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TMI Blog2008 (3) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... ted tender for collection of vehicle tax entering into Ramgarh Cantonment Area. Respondent No. 3 in this appeal, Mukesh Prasad being the highest bidder was awarded the contract and was asked to realise vehicle tax at the rate of Rs. 10 from each goods vehicle entering into the Ramgarh Cantonment Area for a period of six months starting from March 12, 2001. Respondent No. 3 deposited the earnest money. On March 8, 2001 a formal agreement was executed between respondent No. 3 and the Cantonment Board. The Cantonment Board immediately after executing the said agreement issued a letter dated March 11, 2001 restraining respondent No. 3 from collecting vehicle entry tax on the directions of the Deputy Commissioner, Hazaribagh, Bihar. The Secretary, Road Construction Department, Ranchi vide letter dated May 30, 2001 informed that prior permission of the Ministry of Road Transport and the National Highway, Government of India, was necessary for the purpose of putting barriers to collect tax on the national highway. The Cantonment Board is entitled to collect only those taxes which can be realised by the municipality. In other words, the Cantonment Board cannot levy the tax which cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onment Board has any power to levy entry tax, it is necessary to find whether the municipality has similar power to levy entry tax. Chapter IV of the Bihar and Orissa Municipal Act, 1922 (for short, "the 1922 Act") deals with the subject of municipal taxation. Part I of Chapter IV deals with the subject of imposition of taxes. The relevant portion of section 82 reads as under: "82. Power to impose taxes. - (1) The Commissioners may, from time to time at a meeting convened expressly for the purpose, of which due notice shall have been given subject to the provisions of this Act and with the sanction of the State Government, impose within the limits of the municipality the following taxes and fees, or any of them. - . . . (f) a tax on the vehicles, horses and other animals named in the First Schedule. . . . " Under section 82 taxes and fees can be imposed on vehicles and other animals named in the First Schedule. Therefore, it is imperative for us to find out what has been incorporated in the First Schedule. First Schedule of the Municipality Act, 1922 is extracted as under: "THE FIRST SCHEDULE Tax on vehicles, horses and other animals per quarter Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of which this Act makes no provision or insufficient provision and provision is declared by the Commissioners, with the sanction of the State Government, to be necessary: Provided that such bye-laws shall not- (a) apply to any vehicle used on a railway or tramway; and (b) impose any fees for the registration of motor cars or for the grant of a licence to drive a motor car. . . ." According to section 326, all vehicles plying for hire have been specifically excluded from levying of such tax by the municipality and consequently the Cantonment Board also has no power or competence to levy entry tax on vehicle which ply for hire. The "vehicle" and "motor car" have been defined in sections 3(30) and 3(30A) respectively of the 1922 Act. The definitions contained in sections 3(30) and 3(30A) read as under:- "3(30). 'Vehicle' means a wheeled conveyance, other than a motor car capable of being used on a road and includes a tricycle, bicycle, cycle rickshaw, a jinrickshaw and a shampani. 3(30A). 'Motor car' means any mechanically propelled vehicle adopted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the municipality has no such power, competence or authority to levy tax on entry of mechanically propelled vehicles, the Cantonment Board, Ramgarh, Bihar obviously cannot exercise those powers. The learned counsel for the appellants placed reliance on the case of Cantonment Board, Mhow v. M.P. State Road Transport Corporation [1997] 9 SCC 450. This case was cited for the proposition that since the Cantonment Board in Madhya Pradesh has been permitted to levy entry tax on motor vehicles, therefore, the Cantonment Board, Ramgarh, Bihar in the instant case, is also justified in levying entry tax on motor vehicles. In order to avoid any confusion or misunderstanding, we deem it appropriate to deal with the said case of Madhya Pradesh [1997] 9 SCC 450 in detail. The Madhya Pradesh State Legislature has specifically given power under section 127 of the M.P. Municipalities Act, 1961 to the municipalities of Madhya Pradesh to levy entry tax on the vehicle. It may be pertinent to observe that no power to levy entry tax has been given to the municipalities in Bihar under the 1922 Act. Relevant portion of section 127 of the M.P. Municipalities Act, 1961 reads as under: "127. Taxes w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition of tax on motor vehicles entering into the limits of the Cantonment Boards cannot be said to be invalid or inoperative. The High Court in our opinion committed error in striking down those notifications on the ground of repugnancy with this special legislation, namely, the Madhya Pradesh Motor Vehicles Taxation Act." In the said judgment this court held that the Cantonment Board is entitled to levy entry tax on motor vehicles within the limits of the Cantonment oard. This was justified on the ground that similar power was vested in the concerned municipality. It is again reiterated that, in the instant case, the Bihar Legislature has not given powers to the municipalities to levy entry tax, therefore, the Cantonment Board, Ramgarh lacks an authority or competence to levy entry tax on motor vehicles entering into the Cantonment Board area. In this view of the matter, the Madhya Pradesh case [1997] 9 SCC 450 has no application as far as the instant case of the appellants is concerned. The learned counsel for the appellants has also placed reliance on Avinash v. State of Maharashtra [2004] 2 Mah. LJ 511 and Secunderabad Cantonment Board, Secunderabad v. Allied Trading Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X
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