M/S. R. M. D. C. (Mysore) Private Ltd.
Vs. The State of Mysore  INSC 236 (8 August 1961)
Prize Competitions--State enactment for
control and tax on such competitions--Central enactment for control and
regulation of such competitions, adopted by State--Subsequent amendment of
State enactment by State Legislature--Constitutional validity--Mysore Lotteries
and Prize Competitions Control and Tax Act, 1951 (Mysore 27 of 1951), as
amended by Act 26 of 1957, ss. 8, 12(1) (b), 15 Proviso--Prize Competitions
Act, 1955 (42 of 1955), ss. 4,5 -Constitution of India, Arts. 252, 254, Seventh
Schedule, List II, entries 34, 62.
The Mysore Lotteries and Prize Competitions
Control and Tax Act, 1951, was passed by the Mysore Legislature arid came into
force on February 1, 1952. Some of the States comprising the Union of India
passed resolutions under Art.
252(1) of the Constitution of India
authorising Parliament to legislate for the control and regulation of Prize
Competitions, and in pursuance thereof Parliament passed the Prize Competitions
Act, 1955, which came into force on April 1, 1956, On February 23, 1956, the
Mysore Legislature adopted the said Act by passing a resolution under Art.
252(1) that "for the purpose of securing
uniformity in legislation ... the control and regulation of Prize Competitions
and all other matters ancillary thereto should be regulated in the State of
Mysore by the Prize Competitions Act, 1955". The appellants who were
conducting prize competitions in the State of Mysore since 1948 filed a
petition under Art. 32 of the Constitution challenging the constitutional
validity of the Act, and obtained a stay of the operation of the Act pending disposal
of the petition.
The judgment of the Supreme Court dismissing
the petition was given on April 9, 1957, and on August 31, 1957, an Ordinance
was issued, which later was enacted into an Act, Mysore Act 26 of 1957, by
which the Mysore Act of 1951 was amended under which, inter alia, all prize
competitions conducted between March 31, 1956, and August 31, 1957, were
brought within the purview of the amended Act. As a result of this, the prize
competitions which, as a result of the stay of the operation of the Central Act
of 1955, were conducted by the appellants for the said period became liable for
taxation. The appellants challenged the constitutional validity of the
amendment on the grounds that (1) the Mysore Legislature by adopting the
Central Act was no longer competent to pass any law in regard to prize
competitions because the whole matter 231 including the power of taxation was
surrendered in favour of Parliament; (2) even if the whole power had not been
surrendered the impugned Act i.e., the Mysore Act as amended violated Art.
252(2) inasmuch as it indirectly amended the Central Act by adding a new method
of control by imposition of penalties of a monetary nature; (3) the Mysore
Legislature could not amend an Act which stood repealed as a result of the
enactment of the Central Act; (4) the Mysore Act as amended was repugnant to
the Central Act and was, therefore, to the extent of repugnancy, void under
254(1) of the Constitution; and (5) it was
colourable legislation inasmuch as the tax was imposed on the prize
competitions with the object of controlling them.
Held: (1) that by the adoption of the words
"control and regulation of prize competitions and all other matters
ancillary thereto" in the resolution dated February 23, 1956, the Mysore
Legislature did not surrender every matter and power connected with prize
competitions including the power to tax:
B.R.M.D. Chamarbaugwala v. The Union of
India, (1957) S.C.R.
930, relied on.
(2) that the subject of "betting and
gambling" in entry 34 of List II of the Seventh Schedule to the
Constitution of India and that of II taxes on betting and gambling" in
entry 62 of List II have to be read separately as separate powers, and,
therefore, when control and regulation of prize competitions was surrendered to
Parliament by the resolution dated February 23, 1956, the power to tax could
not be said to have been surrendered;
In re The Central Province8 & Berar Art
No. XIV of 1938, (1939) F.C.R. 18 and State of Bombay v. B.M.D. Chamarbaugwala,
(1957) S.C.R. 874, relied on.
