During World War II, he was Army Chief of Staff of the Axis puppet state, the Independent State of Croatia (Croatian: Nezavisna Država Hrvatska, NDH), from June 1941 until August 1942, when he resigned his commission purportedly in protest of the atrocities committed by the Ustaše Militia.

[1] During the First World War he was commander of the 18th Mountain Brigade, and was one of only 131 men [2] who were awarded the Military Order of Maria Theresa, the highest Habsburg decoration; in Laxa's case for the “heroism, enormous bravery, and tenaciously successful defence of positions” by himself and his men on Škabrijel (Italian: Mount Saint Gabriel) during the Eleventh Battle of the Isonzo in 1917.

[citation needed] After the war ended, he joined the newly formed army of (what became known later as) the Kingdom of Yugoslavia.

He took part in a conference in Opatija (2–3 March 1942) that planned the Third anti-partisan offensive, codenamed ‘Trio’.

He remained in the NDH high command until August 1942 when he resigned (although there is a source that claims that Laxa was "removed by order of Marshal Slavko Kvaternik and retired") due to his protestations about atrocities committed by Ustaše irregulars.