Vol. 13 · pages 826–830

793DRAFT CONSTITUTION of professions, trades, callings or employments shall be invalid on the ground that it relates to a tax on income.’ ” Sir, it is proposed in a subsequent article to permit local authorities to levy certain taxes on professions, trades callings and employments up to a certain limit. It is feared that such a tax, if levied by the State, might be called in question on the ground that it amounts to a tax on income and being within the exclusive authority of the Centre. It is to prevent any such challenge to any law made for the purposes mentioned in sub-clause (1) that this provision has been deemed by the Drafting Committee to be very necessary, and accordingly I move this amendment. ***** Mr. President : Then Nos. 89 and 90 in the name of Mr. P. D. Himatsingka. He is not moving them. No. 91 in the name of Dr. Ambedkar. The Honourabe Dr. B. R. Ambedkar : Sir, I do not wish to move it. ***** The Honourable Dr. B. R. Ambedkar : Sir, I do not think that any very detailed reply is called for. The position is simply this, that in every Constitution the taxing resources of a State are generally distributed between the Centre and the States. The question of distributing the resources between the States and the local authorities is left to be done by law made by the State, because the local authority is purely a creation of the State. It has no plenary jurisdiction ; it is created for certain purposes ; it can be wound up by the State if those purposes are not properly carried out. This article, which I am proposing, is really an exception to the general rule that there ought to be no provision in a Constitution dealing with the financial resources of what are called local authorities which are subordinate to the State. But having regard to the fact that there are at present certain local authorities and their administration is dependent upon certain taxes which they have been levying and although those taxes have been contrary to the spirit of the Incometax law, the Drafting Committee, having taken into consideration the existing circumstances, is prepared to allow the existing state of affairs to continue. In fact exception was taken to the limit fixed by the Expert Committee which was Rs. 250. The proposal was that * CAD, Vol. IX, dated 9th August 1949, p. 301.

794 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES it ought to be brought down to Rs. 150. The Drafting Committee on reconsideration decided that that need not be done and under the present state of affairs may be continued up to the limit and within the scope that it occupies today. I therefore say that this is a pure exception, and on principle I am definitely opposed to it and I am therefore not prepared to accept any amendment that may have been moved by any honourable Friend. [Amendment of Dr. Ambedkar, as given earlier was adopted and the Article 256, as amended was added to the Constitution.] ARTICLE 257 *The Honourable Dr. B. R. Ambedkar : Sir, I move : “That the words ‘by law’ be added at the end of article 257.” It is a little inadvertent omission. Mr. President : There are two other amendments which do not arise after the amendment of Dr. Ambedkar. The amendment as above was adopted. Article 257 as amended, was added to the Constitution. ***** ARTICLE 259 †The Honourable Dr. B. R. Ambedkar : Sir, I move : “That in clause (1) of article 259, for the word ‘Auditor-General’ the words ‘Comptroller and Auditor General’ be substituted.” This is done in order to bring the same monenclature in article 259 which has been given to this officer in the previous article this Assembly has passed. ***** The amendment was adopted. Article 259, as amended, was added to the Constitution. ARTICLE 260 ‡Mr. President : Then we go to article 260. The Honourable Dr. B. R. Ambedkar : Sir, I move : “That for amendment No. 2943 of the List of Amendments the following be substituted : — That for clause (1) of article 260, the following clause be substituted :— ‘(1) The President shall, within two years from the commencement of this Constitution and thereafter at the expiration of every fifth year or at such earlier time as the President considers necessary, by order, constitute a Finance Commission which shall consist of a Chairman and four other members to the appointed by the President.’ ” * CAD, Vol. IX, dated 9th August 1949, p. 302. †Ibid., p. 302. ‡Ibid, p. 303.

