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TMI Blog1996 (4) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... es etc. The deliberations of the Municipal Councils were required to be forwarded to the Governor and would become enforceable only after the approval by the Governor in Privy Council. 3. By an agreement dated 21.10.1954, there was a de facto transfer by the French Government of all its French Territories to the Indian Government. Thereafter the Government of India in exercise of the powers conferred by Section 4 of the Foreign Jurisdiction Act, 1947 made the French Establishments (Application of Laws) Order, 1954 and the French Establishments (Administration) Order, 1954. On 28.5.1956, there was a treaty of cession between the President of India and the President of French Republic in respect of the French Establishments in India including Mahe. 4. On 16.8.1962, de jure merger of the French Establishments with India was carried out through an Instrument of Ratification between the two countries as a result of which France ceded to India the sovereignty of its territories namely; Pondicherry, Karikal, Mahe and Yaman. The aforesaid four territories constituted the Pondicherry Union Territory. 5. On 16.8.1962, the Pondicherry Administration Ordinance, 1962 was passed which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondents then filed an appeal against the aforesaid judgment of the Single Judge. During the pendency of this appeal, the Administrator of Pondicherry, on 18.3.1973, promulgated Pondicherry Municipal Decree (Levy and Validation of Taxes, Duties, Cesses and Fees) Ordinance, 1973. This was replaced by the Act (hereinafter referred to as 'the Validation Act') and it became the law on 21.3.1973 when it received the assent of the President of India and was published in the Pondicherry Gazette. This Act was given retrospective operation from 18.11.1973, the day of the Ordinance. This Validation Act was again challenged by the appellants before the Madras High Court by filing a fresh writ petition. 9. The Division Bench of the High Court heard the Appeals against the Single Judge order as well as the new Writ Petition which was filed challenging the Validation Act. By a common Judgment, the High Court allowed the Writ Appeals and dismissed the Writ Petitions. It, inter alia, held that the Validation Act was intra vires. 10. The Division Bench, however, granted leave to appeal to this Court because in its opinion, substantial question of law of general importance arose in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, not necessary for us to go into these aspects in any great detail because this question of excessive delegation does not really arise in the present case. 14. The tax had been levied in the year 1970 under the Municipal Decree of 1880. The items to be taxed and the rate of tax to be levied were specifically determined. After the learned Single Judge held the said levy to be ultra vires, the Legislative Assembly of Pondicherry passed the Validation Act. Section 3 4 of the said Act are as follows: 3: Levy of taxes etc. for the purpose of Municipal Decree.- Any tax, duty, cess or fee which the Legislature of the Union Territory of Pondicherry has power to levy may, subject to any general or special order which the Government may make in this behalf, also be levied, assessed and collected for the purposes of the Municipal Decree in accordance with the provisions contained in or made under the Municipal Decree and notwithstanding the provisions of Section 7 of the Pondicherry (Administration) Act, 1962 (Central Act 49 of 1962), or of any provision of any Act passed by the Legislature of the Union Territory of Pondicherry, the Municipal Decree shall have, and shall be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62 or any other provision in that regard. This Section has to be read with Section 4 of the Validation Act which specifically validates the taxes which had already been levied, assessed or collected in the municipal communes, including the tax in question. At the time when the Validation Act was passed, all the essential ingredients of the levy and assessment of tax on petrol and diesel oil were known and available to the legislature. The tax had been levied at the rate of 2% on the sale of diesel and petrol and the Legislative Assembly of the Pondicherry Union Territory in effect, levied this tax itself when it passed the Validation Act. As a result of this Validation Act, no further act of subordinate legislation had to be performed by any one. The affect of this Act, as already observed, clearly was that a specific levy which had been made in 1970, with the issuance of the arete by the Mayor of Mahe, was re-enacted, with retrospective date, by the competent legislature. Therefore, the question of Section 3 and Section 4 of the Validation Act suffering from excessive delegation does not really arise in this case. 16. Before dealing with the second contention raised by the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Entry 54 of List II of the Seventh Schedule. The effect of Validation Act being promulgated was that the levy on diesel and petrol would no longer be regarded as one being made under Municipal decree of 1880 by the Municipal Council but, in law, will have to be regarded as being a levy made by a competent Legislature, exercising its powers by virtue of Section 18 of (The) Government of Union Territories Act, 1963 read with Article 239A of the Constitution. 19. By virtue of (The) Government of Union Territories Act, 1963, the Pondicherry Legislature was given the powers which any other State Legislature had to enact laws with respect to the matters enumerated in the State List or the Concurrent List. Of course, Sub-section 2 of Section 18 provides that the powers conferred under Sub-section (1) shall not derogate from the powers conferred on Parliament by the Constitution to make laws with respect to any matter for the Union Territory. But, there is no such law relating to the imposition of sales tax on diesel and petrol which has been enacted by the Parliament, while the Validation Act has imposed such a tax. It is not in dispute, and now it is well settled, that the State ..... X X X X Extracts X X X X X X X X Extracts X X X X
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