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2001 DIGILAW 714 (JHR)

STATE OF JHARKHAND v. MUKESH PRASAD

2001-10-04

D.N.PRASAD, VINOD KUMAR GUPTA

body2001
Judgment : V. K. GUPTA, C. J, J. ( 1 ) THIS appeal under Clause 10 of the Letters Patent is directed against the judgment dated 26/07/2001 whereby the writ application filed by Respondent No. 1 writ petitioner against Ramgarh Cantonment Board (Respondent No. 2) and others including the State of Jharkhand and Deputy Commissioner, Hazaribagh (Appellant Nos. 1 and 2) was allowed and the impugned restrictions put by the appellant No. 2, the Deputy Commissioner, Hazaribagh, were quashed. ( 2 ) THE brief facts leading to the filing of this appeal are that Ramgarh Cantonment Board, a Board constituted under the Cantonments Act, 1924, in purported exercise of the power allegedly vested in it under S. 60 of the Cantonments Act, 1924, invited tenders for collection of Vehicles Tax from the vehicles entering into Ramgarh Cantonment area. In response, many persons including writ-petitioner submitted their tenders and deposited earnest money of Rs. 25,000. 00. The writ petitioner being the highest bidder was accordingly, awarded the contract and asked to realise the Vehicles Tax @ Rs. 10. 00 from each goods vehicle entering Ramgarh cantonment area for a period of six months starting from 12/03/2001. Even while this contract was in vogue the Cantonment Board appears to have issued an office order immediately thereafter restraining the writ-petitioner from collecting the aforesaid tax from any vehicle because of some objections raised by the Deputy Commissioner, Hazaribagh. The contention of the Deputy Commissioner, Hazaribagh, was that the Cantonment Board was not authorised to levy any tax on the entry of vehicles in the Ramgarh Cantonment area. ( 3 ) THE contention of the Ramgarh Cantonment Board and the writ-petitioner-contractor before the learned single Judge was that in terms of S. 60 of the Cantonment Act, 1924, the Cantonment Board is empowered to impose the aforesaid tax within the Cantonment area and that the procedure prescribed in S. 61 and 62 of the Act having been followed, the Board was within its jurisdiction to levy the tax. ( 4 ) IN order to appreciate the true import of the rival contentions between the parties, we have to consider the legislative scheme to find out whether, in fact, the Cantonment Board in the present case has any authority, power, competence and jurisdiction to levy any tax on the entry of vehicles in the Cantonment area. ( 4 ) IN order to appreciate the true import of the rival contentions between the parties, we have to consider the legislative scheme to find out whether, in fact, the Cantonment Board in the present case has any authority, power, competence and jurisdiction to levy any tax on the entry of vehicles in the Cantonment area. The Board is relying upon S. 60 of the Cantonments Act, 1924 as being the source of the aforesaid power, authority and jurisdiction. Section 60 reads thus :-"60. General power of taxation : (1) The Board may, with the previous sanction of the Central Government, impose in any cantonment any tax which under any enactment for the time being in force, may be imposed in any municipality in the State wherein such cantonment is situated. (2) Any tax imposed under this section shall take effect from the date of its notification in the official Gazette, or where any later date is specified on this behalf in the notification from such later date. " ( 5 ) AS would be clearly seen, the power to levy any tax in any Cantonment Board area, mentioned in sub-Sec. (1) of S. 60 (supra) is dependent upon and co-existent with any such corresponding power that may be vesting in any Municiplity in that area and such power in any such Municipality being relatable to and dependent upon any legislative enactment concerning, governing or regulating, the powers of such Municipality. In other words, sub-sec. (1) of S. 60 of Cantonments Act not being a totally independent provision by itself, in the sense that the power by itself has not given to the Board to levy tax since the provision is related to and dependent upon any corresponding analogous provision in a legislative enactment relating to a Municipality in that area. If, as is thus understood, a Municipality in an area has the power to levy tax under a relevant enactment, by virtue of the power created under sub-sec. (1) of S. 60, the power would stand vested in a Cantonment Board. Now to find out whether any such power exists or stands vested in any Municipality in the area in question (if there were a Municipality for that area ). We have to advert to Bihar and Orissa