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Madhya Pradesh High Court · body

2012 DIGILAW 929 (MP)

Mohan Chopada v. State of M. P.

2012-09-25

R.S.JHA

body2012
JUDGMENT : All these petitions have been filed by the petitioners who are dealers in timber and have purchased timber from the Forest Depot at Umariya and have been subjected to terminal tax by the Municipal Council, Umariya at rates which have been revised from time to time. All the petitioners have assailed the rate of terminal tax levied by the Municipal Council, Umariya on identical grounds. As all these petitions are identical and involve similar and identical issues, they are heard and decided concomitantly. 2.The short facts leading to the filing of the present petitions are that the petitioners, who are dealers in timber and have saw-mills in Jabalpur, have filed these petitions being aggrieved by the rates of terminal tax determined and recovered by the Municipal Council, Umariya under the provisions of M.P.Municipalities Act, 1961 (hereinafter referred to as 'the Act'). 3.It is stated that the petitioners have purchased timber from the Forest Depot, Umariya and on the said purchase the Municipal Council, Umariya initially levied 0.50% terminal tax on the price of the timber by notification dated 6-3-1984 (Annexure P/l). On 13-2-1994 ( Annexure P/4) this rate was enhanced from 0.50% to 1.50%.From 31-10-2000 (Annexure P/6) it was enhanced from 1.50% to 2.00% and from 30-7-2003 (Annexure P/8) it was enhanced from 2.00% to 3.00%. 4.It is stated by the learned counsel for the petitioners that the petitioners continued to pay terminal tax at the rate enhanced by the Municipal Council from time to time till the year 2009.It is stated that in 2009 they came to know that this Court, in W.P.No.3277/99 and W.P.No.5215/99 decided on 4-4-2002 and 26-8-2002 respectively, had quashed the enhancement of rate of terminal tax made by the Municipal Council, Umariya beyond the rate prescribed by the State Government by the M.P.Terminal Tax (Assessment and Collection) on the Goods Exported from Madhya Pradesh Municipal Limits, Rules 1996 (for short "the Rules of 1996"), in respect of liquor and Mahua and therefore, the petitioners filed representations seeking information in this regard before the Municipal Council, Umariya in the month of June, 2009 which are annexed as Annexure P/ll along with the respective petitions. The petitioners also sought information under the Right to Information Act from the respondent/Municipal Council, Umariya regarding the notifications on the basis of which terminal tax was being imposed. The petitioners also sought information under the Right to Information Act from the respondent/Municipal Council, Umariya regarding the notifications on the basis of which terminal tax was being imposed. As there was no response from the respondent/Municipal Council, Umariya, the petitioners have filed the present petitions before this Court. 5.The terminal tax imposed by the Municipal Corporation is challenged by the petitioners on two grounds, firstly; that the tax levied by the Municipal Council, Umariya is contrary to the provisions of the Rules of 1996 as the rate at which the tax is sought to be recovered by the Municipal Council, Umariya, is more than the rate prescribed by the State Government and therefore, in view of the decisions of this Court rendered in the case of Chief Municipal Officer, Kymore vs. Etemit Everest Ltd. and another, 2000(2) MPLJ 297, the same deserves to be quashed and secondly; the manner in which the tax is being recovered from the petitioners is contrary to the procedure prescribed by law as the respondents are recovering the tax by stopping the trucks and vehicles of the petitioners which is contrary to the law laid down by this Court in the case of Moolji Bhai and 78 others vs. State of M.P. and another, 2000(2) MPHT477.On the aforesaid grounds the petitioners have also sought refund of the excess tax collected by the Municipality. 6.The respondent/Municipal Council, Umariya has filed a return and submitted that the tax that has been imposed and is being levied by the Municipal Council is in accordance with the provisions of sections 127 and 129 of the M.P.Municipalities Act, 1961 by passing a resolution and determining the rate of tax.It is further submitted by the learned counsel for the respondent/Municipal Council, Umariya that in view of the Division Bench decision of this Court rendered in the case of Vyapar Mandal Mandi, Morena vs.State of M.P.and others, 2004 (2) MPLJ 482 , recovery being made by the Municipal Council at the depot itself, without installing any barrier or Naka, is in accordance with law and does not call for any interference by this Court.The claim for refund has also been opposed by the respondents. 7.I have heard the learned counsel for the parties at length.8.Before I advert to the issues raised by the petitioners in the present petitions, it would be appropriate to refer the relevant provisions of the M.P.Municipalities Act, 1961.Section 127 of the Act enumerates the taxes that can be levied under the provisions of the M.P.Municipalities Act by the concerned Municipality.Section 127(1) of the Act enumerates obligatory taxes while section 127(6) of the Act, enumerates optional taxes which the council may impose.Section 127(6) of the Act, provides that in addition to the tax specified in sub-section (1) the council may impose the tax enumerated therein subject to any general or special order which the State Government may make in this behalf.Section 127(6) (n) of the Act provides for imposition of terminal tax on goods or animals exported from the limit of the council. 