JUDGMENT Adarsh Kumar Goel :- This order will dispose of C.W.P. Nos. 10992, 11929 and 12240 of 2010 as all the three petitions involve common question as to validity of levy of entertainment duty under section 3(3C) of the Punjab Entertainment Duty Act, 1955 (in short, "the 1955 Act"). According to the petitioners, the said levy was in substance levy of service tax referable to entry 92C of List I of the Seventh Schedule to the Constitution and was, thus, beyond the competence of the State Legislature. The same does not fall in entry 62 of List II providing for levy of entertainment tax. Activity carried on by the petitioner is covered by taxable service under section 65(105)(zk) to the Finance Act, 1994, as amended by the Finance Act, 2001 providing for levy of service tax on service by a broadcasting agency in relation to broadcasting. The expression broadcasting has been defined under section 65(15) of the said Act as having same meaning as under section 2(c) of the Prasar Bharati (Broadcasting Corporation of India) Act, 1990 and includes receiving of signals through space or cables, direct to home (DTH) signals or other means as specified therein. The petitioner in C.W.P. No. 10992 of 2010 has its broadcasting centre which downlinks signals from broadcaster's satellite and uplinks the same to its own satellite for transmission through dish antennas to the subscribers. The signals broadcasted by the petitioner are in encrypted format and are decrypted/decoded by set top boxes and the viewing cards inside the set top boxes for the customers to receive DTH broadcasting service. The set top boxes are separately sold to the customers. The subscribers are required to pay subscription charges. The petitioner has licence under the Indian Telegraph Act, 1885 and Indian Wireless Telegraphy Act, 1933 in accordance with the Government of India guidelines dated March 5, 2001 for providing direct to home (DTH) broadcasting service. The petitioner has also obtained permission to establish, maintain and operate uplinking hub as per guidelines notified on December 2, 2005. It has also entered into an agreement with the Government of India dated March 24, 2006 to pay annual fee which is a specified percentage of its gross revenue. As per DTH licence dated March 24, 2006, the petitioner is governed by legislation enacted in connection with broadcasting. It is liable to provide access to various content providers/channels. It has also entered into an agreement with the Government of India dated March 24, 2006 to pay annual fee which is a specified percentage of its gross revenue. As per DTH licence dated March 24, 2006, the petitioner is governed by legislation enacted in connection with broadcasting. It is liable to provide access to various content providers/channels. Under article 268A read with article 270 of the Constitution and recommendations of the 12th Finance Commission, 30.5 per cent of net proceeds of service tax is distributed amongst States. Broadcasting is covered by entry 31 of List I. Predominant aspect of the activity of the petitioner is broadcasting service by carrying signals through electromagnetic waves in Ku Band, content of which is provided by third party and entertainment provided is incidental to the broadcasting. The same is not provided by the petitioner but by the channels whose signals are carried by the petitioner. In reply filed on behalf of the State, the levy under the 1955 Act as amended by 2010 Act has been defended on the plea that tax on entertainment being expressly covered by entry 62 of List II cannot be held to be covered by entry 92C of List I. The State tax was not on broadcasting service but on entertainment. Question for consideration : The question which arises for consideration is whether levy of entertainment tax is covered by entry 62 of List II or is tax on broadcasting service covered by entry 92C of List I. Statutory provisions Relevant provisions are as under : Constitutional entries : List I "Entry 31. Posts and telegraphs, telephones, wireless, broadcasting and other like forms of communications." "Entry 92C. Taxes on services" List II "Entry 62. Taxes on luxuries, including taxes on entertainment, amusements, betting and gambling." Punjab Entertainment Duty Act : "3. Duty on payment for admission to entertainments. Posts and telegraphs, telephones, wireless, broadcasting and other like forms of communications." "Entry 92C. Taxes on services" List II "Entry 62. Taxes on luxuries, including taxes on entertainment, amusements, betting and gambling." Punjab Entertainment Duty Act : "3. Duty on payment for admission to entertainments. - (1) A person admitted to an entertainment shall be liable to pay an entertainment duty at a rate (not exceeding one hundred and twenty five per centum of the payment of admission) which the Government may specify, by a notification in this behalf and the said duty shall be collected by the proprietor and rendered to the Government in the manner prescribed." (1A) Notwithstanding anything contained in sub-section (1), the Government may, by notification, levy lump sum entertainment duty at a rate not exceeding, - (a) eight thousand rupees per annum in the local area of a City constituted as such