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TMI Blog1952 (11) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... aning of Section 28, Rajasthan Excise Duties Ordinance 25 of 1949, and whether the publication of the aforesaid notification should be deemed to have been properly authenticated by authentication of the publication of the Ordinance. If not, whether want of authentication would have the effect of invalidating the said Excise Rules? 2. Certain facts may be narrated in order to decide the two points which have been referred to this Bench. The Maharaja Kishangarh Mills Ltd., Kishangarh is_ manufacturing cotton cloth at Kishangarh in the State of Rajasthan. The Central Excises and Salt Act, 1944, was extended to the State of Rajasthan by Section 11, Finance Act, 25 of 1950, from 1-4-1950, and the necessary rules under that Act also came into force from the said date. The Superintendent of Central Excise, Jaipur Circle, Jaipur, served a notice of demand on the applicant for payment of excise duty, on 16-2-1951, on cloth manufactured or in stock before 1-4-1950. The contention of the applicant was that the Union of India was not entitled to levy excise duty on cloth manufactured or in stock before 1-4-1950. Therefore, the notice, that was given to the applicant to pay duty on such clot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ramed under the Jaipur Excise Duties Act of 1945, known as the Jaipur Excise Duties Rules of 1945, will be in force throughout the whole of Rajasthan with necessary modifications, and will be deemed to have been made under the Rajasthan Ordinance, Then follows certain additions to the rules. There is no authentication of any kind to these rules which were published in this Gazette. The presumption therefore of Section 3(2), Rajasthan Administration (Amendment) Ordinance No. 5 of 1949 does not apply to thes rules. 5. It was open, however, to the opposite parties to show that these rules were in fact passed by the Rajpramukh of Rajasthan, and that the authentication was left out in the Gazette by oversight. But the opposite parties have not filed any affidavit to show that thesa rules were considered and passed by the Rajpramukh of Rajasthan before they were published at page 170 of the Hindi version of that (Gazette, dated 12-11-1949. The position, therefore, is that the Gazette does not contain any authentication of the rules the presumption of Section 8(2) of Ordinance 5 of 1949 does not apply, and the opposite parties have failed to prove as a fact that these rules were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as part of central revenue. In para, 9, Chap. 2 of Part II of the Report, is recommended that the centre will take over all central sources of revenue, and all federal items of expenditure in States, and must also take over all current outstandings including pending assessments, refunds and arrears. The argument is that in view of these recommendations, which were accepted by the agreement, the Union of India must be deemed to have taken over all current outstandings of cotton excise duties on 1-4-1950, when the Finance Act brought the Central Excises and Salt Act of 1944 into operation into Rajasthan. It must, however, be remembered that the Report was .made in 1949 in the shape of recommendations, and the Constitution came into force from 26-1-1950, and the report was taken into consideration in framing the, financial provisions of the Constitution. It is true that the principles of the report were accepted by the agreement, but this agreement is subject to the provisions in the Constitution itself. We shall, therefore, have to see whether the provisions in the Constitution made any modifications in the recommendations in the report, 8. The relevant provisions that require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, placed on Article 295(1) of the Constitution which runs as follows: As from the commencement of this Constitution- (a) all property and assets which immediately before such commencement were vested in any Indian State corresponding to a State specified in Part B of Schedule 1 shall vest in the Union, if the purposes for which such property and assets were held immediately before such commencement will thereafter be purposes of the Union relating to any of the matters enumerated in the Union List, and (b) all rights, liabilities and obligations of the Government of any Indian State corresponding to a State specified in Part B of Schedule 1, whether arising out of any contract or otherwise, shall be the rights, liabilities and obligations of the Government of India, if the purposes for which such rights were acquired or liabilities or obligations were incurred before such commencement will thereafter be the purposes of the Government of India relating to any of the matters enumerated in the Union List, subject to any agreement entered into in that behalf by the Government of India with the Government of that State. It is urged that these arrears were asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the applicant that Article 295 had no application to these arrears at all because they could not be called assets or rights within the meaning of that Article. It was pointed out that Article 295 is in Chap. 3 of Part XII of the Constitution, which deals with property, contracts, rights, liabilities, obligations and suits, while matters relating to taxation are in Chap. 1 from Articles 264 to 291. It is consequently urged that these being arrears of taxation, we must look only to the provisions in Chap. 1 of Part XII, and that Chap. 3 of that Part, in which Article 295 appears, does not apply. We do not think it necessary to decide this point finally in view of our decision that even if these arrears can be called assets or rights within the meaning of Article 295, they did not become vested in the Government of India by virtue of Article 295, though there seems to be a good deal of force in the argument of learned counsel for the applicant in this connection. 12. It only remains now to deal with the argument that by virtue of Article 278, and the agreement between the President of India and the Rajpramukh of Rajasthan, these arrears become vested in the Government of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. Therefore, for the period before 1-4-1950, cotton excise duty cannot be said to be a duty leviable by the Government of India so far as the State of Rajasthan is concerned, and therefore Article 278 can have no application with respect to a duty which was leviable by the State of Rajasthan up to 31-3-1950. We are, therefore of opinion that the right to collect these arrears cannot be said to have been transferred to the Union of India by virtue of Article 278 read with the agreement of 25-2-1950. We are clearly of the view that Article 277 is a complete answer to the claim of the Government of India to collect these arrears for a period before 1-4-1950. 13. In this connection, we may contrast the provisions contained in Section 173(4), Government of India Act, 1935 which are as follows: Arrears of any taxes outstanding immediately before the commencement of Part III of this Act shall be deemed to be due to and may be recovered by the Federal Government or a Provincial Government according as the proceeds of any such tax imposed after the commencement of Part III of this Act would be due to and recoverable by the Federal Government or the Provincial Government. Under this pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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