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TMI Blog2015 (1) TMI 1497X X X X Extracts X X X X X X X X Extracts X X X X ..... icipal Corporation, Indore & others, The Assistant Commissioner, Indore Municipal Corporation, Indore & Shouryaditya Advertise, Mr. Rakesh Singh & Mr. M.P.S. Arora D.B.: Hon'ble Shri P.K. Jaiswal And Hon'ble Shri D.K. Paliwal, JJ. Shri A.M. Mathur, learned Senior Counsel with Shri Sumit Nema, advocate for the petitioner in Writ Petitions No.2296, 4081 of 2012. Shri B.L. Pavecha, learned Senior Counsel with Shri Vijayesh Atre, advocate for the petitioner in Writ Petition No.2468/2012, Writ Petition No.8170/2013, Writ Petition No.4770/2014 and Contempt Case No.463/2014. Shri Piyush Mathur, learned Senior Counsel with Shri Sumit Nema & Shri R.S. Raghuvanshi, advocates for the petitioner in Writ Petition No.2725/2012. Shri Pradeep Gupta, advocate for the petitioner in Writ Petition No.3446/2012. Shri Vishal Baheti, advocate for the petitioner in Writ Petitions No.3619, 3627, 5680, 5681, 6134 and 6207 of 2012. Shri Vivek Patwa, advocate for the petitioner in Writ Petition No.3744/2012. Shri S.P. Joshi, advocate for the petitioner in Writ Petitions No.4692 and 4693 of 2012 and Writ Petition No.6344/2014. Shri Sumeet Nema, advocate along with Shri M.P. Devnath, Shri Bhuv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imited v. Commissioner, Municipal Corporation, Indore & others), (8) Writ Petition No.4081/2012 (M/s. Samsung India Electronics Private Limited v. The State of Madhya Pradesh & others), (9) Writ Petition No.4692/2012 (Videocon Industries Limited v. The State of Madhya Pradesh & others), (10) Writ Petition No.4693/2012 (Kail Limited v. The State of Madhya Pradesh & others), (11) Writ Petition No.5116/2012 (Nokia India Limited v. The State of Madhya Pradesh & others), (12) Writ Petition No.5160/2012 (M/s. Ramani Ice Cream Company Limited v. Assistant Commissioner, Indore Municipal Corporation, Indore & another), (13) Writ Petition No.5680/2012 (M/s. Heidelberg Cement India Limited v. The State of Madhya Pradesh & others), (14) Writ Petition No.5681/2012 (Birla Corporation Limited v. The State of Madhya Pradesh & others), (15) Writ Petition No.5814/2012 (Vadilal Enterprises Limited v. Indore Municipal Corporation & another), (16) Writ Petition No.6134/2012 (The India Cements Limited v. The State of Madhya Pradesh & others), (17) Writ Petition No.6207/2012 (M/s. Pidilite Industries Limited v. The State of Madhya Pradesh & others), (18) Writ Petition No.4592/2013 (Tata Teleservices Limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Corporation is empowered to levy tax on permissible display or advertisements on public place or on private land or building at such rate and from such date, as the State Government may direct by notification in the official gazette and in such manner as laid down in the Act of 1956 and as may be provided in the rules made by the State Government under Section 427 (Bye laws) of the Act of 1956. The levy, assessment and collection of taxes under Chapter XII of the Act of 1956 are to be in accordance with the provisions of the Act of 1956 and the Rules and byelaws made thereunder. The provisions in relation to the imposition of 'advertisement tax' has been specified under Section 132 (6) (l) of the Act of 1956, which reads as under: " 132. Taxes to be imposed under this Act.( 6) In addition to the taxes specified in subsection (1), the Corporation may, for the purpose of this Act, subject to any general or special order which the State Government may make in this behalf, impose any of the following taxes, namely:( l) a tax on advertisement other than advertisements published in news papers." 6. Respondent No.2 framed "the Indore Municipal Corporation (Advertiseme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner. (ii) The advertisement boards or notices carried on any vehicle shall in no case project beyond the length and width of the vehicle nor shall they be so placed as to obscure the registration marks or the obligatory lamps or to hamper the rider or driver of any vehicle. (3)(a) The advertisement hoardings: (i) shall not be more than 9 metres high from the ground level. (ii) shall not project beyond the general line of buildings in the street or more than 0.30 metre beyond the building line in the streets for which a building line has been prescribed. (iii) shall not be within 27 metres from any public park or pleasure promenade. (iv) shall not in the opinion of the Municipal Commissioner be disproportionately large in comparison with the size of the land or building on which they are displayed. (v) No advertisement hoardings cinema and posterboards, and similar structures used for the purpose of advertising shall as a general rule be allowed to be put up along the promenades or abutting on public parks and recreation grounds, places of worship, public convenience nor in purely residential localities and at heavy traffic points and important road junctions e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fused on the ground of cleanliness, safety or public order and in such a case the persons for refusal shall be communicated to the applicant in writing. 