under the Punjab Municipal Corporation Act, 1976, or of municipality declared as such under the Punjab Municipal Act, 1911; and (b) Six thousand rupees per annum in areas other than the local areas specified in clause (a); in respect of entertainments arranged by a proprietor by replay of video tape, a video, cassette or a video player or video record player and the lump sum duty so levied shall be recoverable from the proprietor. (2) A draft of the proposed order specifying the rate of entertainments duty referred to in sub-sections (1) and (1-A) shall be notified for the information of all persons likely to be affected thereby and it shall take effect only after the Government has considered all objections received within a period of thirty days from the date of such publications, and has notified the same again, with or without modification : Provided that if the Government consider that such an order should be brought into force at once, the final notification may issue without previous publication : Provided further that Government may impose an entertainments duty on complimentary tickets at a rate different from that imposed on other kinds of payment for admission subject to the maximum specified in sub-section (1). (3) Until such time as the duty referred to in sub-sections (1), (1A) and (2) has been finally notified, the entertainments duty shall be levied at the rates in force in this behalf immediately before the commencement of this Act. (3) Until such time as the duty referred to in sub-sections (1), (1A) and (2) has been finally notified, the entertainments duty shall be levied at the rates in force in this behalf immediately before the commencement of this Act. (3A) Notwithstanding anything in this section, the amount of duty shall be calculated to the nearest multiple of 5 naye paise by ignoring 2 naye paise or less and counting more than 2 naye paise as 5 naye paise. (3B) Notwithstanding anything contained in sub-sections (1), (1A), (2) and (3), in the case of entertainment provided with the aid of antenna or cable television to a connection holder, the proprietor of such entertainment shall pay entertainment duty at such rate per connection per month as the State Government may specify from time to time by a notification in the official gazette but not exceeding seventy-five rupees per month per connection. (3C) Notwithstanding anything contained in this section, in the case of entertainment, provided with the aid of dish relating to direct-to-home television, the proprietor of such entertainment shall pay entertainment duty at the rate of 10 per cent of the charges, received by such proprietor from the subscriber. The entertainment duty shall be paid by the proprietor by the 10th day, commencing from the close of the concerned calendar month. (4) The final notification specifying the rates of entertainment duty shall be laid before the Legislature at the session immediately following its publication. 3A. Entertainment duty is not leviable in case tax is paid under Punjab Act 8 of 1954. - Notwithstanding anything contained in this Act, no entertainment duty shall leviable on the proprietor who opts to pay entertainment tax under the Punjab Entertainment Tax (Cinematograph Shows) Act, 1954. 2. Definitions. 3A. Entertainment duty is not leviable in case tax is paid under Punjab Act 8 of 1954. - Notwithstanding anything contained in this Act, no entertainment duty shall leviable on the proprietor who opts to pay entertainment tax under the Punjab Entertainment Tax (Cinematograph Shows) Act, 1954. 2. Definitions. - In this Act unless the context otherwise requires :- (a) 'Admission to entertainment' includes admission to any place in which the entertainment is being held or is to be held and where television exhibition is being provided with the aid of any type of antenna with a cable networks attached to it or cable television in residential or non-residential areas for which persons are required to make payment by way of contribution or subscription or installation and connection charges or any other charges collected in any manner whatsoever; (aa) 'antenna' means an apparatus which received television signals which enable viewers to tune into transmissions including national or international satellite transmissions and which is erected or installed for exhibition of films or moving pictures or series of pictures by means of transmission of television signals by wire where subscriber's television sets at the residential or non-residential place are linked by metallic coaxial cable or optio-fibre cable to a central system called the head-end, on payment by the connection holder of any distribution or subscription or installation and connection charges or any other charges collected in any manner whatsoever; (aaa) 'cable television' means a system organized on payment by a connection holder of any contribution or subscription or installation and connection charges or any other charges collected in any manner whatsoever, for exhibition of films or moving pictures or series of pictures by means of transmission of television signals by wire where subscriber's television set is linked by metallic coaxial cable or optio-fiber cable to a central system called