Municipal Board, Nainital & ANR Vs.
Brij Mohan Chandra  INSC 230 (26 October 1970)
26/10/1970 DUA, I.D.
CITATION: 1971 AIR 439 1970 SCC (2) 901
U.P. Municipalities Act II of 1916, s.
128(1)-If authorises collection of a toll-tax levied on vehicles from
passengers travelling in a vehicle.
While the first respondent was travelling by
a U.P. Government Road. ways bus from Bhowali to Nainital in May 1967, toll-tax
was demanded from him at the appellant's municipal toll barrier but he declined
to pay. The Executive Officer, Municipal Board, Nainital, thereupon filed a
complaint against him under s. 190(1) (c) la.P.C., for breach of rule 1 of the
Rules made under s. 153(a) of the U.P. Municipalities Act, 1916. The first
respondent's contention was that the levy of toll-tax by the Municipal Board on
passengers was ultra viruses the taxing pow& of the Board. During the
pendency of these proceedings, on an application made,,, by the first respondent
under s. 561A, Cr.P.C., the High Court quashed those proceedings holding that
clause (vii) of s. 128(1) of the Municipalities Act did not authorise the levy
of toll-tax on passengers and that a connected notification also levied tax
only on vehicles and not on passengers. The Rule imposing an obligation on the
passengers to pay the toll was therefore struck down as ultra vires.
In appeal to this Court it was contended
inter alia that toll imposed on the vehicle entering the Municipality could
legally be realised from the passengers carried by it because of their nexus
with the entry of the vehicle.
HELD: Dismissing the appeal, The toll imposed
on the laden vehicles is expressly made payable by the person-in-charge of such
vehicles. No liability has been fixed on the passengers for payment of the tax
imposed on the vehicles carrying them and entering the Nainital Municipality.
There was no precedent or any principle in support of the submission that
merely because the passengers were carried by the vehicles the toll-tax imposed
on the entry of the vehicles into the municipal limits could be demanded from
them [704 D-G] When the impugned levy was outside the-Act, s. 164 of the Act
could not operate to bar the jurisdiction of the High Court to quash the proceedings
relating to the levy which was ultra virus the taxing power of the Board. [704
CRIMINAL APPELLATE JURISDICTION: Criminal
Appeal No. 134 of 1968.
Appeal from the judgment and order dated
April 16, 1968 of the Allahabad-High Court in Criminal Misc. Case No. 3403 of
Yogeshwar Prasad, for the appellant 0. P.
Rana, for respondent No. 2.
701 The Judgment of the Court was delivered
by Dua, J. The short point requiring determination in this appeal-on
certificate of fitness granted by the Allahabad High Court under Art. 134(1)(c)
of the Constitution is whether tolltax on laden motor vehicles levied under s. 128(1)(vii)
of the, U.P., Municipalities Act 11 of 1916 (hereinafter described as the Act)
on their entry within the limtis of Nainital Municipality can be realised from
the passengers carried by them.
The relevant facts which lie within a narrow
compass may now be briefly stated. Brij Mohan Chandra, Vice-President of the
Notified Area Committee, Bhowali, District Nainital (respondent no. 1 in this
Court) traveled in U.P. Government Roadways Bus from Bhowali to Nainital on
17th, 26th and 29th May, 1967. At Kaila Khan Municipal toll barrier one and a
half mile from Nainital on the Bhowali-Nainital Road, toll- tax was demanded
from him but he declined to pay. The Executive Officer, Municipal Boad,
Nainital, thereupon filed a complaint against him under s. 190(1)(c) of the
Code of Criminal Procedure on the allegation that he had by entering the
municipal limits of Nainital without paying the toll dues committed breach or
r. (1) of the Rules made under s.
153(a) of the Act for the 'assessment and
collection of tolls within the municipality of Nainital. Brij Mohan Chandra's
contention in reply was that the levy of toll-tax by the Municipal Board on passengers
was ultra vires the taxing power of the Board. During the pendency of the
proceedings in the court of Sub-Divisional Magistrate, Nainital, Brij Mohan
Chandra applied to the High Court of Judicature at Allahabad under s. 561A, Cr.
