Judgment :- 1. The petitioner resides and owns buildings within the limits of the Municipality of Ernakulam and derives income with respect to them by way of rent. She was being assessed to tax in respect of such income, formerly under S.86 (1)(b) of the Cochin Municipal Act, 18 of 1113, and latterly, under the corresponding S.110(1)(b) of the Kerala Municipalities Act, 1960. When demands were made for payment of such tax for the half-years of 1962-63, she filed this petition under Art.226 of the Constitution, challenging the constitutionality of S.110 (1)(b) so far as it relates to "income from investment." This section so far as it is relevant is as follows: "(1) If the council by a resolution determines that a profession tax shall be levied xxx xxx xxx xxx (b) resides in the municipality for not less than sixty days in the aggregate and is in receipt of any pension or income from investments, shall pay a half yearly tax assessed in accordance with the rules in Schedule II." Income by way of rent with respect to buildings is being taxed as income from investments. The Supreme Court" observed in C. Rajagopalachari v. The Corporation of Madras AIR. 1964 SC. 1172 at p. 1178, a case which related to receipt from pension under the corresponding provision in the Madras City Municipal Act, that "the tax on the receipt of pension or on the income from investments which is referred to in the last part of S. III (1) is in truth and substance a tax on income." The arguments before me, proceeded on the basis of this observation of the Supreme Court. Relying on it, it was contended for the petitioner, that the State had no power to legislate with respect to income from investments as by S.110 (1) (b) of the Kerala Act, because such legislative power is exclusively with Parliament under entry 82, in list I, in schedule VII of the Constitution. Learned Government Pleader appearing for the State, supported the validity of the tax by relying on Art.277 of the Constitution. 2. Learned Government Pleader appearing for the State, supported the validity of the tax by relying on Art.277 of the Constitution. 2. Art.277 may be extracted for ready reference: "Any taxes, duties, cesses or fees which, immediately before the commencement of this Constitution, were being lawfully levied by the Government of any State or by any municipality or other local authority or body for the purposes of the State, municipality, district or other local area may, notwithstanding that those taxes, duties, cesses or fees are mentioned in the Union List, continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law." For the Article to apply, it is immaterial that the tax is one mentioned in the Union List, and that the State Legislature has no plenary power to legislate with respect to it; but the levy would be justified only till provision to the contrary is made by Parliament by law. It was contended for the petitioner, that such a provision was made when Parliament enacted S.13 (1) of the Finance Act, 1950. The relevant part of that Section is in these terms: "If immediately before the 1st day of April, 1950, there is in force in any Part B State... any law relating to income-tax or super tax or tax on profits of business, that law shall cease to have effect..." There were in the former State of Cochin, the Cochin Incometax Act, (Act 8 of 1108) and Excess Profits Tax Act (Act 2 of 1117). Certainly, these are "laws relating to incometax or super tax or tax on profits of business" and they ceased to have effect from the 1st April, 1950. The argument was, that because "income from investments" is income which is liable to incometax, so much of S.86 (1)(b) of the Cochin Municipal Act which was in force at the time as relates to income from investments, must be held to be a law relating to incometax within the meaning of S.13 (1) aforesaid. I am of the opinion, that it cannot be. I am of the opinion, that it cannot be. The Incometax Acts were enacted, as the preamble to one of them shows, "to consolidate and amend the law relating to incometax and supertax" while the Municipal Acts were enacted, as the preamble to the Cochin Municipal Act shows, "to consolidate and amend the law relating to Municipalities in Cochin," or as the preamble to the Kerala Act shows, "to consolidate and amend the law relating to Municipal administration." Prima facie, the Cochin Municipal Act is not a law relating to incometax or super tax or tax on profits of business. For carrying on Municipal administration, taxes may have been imposed and some of them may partake of the characteristics of tax on income. For that reason alone, it is difficult to hold that the Act or S.86 (1) (b) in it, is a law relating to incometax. Before the Finance Act of 1950, tax on income by way of rent was chargeable under the Cochin Incometax Act and also under S.86 (1) (b) of the Cochin Municipal Act. After the Finance Act of 1950 also, this continued to be the position, except that the former was chargeable under the Indian Incometax Act and not the Cochin Act. The object underlying Art.277 has been stated thus by the Supreme Court in Amraoti Municipality v. Ramchandra AIR. 1964 SC. 1166: "If, as is admitted, the sole object sought to be achieved by this provision for 'continuance' is to avoid dislocation of the finances of the State and local authorities, by depriving them of the revenues which they were deriving at the commencement of the Constitution, it would mean that the intention was to permit the existing range of the taxes to be continued." 