# K.ANSHI RAM JAGAN NATH AND OTHERS July 28. • v. THE STATE

- **Citation:** [1962] 2 S.C.R. 942
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/k-anshi-ram-jagan-nath-and-others-july-28-v-the-state-2309
- **Pages:** 6

## Headnote

942
SUPREME COURT REPORTS
[1962]
1961
K.ANSHI RAM JAGAN NATH AND OTHERS
July 28.
•
v.
THE STATE
(P. B. GA.TENDRAGADKAR, K. SURRA RAO, M.
HIDAYATULLAH, J.C. SHAH and RAGHUBAR
DAYAL, ,TJ.)
Excise Dutiei-Law of erstwhi'.le Indian State providing
for royalty on bricks-Extension of Indian excise law to the
State on merger with part B State-Effect on prior law-Levy
of royalty, if repealed- Central Excises and Salt Act, 1944
(1of1944), ss. 2(d) 3(1)-Finance Act, 1950 (25 of 1950),
88. 11. 13 (2).
The Council of Regency of the erstwhile State of Patia!a
issued an order dated February 6, 1919, imposing a royalty on
bricks from all kiln-owners at the rate of Rs. 50 per one lakh.
After the State of Patiala became merged with the Patiala and
East Punjab States Union, a Part B State under the Constitution of India, the Finance Act, 1950, which can1e into force on
April 1, 1950, became operative in that State. By vi.itue of
s. 1 I of that Act the Central Excises and Salt Act, 1944, was
extended, inter alia, to Part B States, whil~ under s. 13(2) it
was provided that if immediately before April 1, 1950, there
was in force in any State a law corresponding to but other than
an Ac1 referred to in s. 1 I such law became repealed with
effect from that date. The legality of the levy of royalty on
bricks under the order dated February 19, 1949, after April
1, 1950, was challenged by the appellant on the grounds that
the royalty was in the nature of an excise duty, and that the
order levying it was a law corresponding to the Central
Excises and Salt Act, 194'4, and therefore became repealed by
s. 13(2) of the Finance Act, 1950.
Held, that' the Central Excises and Salt Act, 1944, which
provided for the levy and collection of duties of excise on
. goods specified in the First Schedule to the Act did not by a
negative
provision expressly save other commodities, not
included in the Schedule, from the operation of any existing
local law.
Con,.quently, the order dated February 19, 1949,
passed by the erstwhile State of Patiala, was not a law corresponding to the Act of 1944 and was not, therefore, within the
repeal created bys. 13(2) of the Finance Act, 1950.

