Supreme Court of India
SRI KRISHNA DASversusTOWN AREA COMMITTEE, CHIRGAON
- Citation
- 1990 INSC 94
- Decided
- 20 March 1990
- Disposal
- Dismissed
- Bench
- K N SAIKIA
Holding
The weighing dues are a tax, the Town Area Committee was duly empowered to levy it under the Town Areas Act and constitutional provisions, and the levy is neither discriminatory nor double taxation.
Summary
S.K. Das, a commission agent dealing in grains and other commodities in Chirgaon, was levied weighing dues under market bye‑laws framed by the Town Area Committee (TAC) of Chirgaon. He challenged the demand of Rs.1892.26 in a writ petition, arguing that the bye‑laws were ultra vires, that the dues were a fee (not a tax) and thus unlawful, discriminatory, and amounted to double taxation. The Supreme Court examined the statutory basis of the TAC’s power under the United Provinces Town Areas Act, 1914, as extended by the Municipalities Act, 1916, and the subsequent amendment Acts. It held that the weighing dues are a tax, not a fee, and that the TAC was empowered to levy such tax under the amended Town Areas Act and the constitutional entries (List II entries 52, 54, 66). The Court found no violation of Article 14, no double taxation, and dismissed the appeal.
Issues considered
- The validity of the market bye‑laws and the authority of the Town Area Committee to enact them.
- Whether the weighing dues constitute a tax or a fee.
- Whether the TAC had constitutional power to levy the dues under List II entries.
- Whether the levy amounts to illegal double taxation.
- Whether the levy is discriminatory and violative of Article 14.
Legislation cited
- Constitution of Indias. Article 14, s. Article 19(1)(g), s. Article 265, s. List II entries 52, 54, 66
- United Provinces Municipalities Act, 1916s. 128(1), s. 298(2)(F)(d)
- United Provinces Town Areas Act, 1914s. 38(1)
- United Provinces Town Areas (Amendment) Act, 1934s. 4
- United Provinces Town Areas (Amendment) Act, 1952s. 12, s. 13
Subjects
taxfeeweighing duesTown Area Committeemunicipal taxationconstitutional lawArticle 14double taxationdiscriminationList IIentry 52entry 54entry 66bye‑lawsultra vires
Judgment
SRI KRISHNA DAS A
v.
TOWN AREA COMMITTEE, CHIRGAON
~--
MARCH 20, 1990
[K.N. SAIKIA AND P.B. SAWANT, JJ.] B
Town Areas Act 1914-Section 38 and Bye Laws of the Town
Area Committee Chirgaon-Weighing dues-Payment of-User of
;- market committee-Validity of weighing dues-Whether 'tax' or 'fee'!
)'
, The appellant is a commission agent, engaged in the business of
c
....- sale and purchase of grains, rice, oil-seeds etc. in Chirgaon, District
Jhansi. By a notification issued under s. 38(1) of the United Provinces
Town Areas Act, 1914, the provisions of Section 298(2)(F)(d) of the
U.P. Municipalities Act, 1916 were extended to the Town Area ofChir-
'-.--- gaon, as a result of which, the Panchayat of Chirgaon was empowered
to make bye-laws for the establishment, regulation· and inspection of D
market and for the proper and cleanly conduct of business therein. Later
by Section 4 of the U.P. Provinces Town Area (Amendment) Act, the
word "Panchayat" wherever it occurred in the Principal' Act was
substituted by the word 'Committee'. In pursuance of the powrs confer-
red on him the District Magistrate, Jhansi fremed bye-laws dated
18.11.1934 for the regulation of the market·in Chirgaon which inter alia E
> provided that weighing dues shall be charged at different rates on
"-.
various articles that came to the Town Area for sale at rates specified
therein. Since the appellant was a dealer in some of these commodities,
he was served with a notice calling upon him to pay Rs.1892/26 as
...--
~
, weighing dues for the period from 1.5.1962 to 30.6.1962. The appellant
challenged the notice by means of a writ petition in the Allahabad High
Court. A learned single Judge of the High Court dismissed the writ
F
petition taking the view that the demand made by the respondent was
> .,.. purely a measure of taxation. Special Appeal against the said order was
also dismissed by the High Court. Hence this appeal by special leave.
