(1) When any provision of this Act or any rule or bye-law is applied with or without modification to a transitional area, such provisions of the Act or the rules or bye-law made thereunder shall, unless a different intention appears, operate as if the transitional area were a municipal area within the jurisdiction of a municipal council and the powers and duties of the municipal council were vested in the Town Panchayat.

(2) When any tax is imposed by a Town Panchayat in a transitional areaunder any of the provisions of this Act as applied under section 353, the proceeds of such tax shall be expended in the same manner in which and for the purposes for which the municipal fund may be expended by a municipal council.