NEW DELHI MUNICIPAL COUNCIL v. STATE OF PUNJAB ETC. ETC.

The Judgments of the Court were delivered by G B.P. JEEVAN REDDY, A.S. ANAND, SUHAS C. SEN, K.S. , PARIPOORNAN AND B.N. KIRPAL, JJ. Article 289(1) of the Constitu- -... tion of India declares that the "property and income of a State shall be exempt from Union taxation". The question in this batch of appeals is whether the properties of the States situated in the Union Territory of H

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A Delhi are exempt from property taxes levied under the municipal enact- ments in force in the Union Territory of Delhi. The Delhi High Court has taken the view that they are. That view is challenged in these appeals preferred by the New Delhi Municipal Council and the Delhi Municipal Corporation. B Leave granted in the Special Leave Petitions.

Prior to 1911-12, a large part of the territory now comprised in the Union Territory of Delhi was a district of the Province of Punjab. By a Proclamation dated September 17, 1912, the Governor General took the c said territory under his immediate authority and management, to be ad- ministered as a separate Province to be known as the Province of Delhi. (This was in connection with the decision to shift the Capital from Calcutta to Delhi.) In the same year, the Delhi Laws Act, 19U (1912 Act) was enacted. It came into force on and with effect from the 1st day of October,

D 1912. Schedule-A to the Act defined the "territory" covered by the new Province. Sections 2 and 3 of the 1912 Act provided inter a/ia that the creation of the new Province of Delhi shall not effect any change in the territorial application of any enactment. One of the Acts so applying to the territory comprised in the new Province of Delhi was the Punjab Municipal E Act, 1911.

In the year 1915, another Act called ''The Delhi Laws Act, 1915" ( 1915 Act) was enacted. Under this enactment, certain areas formerly comprised in the United Provinces of Agra and Oudh were included in F and added to the Province of Delhi with effect from Ist April, 1915. Section 2 of the 1915 Act also contained a saving clause similar to Section 2 of the 1912 Act.

In the Constitution of India, 1950, as originally enacted, the First Schedule contained four categories of States, viz., Part 'A', Part 'B' Part G 'C' and Part D. Part 'D' comprised only of Andaman and Nicobar Islands. The Chief Commissioner's Province of Delhi was one of the Part 'C' States. By virtue of the Part 'C' States (Laws) Act, 1950, the laws in force in the erstwhile Chief Commissioner's Province of Delhi were continued in the Part 'C' State of Delhi. This Act came into force on the 16th day of April, H 1950.

N.D.M.C. v. STATE (REDDY, J.] 489

In the year 1951, the Parliament enacted the Government of Part 'C' A States Act, 1951. This Act contemplated that. there shall be a legislature for each of the Part 'C' States specified therein which included Delhi. Section 21 stated that the legislature of a Part 'C' State shall have the power to make laws with respect to any of the matters enumerated in List-II and List-III of the Seventh Schedule to the Constitution. In the case of Delhi B legislature, however, it was provided that it shall not have power to make law with respect to matters specified therein including "the constitution and powers of municipal corporations and other local authorities, of improve- ment trusts and of water supply, drainage, electricity, transport and other public utility authorities in Delhi or in New Delhi". Section 22 provided that any law made by the legislature of a Part 'C' State shall, to the extent of repugnancy with any law made by Parliament, whether enacted earlier or later, be void. It is necessary to notice the two distinctive features of the . legislatures of Part 'C' States; not only were they created under an Act made by Parliament, the laws made by them even with respect to any of the matters enumerated in List-II were subject to any law made by the Parlia- D ment. In case of repugnancy, the law made by legislature was to be of no effect so far Delhi is concerned, the Parliament placed certain additional fetters referred to in Section 26.

It is stated that in the year 1952, a legislature was created for Delhi which functioned upto November 1, 1956 when the Government of Part 'C' E States Act, 1951 was repealed by Section 130 of the States' Reorganisation Act, 1956. While· repealing the Government of Part 'C' States Act, 1951, the States' Reorganisation Act, 1956 did not provide for the creation or continuance of legislatures for the part 'C' States. The legislature con- stituted for Delhi thus came to an end. F

By Constitution Seventh (Amendment) Act, 1956, some of the Part 'C' States cased to exist, having been merged in one the other State while some others continued - designated as Union territories. The categorisa- tion of the States into Part A, B, C and was done away with. In its place, the First Schedule came to provide only two categories, viz., "(i) the States" G and "(ii) the Union territories". The Seventh (Amendment) Act specified six Union territories, "viz., Delhi, Himachal Pradesh, Manipur, Tripura, Andaman and Nicobar Islands and Laccadiv Minicoy and Amindivi Is- lands. Delhi thus became a Union territory. With the inclusion of Goa and other former Pcirtugese territories in the Union, the number of Union H

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A territories grew to eight by 1962. In that year, the Constitution Fourteenth (Amendment) Act, 1962 was enacted. Pondicherry was added as a Union territory at SL No. 9. More important, the said Amendment Act introduced Article 239-A. The new Article provided that "Parliament may by law create for any of the Union territories of Himachal Pradesh, Manipur, Tripura, B Goa, Daman and Diu and Pondicherry, a body, whether elected or partly nominated, and partly elected to function as a legislature for the Union territory, or a council of ministers, or both with such constitutio11al powers 011d functions i11 each case, as may be specified in the law" (Emphasis added). It is significant to note that the said article did not provide for creation of a legislature or a council of ministers, as a case may be, for the C Union Territory of Delhi.

Pursuant to Article 239-A, Parliament enacted the Government of Union Territories Act, 1963 (1%3 Act). Obviously, this Act applied only to those Union territories as were referred to in Article 239-A. It did not D .apply to Delhi. This Act provided for creation of Legislative Assemblies for the Union territories mentioned in Article 239-A and the extent of their legislative power. Section 3(1) declared that "there shall be a Legislative Assembly for each Union territory'' whereas Section 18(1) provided that "subject to the provisions of this Act, the Legislative Assembly of a Union territory may make laws for the whole or any part of the Union territory with respect to any of the matters enumerated in the State List or the Concurrent List in the Seventh Schedule to the Constitution insofar as any such matter is applicable in relation to Union territories." Sub-section (2) of Section 18 read with Section 21, however, conferred over- riding power upon the Parliament to make any law with respect to any matter for a F Union territory or any part thereof. In case of inconsistency between a Law made by Parliament and a law made by the legislature of any of these Union territories, the latter was to be void to the extent of repugnancy, notwithstanding whether the Parliamentary law was earlier or subsequent in point of time. Section 19 of the Act exempted the property of the Union from all taxes imposed by or under any law made by the Legislative G Assembly of a Union territory except insofar as is permitted by a law made by a Parliament.