9.In exercise of powers conferred under section 355 read with sections 127 and 129 of the Act, the State Government has notified the 1996 Rules.Sub Rule (2) of Rule 1 provides that the rules shall come into force from the date the Municipality decides to impose the terminal tax on goods exported from the municipal limits with a proviso appended thereto to the effect that in case the council has already imposed the said tax, the rules shall come into force from the date of their publication i.e.7-3-1997. 10.The proposed schedule prescribing the rate of terminal tax appended to the Rules provides for imposition of terminal tax at the rate of 0.50% on all sort of timber used for building construction by the Municipal Council.Prior to coming into force the rules of 1996 w.e.f.7-3-1997 various municipalities in the State of M.P.were imposing terminal tax and other taxes on various rates by passing a resolution under section 129 of the Act.Even after coming into force the Rules of 1996, some of the municipalities continued to levy terminal tax at higher rates than the rates prescribed by the rules. 11.The power and authority of the municipality to levy tax at higher rates than the rates prescribed by the Rules of 1996 was assailed before this Court in the case of Chief Municipal Officer, Kymore vs.Eternit Everest Ltd.and another, 2000(2) MPLJ 291 .In the aforesaid decision the Division Bench of this Court held that while the Municipal Council or Nagar Panchayat concerned had the power to impose terminal tax by passing a resolution under section 129 of the Act on obtaining the approval of the State Government at the rates decided by them prior to coming into force the Rules of 1996, however, after coming into force the Rules of 1996, the Municipal Council or the Nagar Panchayat were bound to levy terminal tax at the rate prescribed by the Rules of 1996 and not above the same in view of the express provisions of section 127 (6) of the Act which specifically prescribes that the tax enumerated in that sub-section would be subject to any special and general order issued by the State Government.The judgment of this Court in the aforementioned case travelled to the Supreme Court and has been affirmed by the judgment rendered in the case of Associated Cement Companies Ltd.vs.State of MP and another, 2005(5) SCC 347 . 12.As far as the Municipal Council, Umariya is concerned, they continued to enhance the rates of terminal tax by passing resolutions even after coming into the force the Rules of 1996 as is evident from the documents Annexures P/5, P/6 and P/8 and therefore, certain persons who were exporting liquor and Mahua from the limit of Municipal Council, Umariya filed petitions before this Court assailing the enhancement of terminal tax which were registered as W.P.Nos.3277/99 and 5215/99.Relying on the decision of this Court rendered in the case of Chief Municipal Officer, Kymore (supra), this Court allowed W.P.No.5215/99 by order dated 4-4-2002 reported as 2003(2) MPLJ 340, Lal Narayan Singh vs.Chief Municipal Officer, and another quashing the resolution of the municipal council to impose terminal tax at higher rates than the rates prescribed by the Rules of 1996.Writ Petition No.3277/99 was decided in similar terms by order dated 26-8-2002, reported as 2003(2) MPLJ 26, Gajanand Agrawal vs.State of M.P.and another. 13.In view of the aforesaid pronouncements of law by this Court as well as the Supreme Court, the issue regarding powers of the municipalities to levy tax above the rates prescribed by the Rules of 1996 is no longer res integra and stands specifically concluded by the aforesaid judgment wherein it has been held that the Municipal Council, Umariya or for that matter any other Municipality or Nagar Panchayat cannot levy terminal tax above the rates prescribed by the Rules of 1996. 14.In view of the aforesaid facts and circumstances, the law laid down by this Court and the Supreme Court in the case of Chief Municipal Officer, Kymore (supra) which was followed by this Court in the case of Municipal Council, Umariya itself in the decisions reported in 2003(2) MPLJ 26, Gajanand Agrawal vs.State of M.P.and another and 2003(2) MPLJ 340, Lal Narayan Singh vs.Chief Municipal Officer and another, I am of the considered opinion that the resolution of the Municipal Council, Umariya prescribing higher rate of terminal tax than the rate prescribed in the Rules of 1996 even after coming into force of the aforesaid Rules of 1996, with effect from 7-3-1997, is without any authority of law as the Municipal Council, Umariya is bound to levy terminal tax at the rates prescribed by the State Government in the Rules and therefore, the Municipal Council, Umariya can levy terminal tax on all sort of timber used for building construction only at the rate of 0.50% w.e.f.7-3-1997 and not above or beyond the aforesaid rates till they are revised by the State itself.Consequently, the decisions of the respondent/Municipal Council, Umariya levying terminal tax at the rate above 0.50% after 7-3-1997 are hereby quashed. 