JUDGMENT U. L. BHAT, C.J. - The petitioner, a Government company, on which demand has been made for payment of terminal tax for import and export of goods by the Sarni Municipality has filed writ petition challenging the notifications, annexures P-1 and P-3, and seeking a declaration that the Municipal Council is incompetent to levy and collect terminal tax on the goods and the demands raised are invalid. Return has been filed on behalf of respondents Nos. 2 and 3. We have heard learned counsel for the petitioner, learned Additional Advocate-General for the State and learned counsel for the Municipal Council. 2. Learned counsel for the petitioner urged the following submissions before : (1) The Government was not competent to take out certain areas from two Gram Sabhas and convert the same into a notified area initially and subsequently into a municipality. Since the constitution of the municipality is incompetent, levy of terminal tax by the Municipality is illegal. (2) Terminal Tax sought to be imposed by the Municipality is actually entry tax, which the State Government alone can impose. Total taxation is illegal, inasmuch as the entry tax is being levied by the State. 2A. There were at one time two Gram Sabhas by name Loniya and Sakud, the former taking in the whole of Sarni village and the latter taking in the whole of four villages. By notification (annexure P-3), dated October 27, 1978, the State Government, under section 361(2)(a) of the M.P. Panchayats Act, 1962, excluded certain areas from the two Panchayats and by notification (annexure P-3-A) of the same date, the Government constituted a notified area under section 340 of the M.P. Municipalities Act, 1961, in relation to areas excluded from the two Gram Sabhas. By annexure P-3B, in the year 1982, the Government converted the notified area into a Municipality Class IV, under section 5(4)(a) of the M.P. Municipalities Act, 1961. Subsequently, it was upgraded a Municipality Class II. 3. Section 340 of the Municipalities Act, 1961, is no longer in the statute book and the same has been deleted by Act No. 17 of 1994. Section 340, as it existed, read as follows : "340. Constitution of Notified area. Subsequently, it was upgraded a Municipality Class II. 3. Section 340 of the Municipalities Act, 1961, is no longer in the statute book and the same has been deleted by Act No. 17 of 1994. Section 340, as it existed, read as follows : "340. Constitution of Notified area. - (1) If, in the opinion of the State Government, improved arrangements are required within a specified local area which it is not expedient to constitute as a Municipality, the State Government may, by notification declare such local area to be a 'notified area' (2) The provisions of section 5 shall apply to the issue of notification under this section." "Local area" has not been defined in the Act, through several provisions contain the expression. Section 5 deals with creation, alternation of limits or abolition of Municipalities. After following the requirements, it is open to the State Government to declare any local area to be a municipality, or to include any local area or any specified part thereof in the municipality amalgamated, constitute a new municipality in place of a municipality amalgamated, to split up a municipality and to constitute two or more municipalities in its palace or withdraw the whole area comprised in any municipally from the operation of the Act. 4. Learned counsel for the petitioner, relying on the dictionary meaning of "local area" contended that a local area has fixed boundaries as formed by geological and natural process. Certain areas were taken out of the two Gram Sabhas and made into a notified area as the provision contemplates only a "specified area" being declared as a notified area. We are unable to agree with this contention. The expression "local area" may have a technical connotation in taxation statute and particularly in statutes relating to entry tax, but we are unable to find any technical meaning for the expression used either in section 5 or section 340 of the Act. The expression "local area" denotes some area which requires specification. Use of the expression "specified local area" does not mean that the area which has a separate identity alone can be declared to be a notified area. "An area" cannot have any limitations in its meaning. An area measuring one sq. mile is a "local area". It is also part of a "local area" which may measure 10 sq. miles or 100 sq. miles. "An area" cannot have any limitations in its meaning. An area measuring one sq. mile is a "local area". It is also part of a "local area" which may measure 10 sq. miles or 100 sq. miles. There is nothing in the scheme of the Act or the scheme of the provisions of section 5 and section 340 of the Act to indicate any limitation on the power of the State Government to take area from two deferent Gram Panchayats and to club them in a single notified area. In fact, when the two areas which are contiguous are clubbed forming a notified area, that area can be taken to be within the expression "a local area". There was nothing illegal in the Government clubbing portions of two Gram Sabhas into a notified area. The contention that the municipality was illegally constituted cannot pass muster. 5. It was next contended that the terminal tax is a substitute for entry tax. Power of the municipality to levy tax has been taken away and by means of terminal tax, the municipality is only trying to impose tax through the back door and the petitioner cannot be required to pay entry tax as well as terminal tax on entry of goods into the local area of the municipality. Terminal tax is quite different from entry tax. Entry 89 in List I of the Seventh Schedule of the Constitution of India taking in terminal tax on goods or passengers carried by railway in one case and in the other case carried by road. Entry 52 in List II of the Seventh Schedule of the Constitution relates to taxes on the entry of goods into a local area for consumption, use or sale therein. Specifications of the two taxes separately in the Lists itself would show that the taxes are of different nature. In Punjab Flour & General Mills v. Lahore Corporation AIR 1947 FC 14, the Federal Court observed that there is a definite distinction between the two types of taxes. In Central India Spinning and Weaving and Manufacturing Co. Ltd., The Empress Mills, Nagpur v. Municipal Committee, Wardha AIR 1958 SC 341 , the Supreme Court relied on the above observations of the Federal Court and noticed similarities in the incidence of taxation. In Central India Spinning and Weaving and Manufacturing Co. Ltd., The Empress Mills, Nagpur v. Municipal Committee, Wardha AIR 1958 SC 341 , the Supreme Court relied on the above observations of the Federal Court and noticed similarities in the incidence of taxation. In Man Mohan Tuli v. Municipal Corporation of Delhi AIR 1981 SC 991 , the Supreme Court noticed similarities and dissimilarities in the terminal tax and octroi. It was also noticed that the two taxes are similar kinds of levies which are closely interlinked with destination of the goods and the user in the local area on arrival of the goods. 6. At best, it can be said that there are certain common features in the terminal tax and the entry tax but it cannot be said that their incidence is identical. The entry tax is on entry of goods, in the local area for use, consumption or sale therein. Terminal tax is a tax on imports of goods into or export of goods from a local area. The incidence, coverage and effect of the two taxes are different. There is no principle of law by which the court can hold that when the State imposes entry tax, the Corporation cannot impose terminal tax. 7. In the result, we find no ground for interference made out by the petitioner and accordingly dismiss the petition with costs. Petition dismissed.