By the Constitution Sixty Ninth (Amendment) Act, 1991, Article 239-AA was introduced in Part VIII of the Constitution. This Article H re-named the Union Territory of Delhi" as the "National Capital Territory

N.D.M.C. v.• STATE [REDDY,J.) 491

of Delhi"and provided that there shall be a Legislative Assembly for such A National Capital territory. The Legislative Assembly so created was em- powered by clause (3) of the said Article "to make laws for the whole or any part of the National Capital Territory with respect to any of the matters enumerated in the State List or in the Concurrent List, insofar as any such matter is applicable to Union territories, except matters with respect to B Entries 1, 2 and 18 of the State List and Entiries 64, 65 and 66 of the List . insofar as they relate to the said En!ries 1, 2 and 18". Clause (3l further provided that the power conferred upon the Legislative Assembly of Delhi by the said Article shall not derogate from the powers of the Parliament "to make laws with respect to any matter for a Unif#l territory or any part thereof'; It further provided that in the case of repugnancy, the law made C by Parliamentshall prevail, whether the Parliamentary law is earlier or later to the law made by the Delhi Legislative Assembly. The parliament is also empowered to amend, vary or repeal any law made by the Legislative Assembly. Article 239-AA came into force with.effect from February 1, 1992. Pursuant to the article, the Parliament enacted the Government of National D Capital Territory of Delhi Act, 1991. It not only provided for constitution of a Legislative Assembly but also its powers a5 contemplated by Article 239-AA. This Act too came into force on February 1, 1992. The subordinate status of the Delhi Legislature is too obvio~ to merit any emphasis.

So far as the MUNICIPAL LAWS GO~RNING THE TER- E RITORY OF DELHI is concerned, the following is the position: by Delhi Law Act, 19U, referred to supra, the Punjab Municipal Act continued to govern the territory comprised in the Chief Commissioner's Province of Delhi. The Act is stated to have been extended to Part 'C' State of Delhi under a notification issued upder Part 'C' State (Laws) Act, 1950. In the impugned judgment, the High Court has stated the following facts :

"The various Punjab enactments which were then in force in the

- territory of Delhi continued to be in force by virtue of the Delhi Laws Act of 19U and later by the Part C States Laws Act of 1950 and the Union Territories Laws Act of 1950. The application and the later extension of this law to the Union Territory of Delhi was, therefore, not by the authority of the State, Le..gi§.lature but that of the Central Legislature, that is, the Central·Legislature under the Government of India Act followed by the Central legislature under the Constitution of India, that is, the Parliament of India.... The H

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A Delhi Laws Act 1912, the Union Territories (Laws) Act, 1950 as indeed the Part C States (Laws) Act, 1950 were all central statutes and when a provincial Act or an Act which may be treated as a provincial Act or State Act was extended to a territory by a particular legislature, it would be deemed to be the enactment of such a legislature and this principle is clearly recognised by the B Supreme Court in the case of Mithan Lal v. 17ze State of Delhi and Another, [1959) S.C.R. 445 ... It is thus clear that on the extension of the Act to the Union Territory of Delhi by the various Central Legislative enactments referred to above, it became a Central Act or an Act of J>arliament as if made by virtue of power of Parlia~ c ment to legislate for the Union Territory of Delhi by virtue of clause (4) of Article 246 of the Constitution of India."

The correctness of the above factual statement has not been disputed by anyone before us. Indeed, the contention of Sri P.P. Rao, who led the D argument on ~ehalf of the respondents-State governments was to the same effect. He contended that inasmuch as the Punjab Municipal act has been extended to Part 'C' State of Delhi under the Part 'C' State (Laws) Act, 1950 with effect from April, 16, 1950, it is a post-constitutional enactment made by Parliament and hence the taxes levied there~nder constitute Union taxation. He placed strong reliance upon decision in Mitltan Lal v. E The State of Delhi & Anr., (1959) S.C.R. 445 and also certain observations in T.M. Kanniyan v. lncome Tax Officer, Pondiclterry & Anr., (1968) 2 S.C.R. 103 in that behalf. It is obvious that this was also the case of the State governments before the Delhi High Court. We, therefore, proceed on the basis that the Punjab Municipal Act was extended to Part 'C' State of Delhi F under and by virtue of the Part 'C' State (Laws) Act, 1950 which came into force on April 16, 1950.

By virtue of the Constitution Seventh (Amendment) Act, 1956, the Part 'C' State of Delhi was·designated as a Union Territory. The Punjab Municipal Act continued to govern the Union Territory of Delhi. In the G year 1957, the Parliament enacted the Delhi Municipality Act, 1957. The First Schedule to the Act specified the boundaries of New Delhi within which area the Punjab Municipal Act continued to be in force. The remaining area was designated as the Delhi Municipal Corporation area and the Delhi Municipal Corporation Act, 1957 was made applicable to it. H In the year 1994, the Parliament enacted the New Delhi Municipal Council

N.D.M.C. v. STAIB [REDDY,J.) 493

Act, 1994 repealing Punjab Municipal Act, 1911. This Act has been brought A into force with effect from May 25, 1994. It is, however, confined in its application to the area comprised in the New Delhi Municipal Council. Delhi and New Delhi are thus governed by different municipal enactments. The Delhi Municipal Corporation Act and Ne\\ Delhi Municipal Council Act are, without a doubt, post-constitutional laws enacted by Parliament. B PART- II

Article 1(1) of the Con8titution of India declares that India, i.e., Bharat, shall be a Union of States. As amended by the Constitution Seventh (Amendment) Act, clause (2) and (3) of Article 1 read : C "(2) The States and the territories thereof shall be as specified in the First Schedule.

(3) The territory of India shall comprise -

(a) the territories of State; D

(b) the Union territories specified in the First Schedule; and

(c) such .other territories ~s may be acquired."