15.It is next contended by the learned counsel for the petitioners that the terminal tax recovered by the Municipal Council, Umariya after coming into force of the Rules of 1996, above 0.50% be directed to be refunded to the petitioners. 16.It is pertinent to note that in spite of the aforesaid two decisions of this Court quashing the notification of Municipal Council, Umariya to levy terminal tax on higher rates than those prescribed in the Rules of 1996, the Municipal Council, Umariya again decided to enhance the rate of terminal tax from 2% to 3% by notification dated 30-7-2003 (Annexure P/8) and the petitioners without assailing the same continued to pay terminal tax till 2009. 17.It is alleged by the learned counsel for the petitioners that they came to know about the aforesaid decisions of this Court only in the year 2009 and therefore, they immediately filed representations before the respondent/Municipal Council in the month of June, 2009 asking them to furnish information regarding the decisions and notification issued by Municipal Council, Umariya imposing terminal tax and the authority to do so, however, the petitioners did not make any representation regarding refund of the tax paid by them. 18.The aforesaid prayer of the petitioners is vehemently opposed by the counsel for the Municipal Council, Umariya on the ground that the petitioners continued to pay enhanced rate of terminal tax even after coming into force the Rules of 1996 w.e.f.7-3-1997 without any objection till 2009.It is submitted that as the petitioners objected to the enhanced rate of terminal tax for the first time in 2009 the claim for refund made by them deserves to be rejected on the principle of waiver, estoppel and limitation. 19.The learned counsel for the respondents has further objected to the prayer for refund on the ground that the terminal tax being an indirect tax burden of which is passed on to the consumers as has been done by the petitioners in the present case therefore, in view of the principle of unjust enrichment no order of refund in favour of the petitioners can be ordered by this Court. 20.The petitioners, in order to support their claim for refund, have filed an affidavit stating that the petitioners purchase timber logs in lots which are brought to the sawmills where they are cut and sized depending upon their quality and thereafter sold at different rates depending upon the quality of the sized timber and therefore many a times the petitioners have to incur loss.It is further stated that the sized wood is not immediately sold and the stock remains unsold for months thereby diminishing its value.The petitioners have also stated in the affidavit that they have not passed on the liability to the consumers and have not recovered the amount of excess terminal tax paid to the Municipal Council from their consumers.In support of the statement, the learned counsel for the petitioners by way of an example has stated (during arguments as well as in the written submissions) that in case the petitioners purchase timber from the Umariya Depot for Rs.1000/- they have to pay 3% terminal tax thereon as a result of which timber purchased from Umariya Depot would cost Rs.1030/- whereas the timber purchased by them from any other depot where the terminal tax is in accordance with the Rules of 1996 would cost Rs.1005/-.He further states that in case the price of 10 cubic meter of timber is fixed at Rs.10/-which includes Rs.87-as cost of timber and Rs.21- as profit and the petitioners sell 10 cubic meter of such timber they would earn Rs.100/-out of which Rs.20/- would be the profit while Rs.80/-would be the cost of the wood.But in case the timer is purchased from Umariya Depot their profit would only be Rs.17.50/-in place of Rs.20/-and therefore, they would suffer loss of profit of Rs.2.50/-on the sale of 100 cubic meter of timber out of the logs purchased from the Umariya Depot and in such circumstances and on the strength of the aforesaid illustration it is submitted that the principle of unjust enrichment would not be applicable to deny the relief of refund to the petitioners as the petitioners have suffered loss in profit. 21.The learned counsel for the respondent/Municipal Council, Umariya per contra submits that the petitioners have infact transferred the tax liability upon the consumers and they have not given any details to establish to the contrary, and therefore, have failed to rebut the presumption of passing of the tax liability to the consumers.It is stated that in view of the aforesaid lack of details, the contention of the petitioners deserves to be rejected. 22.I have perused the affidavit filed by the petitioner and considered the submissions made by the learned counsel for the petitioners. 