# THE SUPREME COURT REPORTS THE AMALGAMATED COALFIELDS LTD. ,96, AND OTHERS v. THE JAN AP ADA SABHA, CHHINDW ARA

- **Citation:** [1962] 1 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Bench:** B. P. Sinha, s. K. DAS, A. K. Sarkar, K. C. Das GUPTA, N. Rajagopala Ayyangar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-supreme-court-reports-the-amalgamated-coalfields-ltd-96-and-others-v-the-1992
- **Pages:** 9

## Headnote

Coal Tax-L,gality of-Local Legislature authorising stick
levy by local authority-Legislative competence-Central Provinces
Local Self-Government Act. r920 (C. P. 4 of r920), s. 5r-Government of India Act, r9r5 (5 & 6 Geo. 5, Ch. 6r), ss. 80A(3), 8r(r)(3),
84(2)-Government oj India Act, r935 (26 G,o. 5, Ch. 2), s. r43C onstitution oj India, Art. 227.
Section 51 of the Central Provinces Local Self-Government
Act, 1920, empowered a district council, subject to the previous
sanction of the local Government, to impose "any tax, toll or
rate, other than those specified in ss. 24, 48,49, and 50.'' On
March 12, 1935, an Independent Mining Local Board functioning
in the area in which the petitioners were working certain mines
situated therein, and having vested in it all the powers of a district council, resolved to impose a tax on coal, coal-dust and
coke manufactured at the mines or sold within the territorial
jurisdiction of the Board. The petitioners who were served with
notices of demand requiring them to pay certain sums of money
as the tax due by them for despatches of coal from their mines,
challenged the legality of the levy of the tax on the grounds,
intl'f alia (1) that the Act which by s. 51 authorised the imposition of the tax, had been passed by the local legislature without
the previous sanction of the Governor-General, thereby contravening s. 80A(3) of the Government of India Act, 1915, and that
even if it was found that the Act was validly passed before the
coming into force of the Government of India Act, 1919, which
introduced s. 8oA into the Act of 1915, the power conferred by
s. 51 to levy tax was exercised only in 1935 and by that date
s. 8oA had been introduced into the Government of India Act,
1915, and that thereafter there could be no legal imposition of a
tax without the previous sanction of the Governor-General being
obtained, (2) that s. 51 of the Central Provinces Local SelfGovernment Act, 1920, on its language and ,in the context of
other provisions referred to in that section, did not authorise
~ the levy of a tax of the nature of the coal tax, and (3) that, in
any case, the tax ceased to be legally leviable after the coming
February zo.
2
SUPREME COURT REPORTS
[1962]
r96r
into force of the Government of India Act, r935, and of the Constitution of India, since a tax like that in question could be imAmalgamated
posed only by the Central Government.
Coalfields Ltd.
Held: (r) that the Central Provinces Local Self-Government
v.
Act, 1920, having received the assent of the Governor-General,
Janap~da Sabha, its validity cannot be challenged in view of the saving clauses
Chhindwa•a
in the proviso to s. 80A(3) and s. 84(2) of the Government of
India Act, 1915.
(2) that the validity of Central Provinces Local SelfGovernment Act, 1920, when enacted, not being open to any
objection under the Government of India Act, 1915, any subsequent amendments to the latter Act could not in any manner
affect its continued validity and operation.
(3) that on the proper construction of s. 51 of the Act of
1920, the levy of a coal tax is not excluded from the purview of
the local authority.
(4) that the continued levy of the tax in question even
after the coming into force of the Government of India Act,
r935, and the Constitution of India, is valid in view of s. 143 of
the Act of 1935 and Art. 227 of the Constitution.
ORIGINAL JURISDICTION:
Petition No. 31 of 1959.
Petition under Art. 32 of the Constitution of India
for enforcement of Fundamental Rights.
M. C. Setalvad, Attorney-General of India, IS. N.
Andley, J.B. Dadachanji, Rameshwar Nath and P. L.
Vohra, for the petitioners.
B. Sen and J. N. Shroff, for the respondent.
1961. February 10.
The Judgment of the Court
was delivered by
1
'
Ayyangar ].
AYYANGAR, J.-This petition under Art. 32 has
l
been filed impugning the validity of two ~otices of
_,
demand served on the petitioners requiring them to
pay what has been compendiously described as "coal
tax" by the respondent, which

## Text

THE SUPREME COURT REPORTS
THE AMALGAMATED COALFIELDS LTD.