the head-end, by using a video cassette or disc or both, recorder or player or similar such apparatus on which prerecorded vide cassettes or discs or both are played or replayed and the films or moving pictures or series of pictures which are viewed and heard on the television receiving set at a residential or non-residential place of a connection holder; (b) 'Commissioner' means the Excise and Taxation Commissioner, Punjab, for the time being; (c) 'Entertainment Tax Officer' means the Excise and Taxation Officer appointed as such under this Act; (d) 'entertainment' includes any exhibition, performance, amusement, game, sport, or race to which persons are ordinarily admitted on payment for exhibition of films, or moving pictures or series of pictures which are shown in a cinema house or on the television receiving set, with the aid or any type of antenna with a cable network attached to it or cable television for which persons are required to make payment by way of contribution or subscription or installation and connection charges or any other charges of collected in any manner whatsoever; (e) 'payment for admission' includes - (i) any payment made by a person admitted to any part of a place of entertainment and in a case where such person is subsequently admitted to another part thereof for admission to which an additional payment is required, such additional payment, whether actually made or not; (ii) in case of free, surreptitious, unauthorised or concessional entry, whether, with or without the knowledge of proprietor, the payment which would have been made if the person concerned had been admitted on payment of the full charges ordinarily chargeable for such admission; (iii) Any payment for any purpose whatsoever connected with an entertainment which a person is required to make as a condition of attending or continuing to attend the entertainment in addition to the payment, if any, for admission to the entertainment; (iv) Any payment made by a person by way of contribution or subscription of installation and connection charges or any other charges collected in any manner whatsoever for television exhibition with the aid of any type of antenna with a cable network attached to it or cable television or a dish relating to direct-to-home television network. (g) 'proprietor' in relation to any entertainment includes the owner, partner or a person responsible for management thereof and any person responsible for or for the time being in charge of the management for providing cable connection from any type of antenna or cable television or for providing direct-to-home television service. Service tax provisions "Section 65(105)(zk). 'taxable service' means any service provided or to be provided to a client, by a broadcasting agency or organization in relation to broadcasting, in any manner and, in the case of broadcasting agency or organisation, having its head office situated in any place outside India, includes service provided by its branch office or subsidiary or representative in India or any agent appointed in India or by any person who acts on its behalf in any manner, engaged in the activity of selling of time slots for broadcasting of any programme or obtaining sponsorships for programmes or collecting the broadcasting charges or permitting the rights to receive any form of communication like sign, signal, writing, picture, image and sounds of all kinds by transmission of electro-magnetic waves through space or through cables, direct to home signals or by any other means to cable operator, including multi-system operator or any other person on behalf of the said agency or organisation. Explanation. - For the removal of doubts, it is hereby declared that so long as the radio or television programme broadcast is received in India and intended for listening or viewing, as the case may be, by the public, such service shall be taxable service in relation to broadcasting, even if the encryption of the signals or beaming thereof through the satellite might have taken place outside India. Section 65(15). Section 65(15). 'broadcasting' has the meaning assigned to it in clause (c) of section 2 of the Prasar Bharati (Broadcasting Corporation of India) Act, 1990 (25 of 1990) and also includes programme selection, scheduling or presentation of sound or visual matter on a radio or a television channel that is intended for public listening or viewing, as the case may be; and in the case of a broadcasting agency or organization, having its head office situated in any place outside India, includes the activity of selling of time slots or obtaining sponsorships for broadcasting of any programme or collecting the broadcasting charges or permitting the rights to receive any form of communication like sign, signal, writing, picture, image and sounds of all kinds by transmission of electro-magnetic waves through space or through cables, direct to home signals or by any other means to cable operator including multi-system operator or any other person on behalf of the said agency or organization, by its branch office or subsidiary or representative in India or any agent appointed in India or by any person who acts on its behalf in any manner;" "Section 2(c) Prasar Bharati Act, 1990 