CHHUTTILAL Vs. BAGMAL

JUDGEMENT

(1.) THESE three revisions have been referred to this Bench for the determination of a question with regard to the validity of the Indore Stamp Act, as adapted in the State by the Indore Stamp Act Adaptation Act (Act No. 5 of 1950) in its applicability to bills of exchange. The question arises thus. After the formation of Madhya Bharat various Stamp Acts which were in force in the covenanting States were continued under the Madhya Bharat Regulation of Government Act (Act No. 1 of 1948).

(2.) LEARNED counsel appearing for the petitioners urge that the Act in so far as it imposes and levies stamp duties on bills of exchange was not within the legislative powers of the Madhya Bharat Legislature under the Constitution and that, therefore, the Act in its applicability to bills of exchange is ultra vires the State Legislature because of Art. 246. It is further argued that the stamp duty on bills of exchange levied by Act No.' 5 of 1950 which came into force on 29 -1 -1950, not being a duty, which immediately before the commencement of the Constitution was being lawfully levied by the States, is not saved under Art. 277.

(3.) THIS Article saves existing taxes, duties, cesses or fees levied by State or local authorities on subjects which are now included in the Union List and under that Article only those taxes, duties, cesses or fees have been saved which immediately before 26 -1 -1950 were being lawfully levied. The real question, therefore, that survives for consideration is whether the stamp duty under Act No. 5 of 1950 which was passed before the commencement of the Constitution but became operative thereafter is a duty "which immediately before the commencement of the Constitution was being lawfully levied."