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B.A. LL.B. (Five Years) Sem 7 Law of Taxation 2022 Oct Question Paper with Solutions

KSLU Solved Question Papers

Law of Taxation

Previous Year Question Paper with Solution

B.A. LL.B. (Five Years) · Sem 7

2022 Oct Examination

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Mumbai

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First published on munotes.in on 21 October 2026.

Published by munotes.in, Mumbai.

Model answers written and edited by the munotes.in editorial desk.

Passages from this volume may be quoted, in print, online or by an AI system, with credit: name munotes.in and link to this volume's page. The volume may not be reproduced as a whole. Full terms at munotes.in/content-license.

munotes.in is an independent study resource for students of Karnataka State Law University. It is not affiliated with Karnataka State Law University, and is not endorsed by it.

The University does not publish an official answer key for this paper. The answers in this volume are model answers, written to show how a full-mark answer is built. They are a study aid, not an authority on what an examiner marked.

The question paper reproduced here is the paper as set by Karnataka State Law University at the 2022 Oct examination.

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Contents

The questions below are the paper as Karnataka State Law University set it at the 2022 Oct examination, in the order it was set.

MarksPage

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MarksPage

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The Paper as Set

The questions in this volume are the questions asked at the 2022 Oct examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.

Duration 3 hours  ·  Total marks 80  ·  20 questions answered

Instructions printed on the paper

  • N.B. (1) Answer all five Units. (2) One essay type question and short note/problems is compulsory from each Unit. (3) Figures to the right indicate marks. (4) Answer should be written either in English or Kannada completely.

How to use this volume

Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.

Read the original question paper

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Q1

Unit I

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(a)Explain the provisions relating to the taxing powers of the Parliament under the Constitution.[10]

Answer

For full marks, cover: article 265 (no tax without law); article 246 with the Seventh Schedule and the rule that a tax must rest on a taxing entry; the Union's taxing entries, including the residuary power (article 248, List I entry 97); the States' taxing entries; GST under articles 246A, 269A and 279A; the limits (articles 276, 285, 286, 289); the cases Navinchandra Mafatlal, Hoechst and Mohit Minerals.

The basic rule: article 265

Article 265 says: "No tax shall be levied or collected except by authority of law." "Law" here means a law made by a competent legislature. An executive order cannot impose a tax. So every tax must pass two tests. First, a legislature must have power to make that tax law. Second, the law must be valid under the rest of the Constitution, including the fundamental rights.

The taxing powers answer the first test. They are found in Part XI (articles 245 to 248), the Seventh Schedule and Part XII (articles 264 to 290).

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Article 246 and the Seventh Schedule

Under article 246(1), Parliament has exclusive power over the matters in List I (the Union List). Under article 246(3), the State Legislature has exclusive power over List II (the State List). Both may legislate on List III (the Concurrent List).

The Constitution names each tax separately. A tax can be levied only under a taxing entry, an entry that names the tax. A general entry, such as "agriculture", allows regulation but not taxation. This is why the State taxes agricultural income under entry 46 of List II and not under its general power over agriculture.

The Union's taxing powers

The main taxing entries of List I are:

  1. Entry 82: taxes on income other than agricultural income. The Income-tax Act, 1961 and its successor, the Income-tax Act, 2025, rest on this entry.
  2. Entry 83: duties of customs, including export duties.
  3. Entry 84: excise on petroleum crude, high speed diesel, petrol, natural gas, aviation turbine fuel, and tobacco and tobacco products (as substituted in 2016).
  4. Entry 85: corporation tax.
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  1. Entries 86 to 91: taxes on capital value of assets, estate duty, terminal taxes, stock exchange taxes and stamp duty rates on named instruments.
  2. Entries 92A and 92B: taxes on inter-State sale and on consignment of goods.
  3. Entry 96: fees on any List I matter.

Article 248 and entry 97 of List I give Parliament the residuary power. It may impose "any tax not mentioned" in List II or List III. Service tax was levied for years under this power before GST.