'broadcasting' means the dissemination of any form of communication like signs, signals, writing, pictures, images and sounds of all kinds by transmission of electro-magnetic waves through space or through cables intended to be received by the general public either directly or indirectly through the medium of relay stations and all its grammatical variations and cognate expressions shall be construed accordingly." Rival contentions Contention raised on behalf of the petitioner is that under article 246(3) of the Constitution, legislative power of States is subject to legislative powers of the Centre under article 246(1). Since the subject-matter of broadcasting service is exclusively reserved for Central legislative field, the same will stand excluded from List II on principle of federal supremacy and occupied field. In pith and substance, the levy is on broadcasting service as apart from broadcasting, no other taxing event has taken place and the event of broadcasting service itself has been covered in the definition of entertainment which is the basis of the levy for entertainment duty. When there is no separate taxing event, aspect theory cannot be invoked to justify State levy on an event which is covered by Central levy. When there is no separate taxing event, aspect theory cannot be invoked to justify State levy on an event which is covered by Central levy. In any case, if broadcasting service and entertainment are both covered in a composite transaction, entertainment duty could be only on part of charges recovered by the petitioner attributable to entertainment. On the other hand, the contention on behalf of the State is that the Central levy as well as the State levy are on different aspects and by applying principles of harmonious construction, the State levy could be held not to be in conflict with the Central levy. In pith and substance, the State levy is not on broadcasting service but on entertainment and falls under entry 62 of List II. If entertainment duty is not allowed to be levied, power of the State Legislature under entry 62 will be nullified. Entertainment is the main activity for which charges are collected by the petitioner and broadcasting service is only a medium for the entertainment. Mere fact that content of signals is provided by third party is not enough to exclude levy of tax on provider of entertainment by carrying the signals to the customers for which charges are collected. Charges are not collected under a composite transaction but only for entertainment and expenditure on or in connection with broadcasting may be cost of the person providing entertainment. Settled law on interpretation of scope of taxing entries Before proceeding further, we may notice the settled legal position. Constitutional scheme of distribution of legislative powers between Union and the State Legislatures under article 246 of the Constitution is well known. While Parliament has exclusive power to legislate with respect to matters in List I, the State Legislatures have exclusive power to make laws for matters in List II subject to exclusive power of the Parliament to legislate with respect to matters in List I. Both Parliament and State Legislatures have concurrent power of legislation with respect to matters in List III subject to Central legislation prevailing in case of repugnancy. Principle of federal supremacy can be invoked only if there is irreconcilable conflict in entries in Union and State Lists. If two entries can be reconciled by harmonious construction or by applying principle of pith and substance, there is no occasion to apply the principle of federal supremacy. Principle of federal supremacy can be invoked only if there is irreconcilable conflict in entries in Union and State Lists. If two entries can be reconciled by harmonious construction or by applying principle of pith and substance, there is no occasion to apply the principle of federal supremacy. Concept of repugnancy under article 254 relating to List III is different from repugnancy arising due to overlapping in List I and List II in which case principle of pith and substance is applied to determine legislative competence. Entries in the Lists are not powers of legislation but fields of legislation. Taxation is distinct matter for legislative competence. Power to tax cannot be deduced from general entry. There is no overlapping in taxing power. Entries 82 to 92C and 97 of List I and entries 45 to 63 of List II deal with taxes. There is no entry relating to tax in List III. Every tax may be levied on an object or on an event of taxation. Subject of tax is distinct from incidence of taxation. Tax on property has been described as direct tax and tax on taxable event in respect of property is described as indirect tax. The distinction is based on difference in impact. While considering any particular levy, mere description of the subject-matter of tax is not conclusive. Subjects of tax which fall in power of a particular Legislature in one aspect and purpose may fall within the legislative power of the another in other aspect and purpose. Such overlapping is not considered to be overlapping in law as the same transaction may involve two or more events in different aspects. Overlapping