The main contentions of the appellant, as urged before the High G
... Court, as have be~n repeated before this Court are; (i) that the bye-laws
were invalid; (ii) that the Town Area Committee had no power to
impose such tax; as the Act did not empower the TAC to levy and collect
..lt·
-~
weighing dues; (iii) that the weighing dues were discriminatory because
of the exemptions; (iv) that the weighing dues were not a tax but a fee
which could not be charged without quid pro quo and (v) that there· was H
13
14 SUPREME COURT REPORTS I1990] 2 S.C.R.
double taxation. It was also urged that the imposition of weighing dues
A
is tantamount to illegal extraction without the authority of law. The ·~
respondent, on the other hand, supported the judgment of the High
Court;
Dismissing the appeal, this Court,
B
HELD: Under the Indian Constitution the State Government's
power to levy a tax is not identical with that of its power to levy a fee.
•\
While the powers to levy taxes is conferred on the State Legislatures by --( ~
-
the various entries in List II, in it there is Entry 66 relating to fees,
empowring the State Government to levy fees 'in. respect of any -of.the I
matters in this List, but not including fees taken in any Court'. The
c result is that each State Legislature has the power, to levy fees, which is
co-extensive with its powers to legislate with respect to substantive
matters and it may levy a fee with reference to the services that would rY. ..
be rendered by the State under such law. The State may also delegate
such a power to local authority. [UC-DJ
D
A fee is a payment levied by an authority in respect of services
performed by it for the benefit of the payer, while a tax is payable for
the common benefits conferred by the authority on all tax payers. [2IF]
'While there is no quid pro quo between a tax payer and the
E authority in case of a tax, there is a necessary co-relittion between ·fee .J- '
collected and the service intended to be rendered. Of course the quid
pro quo need not be understood in mathematical equivalence but only
in a fair correspondence between the two, a broad co-relationship is all
that is necessary. [llGJ
·-...
~
~
F Courts caiinot reveiw the wisdom or advisability or expediency of
a tax as the court has no concern with the policy of legislation, so long
·----........
they are not inconsistent with the provisions of the Constitution. It is
only where there is abuse of its powers and transgression of the legisla-
live function in leving a tax, it may be corrected by the judiciary and
not otherwise. [l4B]
G '•
Taxes may be and often are oppressive, unjust and even unneces-
sary but this can constitute no reason for judicial interference. When
taxes are levied on certain articl"8 or services and not on others it -I
cannot be said to be discriminatory. [24C J
H AvinderSingh v. State of Punjab, [1979] I SCR 845, referred to.
S.K. DAS v. TOWN AREA COMMITTEE [SAIKIA, J.] 15
CIVIL APPELLA1E JURISDICTION: Civil Appeal No. 748
A
of 1975.
"'t-
From the Judgment and Order dated 3.12.1971 of the Allahabad
High Court in Special Appeal No. 289 of 1963.
R.K. Maheshwari for the Appellant. B
Rachna Gupta, (NP) and Mrs. Rani Chhabra for the Respon-
I dent.
r
The Judgment of the Court was delivered by
--- K.N. SAIKIA, J. This appeal by special leave is from the Judg-
ment and order dated 3 .12. 1971 of the Allahabad High Court in
c
Special Appeal No. 289 of 1963 dismissing the appeal and con-
'---- sequently the writ petition.
The appellant is a (Pacca Arahatiya) commission agent engaged D
in the sale and purchase of grains, rice, oil-seeds and jaggery in the
town of Chirgaon, District Jhansi.
On March 4, 1933, the Government ofU.P. published a Notifica-
lion purported to have been issued under secton 38{1) of the United
....- Provinces Town Areas Act 1914 (Act II of 1914), hereinafter referred E
to as 'the Town Areas Act', which read as under:
"No. 690/XI-158-T. It is hereby notified that the Governor
.