,96,
AND OTHERS
v.
THE JAN AP ADA SABHA, CHHINDW ARA
(B. P. SINHA, c. J., s. K. DAS, A. K. SARKAR,
K. C. Das GUPTA and N. RAJAGOPALA AYYANGAR, JJ.J
Coal Tax-L,gality of-Local Legislature authorising stick
levy by local authority-Legislative competence-Central Provinces
Local Self-Government Act. r920 (C. P. 4 of r920), s. 5r-Government of India Act, r9r5 (5 & 6 Geo. 5, Ch. 6r), ss. 80A(3), 8r(r)(3),
84(2)-Government oj India Act, r935 (26 G,o. 5, Ch. 2), s. r43C onstitution oj India, Art. 227.
Section 51 of the Central Provinces Local Self-Government
Act, 1920, empowered a district council, subject to the previous
sanction of the local Government, to impose "any tax, toll or
rate, other than those specified in ss. 24, 48,49, and 50.'' On
March 12, 1935, an Independent Mining Local Board functioning
in the area in which the petitioners were working certain mines
situated therein, and having vested in it all the powers of a district council, resolved to impose a tax on coal, coal-dust and
coke manufactured at the mines or sold within the territorial
jurisdiction of the Board. The petitioners who were served with
notices of demand requiring them to pay certain sums of money
as the tax due by them for despatches of coal from their mines,
challenged the legality of the levy of the tax on the grounds,
intl'f alia (1) that the Act which by s. 51 authorised the imposition of the tax, had been passed by the local legislature without
the previous sanction of the Governor-General, thereby contravening s. 80A(3) of the Government of India Act, 1915, and that
even if it was found that the Act was validly passed before the
coming into force of the Government of India Act, 1919, which
introduced s. 8oA into the Act of 1915, the power conferred by
s. 51 to levy tax was exercised only in 1935 and by that date
s. 8oA had been introduced into the Government of India Act,
1915, and that thereafter there could be no legal imposition of a
tax without the previous sanction of the Governor-General being
obtained, (2) that s. 51 of the Central Provinces Local SelfGovernment Act, 1920, on its language and ,in the context of
other provisions referred to in that section, did not authorise
~ the levy of a tax of the nature of the coal tax, and (3) that, in
any case, the tax ceased to be legally leviable after the coming
February zo.
2
SUPREME COURT REPORTS
[1962]
r96r
into force of the Government of India Act, r935, and of the Constitution of India, since a tax like that in question could be imAmalgamated
posed only by the Central Government.
Coalfields Ltd.
Held: (r) that the Central Provinces Local Self-Government
v.
Act, 1920, having received the assent of the Governor-General,
Janap~da Sabha, its validity cannot be challenged in view of the saving clauses
Chhindwa•a
in the proviso to s. 80A(3) and s. 84(2) of the Government of
India Act, 1915.
(2) that the validity of Central Provinces Local SelfGovernment Act, 1920, when enacted, not being open to any
objection under the Government of India Act, 1915, any subsequent amendments to the latter Act could not in any manner
affect its continued validity and operation.
(3) that on the proper construction of s. 51 of the Act of
1920, the levy of a coal tax is not excluded from the purview of
the local authority.
(4) that the continued levy of the tax in question even
after the coming into force of the Government of India Act,
r935, and the Constitution of India, is valid in view of s. 143 of
the Act of 1935 and Art. 227 of the Constitution.
ORIGINAL JURISDICTION:
Petition No. 31 of 1959.
Petition under Art. 32 of the Constitution of India
for enforcement of Fundamental Rights.
M. C. Setalvad, Attorney-General of India, IS. N.
Andley, J.B. Dadachanji, Rameshwar Nath and P. L.
Vohra, for the petitioners.
B. Sen and J. N. Shroff, for the respondent.
1961. February 10.
The Judgment of the Court
was delivered by
1
'
Ayyangar ].
AYYANGAR, J.-This petition under Art. 32 has
l
been filed impugning the validity of two ~otices of
_,
demand served on the petitioners requiring them to
pay what has been compendiously described as "coal
tax" by the respondent, which is a Local Board constituted under the Central Provinces & Berar Local
Government Act, 1948 (C. P. & Berar Act XXXVIII
of 1948). The ground of challenge is that there was
no legislative power for the levy of the tax and that
consequently the fundamental rights of the petitioners
under Art. 19(l)(f) and (g) are being violated.
