport took its territorial place' from railway stations within jurisdirtion. Botwi:en January 2ti, 1950, and ,Juno 30, I 95:!, the respoudrnt 8abha had collected tax totalling Rs. 3,81S!l5/3, the appellant concern contending that from the date of the coming into force of the Constitution the imposition and collec tion of the terminal tax by the respondent Sabha was illegal, because the right to levy terminal taxes the government. of the was vested exclusively in Union under entrv 89 in the l?irst List to the 7th Schedule to the Constitution and sought tho refund of this sum of tax from the respondent Sabha and also required that it should desist from continuing the imposition and leTy of this tax, and when the request was not needed, served not.ice on the Sabha. In consequence of this notice though the Sabha discontinued the collection of the tax, it refused to refund the tax already collected. Thereupon the appellant instituti>d a civil suit in the court of the Civil ,Judge at Gondia pr..aying for a decree for the The suit was sum of l:ts. :~.818; 15/3 and costs. resisted and thereafter this alongwith several similar suits ineluding three by the appellants in the other three appeals were all withdrawn to the High Court undor Art. '228 of the Constitution for deciding the substantial question of law as to the interpretation of the Constitution and of tho Government of India Act as to whether the levy of the tax by the respondent Sabha was lawful or not. These suits were consolidated and were disposed of by a common judgment dated April la, 1955, by which all the suits were dismissed but a certific,1t.c was granted under Art. 132 of the Constitution. On the strength of tho certificate four of the agi,;rieved · plaintiffs filed appeals to tho Courts and that is how the matter is before us. 196Z Ramo Kri•hna Raman, th v. rhe J anpad s ablia, Gondia Ayya11gar J. 3s.c.:R. SUPREME COURT REPORTS Before considering the submissions made to us by the learned Attorney-General for the appel lant it would be convenient to state the exact levy of the factual position impugned tax : relating • (1) The tax being one on goods exported out of the local area by rail would answer the descrip tion of a terminal tax falling within the exclusive iurisdiction of the Central Legislature under the Government of India Act, 1935. The position has continued to be the same under the distribution of taxes under the legislative power in relation to Constitution. The result would, therefore, be that but for the saving contained in s. 143(2) of the Government of India Act, 1935 it would not have local authority been legally competent for the . to tax after Government of India Act came into force ; similarly but for Art. 277 that levy could not have been continued beyond January 26, 1950. On the facts stated earlier it would be seen that the right of the local authority to levy the tax would be ultimately dependent on the same being authorised by s. 149(2) of the Government of India Act. continue lawfully just prior (2) The tax that was sought to be levied by the respondent-Sabhas and which was challenged as unauthorised and illegal was identical in the inci dence as the tax which the District Council of Bhandara levied commencement of Part III of the Go;vernment of India Act, 1935. By incidence we mean the subject matter of the tax, the taxable event as well as the rate of the duty. In other words, the tax now sought to be levied and that which was lawfully imposed 1md collected prior to April 1, 1937 were exactly identical in their effect and operation. Similarly there was no controversy as regards either the identity of the area in aid of .whose administration the tax was now sought to be collec ted, nor as regards the purposes for which they I9C2 Rama K,i1hna Ramtlflath •• The J anpad Sabha, Gomlia AyY1ngar J, SO SUPREME COURT REPORTS [1962) SUPP. were utilised as compared with what prevailed on April I, 1937. The principal contention however, raised on behalf of the appellant before the High Court was based upon a denial of the identity of the autho rities-three .Janpad Sabhas with the District ·Council, Bhandara which levied and collected the tax\.prior to April l, 1937. The learned Judges of the High Court rejected I.his contention and held that tho throe Jan pad Sa bhas which replaced the District Council of Bhandara were in subH tance identical with the latter