Saving clause in local tax law permits retrospective continuation of an existing levy without expanding taxing competence.

Section 143(2) of the Government of India Act, 1935 was treated as a saving provision that allowed continuation of an existing lawful terminal tax, but not a fresh or expanded taxing power. The levy could continue only if its identity, incidence, area, purpose and rate remained substantially unchanged. On the local government statute, the unamended saving clause preserved only arrears already due, while the 1949 retrospective amendment validly continued the tax after repeal of the earlier Act. The levy by the Janpad Sabhas was therefore upheld as a lawful continuation of the existing tax.

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Issues: (i) Whether the saving provision in Section 143(2) of the Government of India Act, 1935 permitted the Provincial Legislature to continue the levy of a terminal tax that had been lawfully collected by a local authority before the commencement of Part III of that Act. (ii) Whether Section 192 of the Central Provinces and Berar Local Government Act, 1948, and the retrospective amendment made in 1949, validly preserved the power of the Janpad Sabhas to levy the tax after the repeal of the 1920 Act.

Issue (i): Whether the saving provision in Section 143(2) of the Government of India Act, 1935 permitted the Provincial Legislature to continue the levy of a terminal tax that had been lawfully collected by a local authority before the commencement of Part III of that Act.

Analysis: Section 143(2) was treated as a saving provision designed to prevent disruption of local finances, not as a plenary source of taxing power. The tax in question was a terminal tax falling within the Federal Legislative List, and its continuance depended on the limited constitutional permission to preserve an existing lawful levy, provided the tax, the collecting authority, the area benefited, and the purpose of application remained substantially the same. The provision allowed continuance of an existing levy, but not enhancement or a fresh unrelated tax power.

Conclusion: The Provincial Legislature had only a limited power to preserve the existing levy, not an unrestricted power to create a new taxing competence.

Issue (ii): Whether Section 192 of the Central Provinces and Berar Local Government Act, 1948, and the retrospective amendment made in 1949, validly preserved the power of the Janpad Sabhas to levy the tax after the repeal of the 1920 Act.

Analysis: The unamended saving in Section 192 was construed as preserving only arrears already due to the District Council when the earlier Act was repealed, not the future power to levy the tax. But the later amendment expressly continued the levy, and, on the proper construction of Section 143(2), the Provincial Legislature was competent to legislate for continuation of the existing tax without altering its incidence or rate. Since the amendment operated retrospectively to maintain continuity, the levy by the Janpad Sabhas was treated as legally sustained.

Conclusion: The amendment validly preserved the power to levy the tax, and the Janpad Sabhas' collection was lawful.

Final Conclusion: The tax levy was upheld and the challenge to the continued collection failed.

Ratio Decidendi: A constitutional saving clause permitting an existing local tax to continue authorises retrospective legislation preserving that levy, provided the tax remains the same in identity, incidence, area, purpose, and rate, and the legislature acts within its limited competence to continue rather than expand the tax.

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