ASSOCIATED CEMENT COMPANIES LTD. v. STATE OF MADHYA PRADESH AND ANR

Citation: [2005] 3 S.C.R. 258

Court: Supreme Court of India

Bench: RUMA PAL, ARIJIT PASAYAT, C.K. THAKKER

Case summary

ASSOCIATED CEMENT COMPANIES LTD. v. STATE OF MADHYA PRADESH AND ANR.pdf

Judgment text

: ;, . ~,· ·_,, .. ·, J _,· J ,:. ,; . ASSOCIATED CEMENT•COMPANIES LTD. v. STATE OF MADHYA PRADESH AND ANR. APRIL 5, 2005 [RUMA PAL, ARIJIT PASAYAT AND C. K. THAKKER, JJ. ] Muni e put for recovery of the terminal tax neither --contractual procedure will be adopted. Where barrier post has been established, that should be immediately removed. For the recovery of the terminal tax the same procedure should be adopted which is applicable for the recovery of commercial tax and in the case of Krishi Upaj Mandi their licence holder should be made responsible for the recovery of the tax. For this purpose if any amendment in the bye-law is required, that should be done accordingly. (2) In view ofthe uniformity ofthe terminal tax in whole ofthe State, the rate is proposed in the annexed schedule. (3) All such goods which are exported out of the country shall be exempted from the tenninal tax.

(4) All such other goods which are carried or sent from one place to another within the State for distribution under the Public Distribution Scheme by the Food Corporation of India/Civil Supply Corporation/ Other Agencies of the State Government shall also be kept exempted from the terminal tax. There is no provision for imposition oftenninal tax under the Madhya Pradesh Municipal Corporation Act, 1956 but the Municipal Corporation may levy this tax under the approval of the State Government since many of the Municipal Corporation have desired to levy terminal tax, the State Government hereby grant general approval for levy ofthe terminal tax to all the Municipal Corporations. The above mentioned conditions shall be applicable in the case of the Municipal Corporation also. Sd/- (C. S. Chadha) Principal Secretary Government of Madhya Pradesh - Local Administration Deptt.

" Though the Government Order refers Sections 127 and 129 of the Act, it is to be noted that there was no proposal by the Municipal Cou~dl for reduction of the rate of tax. In terms of sub-section (1) of Section 127, the power to impose the tax has to be exercised by the Council which is of course subject to any general or special order of the State Government. The Municipal Council exercises the power as a delegatee and the power exercised under Section 127 as noted above is a delegated legislation. Since the Municipal Council has not proposed for any· variation in the rate. of tax the question of the State Government passing any general or special order In that regard is not contemplated. It is to be further noted that the Government Order treats the matter as instruction to all municipalities. So far as Section 129 is concerned, there is no question of any suo motu fixation of rate by the State Government.

In fact while acting on the proposal by the Municipal Cotincil, the State Government can direct modification affecting the substance of the proposal. But the same cannot be given effect to unless and until the modification has been accepted by the Council at a special meeting. In the instant case that contingency has not arisen. Though in terms of Section 131 the State Government can initiate the action for reduction in the rate that can only be done if the enumerated circumstances exist. That situation has also not arisen in the instant case and admittedly the State Government has not acted in terms of Section 131 of the Act. Therefore, the Division Bench is right in its view that the circular of the State Government dated 15. 12. 1995 is really of no consequence. Further changes under Se"Ction 127 can be introduced in terms of sub-section (2) of Section 127 by framing rules. In the instant case, the ru,les were framed in March 1997 and did not have any retrospective effect.

A We, therefore, find no reason to interfere with the judgment of the Division Bench though some of the observations and conclusions are not correct. Ultimate conclusion that the Municipal Council's stand that Circular dated 15. 12. 1995 did not bind it to reduce the tax does not suffer from any infirmity. B The appeal is accordingly dismissed with no order as to costs. D. G. '