23.From a perusal of the record it is apparent that the petitioners have not filed any bills of sale to indicate that they have not charged or passed on the terminal tax to the consumers which they have paid to the Municipal Council.In fact the very example stated by the learned counsel for the petitioners before this Court itself amounts to an admission of the fact and also establishes that the petitioners have infact transferred the tax liability to the consumers and have therefore, earned less profit.In view of the aforesaid, I am of the considered opinion that the petitioners have failed to establish that they have suffered the liability themselves and have not passed on the tax liability to the consumers. 24.Though several judgments have been cited before this Court by both the learned counsel for the parties, I do not deem it necessary to refer to all of them as the issue of refund involved in the present case stands squarely covered by Nine Judge Bench decision of the Supreme Court in the case of Mafatlal Industries Ltd.and others vs.Union of India and others, (1997) 5 SCC 536 .The majority opinion in the aforesaid judgment is contained in paragraphs 78 to 86 in which the Supreme Court has held that any claim of refund of the tax whether it is based on (a); the ground that the tax was levied under an unconstitutional provisions, or (b); on the ground of misinterpretation/misapplication/erroneous interpretation of the Act/Rules or notification or erroneous finding of fact or in violation of fundamental principles of judicial procedure or (c); on the ground of mistake of law, cannot be automatically allowed even if it is found to be justified as it is subject to the principle of unjust enrichment as well as equitable considerations such as waiver, estoppel and limitation.The conclusions recorded by the majority in the aforesaid judgment have been summarized in paragraph 108 of the judgment which is quoted below for ready reference. "108.The discussion in the judgment yields the following propositions.We may forewarn that these propositions are set out merely for the sake of convenient reference and are not supposed to be exhaustive.In case of any doubt or ambiguity in these propositions, reference must be had to the discussion and propositions in the body of the judgment. (i) Where a refund of tax/duty is claimed on the ground that it has been collected from the petitioner/plaintiff whether before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991 or thereafter by misinterpreting or misapplying the provisions of the Central Excises and Salt Act, 1944 read with Central Excise Tariff Act, 1985 or Customs Act, 1962 read with Customs Tariff Act or by misinterpreting or misapplying any of the rules, regulations or notifications issued under the said enactments, such a claim has necessarily to be preferred under and in accordance with the provisions of the respective enactments before the authorities specified thereunder and within the period of limitation prescribed therein. No suit is maintainable in that behalf. No suit is maintainable in that behalf. While the jurisdiction of the High Courts under Article 226 and of this Court under Article 32 cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of section 11-B.This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it. The said enactments including section 11-B of the Central Excises and Salt Act and section 27 of the Customs Act do constitute "law" within the meaning of Article 265 of the Constitution of India and hence, any tax collected, retained or not refunded in accordance with the said provisions must be held to be collected, retained or not refunded, as the case may be, under the authority of law. Both the enactments are self-contained enactments providing for levy, assessment, recovery and refund of duties imposed thereunder. Section 11-B of the Central Excises and Salt Act and section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are constitutionally valid and have to be followed and given effect to. Section 72 of the Contract Act has no application to such a claim of refund and cannot form a basis for maintaining a suit or a writ petition. All refund claims except those mentioned under Proposition (ii) below have to be and must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. It is necessary to emphasise in this behalf that Act provides a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to a Tribunal which is not a departmental organ but to this Court, which is a civil Court. It is necessary to emphasise in this behalf that Act provides a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to a Tribunal which is not a departmental organ but to this Court, which is a civil Court. (ii) Where, however, a refund is claimed on the ground that the provision of the Act under which it was levied is or has been held to be unconstitutional, such a claim, being a claim outside the purview of the enactment, can be made either by way of a suit or by way of a writ petition.This principle is, however, subject to an exception: Where a person approaches the High Court or the Supreme Court challenging the constitutional validity of a provision but fails, he cannot take advantage of the declaration of unconstitutionality obtained by another person on another ground; this is for the reason that so far as he is concerned, the decision has become final and cannot be reopened on the basis of a decision on another person's case; this is the ratio of the opinion of Hidayatullah, C.J. in Tilokchand