3. Learned Government Pleader invited my attention to the doctrine of pith and substance, which is often applied in determining questions of legislative competency to make enactments. That doctrine is too well-settled to require any re-statement by me at this time of the day. Though it has no direct application here, it is helpful perhaps to determine, whether the Cochin Municipal Act can be deemed to be a law relating to incometax and supertax. The pith and substance of that Act is not taxation, but Municipal administration. That doctrine is too well-settled to require any re-statement by me at this time of the day. Though it has no direct application here, it is helpful perhaps to determine, whether the Cochin Municipal Act can be deemed to be a law relating to incometax and supertax. The pith and substance of that Act is not taxation, but Municipal administration. I also find it difficult to accept the argument, that at least S.86 (1) (b) of the Cochin Municipal Act must to the extent it relates to income from investments, be held to be a law relating to incometax or super tax within the meaning of S.13 (1) of the Finance Act. 1950 merely because the Supreme Court has held that it is a tax on income. 4. I also find great difficulty in holding, that S.13(1) of the Finance Act can be considered to be a "provision to the contrary" so as to deprive the Municipality of the benefit of Art.277. As stated above, before the Finance Act, the same income was subject to two taxes under two different enactments. A provision to the contrary must in these circumstances clearly imply, not only that the tax under the Cochin Incometax Act was superseded, but also that the tax leviable under the Cochin Municipal Act was put an end to. An illustration of such a provision is afforded by the decision of the Supreme Court in M.B.S. Oushadhalaya v. Union of India AIR. 1963 SC. 622 where State Excise Acts imposing duties on medicinal and toilet preparations were superseded and repealed by a Central enactment charging such preparations. This was held to be a provision to the contrary. If for example, under the relevant entry in the Union List, Parliament enacted a law with respect to income from investments, apart from the Finance Act of 1950, it seems to me, such a law might well be a provision to the contrary, within the meaning of Art.177. That is not the case here. If for example, under the relevant entry in the Union List, Parliament enacted a law with respect to income from investments, apart from the Finance Act of 1950, it seems to me, such a law might well be a provision to the contrary, within the meaning of Art.177. That is not the case here. It seems to me that S.13(1) of the Finance Act, 1950, is quite consistent with the position, that the right of the Travancore-Cochin State then in existence, to levy the tax under the Cochin Incometax Act or the Travancore Incometax Act, not to mention the Excess Profits Tax Act, alone was meant to be abrogated by it, but not the right of a local body of Municipality to levy the tax under the appropriate law. A "provision to the contrary" must in my opinion, either expressly or by necessary implication mean, that tax on income from investments shall no longer be levied by the Municipality, and it is not enough, that the tax came under the Union List by the Constitution or that it became leviable also under a Central legislation, for these are consistent with the intendment of Art.277. It is noteworthy that all these years, the petitioner was being subjected without objection to the levy and had been paying the same, until the demands Exts. P-1 & P-2 were made. I overrule this contention. 5. The next contention was, that the texture of the tax has undergone a change under the Kerala Municipalities Act. The Cochin Act prescribed by its schedule, maximum and minimum rates of taxation, while the Kerala Act prescribed only the several maxima, which however do not exceed the corresponding maxima under the earlier Act. This does not mean that the tax itself has undergone any vital change. As for its texture, there is no change in the base or the subject-matter of the tax viz., income by way of rent, or in the taxable event viz., the receipt of income, and no enhancement in the rates. The abolition of the minimum is immaterial, for as held by the Supreme Court in M/s. Ram Krishna v. Janpad Sabha AIR. 1962 SC. 1073, while an enhancement is not permitted by Art.277, a reduction is within it and can be maintained. I therefore overrule this contention. 6. The abolition of the minimum is immaterial, for as held by the Supreme Court in M/s. Ram Krishna v. Janpad Sabha AIR. 1962 SC. 1073, while an enhancement is not permitted by Art.277, a reduction is within it and can be maintained. I therefore overrule this contention. 