Clause (30) in Article 366 defines the "Union territory" in the follow- E ing words:

'"Union Territory' means any Union Territory specified in the First Schedule and includes any other territory comprised with the territory of India but not specified in that Schedule." F The expression "State" is not defined in the Constitution. It is defined in the General Clauses Act, 1897 which is made applicable to the inter- pretation of the Constitution by Article 367. As on the date of the com- mencement of the Constitution, clause (58) in Section 3 of the General Clause Act defined "State" in the following words" G "(58). 'State' shall mean a Part A State, a Part B State or a Part C State."

The said definition was amended by the Adaptation of Laws Order No. 1 of 1956 issued by the President in exercise of the power conferred H

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A upon him by Articl~ 372-A of the Constitution introduced by the Constitu- tion Seventh (Amendment) Act. The amended definition reads thus :

"(58) 'States' -

(a) as respects any period before the commencement of the Con- B stitution (Seventh Amendment) Act, 1958), shall mean a Part A State, a Part B State or a Part C State; and

-(b) as respects any period after such commencement, shall mean a State specified in the First Schedule to the Constitution and shall include a Union territory." c The definitions in the General Clauses Act, it is necessary to remem- ber, have to be read and applied subject to the opening words in Section 3, viz., "unless there is anything repugnant in the subject or context .... ".

D Part-XI of the Constitution contains provisions governing relations between the Union and the States. This part is divided into two chapters, viz., Chapter-I containing Articles 245 to 255 and Chapter-II containing Article 256 to 263. Chapter-I carries the title "Legislative relations" while Chapter-II is called "Administrative relations". Article 245, which carries the heading/marginal note "The extent of laws made by Parliament and the E Legislature of States" contains two clauses. Clause (1) says that subject to the provisions of this Constitution, Parliament may make laws for the whble or any part of the territo1y of India and the legislature of a State may make laws for the whole or any part of the State." Article 246 is of crucial relevance herein and must, therefore, be set out in its entirety : F "246. Subject-matter of laws made by Parliament and by the Legis- lature of States. - (1) Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matter enumerated in List I of the Seventh Schedule to the Constitution referred to as the 'Union List'). G (2) Notwithstanding anything in clause (3), Parliament, and, sub- ject to clause (1) the Legislature of any State .. also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule to the Constitution referred to as the H 'Concurrent List').

N.D.M.C. v. STATE [REDDY,J.] 495

(3) Subject to clauses (1) and (2), the Legislature of any State ....has A exclusive power to make law for such State or any Part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule to the Constitution referred to as the 'State List'). B (4) Parliament has power to make laws with respect to any matter for any of the te1Tit01y of India not included in a State notwithstand- ing that such matter is a matter enumerated in the State List."

(Emphasis added) c It is relevant to point out that in clauses (2) and (3), as originally enacted - and upto the Seventh (Amendment) Act - the expression "State" was followed by the words "specified in Part - A or Part-B of the First Schedule". Similarly, the words, "in the Stat~" in clause (3), were, followed by the words "in Part-A or Part-B of the First Schedule". In D other words, clauses (2) and (3) of Article 246 expressly excluded Part 'C' and Part 'D' States from their purview. The position is no different after the Constitution Seventh (Amendment) Act, which designated the Part-C States as Union territories. They ceased to be States. As rightly pointed out by a Constitution Bench of this Court in T.M. Kanniyan, the E context of Article 246 excludes Union territories from the ambit of the expression "State" occurring therein. As a matter of fact, this is true of Chapter-I of Part- XI of the Constitution as a whole. It may be remem- bered that during the period intervening between The Constitution Seventh (Amendment) Act, 1956 and The Constitution Fourteenth F (Amendment) Act, 1962! there was no provision for a legislature for any of the Union territories. Article 239-A in Part-VII - "The Union Ter- rit~ries" - (which before the Seventh Amendment was entitled "The States in Part-C of the First Schedule") introduced by Constitution Fourteenth (Amendment) Act did not itself create a legislature for Union territories; it merely empowered the Parliament to create them for certain specified Union territories (excluding Delhi) and to confer upon them such powers as the Parliament may think appropriate. Thus, the legislatures created for certain Union territories under the 1963 Act were not legislatures in the sense used in Chapter-III of Part-IV of the Constitution, but were mere creatures of the Parliament - some sort of H

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A subordin~te legislative bodies. They were unlike the legislature con- templated by Chapter-III of Part-VI of the Constitution which are supreme .in the field allotted to them, i.e., in the field designated by List-II of the Seventh Schedule. The legislatures created by the 1963 Act for certain Union territories owe their existence and derive their powers from the Act B of the Parliament and are subject to its over-riding authority. In short, the State legislatures contemplated by Chapter-I of Part-XI are the legislatures of State referred to in Chapter-III of Part-VI and not the legislatures of Union territories created by the 1963 Act. Union territories are not States for the pm.poses for Part-XI (Chapter-I) of the Constitution.

C Article 248 confers the residuary legislative power upon the Parliament. The said power includes the power to make any law imposing a tax not me~1uoned in either List-II or List-III. Articles 249, 250, 252 and 357 confer upon the Parliament power to make laws with respect to matters enumerated in List-II in certain exceptional situations, which may, for the sake of con- D venience, be called a case of "substitute legislation". It would be enough to refer to the marginal headings of these four Articles. They read :

"249. Power of Parliament to legislate with respect to a matter in the State in the. national interest.

E 250. Power of Parliament to legislate with respect to any matter in the State List if a Proclamation of Emergency is in operation.

"252. Power of Parliament to legislate for two or more States by consent and adoption of such legislation by any other State.

F 357. Exercise of legislative powers under Proclamation issued under article 356."

We may now set out ARTICLES 285 AND 289:

"285. Exemption of property of the Union from State taxation.- (1) ""'G The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State.

(2) Nothing in clause (1) shall, until Parliament by law otherwise provides, prevent any authority within a State from levying any tax

N.D.M.C. v. STATE (REDDY,J.] 497

on any property of the Union to which such property was imme- A diately before the commencement of this Constitution liable or ·. treated as liable, so long as that tax continues to be levied in that State.

289. Exemption of property and income of a State from Union taxation. -- (1) The property and income of a State shall be exempt from Union taxation.

(2) Nothing in clause (1) shall prevent the Union from imposing or authorising the imposition of, any tax to such extent, if any, as Parliament may by law provide in respect of the trade or business of any kind carried on by, or on behalf of, the Government a State, or any operations connected therewith, or any property used or occupied for the purposes of such trade or business or any income accruing ·in connection therewith.