does not detract from distinctness of the aspects. The aspect theory, however, cannot be applied to justify encroachment in legislative fields. Some of the leading judgments on the subject are Hoechst Pharmaceuticals Ltd. v. State of Bihar [1984] 55 STC 1 (SC); AIR 1983 SC 1019 , Godfrey Phillips India Ltd. v. State of U.P. [2005] 139 STC 537 (SC); [2005] 2 SCC 515, Bharat Sanchar Nigam Ltd. v. Union of India [2006] 3 VST 95 (SC); [2006] 145 STC 91 (SC); [2006] 282 ITR 273 (SC); [2006] 3 SCC 1 and State of West Bengal v. Kesoram Industries Ltd. [2004] 266 ITR 721 (SC); [2004] 10 SCC 201. We may extract observations from Kesoram Industries Ltd. [2004] 266 ITR 721 (SC); [2004] 10 SCC 201 : "31. Article 245 of the Constitution is the fountain source of legislative power. It provides - subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State. The legislative field between Parliament and the Legislature of any State is divided by article 246 of the Constitution. Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule, called the 'Union List'. Subject to the said power of Parliament, the Legislature of any State has power to make laws with respect to any of the matters enumerated in List III, called the 'Concurrent List'. Subject to the abovesaid two, the Legislature of any State has exclusive power to make laws with respect to any of the matters enumerated in List II, called the 'State List'. Under article 248 the exclusive power of Parliament to make laws extends to any matter not enumerated in the Concurrent List or the State List. The power of making any law imposing a tax not mentioned in the Concurrent List or the State List vests in Parliament. This is what is called the residuary power vesting in Parliament. The principles have been succinctly summarised and restated by a Bench of three learned judges of this court on a review of the available decision in Hoechst Pharmaceuticals Ltd. v. State of Bihar [1984] 55 STC 1 (SC); [1983] 4 SCC 45. They are : '(1) The various entries in the three Lists are not "powers" of legislation but "fields" of legislation. The Constitution effects a complete separation of the taxing power of the Union and of the States under article 246. There is no overlapping anywhere in the taxing power and the Constitution gives independent sources of taxation to the Union and the States. The Constitution effects a complete separation of the taxing power of the Union and of the States under article 246. There is no overlapping anywhere in the taxing power and the Constitution gives independent sources of taxation to the Union and the States. (2) In spite of the fields of legislation having been demarcated, the question of repugnancy between law made by Parliament and a law made by the State Legislature may arise only in cases when both the legislations occupy the same field with respect to one of the matters enumerated in the Concurrent List and a direct conflict is seen. If there is a repugnancy due to overlapping found between List II on the one hand and List I and List III on the other, the State law will be ultra vires and shall have to give way to the Union law. (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 enumeration 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. 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. (6) The doctrine of occupied field applies only when there is a clash between the Union and the State Lists within an area common to both. There the doctrine of pith and substance is to be applied and if the impugned legislation substantially falls within the power expressly conferred upon the Legislature which enacted it, an incidental encroaching in the field assigned to another Legislature is to be ignored. While reading the three Lists, List I has priority over Lists III and II and List III has priority over List II. However, still, the predominance of the Union List would not prevent the State Legislature from dealing with any matter within List II though it may incidentally affect any item in List I.' 43. In Ralla Ram v. Province of East Punjab [1948] FCR 207; AIR 1949 FC 81 the Federal Court made it clear that every effort should be made as far as possible to reconcile the seeming conflict between the provisions of the Provincial legislation and the Federal legislation. Unless the court forms an opinion that the extent of the alleged invasion by a Provincial Legislature into the field of the Federal Legislature is so great as would justify the view that in pith and substance the impugned tax is a tax within the domain of the Federal Legislature, the levy of tax would not be liable to be struck down. The test laid down in Sir Byramjee Jeejeebhoy's case AIR 1940 Bom 65 by the Full Bench of the Bombay High Court was approved. 