## Text

942
SUPREME COURT REPORTS
[1962]
1961
K.ANSHI RAM JAGAN NATH AND OTHERS
July 28.
•
v.
THE STATE
(P. B. GA.TENDRAGADKAR, K. SURRA RAO, M.
HIDAYATULLAH, J.C. SHAH and RAGHUBAR
DAYAL, ,TJ.)
Excise Dutiei-Law of erstwhi'.le Indian State providing
for royalty on bricks-Extension of Indian excise law to the
State on merger with part B State-Effect on prior law-Levy
of royalty, if repealed- Central Excises and Salt Act, 1944
(1of1944), ss. 2(d) 3(1)-Finance Act, 1950 (25 of 1950),
88. 11. 13 (2).
The Council of Regency of the erstwhile State of Patia!a
issued an order dated February 6, 1919, imposing a royalty on
bricks from all kiln-owners at the rate of Rs. 50 per one lakh.
After the State of Patiala became merged with the Patiala and
East Punjab States Union, a Part B State under the Constitution of India, the Finance Act, 1950, which can1e into force on
April 1, 1950, became operative in that State. By vi.itue of
s. 1 I of that Act the Central Excises and Salt Act, 1944, was
extended, inter alia, to Part B States, whil~ under s. 13(2) it
was provided that if immediately before April 1, 1950, there
was in force in any State a law corresponding to but other than
an Ac1 referred to in s. 1 I such law became repealed with
effect from that date. The legality of the levy of royalty on
bricks under the order dated February 19, 1949, after April
1, 1950, was challenged by the appellant on the grounds that
the royalty was in the nature of an excise duty, and that the
order levying it was a law corresponding to the Central
Excises and Salt Act, 194'4, and therefore became repealed by
s. 13(2) of the Finance Act, 1950.
Held, that' the Central Excises and Salt Act, 1944, which
provided for the levy and collection of duties of excise on
. goods specified in the First Schedule to the Act did not by a
negative
provision expressly save other commodities, not
included in the Schedule, from the operation of any existing
local law.
Con,.quently, the order dated February 19, 1949,
passed by the erstwhile State of Patiala, was not a law corresponding to the Act of 1944 and was not, therefore, within the
repeal created bys. 13(2) of the Finance Act, 1950.
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 292 of 1958.
'
2 S.C.R.
SUPREME COURT l{,EPORTS
943
Appeal from the judgment and dcf:rec dated
October '.?3, 1956, of the PEPSU (now l'unja.b)
High Court in l~egular Second Appeal No. 29 of
195!.
C. K. Daphtary, Svlfoitor-Geneml uf India,
J.B. JJadaohanji, Rav·inder Narain and 0. C. ,tfathnr,
for the appellants.
S. M. SiLTi, Advowlt;-General for tlte State of
Punjab, N. S. Bindra and P. D. Jlcnuu, for the
respondent.
1961. J11ly 28. Judgment of the: Court W<'.S
delivered by
1961
Kanshi Ram
Jagan Nath
v.
The Sta!t
HIDAYATULLAH, J.-The only question in this Jlidayatullah J.
appeal, with certificate under Art. 13:J(l )( c) uf the
Constitution, against the judgment and decree of
the High Court of Patiala and East :Punjab :::>tates
Union, is whether the levy of royalty at l{,s. 50
per one lakh bricks under n Robkar issued by the
ljlas-i-Khas (Council of Hegency),
Patiala i:ltate,
on February 6, 1919, is valid.
The Appeal arises out of a suit filed by the
present appellants in the Court of the
Hubordin~.te
Judge, l<'aridkot, for dee laration ~.nd injunction.
The suit was dismissed by the trial Judge, but on
appeal to the Distriet Court, the denisio.11 was
rcvurs('cl. On further appeal to thf' High Court,
the decision of the Adrlitional DiHtrid .Tudgo \1·iis
set aside, and that of the trial ,Judge n·otored.
In this appeal, the only point argurd is
whether the OYder of the lj[as .. i'.-Kha8 contim1f's to
be effective, after the ew10tm r:nt. of the :b'imrnc:o Act.
il9ii0. The suit was fikd on l\fa~· l:J, l!lii2, for
njunctiun agaimt notices of ckmand issued to the
appellants from the Tehsil Office. Faridko1, on or
about April :W, 1951.
The:
kanwcl SolicitorGeneral conced!'s that the appc·llants' daim must.
'be confined to the 1wriod after Apr.il l, l95H, from
1961
A. anJ:Jki lt:t '1.
J uyrtn ..._Vath
\'.
1'he State
11 idaynt'U ll<L/i J
94i
SUPREME COURT REPORTS
[1962]
which date the Finance Act, HIGO, began to
operate. He states that prior to that date the
law could not be co1rnidcrcd _to be invalid because
uf Art. "277, which saved taxes, duties, cesses or
fees which were being levied in any State prior to
the commencement of the Constitution.
He also
cuncedes that tbe Finance Act, 1950, could not
operate before April l, 1!!50, antl the question,
therefore, is, what is the effect of the Finance Act,
l !JGO, un the order impugm d ? It may also be
poiuted out that the authority of the Regency
Uouncil tu issue the "impugned order and the validity of that order, unless affeeted by any Indian
law, are not called in question.
The Finance Act, 1950, was passed to give
effect to the financial proposals for the year commencing on Aprill, 1950. Se<,tion 11 of that Act
extended, amongst ut,hers,
the Uentral Exdse:s
and Salt Act, 1944, to the whole of India induding
Part B Stntes, except the State of Jammu and
Kashmir. By s. 13(2 ), it was provided, inter alia,
as follows:
"If immediately before the 1st day of
April, 1950, there is in force in any State
other than
Jammu and Kashmir a law
corresponding to, but other
than an Act
referred to in sub-section ( 1) or ( "2) of section
11, such law is hereby repealed with effect
from the o'.lid date ......... ".
It i:s contended that hy
the extension of the
Central }<]x<'ii<t
0 S and Salt Act,
1944, there was
repeal of any law imposing exdsc du_ty on the
manufacture of any dnss of goods.
Attention is,
therefore, drawn to the provisions of the Robkar,
where the royalty i:s dwrged as follows :
"Jlc!isvl ( lloynlty) at the rnte uf Rs. 50
per lac brieks be charged from nil the kiluowners irrespective of the fact whether they
I
I
2 s.c.R.
SUPREME COURT REPORTS
945
construct brick-kilns on the land belonging
to Government or not.
In case they
construct brick-kilns on the land belonging to
