A municipality can levy a fee for the purpose of regulating the sale or exposure for sale of articles in a public road, but the fee must be reasonable and commensurate with the services rendered by the Municipality.

( 1 ) THE Judgment of the Court was delivered by The Hon ble The Chief justice. This is an appeal against the judgment of our learned brother Umamaheswaram J. quashing the resolution passed by the Guntur Municipality levying a fee on sellers occupying road margins. On 2-2-1955 the Municipal Council, Guntur, passed a resolution under sections 270 and 312 of the Madras District Municipalities Act (V of 1920) (hereinafter referred to as the Act.) In and by the said resolution the municipality levied a tax on persons selling or displaying for sale any articles or animals on the margins of public roads at the following rates: re. 0-3-0 per basket. Re. 0-6-0 per Jalla and re. 0-2-3 per square yard of occupied space. The right to collect the said amount was farmed out to the 2nd respondent. The petitioner filed the petition under Art. 226 of the Constitution of India contending inter alia that the Municipality was not authorised to levy tax on persons vending their articles on the margins of public roads and that even if the tax was deemed to be a licence fee, they had no right to collect the same as they were not spending any sum whatsoever for discharging any obligation under the resolution. He further pleaded that he was entitled to the free use of the roads of the Municipality without any restriction under Art. (19) (1) (d) of the Constitution and that the restriction imposed by the resolution that a person should not use the same except on payment of a fee to the Municipality was unreasonable and void. In the counter filed tb the said petition the Municipality pleaded that the levy was neither a. tax nor a, licence fee but was only rent to be collected from those who occupy any road margin. They also denied that the petitioner had any fundamental right to use the road margins without any restriction by the Municipality. In the rejoinder the petitioner reiterated the plea that the levy was essentially a tax which the Municipality had no right to impose. Before the learned Judge the advocate appearing for the Municipality clarified its position by stating that though the notification levying the fee was issued under Section 270 of the Act, it must be regarded as one under sec. 183 (3) of the Act and that the amount sought to be collected from persons occupying road margins should be regarded as rent. The learned judge after considering the argument came to the conclusion that there was no relationship of land-lord and tenant between the Municipality and the sellers and that the fees were collected only in respect of the right exercised by the sellers to vend their goods and not for the occupation of the road margins. On the assumption that the levy was a fee in respect of the right exercised by the sellers to vend their goods, the learned Judge held that as it was not stated that any extra expenses were incurred by the municipalivy for the regulation of the trade or business, the levy was invalid. On those cenclasions, the learned Judge quashed the resolution, Hence the appeal. The learned Advocate General who appeared for the Municipality before us adopted a different line of argument which was inconsistent and contrary to the admissions made both in the counter filed by the Municipality and in the arguments advanced before the learned Judge. He took the position that the levy was not rent but it was either a tax or a fee which the Municipality was authorised to levy under Section 270 of the Act. If it was a pure question of law arising on the admitted facts, it might be that there was some justification to allow the advocate General to strike a new line altogether. But where the arguments depend upon going back on the admission of fact made by the Municipality in the counter affidavit, there cannot be any justification whatsoever for allowing the appellant to raise it for the first time in the appellate Court. As we have already noticed in the counter affidavit it was definitely stated that the levy was rent payable in respect o
Click Here to Read the rest of this document