MAHARAJA KISHANGARH MILLS LTD Vs. MUNICIPAL BOARD KISHANGARH

JUDGEMENT

(1.) The following question has been referred to a Full Bench for reply:

(2.) The facts which have led to this reference may be briefly narrated. The applicant is a joint stock company having its registered office at Kishangarh and is carrying on business of production and sale of cotton yarn and cloth at that place. The State of Rajasthan by means of a notification No. F-2(157) LSG/50 dated 21st August 1950 published in the Rajasthan Rajpatra dated 25th November, 1950 sanctioned the imposition of a licence fee on flour mills and other factories at a certain rate based on Horse Power. This was done under Sub-section (2) of Section 135 of the Uttar Pradesh Municipalities Act, 1916 as that Act was in force with respect to Kishangarh Municipality at the time. In consequence of this notification, the Municipal Board of Kishangarh made a demand for a large sum of money from the applicant on account of licence fee for the period from December, 1950 to March, 1955. The applicant contested the legality of the demand. The Municipal Board, however, attached two cars belonging to the applicant in that connection. Further demand on account of licence fee from 1st of April, 1955 to 31st of March, 1956 was made later and steps were being taken by the Municipal Board to sell the attached cars. Consequently, the applicant filed the present writ application attacking the legality of the tax on various grounds. It is not necessary for purposes of this reference to refer to all the grounds raised on behalf of the applicant. It is enough to say that one of the contentions of the applicant was that the tax or licence fee was not levied by any authority of law and could not be levied under the law at all and, therefore, could not be recovered in view of the provisions of Article 265 of the Constitution.

(3.) The application has been opposed on behalf of the opposite parties and their case is that the levy is justified under Section I28(i)(xiv) of the Uttar Pradesh Municipalities Act and items 5 and 66 of List II and items 36 and 47 of List III of the Seventh Schedule to the Constitution of India.