principally for the reason that the aroa covered by the three newly created Janpads was the same as that for which the District Council functioned and that the pur poses for which the tax collected would be utilized which arc the criteria specified in s. 143(2)-werc exactlv the same, Just as it could not be dis puted "that if there were any ehango in the com position of the District Council the identity of a. local authority would not be altered for the pur poses of s. 14:l(2}, tile mere splitting up of that local area for being administered by a plurality of Local Government Units would not effect any change mau, rial for the purposes of the continued exigibility of the tax under s. 143(2). The learned Attorney-General therefore very properly did not press before us this point based upon the dis appearance of the District Council and its being replaced by the respondent-Sabhas as any ground for denying ·to tho respondent-Sabhas the right to levy the ·tax. The only point that was urged before UB challenge of the right of the respondent-Sabhas to continue the levy of this terminal tax may be thus: The Prov incia.l Legislature of formulatecl Central Provinces & Berar in exercise of it~ legis lative power under item 13 of the Provincial Legis lative List enacted the Local Government Act, ! 196! Rama Krishna Ramanath v. The Janpad Sabha, Gondia A11'1/on(Jar J. 3 S.C.R. SUPREME COURT REPORTS 81 1948 and validly repealed the Act of 1920 under which this tax was levied. As part of the same · legislation and taking effect at the same time it was open to that Legislature to have continued the provisions of the repealed Act of 1920 under which the impugned tax was levied so as to enable the newly created Janpad Sabhas to exercise the fiscal powers of the District Councils which they . replaced, thus so to speak modifying or qualifying the repeal. Such a continuance could be provided by a saving clause couched in appropriate phra seology to effectuate such an intention. If this had been done the source of legal authority to levy the tax would, even after the Act of 1948 came into force, have been the repealed Act of 1920 which to the extent of the saving would be deemed to have continued in force. But tl)is was not done. There was, no doubt, a saving under the proviso to s. 192 )Jut the saving in respect of to the the taxes which was contained in sub-cl. ( c) proviso was confined to the recovery of taxes which had accrued due on the date of the repeal but which still purpose of the sub-clause was to effect a distri bution of those assets, viz., of the accrued arrears among the several Jan pad Sabhas which replaced each District Council, so that when on June 11, 1948, the Act of 1948 came into force, the effect of it was that the repeal of the Act of 1!120 was for all purposes relevant to the matter now in controversy complete and with it the power to levy the tax in future stood extinguished, save only as regards the right to collect the arrears which had accrued due to the District Councils the Provincial before Legislature effected an amendment to s. 192 in 1949 py which the saving was extended to include the right of the Jan pad Sabhas to continue to levy the impugned tax and this amendment was given retrospective effect as from June 11, 1948, but remained uncollected and that date. No doubt, ·- 1952 Rama K1ishna Ramanalh v. The Janpad Sabha, Gandia A.yyanuar J. 8:! SUPREME COURT REPORTS [1962) SUPP. this amendment was beyond the legislative com· petence of the Provincial Lagislature since in pith and substance it was virtually a legisla\ion ex· pressly conferring upon the Jan pad Rabhns H~ right to levy 11. t{lrminal tax-a right which thnv did not possess b.,fore that date and unless the Lcgis· lature was competent to enact a law in relation to such a tax it could not vnlidly confer upon the local. authority whnt in legal effect should he considered to be a fresh right to levy the tax. The argument wa.s also pre~onted in a slightly diff· crcnt form by snying that on the terms of s. 143(2) of the Government of India Act thcro was a provision only for tho r.ontimiance of the tax and that when once that continuitv was broken finch as took place in this ci>se when the Local flelf Con>rnment Act I !l20 wcs repealrd without a prnperly draftPd saving clause enabling the continiH'd levy of the tax, tho disccmtinnity created thereby crmld nrJt there the gap filled by further after be repnired and legislation even though it purported to be with rcstrospccti ,.e effect. a v1ili1! piccr. of legislation Mr. 811.nval-karned Additionnl Solieitor General who appeared for the respondent.