1964 (3) TMI 78

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..... tween the President of India and the Rajpramukh of the State of Travancore-Cochin that State and the State of Kerala which came into existence on the 1st November, 1956, had no power to levy sales tax in respect of "works contracts". The agreement expired only on the 25th January, 1960, and so the assessee cannot but be exonerated from the levy of sales tax in respect of "works contracts" for the period prior to the 26th January, 1960. 3.. The only question for determination is whether sales tax in respect of "works contracts" is permissible on and from the 26th January, 1960. The Supreme Court did not deal with the question. It said: "We are not concerned here with the legal position after the expiry of the said period, and we do not p .....

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..... y a State immediately before the commencement of the Constitution and that, as the Act came into force only after the Constitution, the levy made thereunder does not satisfy the condition laid down by the Article. To appreciate this contention some relevant facts may be recapitulated. The Act was published in the Gazette on 17th January, 1950, but was brought into force only on 30th May, 1950, i.e., after the commencement of the Constitution. If so, it follows that the tax under the Act would not be saved, as the necessary condition that the levy should have been lawfully made before the Constitution was not satisfied"; and submitted that the Supreme Court has held that Article 277 will not save the levy. We do not understand the sentence .....

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..... 372 saves all pre-Constitution valid laws, Article 277 is confined only to taxes, duties, cesses or fees lawfully levied immediately before the Constitution. Therefore, Article 372 cannot be construed in such a way as to enlarge the scope of the saving of taxes, duties, cesses or fees. To state it differently, Article 372 must be read subject to Article 277. We have already held that an agreement can be entered into between the Union and the States in terms of Article 278 abrogating or modifying the power preserved to the States under Article 277..... In one view Article 277 excludes the operation of Article 372, and in the other view, an agreement in terms of Article 278 overrides Article 372. In either view, the result is the same, namely .....

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