~ acting with his Ministers, in exercise of the powers confer-
'\ red by s. 38(1) of the United Provinces Twon Areas Act
1914 {II of 1914) is pleased to extend the provisions of F
s. 298(2){F)(d) of the United Provinces Municipalities Act
>' - 1916 to the Twon Area of Chirgaon in the Jhansi District in
the modified form set forth below:
Modified section of the United Provinces Municipali-
ties Act, 1916 (II of 1916) s. 298(2)(F){d) "The Panchayat G
may make bye-laws for the establishment, regulation. and
inspection of market and for the proper and cleanly con-
t duct of business therein."
Later by section 4 of the United Provinces Town Area (Amend-
men!) Act, 1934 (U.P. Act II of 1934) the word 'Panchayet' wherever H
16 SUPREME COURT REPORTS [1990) 2 S.C.R.
d it occurred in the Principal Act was substituted by the word 'Com-
mittee'.
It may be noted that the Town Area Panchayat was superseded
for a period of one year with effect from 20.10.1933 to 19.10.1934 and
was revived thereafter.
B
The District Magistrate, Jhansi promulgated a set of bye-laws
dated 18.11.1934 for the establishment, regulation and inspection of
the market in the Town Area of Chirgaon and for the proper and
cleanly conduct of business therein. Under Bye-law (1), sellers and
purchasers of the commodities mentioned thereunder were required to
pay weighing dues. It said:
c
"l(a) Weighing dues shall be charged at the rate of 1/4/6
per cent (eight-/8/-annas per cent from the_ sellers and twelve
and a half annas per cent from the purchaser) on the
following articles which comes to the Town Area for sale:
D
Grains, oilseeds, oil cakes, cotton, vegetables for whole-
sale, Dhania for wholesale and gur etc.
{b) Weighing dues on Ghi shall be charged at the rate of
/2/6/ two and half annas per maund half from the seller and
E half from the purchaser.
N .B. In recovery of weighing dues fraction of a pie shall be
omitted and more the figure ad justed to the nearest
price.
F (c) The purchaser shall be responsible for the full amount
of weighing dues. He shall deduct the seller's share from
the price. , --.,
(d) No weighing dues shall be charged on_ any article
imported by rail nor on rice, salt, gur and sugar imported
G from Jhansi and Moth by rail or road.
(e) On refusal to pay the weighing dues it shall be recover-
able as arreais of tax on circumstances and property." · --,f
Since the appellant was a dealer in some of these commodities,
H he was served with a notice dated 27.7.1962 demanding Rs.1892.26 as
weighing dues for the period from 1.5.1962 to 30.6.1962.