(3) that the tax imposed under the Mysore
Lotteries and Prize Competitions Control and Tax Act, 1951, was not by way of
penalty but was in the exercise of the power which the State Legislature
possessed of imposing tax under entry 62, and, consequently, the amendment of
the Mysore Act of 1951 could not be said to be a new method of controlling
prize competitions nor was it a piece of colourable legislation.
K. C. Gajapati Narayan Deo v. The State of
Orissa, (1954) S.C.R. 1, relied on.
(4) that the Prize Competitions Act, 1955,
dealt with "betting and gambling" in entry 34, whereas the taxing
sections of the Mysore Act related to "tax on betting and gambling"
under entry 62 and, therefore, Art. 252(2) was not contravened by the amendment
of the Mysore Act, 232 State of Bombay v. R.M.D. Chamarbaugwala, (1957) S.C.R. 874,relied
(5) that there was no amendment of the Mysore
Act which stood repealed nor was the retroactive operation of the remanding Act
affected by Art. 254(1) of the Constitution.
Deep Chand v. The State of Uttar Pradesh and
others (1959) Supp. 2 S.C.R. 8, relied on.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 517 of 1960.
Appeal from the Judgment and order dated
November 20, 1958, of the Mysore High Court in Civil Writ Petition No. 234 of
Porus A. Mehta, J. R. Gagrat and G.
Gopalakrishnan, for the appellants.
N. C. Chatterjee, G. Channappa, R.
Gopalakrishnan and T. M. Sen, for the respondent.
1961. August 8. The Judgment of the Court was
delivered by KAPUR, J. This is an appeal against the judgment and order of the
High Court of Mysore dismissing the petition of the appellants made under Art.
226 of the Constitution. The appellants. were conducting since the month of
August 1948, what were called "prize competitions" in the State of
Mysore with the permission of the Government of the erstwhile State of Mysore.
An Act called the Mysore Lotteries and Prize Competitions Control and Tax Act,
1951 (Act 27 of 1951), hereinafter called the "Mysore Act" was passed
by the Mysore Legislature and came into force as from June 21, 1951. The Rules
made there under came, into force on February 1, 1952.
Previous to that the Bombay Legislature had
passed a similar Act called the Bombay Lotteries and Prize Competitions Control
and Tax Act, 1948, which was amended in November 1952. by the Bombay Act 30 of
1952. In December 1952 and January 1953 petitions under Art. 226 were filed in
the High Court of Bombay challenging the Bombay Act. On January 12, 1955 233
the Bombay High Court held that the provisions of the Bombay Amendment Act
above referred to were unconstitutional and that the taxes imposed under the
provisions of that Act were hit by Art. 301 of the Constitution. The result of
that judgment was that though prize competitions could be controlled by the
States within their respective borders, their ramifications beyond those
borders could only be dealt with by action under Art. 252(1) of the Constitution.
It was for that reason that the States of Andhra, Bombay, Madras U. P.,
Hyderabad, Madhya, Bharat, Pepsu and Saurashtra passed resolutions under Art.
252(1) of the Constitution authorising Parliament to legislate for the control
and regulation of prize competition% and in pursuance thereof Parliament passed
the Prize Competitions Act (Act 42 of 1955) hereinafter called the
"Central Act" which Received the assent of the President on October
22, 1955, and came into force on April 1, 1956. On February 24, 1956, the
Mysore Legislature passed a, resolution adopting the said Act. The resolutions
passed by the various States and the resolution passed by the Mysore
Legislature will be quoted in a later part of this judgment.
On April 7, 1956, the appellants filed a
petition under Art.
32 of the Constitution in the Supreme Court
challenging the validity of the Central Act but that petition was dismissed and
is reported as R.M.D.C. Chamarbaugwala v. The Union of India (1). The appeal
against the Bombay judgment declaring the Bombay Act to be unconstitutional was
brought in this court and, was allowed and that case is reported as State of
Bombay v. R. M. D. Chamarbaugwala (2) . During the pendency of their petition
under Art. 32 the appellants applied for and wore granted a stay of the
operation of the Central Act pending the disposal of the said writ petition.