(3) Nothing in Clause (2) shall apply to any trade or business, or to any class of trade or business, which Parliament may by law declare to be incidental to the ordinary functions of Government."

A Federation Pre-supposes two coalescing units : the Federal

- Government/Centre and the States/Provinces. Each is supposed to be supreme in the sphere allotted to it/them. Power to tax is an incident of sovereignty. Basic premise is that one sovereign cannot tax the other sovereign. Articles 285 and 289 manifest this mutual regard and immunity but in a manner peculiar to our cons.titutional scheme. While the immunity created in favour of the Union is absolute, the immunity created in favour of the States is a qualified one. We may elaborate : Article 285 says that F "the property of the Union shall.. :be exempt from all taxes imposed by a State or by any authority within a State" unless, of course, Parliament itself permits the same and to the extent permitted by it. (Clause (2) of Article 285 saves the existing taxes until the Parliament otherwise provides, but this is only a transitional provision.) The ban, if it can be called one, is absolute G and emphatic in terms. There is no way a State legislature can levy a tax upon the property of the Union. So far as Article 289 is concerned, the position is different. Clause (1), had it stood by itself, would have been similar to clause (1) of Article 285. It says that "the property - and income - of a State shall be exempt from Union taxation". But it does not stand alone. It is qualified by clause (2) and clause ·(3) is an exception to clause H

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N.D.M.C. v. STATE [REDDY, J.] 499

(2) is an exception or a proviso to clause (1) and as such whatever is included in clause (2) must be deemed to be included in clause (1). In other words, the trading and business activities referred to in clause (2) are included in clause (1) and precisely for this reason the exception in clause (2) was provided. Clause (3), it was held, is an exceprion to clause (2). In the words of the Constitution Bench : B "The scheme of Art. 289 appears to be that ordinarily, the income derived by a State both from government and non- governmental or commercial activities shall be immune from income-tax levied by the Union, provided, of course, the income in question can be said to be income of the State. This general proposition flows from clause (1).

Clause (2) then provides an exception and authorises the Union to impose a tax in respect of the income derived by the Govern- ment of a State from trade or business carried on by its, or on its behalf; that it to say, the income from trade or business carried on by the Government of a State or on its behalf which would not have been taxable under clause (1), can be taxed, provided a law is made by Parliament in that behalf. If clause (1) had stood by itself, it may not have been easy to include within its purview income derived by the State from commercial activities, but since clause (2), in terms, empowers Parliament to make a law levying a tax on commercial activities carried on by or on behalf of a State~ the conclusion is inescapable that these activities were deemed to have been included in cl. (1) and that alone can be the justification " for the words in which cl. (2) has been adopted by the Constitution. F It is plain that cl. (2) proceeds on the basis that but for its provision, the trading activity which is covered by it would have claimed exemption from Union taxation under cl. (1). That is the result of .. reading clauses (1) and (2) together.

Clause (3) then empowers Parliament to declare by law that G any trade or business would be taken out of the purview of cl. (2) and restored to the area covered by cl. (1) by declaring that the said trade or business is incidental to the ordinary functions of government. In other words, cl. (3) is an exception to the exception prescribed by cl. (2). Whatever trade or busitiess is declared to be H

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A incidental to the ordinary functions of government, would cease to be governed by cl. (2) and would then be exell1pt from Union ' taxation. That, broadly stated appears to be the result of the scheme adopted by the three clauses of Art. 289."

PART - III B The crucial question arising in this batch of appeals pertains to the meaning of the expressiop "Union taxation" occurring in Article 289(1). According to the appellant-municipal corporations, the property taxes levied either by Punjab Municipal Act, 1911, as extended to and applicable in the New Delhi Municipal Council area or by the Delhi Municipal Corporation Act, 1957 applicable to the Delhi Municipal Corporation area do not fall within the ambit of the expression "Union taxation". According to them, "Union1 taxation" means levy of any of the taxes mentioned in the Union List (List-I in the Seventh Schedule to the constitution). May be, it may also take in levy of Stamp duties (which is the only taxation entry in the Concurrent List) by Parliament, but by no stretch of imagination, they contend, can levy of any tax provided in the State List (List-II in the Seventh Schedule) can be characterised as Union taxation. Merely because the Parliament levies the tax provided in List-II, such taxation does not amount to Union taxation. These are many situations where the Parliament E is empowered by Constitution to make laws with respect to matters enumerated in List-IL For example, Articles 249, 250, 252 and 357 em- power the Parliament to make laws with respect to matters enumerated in List-II in certain specified situations. If any taxes are levied by Parliament while legislating under any of the above articles, such taxation cannot certainly be termed as "Union taxation". It woi.Jld still be State taxation. The levy of taxation by Parliament within the Union territories is of a similar nature. Either because the Union territory has no legislature or because the Union territory has a legislature but the Parliament chooses to act in exercise of its over-riding power, the taxes levied by a Parliament enact- ment within such Union territories would not be Union taxation. It is relevant to notice, the learned counsel contend, that the legislatures of the Union territories referred to in Article 239-A as well as the legislature of Delhi created by Article 239-AA are empowered to make laws with respect to any of the matters enumerated in List-II and List-III of the Seventh Schedule, just like any other State legislature; any taxes levied by these legislatures cannot certainly be characterised as "Union taxation". Merely

N.D.M.C. v. STATE [REDDY, J.] 501

because the Parliament has been given an over-riding power to make a law with respect to matter enumerated even in List-II, in supersession of the law made by the legislature of the Union territory, it does not follow that the law so made is any the less a law belonging to the sphere of the State. The test in such matters - it is contended - is not who makes the law but to which matter in which List does the law in question pertain. Clause (4) B of Article 246 specifically empowers the Parliament to make laws with respect to any matter enumerated in List-II in the case of Union territories. This shows that even the said clause recognises the distinction between List-I and List-II in the Seventh Schedule, it is submitted.

The learned Attorney General appearing for the Union of India C supported the contentions of the appellants-municipal corporations.

