1. Municipal Board imposed tolls on vehicles entering and leaving municipal limits under the U.P. Municipalities Act, 1916 — Challenge to the legality of tolls on departing vehicles. (Para 2 )
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1965 Supreme(SC) 339
SUPREME COURT OF INDIA
P.B. GAJENDRAGADKAR, C.J.I., K.N. WANCHOO, M. HIDAYATULLAH, V. RAMASWAMI, P. SATYANARAYANA RAJU, JJ.
Municipal Board of Hardwar (in all the Appeals), Appellants
Versus
Raghubir Singh etc., Respondents.
Civil Appeals Nos. 311 to 366 of 1964.
Advocates appeared
Mr. M. C. Setalvad, Senior Advocate, (M/s. B. P. Jha and J. P. Goyal, Advocates, with him), for Appellant; Mr. G. S. Pathak, Senior Advocate. (M/s. B. Dutta and Naunit Lal Advocates with him), for Respondents In C. As. Nos. 311, 312, 320, 322, 328, 338, 341, 349, 353, 354, 358, 360, 361 and 366 of 1964.
Advocates:
B.DUTTA, B.P.JHA, G.S.PATHAK, J.P.GOYAL, M.C.SETALVAD, NAUNIT LAL
B.DUTTA, B.P.JHA, G.S.PATHAK, J.P.GOYAL, M.C.SETALVAD, NAUNIT LAL
A local authority's power to levy tolls is strictly limited by its enabling statute. If the statute specifies tolls on vehicles "entering" a municipality, the authority cannot levy tolls on vehicles "leaving" the municipality, and residuary powers cannot be used to expand this specific limitation.
Headnote:(A) U.P. Municipalities Act, 1916 - Section 128(1)(vii) and (xiv) - Toll on vehicles - Power of local authority to levy toll - Limitation to vehicles entering the municipality - Residuary power under clause (xiv) cannot be used to expand a specifically limited power under clause (vii) - If the statute limits the levy of toll to vehicles entering the municipality, no toll can be levied on vehicles leaving the municipality. (Paras 4, 7, 10)
(B) Local Authorities - Nature of power - Local authorities do not act as legislatures when imposing taxes but as agents of the State Legislatures; their powers and the extent thereof must be found in the statute which creates them and endows them with such powers. (Para 4)
(C) Interpretation of "Toll" - A toll is a tribute or custom paid for a privilege, generally for passage over a bridge, road, ferry, or railway - Generally collected once, typically at the point of entry, though for convenience it may be collected at either end, but not twice on the same vehicle. (Paras 8, 9)
Facts of the case:
A local authority issued notifications imposing a toll on motor vehicles, rickshaws, and tongas entering or leaving its municipal limits. The notifications were issued under the powers conferred by the municipal act. The validity of the toll on vehicles leaving the municipal limits was challenged. A single judge held that toll could not be levied on vehicles leaving the limits. A divisional bench modified this, holding that while toll could be levied on vehicles leaving, it could not be levied on a vehicle that had already paid toll upon entry.
Findings of Court:
The power to levy tolls under the relevant municipal statute is specifically restricted to vehicles entering the municipality. The residuary power granted to the local authority cannot be used to override or extend this specific restriction. Consequently, the levy on vehicles leaving the municipality is unauthorized.
Issues: Whether a local authority, empowered to levy tolls on vehicles entering a municipality, can also levy tolls on vehicles leaving the municipality by invoking residuary powers.
Ratio Decidendi: Local authorities act as agents of the State Legislature and their powers are limited by the enabling statute. Where a statute expressly limits the power to levy a toll to vehicles "entering" a municipality, that limitation must be respected. A residuary clause cannot be used to extend a power that the legislature has specifically restricted, as such an extension would render the specific restriction ineffective.
Result: Appeals dismissed.