This was on April; 16, 1956. The judgment of the Supreme Court in that petition
was given. on April 9, 1957. On August 31, 1957, the (1)  S.C.R. 930, 939.
(2)  S.C.R. 874, 929.
234 Mysore Lotteries & Prize Competitions
Control and Tax (Amendment) Ordinance, 1957 (Ord. 6 of 1957) was issued by the
Governor of Mysore and thus for the period of about 16 months the appellants
carried on prize competitions as before.
The Ordinance was enacted into an Act on
September 28, 1957, which is Mysore Act 26 of 1957. Certain amendments were
made by this in the Mysore Act as originally passed in 1951.
As a result of this amendment the definition
of prize competition was amended the definition as given in the Central Act was
adopted and ss. 8 & 9 of the Mysore Act.
were omitted with retrospective effect from
April 1, 1956;
cl.(b) of sub-s. (1) of s.12 was amended and
certain words referring to licences under s.8 were retrospectively omitted and
retrospective effect was given to the Mysore Act as amended. By adding a
proviso to s.15 of the Mysore Act all 'prize competitions conducted between
March 31,1956, and August 31 1957, were brought within the purview of the
amended Act. Thus the prize competitions which as a result of the stay of the
operation of the Central Act were conducted by the appellants became subject to
the operation of the Mysore Act as amended. The appellants on September 10,
1957, were called upon to file their returns but at their request for extension
of time, they were given another 15 days in which to file their return. They
filed their return but under protest. The gross collections were of a sum of
Rs. 26,47,147-5-9 and on that the appellants were "called open to pay up
provisionally" a sum of Rs. 3,30,8937-0. As the money was not paid within
the time specified proceedings were taken under s. 6 (1) of the Revenue
Recovery Act, 1890 (Central Act 1 of 1890), and certain properties moveable and
immoveable were attached 'and one of the properties was sold and the price so
realised was deposited in the Government treasury.
The Mysore amending Act was challenged in the
High Court of Mysore by a petition under Art, 226 which was dismissed on November
20, 1958 235 and against that judgment and order this appeal has been brought
pursuant to a certificate of the, High Court under Art. 132 (1) of the
Constitution. The Certificate was confined to the interpretation of Art. 252 of
the Constitution. The respondent in the present appeal is the State of Mysore.
The challenge to the constitutionality of the
Mysore Act was on the ground that (1) the Mysore Legislature by. adopting the
Central Act was no longer competent to pass any law in regard to prize, competitions
because the whole matter including the power of taxation was surrendered in
favour of Parliament. (2) Even if the whole power had not been surrendered the
impugned Act i.e. the, Mysore Act as amended violated Art.252(2) of the
Constitution inasmuch as it indirectly amends the Central Act by adding a new
method of control by imposition of penalties of a monetary nature. (3) The
Mysore Legislature could not amend an Act which stood repealed as a result of
the enactment of the Central Act.
(4) The Mysore Act as amended was repugnant
to the Central Act and is therefore, to the extent of repugnancy, void under
Art. 254 (1) of the Constitution and (5) it was colorable legislation in as
much as the tax was imposed on the prize competitions with the object of
Certain other questions relating to the
legality of the imposition of the tax and the proceedings for the recovery of
the tax were also raised but on all these points the High Court found against
the appellants The first question, raised before us is the effect of the;
resolution passed by the, legislatures of the
States above mentioned and of the resolution passed by the Mysore legislature
adopting, the central Act. The resolution Passed by the States was in the
"This Assembly do resolve that it is
desirable that control and regulation of Prize 236 Puzzle competitions and all
other matters consequential and incidental thereto insofar as these matters are
matters with respect to which Parliament has no power to make laws for the
States should be regulated by Parliament by law." The two Houses of the
Mysore Legislature passed the following resolution on February 23, 1956 *and
February 21, 1956, respectively :Resolution passed by the Mysore Legislative
Assembly on 23rd, February, 1956.