Municipal Act, 1922. Section 82 of 1922 Act falls in Chapter IV which deals with the subject of Municipal Taxation. Now to find out whether any such power exists or stands vested in any Municipality in the area in question (if there were a Municipality for that area ). We have to advert to Bihar and Orissa Municipal Act, 1922. Section 82 of 1922 Act falls in Chapter IV which deals with the subject of Municipal Taxation. Part I of Chapter IV relates to the subject of Imposition of Taxes. the relevant extract of S. 82 for our purposes reads thus:-"82 (1) : The Commissioners may, from time to time at a meeting convened expressly for the purpose, of which due notice shall have been given subject to the provisions of this Act and with the sanction of the State Government, impose within the limits of the municipality the following taxes and fees, or any of them : -. . . . . . . . . . . . (f) a tax on the vehicles, horses and other animals named in the First Schedule;. . . . . . "since there is a reference to First Schedule in clause (f) (supra), it is advantageous to reproduce that First Schedule to 1922 Act. The relevant extracts of First Schedule are as under :-"the First Schedule" (See Sections 82 (1) (f) and 137)tax ON VEHICLES, HORSES AND OTHER ANIMALS "per quarter" rs. P. For every four wheeled vehicle drawn by two horses. . . . . . . . . . . . 10-00 for every two wheeled vehicle other than those specified above. . . 5. 00 since a reference is made to S. 137 of the 1922 Act, it shall be profitable to notice S. 137 also. It reads thus :-"137: Tax on vehicles, horses and other animals specified in the First Schedule shall be imposed, the Commissioners at a meeting shall, subject to the provisions of S. 138, make an order that the owner of every vehicle, horse and every other animal of the kind specified in the said schedule, which is kept or is used in the ordinary course within the municipality, or which is kept without the municipality and is used in the ordinary course within it, shall pay the tax in respect of such vehicle horse or other animal and shall cause such order to be published in the manner described in S. 356. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . "( 6 ) A combined reading of Ss. 82 and 137 as also a bare look at the First Schedule of 1922 Act clearly suggest that a Municipality under 1922 Act has the power, authority and jurisdiction to levy a tax on the vehicles as are named in the First Schedule, but such tax is leviable only in respect of such vehicles which are kept or are used in the ordinary course within the Municipality. This is fortified by the fact that in the first Schedule, the tax rate is with respect to "per quarter". The expression "per quarter" as used in the First Schedule read with Ss. 82 and 137 of the 1922 Act clearly indicate the legislative intention that the tax to be imposed and levied under these provisions on vehicles is with respect to such vehicles which are kept or are used within the municipal limits in the ordinary course. This tax is not leviable on the vehicles entering the municipal limits. ( 7 ) IN the case of Cantonment Board, Mhow v. M. P. State Road Transport Corpn. AIR 1997 SC 2013 , their Lordships of the Supreme Court while dealing with a matter relating to the interpretation and applicability of S. 60 of the Cantonment Act with reference to the corresponding provisions in the Municipal law, observed as under :-"thus considered, the tax leviable on Motor Vehicles when used or Kept for use under S. 3 (2) of the Madhya Pradesh Motor Vehicles Taxation Act is different from the tax leviable on Motor Vehicles. Entering the limits of the Municipality under S. 127 (1) (iii) of the Madhya Pradesh Municipalities Act, 1961, and there is no repugnancy between the two and both the provisions can therefore operate in its own field. Since under S. 127 (1) (iii) of the Municipalities Act, Municipality could levy a tax on Motor Vehicles entering the limits of the Municipality, the same could be levied by the Cantonment Board in exercise of its power under S. 60 of the Cantonment Act with the previous sanction of the Central Government. Since under S. 127 (1) (iii) of the Municipalities Act, Municipality could levy a tax on Motor Vehicles entering the limits of the Municipality, the same could be levied by the Cantonment Board in exercise of its power under S. 60 of the Cantonment Act with the previous sanction of the Central Government. Consequently, notifications issued by the Cantonment Boards of Mhow, Jabalpur and Saugar were valid notifications issued under S. 60 of the Cantonments Act and imposition of tax on Motor Vehicles entering into the limits of the Cantonment