1969 (7) TMI 111

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....at the State Legislature is incompetent to impose that tax under the Kerala Act 30 of 1961. Govindan Nair, J., declared that the Legislature was incompetent to enact s. 126 of the Calicut City Municipal Act, 1961 (30 of 1961). The decision of Govindan Nair, J., was reversed in appeal by a Division Bench 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 goods 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....

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.... provides: "(1) If timber is brought into the city and it is', claimed that it is in the course of transit to a place outside the city and not for consumption, use or sale within. the city and if in the opinion of the authority or officer authorised to collect the tax on timber, such timber brought into the city is not for the purpose of 'transit but for the purpose of consumption, use or sale therein, such authority or officer may demand from the person claiming exemption an amount equal to the tax leviable for such timber as security. (2) If the person, who has paid the security satisfies Commissioner within 14 days from the date of payment that the timber in respect Of which the amount was paid was brought into the city ....

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....neral levy of tax on entry of goods, into a local area is not conferred on the State Legislature by item 52 of List II of Sch. VII of the Constitution. The Municipality derives its power to tax from the State Legislature and can obviously not have authority more extensive than the authority of the State Legislature. If the State Legislature is competent to levy a tax only on the entry of goods for consumption, use or sale into a local area, the Municipality cannot under a legislation enacted in exercise of the power conferred by item 52, List II 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 Legislature itself. being subject to a restriction....