6. The third contention was, that the Cochin Act has been repealed by S.2 of the Kerala Municipalities Act, without any qualification or saving, so as to provide for the continuance of the levy. For the argument, reliance was placed on M/s. Ram Krishna v. Janpad Sabha A.I.R. 1962 S.C.1073. In that case, an Act of 1948 repealed the earlier Act of 1920 under which the levy was made, without a saving for the continuance of the levy. By an amendment of the 1948 Act passed in the year 1949, a saving provision in the repeal was made for the continuance of the levy retrospectively. This was held to be sufficient to remove the hiatus or the break in the continuity of the levy, so as to attract Art.277. It was urged before me, that without a similar saving provision in S.2 of the Kerala Municipalities Act, Art.277 could not be invoked. In the case before the Supreme Court, there was no provision in the 1948 Act for the continuance of the levy and there was only a repeal. The court observed, "it is obvious that the Janpad Sabhas could no longer levy the terminal tax on bidis and bidi-leaves where the export was effected on or after June 11, 1948, on which date by virtue of the Act of 1948 coming into force the earlier Act of 1920 stood repealed." But the Kerala Municipalities Act while repealing the Cochin Act, provided for the continuance of the levy by a re-enactment of the provisions. Whatever be the effect of a repeal and re-enactment on other aspects of law, here, eo instante with the repeal the provision for continuance came into being. There is no force in the contention. 7. My attention was drawn to a case decided by the Calcutta High Court in Liberty Cinema v. Commissioner, Calcutta Corporation A.I.R. 1959 Calcutta 45 in which apparently a re-enactment of the taxation provision was held to connote a fresh impost and not a continuation of the old levy. There is no force in the contention. 7. My attention was drawn to a case decided by the Calcutta High Court in Liberty Cinema v. Commissioner, Calcutta Corporation A.I.R. 1959 Calcutta 45 in which apparently a re-enactment of the taxation provision was held to connote a fresh impost and not a continuation of the old levy. After M/s Ram Krishna v. Janpad Sabha, A.I.R. 1962 S. C. 1073, speaking with respect, I am of the opinion, that this view cannot be sustained. After referring to the corresponding words "may continue to be levied if so desired by the Provincial Legislature" occurring in S.143(2) of the Government of India Act, 1935, corresponding to Art.277, the Supreme Court said thus: "This would therefore posit a limited legislative power in the Province to indicate or express a desire to continue or not to continue the levy. If in the exercise of this limited power the Province desires to discontinue the tax and effects a repeal of the relevant statute the repeal would be effective. Of course, in the absence of legislation indicating a desire to discontinue the tax, the effect of the provision of the Constitution would be to enable the continuance of the power to levy the tax but this does not alter the fact that the provision by its implication confers a limited legislative power to desire or not to desire the continuance of the levy subject to the overriding power of the Central Legislature to put an end to its continuance and it is on the basis of the existence of this limited legislative power that the right of the Provincial Legislature to repeal the taxation provision under the Act of 1920 could be rested. Suppose for instance, a Provincial Legislature desires the continuance of the tax but considers the rate too high and wishes it to be reduced and passes an enactment for that purpose, it cannot be that the legislation is incompetent and that the State Government must permit the local authority to levy tax at the same rate as prevailed on April 1, 1937, if the latter desired the continuance of the tax. If such a legislation were enacted to achieve a reduction of the rate of duty, its legislative competence must obviously be traceable to the power contained in the words "may continue to be levied" in S.143(2) of the Government of India Act. If such a legislation were enacted to achieve a reduction of the rate of duty, its legislative competence must obviously be traceable to the power contained in the words "may continue to be levied" in S.143(2) of the Government of India Act. If we are right so far it would follow that in the exercise of this limited legislative power the Provincial Legislature would also have a right to legislate for the continuance of the tax provided, if of course, the other conditions of S.143(2) are satisfied..." The exercise of the limited legislative power to desire or not to desire the continuance of the levy may manifest itself in the enacting part and not necessarily through a saving provision in the repeal clause. There can be no question, that the intention to continue the levy is manifest from the Kerala Municipalities Act. 8. I do not set much store by the argument of learned counsel for the petitioner, that under the Kerala Act, it is discretionary with the Municipal Council whether to impose or not to impose the tax. This feature was present in the Cochin Act too, and if it means anything, it is only that the Council can abolish the tax by resolution. 9. For the reasons stated, I hold that S.110(1)(b) of the Kerala Municipalities Act cannot be struck down in relation to income from investments. The demand if any, for surcharge is ultra vires as held by this Court in O.P. 1342 of 1962 and O.P. 1103 of 1963. The result is, that subject to this, the petition is dismissed with costs to the State Government. Dismissed.