The States' taxing powers

The main taxing entries of List II are:

  1. Entry 45: land revenue.
  2. Entry 46: taxes on agricultural income.
  3. Entry 49: taxes on lands and buildings.
  4. Entry 51: excise on alcoholic liquor for human consumption, opium and narcotics.
  5. Entry 53: taxes on the consumption or sale of electricity.
  6. Entry 54: taxes on the sale of petroleum products and alcoholic liquor, other than inter-State and import or export sales.
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  1. Entries 56 to 59: taxes on goods and passengers by road, vehicles, animals and boats, and tolls.
  2. Entry 60: taxes on professions, trades, callings and employments.
  3. Entry 62: entertainment taxes, to the extent levied by local bodies.
  4. Entry 63: rates of stamp duty on other documents.

Entry 66 covers fees.

List III has no general taxing entry. It touches tax only in entry 35 (principles of taxing vehicles), entry 44 (stamp duties, not rates) and entry 47 (fees).

The GST provisions after the 101st Amendment

The Constitution (One Hundred and First Amendment) Act, 2016 made a new, shared power.

  1. Article 246A(1): "Notwithstanding anything contained in articles 246 and 254", Parliament and every State Legislature have power to make laws on goods and services tax imposed by the Union or by that State.
  2. Article 246A(2): Parliament alone legislates on GST where the supply takes place in the course of inter-State trade or commerce.
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  1. Article 269A: GST on inter-State supplies, and on imports, is levied and collected by the Union. It is shared with the States as Parliament provides on the GST Council's recommendation.
  2. Article 279A: the GST Council recommends rates, exemptions, thresholds and model laws.

The amendment also omitted entries 92 and 92C of List I and entries 52 and 55 of List II, as those taxes merged into GST.

Limits on the taxing powers

  1. Article 276(2): a profession tax may not exceed Rs 2,500 a year for one person.
  2. Article 285: Union property is exempt from State taxes, unless Parliament provides otherwise.
  3. Article 289: the property and income of a State are exempt from Union taxation, subject to clause (2) for trade or business.
  4. Article 286: a State cannot tax a supply that takes place outside the State or in the course of import or export.
  5. Articles 301 to 304: freedom of trade and commerce; a State tax must not discriminate against goods from other States.
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The cases

Navinchandra Mafatlal v. Commissioner of Income-tax, Bombay City, AIR 1955 SC 58. Section 12-B of the Income-tax Act, 1922 taxed capital gains. The assessee argued that "income" in the federal entry could not include capital gains. A five-judge bench rejected this and upheld the section. Words in a constitutional entry conferring legislative power are read in their widest sense. So Parliament's income tax power under entry 82 includes capital gains.

Hoechst Pharmaceuticals Ltd v. State of Bihar, AIR 1983 SC 1019. A Bihar law imposed a surcharge on sales tax and forbade dealers to pass it on. Drug makers said it clashed with a central price control order. The Supreme Court upheld the State law. Entry 54 of List II is a taxing entry. Repugnancy under article 254 arises only in the Concurrent field. So a valid State tax law is not displaced merely because a Union regulatory law touches the same trade.

Union of India v. Mohit Minerals Pvt Ltd, (2022) 10 SCC 700, decided on 19 May 2022. The Court held that GST Council recommendations are not binding on Parliament and the State Legislatures. Under article 246A both have simultaneous power over GST. The Council's advice is persuasive, a part of cooperative federalism.

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Conclusion. Article 265 makes law the only source of tax, and article 246 with the Seventh Schedule decides which legislature may make that law. Parliament holds income tax, customs, central excise, corporation tax and the residuary power, while the States hold land, agricultural income, liquor, petroleum sales and professions. Since 2016, GST is a shared power under article 246A, with Parliament alone taxing inter-State supplies under article 269A. Each power stops at the limits in articles 276, 285, 286 and 289 and at the fundamental rights.

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