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High Court Of Madhya Pradesh
A. K. MATHUR, S. C. PANDEY
MEERA KHANDELWAL - Appellant
Versus
STATE OF M.P. - Respondents
W. P. 3161 Of 1995
Decided On : 01/09/1996
MUNICIPALITIES ACT - SECTION 129 - EXPORT TAX - VALIDITY - CONSTITUTIONALITY - ARTICLES 301, 304(B), 19(1)(G) - DELEGATION OF POWER - GUIDELINES - DISCRIMINATION - HIGHWAY - ENTRIES 23, 42, 89 OF LIST-I, SEVENTH SCHEDULE.
Fact of the Case:
The petitioner challenged the constitutional validity of Section 129 of the M. P. Municipalities Act, 1961, as amended by Act No. 12 of 1995, and the imposition of export tax by the respondent Municipality.
Finding of the Court:
The Court upheld the constitutional validity of Section 129 of the Act and the imposition of export tax by the Municipality. It held that the tax was not violative of Articles 301, 304(b), or 19(1)(g) of the Constitution. The Court also held that the delegation of power to the State Government to lay down guidelines for the imposition of the tax was valid and did not amount to excessive delegation. The Court further held that the tax was not discriminatory and that the goods exported through railways or highways were not similarly situated as to violate Article 14 of the Constitution.
Issues: 1. Whether Section 129 of the M. P. Municipalities Act, 1961, as amended by Act No. 12 of 1995, is constitutionally valid? 2. Whether the imposition of export tax by the respondent Municipality is valid? 3. Whether the delegation of power to the State Government to lay down guidelines for the imposition of the tax is valid? 4. Whether the tax is discriminatory?
Ratio Decidendi: 1. Section 129 of the Act is a procedural provision and does not violate Articles 301, 304(b), or 19(1)(g) of the Constitution. 2. The tax is compensatory in nature and is justified under Articles 301 and 304(b) of the Constitution. 3. The delegation of power to the State Government is valid and does not amount to excessive delegation. 4. The tax is not discriminatory as the goods exported through railways or highways are not similarly situated.
Final Decision: The Court dismissed all three writ petitions with costs of Rs. 1000/- each.
( 1 ) ALL these three writ petitions Nos. 3161/95, 3469/95 and 2793/95 involve common question of law; therefore, they are disposed of by a common order. For convenient disposal of all these writ petitions, facts given in W. P. No. 3161 of 1995 are taken into consideration.
( 2 ) THE petitioner has by this petition prayed that the provisions of Section 129 of the M. P. Municipalities Act 1961, as amended by the provisions of the M. P. Nagar Palik Vidhi (Sanshodhan) Adhiniyam 1995 may be declared as ultra vires. It is also prayed that imposition of export-tax by the respondent Municipality by resolution dated 20-7-1995 be declared invalid.
( 3 ) PETITIONER Smt. Meera Khandelwal is the wife of Shri Vinod Khandelwal and Proprietor of Khandelwal Industries, Industrial Ward, Dhamtari, District Raipur. The petitioner challenges by this petition the constitutional validity of Section 129 as amended by Act No. 12 of 1995. It is submitted that there is no procedural safeguard in the exercise of powers for imposition of tax. It is also contended that the power has been conferred by the said proviso without inviting objections. It is further alleged that imposition of export tax violates Art. 301 of the Constitution of India and also violates the freedom of trade throughout the territories of India. The provision also suffers from the vice of excessive delegation as no maximum limit has been fixed for the imposition of export tax.
( 4 ) BEFORE we deal with the arguments urged by the learned counsel for the petitioner, it would be relevant to quote here Section 129 of the Municipalities Act, 1961 which has been amended by the recent amendment Act No. l2/95, Sec. 129 as amended reads thus :"sec. 129 (1) The Council may, by a resolution, at the time of final adoption of the budget estimates for the next financial year subject to the provisions of this Act and subject to such limitations and conditions, as may be prescribed by the State Government in this behalf :- (a) impose any of the taxes or fees specified in this Act; or (b) increase the rates of taxes or fees already imposed. (2) The resolution as referred to in subsection (1) shall contain - (a) in case of imposition of any tax or fee, the provisions under which such tax or fee is being imposed, class of persons or description of property to be taxed, the amount or rate of tax or fee being imposed, system of assessment and collection to be adopted and the date from which imposition of such tax or fee shall take effect; (b) In case of increase of rate of any tax or fee the prevailing rate of such tax or fee, the proposed increased rate of such tax or fee and the date from which increase of rate or such tax or fee shall take effect. (3) The resolution, as passed shall be conclusive evidence of the imposition of a new tax or fee, or increase of rate of any tax or fee, as the case may be :provided that if the Council decides to have supplementary taxation during the financial year, it may do so from such date as the council may resolve, subject to the provisions of this Act and subject to such limitations and conditions, as may be prescribed by the State Government in this behalf. (4)Nothing contained in this Section shall apply to tax mentioned in Clause (i) of sub- section (1) of Sec. 127 which shall be charged and levied in accordance with Section 127-A. "by this amendment Act, various other provisions of the Municipalities Act were amended; but, at present, we are concerned with the Constitutional validity of Section 129 of the Act only. This amendment has been brought about in order to confer wide powers to the local bodies and remove some of the anomalies in the M. P. Municipal Corporation Act, 1956 and the M. P. Municipalities Act, 1961, as pointed out by the State Election Commission. Rest of the amendments have been proposed as a measure of consequential nature. With thisstatement of object, the Act was amended. Section 127 of the M. P. Municipalities Act, 196
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