Inter-State recovery of pre-Constitution claims and accrued fiscal liabilities can survive repeal absent clear displacement.

Entry 43 in List III was read as a machinery provision permitting Parliament and the States to legislate for recovery of claims arising outside the State, whether the claims accrued before or after the Constitution. The provision was not confined to post-Constitution claims. The repeal of the earlier Cochin enactment did not extinguish accrued liabilities or pending remedies, because section 6 of the General Clauses Act preserved enforcement of pre-existing rights unless clearly displaced. The absence of an express saving clause in the later recovery law therefore did not bar recovery of liabilities already incurred, and the challenge to the recovery notice failed.

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Issues: (i) Whether Entry 43 in List III of the Seventh Schedule to the Constitution of India empowered Parliament and the States to legislate for recovery of claims that had arisen before the Constitution came into force. (ii) Whether the absence of an express saving provision in the later recovery legislation prevented enforcement of claims that had arisen under the repealed Cochin enactment.

Issue (i): Whether Entry 43 in List III of the Seventh Schedule to the Constitution of India empowered Parliament and the States to legislate for recovery of claims that had arisen before the Constitution came into force.

Analysis: The expression "claims arising outside that State" was read as referring to the place where the claim arose, not to the time when it arose. The existence of the two States was relevant at the time of recovery, and nothing in the Entry restricted legislative power to claims arising only after the Constitution. The constitutional provision was treated as a machinery entry enabling recovery of existing as well as future claims.

Conclusion: The Entry authorised legislation for recovery of claims whether they accrued before or after the Constitution.

Issue (ii): Whether the absence of an express saving provision in the later recovery legislation prevented enforcement of claims that had arisen under the repealed Cochin enactment.

Analysis: The repeal of the earlier enactment did not, by itself, destroy accrued rights or pending remedies. Section 6 of the General Clauses Act was applied on the footing that its operation was not confined to cases of repeal without re-enactment, and the contrary view was rejected. The later enactment therefore did not prevent recovery of liabilities already incurred under the repealed law.

Conclusion: The absence of an express saving clause did not bar enforcement of the pre-existing tax liability.

Final Conclusion: The petitioner's challenge to the recovery notice failed, and the recovery proceedings were upheld.

Ratio Decidendi: A constitutional entry enabling inter-State recovery of claims covers claims arising before as well as after the Constitution, and accrued liabilities under a repealed fiscal law remain enforceable unless clearly displaced.

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