SHEROATANLAL Vs. GRAM SABHA, JAITWARA

JUDGEMENT

(1.) BY this application under Article 226 of the Constitution the petitioner challenges the legality of a tax imposed by the Gram Sabha, Jaitwara, on certain goods sent outside the limits Of Jaitwara by rail or motor trucks at certain rates and prays that a writ of certiorari be issued for quashing the decision of the Gram Sabha imposing the tax as also the notices issued by the Gram Sabha to the petitioner for the payment of tax amount of Rs. 1,400/ - on goods said to have been sent out by it during the period from 1st October 1958 up to 21st March 1959.

(2.) ON 19th June 1958 the Gram Panachayat, which is the executive committee of the Sabha, passed a resolution imposing a tax on goods sent outside Jaitwara by rail and motor truck. The resolution was published and objections to the imposition were invited. The objections were considered by the Panchayat on 17th July 1958 and rejected. A resolution was then passed confirming the previous resolution of 19th June 1958. Thereafer the Collector approved the imposition of the tax by making an order on 24th September 1958. After the imposition of the tax the Gram Panchayat served on the petitioner a notice on 16th April 1959 calling upon it to deposit a sum of Rs. 1,400/ - as tax due from it for the period from 1st October 1958 to the 31st March 1959 on certain goods sent our by it.

(3.) IN our judgment this petition must succeed on the ground of incompetency alone of the Gram Sabha to levy the impugned tax. Section 37 of the Vindhya Pradesh Gram Panchayat Ordinance, 1949, sets out the taxes which may be imposed by a Gram Sabha. The power given to a Gram Sabha is subject to the rules prescribed under the Ordinance. The Gram Sabha has the power to impose "a tax on trade, calling and profession not exceeding such rate as may be prescribed." There is no dispute that the Gram Sabha purported to levy the impugned tax in the exercise of this power to tax trade, calling and profession Rule 221 of the Rules made under the Ordinance deal with the mode in which a tax on trade, calling and profession may be levied. That rule empowers a Gram Panchayat to pass a resolution requiring that no person shall carry on the trades mentioned in sub -rule(1) of Rule 221 without obtaining a licence for the same on payment of the annual, fee specified in the sub -rule. Sub -rule (2) permits a Panchayat to recover from cloth merchants sugar merchants, refiners and persons carrying on any other trade determined by the prescribed authority a tax on the annual income of their trade within the rates and limits mentioned in the sub -rule. As the power of a Gram Sabha to imposea tax under Section 37 is subject to the prescribed rules, it is clear that under the head of a tax on 'trade, calling and profession' the Gram Sabha can only impose the levies indicated in Rule 221. The impugned tax on certain goods exported outside Jaitwara is neither a licence fee nor a tax on income of any trade. It is an export tax simpliciter and the liability to pay the tax arises when the articles subjected to levy are taken outside Jaitwara. Leaving aside the question whether a tax imposed by the Gram Sabha on the annual income of any trade would be saved under Article 276, it is clear that the impugned tax not being of the nature prescribed in Rule 221 (2) is not valid. It is also not a licence fee covered by sub -rule (1).