Education cess could not be imposed on shop-rent or merged tree imposts where the statute did not authorise the levy.

Education cess under the Mysore Elementary Education Act, 1941 could not be levied on shop-rent, tree-tax, or tree-rent collected from excise contractors because those amounts were not shown to be excise revenue within the charging provision. Shop-rent was treated as consideration for the exclusive privilege of vending liquor, not as revenue from production or manufacture, and the earlier binding view had already excluded it from excise duty. Tree-tax and tree-rent had ceased to be separately levied and had merged into shop-rent, so no lawful levy survived on them. A contractual promise in auction terms could not create a statutory cess liability where the law did not authorise it.

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Issues: Whether education cess could validly be levied under the Mysore Elementary Education Act, 1941 on shop-rent, tree-tax, and tree-rent collected from excise contractors, and whether any contractual undertaking could create such liability.

Analysis: The relevant charging provision authorised levy of education cess on specified items of State revenue, including excise revenue. Shop-rent paid for the exclusive privilege of vending toddy, arrack, or beer was held not to be excise revenue because it was a payment for the privilege of sale and had no direct relation to production or manufacture of liquor. The earlier decision binding on the Court had already settled that shop-rent was not excise duty within the constitutional taxing entry. As to tree-tax and tree-rent, the record showed that those imposts had ceased to be levied separately after the 1907 notification and had merged in shop-rent. A statutory levy could not be enforced merely because the auction terms contained an agreement to pay cess, and in any event there was no lawful levy on those items under the unamended schedule.

Conclusion: Education cess was not leviable on shop-rent, tree-tax, or tree-rent, and the levy challenged by the excise contractors was invalid.

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