SOHAN LAL OM PRAKASH Vs. MUNICIPAL BOARD, BISALPUR

JUDGEMENT

(1.) (for self and for H. N Seth, J ) - Petitioners, who carry on their business as General Merchants, Kirana Merchants or Commission agents within the municipal limits of Bisalpur in district Pilibhit, have challenged the validity of Notification No. 507/23-260 (16-21), dated 16th Nov., 1957 imposing what is termed as an Education cess on all the commodities brought for sale within the limits of the Municipal Board primarily on the grounds (1) that no education cess could be imposed under Sec. 128 of the U P. Municipalities Act (hereinafter referred to as the Act) and (2) that primary education having been taken over by the State Government under U.P. Act No. 34 of 1972 no cess for the purpose of primary education could be imposed by the Board.

(2.) It appears that the Municipal Board, Bisalpur, in exercise of powers under Sec. 128 of the Act imposed tax on the entry of goods within the municipal limits for consumption, use or sale therein. Subsequently the rate of levy was enhanced by a notification dated May 24, 1949. A part of the amount realised from enhanced rate of levy was to be utilized to meet the Boards expenditure on compulsory primary education. On 18th Nov., 1955 a further notification was issued imposing an additional cess at the rate of 50 naya paise per cent on all the saleable commodities worth more than Rs. 6 brought within the municipal limits of Bisalpur, The grievance of the petitioner appears to be that when in July 1972 the U.P. Government itself took over the management of primary and junior High Schools from the respondent Board and has since then been running it under the District Inspector of Schools appointed for the purpose the Board was not competent to continue to realise the education cess. It has further been asserted that .he Board is now under no obligation to meet the expenses of Shri Ram Chandra Municipal Intermediate College which earlier received financial aid from the Board out of the education cess realised. According to the petitioners the Board collects about 2 lacs of rupees annually under the head of "Education cess" but no amount is spent on education which has been taken over entirely by the Government and the amount realised as education cess is being utilized towards general administrative expenses.

(3.) In the counter-affidavit filed on behalf of the Board it has been asserted that with a view to provide for extension of Primary education in the Municipalities in Uttar Pradesh and with the object to enable the Municipalities to introduce compulsory primary education the U.P. Primary Education Act, 1919 was passed. Under Sec. 15 of the said Act the Board has been empowered to impose what is termed as 'education cess'. The proceeds whereof to be devoted for primary education. The said provision also empowered the Board for this purpose to select any of the taxes which it is authorised to imposed under the Principal Act, or may for the purposes, increase any tax which is already levied under the provisions of the Principal Act and in such a case the income derived from the increase shall be deemed to be proceeds of the - education cess. By a notification dated 18th Nov., 1958 published in U.P. Gazette dated 29th Nov., 1958 the Schedule of Toll was amended and it was provided that the amount realised on the basis of the enhanced rate of tax was deemed to be education cess. The Board has further asserted that the entire amount so realised is being spent towards the expenses for imparting primary, secondary and higher secondary education in the Municipal Board. The Board also spends money on the maintenance of S. R. M. Intermediate College i.e., its building, furniture and equipments. It has been denied that any part of the education cess is spent towards general administration of the Board.