Shah, J. - (1.) In a group of petitions presented before the High Court of Kerala the appellants challenged the validity of the levy of "timber-tax"by the Corporation of Calicut on the grounds, inter alia, that the State Legislature is incompetent to impose that tax under the Kerala Act 30 of 1961. Govindan Nari, J., declared that the Legislature was incompetent to enact Section 126 of the Calicut City Municipal Act, 1961 (30 of 1961). The decision of Govindan Nair, J., was reversed in appeal by a Division Bench of the High Court and the petitions were dismissed.
(2.) By virtue of Article 246 read with Schedule VII, Item 52, List II of the Constitution, the State may legislate in the matter of "tax on the entry of goods into a local area for consumption, use or sale therein". The appellants content that Section 126 conferring authority to impose timber tax violetes the restrictions upon the legislative power imposed by the Constitution and on that account is void.
(3.) Section 98 of the Act enumerates the taxes and duties which the Municipality may levy and one of the taxes described in clause (e) is " tax on timber brought into the city". Section 126 declares a charge of tax on timber brought into the city:it provides, (insofar as it is material): (1) If the Council by a resolution determine that a tax shall be levied on timber brought into the city, such tax shall be levied at such rates, not exceeding five rupees per ton, and in such manner as may be determine by the Council:Provided that no tax shall be levied on any timber brought into the city in the course of transit to any place outside the city and directly removed out of the city by rail, road or water. (2) No timber shall, except in the case referred to in the proviso to sub-sec. (1) be brought into the city unless the tax due thereon has been paid. (3) The tax shall be levied on timber kept within the city for sale if the commissioner has reason to believe that the tax, if any, due thereon has not been paid: ********** " ;