"Whereas for the purpose of securing
uniformity in legislation it is desirable that the control and regulation of
Prize Competitions and all other matters ancillary thereto should be regulated
in the State of Mysore by the Prize Competitions Act, 1955 (Central Act 42 of
1955) passed by Parliament;
Now, therefore, in pursuance of Clause, (1)
of Article 252 of the Constitution, this Assembly resolves that the Act
aforesaid be adopted by the State of Mysore." It was contended that by
these resolutions the legislatures of the various States had surrendered their
power of legislation in regard to the "control and regulation of prize
puzzle competitions and all other matters consequential and incidental thereto
and had thus no legislative power left in regard to that matter including the
power to tax.
Article 252 provides Art. 252(1) "If it
appears to the legislature of two or more, States, to be desirable that any of
the matters with respect to which Parliament has no power to make laws for the
States except as provided in articles 249 and 250 should be regulated in such
States by Parliament by law, and if resolutions to that effect are passed by
all the Houses of the legislatures-of those States, it shall be lawful 237 for
Parliament to pass an, Act for regulating that matter accordingly, and any Act
so passed shall apply to such States and to any other State by which it is
adopted afterwards by resolution passed in that behalf by the House or, where
them are two Houses, by each of the Houses of the Legislature of that State.
(2) Any Act so passed by Parliament maybe
amended or repealed by an Act of Parliament passed or adopted in like manner
but shall not, as respects any State to which it applies, be amended or
repealed by an Act of the Legislature of that State." The result of the
passing of a, resolution under Art. 952(1) is that any matter with respect to
which Parliament has no power to enact laws becomes a matter for the regulation
of which Parliament becomes empowered to pass any Act, and such Act, if passed
by the Parliament, becomes applicable to the States passing the resolution or
adopting that Act. Sub clause (2) of that Article provides that any such Act
may be amended or repealed by an Act of Parliament in the like manner i.e. in
the manner provided in cl. (1) and it cannot be amended or repealed by the
Legislature of the State or States passing the resolution. The question then
arises do the resolutions as passed and particularly the words "control
and regulation of prize puzzle competitions and all other matters ancillary
thereto" surrender the whole subject of prize competitions to the Central
Parliament i.e. every matter and power connected therewith including the power
to tax. The argument raised was that the language of the resolutions was wide
enough to comprise the legislative power under entries 34 and 62 of List II the
former dealing with betting and gambling" and the latter with taxation of
luxuries including "betting and gambling". One of the methods of
control and regulations, it was submitted, is by 238 taxation and as the power
; to control, and regulate and all powers ancillary to the subject were
surrendered the power to 'tax, being included therein was also surrendered. In
support of this -Argument reliance was placed on. certain judgments of the
American Supreme Court. The first case relied upon was. Rudolph Helen V. United
States (1). In that ease the question was about the jurisdiction of the United
States District Court which, depended upon the nature-. of -the, imposition of
-an, additional duty i.e. whether it was penalty or' not. The imposition, was
held to be a penalty as it was not imposed for the purpose of revenue but was
based -upon the particular act of the importer i.e. his undervaluation of the goods
imported ; in other words this additional sum was a penalty for undervaluation
whether innocently done or not and whether it was called a further sum or an
additional duty 'the amount imposed was not a duty upon imported article but a
penalty and nothing else.
The next case relied upon was J. W. Bailey v.
