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D. Y. CHANDRACHUD, J. B. PARDIWALA, MANOJ MISRA
South Eastern Coalfields Ltd – Appellant
Versus
State of Madhya Pradesh – Respondent
Key Points: - The court established the validity of the levy of a terminal tax within the limits of the Municipal Council under a State statute (!) . - The issues raised in the appeals were found to lack substance (!) . - The Madhya Pradesh Municipal Corporation Act 1956, Section 132, and the Madhya Pradesh Municipalities Act 1961, Section 127, empower the respective bodies to levy a terminal tax on goods exported from their limits (!) . - The Terminal Tax (Assessment and Collection) on the Goods Exported from Madhya Pradesh Municipal Limits Rules 1996 were framed in exercise of these statutory powers (!) . - The appellant challenged the levy of terminal tax under Article 226 of the Constitution, but the High Court rejected the plea, holding the State statute was enacted with due legislative competence (!) . - Part IXA of the Constitution, dealing with Municipalities, does not apply to Scheduled Areas as per Article 243-ZC (!) (!) . - The Fifth Schedule of the Constitution, particularly Paragraph 5, empowers the Governor to direct that any Act of Parliament or the State Legislature shall not apply to a Scheduled Area or shall apply with exceptions and modifications (!) (!) (!) . - No notification from the Governor was produced to indicate that the municipal laws in question did not apply to the Scheduled Areas or applied with exceptions that would disable the levy of tax (!) (!) . - The inapplicability of Article 243-X to Scheduled Areas did not denude the state legislature of its power to enact legislation for the State (!) . - The appeals were dismissed (!) .
ORDER :
1. This batch of appeals arises from a judgment dated 21 July 2010 by a Division Bench of the High Court of Madhya Pradesh in a set of petitions under Article 226 of the Constitution.
2. Section 132 of the Madhya Pradesh Municipal Corporation Act 1956 provides for “taxes to be imposed under this Act”. Sub-section 6(n) empowers the Corporation to levy “a terminal tax” on goods and animals exported from the limits of the Corporation. A corresponding provision is contained in the Madhya Pradesh Municipalities Act 1961; Section 127(6)(n) empowers the Municipal Council to imposed “a terminal tax on goods or animals exported from the limits of the Council”. In exercise of the statutory powers conferred by the two statutes, the Terminal Tax (Assessment and Collection) on the Goods Exported from Madhya Pradesh Municipal Limits Rules 1996 have been framed. Section 2(c) defines the expression “terminal tax” in the following terms :
“(c) "Terminal tax" means the terminal tax on goods exported from the Municipal limit in accordance with the sanction of State Government under clause (o) of sub-section (2) of Section 132 of the Madhya Pradesh Municipal Corporation Act, 1956 and the tax des
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