44. In Assistant Commissioner of Urban Land Tax, Madras v. Buckingham and Carnatic Co. Ltd. [1970] 75 ITR 603 (SC); [1969] 2 SCC 55 for the purpose of attracting the applicability of entry 49 in List II, so as to cover the impugned levy of tax on lands and buildings, the Constitution Bench laid down twin tests, namely, (i) that such tax is directly imposed on lands and buildings, and (ii) that it bears a definite relation to it. Once these tests were satisfied, it was open for the State Legislature, for the purpose of levying tax, to adopt the annual value or the capital value of the lands and buildings for determining the incidence of tax. Merely, on account of such methodology having been adopted, the State Legislature cannot be accused of having encroached upon entry 86, 87 or 88 of List I. Entry 86 in List I proceeds on the principle of aggregation and tax is imposed on the totality of the value of all the assets. It is quite permissible to separate lands and buildings for the purpose of taxation under entry 49 in List II. There is no reason for restricting the amplitude of the language used in entry 49 in List II. The levy of tax, calculated at the rate of a certain percentage of the market value of the urban land, was held to be intra vires the powers of the State Legislature and not trenching upon entry 86 in List I. So is the view taken by another Constitution Bench in Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality [1971] 79 ITR 136 (SC); [1969] 2 SCC 283, where the submission that the levy was not a rate on lands and buildings as appropriately understood, but rather a tax on capital value was discarded. 45. R.R. Engineering Co. v. Zila Parishad, Bareilly [1980] 3 SCC 330 is a case of circumstance and property tax levied on the basis of income which the assessee receives from his profession, trade, calling or property. The plea that the tax was a tax on income was discarded. 45. R.R. Engineering Co. v. Zila Parishad, Bareilly [1980] 3 SCC 330 is a case of circumstance and property tax levied on the basis of income which the assessee receives from his profession, trade, calling or property. The plea that the tax was a tax on income was discarded. The test propounded by the Constitution Bench is that an excessive levy on circumstance may tend to blur the distinction between a tax on income and a tax on circumstances. Income will then cease to be a measure or yardstick of the tax and will become the very subject-matter of the tax. Restraint in this behalf is a prudent prescription for the local authorities to follow. The Constitution Bench observed that it was only a matter of convenience that income was adopted as a yardstick or measure for assessing the tax and the evolvement of such mechanism was not conclusive on the nature of tax. 50. The Constitution is an organic living document. Its outlook and expression as perceived and expressed by the interpreters of the Constitution must be dynamic and keep pace with the changing times. Though the basics and fundamentals of the Constitution remain unalterable, the interpretation of the flexible provisions of the Constitution can be accompanied by dynamism and lean, in case of conflict, in favour of the weaker or the one who is more needy. Several taxes are collected by the Centre and allocation of revenue is made to States from time to time. The Centre consuming the lion's share of revenue has attracted a good amount of criticism at the hands of the States and financial experts. The interpretation of entries can afford to strike a balance, or at least, try to remove imbalance, so far as it can. Any conscious whittling down of the powers of the State can be guarded against by the courts. 'Let it be said that the federalism in the Indian Constitution is not a matter of administrative convenience, but one of principle - the outcome of our own historical process and a recognition of the ground realities.' Quoting from Setalvad, M.C. : Tagore Law Lectures, 'Union and State Relations under the Indian Constitution' (Eastern Law House, Calcutta, 1974), Jeevan Reddy, J. observed : 'It is enough to note that our Constitution has certainly a bias towards the Centre vis-a-vis the States. ... ... It is equally necessary to emphasise that courts should be careful not to upset the delicately crafted Constitutional scheme by a process of interpretation.' In a nutshell 129. The relevant principles culled out from the preceding discussion are summarised as under : (1) In the scheme of the Lists in the Seventh Schedule, there exists a clear distinction between the general subjects of legislation and heads of taxation. They are separately enumerated. (2) Power of 'regulation and control' is separate and distinct from the power of taxation and so are the two fields for purposes of legislation. Taxation may be capable of being comprised in the main subject of general legislative head by placing an extended construction, but that is not the rule for deciding the appropriate legislative field for taxation between List I and List II. As the fields of taxation are to be found clearly enumerated in Lists I and II, there can be no overlapping. There may be overlapping in fact but there would be no overlapping in law. The subject-matter of two taxes by reference to the two Lists is different. Simply because the methodology or mechanism adopted for assessment and quantification is similar, the two taxes cannot be said to be overlapping. This is the distinction between the subject of a tax and the measure of a tax. (3) The nature of tax levied is different from the measure of tax. While the subject of tax is clear and well defined, the amount of tax is capable of being measured in many ways for the purpose of