Dexel Furniture Company (2). That was a case of colorable exercise, of
legislative power. .Under the Child Labour Tax Law a tax of 10% of the net
profits of the year could be imposed upon an employer and knowingly during any
portion of the taxable period employed children within certain agelimits
irrespective of whether only one child was employed or several, This was held
not to be a valid exercise by Congress of power of taxation but an unconstitutional
regulation by the use of the tax as a penalty for the employment of child
labour in the States which was exclusively a State function. That case was one
in which the Congress exercised its. power of regulation by imposing a tax by
way of penalty in,order to prevent the employment of child...labour and thus by
If the exercise of the power which it possessed i.e. of (1) (1903)188 U.S.605:
47 L.Ed. 614. (2) (1922)259 U.S.33: 66 L. Ed. 817.
239 taxation it tried to regulate a subject
over which it had no jurisdiction and that really was the matter which was
decided by the American Supreme Court.
The next case relied upon was Gloucester
Perry The (company v. Commonwealth of Pennsylvania (1). That was a case of
interstate commerce and it was hold that no State could impose a tax on that
portion of interstate commerce which is involved in the transportation of
persons and property whatever be the instrumentality by which it is carried on.
The tax there was levied upon receiving and landing of passengers and freight
which was held to be a tax on transportation i.e., upon commerce. between the
two States involved in such transportation. The following passage in the
judgment of Field, J., at p. 162 was relied upon by counsel for the appellants
"The Power to regulate that commerce, as well as commerce with foreign
nations, vested in Congress is the power to prescribe the rules by which it
shall be governed that is, the conditions upon which it shall be conducted ;
to determine when it shall be free, and when subject
to duties or other exactions." But these observations were made in a
different context, i.e., whether the tax could be levied upon transportation
made in ferry boats which passed between States every hour of the day and as
this transportation was within the commerce clause no tax could be levied by
Reference was next made to certain
observations made in the State of Bombay v. R.M.D. chamarbaugwala (2) which was
an appeal against the judgment of the. Bombay High Court.
Das, C. J., observed at p. 926 "The fact
that regulatory provisions have been enacted to control gambling by issuing (1)
(1885) 114 U.S. 196: 29 L. Ed. 158. (2)  S.C. R. 874, 929.
240 licences and by imposing taxes does not
in any way alter the nature, of gambling which is inherently vicious and
pernicious." In that case no question as to the meaning of the word
"control and regulation" arose nor whether those words included the
power 'of taxation. All that the Court was called upon to decide was whether
prize competitions were trade, commerce or business or were anti-social
It was then argued that it was because of the
decision by the Bombay High 'Court in State of Bombay v. R. M. D. Chamarbaugwala
(1) whereby the tax imposed on prize competitions was struck down as
contravening Art. 304(b), that the various States combined together and passed
the resolution under Art. 252(1) of the Constitution. The object of the
resolutions, it was submitted, was to get over the unconstitutionality pointed
out by the Bombay High Court and therefore the resolutions were passed in the
language used therein, i.e., for the control and regulation of prize
competitions which power was transferred and surrendered to Parliament along
with the powers incidental and ancillary thereto which must include taxation.
It was further argued that as Parliament had failed to impose any tax it
implied that it had refused to do so. In support of this argument reliance was
placed on Sabine Robbins v. Taxing District of Shelby County, Tennessee (2). It
was there held that where the power of the Legislature is exclusive its failure
to make express regulation indicated its will that the subject shall be left
free from any restriction or imposition. The pivot of the appellants' argument
is that the words "control and regulation" and ,'incidental and
ancillary thereto" included power of taxation but this argument is not
well founded. The power in regard to betting and gambling is contained in entry
34 of the State List which as follows .
Entry 34: "Betting and gambling".
(1) I. L. R.  Bom. 680.
(2) 30 L. Ed. 694.