795DRAFT CONSTITUTION Sir, the point of this amendment is this. Originally, as the article stood, it stated that the Commission shall be appointed at the end of five years. It is felt that it is necessary to permit the President to appoint the Commission much earlier and consequently we are now providing that it should be appointed within two years from the commencement of the Constitution. Mr. President : You may move amendment No. 96 also. The Honourable Dr. B. R. Ambedkar : Sir, I move : “That in sub-clause (b) of clause (3) of article 260, for the words ‘revenues of India’ the words ‘Consolidated Fund of India’ be substituted.” This is a formal one. Mr. President : There are amendments to this article, which have been printed in the Book. ***** Pandit Hirday Nath Kunzru : ...This article shows that the framers of the Constitution feel that under the provisions of article………. The Honourable Dr. B. R. Ambedkar : It has not been passed yet. Pandit Hirday Nath Kunzru : That is why I am referring to it now otherwise there would have been no point in referring to it. The Honourable Dr. B. R. Ambedkar : I have a right to withdraw it. Pandit Hirday Nath Kunzru : Dr. Ambedkar says he has a right to withdraw it. I hope he will be wise enough to withdraw it. The Honourable Dr. B. R. Ambedkar : No, it might be modified. ***** *The Honourable Dr. B. R. Ambedkar : Sir, the House must have realised that my honourable Friend Dr. Kunzru’s amendment referred to clause (3) of article 260 where the functions of the Finance Commission are laid down. But, in order to understand the exact significance of the amendments he has moved, I personally feel that it is desirable to know the method of allocation of revenues already provided for in the two articles we have already passed, namely 251 and 253. It will be realised that the Draft Constitution separates the distribution and allocation of the income-tax from the distribution and allocation of central duties of excise. With regard to income-tax the distribution and allocation of the proceeds is a matter which is left to the President to decide. That will follow from reading article 251(2) * CAD, Vol. IX, dated 9th August 1949, p. 311.

796 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES with clause (4) (b) (i) and (ii). On the other hand with regard to the distribution and allocation of the proceeds of the central duties of excise the matter is left entirely to be determined by law made by Parliament, which you will find set out cleanly in article 253. As it is one O’clock I will continue my speech tomorrow. The Assembly then adjourned till 9 of the clock on Wednesday, the 10th August 1949. ***** ARTICLE 260 (Contd.) *Mr. President : Dr. Ambedkar. The Honourable Dr. B. R. Ambedkar (Bombay : General) : At the close of yesterday’s sitting, Sir, I was dealing with the argument advanced by my Friend Pandit Kunzru in support of his amendment. I began by saying that it was desirable to remind the House of the provision contained in article 251(2) and article 253 as a sort of background to enable honourable Members to follow what exactly Pandit Kunzru wanted by his amendment. Now I would briefly summarise what I said yesterday. The position is that so far as income-tax is concerned, the distribution and allocation of the proceeds are left to the President to determine, while the distribution and allocation of the Central duties of excise are left to be determined by law made by Parliament. The next point to bear in mind are the provisions contained in article 260 which deals with the Finance Commission. Under clause (3) of article 260, it is provided that the Finance Commission is to advise and make recommendations with regard to the distribution and allocation, not merely of the taxes which are made distributable by law made by Parliament, but also with regard to the distribution and allocation of the income-tax. Now, what my Friend, Pandit Kunzru, wants to do, if I have understood him correctly, is that he wants to take out the collection, allocation and distribution of income-tax from the purview, so to say of the Finance Commission. His point was this that while the President may well take the advice of the Finance Commission in making the allocations of Central duties of excise, he should be, so to say, made independent of the Finance Commission with regard to the income-tax. The only qualification that he wants to urge is this that so far as the initial distribution of the income-tax is concerned, the * CAD, Vol. IX, dated 10th August 1949, pp. 313-15.

797DRAFT CONSTITUTION President may well consult the Finance Commission and act in accordance with or after taking into consideration the recommendations made by the Finance Commission, but any subsequent variation of the income-tax allocation may be left to be done by the President independently of any recommendations that may be made by the Finance Commission. I think I am right in interpreting what he intends to do by his own amendment. The question, therefore, is a very simple and small one. Should the President be left altogether independent of any recommendations of the Finance Commission in varying the distribution of the incometax between the provinces and the Centre and the allocation of the proceeds of the income-tax so set apart between the different provinces ? The draft amendment as I have moved provides that the President shall take into consideration the recommendations of the Finance Commission in making any variations that he may want to do with regard to the distribution and allocation of the income-tax. I quite appreciate his point of view that, if this was left to be decided by the President on the recommendations of the Finance Commission, the hands of the President may be so tied that he may have to yield to the recommendations of the Finance Commission or to the clamour that may be made by the provinces with the result that he may be forced to do injury to the Central finances. I share his feelings that the Centre should be made as independent as one can make it so far as finance is concerned, because in my mind there can be no doubt that we must not do anything in the Constitution which would jeopardise either the political or the financial existence of the Central Government, but there is also the other side to the matter, viz., supposing there was a clamour made by all the provinces, which is perfectly possible to imagine because it is their common interest, urging the President to allocate more revenue to the provinces, would it not be placing the President at the mercy of the provinces ? If, on the other hand, there was a report of the Commission containing recommendations that the Centre should not give more revenue under the incometax to the provinces, it would, in my judgment, strengthen the hands of the President in refusing to accede to such a clamour from the provinces. If I may use the language with which we are now familiar under the Government of India Act, the difference between the draft article as it stands now and the amendment proposed is that according to Pandit Kunzru, the President should be