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10. Similarly, Mr. Justice Fasl Ali, in delivering the judgment of the Federal Court in -- 'Ralla Ram v. Province of East Punjab' has observed that (p. 87): "..... .if a tax is to be levied on property, it will not be irrational to correlate it to the value of the property and to make some kind of annual value the basis of the tax without intending to tax income".

In the said case, the learned Judges of the federal Court were considering the question as to whether the tax leviable under the Punjab Urban Immoveable Property Tax Act amounted to a tax on income and thus trespassed on Item 54 in List I of sch. VII to the Government of India Act. In repelling the argument that the tax levied by the Provincial Legislature amounted to a trespass of the kind alleged, Mr. Justice Fazl AM examined the real purpose and the object of the tax and he emphasized that though the method and mode adopted by the Provincial Legislature in determining the reasonable amount of tax may appear to be similar to the method and mode which may be adopted by the Central Legislature in levying tax on income as such, in essence the two taxes are different and there is no question of trespass by one on the field of the other. Mr. Seervai has relied on these decisions.

In other words, the learned Judges who decided this case adopted the test of what is described as the 'pith and substance' of the Act. They set out to discover the essential character of the tax and they came to the conclusion that the essential character of the tax was that it was a tax on property, and not a tax on income. It would be noticed that the Full Bench came to this conclusion though it did appear to the learned Judges that the method adopted in deciding the annual letting value of the property was very similar to the method that would be adopted in deciding the income of the property for the purpose of income-tax. In my opinion, it would be legitimate to rely on this decision in support of the view that the character of the means or machinery devised by the Legislature for levying a tax would not by itself determine the character of the tax as such We must examine the essential features of the tax and consider the 'pith and substance' of the legislation before we decide whether it is a tax on land as such or it amounts to a tax on the capital value of the assets consisting of the land. Incidentally, I would like to add that, the observations made by Mr. Justice Broomfield have been expressly approved by Mr Justice Fazl Ali who delivered the judgment of the Federal Court in --'Ralla Ram's case, (C)', to which I have already referred.

and yet, in order to avoid a conflict between Entry 45 in the Federal List and Entry 48 in the Provincial List, Their Lordships approved of the view taken by the Federal Court in limiting the scope of Entry 45 to a duty of excise on the goods before they go into the market: "The two taxes," said Lord Simonds, "the one levied on a manufacturer in respect of his goods, the other on a vendor in respect of his sales, may, as is there (Boddu Paidanna's case, (H)',) pointed out, in one sense overlap. But in law there is no overlapping. The taxes are separate and distinct imposts." (p. 101) In my opinion, the tax which has been levied by the Municipal Corporation on the open land is a tax on land properly so called, and it cannot be treated as constituting a trespass on Entry 55 in List I on the assumption that it amounts to a tax on the capital value of the assets. Therefore, I must hold that neither E. 350A framed by the Corporation nor the Explanation to Section 75 of the Bombay Municipal Boroughs Act is 'ultra vires',

Also, in -- '', a question arose whether a tax on the sale of motor spirits was a tax on the sale of goods within Entry 48 of the Provincial List or a duty of excise within Entry 45 of the Federal List and the learned Chief Justice observed (pp. 7, 8) : "....... .Only in the Indian Constitution Act can the particular problem arise which is now under consideration; and an endeavour must be made to solve it, as the Judicial Committee have said, by having recourse to the context and scheme of the Act, and a reconciliation attempted between two apparently conflicting jurisdictions by reading the two entries together and by interpreting, and, where necessary, modifying, the language of the one by that of the other. If indeed such a reconciliation should prove impossible, then, and only then, will the 'non obstante clause operate & the federal power prevail; for the clause ought to be regarded as a last resource, a witness to the imperfections of human expression and the fallibility of legal draftsmanship."