241 The power of taxation is contained in
entry 62 which is as under Entry 62 : "Taxes on luxuries including taxes
on entertainments., amusements, betting and gambling." In the Indian
Constitution as it was in the Government of India Act the power of legislation
is distributed between the Union and the States and the subjects on which the
respective Legislatures can legislate are enumerated in the three 'Lists and in
the Articles of the Constitution, provision is made as to what is to happen if
there is a conflict between the Statutes passed by Parliament and the
Legislatures of the States. The peculiar nature of the Indian Constitution in
regard to the enumeration of powers in the entries in the Lists was emphasised
by Gwyer, C. J., in re The Central Provinces & Berar Act No. XIV of 1938
(1) at p. 38 and by Sulaiman, J., at pp. 73 and 74. Gwyer, C.J., said:"But
there are few subjects on which the decision of other Courts require to be
treated with greater caution than that of federal and provincial powers, for in
the last analysis the decision must depend upon the words of the Constitution
which the Court is interpreting ;
and since no two Constitutions are in
identical terms, it is extremely unsafe to assume that a decision on one of
them can be applied without qualification to another.
This may be so even where the words or
expressions used are the same in both cases ;
for, a word or a phrase may take a colour
from its context and bear different senses accordingly." (1) 
242 At p. 74 Sulaiman, J., observed:
"The heads have been separately
specified in great detail ; and a special head "'taxes on the sale. of
goods" has been assigned to the Provinces, which did not at all find a
separate and distinct place in the State or Provincial List of any of the
Dominions. This peculiarity is a unique feature of the Indian Constitution,
having an important bearing on the present case, as taxes on Bales have been adopted
as a post-war measure in most countries." The entries in the Lists have to
be read in accordance with the words employed and it will be wholly unjustified
in forcing into them a meaning which they cannot reasonably bear. See Brophy v.
Att. Gen. of Manitoba (1) Similar observations were made by Lord Wright, M. R.
in James v. Commonwealth of Australia (2) and both these oases were quoted with
approval in re The Central Provinces and Berar Act No. XIV of 1938 (3) by
Sulaiman, J. Thus the subject of "betting and gambling" given in
entry 34 of List II and the taxes on betting and gambling as given in entry 62
of List II have to be read separately as separate powers and therefore when
control and regulation of prize competitions was surrendered to Parliament by
the resolutions above quoted the power to tax under entry 62 of List II which
is a separate head, cannot be said to have been surrendered. See the
observations of Das, C. J., in State of Bombay v. R. M. D. Chamarbaugwala
quoted a little later in this judgment.
The scheme of the Indian Constitution and
distribution of powers under it are entirely different from what it is in
America and therefore the construction of the entries in the manner contended
for by the appellants would be erroneous.
It was then contended that a tax must be (1)
 A.C. 202, 215.
(2)  A.C. 578, 613.
243 levied for the purpose of revenue and
cannot be for purpose of control and that in the Mysore Act was really
colourable legislation in that the impugned tax had been levied for the purpose
of controlling prize competitions although it was given the form of a tax. It
may be remarked that the Court in construing and interpreting the Constitution
or provisions of an enactment has to ascertain the meaning and intention of
Parliament from the language used in the statute itself and it is not concerned
with the motives of Parliament. To use the language of Gwyer, C.J., in re, The
Central Provinces and Berar Act No XIV of 1938 (1) :
"It is not for the Court to express, or
indeed to entertain, any opinion on the expediency of a particular piece of
legislation, if it is satisfied that it was within the competence of the
Legislature which enacted it ; nor will it allow itself to be influenced by any
considerations of policy, for these lie wholly outside its sphere."
Similar observations in regard to the doctrine of colourable legislation were
made by Mukherjea, J., (as he then was), in K. C. Gajapati Narayan Deo &
Others v. The State of Orissa (2), where it was observed :
"It may be made clear at the outset that
the doctrine of colourable legislation does not involve any question of bona
fides or mala fides on the part of the legislature. The whole doctrine resolves
itself into the question of competency of a particular legislature to enact a
particular law. If 'the legislature is competent to pass a particular law, the
motives which impelled it to act are really irrelevant. On the other hand, if
the legislature lacks competency, the question of motive does not arise at all.
Whether a (1)  F.C.R. 18, 38, 73, 74.
(2)  S.C.R. 1, 10.
