LexJOTHI TIMBER MART & OTHERS versus CORPORATION OF CALICUT & ANOTHER
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JOTHI TIMBER MART & OTHERS
v.
CORPORATION OF CALICUT & ANOTHER
July 18, 1969
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[J. C. SHAH, S. M. Suoo AND V. RAMASWAMI, JJ.J
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Calicut City Municipal Act 30 of 1961, Section 126-lf State Legisla-
ture co1npetent to enact under entry 52 List 11, 1th schedule to the Cons~
tituticn.
Section 126 of the Calicut City Municipal Act 30 of 1961 provided
for the levy of a timber tax on timber brought into the city. The proviso to
the section exempted from the levy any timber brought into the city in
the course of transit'.ito any place outside the city and directly removed
out of the city by rail. road or water.
On a petition filed by the appel-
lants. a single bench of the Kerala High Court held that the legislature
was incompetent to enact section 126. But this decision was reversed in
appe2! by R division bench.
Jt was contended in the appeal to this Court the High Court had
wrongly considered that entry of timber into the Municipal area could
only be for consumption. use,' or sale within the Municipality or in the
course of transit through the limits of the Municipality; such entry could
be for storage or other purposes and a provision levying tax on goods
entering the area of ~he 1\-funicipalitv without specification of the purpose
\\';:$' 1'e~·ond the legislative powers of the State under entry 52, List II of
the 7th schedule to the Constitution.
HELD : Dismissing the appeal,
If the State Legislature was competent under Entry 52 List II to levy
a 1ax only on the enfry of goods for consumption, use or sale into a local
area. the Municipa1ify could not under legislation enacted in exercise of
the povv·er conferred by that Entry have power to levy tax in respect of
goods brought into the local area for purposes other than consumption,
use or sale. The authority of the State Legislatu're itself being subject to
a restriction in that behalf. s. 126 may reasonably be read as subject to
the same Hmitationsl
When the power Of the Legislature with limited
authority is exercised in respect of a subject-matter, but words of- wide
and general import are used, it may reasonably be presumed that the
Legislature \vas using: the words in regard to that activity in respect of
which it is competent to legislate and no other; and that the Legislature
did not intend to transgress the limits imposed by the Constitution.
!632 B-E]
In re Hindu Women's Rights to Property Act, 1937, [1941] F.C.R. 12;
referred to.
The expression "brought into the city" in s. 126 was rightly inte'rpreted
by the Hig:h Court
~s meaning brought into the municipal limits for
purposes ·of consumption, use or sale and not for any other purpose.
[6~2 E-Fl
. CIVIL APPEL1'ATE JURISDICTION: Civil Appeals Nos. 1079 to
1086 a;nd 1088 to 1099 of 1966.
Appeals from the judgment and orders dated August 31, 1965
of the Kerala High Court in Writ Appeals Nos. 134 of 1964 etc.
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SUPREME COURT REPORTS
[1970] l S.C.R.
H. R. Gokhale, B. Datta, J. B. Dadachanji and 0. C. Mathur,
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for the appellants (in all the appeals).
C. K. Daphtary, A. S. Nambiar and Lily Thomas, for respon-
dent No. 1 (in all the appeals).
D. P. Singh and M. R. K. Pillai. for respondent No. 2 (in all
the appeals).
The Judgment of the Court was delivered by
Shah, J.
In a group of petitions presented before the High
Court of Kerala the appi:llants challenged the validity of the levy
of "timber-tax" by the Corporation o{ Calicut on the grounds,
inter alia, that the State Legislature is incompetent to impose that
tax und•:r the Kerala Act 30 of 1961. Govindan Nair, J., declared
that the Legislature was incompetent to enact s. 126 of the Cali-
cut City 'vlunicipal Act, 1961 (30 of 1961 ). The decision of
Govindan Nair, J., was reversed in appeal by a Division Benr.h of
the High Court and the petitions were dismissed.
By virtue of Art. 246 read with Sch. VII, Item 52, List II of
the Constitution, the State may legislate in the matter of "tax on
the entry of gocds into a local area for consumption, use or sale
therein." The appellants contend that s. 126 conferring authority
to impose timber tax violates the restrictions upon the legislative
power imposed by the Constitution and on that account is void.
Section 98 of the Act enumerates the taxes and duties which
the Municipality may levy and one of the taxes described in cl. (e)
is "tax on timber brought into the city". Section 126 declares a
charge of tax on timExcerpt shown. Read the full judgment & AI analysis in Lexace.