-Sabhas submitted several nnswors to suHWJ.in the valirlity of the continued imposition of tho tnx. He first urgod th:1t the effect of s. 14:l(2) of the Govern in effect to vest in· ment. of India Act, I !l:-15 was Provincial Legislat.urns IL plennry power to legis· lat" in rospect of every tax which was being 111.w· fully levied by locnl authorities etr:. in thn Provine!' prior to the commencement of Part ITT of GoTernmont of India Act sn much so thctt even if tho amendment cf!'ected to s. lv2 hy the Local Government (Amendment) Act of 1949 be !rented as itself a fresh imposition of tho tax its validity could not be challenged. We must express our inability extreme conkntio11. thiH is a saving clause nnd Section 143 (:!) which accept 196! Rama K'l'ishna Ramanath v. The Janpad Sabha, Gondia Ayyangar J. 3 S.C.R. SUPREME COURT REPORTS 83 obviously designed to prevent a dislocation of the finances of Local Governments and of local authori ties by reason of the coming in to force of the provisions of the Government of India Act dis tributing heads of taxation on Jines different from those which prevailed before that date, cannot be construed as one conferring a. plenary power to legislate on those topics till such time as the Cen tral Legislature intervened. Such a -construction would necessarily involve a power in the Pro vincial Legishture to enhance the rates of tax ation-a result we Il\UBt say from which Mr. Sanyal the language did not shrink, but having regard to of the section providing for a mere continuity and its manifest purpose this construction must bfl rejected. The next point urged by Mr. Sanyal was based on the construction which he sought to put on cl.( c) of the proviso to s. 192 of the Local Government Act of J 948. He submitted that the words "due to the District Council" were wide and apt enough to include not merely the taxes that had accrued due on_ the date of the repeal of the Act of 1920 but even the amounts which accrued later and becanie payable subsequent that date-"Due" he said meant "payable" and as the words of the sub-section did not specifically limit the period when the cess became payable to some time anterior to the repeal of the Act of 1920, it ought to be read as including those amounts which accrued due and became payable even there after. We find it difficult to accept this submiseion either. The difficulty in accepting it is created only in part by the use of the expression "due" but the main hurdle in the way of the respondent is that what is saved by the sub-clause (and is distributed among the Janpad Sabhas which replaced the District Councils), is specified as a cess, rate etc. du(' to a District Council. The rate, cess or duty due to a District Council could obviously be only that which 196Z Rama K tishna Rama11al-h " Tht J an}Md Sabha, Urmdia Ayyangar J. 84 SCPREl\IE CO"CRT REPORTS [I 06~] SUPP. had accurcd due to a District Council while that bodv waA in existeno<> and "it h the extinct i"n of the ·Di~trict Councils by the rcpc; Ll of thP Act of l!'l20 there could b,, no question ofony further sums being clue to such a body. :\Ir. Sanyal howe>er 8ought to got over this situati:m by suggr,~ting that the words "due to a District Council" were merelv descriptivr' of the nature of the tax and did not pre· dioatc that it was an amount due to a part.icular body on the d1tte when it became due. In our opinion this is not an interpretation which the words could reasornihl.v bear and we have, therefore, no hesita tion in rejecting this argumrnt. It waA then submitt.ed that e\·en if the words of cl. (c) of the rwoviso would not or<linarily include n saving as regards the right of the Ja11pad Sahhas to levy the tax in tho future, still we should adopt that constrnotion as hPing in conS('nance with and for giving effect t.o th<' intention of the legislature which made it clear that that wns so hv enacting the am•mdment to s. I !l2 hv the Act ·of f\l4!) within a year or so after the Act of 19-!8. 