Legal Category Hierarchy
Table of Contents
2. Whether the power to levy tolls under the Municipalities Act extends to vehicles leaving the municipality or is restricted to those entering. (Para 5 )
3. Local authorities act as agents of State Legislatures; specific limitations in the enabling statute override general residuary powers regarding the levy of tolls. (Para 4 , 6 , 7 )
4. Where a statute specifically empowers a local authority to levy tolls on vehicles entering a municipality, such power cannot be extended to vehicles leaving. (Para 7 , 10 )
5. Appeals dismissed; the levy of toll on vehicles leaving the municipal limits is held to be illegal. (Para 11 )
6. Do local authorities act as legislatures when imposing taxes?
No, local authorities act as agents of the State Legislatures. Their powers and the extent of those powers must be found in the statute which creates them and endows them with such powers. (Para 4 )
7. Can a residuary power clause extend a specifically limited taxing power?
No. If the legislature expressly limits the power of a Board to levy tolls on vehicles entering a municipality, that limitation cannot be extended by a residuary clause, as the specific limitation overrides the general power. (Para 7 )
8. Can a municipal board levy tolls on vehicles leaving the municipal limits under Section 128(1)(vii) of the U.P. Municipalities Act?
No, the power under Section 128(1)(vii) is strictly limited to vehicles entering the municipality; therefore, tolls cannot be levied on vehicles leaving the municipal limits. (Para 7 , 10 )
Judgement
HIDAYATULLAH, J. : There appeals involve a short common point of law and to appreciate it the narration of a few simple facts will be sufficient.
2. On October 29, 1941 the Hardwar Union Municipal Board (for brevity called the Board in this judgment) issued a notification (No. 4188/XI-416-41) by which it imposed a toll on motor vehicles and tongas entering or leaving the municipal limits with passengers at the rate of 2 annas per passenger. There were nine classes of persons who were exempted and one such class was persons travelling in motor vehicles and tongas from Rishikesh. Exemption certificates valid to the end of the calendar year were available in respect of some of the other classes. The notification purported to be issued in exercise of powers conferred by S. 128(1)(xiv) of the U. P. Municipalities Act. 1916 (U. P. Act 2 of 1916). Accompanying the notification were rules for the levy and collection of the toll. On February 22, 1955 a second notification was issued (No. 830/XXIII -16(C) -53-54), this time in exercise of the powers conferred by S. 128 (1)(vii) of the Act, and it increased the toll from 2 annas to 4 annas per passenger and added rickshaws to the vehicles. This notification also removed the exemption in favour of persons travelling from Rishikesh. The Board established a toll-barrier on the Rishikesh/Hardwar road at a place called Kharkhari within the limits of Hardwar Municipality. Toll was collected at that barrier from vehicles entering the municipal area or departing from it, at the rate of 4 annas per passenger travelling by motor car, tonga or rickshaw. On September 18, 1957 a third notification (No. 2706-B(a) XI-C-57) was issued, once again in exercise of powers conferred by S. 128(1)(xiv) and the Board amended of 1941 and deleted the exemption which had been granted to persons travelling between Rishikesh and Hardwar. The final description of the tax reads:
"In the Description of the tax-
(i) * * * *
"A toll on motor vehicles, rickshaws and togas entering or leaving the limits of the Hardwar Union Municipality with passengers to be levied at the rate of annas 4 per passenger"
(ii) Delete the Cl. (c) "All persons travelling in motor vehicles and tongas from and to Rishikesh" given under the proviso 2 to Para 1."
The last notification was issued after the respondents who are owners of motor vehicles plying between Rishikesh and Hardwar had filed their petitions under Art. 226 of the Constitution challenging the toll.
3. The judgment, which is impugned here by the Board as appellant, is by a Divisional Bench consisting of Mootham, C. J. and Shrivastava. J. in a special appeal decided on December 6, 1957. The special was filed against a judgment of Mehrotra, J. dated September 26, 1955. Mr. Justice Mehrotra had held that toll could not be levied at all on vehicles going outside the Municipal limits and he issued a writ ordering the Board to desist from collecting toll on vehicles leaving Hardwar Union Muinicipality. He upheld the levy of toll on vehicles entering the municipal limits. Other contentions against the notifications which sought to have the levy of toll in any shape or form declared illegal were rejected. The Divisional Bench maintained the order but held that although toll could be levied on vehicles leaving the municipal area, it could not be levied on the same vehicle if it had been once levied on its entry into the municipal area. The Divisional Bench modified the order by adding a direction that the appellant Board should not levy toll on vehicles leavying the municipal limits, which had paid toll on entry into these limits. The Bench observed further-
"We think, therefore, with respect, that the learned Judge went too far when he said that a toll cannot be levied on a vehicle going out of the limits of the Municipal Board........"
Following its own decision the Divisional Bench dismissed the other special appeals but certified all cases as fit for appeal so this Court and that is