On the other hand, the contentions of the learned counsel for the respondents are to the following effect : a Union territory is not a "State" within the meaning of Article 246. Even prior to the Seventh (Amendment) D Act, Part 'C' States, or for that matter Part-D States, were not within the purview of the said Article. The division of the legislative powers provided by clauses (1), (2) and (3) of Article 246 has no relevance in the case of a Union Territory. Union territory, as the name itself indicates, is a territory belonging to Union. A Union territory has no legislature as contemplated by Part-VI of the Constitution. A Union territory may have a legislature or E may not. Even if it is bestowed with one, it is not by virtue of the Constitution but by virtue of a Parliamentary enactments, e.g., Government of Part 'C' States Act, 1951 (prior to November 1, 1956) and Government of Union Territories Act, 1963. Even the legislature provided for Delhi by Article 239-AA of the Constitution with effect from February 1, 1992 is not F a legislature like that of the States governed by Part-VI of the Constitution. Not only the powers of the legislature are circumscribed by providing that such legislature cannot make laws with reference to certain specified ... entries in List-II but any law made by it even with reference to a matter enumerated in the State List is subject to the law made by Parliament. In G any event, the position obtaining in Delhi after February 1, 1992 is not relevant in these appeals since these appeals pertain to a period anterior to the said date. The Punjab Municipal Act, 1911 (as extended and applied to the Union Territory of Delhi by Part 'C' States (Laws Act) and the Delhi Municipal Corporation Act, 1957 are Parliamentary laws enacted under and by virtue of the legislative power vested in Parliament by clause (4) of H

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A Article 246. The taxes levied by the said enactments constitute "Union • taxation" within the meaning of Article 289(1) and hence, the properties of the States in the Union Territory of Delhi are exempt there from. Reliance is placed upon the majority opinion in Re. : Sea Customs Act in support of the above propositions. It is submitted that there are no reasons to take a B different view now.

On a consideration of rival contentions, we are inclined to agree with the respondents-States. The States put together do not exhaust the territory of India. There are certain territories which do not from part of any State and yet are the territories of the Union. That the States and Union C territories are .different entities, is evident from clause (2) of Article 1 - indeed from the entire scheme of the Constitution. Article 245(1) says that while Parliament may make laws for the whole or any part of the territory of·lndia, the legislature of a State may make laws for the whole or any part of the State. Article 1(2) read with Article 245(1) shows that so far as the D Union territories are concerned, the only law-making body is the Parlia-· ment. The legislature of a State cannot make any law for a Union territory; it can make laws only for that State. Clauses (1), (2) and (3) of Article 246 speak of division of legislative powers between the Parliament and State legislatures. This division is only between the Parliament and the State legislatures, i.e., between the Union and the States. There is no division of · E legislative powers between the Union and Union territories. Similarly, there is no division of powers between States and Union territories. So far as Union territories are concerned, it is clause (4) of Article 246 that is relevant. It says that the Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State ·notwithstanding that such matter is a matter enumerated in the State List. F Now, the Union territory is not included in the territory of any State. If so, Parliament is the only law-making body available for such Union territories. It is equally relevant to mention that the Constitution, as originally enacted, did not provide for a legislature for any of the Part 'C' States (or, for that matter, Part 'D' States). It is only by virtue of the Government of Part 'C'- G States Act, 1951 that some Part 'C' States including Delhi got a legislature. This was put an end to by the States Reorganisation Act, 1956. In 1962, the Constitution Fourteenth (Amendment) Act did provide for crea- tion/constitution of legislatures for Union territories (excluding, of course, Delhi) but even here the Constitution did not itself provide for legislatures for those Part 'C' States; it merely empowered the Parliament to provide H for the same by making a law. In the year 1991, the Constitution did provide

N.D.M.C. v. STATE [REDDY,J.] 503

for a legislature for the Union Territory of Delhi (National Capital Ter- A ritory of Delhi) by Sixty-Ninth (Amendment) Act (Article 239AA) but even here the legislature so created was not a full fledged legislature nor did have the effect of - assuming that it could - lift the National Capital Territory of Delhi from Union territory category to the category of States within the meaning of Chapter-I of Part XI of the Constitution. All this necessarily means that so far as the Union territories are concerned, there B is no such thing as List-I, List-II or List-III. The only legislative body is Parliament - or a legislative body created by it. The Parliament can make any law in respect of the said territories - subject, of course, to constitu- tional limitation; other than -those specified in Chapter-I of a Part-XI of the Constitution. Above all, Union Territories are not "States" as con- C templated by Chapter-I of Part-XI; they are the territories of the Union . falling outside the territories of the States. Once the Union territory is a part of the Union and not part of any State, it follows that any tax levied by its legislative body is Union taxation. Admittedly, it cannot be called "State taxation" - and under the constitutional scheme, there is no third kind of taxation. Either it is Union taxation or State taxation. This is also D the opinion of the majority in Re. : Sea Customs Act. B.P. Sinha, CJ., speaking on behalf of himself, P.B. Gajendragadkar, Wanchoo and Shah, JJ. - while dealing with the argument that in the absence of a power in the Parliament to levy taxes on lands and buildings (which power exclusively belongs to State legislatures, i.e., Item 49 in List- II), the immunity provided by Article 289(1) does not make any sense - observed thus : E

'It is true that List I contains no tax directly on property like List II, but it does not follow that the Union has no power to impose a tax directly on property under any circumstances. Article 246(4) gives power to Parliament to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List. This means that so far as Union territories are con- cerned Parliament has power to legislate not only with respect to items in List I but also with respect to items in List II. Therefore, so far as Union territories are concerned, Parliament has power to impose a tax directly on property as such. It cannot therefore be said that the exemption of States' property from Union taxation directly on property under Art. 289(1) would be meaningless as Parliament has no power to impose any tax directly on property. If a State has any property in any Union territory that property H

504 SUPREME COURT REPORTS(1996) SUPP. 10 S.C.R.

A would be exempt from Union taxation on property under Art. 289(1). The argument therefore that Art. 289(1) cannot be con- fined to tax directly on property because there is no such tax provided in List I cannot be accepted."

B Rajagopala Iyyengar, J. agreed with Sinha, CJ. on this aspect, as indeed on the main holding. The decision in Re. : Sea Customs Act has been rendered by a Bench of nine learned Judges. The decision of the majority is binding upon us and we see no reason to take a different view. Indeed, the view taken by the majority accords fully with the view expressed by us hereinabove. c Now, so far as the analogy of laws made by Parliament under Article 249, 250, 252 and 357 are concerned, we think the analogy is odious. Articles 249, 250 and 357 are exceptional situations which call for the Parliament to step in and make laws in respect of matters enumerated in D List-II and which laws have effect for a limited period. Article 252 is a case where the State legislatures themselves invite the Parliament to make a law on their behalf. These are all situations of what may be called "Substitute legislation" - either because of a particular situation or because there is no legislature at a given moment to enact laws. As against these provisions, clause (4) of Article 246 is a permanent feature and laws made thereunder are laws made in the regular course.