quantification. Defining the subject of tax is a simple task; devising the measure of taxation is a far more complex exercise and, therefore, the Legislature has to be given much more flexibility in the latter field. The mechanism and method chosen by the Legislature for quantification of tax is not decisive of the measure of the tax though it may constitute one relevant factor out of many for throwing light on determining the general character of the tax. (5) The entries, in List I and List II must be so construed as to avoid any conflict. If there is no conflict, an occasion for deriving assistance from the non obstante clause 'subject to' does not arise. (5) The entries, in List I and List II must be so construed as to avoid any conflict. If there is no conflict, an occasion for deriving assistance from the non obstante clause 'subject to' does not arise. If there is conflict, the correct approach is to find an answer to three questions step by step as under : One - Is it still possible to effect reconciliation between the two entries so as to avoid conflict and overlapping ? Two - In which entry does the impugned legislation fall by finding out the pith and substance of the legislation ? and Three - Having determined the field of legislation wherein the impugned legislation falls by applying the doctrine of pith and substance, can an incidental trenching upon another field of legislation be ignored ? (8) The primary object and the essential purpose of legislation must be distinguished from its ultimate or incidental results or consequences, for determining the character of the levy. A levy essentially in the nature of a tax and within the power of the State Legislature cannot be annulled as unconstitutional merely because it may have an effect on the price of the commodity. A State legislation, which makes provisions for levying a cess, whether by way of tax to augment the revenue resources of the State or by way of fee to render services as quid pro quo but without any intention of regulating and controlling the subject of the levy, cannot be said to have encroached upon the field of 'regulation and control' belonging to the Central Government by reason of the incidence of levy being permissible to be passed on to the buyer or consumer, and thereby affecting the price of the commodity or goods. Entry 23 in List II speaks of regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union. Entries 52 and 54 of List I are both qualified by the expression 'declared by Parliament by law to be expedient in the public interest'. A reading in juxtaposition shows that the declaration by Parliament must be for the 'control of industries' in entry 52 and 'for regulation of mines or for mineral development' in entry 54. Such control, regulation or development must be 'expedient in the public interest'. A reading in juxtaposition shows that the declaration by Parliament must be for the 'control of industries' in entry 52 and 'for regulation of mines or for mineral development' in entry 54. Such control, regulation or development must be 'expedient in the public interest'. Legislation by the Union in the field covered by entries 52 and 54 would not like a magic touch or a taboo denude the entire field forming the subject-matter of declaration to the State Legislatures. Denial to the State would extend only to the extent of the declaration so made by Parliament. In spite of the declaration made by reference to entry 52 or 54, the State would be free to act in the field left out from the declaration. The legislative power to tax by reference to entries in List II is plenary unless the entry itself makes the field 'subject to' any other entry or abstracts the field by any limitations imposable and permissible. A tax or fee levied by the State with the object of augmenting its finances and in reasonable limits does not ipso facto trench upon regulation, development or control of the subject. It is different if the tax or fee sought to be levied by the State can itself be called regulatory, the primary purpose whereof is to regulate or control and augmentation of revenue or rendering service is only secondary or incidental. (9) The heads of taxation are clearly enumerated in entries 83 to 92B in List I and entries 45 to 63 in List II. List III, the Concurrent List, does not provide for any head of taxation. Entry 96 in List I, entry 66 in List II and entry 47 in List III deal with fees. The residuary power of legislation in the field of taxation spelled out by article 248(2) and entry 97 in List I can be applied only to such subjects as are not included in entries 45 to 63 of List II. It follows that taxes on lands and buildings in entry 49 of List II cannot be levied by the Union. The residuary power of legislation in the field of taxation spelled out by article 248(2) and entry 97 in List I can be applied only to such subjects as are not included in entries 45 to 63 of List II. It follows that taxes on lands and buildings in entry 49 of List II cannot be levied by the Union. Taxes on mineral rights, a subject in entry 50 of List II, can also not be levied by the Union though as stated in entry 50 itself the Union may impose limitations on the power of the State and such limitations, if