'Ve "onsider that this submission also dcRen·es, in th!' circumstances It is a cardinal of the present ca~e. to he rejected. principlP of Ht'ltu tory construction t bat the i nt.ention of the legislature should bo gathered from the WL'rdR of the enactment. If, as we have held, those words arc incapable of the construct ion that. thern was a saving of the right of the .fonpad Snhhas to impose and co lied thn tax- apart from the right. to collect the arrPars of tax which accurcrl due while th(• District Council was in cxistenoe, that eonstructio11 cannot be morlific<l and the legiHlative int<-nl with whi<"h that proviso was "nacted HUpplrmcntcrl by a reference to what the l<•gislatnr<.> <lie! later. Xo doubt, there is authority for the position that when the mPaning of tbB words used in a.n Pnactment is amhiguouH nr obscure, subsequent statutes might sometim<>s l><• n~ed as n·hat hA.s been tnrmcd "a parli:tmcntary e:xpo~ition" of the obscure phra~eology. It.i~ hardly 1962 Rar1.a Krishnrr Ramanath v. The J anpad Sabha, Gondia Ayyangar J. 8 SC.R. SUPREME COURT REPORTS 85 necessary to discuss the permissible limits of this mode of construction for the purpose of-the present case, because the prime conditions for invoking that rule are absent here-there is no obscurity or am~iguity in the words of cl. (c) and secondly if the learned Attorney-General is right, the Provincial Legislature had no legislative capacity to enact the Amending Act of 1949-and this must include legis lation either by way of explanation or exposition, and of course by positive enactment. If there is incapacity to enact retrospective legislation on the matter, the position is not rendered different by viewing it as parliamentary exposition. The validity of the amendment effected by the Act of 1949 must be judged independently and on its own merits and its terms cannot be used as a guide to the inter pretation of what the legislature in enacting s. 192 of the Act 1948 intended by the words in cl. (c). .., - The next submission was that as the Act of 1949 amended the terms of s. 192 so as to save the power of the Janpad Sabhas to levy the cess with retros· pective effect from the date when the Act of 1920 stood repealed, there was in the eye of the law a continuity in the levy of the cess or rate and so no hiatus or period of discontinuity existed such as had been suggested by the learned Attorney-General and the existence of which was the entire founda tion of his argument. It must, however, be mentioned that the learned Attornev-General was not oblivious of this feature of the legislation of 1949, viz., that it purported to operate as it were to close the gap, but his submission was that if, in fact, the gap existed and there was factually a period of disconti nuity, the legislature which had no authority to enact positive leiislation with reference to the topic in May 1949 was incompetent to pass an enactment with retrospective effect. In our opinion, this argument of Mr. Sanyal requires serious consideration and the answer wouF HG2 Rnma K,ial~na Rllfrlalud1' The J anpi:u/ Sabha, Ocmdia A.yvangar J, 86 SUPRE~1E COUH.T REPOHTS [l!l62J SU!'P. turn on the proper construction of the terms uf . s. 143(2) of the Go\'erument uf India Act. The first matter tu bo considered would be the source of tho legislative power tu enact the Local Government In so far as the constitution of local • [Act of l!J4~. l authorities, their territorial di8tributiou, the endow l ing them with puwcrn, jW"isdictiun and authority in general are concerned, the legislative power there fore is to be found in entrv 13 of the P10vincial Legislative List II to Sch. V H uf th ti Gu.vemment of India Act, l!l35 reading : ·'Luca! Government, that is to 8"Y' the constitution and powers of municival co'rpora tions, trusts, district boards, minii1g settlement authorities illld other local authorities for the purpose of local self. government on village administration". improvement It must howevn be observed that merely bt'cause the legislature is empowered under this entry to constitute local authorities and vest them with powers and jurisdiction it would not follow that these local bodies could be vested with authority to levy any and every tax for tho purporn of raising re,...nuo for the pi:rposes of local administration. They could be validly authorised to raisu only those taxes which tho Province could raise under and by virtue of the relevant. entries in the Provincial Legislative List. Thi~ is on the principle that the Province cou Id not <mthorise local bodies created by it t.o. impose taxes which it itself could nut directly levy for the J.