MUNICIPAL BOARD OF HARDWAR Vs. UNION OF INDIA

JUDGEMENT

(1.) Is the Comptroller and Auditor General of India under a legal duty to give a hearing to the State Government before he certifies the net proceeds as required by Article 279(2) of the Constitution, is a question that arises in this writ petition ? This petition also brings into open the strain and lack of mutual understanding which may sonic time arise between the Centre and a State under Federal Constitution like ours

(2.) This writ petition was originally filed by the Municipal Board of Hardwar V Union (Petitioner No. 1). Respondent No. 1 is Union of India. Respondents 2 and 3 are the Railway Board and the Northern Railway respectively. Respondent No. 4 is the Comptroller and Auditor General of India. State of U.P. was respondent No. 5. Later on C.M. 73-W/73 was filed by the State of U.P. seeking to transpose itself from the array of the respondents to that of the petitioner. This was allowed by this court and in consequence an amended petition was filed with the State of U.P. as petitioner No. 2.

(3.) Hardwar in U.P. is one of the important pilgrim stations of all India importance. A tax commonly known as Pilgrim Tax is imposed on the passengers visiting Hardwar by Road and rail respectively and has been in existence since 1894. Pilgrim tax on passengers by road is levied by petitioner No. 1 with the sanction of petitioner No. 2. Tax which is levied on passengers arriving by rail is known as terminal tax on Railway passengers and is collected by the railways for which they charge collection charges. We are in this writ petition only concerned with the tax which is imposed on passengers carried by Rail. Petitioner No. 1 like other municipalities in the State of U. P.. had made arrangements with the railways for collecting this pilgrim tax. This was given a statutory shape under U.P. Act No. 2 of 1899 as amended from time to time by which it was lawful for the Railway Administration to agree with the Municipal Board to collect tax within the Municipal or the cantonment board limit on such terms as may be initially agreed upon. The railway which realised the tax used to remit the tax proceeds after deducting their commission. It appears that the then Magistrate, Roorkee in his sole capacity as sole administrator of the pilgrim tax wrote to the Chief Commercial Manager, E.I.R.. Calcutta on 10-4-1949 requesting that permission may be given for representative of the Hardwar Board to check records of the tax maintained at the Hardwar, Bhimgoda Tank and Jawalapur Stations. The railway by its letter dated 1-9-1949 informed the Magistrate that there was no objection to the representative of the Hardwar Board being deputed to check the records relating to pilgrim tax. In pursuance of this arrangement the procedure being followed was that a checking officer was appointed by the State Government who was given facilities to inspect the records of the railway. As and when any discrepancy came to his notice the same was pointed out to the railway which would look into the matter and if necessary make the correction.