doctrine of pith and substance

Good for academic discourse.

Doctrine of Pith and Substance says that where the question arises of determining whether a particular law relates to a particular subject (mentioned in one List or another), the court looks to the substance of the matter.

The Supreme Court in the Atiabari Tea Co. case held that taxes, which hampered free flow of trade and commerce, contravened Part XIII and, therefore were unconstitutional.

The Constitutional validity of the Assam Taxation (on Goods Carried by Roads or Inland Waterways) Act, (Assam Act XIII of 1954) (hereinafter referred to as Act) has been challenged under the present appeal before the Honourable Supreme Court through Article 32 of the Constitution.

It was contended on behalf of the appellants that the impugned Act imposed fetters on the free flow of trade and commerce in respect of tea and jute, the two commodities dealt with by the Act and, therefore, contravened the provisions of Article 301 of the Constitution; that the legislation was beyond the legislative competence of the Assam Legislature and was not authorised by entry 56 in List II; that the tea industry was a controlled industry as declared by Parliament and directly came under entry 52 of List I; that it was colourable piece of legislation which, in its true effect, was a levy of a duty of excise which could only be done by the Union Legislature, and finally, that it contravened Article 14 of the Constitution.

On the other hand, the state of Assam contended that the power to tax is a peculiar legislative function with which the courts are not directly concerned and that, therefore, the freedom contemplated by Article 301 of the Constitution. Moreover, the freedom envisaged by Article 301 does not include immunity from taxation.

The Honourable Supreme Court did not accept the argument of the State and allowed the appeal thereby holding the Act to be unconstitutional. It was observed that the sovereign State, in some cases the Union, in other cases the State, has the inherent power to impose taxes in order to raise revenue for purposes of State. This power of the State to raise finances for Government purposes has been dealt with by Part XII of the Constitution, which contains the total prohibition of levy or collection of tax, except by authority of law (Article 265).

 Now to your question:

"can we say SC judgement has a fair chance of being overturned if reconsidered ?"

The conclusion and the disposal of the said appeal is given below:

In that view, the Assam Taxation (on Goods carried by Roads or Inland Waters) Act, 1954, must be regarded as an infringement to the guarantee of freedom of trade and commerce under Article 301 because the bill moved in the assembly had not received the assent of the president as required under Article 304(b) proviso, and the Act has not been validated by the assent of the president under Article 255(c). The appeal was thus allowed.

Based on the above decision do you think that the said decision passed by the hobnorable apex court can be overturned?