10. Removal of advertisements. (1) The Municipal Commissioner shall be entitled to require the owner or occupier of any property or the persons, firm or institution to remove an advertisement exhibited without permission. (2) The order under clause (1) shall be in writing and served on the person concerned with the offending advertisement. (3) The person on whom the order under clause (1) is served shall comply with the same within the period specified in the order. (4) In case of noncompliance the Municipal Commissioner may take all necessary steps to remove the advertisement and the cost incurred in this behalf shall be recovered from the person against whom the order under clause (1) is made. 11.Appeals. Any person aggrieved by an order of the Municipal Commissioner under these byelaws may appeal to the Corporation within thirty days from the date of such order. 12.Penalty. Whoever contravene any provisions of these byelaws shall be punishable with fine which may extend to one hundred rupees and in the case of a cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of property tax, by attachment of rent due in respect of the property. (7) by a suit. 173. Presentation of bill for taxes and other demands.( 1) When any amount declared by or under the provisions of this Act to be recoverable in the manner provided in this chapter, or payable on account of any tax imposed within the limits of the city shall have became do, the Commissioner shall, with the least practicable delay cause to be presented to any person liable for the payment thereof a bill for the sum claimed as due. (2) Contents of bill.Every such bill shall specify( a) the period for which: and (b) the property, occupation or thing in respect of which the sum is claimed, and shall also give notice of( i) the liability incurred in default of payment; and (ii) the time within which an objection may be preferred as against such claim. 174. If bill not paid within 15 days notice of demand to issue.(1) If the sum , for which a bill is presented as aforesaid, is not paid and no objection has been prefer within 15 days from the presentation of the bill, the Commissioner may, serve upon the person to whom such bill has been presented a notice demand in the form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty office, and a receipt thereof has been filed with a memo of appeal. 189. Taxation not to be questioned except under this Act.( 1) No objection shall be taken to any valuation or assessment, nor shall the liability of any person to be assessed or taxed be questioned in any other manner or by any other authority than as provided in this Act. (2) The Government may make rules under this Act regulating the refund of taxes and such rules may impose limitations on such refunds. (3) No refund of any tax shall be claimed by any person otherwise than in accordance with the provisions of this Act and the rules and the byelaws made there under. 189A. Recovery of taxes by public auction or private contract.Notwithstanding anything contained in this Act, the Corporation may, by public auction or private contract lease the recovery of any of the taxes and fees which may be imposed under this Act, subject to the conditions and limitation, if any, prescribed by the State Government in this behalf. 427. Byelaws. The Corporation may, and if so required by the Government, shall make byelaws consistent with the provisions of this Act and the rules made there under for carrying out the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... public, 'advertisement tax' was made effective in the City of Indore from the date of publication in official gazette i.e. 10.08.1973. On 31th May, 1978, byelaws were framed for assessment and collection of 'advertisement tax'. Validity of implementation of 'advertisement tax' was upheld by a Division Bench of this Court in the case of Shri Krishna Pictures, Indore & others v. Administrator, Indore Municipal Corporation & another reported in 1980 JLJ 530; paragraphs 4 and 5 are relevant, which reads, as under: " 4. The learned counsel for the petitioners also contended that the byelaws for assessment and collection were made on 18th August, 1978 and that before this date the tax was inoperative because no machinery existed for assessment or collection of tax. A taxing statute has to provide not only for imposition of the tax with which it deals but also for its assessment and collection. This follows from Article 265 of the Constitution which directs that no tax shall be levied or collected except by authority of law. The words "levy" and "collection" in this Article are used in a comprehensive sense to cover all steps beginning from imposition and ending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed, and shall also give notice of( i) the liability incurred in default of payment; and (ii) the time within which an objection may be preferred as against such claim. 174. If bill not paid within 15 days notice of demand to issue.(1) If the sum , for which a bill is presented as aforesaid, is not paid and no objection has been prefer within 15 days from the presentation of the bill, the Commissioner may, serve upon the person to whom such bill has been presented a notice demand in the form prescribed by byelaws. (2) For every notice of demand a fee shall be charged at the rate specified in the byelaws and shall be payable by the said person, and the fee shall be included in the costs of recovery. 175. In what case warrant may issue.