In this connection, it is necessary to remember that all the Union Territories are not situated alike. There are certain Union territories (i.e., Andaman and Nicobar Islands and Chandigarh) for which there can be no legislature at all - as on today. There is a second category of Union Territories covered by Article 239- A (which applied to Himachal Pradesh, Manipur, Tripura, Goa, Daman and Diu and Pondicherry- now, of course, only Pondicherry survives in this category, the rest having acquired Statehood) which have legislatures by courtesy of Parliament. The Parlia- G ment can, by law, provide for constitution of legislatures for these States and confer upon these legislatures such powers, as it may think ap- propriate. The Parliament had created legislatures for these Union ter-. ritories under the "The Government of India Territories Act, 1963", empowering them to make laws with respect to matters in List~II and H List-III, but subject to its over-riding power. The third category is Delhi.

N.D.M.C. v. STATE [REDDY, J.] 505

It had no legislature with effect from November 1, 1956 until one has been A created under and by virtue of the Constitution Sixty- Ninth (Amendment) Act, 1991 which introduced Article 239-AA. We have already dealt with the special features of Article 239-AA and need not repeat it. Indeed, a refer- ence to Article 239-B read with clause (8) of Article 239-AA shows how the Union Territory of Delhi is in a class by itself but is certainly not a State B within the meaning of Article 246 or Part-VI of the Constitution. In sum, it is also a territory governed by clause (4) of Article 246. As pointed out by the learned Attorney General, various Union territories are in different stages of evolution. Some have already acquired Statehood and some may be on the way to it. The fact, however, remains that those surviving as Union C territories are governed by Article 246(4) notwithstanding the differences in their respective setups - and Delhi, now called the "National Capital Ter- _ritory of Delhi", it yet a Union territory.

It would be appropriate at this stage to refer to a few decisions on this aspect. In T.M. Kanniyan, a Constitution Bench speaking through D Bachawat, J. had this to say:

"Parliament has plenary power to legislate for the Union territories with regard to any subje~t. With regard to Union tenitories, there is E no distribution of legislative power. Article 246(4) enacts that 'Par- liament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List.' In R.K Sen v. Union, (1966) l S.C.R. 430, it was pointed out that having regard to Art, 367, the definition of 'State' ins. 3(58) of the General F Clause Act, 1897 applies for the interpretation of the Constitution Unless there is any thing repugnant in the subject or context. Under that definition, the expression 'State' as respects any period after the commencement of the Constitution (Seventh Amend- ment) Act, 1956 'shall mean a State specified in the First Schedule G to the Constitution and shall include a Union territory'. But this inclusive definition is repugnant to the subject and context of Art.

246. There, the expression 'State' means the States specified in the 1 First Schedule. There is a distribution of legislative power between Parliament and the legislatures of the States. Exclusive power to legislate with respect to the matters enumerated in the State List H

506 SUPREME COURT REPORTS(1996) SUPP. 10 S.C.R.

A is assigned to the legislatures of the States established by Part VI. There is no distribution of legislative power with respect to Union territories. That is why Parliament is given power by Art. 246(4) to legislate even with respect to matters enumerated in the State List. If the inclusive definition of 'State' in s. 3(158) of the General Clauses Act were to apply to Art. 246(4), Parliament would have B no power to legislate for the Union territories with respect to matters enumerated in the State List and until a legislature em- powered to legislate on those matters is created under Art. 239A for the Union territories, there would be no legislature competent to legislate on those matters; moreover, for certain territories such c as the Andaman and Nicobar Islands no legislature can be created under Art. 239A, and for such territories there can be no authority competent to legislate with respect to matters enumerated in the State List. Such a construction is repugnant to the subject and context to Art. 246. It follows that in view of Art. 246(4), Parlia- ment has plenary powers to make laws for Union territories on all matters. Parliament can by law extend the Income-tax Act, 1961 to a Union territory with such modifications as it thinks fit. The President in the exercise of his powers under Art. 240 can make regulations which have the same force and effect as an .Act of Parliament which applies to that territory. The President can therefore by regulation made under Art. 240 extend the Income-tax Act, 1961 to that territory with such modifications as he thinks it.

The President can thus make regulations under Art. 240 with respect to a Union territory occupying the same field on which F Parliament can also make laws. We are not impressed by the argument that such overlapping of powers would lead to a clash between the President and Parliament. The Union territories are centrally administered through the President acting through an administrator. In the cabinet system of Government the President acts on the advice of the Ministers who are responsible to Parlia- G ment. ... It is not necessary to make any distribution of income-tax with respect to Union territories as those territories are centrally administered through the President."

H (Emphasis added)

N.D.M.C. v. STATE [REDDY,J.) · 507

We respectfully agree with the above statement of law. A We do not think it necessary to refer to or discuss the propositions laid down in Management of Advance Insurance Co. Ltd. v. Shri Gwudas- mal & Ors., [1970) 3 S.C.R. 881 holding that the amended definition of "State" in clause (58) of Section 3 of the General Clauses Act applies to B interpretation of Constitution by virtue of Article 372-A nor with the contrary proposition in the dissenting judgment of Bhargava, J. in Shiv Ki,rpal Singh:v. Shri V.V. Giri, [1971) 2 S.C.R. 197 at 313. It is enough to say that context of Article 246 - indeed of Chapter-I in Part XI - excludes the application of the said amended definition. c In Mithanlal (supra), T.L. Venkatrama Iyer, J., speaking for the Constitution Bench, wJiiie dealing with an argument based on Article 248(2) observed :

"That Article has reference to the distribution of legislative powers between the Centre and the States mentioned in Parts A and B D Under the three Lists in Sch. VII, and it provides that in respect of matters not enumerated in the Lists including taxation, it is Parliament that has power to enact laws. It has no application to Pait C States for· which the governing provision is Art. 246(4). Moreover, when a notification is issued by the appropriate Govern- E ment extending the law of a Part A State to a Part C State, the law so extended derives its force in the State to which it is extended from s. 2 of the Part C States (Laws) Act enacted by Parliament. The result of a notification issued under that section is that the provisions of the law which is extended become incorporated by reference in the Act itself, and therefore a tax imposed thereunder F is a tax imposed by Parliament. There is thus no substance in this contention."