Motichand vs. H.B.Munshi, (1969) 1 SCC110 and we respectfully agree with it. Such a claim is maintainable both by virtue of the declaration contained in Article 265 of the Constitution of India and also by virtue of section 72 of the Contract Act. In such cases, period of limitation would naturally be calculated taking into account the principle underlying clause (c) of sub-section (1) of section 17 of the Limitation Act, 1963.A refund claim in such a situation cannot be governed by the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be, since the enactments do not contemplate any of their provisions being struck down and a refund claim arising on that account. In other words, a claim of this nature is not contemplated by the said enactments and is outside their purview. (iii) A claim for refund, whether made under the provisions of the Act as contemplated in Proposition (i) above or in a suit or writ petition in the situations contemplated by Proposition (ii) above, can succeed only if the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. (iii) A claim for refund, whether made under the provisions of the Act as contemplated in Proposition (i) above or in a suit or writ petition in the situations contemplated by Proposition (ii) above, can succeed only if the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the judgment. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any real loss or prejudice. The real loss or prejudice is suffered in such a case by the person who has ultimately borne the burden and it is only that person who can legitimately claim its refund. But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reason, it is just and appropriate that that amount is retained by the State, i.e., by the people. There is no immorality or impropriety involved in such a proposition. The doctrine of unjust enrichment is a just and salutary doctrine.No person can seek to collect the duty from both ends.In other words, he cannot collect the duty from his purchaser at one end and also collect the same duty from the State on the ground that it has been collected from him contrary to law.The power of the Court is not meant to be exercised for unjustly enriching a person.The doctrine of unjust enrichment is, however, inapplicable to the State.State represents the people of the country.No one can speak of the people being unjustly enriched. (iv) It is not open to any person to make a refund claim on the basis of a decision of a Court or tribunal rendered in the case of another person.He cannot also claim that the decision of the Court/tribunal in another person's case has led him to discover the mistake of law under which he has paid the tax nor can he claim that he is entitled to prefer a writ petition or to institute a suit within three years of such alleged discovery of mistake of law.A person, whether a manufacturer or importer, must fight his own battle and must succeed or fail in such proceedings.Once the assessment or levy has become final in his case, he cannot seek to reopen it nor can he claim refund without reopening such assessment/order on the ground of a decision in another person's case.Any proposition to the contrary not only results in substantial prejudice to public interest but is offensive to several well-established principles of law.It also leads to grave public mischief.Section 72 of the Contract Act, or for that matter section 17(1)(c) of the Limitation Act, 1963, has no application to such a claim for refund. (v) Article 265 of the Constitution has to be construed in the light of the goal and the ideals set out in the Preamble to the Constitution and in Articles 38 and 39 thereof.The concept of economic justice demands that in the case of indirect taxes like Central Excises duties and Customs duties, the tax collected without the authority of law shall not be refunded to the petitioner-plaintiff unless he alleges and establishes that he has not passed on the burden of duty to a third party and that he has himself borne the burden of the said duty. (vi) Section 72 of the Contract Act is based upon and incorporates a rule of equity.In such a situation, equitable considerations cannot be ruled out while applying the said provision. (vi) Section 72 of the Contract Act is based upon and incorporates a rule of equity.In such a situation, equitable considerations cannot be ruled out while applying the said provision. (vii) While examining the claims for refund, the financial chaos which would result in the administration of the State by allowing such claims is not an irrelevant consideration.Where the petitioner-plaintiff has suffered no real loss or prejudice, having passed on the burden of tax or duty to another person, it would be unjust to allow or decree his claim since it is bound to prejudicially affect the public exchequer.In case of large claims, it may well result in financial chaos in the administration of the affairs of the State. (viii) The decision of this Court in STO vs.Kanhaiya Lal Mukundlal Saraf, AIR 1959 SC 135 must be held to have been wrongly decided insofar as it lays down or is understood to have laid down propositions contrary to the propositions enunciated in (i) to (vii) above.It must equally be held that the subsequent decisions