GOVERNOR-GENERAL Vs. PROVINCE OF MADRAS

JUDGEMENT

(1.) THIS appeal is brought by the Governor-General in Council from a decree made by the Federal Court of India in its original jurisdiction on March 17, 1942. In proceedings commenced in that Court against the respondent, the Province of Madras, the appellant claimed that the Madras Act IX of 1939, known as the Madras General Sales Tax Act of 1939 and hereafter referred to as "the Madras Act," in so far as it purports to levy a1 tax on first sales in Madras1 of goods manufactured or produced in India is, except in respect of certain excepted goods, ultra vires and beyond the competence of the Legislature of the respondent. The Federal Court dismissed the appellant's suit following its previous decision in an appeal from the High Court of Madras in a suit in which the present respondents were appellants and a firm called Boddu paidanna and Sons were respondents and the validity of the same provisions of the same Act was in issue. THIS case will be referred to as the Boddu Paidanna case prov. Of Mad. v. Boddu Paidanna (1942) 46 C. W. N. (F. R.) 38

(2.) THE legislative powers of the Federal and Provincial Legislatures respectively are defined in the Government of India Act, 1935, sometimes called "the Constitution Act," and it will be convenient to refer to them before examining the provisions of the impugned Madras Act.

(3.) BEFORE further considering the provisions of the Constitution Act it will be convenient to examine somewhat closely the Madras Act. For in a Federal constitution, in which there is a division of legislative powers between Central and Provincial Legislatures, it appears to be inevitable that controversy should arise whether one or other Legislature is not exceeding its own, and encroaching on the others, constitutional legislative power, and in such a controversy it is a principle, which their Lordships do not hesitate to apply in the present case, that it is not the name of the tax but its real nature, its "pith and substance" as it has sometimes been said, which must determine into what category it falls.