S.K. DAS v. TOWN AREA COMMITTEE [SAIKIA, J.] 17
The appellant challenged the aforesaid notice filing a writ peti- A
tjon on 18.8.1962 in the Allahabad High Court being Civil Misc. Writ
Petition No. 2400 of 1962. A learned Single Judge by his order dated
29.4.1963, dismissed the same taking the view that the demand made
by the respondent was purely a measure of taxation. The appellant
filed therefrom Special Appeal No. 289 of 1963, which was dismissed
by the impugned judgment and order. B
Before the High Court the appellant contended, inter alia, that
the Bye-laws were invalid as the Town Area Committee, shortly 'the
TAC', did not frame them; that the TAC had no power to impose such
tax; that the U.P. Town Areas (Amendment) Act 1952 did not
empower the TAC to levy and collect weighing dues; that the weighing
dues were discriminatory because of the exemptions; that the weighing·
c
dues were not a tax but a fee which, could not be charged without quid
pro quo; that there was double taxation; and in the alternative, that
the weighing dues amounted to neither a fee nor a tax but an illegal
extraction without the authority of law. All the arguments were
rejected by the High Court. D
Before us Mr. R.K. Maheshwari, the learned counsel for the
appellant, submits, inter alia, that the Bye-laws were invalid at the
time when those were framed and could not have been validated by
mere adoption by the TAC in 1935; that the weighing dues were
merely in the nature of purchase tax and were illegal inasmuch as the E
TAC had no right or authority to levy the same when it had already
been imposed by the State ofUttar Pradesh under section 128(1)(xiv) of
the U.P. Municipalities Act; that the TAC did not render any special
service to the 'Arhatias' or farmers who came to the town to conduct
their business, nor did it incur any expenditure in this regard; that the
charging of weighing dues was discriminatory .inasmuch as there were F
• no weighing charges on some articles imported 'from Jhansi or Moth
Tehsil by rail anp on rice, salt, jaggery or sugar brought either by road
or by rail; that goods coming from villages situate between Chirgaon
and Jhansi were not required to pay weighing dues while goods from
other places in the State of U.P. were being subjected to the dues; that
similar tax had already been imposed by the State Legislature under G
the Provisions of the U .P. Sales-tax Act under Entries 52 and 54 of List
II and there was double taxation by the TAC; that the goods arriving
by car have been subjected to the weighing dues while goods arriving
by rail from Jhansi and Moth were exempted; that the levy of weighing
dues by the Town Area Committee Chirgaon is arbitrary and dis-
criminatory and is grossly violative of Article 14 of the Constitution; H
18 SUPREME COURT REPORTS [ 1990] 2 S.C.R.
A that the levy, though called tax is actually a fee and is collected in the
disguise of tax; that double taxation in ihe fonn of sales tax by the
State Government and weighing dues by the TAC is unjustified and it Y'
imposes unreasonable restriction on the rights guaranteed under Arti-
cle 19(l)(g) of the Constitution; and that the High Court erred in
dismissing the appeal and the writ petition. <Ill
B •
The learned counsel for the respondent refutes all the submis-
sions of the appellant and supports the impugned judgment.
·(
The first question that needs examination is the validity of the '
i'
Bye-laws promulgated by the District Magistrate on 18.11.1934 after
.... .....__
c the Notification published by the Government of U .P, issued under
section 38(1) of the Town Areas Act. That section, as it stood at the
relevant time, empowered the Provincial Government to extend, by
notification in the Gazette, to all town areas or to any town area or to
any part of a town area any enactment for the time being in force in ,...... -.-i~
any municipality in the United Provinces subject to such restrictions
D arid modifications, if any, as it thought fit. By the instant Notification
--
dated March 4, 1933 the Provincial Government extended the Provi-
sions of section 298(2)(F)(d) of the United Provinces Municipalities
Act, 1916, hereinafter referred to as the Municipalities Act, to the
town area of Chirgaon in the Jhansi District in the modified fonn set
forth in the Notification itself. The word 'Panchayat' was substituted
E by the word 'Committee' by section 4 of the United Provinces Town
Areas (Amendment) Act. There could, therefore, be no doubt that r•
the TAC could make the Bye-laws.
F
The question then is the nature and extent of the empowennent
under the above Notification. The empowerment would naturally be
what a Municipality could do under that provision, namely, section f
--
298(2)(F)(d). Section 298 was includes in Chapter IX of the Muni-
cipalities Act and it dealt with rules, regulations and bye-laws. There - --<._
could, therefore, be no doubt that the TAC was empowered to make
bye-laws "for the establishment, regulation and inspection of market
and for the proper and cleanly conduct of business therein."
G
The Bye-laws dated 18.11.1934 were promulgated by the District
Magistrate. The contention that the District Magistrate had no power
to promulgate the Bye-laws was rightly rejected by the learned courts -{
below holding that the District Magistrate was at that time functioning
as TAC as it then remained suspended and those were ratified on
H 9.1.1935 by the TAC after it was revived.
S.K. DAS v. TOWN AREA COMMITTEE [SAIKIA, J.[ 19
Section 298(2)(F)(d) as modified in the Notification did not
A
ex facie authorise the imposition of any tax. The Municipalities Act,
~/
Chapter V, (Sections 128 to 165) dealt with municipal taxation,
, imposition and alteration of taxes. Chapter VII of that Act which
included section 298(2)(F)(d) did not deal with taxation. section
.
,
298(2)(F)(d) dealt with markets, slaughter houses, sale of food etc.
Cluase (d) thereunder did not ex facie envisage imposition of any tax.