(Emphasis added) G To the same effect is the decision of a Division Bench in Satpal & Co. v. Lt. Governor, [1979) 3 S.C.R. 651.

It is then argued for the appellants that if the above view is taken, it would lead to an inconsistency. The reasoning in this behalf runs thus : a law made by the legislature of a Union territory levying taxes on lands and H

508 SUPREME COURT REPORTS[1996] SUPP.10 S.C.R.

A buildings would be "State taxation", but if the same tax is levied by a law made by the Parliament, it is being characterised as "Union taxation"; this is indeed a curious and inconsistent position, say the learned counsel for the appellants. In our opinion, however, the very premise upon which this argument is urged is incorrect. A tax levied under a law made by a B legislature of a Union territory cannot be called "State taxation" for the simple reason that Union territory is not a "State" within the meaning of Article 246 (or for that matter, Chapter-I of Part-XI) or Part-VI or Articles 285 to 289.

Lastly, we may refer to the circumstance that Delhi Municipal Cor- C poration Act, 1957 was enacted by Parliament. Hence, so far as the Delhi Municipal Corporation area is concerned, the taxes are levied under and by virtue of a Parliamentary enactment. So far as the New Delhi Municipal Council area is concerned, the taxes were levied till 1994 under the Punjab Municipal Act, 1911 as extended and applied by the Part 'C' State (Laws) D Act, 1950 enacted by Parliament. it is held by this Court in Mithanlal that extension of an Act to an area has the same effect as if that Act has been made by the extending legislature for the area. The Court said :

"Moreover, when a notification is issued by the appropriate Government extending the law of a Part A State to a Part C State, E the law so extended derives its force in the State to which it is extended from s. 2 of the Part C States (Laws) Act enacted by Parliament. The result of a notification issued under that section is that the provisions of the law which is extended become incor- porated by reference in the Act itself, and therefore a tax imposed thereunder is a tax imposed by Parliament. There is thus no substance in this contention."

(Also See T.M. Kanniyan [1968] 2 S.C.R. 103 at 108.)

It must accordingly be held that with effect from 1950, it is as if the property taxes are levied by a Parliamentary enactment. In 1994, of course, Parliament itself enacted the New Delhi Municipal Council Act (with effect form May 25, 1994) repealing the Punjab Municipal Act. Taxes levied under these enactments cannot but be Union taxation - Union taxation in a Union Territory.

H For all the above reason, we hold that the levy of taxes on property

N.D.M.C. v. STATE [REDDY,J.] 509

by the Punjab Municipal Act, 1911 (as extended to Part 'C' States of Delhi A by Part 'C' States (Laws) Act, 1950), the l)elhi Municipal Corporation Act, 1957 and the New Delhi Municipal Council Act, 1994 (both Parliamentary enactments) constitutes "Union taxation" within the meaning of Article 289(1).

PART-W B

The Delhi Municipal Corporation Act, 1957, the Punjab Municipal Act, 1911 (as extended to the Union Territory of Delhi) and the New Delhi Municipal Council Act, 1994 (N.D.M.C. Act) specifically exempt the properties of the Union from taxation. Section 119 of the Delhi Municipal C Corporation Act is in terms of Article 285 of the Constitution. It reads :

"119. Taxation of Union prope1ties - (1) Notwithstanding anything contained in the foregoing provisions of this Chapter, lands and buildings being properties of the Union shall be exempt from the property taxes specified in section 114 : D

Provided that nothing in this sub-section shall prevent the Corporation from levying any of the said taxes on such lands and buildings to· which immediately before the 26th January 1950, they were liable or treated as liable, so long as that tax continues to be levied by the Corporation on other lands and buildings." E Sub-section (3) of Section 61 is also in terms of Article 285 of the Constitution. It reads :

"Nothing in this sub-section shall authorise the imposition of any tax which the provincial legislature has no power to impose in the F Province under the Constitution-

Provided that a committee which immediately before the com- mencement of the Constitu.tion was lawfully levying any such tax under this section as then in force may continue to~evy such tax G until provision to the contrary is made by Parliament."

Sub-section (1) of Section 65 of the N.D.M.C. Act is again in the same terms as Article 285.

None of the above enactments provide any exemption in favour of H

510 SUPREME COURT REPORTS(1996] SUPP. 10 S.C.R.

A the properties of a State. Section 115(4) of the Delhi Municipal Corpora- tion Act, Section 61 of the Punjab Municipal Act and Section 62 of the N.D.M.C. Act levy property tax on all the properties within their jurisdic- . tion. From the fact that properties of the Union have been specifically exempted in terms of Article 285 but the properties of the States have not been exempted in terms of Article 289 shows that so far as these enact- ments go, they purport to levy tax on the properties of the States as well. The State governments, it is equally obvious, are not claiming exemption form municipal taxation under any provision of the concerned State enact- ment but only under and by virtue of Article 289 of the Constitution. They are relying upon clause (1) of Article 289 which is undoubtedly in absolute terms. Clause (1) of Article 289 says, "the property and income of a State shall be exempt from Union taxation". But clause (1) does not stand alone. It is qualified by clause (2) - which in turn is qualified by clause (3). Where an exemption is claimed under clause (1), we cannot shut our eyes to the said qualifying clause and give effect to clause (1) alone. In the decision in D A.P.S.R.T.C., this Court has held that clause (2) is an exception to clause (1) and that clause (3) is an exception to clause (2). When a claim for exemption is made under clause (1) of Article 289, the Court has to examine and determine the field occupied by clause (1) by reading clauses (1) and (2) together: If there is a law made by Parliament within the meaning of clause (2);·the area c~vered by that law will be removed from E the field occupied by clause (1). By way of analogy, we may refer to sub- clause (f) of clause (1) and clause (5) of Article 19, which has been explained by a Special Bench of eleven Judges in R.C. Cooper v. Union of India, (1970) 1 S.C.C. 248 in the following words : "Clause (5) Article 19 and clauses (1) and (2) of Article 31 prescribe restrictions upon State p action, subject to which the right to property may be exercised". But before we elaborate this aspect, it would be appropriate to examine the meaning and scheme of Article 289 and the object underlying it.