244 statue is constitutional or not is thus.
always a question of power." Therefore
if the Mysore Legislature had the power, which in our opinion, it had and it
had not surrendered its power to Parliament which, in our opinion, it had not
then it cannot be said that the imposition of the tax is a piece of colourable
legislation and is on that ground unconstitutional. It will be opposite to
quote at this stage the observations of Das, C.J., in the State of Bombay v.
Chamarbaugwala (1):"For the reasons
stated above, we have come to the conclusion that the impugned law is a law
with respect to betting and gambling under entry 34 and the impugned taxing
section is a law with respect to a tax on betting and gambling under entry 62
and that it was within the legislative competence of the State legislature to
have enacted it. There is sufficient territorial nexus to entitle the State
legislature to collect the tax from the petitioners who carry on the prize
competition s through the medium of a newspaper printed and published outside
the State of Bombay." Thus the Central Act is with respect to betting and
gambling under entry 34 of List II and the taxing sections of the Mysore Act are
with respect to a tax on betting and gambling under entry 62. It is also
instructive to note that Venkatarama Ayyar, J., in B. M.D. Chamarbaugwala v.
The Union of India (2) in construing the language of the resolution was of the
opinion that the use of the word "control and regulation" was
requisite in the case of gambling and as regards regulation of competitions
involving skill mere regulation would have been sufficient.
In view of our finding that by passing the
resolution the States did not surrender their power of taxation it cannot be
said that al. (2) of Art. 252 (1)  S.C.R. 874, 929.
(2)  S.C.R. 930, 939.
245 of the Constitution was violated by the
amendment of the Mysore Act ; nor can it be said that in reality it was a piece
of colourable legislation by an indirect attempt to amend the Central Act and a
new method of control was devised by imposing a penalty under the name of tax.
We have already held that the tax imposed under the Mysore Act was not by way
of penalty but was the exercise of the power which the legislature possessed of
imposing tax under entry 62.
The next contention raised was that after the
passing of the Central Act, s.12(1)(b) of the Mysore Act became, void because
of the provisions of Art. 254(1) of the Constitution which provides :
Art. 254(1) "If any provision of a law
made by the Legislature of a State is repugnant to any provision of a law made
by Parliament which Parliament is competent to enact or to any provision of an
existing law with respect to one of the matters enumerated in the Concurrent
List, then, subject to the provisions of clause (2) the law made by Parliament
whether passed before or after the law made by the Legislature of such State or
as the case may be, the existing law shall prevail and the law made by the
Legislature' of the State shall, to the extent of the repugnancy, be
void." It was contended that because of the repugnancy between the Central
Act and the Mysore Act in regard to licensing all provisions which had any
reference to licensing became void under Art. 254(1) and if they were void they
could not be amended. On behalf of the State it was submitted that Art.
252(1) was a complete code by itself and Art.
254 was inapplicable because the latter Article like its predecessor, s.107 of the
Government of India Act, 1935, applied where the repugnancy arose under List
III of the Constitution i.e., the 246 Concurrent List. It is not necessary to
decide this latter contention or to refer to cases which have been relied upon
i.e. Megh Raj v. Allah Rakhia (1) or Deep Chand v. The State of Uttar Pradesh
& Others (2) The inconsistency would operate on that portion of the Mysore
Act which became repugnant to ss. 4 and 5 of the Central Act as to prohibition
of prize competitions and licensing. of prize competitions e.g., s.8 of the
Mysore Act and consequently that portion of s.12(1)(b) which deals with taxes
in respect of prize competitions for which a licence had been .Obtained under
s.8 might be said to have become void and not the rest. Therefore by the
omission of words "for which a licence had been obtained", under s.8,
the rest of the clause would be valid. The effect of the amending Act is that
the above mentioned words were deemed to have been omitted as from April 1,
1956, and the rest of clause (b) is not repugnant to any of the provisions of
the Central Act.