any, imposed by Parliament by law relating to mineral development and to that extent shall circumscribe the States' power to legislate. Power to tax mineral rights is with the States; the power to lay down limitations on the exercise of such power, in the interest of regulation, development or control, as the case may be, is with the Union. This is the result achieved by homogeneous reading of entry 50 in List II and entries 52 and 54 in List I. So long as a tax or fee on mineral rights remains in pith and substance a tax for augmenting the revenue resources of the State or a fee for rendering services by the State and it does not impinge upon regulation of mines and mineral development or upon control of industry by the Central Government, it is not unconstitutional." The aspect theory Aspect theory has been subject-matter of several decisions. In Federation of Hotel & Restaurant Association of India v. Union of India [1989] 74 STC 102 (SC); [1989] 3 SCC 634, the levy considered was expenditure tax under Central law with reference to the contention that the same was in substance tax on luxury under entry 62 of List II. Stand of the Central Government was that expenditure aspect was different from luxury aspect and expenditure aspect could be held to be excluded from the luxury aspect. The plea was upheld. It was observed : "26. ... Wherever legislative powers are distributed between the Union and the States, situations may arise where the two legislative fields might apparently overlap. Stand of the Central Government was that expenditure aspect was different from luxury aspect and expenditure aspect could be held to be excluded from the luxury aspect. The plea was upheld. It was observed : "26. ... Wherever legislative powers are distributed between the Union and the States, situations may arise where the two legislative fields might apparently overlap. It is the duty of the courts, however difficult it may be, to ascertain to what degree and to what extent, the authority to deal with matters falling within these classes of subjects exists in each Legislature and to define, in the particular case before them, the limits of the respective powers. It could not have been the intention that a conflict should exist; and, in order to prevent such a result the two provisions must be read together, and the language of one interpreted, and, where necessary modified by that of the other. 27. The Judicial Committee in Prafulla Kumar Mukherjee v. Bank of Commerce AIR 1947 PC 60; [1947] FCR 28, referred to with approval the following observations of Sir Maurice Gwyer, 'C.J.' in Subrahmanian Chettiar's case AIR 1941 FC 47 : 'It must inevitably happen from time to time that legislation, though purporting to deal with a subject in one List, touches also on a subject in another List, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the judicial committee, whereby the impugned statute is examined to ascertain its "pith and substance", or its "true nature and character", for the purpose of determining whether it is legislation with respect to matters in this List or in that.' 28. This necessitates as an 'essential of Federal Government, the role of an impartial body, independent of general and regional Governments', to decide upon the meaning of division of powers. The court is this body. 29. The position in the present case assumes a slightly different complexion. It is not any part of the petitioners' case that 'expenditure tax' is one of the taxes within the States' power or that it is a forbidden field for the Union Parliament. The court is this body. 29. The position in the present case assumes a slightly different complexion. It is not any part of the petitioners' case that 'expenditure tax' is one of the taxes within the States' power or that it is a forbidden field for the Union Parliament. On the contrary, it is not disputed that a law imposing 'expenditure tax' is well within the legislative competence of Union Parliament under article 248 read with entry 97 of List I. But the specific contention is that the particular impost under the impugned law, having regard to its nature and incidents, is really not an 'expenditure tax' at all as it does not accord with the economists' notion of such a tax. That is one limb of the argument. The other is that the law is, in pith and substance, really one imposing a tax on luxuries or on the price paid for the sale of goods. The crucial questions, therefore, are whether the economists' concept of such a tax qualifies and conditions the legislative power and, more importantly, whether 'expenditure' laid out on what may be assumed to be 'luxuries' or on the purchase of goods admits of being isolated and identified as a distinct aspect susceptible of recognition as a distinct field of tax legislation. 30. In Lefroy's 'Canada's Federal System' the learned author referring to the 'aspects of legislation' under sections 91 and 92 of the Canadian Constitution, i.e., British North America Act, 1867 observes that 'one of the most interesting and important principles which have been evolved by judicial decisions in connection with the distribution of legislative power is that subjects which in one aspect and for one purpose fall within the