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TMI Blog1945 (1) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... re respondents and the validity of the same provisions of the same Act was in issue. This case will be referred to as the Boddu Paidanna case [1942] 5 F.L.J. 61; p. 104 supra. The legislative powers of the Federal and Provincial Legislatures respectively are defined in the Government of India Act, 1935, some- times called The Constitution Act and it will be convenient to refer to them before examining the provisions of the impugned Madras Act. Section 100 of the Constitution Act provides as follows: (1) Notwithstanding anything in the two next succeeding sub- sections the Federal Legislature has, and a Provincial Legislature has not, power to make laws with respect to any of the matters enumerated in List I in the seventh schedule to this Act (hereinafter called the 'Federal Legislative List'). (2) Notwithstanding anything in the next succeeding sub-sections the Federal Legislature and, subject to the preceding sub-section, a Pro- vincial Legislature also, have power to make laws with respect to any of the matters enumerated in List III in the said Schedule (hereinafter called the 'Concurrent Legislative List'). (3) Subject to the two preceding sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it is to extend to the whole of the Province of Madras. The rest of the Act does not belie its title or its declared purpose. Section 2 contains a number of definitions of which it is necessary to refer only to the following: (b) 'dealer' means any person who carries on the business of buying or selling goods. (h) 'sale' with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration but does not include a mortgage, hypothecation, charge or pledge. (i) 'Turnover' means the aggregate amount for which goods are either bought or sold by a dealer whether for cash or for deferred pay- ment or other valuable consideration provided that the proceeds of the sale by a person of agricultural or horticultural produce grown by him- self or grown on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover. Explanation: Subject to such conditions and restrictions, if any, as may be prescribed in this behalf: (i) the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods for delivery outside the Province, Section 8 for the licensing and exemption of agents. Other sections provide the necessary administrative machinery for the assessment and collection of a tax on sales. Section 19 provides that the Provincial Government may make rules to carry out the purposes of the Act. Under Section 3(2) of the Madras Act the Provincial Government made rules which are called The Madras General Sales Tax (Turn- over and Assessment) Rules, 1939, and under Section 19 further Rules which are called The Madras General Sales Tax Rules, 1939. To these rules which are of an elaborate and comprehensive character it is unnecessary to refer except to note that under rule 4(1) of the first mentioned rules the gross turnover of a dealer for the purposes of the rules is to be the amount for which the goods are sold by him except that under rule 4(2) in the case of certain goods therein enu- merated the gross turnover is to be the amount for which the goods are bought. Their Lordships have thought it desirable to refer to the pro- visions of the Madras Act in this detail in order to emphasise its essential character. Its real nature, its pith and substance , is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind first that the problem of the division of taxing power in a Federal Constitution was in general no new one and that the framers of the Constitution must in particular have been well aware of the controver- sies that had arisen in regard to excise and taxes on first or other sales, and, secondly, that the contention of the appellant would remove from the range of Provincial taxation goods which had not been in the past, nor were likely in the future to be, the subject of an excise duty, their Lordships would be reluctant to adopt such a con- struction if any other was fairly open to them. The validity of the appellant's first reason must therefore be examined in order to see whether the Lists can be reconciled not by doing violence to the language of the Provincial List but by giving some other than the meaning and effect, for which the appellant contends, to the relevant words of the Federal List. Their Lordships would first observe (concurring herein in the cogent reasoning of the Federal Court in the Boddu Paidanna case) that little assistance is to be derived from the consideration of other Federal Cons- titutions and of their judicial interpretation. Here there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lap, that may be because the taxing authority, imposing a duty of excise, finds it convenient to impose that duty at the moment when the excisable article leaves the factory or workshop for the first time upon the occasion of its sale. But that method of collecting the tax is an accident of administration: it is not of the essence of the duty of excise which is attracted by the manufacture itself. That this is so is clearly exemplified in those excepted cases in which the Provincial, not the Federal, Legisla- ture has power to impose a duty of excise. In such cases there appears to be no reason why the Provincial Legislature should not impose a duty of excise in respect of the commodity manufactured and then a tax on first or other sales of the same commodity. Whether or not such a course is followed appears to be merely a matter of administrative convenience. So by parity of reasoning may the Federal Legislature impose a duty of excise upon the manufacture of excisable goods and the Provincial Legislature impose a tax upon the sale of the same goods when manufactured. It appears then to their Lordships that the competing entries No. 45 of the Federal List and No. 48 of the Prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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