Since Article 289 is successor to Section 155 of the Government of India Act, 1935 - no doubt, with certain changes - it would be helpful to ,•

G refer to and examine the purport and scope of Section 155 (as it obtained prior to its amendment in 1947). We would also be simultaneously examin- ing the scheme and purport of Article 289. It would be appropriate to read both Article 289 and Section 155 together :

N.D.M.C. v. STAIB [REDDY,J.] 511

"289. Exemption of property and 155. (1) Subject as hereinafter A income of a State from Union provided, the Government of a taxation - (1) The property and Province and the Ruler of a income of a State property and Federnted State shall not be liable ,. income of a State shall be exempt to Federal taxation in respect of from Union taxation. lands or buildings situate in British B India or income accruing, arising or (2) Nothing in clause (1) shall received in British India; prevent the Union from imposing, or authorising the imposition of, Provide that - any tax to such extent, if any, as Parliament may by law provide in (a) where a trade or business of any respect of a trade or business of kind is carried on by or on behalf of any kind carried on by, or on the Government of a Province in behalf of, the Government of a any part of British India, outside State, or any operations that Province or by a Ruler in any connected therewith, or any part of British India, nothing in this property used or occupied for the sub-section shall exempt that purposes of such trade or Government or Ruler from any business, or any income accruing Federal taxation in respect of that or arising in connection there- trade or business, or any operations with. connected therewith, or any income ' arising in connection therewith, or E (3) Nothing in clause (2) shall any property occupied for the apply to any trade or business, purposes thereof; which Parliament may by law (b) nothing in this sub-section shall declare to be incidental to the exempt a Ruler from any Federal ordinary functions of taxation in respect of any lands, p Government. buildings or income being his personal property or personal income.

(2) Nothing in this Act affects any exemption from taxation enjoyed as G of right at the passing of this Act by the Ruler of any Indian State in respect of any Indian Government securities issued before that date." H

512 SUPREME COURT REPORTS(1996] SUPP.10 S.C.R.

A The first distinguishing feature to be noticed is that while Section 155 spoke of "lands and buildings" belonging to the Government of a Province situate in British India being exempt from Federal taxation (we are leaving [ out the portion relating to Rulers of Acceeding States/Federating States), ·Article 289(1) speaks of "the property' of a State being exempt from Union taxation. The second material difference is between proviso (a) to Section B 155(1) and clause (2) of Article 289 corresponding to it. Under the proviso, trade or business carried on by a Provincial government was excluded from the exemption provided in the main limb of sub-section (1) whereas clause (2) does not itself deny the exemption to such trade or business; it merely enables the Parliament to make a law levying tax on such trade or business. C This change has a certain background, which we shall refer to later. The third distinguishing feature between the said proviso and clause (2) is this : while the denial of exemption provided by the proviso was to the trade or business carried on by a Provincial government outside its territory, clause (2) of Article 289 contains no such restrictive words. The fourth distinguish- D ing feature is the provision in clause (3) of Article 289, which enables the Parliament to declare which trades/businesses are incidental to ordinary functions of government, in which event those trades/businesses go out of the purview of clause (2); no such provision existed in Section 155.

Even under the Government of India Act, 1935 the power to levy E taxes on lands and buildings was vested in the Provincial legislatures alone. Federal legislature had no power to levy such taxes. If so, the question arises - why did the British Parliament provide that the lands and buildings of a Provincial government situated in British India are exempt from Federal taxation. Since, no Federal tax could ever have been levied by the p Federal legislature on lands or buildings, is the exemption meaningless? This is the question which was also agitated before the learned Judges who answered the Presidential reference in Re.: Sea Customs Act. Sri P.P. Rao and other learned counsel appearing for the State governments submit that the said exemption is neither meaningless nor unnecessary. They submit that the language used in the main limb of sub-section (1) of Section 155 G was used advisedly' to meet a specific situation. Their explanation, as condensed by us in our words, is to the following effect :

even at the time of enactment and commencement of the Govern- ment of. India Act, 1935, the area now comprised in the Union H Territory of Delhi was comprised in the Chief Commissioner's

N.D.M.C. v. STATE [REDDY, J.] 513

Province of Delhi; besides Delhi, there were several other Chief A Commissioner's Provinces within British India; every Provincial government and almost every major native State had properties in Delhi for one or the other purpose; prior to the commencement of the 1935 Act, there was no such thing as division of powers between the Centre and the Provinces; Provinces were mere ad- ministrative units; the concept of division of powers between the B Federation (Centre) and its units (Provinces), i.e., the concept of a Federation, broadly speaking, was introduced by the said Act for the first time; in such a situation, it was necessary that the mutual respect and regard between the Centre and the Provinces basic to a federal concept, is affirmed and given due constitutional recog- C nition; even before the enactment of the Delhi Laws Act, 1912, the Governor General in Council with the sanction and approbation of the Secretary of State for India, had, by proclamation published in Notification No. 911 dated the 17th day of September, 1912, taken under his immediate authority and management, the ter- ritories mentioned in Sc~Ie-A to the Act (the portion of the D district of Delhi compri'Sing the tehsil of Delhi and police station of Mehrauli) which were formerly included in the Province of Punjab, with a view to provide for the administration thereof by a Chief Commissioner as a separate Province to be known as the Province of Delhi; it was the said status which was affirmed by the Delhi Laws Act, 1912; Section 5 of the Government of India Act, E 1935 made a clear distinction between the Provinces and the Chief Commissioner's Provinces; while the Provinces were provided with legislatures (Chapter-III of Part-III of the Act), the Chief Commissioner's Provinces, governed by Part-IV of the Act, had no legislatures of their own; the only legislature for them was the F Federal legislature; any tax levied in the Chief Commissioner's Province could have been levied only by the federal legislature or the Governor General, as the case may be; Section 99( 1) of the Act provided that "the Federal Legislature may make laws for the whole or any part of British Indian or for any Federated State and a Provincial Legislature may make laws for the Province or for any G part thereof'; all this shows that the tax on lands or buildings in ~. the Chief Commissioner's Provinces including Delhi could have been levied only by Federal legislature; Section 155(1) was meant to exempt the lands or buildings of Provincial governments from such federal taxation - it is submitted. H