AMRIT BANASPATI COMPANY LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) This writ Petition has been filed by Ami-it Banaspati Company Limited praying for a declaration that the provision in section 178 of the Delhi Municipal Corporation Act No. 66 of 1957 (hereinafter referred to as "the Corporation Act"), for levy of terminal tax is ultra vires the Constitution of India, and for the issuance of a writ of prohibitation or other suitable writ or direction directing the respondents to forbear from realising any terminal tax from the petitioner under the provision in the said section. The petitioner also prayed for a direction to the respondents to refund a sum of Rs. 2,95,396.01 which was alleged to have been realised by the respondents as terminal tax from the petitioner. The respondents are (1) The Union of India through the Secretary, Ministry of Home Affairs ; (2) The Lt. Governor, Delhi ; (3) The Commissioner Municipal Corporation of Delhi ; and (4) The Delhi Terminal Tax Agency.

(2.) The petitioner-company was incorporated under the Companies Act, 1956, and it was its registered office at G. T. Road, Ghaziabad, in the State of Uttar Pradesh. It carried on and still carries on the business of manufacturing and dealing in Vanaspati, also known as Vegetable Ghee and Vegetable Solidified Oil (hereinafter referred to as "Vansapati products"). It has a factory, inter aha, at Ghaziabad for manufacturing the said Vanaspati products. In the course of its business, the company carried and still carries its products by railway and/or road into the Union Territory of Delhi from Ghaziabad for the purpose of sale at Delhi.

(3.) The Corporation Act was enacted by the Parliament and it came into force on December 28, 1957. Section 178 of the said Act provides for the levy of terminal tax at the rates specified in the Tenth Scheduled to the Corporation Act on all goods carried by railway or road into the Union Territory of Delhi from any place outside thereof. Under the provision in the said section, respondent 4 realised various amounts from time to time from the petitioner by way of terminal tax on Vanaspati products carried by the petitioner by railway and/or road into the Union Territory of Delhi. The amounts said to have been so realised are: Year Amount Rs. 1969 ..... 68,620.09 1970 ..... 90,137.54 1971 ..... 1,36,638.38 According to the petitioner, the provision in section 178 of the Corporation Act directly and immediately impedes the movement of goods from one place to another and thus restricts trade, commerce and intercourse, and also discriminates between goods manufactured within the Union Territory of Delhi and the goods manufactured outside the said Territory. Further, according to the petitioner, the terminal tax chargeable under section 178 is not referable to any service rendered or to be rendered by any railway or road transport organization. Thus, according to the petitioner, section 178 of the Act violates the freedom guaranteed under Article 301, and is not protected by Articles 302, 303 and 304 of the Constitution of India, and as such is ultra vires the Constitution. The petitioner, therefore, wrote a letter on November 18, 1971, requesting the respondents to refrain from levying and/or collecting any terminal tax under section 178 and lo refund the tax already collected. As there was no reply to the said letter, the petitioner sent another letter, dated December 20, 1971. but there was no reply even to that letter. The petitioner thereupon filed the present Writ Petition praying (a) that section 178 be declared ultra vires the Constitution of India ; (b) that a writ of prohibition or other suitable writ or direction be issued directing the respondents to forbear from realising any terminal tax from the petitioner under section 178 of the Act, and (c) for the issuance of a direction to the respondents to relund the sum of Rs. 2,95,396.01 which was realised from the petitioner by way of terminal tax in the years 1969, 1970 and 1971.