P.C. for quashing those proceedings. The High Court (S. D. Singh J) on April
16, 1968 quashed the proceedings by the impugned order holding that cl, (vii)
of s. 128(1) of the Act did not authorise levy of toll-tax on passengers and
that the relevant notification also levied tax only on vehicles and not on
passengers. The rule imposing an obligation on the passengers to pay the toll
was, therefore, struck down as ultra vires.
In this Court Shri Yogeshwar Prasad, learned
counsel for the appellants (the Municipal Board, Nainital and the Executive
Officer of the Board) at the outset attempted obliquely to seek support for the
validity of the levy on passengers from cl. (xiv) of s. 128(1) as pleaded in
the memorandum of appeal lodged in this Court under O.21, r. 12 of the Supreme
Court Rules. But this attempt was soon abandoned and Shri Yogeshwar Prasad felt
constrained to concede that in view of the clear and precise position taken on
behalf of the Board in the High Court that it had never been intended to impose
toll-tax on passengers, it was not 702 open to him in this Court to rely on cl.
(xiv). Shri O. P. Rana, the learned counsel for the respondent State of U.P. supporting
the appeal, also did not rely on cl. (xiv). We, therefore, do not purpose to
express any opinion on the question whether or not a toll-tax on passengers
would be permissible under cl. (xiv).
The only point seriously pressed on behalf of
the appellants as also by Shri O. P. Rana on behalf of the State of U.P.
was that the toll imposed on the vehicle entering
the municipality could legally be realised from the passengers carried by it
because of their nexus with the entry of the vehicle. Before examining this
contention we may in passing turn to cl. (vii) of s. 128 ( 1 of the Act which
"128(1) Subject to any general rules or
special orders of the State Government, in this behalf, the taxes which a board
may impose in the whole or part of a municipality are- (vii) a toll on vehicles
and other conveyances, animals, and laden coolies entering the municipality;
This clause in clear and unambiguous terms
speaks of a toll on vehicles and other conveyances, animals and laden coolies
,entering the municipality. It does not take within its Cold the, passengers
carried by vehicles to be taxed, with the result that imposition of tax on
passengers by the Municipal Board would be incompetent under this clause. And
this in fact was not ,disputed at the Bar.
The argument of nexus was also raised in the
High Court: but it was repelled by that Court which observed as follows
"It was urged that when a tax on conveyance is levied, some provision has
to be made for the assessment and collection of that tax and some provision
made about the persons from whom that tax may be recovered and that if there is
any reasonable or rational nexus between the levy of the tax and the persons
from whom that tax may be recovered, the Municipal Board would be within its
rights to realise the tax from the persons so named. It is difficult, however,
to apply the nexus theory in a manner so as to enable the Municipal Board to
recover the toll-tax from the passengers travelling in a bus otherwise there
will be no distinction left between a vehicles-tax and a passenger tax. When a
toll-tax is 703 levied on a vehicle, it is levied at the point of its entry
within the municipal limits. It is obviously, therefore, the person, who is in
charge of the vehicle or who makes an attempt to take the vehicle inside the
municipal limits, who takes upon himself the responsibility for the payment of
the toll- tax. There is no question of there being any nexus between the levy
of the tax on the vehicle and the persons sitting inside the same. In the case
of ,vehicles plying on hire the driver or conductor of the vehicle can, of
course, charge the amount of tax which has to be paid, from the passengers in
addition to the fare which is normally charged from them." The same
argument was repeated before us. The submisssion seems to be based largely on
the policy of the law to ensure the collection of taxes by preventing
fraudulent evasion. in order to, appreciate its cogency we may appropriately
advert 'to the Rules made by the State Government, in 1922 under s. 296 read
with s. 153(a) of the Act, with respect to the assessment and collection of
tolls in the Nainital Municipality. So far as relevant for the purposes of this
appeal, according to r. (1), no person can bring within the limits of the
Nainital Municipality any vehicle in respect of which the toll-tax imposed
under s. 128 ( 1 ) (vii) of the Act is leviable until the toll due in respect
thereof has been paid to such muharrir and at such barrier as the Board may
from time to time appoint. Under r. 2(a), in the case of laden motor vehicles
the load recorded in the chalan or invoice accompanying the vehicle has to be
accepted by the muharrir for purposes of assessing the toll. If no chalan or
invoice accompanies the vehicle the load is to be assumed for the purposes of
assessment to exceed three mounds unless it is ascertained to be less by
weighment undertaken 'at the request of the person-in-charge of the vehicle.