The Town Areas Act, Chapter III (Sections 14 to 25) dealt with taxa-
B
tion and town fund. Under section 14, subject to any general rules or
special orders of the Provincial Government in that behalf, the taxes
I
which a TAC could impose had been stated. It did not mention weigh-
~
ing dues as such.
The Bye-laws envisaged by section 298((2)(F)(d), therefore, c
could not exfacie be said to have empowered the TAC to impose a tax
on the subject matter of that clause. It was contended before the High
Court that the U.P. Town Areas (Amendment) Act, 1952 (U.P. Act 5
- ~-
of 1953) cured the defects in the bye-laws, if any, inasmuch as section
12 of that Amending Act added clause (g) to section 14(1) of the Town D
Areas Act in the following terms:
"Any other tax being one of the taxes mentioned in sub-
section (1) of section 128 of the U.P. Municipalities Act,
1916."
E
.... Section 128( 1) of the Municipalities Act did not mention weigh-
ing dues as such. But Clause (xiv) of that section provided:
-r
. "Any other tax which the State Legislature has power to
impose in the State under the Constitution."
F
At the relevant time, after the amendment of section 14( l)(g) of
_,_. the Town Areas Act, the TAC was thus empowered to levy any other
tax, being one of the taxes mentioned in sub-section (I) of section 128
of the U. P. Municipalities Act, 1916.
The High Court on the basis of the above provision concluded G
that the TAC became empowered to levy all those taxes which the
State Government could levy under sub-section (1) of section 128 of
•
the Municipalites Act; and the TAC could impose any tax which the
State legislature could impose under the Constitution. Further, it was
concluded that Entry 52 of list II empowered the State Government to
impose tax on the entry of goods into local area for consumption,.use H
20 SUPREME COURT REPORTS [1990] 2 S.C.R.
A or sale therein and Entry 54 of list II empowered the State Goovern-
menf to impose a tax on the sale or purchase of goods and hence the
TAC could impose tax on the entry of goods as well as on the sale or
purchase of.goods.in view of the Entries 52 and 54 of list II. Referring
to the Bye-law No. 1, the High Court concluded that this imposition
was upon the entry of the mentioned articles into Town area for sale
B and it was clearly covered by entry 52 of list II of the 7th schedule and
hence it could not be said that the TAC did not possess the requisite
power to levy this tax. In other words, the weighing dues were
construed as entry tax and sale or purchase of goods tax combined.
The High Court also held that the defect, if any, in this regard
was cured by section 13 of the U.P. Town Areas (Amendment) Act,
c 1952 as section 13 of that Act provided:
"Notwithstanding anything contained in the principal Act,
---'-...
(1) where any tax of the nature described in clause (g) of
D Sub-section (1) of Section 14 of the Principal Act & by
whatever name or description called has been imposed,
levied or assessed by any Town Area Committee prior to the
commencement of this Act, the same shall be and is hereby
declared to be good and valid in law as if this Act had been
in force on all material dates and the tax had been imposed,
E levied and assessed under and in accordance with the
appropriate provision in that behalf."
(Emphasis supplied by us)
The High Court concluded, and we think rightly, that the imposi-
tion of this tax (weighing dues) had ben validated retrospectively, as if
F the Amending Act had been in force even in 1934, when the bye-laws
were framed. The validity of the provision having not been challenged,
it cannot be held that the imposition of this tax was without authority
of law if it could be brought within any of the taxation entries of List II
of the Seventh Schedule of the Constitution. However, if the weighing
dues did not amount to a tax but a fee, then the question would be
G whether the TAC could levy such a fee. In fact one of the submissions
of the appellant is that it was a fee and not a tax as claimed by the
respondent.
A fee is paid for performing a function. A fee is not ordinarily
considered to be a tax. If the fee is merely to compensate an authority
H for services performed or as compensation for the services rendered, it
SX DAS v. TOWN AREA COMMITTEE [SAIKIA, J.J 21
can hardly be called a tax. However, if the object of the fee is to
provide general revenue of the authority rather than to compensate it, A
and the amount of the fee has no relation to the value of the services,
the fee will amount to a tax. In the words of Cooley, "A charge fixed
by statute for the service to be performed by an officer, where the.
charge has no relation to the value of the services performed and
where the amount collected eventually finds its way into the treasury B
J
of the branch of the Government whose officer or officers collect the
charge is not a fee but a tax."
