Ananda Transport Co. vs State of Karnataka and Another

Tirath S. Thakur, J.—This Writ Petition calls in question the validity of the imposition and recovery of toll on Motor Vehicles registered under the Motor Vehicles Act 1957, passing through the limits of the Town Municipal Council, Annageri and for a mandamus directing the said Municipal Council to remove the Road barriers put up by it on the National High-way between Hubli to Sholapur via Gadag. The facts in brief may be stated thus.

The petitioner is engaged in transport business and owns several lorries which are all registered under the provisions of the Motor Vehicles Act. Taxes in respect of the said lorries are being paid by the petitioner under the Karnataka Motor Vehicles Taxation Act, 1957. These vehicles are being used by the petitioner for transport of goods throughout the State of Karnataka and even beyond. The second-Respondent, Town Municipal Council, Annageri is constituted under the Karnataka Municipalities Act, 1964 and comprises the Annageri town and areas in the immediate vicinity thereof. Vehicles owned by the petitioner and engaged in transporting granites, stones and other goods travel on the Highway between Hubli and Sholapur, which in part runs through the limits of the 2nd Respondent, Municipality, The Municipality, it appears proposed the levy of toll tax u/s 94(1)(b)(iii) of the Karnataka Municipalities Act, 1964 on vehicles entering its Municipal limits. The levy which was according to the Respondent-Council meant to augment its resources for carrying out developmental and other works was on the recommendations of the Deputy Commissioner, Dharwad, sanctioned by the Government vide order No. HMA 23 TOR 76 Bangalore dated the 9th February 1976. Consequently, the tax in question was levied and toll Naka gates set-up within the Municipal Limits on the High-way for recovery of the tax for the vehicles entering into the said limits. Recoveries were accordingly started, aggrieved whereof the petitioner has come up with the present Writ Petition, as already stated earlier

Learned Counsel appearing for the petitioner argued that the levy in question was patently illegal and in total violation of Section 19 of the Karnataka Motor Vehicles Taxation Act, 1957 according to which, no Local Authority is empowered to levy any tax or toll on any Motor Vehicle registered in the State of Karnataka or in any other State or Union Territory in India. The vehicles owned by the petitioner, it was argued, were all registered under the Motor Vehicles Act in the State of Karnataka and were therefore immune from the payment of any tax whether by way of Toll or otherwise u/s 19(supra). Reliance was also placed upon Section 94 of the Karnataka Municipalities Act 1964, in support of the submission that Section 94(1)(b)(iii) read with Schedule-Ill to the said Act, permitted levy of a Toll only on vehicles other than those exempted from the Municipal Toll under Karnataka Motor Vehicles Taxation Act, 1957. A levy purporting to be u/s 94, could not according to the learned Counsel, extend to creating any tax liability in respect of vehicles that were otherwise exempt under the Taxation Act, mentioned above.

Section 19 of the Karnataka Motor Vehicles Taxation Act, 1957, reads thus:-

"Notwithstanding anything contained in any other law for the time being in force, no local authority shall levy a tax or toll on any motor vehicle registered in the State of Karnataka for in any other State in India or in any Union Territory in India (and any law authorising any such levy cease to be in force)."

A plain reading of the above provision leaves no manner of doubt that no local Authority is entitled to impose any tax or Toll on any Motor Vehicle registered anywhere in the country and any law authorising any such levy is made inoperative. The Section starts with a non-obstinate clause and has over-riding effect upon any other law whether enacted before the promulgation of the said Act or subsequent thereto. In that view of the matter therefore there is no escape from the conclusion that the levy of Toll Tax by the Respondent Council was clearly illegal and unjustified. There is yet another aspect to which it is necessary to advert at this stage. In terms of Section 94 of the Karnataka Municipalities Act, 1964 a Municipal Council is empowered to levy among others a Toll tax on vehicles specified in Schedule-Ill entering its municipal limits but not liable to taxation under Clause-IV. Clause-IV of Section 94(1)(b) envisages a tax on all vehicles (other than Motor Vehicles) specified in Schedule-IV and used for riding, draught or burden, kept within the municipal area for use. A reference to schedule-Ill, referred to in Section 94(1)(b)(iii) shows that the same prescribes maximum rates of Toll payable for goods or stage carriage vehicles as defined in the Motor Vehicles Act 1939 other than those exempted from Municipal Toll under the Karnataka Motor Vehicles Taxation Act, 957. This implies that the Schedule does not prescribe any rate of Toll Tax in respect of vehicles that are exempted from Municipal Toll under the Taxation Act (supra). A harmonious construction of Section 94(1)(b)(iii) and the Schedule-Ill, therefore leads to only one possible conclusion namely: the provisions of Section 94 do not envisage imposition of a Toll Tax on a vehicle that is otherwise exempt under the provisions of the Motor Vehicles Taxation Act, 1957. In the circumstances, it is difficult to sustain the levy nor was. Mr. Singri, learned Government Advocate appearing for the Respondents in a position to justify the same on any legal or other hypothesis.

In the result, this petition succeeds and is hereby allowed and by a writ of prohibition the second-Respondent Council restrained from recovering any Tax by way of Toll on the vehicles owned by the petitioner passing through its Municipal limits in pursuance or on the basis of Government Order dated 9th February 1976 or any Resolution or proceedings imposing any such levy. The prayer made by the petitioner for refund of the amount recovered from it between the date of its imposition and the filing of this Writ Petition is however rejected keeping in view the fact that the petitioner had acquiesced in the said levy for over a period of three years before coming to the Court. Besides the financial condition of the Respondent-Municipal Council which had imposed the levy with a view to carry-out the developmental works and pay the salaries of its staff would hardly justify an order of refund. There shall be no order as to costs.