The toll on a laden motor vehicle has to be paid by the person-in-charge of the
vehicle and toll on a passenger is to be paid by the passenger. Rule 2 (b)
provides that when any person-in-charge of a laden vehicle enters the municipal
limits such person shall pay the toll to the muharrir at the barrier add the
muharrir shall tender a face-value-ticket with coupon attached for the amount
to the person paying the toll. This face value ticket can be examined by the
official appointed for the purpose and the person bringing the vehicle with the
municipal limits is bound under r. 3 to permit such examination. Under r. 2(c),
every driver of a motor lorry or other vehicle plying for ,hire and every driver
of a private motor can or vehicle carrying passengers or goods has to so his
lorry or vehicle at the toll barrier for a reasonable time to enable the, toll
staff to recover prover toll tax from passengers and on the goods loaded
therein. The pro- 704 vision contained in r. 2(a) that the toll on a passenger
shall be paid by the passenger on which reliance has principally been placed,
is of no assistance to the appellants because it postulates imposition of toll
on_ passengers and, therefore, unless a ton has been imposed on passengers none
can be demanded from them under this clause.
Similarly the notification (No. 1450/XI-476
E) dated 19th August, 1921, according to which toll-tax under s. 128 (1) (vii)
of the Act sanctioned by the U.P. State Government under S. 135(2) of the Act
is levied on motor vehicles other than cars at the rate of Re. 1/- per
passenger carried by them and at the rate of Rs. 2/- per vehicle is unhelpful
to the appellants. As already observed by us, no toll-tax has been imposed on
passengers and indeed it was conceded on behalf of the appellants, both here
and in the High Court, that the Board had never intended to impose a tax on
passengers. It is also noteworthy that the toll imposed on the laden vehicles
is expressly made payable by the person- in charge of such vehicles and
according to the scheme of the rules which provide the procedure for collecting
such tolls, the person bringing the vehicle within the municipal limits (who is
supposed to be the person-in-charge) is enjoined to permit examination of the
face-value-ticket when demanded after the vehicle's enquiry into, those limits.
No liability has been fixed on the passengers for payment of the tax imposed on
the vehicles carrying them 'and entering the Nainital Municipality. The liability
for the payment of such tax having been fixed only on the person-in-charge of
the vehicle and not on the passengers it is difficult to appreciate how the
authorities entrusted with the duty of realising the same can demand it from
the passengers. Our attention was not invited to any provision of law under
which the passengers can be held liable to pay the toll-tax imposed on the
vehicles. Neither any precedent nor any principle was cited at the Bar in
support of the submission that merely because the passengers were carried by
the vehicles the toll-tax imposed on the entry of the vehicles into the
municipal limits could be demanded from them. On the facts and circumstances of
this case and on the arguments addressed we are, therefore, unable to hold that
the passengers carried by the vehicles entering the municipality of Nainital can be legally called upon to pay the tax imposed on the vehicles.
As a last resort a faint attempt was made by
the appellants' counsel to rely on s. 164 of the Act in bar of the jurisdiction
of the High Court in entertaining the petition under s. 561A, Cr. P.C. and in
holding the impugned assessment and liability of the passengers to be
unauthorised and illegal. This argument ignores the vital point that if the
impugned levy is outside the Act then this section cannot operate and the
jurisdiction of the High Court 705 to quash the proceedings relating to the
levy which is ultra vires the taxing power of the Board under the Act cannot be
taken away to the prejudice of the aggrieved, citizen. This submission is
In the final result this appeal fails and is
R.K.P.S. Appeal dismissed.