It may be stated at the outset that the tax now •
impugned has been imposed by the local authority
1 S.C.R. SUPREME COURT REPORTS
3
from March 12, 1935 and that the first occasion when
x96z
its validity was attacked was in only 1957, though if Amalgamated
the petitioners are right in their submissions their Ccalfidds Ltd.
acquiescence might not itself be a ground for denying
v.
them relief.
Before however we set out the points fanapada Sabha,
urged by the learned Attorney-General in support of
Chhindwara
the petition, it would be convenient if we narrate
briefly the history of the levy of this tax.
Ayyangar f.
Section 51 of the Central Provinces Local Self-
'
Government Act, 1920 (C. P. Act IV of 1920), which
will be referred to hereafter as the Act, ran :
"51(1). Subject to the provision of any law or
enactment for the time being in force, a district
council may, by a resolution passed by a majority
of not less than two-thirds of the members present
at a special meeting convened for the purpose, impose any tax, toll or rate other than those specified
in sections 24, 48, 49 and 50.
(2). The first imposition of any tax, toll or rate
under sub-section (1) shall be subject to the previous
sanction of the local Government."
The petitioners are working certain mines situated in the district of Chhindwara and for the area
covered by the mines an Independent Mining Local
Board was constituted in or about 1926 and such
Boards are included in the definition of a Local Board
under the Act and they have vested in them all the ·
powers of a District Council.
This Mining Board,
after obtaining the previou.; approval of the local
Government, passed on March 12, 1935, by the majo-

rity requisite under s. 51(1) of the Act a resolution to
impose a tax on coal, coal-dust and coke in the following terms:
"The tax shall be levied at the rate of three pies..
per ton c:n coal, coal dust or coke, manufactured at
the mines, sold for export by rail or sold otherwise
than for export by rail within the territorial jurisdiction of the Independent Mining Local Board."
The tax has been levied and collected ever since.
The Local-Self Government Act of 1920 was repeal-
•. ed and re-enacted by the Central Provinces & Berar
Local Government Act, 1948, but nothing turns on
4
SUPREME COURT REPORTS
[1962]
r96r
this, because the later enactment and certain amendments made subsequently contain provisions for the
Amalgamated
·
f
h
L
l B
d
Coalfields Ltd. contmuance o t e
oca
oar s constituted under
v.
the repealed enactment and for the continued exigiJanapada Sabha, bility of the taxes and cesses in force at the date of
Chhindwara
the commencement of the Act of 1948. The respondent was, as stated earlier, constituted under the Act
Ayyangar ].
of 1948 and is 'admittedly the successor of the Independent Mining Board which imposed the tax by its
resolution dated March 12, 1935, and is legally entitled
to continue the levy if the original imposition was
valid. There is only one other matter to be mentioned at this stage, viz., that the rate of duty which, as
seen from the resolution extracted earlier, was 3 pies
per ton when imposed in 1935 was raised by the local
body to 9 pies per ton in 1949, this being the rate
which now prevails. On August 23, 1958, the Chief
Executive Officer of the respondent-Sabha served two
notices of demand on the first and second petitioners
requiring them to pay sums of Rs. 21,898.64 and
Rs. 11,838·09 respectively as the tax due by each, for
despatches of coal from their respective mines for the
period January 1, 1958, to June 30, 1958. It is the
validity of these notices that is impugned in this petition.
The submissions of the learned Attorney-General
were three:
(1) The levy of the tax by the Independent Mining
Board was invalid at the date of its original imposition in 1935, and consequently the respondent-Sabha
-its successor-obtained no authority to continue the
same.
(2) Assuming the levy was valid when originally
imposed, it ceased to be legal after the coming into
force, first of the Government of India Act, 1935 and
later of the Constitution of India in 1950 under which
the tax in question or some portions of it became
exclusively leviable by the Central or Union Government and would not be covered by the saving as to
previously existing taxes in s. 143 of the Government
of India Act, 1935, and subsequently of Art. 277 of
the Constitution.
I
•
1 S.C.R. SUPREME COURT REPORTS
5
;
(3) Assuming further that the provision contained
r96r
in s. 143 of tlie Government of India Act covered the
Amalgamated
tax, the protection afforded by it or the continuance Coalfields Ltd.
for which it provided, is only for a tax at the rate of
v.
3 pies per ton prevailing before the commencement of .Janapada Sabha,
the Government of India Act (April 1, 1937), and the
Chhindwara
increase in the rate to 9 pies per ton in 1949 rendered
the levy and the demand illegal either in whole or at
Ayyangar f.
least in part.