(1) If the person on whom a notice of demand is served under subsection (1) of section 174 does not within thirty days of the service of such notice( a) Pay the sum demanded in the notice; or (b) show cause to the satisfaction of the Commissioner why he should not pay the same; or (c) prefer an appeal in accordance with the provisions of section 184 against the demand; such sun with all costs of recovery may be recovered under a wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manner indicated above. As the procedure under these sections is quasijudicial in nature and is coupled with a safeguard of appeal, it cannot be said that the procedure is administrative and does not fulfill the requirement of the Constitution. In Assistant Collector, C.K. v. N.T. Co. of India Limited (supra) the Supreme Court inferred a quasijudicial procedure for assessment from rule 10A of the Central Excise Rules which apparently dealt with residuary powers for recovery of sums due to Government and did not expressly provide any procedure for assessment. Similarly, in Roopchand v. K.U.M. Samiti, Raipur (supra) a quasijudicial procedure for assessment was inferred from section 20 of the Madhya Pradesh Agricultural Produce Markets Act, 1960 and rule 56 made thereunder although none of these provisions expressly provided for assessment of the fee imposed. These decisions support our conclusion that sections 173 and 174 impliedly provide for assessment in a quasijudicial manner in cases where there are no separate byelaws for assessment of a tax. We are, therefore, unable to accept the argument that the tax was inoperative till 18th August, 1978 for want of any machinery for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no such power can be conferred on the contractor. 16. It is also submitted by Shri A.M. Mathur, learned Senior Counsel for the petitioners that no 'advertisement tax' can be recovered from the petitioners without determination of the essential jurisdictional facts by the Municipal Corporation as to (a) whether the glowsign board / sinage is, in fact, an advertisement; (b) that it is the petitioner, who has exhibited / erected / fixed / retained / displayed the same; (c) its location; and (d) its contents. He submitted that in the present batch of writ petitions, the power to levy of tax involves its levy, assessment and then recovery and all the three stages cannot be entrusted to the private contractor under Section 189A of the Act of 1956. 17. The argument of the learned Senior Counsel for the petitioners is that the expression "system of assessment" means the entire procedure for assessment and collection of tax, and that as the order of the Administrator do not contain any procedure for assessment or collector of tax, there was noncompliance of the mandatory requirement of Section 133 of the Act of 1956 and the imposition of 'advertisement tax' was invalid. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Part XChapter XXXVII of the Municipal Corporation Act, 1956 deals with framing of Byelaws: 427. Byelaws. The Corporation may, and if so required by the Government, shall make byelaws consistent with the provisions of this Act and the rules made there under for carrying out the provisions and intentions of this Act, and in particular and without prejudice to the generality of the foregoing power, it may, make byelaws to regulate all or any of the following matters namely:xxxxxxxxxxxxxxxx (3)Assessment, collection, remission, refund and recovery of taxes, cesses, etc. ( c)the date, place and manner of paying tax or installment of tax payable under this Act and the person to whom it shall be paid". Section 430 invests State Government with power to sanction which reads as under: "430. Byelaws to be subject to sanction of Government.( 1) No byelaw made by the Corporation under this Act shall have any validity until it is confirmed by the Government. (2) Before sanctioning any such byelaw the Government may modify it. (3)The Government my cancel its confirmation of any such byelaw and thereupon the byelaws shall cease to have effect." Thus, when the byelaws are framed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) all interest and profits arising from any investment or from any transaction in connection with, any money belonging to the Council; (2) Nothing in this section of in this act shall affect any obligations of a Council arising from a trust legally imposed upon or accepted by a Council. (3) A Council may, for the purpose of efficient discharge of any of the duties imposed upon it under clauses(d), (j) and (l) of section 123 by a resolution passed in that behalf, earmark for each such purpose a specified portion of its income every year for a specified number of years for being credited to a fund called the Public Utility Scheme Fund. The amount so credited shall be expended for the purposes for which it has been earmarked. Section 160. Lease of levy of tolls, market dues and fees - (1) The council, may by public auction or private contract, lease the levy of tolls, market dues and fees which may be imposed under this Act: Provided that the lease shall give security for the due fulfillment of the conditions of the lease. (2) When leave has been given under subsection (1) the lessee and any person employed by him to collect any tolls, market dues