AVINASH PANDURANG TARAWADE Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THE petitioners have filed the present petition to challenge the action of respondent no. 2, the Cantonment Board, aurangabad, which has imposed a tax styled as "vehicle Entry Tax". The petitioners aver that they are residents of Aurangabad and are engaged in the business of transport. Respondent No. 3 is the Contractor, to whom the contract to collect Vehicle Entry Tax has been allotted. Respondent no. 4 is Union of India who, according to the petitioners, has granted sanction to Respondent No. 2 to impose the Vehicle Entry Tax. The petitoners are engaged in transport business and use their vehicle for transportation of the employees of various industries situated at Waluj industrial area from Aurangabad to Waluj and from Waluj to Aurangabad. The vehicles of the petitioners when used for the purpose, are required to use the Aurangabad-Pune Road, which passes through Aurangabad cantonment Area, Aurangabad. The respondent No. 2 Catonment Board had issued draft notification for imposing the vehicle entry tax an entry of vehicle within the limits of Aurangabad Cantonment which was publised on 24. 4. 2003. Objections were invited by the said notification as also suggestions from all persons likely to be affected thereby within a period of 60 days from the date of publication of the notification. The Board thereafter, in exercise of the powers conferred on it under the Cantonments Act, 1924, was pleased to impose tax, to be known as Vehicle Entry tax on commercially loaded vehicles entering and passing through the limits of Aurangabad Cantonment, Aurangabad, to be paid by the owners of the vehicles. This applies to vehicles carrying both passengers and goods. There are some exclusions in terms of of the said notification. The collection of the Vehicle Entry Tax commenced from 11. 10. 2003. The contention of the petitioners is that, considering Section 20 of the Bombay Motor Vehicles Act, 1958, the Cantonment Board has no authority to impose the impugned Vehicle Entry Tax on motor vehicles. Consequently, the action of the 2nd Respondent is without jurisdiction and is violative of Articles 14 and 19 (l) (g) of the constitution of India. It is further averred that the Cantonement Board is neither the owner nor is having any control over the Aurangabad Pune Road as well as Aurangabad Nashik Road, which are under the control of the State and, as such, levying Vehicle entry Tax for plying on the road not maintained by the Cantonement board is incompetent, invalid and interferes with the freedom of trade, commerce and intercourse guaranteed by Art. 301 of the Constitution and, therefore, the reliefs, as prayed for.

(2.) RESPONDENT no. 2 has filed affidavits. It is pointed out that the cantonement Board, Aurangabad, was establised in the year 1890 and is looking after all civic amenities, including water supply, sanitation, health care, maintenance and development of road and electrification of the streets, etc. The Board has meagre source of income and is facing severe financial constraints. It has not received grant in aid from the State Government. The Central Government releases small amount which can hardly meet its day to day expenditure. It is then pointed out that under Section 60 of the Cantonement Act, 1924, the Board is entitled to impose tax with prior permission of the Central Government. Considering these circumstance, respondent No. 2 passed resolution no. 14, dt. 13. 10. 2001, to impose vehicle entry tax in the cantonement area of Aurangabad As required, a detailed proposal for imposition of vehicle entry tax along with the Board Resolution and draft notification was sent to the Central Government. The Central Government vetted the same and granted approval. It was only after that, the notification was published. Reliance is placed also on the bye-laws as framed for the purpose of collection of the vehicle entry tax. It is contended that the vehicle entry tax is imposed legally and as per the provisions of law. It is pointed out that there is no bar either under the Bombay Motor Vehicles Act for levying of the vehicle entry tax. It is also pointed out that the Aurangabad Municipal Corporation as well as many other Municipal Corporations for the State of maharashtra are levying similar type of taxes in the name of transit fee or escort duty. ' the respondent no. 5 has also filed its reply wherein it is pointed out that the Corporation has imposed the octroi toll on the goods entering in the Municipal limits and transit fee which they were entitled to under the law. It is also pointed out that the Cantonment Board through their agents are imposing and collecting entry tax from the vehicles which are passing through the State Highway when the same are entering into the cantonement area. It is also pointed out that the Cantonement Board has no authority or power to impose entry tax on vehicles which are passing on the State Highway. No power is conferred on Cantonement Board to that effect. Reply has also been filed on behalf of Principal Director, Estates, Ministry of Defence, Government of India, which is respondent No. 4. In that affidavit, it is set out that the Cantonment Board, Aurangabad had passed a resolution dated 30. 10. 2001, bearing resolution No. 14, proposing levy of the vehicle entry tax. That was sent to the Central Government for approval. The Ministry of defence, in concurrence with the ministry of law, Government of India, had considered the proposal and accorded sanction. On the issue of law, it is contended that the bar contained under the Bombay Motor Vehicles Tax Act is not applicable.

(3.) A rejoinder has been filed on behalf of the petitioner, in which it is pointed out that the Cantonment has no inherent right to tax, not being a sovereign body nor has it attributes of the sovereign powers. Its authority is entirely delegated and exercises those powers which are conferred on it by the legislature. It is pointed out that the name of the tax is vehicle entry tax; the taxable event is the entry of Motor Vehicle in the local area from the flowing traffic on the highway. The State Highways from which the vehicles are passing, it is contended, cannot be made subject to such entry tax as the road does not vest in the Cantonment board. Cantonment Board also does not render any service nor are any special benefits offered by the Cantonment Board to the Vehicles subjected to the impugned tax. The power of the cantonment Board is coextensive with the powers of Municipal Corporation relating to imposition of tax. The priniciple embodied is that there should not be any conflict with the State laws. If the vehicle entry tax imposed by the Cantonment board, it is contended, if allowed to be continued, in that case, it would amount to double taxation. The petitioners, under the provisions of Bombay Motor vehicles Tax Act, are depositing the amount with the Regional transport officer and until and unless such tax is paid, no vehicle can be used on the road unless tax leviable has been paid as per the provisions of motor Vehicles Tax Act. The imposition of the tax under the head of vehicle entry tax by the Cantonment Board will amount to double taxation penalising the petitioners as well as the public at large. The stand of the respondent No. 2 is then sought to be highlighted. It is not necessary to deal with the averments considering the stand of respondent No. 2 that what they are charging is a tax. There are affidavits in reply filed by Respondent No. 2 and also Sur-Rejoinder by the Petitioner.