,
We shall now proceed to deal with these points in
that order:
(1) That the imposition of the tax by the Independent
Mining Board by resolution dated March 12, 1935, was
invalid. This was songht to be rested on three distinct
grounds:
(a) that the levy of the tax was in contravention
of s. 80A(3) of the Government of India Act, 1915.
Section 80A(3) enacted, to quote only the part material:
"The local legislature of any province may not,
without the previous sanction of the GovernorGeneral, make or take into consideration any law-
(a) imposing or authorising the imposition of any
new tax unless the tax is a tax scheduled as exempted from this provision by rules made under this
Act; or
,,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The taxes now impugned are not within those enumerated in the schedules to the Scheduled Taxes Rules
and hence the previous sanction of the GovernorGeneral was required before a bill authorising the
levy of the tax could be taken into consideration.
And the Act which by s. 51 authorised the imposition
of the tax, had been passed by the local legislature
without the previous sanction of the Government
having been obtained.
The petition as filed setting out this contention proceeds on the basis that the Act was passed after the
Government of India Act, 1919, by which s. 80A was
introduced into the Act of 1915 came into force. If
that had been the correct position, the proviso to
s. 80A(3) readfo.g:
Amalgamated
Coalfields Ltd.
v.
J anapada Sabha,
Chhindwara
Ayyangar ].
6
SUPREME COURT REPORTS
[1962]
"Provided that an Act or a provision of an Act
made by a local legislature, and subse4uently assented to by the Governor-General in pursuance of this
Act, shall not be deemed invalid by reason only of
its requiring the previous sanction of the GovernorGeneral under this Act."
would be a complete answer to the above objection,
since under the Government of India Act, 1915, before
and after its amendment in 1919, every bill passed by
a local legislative council had, after receiving the
assent of the Governor, to be transmitted to the
Governor-General and could become law only after
the latter had signified his assent (Vides. 81(1) & (3)
of the Act).
That the Governor-General had assented
to the Act under this provision was never in dispute.
The saving contained in the proviso is, it should be
noticed, in addition to the general saving contained
s. 84(2) of the Government of India Act (to read only
the material words): " ... the validity of any Act of ...
any local legislature shall not be open to question
in any legal proceedings on the ground that the Act
affects ... a central subject" which is of wider import
and designed to remove all questions of legislative
competence of the type now put forward from the
purview of Courts.
At the stage of the arguments, however, it was
found that the Act had become law even prior to the
coming into force of the Government of India Act,
1919, with the result that the contention raised in the
petition based on s. 80A(3) could not be urged. From
the recitals at the beginning of the Act it was found
that the previous sanction of the Governor-General
had been obtained to the introduction of the measure
in the Local Legislature under s. 79(2) of the Government of India Act, 1915-i.e., before s. 80A(3) introduced into the Government of India Act, 1919, was
brought into force.
The learned Attorney-General, therefore, modified
his argument and presented it in this form: No doubt
when s. 51 of the Act was enacted, it was within the
competence of the Local Legislature. But the power
conferred by that section to levy the tax was exercised
,
•
•
•
1 S.C.R. SUPREME COURT REPORTS
7
only in 1935 and by that da'te s. SOA had been intro.
'96'
duced into the Government of India Act and there.
Amalgamated
after there could be no legal imposition of a tax, not
coalfields Ltd.
included in the Scheduled Taxes Rules without the
v.
previous sanction of the Governor-General being ob. J anapada Sabha,
tained.
We consider this argument wholly without
Chhindwara
force. The validitv of s. 51 of the Act, when enacted,
not being open to "any objection under the GovernAyyangar J.
ment of India Act, 1915, the amendments effected to
the Government of India Act, 1915, by the Act of
1919 did not in any manner, or to any extent, expressly or even by implication affect or trench upon the
continued validity and operation of that section.
Obviously, s. 80A(3) was only concerned to lay down
the preliminaries for enacting a law after that provision came into force and after a law has once been
enacted and is in operation, there is no question of
the procedure laid down for bills being attracted. This
apart, all controversy is set at rest and any argup:ient
of the type now urged is precluded by r. 5 of the
Scheduled Taxes Rules which runs:
"Nothing in these rules shall affect the right of
a local authority to impose a tax without previous
sanction or with the previous sanction of the local
Government when such right is conferred upon it
by any law for the time being in force."
.
The submission therefore that before the power con·
ferred by s. 51 of the Act, the previous sanction of
the Governor-General had to be obtained or that there
must be fresh legislation, must be rejected.