and fees shall, subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng collection of tax to be made only through permanent employees of the local body. Arrangement for collection is left to be made by the local body subject to the broad scheme of the Act. The local body has made byelaws providing for collection of tax by auction. We are unable to agree that this mode of collection is contrary to the Act and the intention of the legislature. We are also unable to agree that the contractor and the staff are beyond the restrictions of law. There is no data in support of the contention that the arrangements secured by the contractor would fetch him undue profit. On the other hand, the data provided by the local body shows that the mode of auction is really beneficial to the local body. We, therefore, reject the contention of the petitioners and uphold the mode of collection challenged by the petitions." 20. The petitioners have also placed reliance on the Apex Court decision in the case of Indore Municipal Corporation v. Gujarat Cooperative Housing Society Limited reported in AIR 1992 SC 1506, wherein the Apex Court in paragraph 24 has held, as under: " 24. The bye-laws are framed under Section 427 of the Act and Section 431 provides that all bye-la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the byelaws and should have sent it to the State Government for its approval. If the Government has approved and accepted the proposal then the procedure for amending the byelaws should be followed in the same manner as the byelaws were framed. Without any amendment in byelaws the Nagar Panchayat or Municipal council is not empowered to enhance the rate of fee under the provisions of section 129 of the Act. The enhancement of fee by the respondent Nagar Panchayat in excess of fee prescribed in the byelaws is void and cannot be recovered. The respondents are entitled to recover the fee as mentioned in the byelaws. Unless the byelaws are amended, the respondents are not empowered to recover higher rate of fee than mentioned in the byelaws. This enhanced fee not provided in any rule or byelaws cannot be recovered. Even Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. Article 265 provides that not only levy but also collection of tax must be under the authority of some law. Any recovery by invalid law or rule is liable to be interfered by the Court." 22. The contention of the learned Senior Counsel for the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , if he himself exports any goods as shown in the schedule or sale for the purpose of export. 4. The person, businessman, establishment or license holder, as mentioned in Rule 3 shall deposit in the Municipal Treasury the amount of terminal tax collected during the last month on the goods exported from the Municipal limits, through their shop establishment alongwith the return up to 10th day of every month. 5. If on the examination of the return, the Municipal Commissioner or the Chief Municipal Officer, as the case may be required any additional information, he shall give the notice to the person concerned, businessman, establishment or in case of Krishi Upaj Mandi, its license holder, and they shall submit such information within 30 days from the date of receipt of such notice. 6. The Municipal Commissioner/Chief Municipal Officer, as the case may be or any Municipal Officer/employee authorised by them, with the prior approval of Commissioner in case of Municipal Corporation and Chief Municipal Officer and in case of Municipality and Nagar Panchayat, may enter in the shop concerned, establishment or Mandi, as the case may be, to enquire into the information given in the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount may be collected by the Contractor. Such contract can be auctioned. But recovery by contractor shall be in accordance with the agreement and as per Rules of 1996. Contractor is required to recover the dues under the Rules of 1996. However, if the assessee refuses to pay the amount to the contractor, contractor is not empowered to take any coercive action. On failure to deposit tax due by the assessee, contractor is required to report the matter to the Authorities of the Municipal Council and the Municipal Council shall initiate proceedings for recovery of the tax under the provisions of the Act. Chapter VIII which begins from Section 164 of the Act relates to recovery of Municipal Claims. Section 165 confers power upon the Authorities of the Municipal Council to recover arrears and such recovery can be made through the Magistrate having jurisdiction within the limits of the Municipality and such Magistrate may order recovery by distress and sale of any movable property or attachment and sale of immovable property belonging to such person within the limits of his jurisdiction. Thus power to recover arrears of demand by coercive method vests with the Magistrate under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 189A. In Writ Petition No.2725/2012, the petitioner has moved IA No.3356/2014, pointing out with reference to specific documents and FIR that by way of coercive action, the private respondent has damaged the petitioner's board installed at petitioner's own store and has caused loss of Rs.8,00,000/(rupees eight lakh) to the petitioner. The Municipal Corporation in its letter to the Police Station Incharge has categorically mentioned that coercive recovery has not been made by Municipal Corporation and M/s. Shauryaditya Advertiser (respondent No.3) has resorted to the said illegal action. The letter dated 04.06.2014 annexed as Annexure A/4 to the said IA No.3356/2014 in Writ Petition No.2725/2012 at page No.4, thus confirms the factum of illegal coercive action by the private respondent No.3. 