of this Court following and applying the said propositions in Kanhaiya Lal have also been wrongly decided to the above extent.This declaration - or the law laid down in Propositions (i) to (vii) above - shall not however entitle the State to recover the taxes/duties already refunded and in respect whereof no proceedings are pending before any authority/Tribunal or Court as on this date.All pending matters shall, however, be governed by the law declared herein notwithstanding that the tax or duty has been refunded pending those proceedings, whether under the orders of an authority, Tribunal or Court or otherwise. (ix) The amendments made and the provisions inserted by the Central Excises and Customs Law (Amendment) Act, 1991 in the Central Excises and Salt Act and the Customs Act are constitutionally valid and are unexceptionable. (ix) The amendments made and the provisions inserted by the Central Excises and Customs Law (Amendment) Act, 1991 in the Central Excises and Salt Act and the Customs Act are constitutionally valid and are unexceptionable. (x) By virtue of sub-section (3) to section 11-B of the Central Excises and Salt Act, as amended by the aforesaid Amendment Act, and by virtue of the provisions contained in sub-section (3) of section 27 of the Customs Act, 1962, as amended by the said Amendment Act, all claims for refund (excepting those which arise as a result of declaration of unconstitutionality of a provision whereunder the levy was created) have to be preferred and adjudicated only under the provisions of the respective enactments.No suit for refund of duty is maintainable in that behalf.So far as the jurisdiction of the High Courts under Article 226 of the Constitution - or of this Court under Article 32 - is concerned, it remains unaffected by the provisions of the Act.Even so, the Court would, while exercising the jurisdiction under the said articles, have due regard to the legislative intent manifested by ths provisions of the Act.The writ petition would naturally be considered and disposed of in the light of and in accordance with the provisions of section 11-B.This is for the reason that the power under Article 226 has to be exercised to effectuate the regime of law and not for abrogating it.Even while acting in exercise of the said constitutional power, the High Court cannot ignore the law nor can it override it.The power under Article 226 is conceived to serve the ends of law and not to transgress them. xi) Section 11-B applies to all pending proceedings notwithstanding the fact that the duty may have been refunded to the petitioner/plaintiff pending the proceedings or under the orders of the Court/Tribunal/Authority or otherwise.It must be held that Union of India vs.Jain Spinners, (1992) 4 SCC 389 and Union of India vs.ITC, 1993 Suppl.(4) SCC 326 have been correctly decided.It is, of course, obvious that where the refund proceedings have finally terminated - in the sense that the appeal period has also expired - before the commencement of the 1991 (Amendment) Act (19-9-1991), they cannot be reopened and/or governed by section 11-B(3) [as amended by the 1991 (Amendment) Act].This, however, does not mean that the power of the appellate authorities to condone delay in appropriate cases is affected in any manner by this clarification made by us. (xii) Section 11-B does provide for the purchaser making the claim for refund provided he is able to establish that he has not passed on the burden to another person.It, therefore, cannot be said that Section 11-B is a device to retain the illegally collected taxes by the State.This is equally true of section 27 of the Customs Act, 1962." 25.The decision in the case of Mafatlal (supra) has been followed subsequently by the Supreme Court in the cases of Union of India vs.Raj Industries, (2000) 2 SCC 172 , Automotive Tyre Manufacturers Association vs.Designated Authority (2011) 2 SCC 258 and A.P Rice Bran Solvent Extractors Association vs.Union of India, (1998) 8 SCC 384 and various other cases. 26.In view of the aforesaid law laid down by the Supreme Court in the case of Mafatlal (supra), I am of the considered opinion that the claim for refund made by the petitioners in the instant case deserves to be rejected as, in the instant case, the petitioners have passed on the burden of terminal tax to the consumers and have failed to establish to the contrary though the burden was on them to do so. 27.It is next contended by the learned counsel for the petitioners that the respondents/Municipal Council cannot install barriers, check posts, etc.for; making recovery of terminal tax by intercepting the trucks and vehicles of thej petitioners in view of the decisions of this Court in the case of Moolji Bhai and 78 others vs.State of M.P.and another, 2000(2) MPHT477. 27.It is next contended by the learned counsel for the petitioners that the respondents/Municipal Council cannot install barriers, check posts, etc.for; making recovery of terminal tax by intercepting the trucks and vehicles of thej petitioners in view of the decisions of this Court in the case of Moolji Bhai and 78 others vs.State of M.P.and another, 2000(2) MPHT477. 