)
> U oder the Indian Constitution the State Government's power to
levy a tax is not identical with that of its power to levy a fee. While the
powers to levy taxes is conferred on the State Legislatures by the
various entries in list II, in it there is Entry 66 relating to fees, empower- c
ing the State Government to levy fees "in respect .of. any of the matters
in this List, but not including fees taken in any Court." The result is
that each State Legislature has the power, to levy fees, which is
co-extensive with its powers to legislate with respect to substantive
matters and it may levy a fee with reference to the services that would D
be rendered by the State under such law. The State may also delegate
such a power to a local authority. When a levy or an imposition is
questioned, the Court has to inquire into its real nature inasmuch as
though an imposition is labelled as a fee, in reality it may not be a fee
but a tax, and vice versa. The question to be determined is whether the
power to levy the tax or fee is conferred on that authority and if it falls E
beyond, to declare it ultra vires.
We have seen that a fee is a payment levied by an authority in
respect of services performed by it for the benefit of the payer, while a
tax is payable for the common benefits conferred by the authority on
all tax payers. A fee is a payment made for some special benefit F
enjoyed by the payer and the payment is proportional to such benefit.
Money raised by fee is appropriated for the performance of the service
and does not merge in the general revenue. Where, however, the
service is indistinguishable from the public services and forms part of
the latter it is necessary to inquire what is the primary object of the
levy and the essential purpose which it is intended to achieve. While G
there is no quid pro quo between a tax payer and the authority in case
of a tax, there is a necessary co-relation between fee collected and the
service intended to be rendered. Of course the quid pro quo need not
be understood in mathematical equivalence but only in a fair corres-
pondence between the two. A broad co-relationship is all that is
necessary. H
22 SUPREME COURT REPORTS (1990] 2 S.C.R.
Where it appears that und.er the guise of levying a fee the autho-
A rity is attempting to impose a tax, the Court has to scrutinise the
scheme to find out whether there is a real co-relation between the '-!·
services and the levy whether it is so co-extensive as to be a pretence of
a fee but in reality a tax, and whether a substantial portion of the fee
collected is spent in rendering the service.
B
In the instant case replying to paragraph 9 of the writ petition in •
paragraph 6 to 9 of the Counter Affidavit in the High Court the TAC
stated that it used to realise the amount of weighing dues as tax and not '\ •
as a fee and that no question of qµid pro quo was involved in the i
matter. Most of the carts of the cultivators who brought their produce
were parked in the cart-park which was on the land of the TAC 'and it
c maintained sanitary staff in order to keep the place clean as bullocks ----
and carts rnade the place dirty. Arrangement for lighting the patromax
lamps anti for keeping the place clean was made by the TAC. To
~~
ensure correct weighment and to prevent cheating and defrauding
bakshis and peons of TAC were deputed to supervise the daily weigh-
D ing of the goods and the TAC maintained standard weights and
measures in case of any dispute which were to be settled. The weights
of persons were also checked and verified by the TAC and its seal was
affixed to those weights in order to prevent cheating. In paragraph 12
it was stated that TAC employed about 40 sweepers out of which about
half were especially deputed for keeping the places where the sale
E transactions took place clean. One bakshi, one jamadar and one peon .~
were also deputed to supervise the selling in order to see that the
bye-laws in respect of weighment were carried out and that there was
no cheating. Thus, the TAC justified the charging of weighing dues,
but conceded that the same was a tax as there was no quid pro quo.
1-
--
F The respondent having thus conceded that there was no quid pro
quo, we have to hold, as also was rightly held by the High Court, that
the weighing dues constituted a tax and not a fee.
___ .......,_
"'
We do not find any merit in the appellant's submission that there
was double taxation in this case. The expression "double taxation" is
G often used in different senses, namely, in its strict legal sense of direct
double taxation and in its popular sense of indirect double taxation.