>lll'poscs of the Provincial Government. Now come11 the question whether the Provincial Legislature was competent, by legislation, tp dis continue the levy of the tax by effecting a ropeal of the taxing provision contained in the Local Self Government Act of 1920. There is no doubt that the general principle is that the power of a legisla tive body to repeal a law is co-extensive with its power to enact such a law, as would he seen from 1962 Rama Krishna Ramauath v. The Janpad Sabha, Gondia AyyangarJ. 3 S.C.R. SUPREME COURT REPORTS 87 the following passage in the judgment by Lord \Vatson in Attorney·General for Ont, ario v. Attorney General for the Dominion(1) : "Neither the Parliament of Canada nor the provincial legislatures have authority to repeal statutes which they could not directly enact." But obviously its application in particular instances would be controlled by express constitutional pro vision modifying the same. We have such ·provi sion in the case on hand in s. 14i1(2} of the Govern ment of India Act, HJ35. In the context the rele· vant words of the sub-section could only mean "May continue to be levied if so desired by the Pro· vincial Legislature" which is indicated by or is implicit in the use of the expression "May" in the clause "may be continued until provision to the contrary is made by the Federal Legislature." This would therefore posit a limited legislative power in the Province to indicate or express a desire to continue or-not to continue the levy. If in the exercise of this limited power the Province desires to discontinue the tax and effects a repeal of the relevant statute the repeal would be effec tive. Of course, in the absence of legislation indica ting a desire to discontinue the tax, the effect of the provision of the Constitution would be to enable the continuance of the power to levy the tax but . this does not alter the fact that the provision by its implication confers a limited legislative power to desire or not to desire the continuance of the levy subject to the ·overriding power of the Central Legislature to put an end to its continuance and it is on the basis of the existence of this limited legis lative power that the right of the Provincial Legis lature to repeal the taxation provision under the Act of 1920 could be rested. Suppose for instance, a Provincial Legislature desires the continuance of the tax but considers the rate too High and (I) (1896] A. C. 348, 366. 1962 llama KriF!rna Rar'l'/auath , .. n .. J anp,d s ubha, Oondia A;Jllllf,O, J. 88 SUPREME COURT REPORTS [I 062] SUPP. wishes it to le reduced and pnsses an enactmPnt for that purpose, it cannot b" that the legislation is incompetent and that the Statt> GovernmPnt must permit the local authority to levy tax at the same rate as prevailed on April I, J ll3i if the latter dosircd the continuance of the tax. If surh a l~gisla­ tiou were e:1acted to achieve a r<'duction of tlw rate of the duty, l~gislath·e competence must obviously be ·traceable to the power contained in words "m:.y continue to be levied" in s. 14:l(2) of If we nm right so the Goverrnnem of India Act. far it woulc.l follow thnt in the cxercist' of this limit tho l'ro\•ineial Legislature ed legislative power would also have a right to legislate for the eonti nuanco of the tax provided, if of c:ourse, the other conditions of s. ,4;Jp!) a.re satiefiecl, viz., (I) that the tax was one which was lawfully levi~d by a local authority for the purposes of a local arl'a nt the commencement. of Part III of the Govemml'nt of India Act.., (2) that. the identity of the body that collects the tax, the area for whose benefit the tax is to be utilised and the purposes for which the utilisation i:i to t;ike place continue to be the same and (~1) the rate of tho tax is not enhanced nor it;i incidence in any manneralterod, so that it continues to be same tax. If as we have held earlier thero is a limited legislative power in the Province to enact a law with reference to the tax levy iiu as to continue it, tho validity of th(' Act of I \J4\! which manifested the legislative intent to Continue the tax . without any break, the legal continuity hl, ing established by the retrospective operation of tlw provision, has to be upheld. The appeals therefore fail and are dismissed with costs-·one set of hearing fee~. Appeals dismissed.