28.The aforesaid contention of the learned counsel for the petitioners is opposed by the learned counsel for the respondent on the ground that the respondents have not installed any barrier or check posts to recover tax as alleged by the petitioners and with a view to facilitate payment of tax by the petitioners they have made arrangement for payment and recovery of tax at the time of sale at the forest depot itself which is permissible and is in accordance with law in view of the decision rendered by this Court in the case of Vyapar Mandal Mandi, Morena vs.State of M.P.and others, 2004 (2) MPLJ 482 . 29.As it is not a disputed fact that the respondents have not established any check posts or barriers to recover the terminal tax therefore, the contention of the learned counsel for the petitioners based on the decision rendered in the case of Moolji Bhai and 78 others vs.State of MP and another, 2000(2) MPHT 477 is factually misplaced and misconceived and is accordingly rejected.As the Municipal Council has not installed any check posts or barriers and is only facilitating recovery of tax by making arrangement for making payment and deduction of tax at the depot itself and the petitioners have been paying the same without any protest since so many years, therefore, I do not find any reason to issue orders/direction in this regard, in view of the law laid down by the Division Bench of this Court in the Case of Vyapar Mandal Mandi, Morena vs.State of MP and others 2004 (2) MPLJ 482 . 30.In view of the aforesaid, while the petitions of the petitioners so far as they relate to the challenge to the decision of the Municipal Council, Umariya to impose terminal tax at higher rates than prescribed in the Rules 1996 after 7-3-1997 are allowed and the decision and the notification issued by the Municipal Council, Umariya to the contrary are hereby quashed, the claim for refund made by the petitioners stands rejected in view of the fact that the petitioners have passed on the burden of tax onto the consumers and therefore, are not entitled to any unjust enrichment by way of refund in view of the decisions of the Supreme Court in the case of Mafatlal (supra) and others. 31.As a result of the aforesaid discussions, the petitions filed by the petitioners are partly allowed to the extent indicated above, namely, the decisions and notifications issued by the Municipal Council, Umariya imposing terminal tax over and above the rates prescribed in the Rules of 1996 after 7-3-1997, are hereby quashed but the claim for refund made by the petitioners is hereby rejected. 32.At this stage, it is submitted by the learned counsel for the petitioners that the Municipal Council, Umariya was well aware of the fact that the levy of terminal tax above the rates prescribed in the Rules of 1996 was unjust, illegal and contrary to law, in view of the decision rendered in the cases of Gajanand Agrawal vs. State of M.P.and another 2003(2) MPLJ 26 and Lal Narayan Singh vs. Chief Municipal Officer, and another, 2003(2) MPLJ 340, wherein the Municipal Council, Umariya itself was the respondent and the rates of terminal tax imposed by them were quashed by this Court in spite of which the Municipal Council, Umariya continued to recover terminal tax at the enhanced rate from the petitioners, therefore, even if the claim of the petitioners for refund is rejected by this Court the act of the Municipal Council in deliberately and knowingly perpetuating the illegality should not be approved and cost should be imposed upon the respondent/Municipal Council, Umariya. 33.The aforesaid contention of the learned counsel for the petitioners is vehemently opposed by the learned counsel appearing for the respondent/Municipal Council, Umariya on the ground that the petitioners continued to pay tax without assailing the same. 33.The aforesaid contention of the learned counsel for the petitioners is vehemently opposed by the learned counsel appearing for the respondent/Municipal Council, Umariya on the ground that the petitioners continued to pay tax without assailing the same. However, this Court cannot ignore the fact that the Municipal Council, Umariya was well aware of the fact that the recovery of terminal tax at rates higher than the rate prescribed in the Rules of 1996 was illegal in view of the decisions of this Court in the cases of Gajanand Agrawal vs.State of MP and another 2003(2) MPLJ 26 and Lal Narayan Singh vs. Chief Municipal Officer, and another 2003(2) MPLJ 340, in spite of which it deliberately and knowingly continued to recover tax at enhanced rate from the petitioners and infact passed resolutions to the contrary thereby perpetuating the illegality. The Municipal Council, Umariya is a local authority having constitutional recognition and is therefore, bound to follow the law and cannot be permitted to subject its citizens to unjust recovery of tax without having any regard for the law and the decisions of this Court. 34.In the circumstances, while the petitions are.partly allowed in the above stated terms, a cost of Rs.1500/- per petition is imposed upon the Municipal Council, Umariya for perpetuating the illegality even after decisions of this Court in the year 2002 which shall be paid by the respondent/Council within one month. A copy of this order be placed in the record of the connected petitions. Petitions partly allowed.