Double taxation in the strict legal sense means taxing the same pro-
perty or subject matter twice, for the same purpose, for the same
period and in the same territory. To constitute double taxation, the two
...
or more taxes must have been (1) levied on the same property or
H subject matter, (2) by the same Government or authority, (3) during
S.K. DAS v. TOWN AREA COMMITTEE [SAIKIA, J.] 23
the same taxing period, and (4) for the same purpose. "There is no
double taxation, strictly speaking" says Cooley, "where (a) the taxes A
. are imposed by different States, (b) one of the impositions is not a tax,
(c) one tax is against property and the other is not a property tax, or
( d) the double taxation is indirect rather than direct."
In the instant case there cannot be said to be double taxation as B
there is no such taxation imposed by the TAC for the same period on
the same goods at the same time and for the same purpose.
)
> Where more than oQi Uegislative authority, such as the State
- Legislature and a local or municipal body possess the power to levy a
tax, there is nothing in the Constitution to prevent the same person or
property being subject to both the State and municipal taxation or the
same legislature exercising its power twice for different purposes. In
Avinder Singh v. State of Punjab, [1979) 1 SCR 845, the State of
Punjab in April, 1977 reqired the various municipal bodies in the State
c
to impose tax on the sale of India made foreign liquor @ Rs. I per
bottle w .e.f. 20.5.1977. The municipal authorities having failed to take D
action pursuant to the directive the State of Punjab directly issued a
Notification under section 90(5) of the Punjab Municipal Corporation
Act, 1976 and similar. provision of the Municipal Act 1911. The
petitioner challenged the Constitutional validity of the said statutes
and the levy on the, inter alia ground of double taxation. Krishna Iyer,
J. speaking for the Court held: "There is nothing in Article 265 of the E
Constitution from which one can spin out the Constitutional vice
called double taxation. (Bad' economics may be good law and vice
versa). Dealing with a somewhat similar argument, the Bombay High
Court gave short shrift to it in Western India Theatres (AIR 1954
Born. 261). Some undeserving contentions die hard, rather survive
after death. The only epitaph we may inscribe is: Rest in peace and F
don't be re-born! If on the same subject matter the legislature chooses
_.--- to levy tax twice over there is no inherent invalidity in the fiscal
adventure save where other prohibitions exist." We do not find mate-
rials in this case to allow the contention to be re-born. The submission
is accordingly rejected.
The contention that the tax is discriminatory in view of the
exemptions granted to some of the products and to those that enter the
) TAC by rail or motor transport is equally untenable. It is for the
legislature or the taxing authority to determine the question of need,
the policy and to select the goods or services for taxation. The courts
cannot review these decisions. In paragraph 16 of the counter affidavit H
24 SUPREME COURT REPORTS [1990] 2 S.C.R.
A the TAC tried to explain the reason of not taxing salt, sugar and rice
stating that they were not local produce but were imported from dis-
tant places and that the tax was levied only on the local produce which
came from the neighbouring places. Courts cannot review the wisdom
or advisability or expediency of a tax as the court has no concern with
the policy of legislation, so long they are not inconsistent with the
B provisions of the Constitution. It is only where there is abuse of its
powers and transgression of the legislative function in levying a tax, it
may be corrected by the judiciary and not otherwise. Taxes may be
\
and often are oppressive, unjust, and even unnecessary but this can
constitute no reason for judicial interference. When taxes are levied
i
on certain articles or services and not on others it cannot be said to be
C discriminatory. Cooley observes: "Every tax must discriminate; and
only the authority that .imposes it can determine how and in what
directions." The TAC having decided to impose weighing dues on the
goods mentioned in the Bye-Laws it is not for the court to question it
on the ground that some similar commodities or commodities arriving
by rail or road were not subjected to the tax.
0
The tax having not been found to have been discriminatory or
otherwise illegal we do not find any force in the submission that it
imposed any unreasonable restriction on the appellants' rights
guaranteed under Article 19(1)(g) of the Constitution of India.
E In the result, we find no merit in this appeal and it is accordingly
dismissed. Considering the facts and circumstances of the case we,
however, make no order as to costs. Interim orders, if any, stand
vacated.
Y. Lal Appeal dismissed.
-------
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "tax"Sign in to search