Boards cannot be said to be invalid or inoperative. The High Court in our opinion committed error in striking down those notifications on the ground of repugnancy with this special legislaion, namely, the Madhya Pradesh Motor Vehicles Taxation Act. "it is noteworthy, however, that in the course of same judgment their Lordships were also discussing the scope of Ss. 3 and 6 of the Madhya Pradesh Motor Vehicles Taxation Act, 1947 vis-a-vis S. 127 of the Madhya Pradesh Municipalities Act, 1961. In order to appreciate the true perspective relating to the interpretation of the aforesaid provisions, in the light of the ratio in the aforesaid judgment of the Supreme Court, it is advisable to take notice of S. 127 of the Madhya Pradesh Municipalities Act, 1961. This Section reads thus :-"127. Taxes which may be imposed - (1) A council may, from time to time, and subject to the provisions of this Chapter, and any general or special order which the State Government may make in this behalf, impose in the whole or in any part of the Municipality any of the following taxes, for the purposes of the Act, namely, :- (iii) a tax on vehicles, boats and animals used as aforesaid entering the limits of the Municipality but not liable to taxation under clause (ii ). " ( 8 ) IN contra-distinction to S. 127 of the Madhya Pradesh Municipalities Act, 1961, S. 3 of Madhya Pradesh Motor Vehicles Taxation Act, 1947, provide for the levy of a tax on motor vehicles used or kept for use in a Municipality or in any other area. " ( 8 ) IN contra-distinction to S. 127 of the Madhya Pradesh Municipalities Act, 1961, S. 3 of Madhya Pradesh Motor Vehicles Taxation Act, 1947, provide for the levy of a tax on motor vehicles used or kept for use in a Municipality or in any other area. These observations of the Supreme Court with regard to such provisions are contained in paragraph 3 of the judgment :-"the Madhya Pradesh Motor Vehicles Taxation Act, 1947 (M. P. Act No. VI of 1947) provide for the levy of a tax on Motor Vehicles in Madhya Pradesh. Section 3 (1) of the tax on motor vehicles used or kept for use at the rate specified in the First Schedule readwith sub-sec. (2) of S. 3 of the said Act. "( 9 ) AFTER discussing the aforesaid three provisions in three enactments, their Lordships observed thus :-"the admitted position that emerges from the facts already narrated are that the Cantonment Act,1924 is a the earliest in point of time which empowered the Cantonment Board to impose tax with the previous sanction of the Central Government which tax could be imposed in any Municipality in the State where such Cantonment is situated. The Madhya Pradesh Motor Vehicles Taxation Act, 1947 is a special provision dealing with levy of tax on Motor Vehicle which is used or kept for use. There is no provision in the aforesqaid Taxation Act for levy of any tax on entry of Motor Vehicles alone. The Municipalities Act of 1961, however, authorises imposition of tax on vehicles, boats and animals entering the limits of the Municipality as provided in S. 127 (1) (iii) of the said Act. In the aforesaid premises it is required to be considered and decided as to whether the Cantonment Board could impose tax on vehicles entering the limits of the Cantonments which could have otherwise been levied by the Municipality, in exercise of power under S. 127 (1) (iii) of the Municipalities Act. It may be further noticed that the Motor Vehicles Taxation Act as well as the Municipalities Act are both enacted by the State Legislature. The first question that arises for consideration is whether there is any repugnency between the provisions of the Motor Vehicles Taxation Act and the Municipalities Act in relation to impositition of tax on Motor Vehicles entering the limits of the Municipality. The first question that arises for consideration is whether there is any repugnency between the provisions of the Motor Vehicles Taxation Act and the Municipalities Act in relation to impositition of tax on Motor Vehicles entering the limits of the Municipality. As has been stated earlier under the Taxation Act, tax could be imposed on the Motor Vehicles which is used or kept for use as provided in S. 3 (2) of the said Act and there is no provision for imposition of tax on vehicles which is neither used nor kept for use but for mere entry into any municipal limits. When the legislatures imposed a ban on levy of tax by any local authority under S. 6 of the Taxation Act what is prohibited is levy of tax which is leviable under S. 3 (2) of the Taxation Act. When the same legislature enacted the Municipalities Act in 1961 and authorised the Municipalities to impose tax on vehicles entering the limits of the Municipality