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Ms Bharti Telemedia Limited ... vs Chief Secretory on 30 January, 2014
Showing the contexts in which doctrine of pith and substance appears in the document
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12. It is the submission of the learned counsel for the respondents that the Jharkhand Entertainment Tax Act, 2012 does not, in any manner, transgress into the subject of "service" for which service tax is levied under Entry 92C of the Union List. Placing reliance upon number of decisions, the learned counsel submitted that the ‗doctrine of pith and substance' has to be applied to determine as to which Entry the impugned legislation relates and that the Court has to look at the substance of the matter. Placing reliance upon various judgments, the learned counsel submitted that the Jharkhand Entertainment Tax Act, 2012 and the Jharkhand Entertainment Tax Rules, 2013 are constitutionally valid. The learned counsel submitted thatDirect-to-Home (DTH) service has two aspects - one is providing "service" and the other is providing "entertainment" through Direct-to-Home (DTH) service and the entertainment tax is levied on the entertainment part which is within the legislative competence of the State Legislature. It is the submission of the learned counsel for the respondent that the levy of "Service Tax" as well as "Entertainment Tax"can co-exist as they are mutually exclusive, taxable events under Entry 92C of the Union List and Entry 62 of the State List of Seventh Schedule of the Constitution of India. It was submitted that the "entertainment" is the main activity and "broadcasting service" is only a medium for entertainment. It was submitted that the "service tax" is levied for "broadcasting services" and"entertainment tax" is levied by the State Act for the taxable event of "entertainment" and there is no double taxation as contended by the petitioners.

25. Where the legislative competence of the legislature of any State is questioned on the ground that it encroaches upon the legislative competence of Parliament to enact a law, the question one has to ask is whether the legislation relates to any of the entries in List I or List III. If the State law relates to any of the entries in List I or List III, then the Parliament‟s legislative competence must be upheld. As held by Hon‟ble Supreme Court that where there are three Lists containing a large number of entries, there is bound to be some overlapping among them. In such a situation, the doctrine of pith and substance has to be applied to determine as to which entry does a given piece of legislation relate. Once it is so determined, any incidental trenching on the field reserved to the other Legislature is of no consequence.

(3) Taxation is considered to be a distinct matter for purposes of legislative competence. There is a distinction made between general subjects of legislation and taxation. The general subjects of legislation are dealt with in one group of entries and power of taxation in a separate group. The power to tax cannot be deduced from a general legislative entry as an ancillary power.

(4) The entries in the lists being merely topics or fields of legislation, they must receive a liberal construction inspired by a broad and generous spirit and not in a narrow pedantic sense. The words and expressions employed in drafting the entries must be given the widest- possible interpretation. This is because, to quote V. Ramaswami, J., the allocation of the subjects to the Lists is not by way of scientific or logical definition but by way of a mere simplex enumeratio of broad categories. A power to legislate as to the principal matter specifically mentioned in the entry shall also include within its expanse the legislations touching incidental and ancillary matters. (5) Where the legislative competence of the Legislature of any State is questioned on the ground that it encroaches upon the legislative competence of Parliament to enact a law, the question one has to ask is whether the legislation relates to any of the entries in List I or III. If it does, no further question need be asked and Parliament's legislative competence must be upheld. Where there are three Lists containing a large number of entries, there is bound to be some overlapping among them. In such a situation the doctrine of pith and substance has to be applied to determine as to which entry does a given piece of legislation relate. Once it is so determined, any incidental trenching on the field reserved to the other Legislature is of no consequence. The court has to look at the substance of the matter. The doctrine of pith and substance is sometimes expressed in terms of ascertaining the true character of legislation. The name given by the legislature to the legislation is immaterial. Regard must be had to the enactment as a whole, to its main objects and to the scope and effect of its provisions. Incidental and superficial encroachments are to be disregarded.

36. The contention of the petitioners that by enacting the Prasar Bharti Act and amending Finance Act, 1994, imposing tax on service, the Union Legislature has occupied the said field, denuding the State Legislature the power to levy tax on the activity of entertainment is without any substance. However, though there could not be overlapping in law in respect of respective legislative fields available to both the Legislature but overlapping or incidental encroachment may result in fact. In order to determine whether the State Legislation has invaded into the territory of another legislation, the Doctrine of Pith and Substance is to be applied. According to the principle laid down in the case referred earlier in the case of M/s Hoechst Pharmaceuticals Ltd &ors., Kesoram Industries Ltd. and others asalsointhecaseofGirnar Traders Vrs. The State of Maharashtra(supra), the Doctrine of Pith and Substance has to be applied not only in case of conflict between powers of the two Legislatures but also in any case where the question arises as to whether the legislation is covered by particular legislative field over which the power is purported to be exercised. What is of paramount consideration is substance of the legislation which is to be examined to arrive at a correct analysis.