The Municipal Council cannot impose terminal tax at rates higher than those prescribed in the Rules of 1996. The claim for refund of tax is rejected if the petitioner has passed on the tax burden to consumers. The court may impose a cost on the Municipal Council for perpetuating illegality.

All these petitions have been filed by the petitioners who are dealers in timber and have purchased timber from the Forest Depot at Umariya and have been subjected to terminal tax by the Municipal Council, Umariya at rates which have been revised from time to time. All the petitioners have assailed the rate of terminal tax levied by the Municipal Council, Umariya on identical grounds. As all these petitions are identical and involve similar and identical issues, they are heard and decided concomitantly.

2.The short facts leading to the filing of the present petitions are that the petitioners, who are dealers in timber and have saw-mills in Jabalpur, have filed these petitions being aggrieved by the rates of terminal tax determined and recovered by the Municipal Council, Umariya under the provisions of M.P.Municipalities Act, 1961 (hereinafter referred to as 'the Act').

3.It is stated that the petitioners have purchased timber from the Forest Depot, Umariya and on the said purchase the Municipal Council, Umariya initially levied 0.50% terminal tax on the price of the timber by notification dated 6-3-1984 (Annexure P/l). On 13-2-1994 ( Annexure P/4) this rate was enhanced from 0.50% to 1.50%.From 31-10-2000 (Annexure P/6) it was enhanced from 1.50% to 2.00% and from 30-7-2003 (Annexure P/8) it was enhanced from 2.00% to 3.00%.

4.It is stated by the learned counsel for the petitioners that the petitioners continued to pay terminal tax at the rate enhanced by the Municipal Council from time to time till the year 2009.It is stated that in 2009 they came to know that this Court, in W.P.No.3277/99 and W.P.No.5215/99 decided on 4-4-2002 and 26-8-2002 respectively, had quashed the enhancement of rate of terminal tax made by the Municipal Council, Umariya beyond the rate prescribed by the State Government by the M.P.Terminal Tax (Assessment and Collection) on the Goods Exported from Madhya Pradesh Municipal Limits, Rules 1996 (for short "the Rules of 1996"), in respect of liquor and Mahua and therefore, the petitioners filed representations seeking information in this regard before the Municipal Council, Umariya in the month of June, 2009 which are annexed as Annexure P/ll along with the respective petitions. The petitioners also sought information under the Right to Information Act from the respondent/Municipal Council, Umariya regarding the notifications on the basis of which terminal tax was being imposed. As there was no response from the respondent/Municipal Council, Umariya, the petitioners have filed the present petitions before this Court.

5.The terminal tax imposed by the Municipal Corporation is challenged by the petitioners on two grounds, firstly; that the tax levied by the Municipal Council, Umariya is contrary to the provisions of the Rules of 1996 as the rate at which the tax is sought to be recovered by the Municipal Council, Umariya, is more than the rate prescribed by the State Government and therefore, in view of the decisions of this Court rendered in the case of Chief Municipal Officer, Kymore vs. Etemit Everest Ltd. and another, 2000(2) MPLJ 297, the same deserves to be quashed and secondly; the manner in which the tax is being recovered from the petitioners is contrary to the procedure prescribed by law as the respondents are recovering the tax by stopping the trucks and vehicles of the petitioners which is contrary to the law laid down by this Court in the case of Moolji Bhai and 78 others vs. State of M.P. and another, 2000(2) MPHT477.On the aforesaid grounds the petitioners have also sought refund of the excess tax collected by the Municipality.

6.The respondent/Municipal Council, Umariya has filed a return and submitted that the tax that has been imposed and is being levied by the Municipal Council is in accordance with the provisions of sections 127 and 129 of the M.P.Municipalities Act, 1961 by passing a resolution and determining the rate of tax.It is further submitted by the learned counsel for the re