under S. 127 (1) (iii) they must be presumed to be aware of the provisions of the Taxation Act and leviability of the tax thereunder in respect of Motor Vehicles used or kept for use. . . . . . " ( 10 ) VIEWED thus, we have no doubt in our mind that by levying and imposing the tax on the motor vehicles entering the limits, areas or territories of the Cantonment Board, the Ramgarh Cantonment Board, respondents Nos. 2 and 3 in this appeal have transgressed their jurisdiction as was vesting in the Board under S. 60 of the Cantonment Act and have imposed and levied a tax for which the legislative sanction is wanting and it was not permissible for the Board to do. The tax in question is not with respect to the use or keeping of the vehicles in the Cantonment area, but with respect to the entry of the vehicles. It is not the case of the Cantonment Board that the vehicles entering the area of the Board remain there, or are kept there, or these use the territories of the Cantonment Board. It is not the case of the Cantonment Board that the vehicles entering the area of the Board remain there, or are kept there, or these use the territories of the Cantonment Board. It is the admitted and undisputed case of the parties, that Ramgarh town is on the National Highway, a very busy National Highway, and the vehicles passing through this National Highway going from one destination to another, have to willy-nilly and per force enter that stretch of the National Highway which forms a part of the Ramgarh Cantonment Board. The vehicles, thus, actually just pass through the Ramgrah Cantonment Board area only because the National Highway is located on that stretch of the Cantonment Board area, even though it is a very small stetch of just a couple of kilometers. It is just incidental that these vehicles rushing through the National Highway enter the Ramgarh Cantonment Board area and leave also with in a matter of a couple of minutes. It cannot be, therefore, at all said that these vehicles either use the Ramgrah Cantonment area or are kept there in the ordinary course of their business, trade or calling. ( 11 ) THE Deputy Commissioner, Hazaribagh, was therefore, fully justified in objecting to the levy of the impugned tax because of the abovestated clear legislative position which patently precluded the Cantonment Board from issuing any order or notification levying such a tax. Ramgarh Cantonment is a part of Hazaribagh district and, therefore the Deputy Commissioner, Hazaribagh, was performing his functions and discharging his duties as Chief Executive of this District, and rightly so. With the ever expanding multi-dimensional traffic on the National Highways and the paramount imperative need to ensure rapid, faster and smooth flow of traffic on the National Highways, it is inconceivable that obstructions are put by any executive order in the uninterrupted, smooth and faster movement of the traffic. We are presently moving in the direction of liberalising the trade regime, attempting to remove all barriers and here comes an attempt which seeks to levy entry tax on motor vehicles for a stretch of a busy National Highway. Didnt the cantonment Board realise that by its move of levying entry tax, for collecting such a tax, the vehicles have to stop, thus retarding the smooth, un-interrupted and fast flow of traffic? Didnt the cantonment Board realise that by its move of levying entry tax, for collecting such a tax, the vehicles have to stop, thus retarding the smooth, un-interrupted and fast flow of traffic? This was just another aspect of the matter and we thought we must make observations on such aspect because these are pertinent in the present-day scenario where liberal trade concepts are taking over from the old conservative and archaic restrictions and barriers. We have no doubt, therefore, that everyone concerned should make all-out efforts in ensuring smooth, fast and un-interrupted flow of traffic on National Highways rather than obstructing the same. ( 12 ) IN the judgment under appeal, the learned single Judge did not take notice of S. 82, S. 137 or the First Schedule to 1922 Act. May be these provisions were not brought to his notice. As is now clearly evident, S. 60 of the Cantonments Act being dependent on these provisions and these provisions not catering to the levy of any tax on motor vehicles entering the area of a Municipality, the Cantonment Board under S. 60 of the Cantonments Act, thus, had no jurisdiction, power or authority whatsoever to levy any such tax. The judgment under appeal, therefore, is set aside and the appeal, accordingly, is allowed with all consequences, but without any costs. Appeal allowed. --- *** --- .