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1971 (7) TMI 54 - SC - Central ExciseWhether the levy of royalty at ₹ 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.? Held that - Robkar under which the royalty was imposed, cannot be said to be a law corresponding to the Central Excises and Salt Act, 1944, and is, therefore, not within the repeal created by Section 13(2) of the Indian Finance Act, 1950. Appeal dismissed.
Issues: Validity of levy of royalty under a Robkar issued by Ijlas-i-Khas, Effect of Indian Finance Act, 1950 on the order of royalty, Interpretation of Section 13(2) of Indian Finance Act, 1950, Comparison of Robkar with Central Excises and Salt Act, 1944.
The Supreme Court of India, in a judgment delivered by Hidayatullah J., addressed the issue of the validity of a royalty levy of Rs. 50 per one lakh bricks under a Robkar issued by the Ijlas-i-Khas, Patiala State in 1919. The main question in the appeal was whether this levy was valid after the enactment of the Indian Finance Act, 1950. The suit originated from a claim for declaration and injunction filed by the appellant, which was initially dismissed by the trial Judge, then reversed by the District Court, and ultimately restored by the High Court. The central argument revolved around the continued effectiveness of the Ijlas-i-Khas order post the Indian Finance Act, 1950, which came into operation on April 1, 1950. The Solicitor-General conceded that the claim should be limited to the period after this date, as taxes levied before the Constitution's commencement were saved under Art. 277. The focus was on the impact of the Finance Act on the impugned order rather than questioning the Regency Council's authority to issue it. The Indian Finance Act, 1950 aimed to implement financial proposals from April 1, 1950, extending the Central Excises and Salt Act, 1944 to all of India, excluding Jammu and Kashmir. Section 13(2) of the Act provided for the repeal of laws corresponding to the Central Excises and Salt Act in force before April 1, 1950. The Court analyzed whether the Robkar's royalty imposition could be considered a law corresponding to the Central Excises and Salt Act, 1944, which was extended in 1950. The argument that the royalty equated to an excise duty was examined, emphasizing that the repealed law must correspond to the Indian statute. The Central Excises and Salt Act, 1944 was seen as limited to enumerated goods, and the consolidation aimed to cover specific commodities without saving other goods from local laws, indicating that the Robkar did not correspond to the Act and was not repealed by the Finance Act. Ultimately, the Court upheld the High Court's decision, dismissing the appeal with costs. The judgment highlighted the specific provisions of the Central Excises and Salt Act, 1944, emphasizing the Act's limited scope and consolidation objective. The analysis focused on the interpretation of Section 13(2) of the Indian Finance Act, 1950 in relation to the Robkar's royalty levy, concluding that the Robkar did not correspond to the Act and therefore was not affected by the Finance Act's repeal provision.
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