Article 254(1) therefore did not make
s.12(1)(b) wholly void. All that it did was that the portion which refers to
licensing became repugnant but it did not affect the rest of the section. At
the time when the Mysore Act was passed it was within the legislative power of
the Mysore Legislature and it may be that it was rendered unconstitutional by
reason of ss. 4 and 5 in the Central Act but that portion which deals with
taxation cannot be held to be void because as a result of the Amending Act the
words which were repugnant to the provisions of the Central. Act were
subsequently declared by. the Mysore Legislature to be deemed to have been
omitted as from April 1, 1956, the day when the Central Act came into force.
This is in accord with the view taken in Deep Chand v. The State of Uttar
Pradesh and Others(2), i.e., the doctrine of eclipse could be invoked in the
case of a 'law which was valid when made but was rendered invalid by a supervening
constitutional inconsistency. This (1).(1947) L. R. 74 I.A. 12,19.
(2)  Supp. 2 S. C. R. 8, 24,42.
247 disposes of the challenge to the
constitutionality of the Mysore Act on the five points set out above. Therefore
the law may be summed up as follows (1) By passing the resolutions as to
control and regulation the power to tax had not been surrendered to Parliament.
(2) The amending Act was not a new method of
controlling prize competitions nor was it a piece of colourable legislation.
(3) There was no amendment of an Act which
stood repealed nor was the retroactive operation of the Amending Act affected
254(1) of the Constitution.
The next three objections to the legality of
the assessment were: (1) that the assessment was provisional which was not
contemplated under the Act ; (2) there should have been a fresh notification
after the amendment of the Mysore Act and (3) at the time when the recovery
proceedings were taken the tax had not become due as it was payable within a
week which had not expired. On September 10, 1957, the Deputy Commissioner,
Bangalore, called upon the appellants to produce accounts in respect of prize
competitions conducted as from April 1, 1956, up to the date of the closure of
the competitions and three days were given to comply with that notice. Their
reply was that the Ordinance under which the notice was issued was
unconstitutional and illegal and they also asked for thirty days in which to
prepare their statements but they were granted a period of fifteen days only.
They agreed to file their statements within the time allowed though under
protest. These statements were submitted on October 9, 1957, and at the end of
the statements which showed a gross collection of Rs. 26,47,1475-9, there was
the following endorsement :"The above figures of collections are verified
partly with available bank statements and partly with the books of accounts and
are 248 subject to reconciliation between the amount as per ledger and that as
above. The commission and expenses deducted by Collectors are accepted as per
certificate of the Management and the State Account. Collections are verified
only with. the Collection Register.
Chartered Accountants." Under this the
Deputy Commissioner wrote a letter on October 16,1957, in which it was said:
"You are, hereby called upon to pay up
provisionally a sum of Rs. 3,30,893-7-0 towards tax amount to the Reserve Bank
of India and forward the challan in token of payment to this office within a
week." As the tax was not paid the provisions of the Revenue Recovery Act
were resorted to. This cannot be said to be a provisional assessment. The
return submitted by the appellants as far as it went was accepted and on that
the tax was demanded which was not a case of provisional assessment at all but
as was held by the High Court it must be taken to be a final assessment and if
and when any further assessment or a revised assessment is made the question
may become relevant.
The next question As to the necessity of a
fresh notification, the submission is equally unsubstantial. Its legality
depends upon the constitutionality of amended s.12(1)(b) and if that is valid,
as we have held it to be, the notification is equally valid. The notification
was only in regard to the rate of taxation and had no reference to the
obtaining or not obtaining of the licence.
The last point raised was that the tax was
payable within a week which had not expired. As we have pointed out the notice
of demand called upon the appellants to pay the sum therein specified and to
produce the challan in token of payment 249 within a week. It is not the case
of the appellants that they had paid or-were in a position to produce the
challan within a week. It was not an order making the tax payable within a
week. These objections, in our opinion, are without substance and are therefore
In the result this appeal fails and is
dismissed with costs.