25. It is also pointed out that the Municipal Corporation has only right to take coercive action for recovery of dues of 'advertisement tax', as prescribed under the Act of 1956 and the Byelaws of 1978 framed thereunder. Respondent No.3 has no power or authority to take any coercive action. 26. The question whether glowsign board is an advertisement or not, and who has ere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertisements at their premises /outlet in order to inform the customers about the presence of the product of the petitioner in their shops / premises. These sinage and display boards are not exhibited / erected / fixed / retained or displayed by the petitioner, but are the function and property of the retailers, who display the same on their own and in any event, the petitioner cannot be called upon by the respondents to pay any 'advertisement tax'. It is also submitted that as per the byelaws of the Indore Municipal Corporation, 'advertisement tax' is payable by a person, who exhibits / erects, fixes or displays the advertisement at his location / premises. The petitioners have filed affidavit stating therein that the 'advertisement tax' cannot be subjected to tax in the hands of the petitioners, because these have not exhibited / erected / fixed by the petitioners at its premises. Respondent No.3 without verifying the aforesaid only on the basis of ex parte survey made by respondent No.3 for assessment of 'advertisement tax', whereas no advertisement has been erected or installed by the petitioners at its premises. Merely because, a third person use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords used in Article 265 are levy and collect. In taxing statute the words levy and collect are not synonymous terms, (refer to Assistant Collector of Central Excise, Calcutta Division v. National Tobacco Company of India Limited (1972) 2 SCC 560 at page 572, while 'levy' would mean the assessment or charging or imposing tax, 'collect' in Article 265 would mean the physical realisation of the tax which is levied or imposed. Collection of tax is normally a stage subsequent to the levy of the same. The enforcement of levy could only mean realisation of the tax imposed or demanded. That the States were prevented to recover the tax, if not already realised, in respect of the period prior to 25th October, 1989 is further evident from paragraph 90 of the judgment. The said paragraph shows that as on the date of the judgment for the period subsequent to 1st March, 1986 the demand of the Central Excise Department on the alcohol manufactured was over Rs. 4 Crores. The Court referred to its orders dated 1st October, 1986 and 16th October, 1986 whereby the State Government was permitted to collect the levy on alcohol manufactured in the company's distilleries. With respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 32. The bills sent by the contractor - M/s. Shouraditya is the action of the own exercise and imagination, without any approval or participation of the Municipal Corporation. The petitioners have no opportunity to oppose the bill and to seek its determination by an independent quasi judicial machinery / authority. Such a demand is violative of principles of natural justice and deserves to be quashed on this short ground alone. The fact that the contractor has raised the bills without intervention of the Municipal Corporation is evident from paragraph No.2 of the legal notice dated 21st February, 2012 (Annexure P/6 in Writ Petition No.2468/2012), which reads as under: " 2.My client submits that in the light of aforesaid agreement and work order my client started its tax collection process after making due survey on different private and commercial institutions, shops, malls and other premises on 21st December, 2011. In respect to the aforesaid process my client sent its humble demand letter along with bill and other supported documents on 14.01.2012 and took signed and sealed receipt fro you whereby it requested for your kind support and for payment of your dues of advertising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that on the basis of Section 189A of the Act of 1956, the Corporation is empowered to auction for recovery of 'advertisement tax' through a contractor. It is also submitted that by virtue of the powers conferred under Section 131 of the Act of 1956, a resolution was passed by the Indore Municipal Corporation in respect of the imposition of 'advertisement tax' and 'advertisement tax' has been levied in the entire township of Indore within the municipal limits. It has also been stated that in order to recover 'advertisement tax', tenders were floated and the offer of the highest bidder was accepted on behalf of the Indore Municipal corporation and thereafter, an agreement was executed on 24.08.2011. He submitted that as per Section 132 (6) (l) of the Act of 1956, the petitioner is liable to be taxed, therefore, no case for interference is made out in the matter. He submitted that no power has been given to respondent No.3 - private contractor to recover the tax by taking coercive action against the petitioner. He has drawn our attention to the decision of Gwalior Bench of this Court in the case of Gwalior Advertisers Association, Gwalior & oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cupied by the company. Total area of office is about 60,000 square feet having six entrance. To know their location, they put sign board / kiosk on some part of their office, which is at their own premises, and therefore, no 'advertisement tax' can be levied by them, which is less than 10% of the total space of the Office. 