Government, cost (of the land) or damages
thereof be charged (from them) in addition
to the Mehsul (Royalty) ...... ". ·
The provisions of s. 13(2) of the Fin!Lnce Act,
1950, clearly show that only a law corresponding
to the Central Excises and Salt Act, 1944, was
intended to be repealed. If the law did not
correspond to the Indian statute, it would be saved
by virtue of Art. 277. We have. thus to. det~rmme
in this case whether the Robkar ot the IJlas-i-Khas,
imposing a royalty on bricks cun be sai~ to be a
law corresponding to the
Central
Exel~&~ a.iiil
Salt Act, 1944, which was extended on April 1, 1950.
The argument of M:t·. Daphtary proceeds on
the assumption that the royalty is in the nafure of
an excise duty, and the RobkM is thus a law corresponding to the Indian statute. That, however,
does not determine the question, because the words
of sub-s. (2) of s. 13 of the Finanee Act, 1950, are
that the law repealed must be a law corresponding
to the Indian statute. The atgument in support
of the contention that this is such a law is that the
Central Excises and Salt Act, 1944, is, as its long
title and preamble show, a consolidating and
amending law relating to Central duties of excise
on goods ·manufactured or produced in certain parts
of India and to salt. It is urged that the Act is in
the nature of a code, which not only provides for
the levy of excise duty on the commodities specifically
mentioned
therein but by implication,
exonerates other articles from the levy of excise
duty, and that, thercfon,, the Indian statute is
uomprehensivc C'llough to include not only suo:l1
commodities as arc mentioned in it but also other
commodities on which there is no levy. It is conceded, however, that there is no negative provision
1961
Kanshi Ram
Jagan Naty
v
The Stat•
Hidayatullah .J.
1961
K analti Rarn
JaJJan Naik
v.
Tke SfJJ,/R,
Bidayatullah J.
946
SUPREME COURT REPORTS
[1962]
under which other good~ manufactured in India are
expressly saved from the uperation of any other
law.
Section 3( 1) of the Central Excises and i:lalt
Act, 1944, lays down the charge of excise duty, and
provides:
"There <lhall be levied and collected in
such manner as may be prescribed duties of
excise on all excisable goods other than sa It
which
are produced or manufactured in
India ......... at the rates, set forth ii: the First
Schedule."
"Excisable goods" is defined bys. 2(d). and mea11s
"goods specified In the First Schedule as being subject to a duty of excise and includes salt".
These
two provisions read together limit the operation of
the excise law to enumerated commodities and salt,
and the ambit of the law is thus confined. The wor(ls
"to consolidate and amend
the
Jaw''
han,
reference really to the Acts, which were repealed
by s. 39.
Prior to the enactment of this consolidating Act, there were no less than li Acts dealing
with different commodities, am\ in HJ44, all those
laws were repealed, and a eollSolidated Act was
passed to cover all those Aets and to include
certain new commodities.
Tht• effect uf "onsolidation waH not to eorlify the law in s11L·h a way as to
repeal other 1wts, which were nut specilically
mentioned in the Schedule dealing with repeal~.
No negative provision to save other eommoditios
from the operatio11 of any existing local law was
either expressly induded or even contemplated in
the Act. The result, therefore, is quite clear th~,t
the Robkar, under which the roy01lty was imposed,
cannot be said to bt> a law eo1Tesponding to the
Central Excise;; and Salt Avt, l!J44, and is, therefore, not within the repeal created by s. 13(2) of the
Finance Act, l !l.50.
'
•
2 s.c.R .
·.~· .
. .. :
'
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·:
·._.
'
_::
SUPRE~ffi COURT REPORTS---;947--
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•
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In ·our judgment, the· decision of the High
Court is . correct; · and the appeal is dismissed with
costs.·
.Appeal dismissed.
---
. ROSHAN LAL 1\IEHRA
ISHWAR DAS.
(B. P. SINHA; C.J., S.K. DAS,
A. K .. SARKAR;
N_, RAJAGOPALA AYYANGAR 'lnd J.R; 1\IuDHOLKAR, JJ.)
Standard rent, (fixati<m of-Neirly Constructed .and old
buildings-Cla8sification, if· .-iolatii-e of fundamental right and
principksof natural.iustice-:-Constitution of India, Art •. 14-:-
Delhi and Ajmer-Marwara Rent Control Act, 1947 (Act XIX of
1941), SS. 7, 7A, Sch. IV.
.
.
··. The ·appellants applied to the Rent Controller· for' ·fixa.
tion of fair and standard rent of certain shops and other
premises alleging that the rent charged by the landlords was
exorbitant.
The questions arising for detennination were .
(I) wbethei; the Delhi and Ajmer-Marwara Rent Control Act,
1947· in so far as it provided for the fixation of standard rent
in respect of premises the construction of which was completed
after March 24," 1947 by the Rent Controller violated the
fundamental right guaranteed under'Art. 14 of the Constitution; and (2) whether the procedure to be followed by the Rent
Controller violated the principles of natural justice •.
Held, thats. 7Aand the relevant provisions of Sch. IV
of the Act laying down the proce<Jure for fixing standard rent
by t!JJ' Rent Controller are not· unconstitutional and do not
violate Art. 14 of the Constitution. The classification between
premises the ·construction of which was completed before
March 24, 1947.when the Act came into force and those which
•
\\·ere_ completed :thereafter, is reasonable,. and the cr~teria for
the fixation ·-Of-standard rent for both old and new buildings·
under tl:e Act were not substantially different.
·
.. ·.-.. The. procedure laid down Wider those provisions docs not
:.violate the principles of natural juatice.~ The power given to
the Rent Controller is not arbitraiy and he has to exercise it
on a judicial_ consideration of all the cir.<UJDstar.~cs of th_e caoc.
, .
·--~--
_ kanslii&.m
Jagardfoth.,
-_.' V.•. ; •. ~
Tht Stiitt
HidayatuUah J •
1961
-
A1Jgust 2.