LexMAHE BEACH TRADING COMPANY AND ETC. versus UNION TERRITORY OF PONDICHERRY AND ORS.
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MAHE BEACH TRADING COMPANY AND ETC.
v.
UNION TERRITORY OF PONDICHERRY AND ORS.
APRIL 4, 1996
[AM. AHMADI, CJ, SUJATA V. MANOHAR AND
B.N. KIRPAL, JJ.]
A
B
Co11stinttio1J of l1Jdia, 1950: Article 239A read with Sectioll 18, Govem-
ment of Unio11 Tenitmies Act, 1963-Pondicheny Legislature-Competence
of-To legislate ill respect of matters ill State List or Co11current List-Ellact-
C
mellt of Pondicheny Mullicipal Decree (Leiy a11d Validation of T{l)Ce,~ Duties,
Cesses a11d Fees) Act, 1973 with retrospective effect-Whether intra
vires-Held, yes.
Pondicheny Municipal Decree ( Leiy and Validation of T{l)Ces, Duties, D
Cesses and Fees) Act, 1973-Sections 3 & 4: Whether suffer from vice of
excessive delegatio11 of legislative power-Held, /JO. Whether 1epugnant to
Section 7 of the Pondicheny (Administratioll) Act, 1962 a11d Section 21 of
Govemment of U1Jio1J Tenitolies Act, 1963-Held, llo.
The French Decree dated 12 March 1880 governed and regulated E
the municipal bodies of French Establishments in India. Paragraph 46
of the said Decree contemplated the Municipal Councils to deliberate
the budget as well as the mode of assessment, rates and rules regarding
collection of all municipal revenues.
The sovereignty of the French Establishments viz, Pondicherry,
Karikal, Mahe and Yaman was ceded to India on 16th August 1962.
Section 4 of the Pondicherry (Ad1ninistration) Act, 1962, all laws, in force
immediately before the aJlpointed day in the former French Estab-
F
lishments continued to be in force in the Pondichcrry Union Territory. G
By section 7 of that Act all taxes, duties, cesses and fees being lawfully
levied in the said Establishments were continued to be levied.
Article 239A of the Constitution (inserted by the Constitution
(Fourteenth Amendment) Act, 1962), provid.ed for the Parliament creat-
ing, by law, for the Union Territory of Pondicherry, a body to function H
l
2
SUPREME COURT REPORTS [1996] SUPP. 1 S.C.R.
A as a Legislature. The Government of Union Territories Act, 1963 passed
by Parliament in pursuance of Article 239A, was made applicable to tbe
Union Territory of Pondicherry from 1st July 1963. Section 18(1) of that
Act empowered the Legislative Assembly of a Union Territory to make
laws for the Union Territory with respect to any of the matters
B enumerated in the State List or the Concurrent List in the Seventh
Schedule to the Constitutim1, and section 18(2) provided that such
powers shall not derogate from the powers conferred on Parliament by
the Constitution, while section 21 dealt with inconsistency between the
laws made by the Parliament and the laws made by the legislative
c
D
E
F
assemblies.
The Municipal Council of Mahe on 7th August 1969 decided to
levy a municipal tax on each letter of pertol and diesel oil sold at the
petrol pumps situate in Mahe. Thereupon, the Mayor issued an "arrete"
under the Municipal Decree 1880 for the levy of the aforesaid tax and
its collectiou with effect from 13th January 1970.
A Single Judge of the Madras High Court struck dowu the said
levy on the view that the tax was on the sale of goods, ,that it was levied
in excess of the municipality's power of taxation, that the said levy
violated section 7 of the Pondicherry (Administration) A~t, 1962, and
that since the Pondicherry Legislature had itself enacted a General Sales
Tax Act applicable to the Union Territory, the Municipal Council, in any
case, possessed no power to levy a parallel sales ~ for municipal
purposes.
During the pendency of the appeal against that judgment the
Pondicherry Legislature passed the Pondicherry Municipal Decree (Levy
and \'alidation of Taxes, Duties, Cesses and Fees) Act, 1973. Section 3
of that Act provided for the levy, assessment and. collection of any tax,
G duty, cess or fee, which that Legislature had power to levy, also for the
purposes of the Municipal Decree in accordance with the provisions
contained in or made under the Municipal Decree. It provided further
that notwithstanding the provisions of section 7 of the Pondicherry
(Administration) Act, 1962, or any provision of any Act passed by the
H Legislature of the Union Territory of Pondicherry, the Municipal Decree
MAHE BEACH TRADING CO. v. U.T.PONDICHERRY
3
shall have and shall be deemed to have had on and from the 16th day A
of August 1962, effect accordingly. Section 4 validated the taxes which
had already been levied, assessed or collected under the saExcerpt shown. Read the full judgment & AI analysis in Lexace.