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1992 Supreme(All) 388
IN THE HIGH COURT OF ALLAHABAD
S. C. MATHUR, B. C. SAKSENA
MOHAMMAD MAHROZ IQBAL - Appellant
Versus
STATE OF UTTAR PRADESH - Respondents
W. P. 47 Of 1980
Decided On : 07/27/1992
S.Mohd Husain, SURYA AVASTHY
The imposition of taxes and fees by the Town Area Committee through bye-laws framed under Section 298 of the Municipalities Act was not valid as the entire Section 298 had not been extended to town areas, and the procedure prescribed in the Town Areas Act for imposing taxes and fees had not been followed.
Headnote:
TOWN AREA COMMITTEE - TAXES AND FEES - IMPOSITION - PROCEDURE - BYE-LAWS - FRAMING - JURISDICTION - TOWN AREAS ACT, 1914 (II OF 1914), SS. 14, 15-A, 15-B, 17, 26, 27, 29, 38 - U. P. MUNICIPALITIES ACT, 1916 (II OF 1916), SS. 128, 298 - NOTIFICATION DATED 3/04/1928 ISSUED UNDER S. 38 OF THE TOWN AREAS ACT, 1914 - INTERPRETATION AND APPLICATION.
Fact of the Case:
The petitioners, residents of Manikpur town area, challenged the imposition of taxes and fees by the Town Area Committee through a notification issued under Section 298 (2) read with Section 301 (2) of the U. P. Municipalities Act, 1916. The notification referred to an earlier notification dated 2/04/1928, which was later found to be 3/04/1928. The petitioners contended that the bye-laws were beyond the scope of Section 298 (2), were framed without following the procedure prescribed in the Town Areas Act, and that the fees levied were not related to any service. They also argued that tax on trade, callings, and profession could only be imposed after framing rules under Section 14 of the Town Areas Act, which had not been done.
Finding of the Court:
The court examined the provisions of the Town Areas Act and the Municipalities Act and found that the Town Area Committee was competent to impose practically any tax which the State Legislature was competent to impose. However, the court held that the impugned taxes and fees could not be imposed by framing bye-laws under Section 298 of the Municipalities Act because the entire Section 298 had not been extended to town areas, and the clauses that were extended did not cover the items on which the bye-laws were framed. The court also found that the procedure prescribed in the Town Areas Act for imposing taxes and fees had not been followed, as the State Government had not framed rules in respect of the items covered by the impugned notification.
Issues: 1. Whether the Town Area Committee had the jurisdiction to impose the impugned taxes and fees? 2. Whether the bye-laws were framed in accordance with the procedure prescribed in the Town Areas Act? 3. Whether the fees levied were related to any service?
Ratio Decidendi: 1. The court held that the Town Area Committee was competent to impose the impugned taxes and fees, as the provisions of Section 128 (1) of the Municipalities Act were applicable to town areas except clauses (vii) and (viii), and clause (xiv) conferred wide powers to impose tax on any other item not specifically provided for in clauses (i) to (xiii-B). 2. The court held that the bye-laws were not framed in accordance with the procedure prescribed in the Town Areas Act, as the State Government had not framed rules in respect of the items covered by the impugned notification. The court distinguished the procedure for framing bye-laws under Section 298 of the Municipalities Act from the procedure for framing rules under the Town Areas Act, highlighting that the latter required preliminary proposals, draft rules, and objections from inhabitants, which were not required under the former. 3. The court did not address the issue of whether the fees levied were related to any service, as it found that the impugned taxes and fees could not be imposed through bye-laws.
Final Decision: The court allowed the writ petition and quashed the impugned bye-laws contained in Annexure No. 1, holding that the imposition of the impugned taxes and fees through the bye-laws could not be sustained.
( 1 ) THE petitioners, seventeen in number, residing within the jurisdiction of Town Area Committee, Manikpur, district Pratapgarh, and having houses in the area and doing business, have approached this Court through the instant petition to challenge the imposition/levy of certain taxes/fees. The imposition/levy has been made through notification dated 7th Sept. 1979 issued by the District Magistrate, Pratapgarh under Section 298 (2) read with Section 301 (2) of the U. P. Municipalities Act, 1916 (II of 1916), for short Municipalities Act, a copy of which has been filed as Annexure-1 to the writ petition. It is alleged by the petitioners that this notification was published in the U. P. Gazette dated 13/10/1979. This notification refers to an earlier notification dated 2/04/1928.
( 2 ) THE above notification contains bye-laws on various subjects like - (1) Tahbazari (2) Licensing of bicycles (3) Use of loud speakers (4) Regulation of house building (5) Control of shops of various categories (6) Control of shops of various categories including barber shops (7) Control of flour mills and factories (8) Control of slaughter houses (9) Control of meat and fish markets (10) Trade, calling and profession.
( 3 ) THERE is separate notification in respect of the bye-laws covering each subject. Thus Annexure-1 is a compilation of several bye-laws. In the bye-laws in respect of each item it is mentioned that they have been framed and that the District Magistrate confirms them and publishes them under Section 301 (2) of the Municipalities Act. These notifications do not make any references to any provision of the U. P. Town Areas Act, 1914 (II of 1914), for short T. A. Act.
( 4 ) THE above-laws have been challenged by the petitioners on the following grounds:- (1) the bye-laws are beyond the scope of Section 298 (2) which has been invoked in the impugned notification; (2) the bye-laws have been framed without following the procedure prescribed in T. A. Act; (3) the fees levied is not related to any service and cannot, therefore, be charged; (4) tax on trade, callings and profession can be imposed only after framing rules under Section 14 of the T. A. Act but no rules have been framed and yet the said tax has been imposed; (5) rules are necessary in order to provide guidelines for imposition of the tax; and (6) the taxes and fee imposed are, in any case, excessive.
( 5 ) IN Annexure-1 there is reference to notification No. 974/xi-574-E. dated 2/04/1928. Annexure-1 is not certified copy of the notification. On checking the correct date of the notification from the Government Gazette it appeared that the date of the notification is 3/04/1928 and not 2/04/1928. The notification dated 3/04/1928 was issued by the State Government in exercise of the power conferred by Section 38 (1) of the T. A. Act Section 38 (1) empowers the State Government to extend the provisions of any enactment in force in any municipality town area or any part thereof. This extension is possible to be made with restrictions and modifications also. By the notification dated 3/04/1928 the provisions of Sections 298 (2)H (h) to (1), 251, 299 (1), 301 (2) and 301 (5) of the Municipalities Act have been extended to all the town areas in the State in the modified form set forth in the notification. Thus the extension of the provisions of the Municipalities Act mentioned herein is with modifications.
( 6 ) MODIFICATION in respect of Clause H (h) to (1) of Section 298 (2) of the Municipalities Act is as follows:- (H) Providing for the seizure and confiscation of ownerless animals atraying within the limits of the town area; (i) Providing for the registration of dogs; (j) Providing for the imposition of an annual fee for such registration; (k) Requiring that every registered dog shall wear a collar to which shall be attached a token, to be issued by the Panchayat; and (1) providing that a dog, unless registered and wearing such a token, may, if found in any public