39. He submitted that after awarding contract to the private contractor, employee of respondent No.3 along with its number of persons came to the premises of the petitioner and started demanding 'advertisement tax'. On failure to pay 'advertisement tax, persons of respondent No.3 started removing sign boards etc. and along with them, no employee / officer of Indore Municipal Corporation was present. 40. It is evident from the aforesaid provisions and the decisions that the power which have been delegated under Section 189A is for recovery of the amount. That power does not include the levy and the assessment of the tax. In this case, the assessment has to be made by the Corporation. It is for the Corporation to issue notice to the petitioners regarding the provisional levy in respect of the hoardings either installed by them or through the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax determined. SubClause (2) of Clause (6) lays down that Municipal Corporation shall within four days from the date of receipt of the application intimate the applicant the amount of tax payable on intended advertisement. There appears to be in built provision in Clause 6 (2) to raise objection, but there is no prohibition that the objection cannot be raised. The provisions of the Act of 1956 impliedly gives the power on receipt of the amount of tax payable, as laid down under Clause 6 (2) and if the applicant feels that the amount so determined is not payable or in excess, an objection can be raised and that is why in Clause 3, after the payment of the said tax, the application requires to be considered and the Municipal Corporation is required to pass an order in Form 'B' permitting exhibition or retention of the advertisement. Passing of the order, after the consideration, impliedly means that if any objection is raised, the same has got to be considered. Thus, it cannot be said that no opportunity is accorded to the applicant to raise an objection. Intimation of the amount of tax for the intended advertisement and consideration of the application impliedly amounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Sahiti Multi Purpose & Transport Cooperative Society Limited, Bhopal v. State of MP & another (supra) has held that taxation and collection of tax are no doubt sovereign functions. The sovereign himself or itself cannot collect the tax. Tax has to be collected through appropriate agency. The agency can be a permanent cadre of employees. The agency can also be temporary agents on whom is conferred the authority to collect the tax, however, of course subject to the control of the sovereign or the local body. Where the employees collect the tax, they deposit the entire amount in the municipal fund and draw their pay. The same method could be followed under the scheme of auction. The successful bidder could be required to deposit the entire collection in the municipal fund and he may be separately paid for his exertion. Under the byelaws, instead of depositing the entire amount and taking back the remuneration, the net amount is required to be deposited. Where the collection agency has to be remunerated, remuneration may be fixed on any reasonable basis including percentage or a lump sum. At the same time, the local body may secure guarantee of minimum collection. All these factors a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18.08.1978. In view of the aforesaid, we are of the view that no case is made out to quash the Resolution No.167 dated 24.08.2011 and Resolution No.233 dated 13.10.2011 passed by the Mayorincouncil. Nor any case is made out to quash the work order dated 20.10.2011 issued by respondent No.2 - Indore Municipal Corporation in favour of respondent No.3 and the agreement by which respondent No.2 awarded the contract to respondent No.3 for collection of the 'advertisement tax'. Considering the fact that the procedure, as prescribed under the Byelaws of 1978, has not been followed by the Municipal Corporation while directing respondent No.3 - contractor to recover 'advertisement tax' on their behalf, we quash the demand, which are subject matter in this batch of writ petitions and direct the Municipal Corporation to issue fresh demand regarding levy and collection of the 'advertisement tax', as per the rules of Byelaws and when the demand is finalized by the Municipal Corporation, then only the same may be given to respondent No.3 - contractor to recover it. The contractor shall recover the amount as per the scheme framed under the Byelaws. The contractor cannot t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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