(b) The second matter urged under this head was
based on the meaning to be given to the opening
words of s. 51 of the Act: "Subject to the provision of
any law or enactment for the time being in force".
It was suggested that the provision contained in
s. 80A(3) of the Government of India Act read with
the Scheduled Taxes Rules framed under that section
constituted "a law for the time being in force" to
which the power to levy the tax was subject. In the
first place, it is clear that a law like that which is
found in s. 80A(3) prescribing a procedure for enacting future Acts of the Local Legislature could not be
8
SUPREME COURT REPORTS
(1962]
r9 6r
comprehended within those words. But even if it did,
in the face of r. 5 of the Scheduled Taxes Rules, the
Amalgarnated
Coalfields Ltd. construction suggested could have no basis.
v.
( c) The last reason assigned for disputing the
Janapada Sabha, validity of the original imposition of the tax, was that
Chhindwara
s. 51 of the Act on its language and in the context of
the other provisions referred to in that section, did
Ayyangar j.
h
h
not .aut orise t e levy of a tax or cess of the nature
of the "coal tax". We are wholly unable to accept
this argument. The relevant words of s. 51 are:
"impose any tax, toll or rate other than those specified in sections 24, 48, 49 and 50".
It is not suggested that "the coal tax" is one specified in any of the sections set out, and hence there
was power to levy any other tax including that which
is now impugned. The learned Attorney-General however suggested that the tax authorised by s. 51 should
still be somewhat like the taxes referred to in the
other sections, though not identical with them. Obviously, in the face of the words "other than those ... "
the rule of ejusdem generis is contra-indicated and if
so on no rule of construction could "the coal tax" be
excluded from the purview of the local authority.
We, therefore, hold that the original imposition of
the tax in 1935 was valid.
(2) The next question is: has the tax ceased to be le-.
gally leviable by reason of the coming into force of the
Government of India Act, 1935 and of the Constitution?
Both these constitutional enactments contain
express provisions whereby taxes, cesses, etc., which
were previously lawfully levied by local authorities
for the purposes of their local areas, might continue to
be collected and applied for the same purposes notwithstanding that those taxes could thereafter be imposed only by the Central or the Union Government,
as the case may be (Vide s. 143 of the Government of
India Act, 1935, and Art. 277 of the Constitution).
The objection therefore that "coal tax" or some of the
components of it, .could have been imposed only by
the Central Government or the Union Government is
no ground for impugning the continued validity and
exigibility of the tax. It is needless to add that if the
•
I
'
•
'
•
1 S.C.R. SUPREME COURT REPORTS
9
tax fell within the Provincial or the State List, the
z96z
levy would be valid under s. 292 of the Government
Amalgamated
of India Act and Art. 372 of the Constitution even
Coalfields Ltd.
without the aid of the special provision in s. 143 or
v.
Art. 277. In view of these considerations the learned Janapada Sabha,
Attorney-General did not address us seriously on this
Chhindwara
point.
Ayyangar ] .
(3) The last point urged was as regards the validity
of the increase in the rate of tax to 9 pies per ton
effected in 1949, i.e., after the commencement of
Government of India Act, 1935.
This objection was
not even hinted in the petition now before us, and we
did not consider it proper to permit petitioners to
raise the point.
The result is that the petition fails and is dismissed
with costs .
Petition dismissed.
THE CHIEF INSPECTOR OF MINES AND
ANOTHER
v.
LALA KARAM CHAND THAP AR ETC.
(B. P. SINHA, c. J., s. K. DAS, K. c. DAS GUPTA,
N. RAJAGOPALA AYYANGAR and
J. R. MunHOLKAR, JJ.)
Colliery Company-Violation of Coal Mines RegulationsProsecution of all directors of company, the managing agents and
the manager of company-Legality-Mines Act of I923 repealed
and re-enacted-Regulations made thereunder, if continue in force-
' Anyone of directors' meaning of-Indian Coal Mines Regulations,
Ig26-Mines Act, r923 (4 of r923), s. JT(4)-Mines Act, Ig52, (35
of I95Z), ss. 2(r), 76-General Clauses Act, I897 (IO of r897), s. 24
-Constitution of India, Art. 20(I).
1~he directors of a company, which was the owner of a
colliery, the directors of the managing agents of the company,
and the manager and the agent of colliery were prosecuted for
offences under ss. 73 and 74 of the Mines Act, 1952, for violation
•
February IO.