Harbans Lal & Ors. vs Municipal Council Jammu & Ors.

(1) The petitioners are the owners of Cinematographs in Jammu City. The Municipal Council Jammu, purporting to act under Section 77 (1) of the

J & K Municipal Act, 2008, (hereinafter called as ""The Act"") has levied a tax at the rate of Rs. 10/ per show on every cinematograph owner. The

petitioners dispute the validity of the tax, hence this petition under Article 226 of the Constitution of India read with Section 103 of the State

Constitution for an appropriate writ.

(2) The notification dated 441574 issued by the Municipal Council reads as under :

The Municipal Council has resolved in its special meeting held on 1331974 vide resolution No. 144 to impose the below rated taxes under

Section 77 of the

Municipal Act. Any inhabitant objecting to the proposed taxes may within 30 days from the date of publication of this notice in Govt. Gazette

submit his objection in writing to the Municipal Council, Jammu.

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Owners of Cinematographs Rs.10/ per show

The tax would be assessed on numbers of shows exhibited.

This resolution was made absolute on the expiry of the period of 30 days and consequently the Executive officer of the Municipal Council issued

orders to recover the amount.

(2) The dispute initially was whether the levy is in the nature of a tax on profession falling within the purview of clause (ii) of sub section 1 of

Section 77 of the Act or one in the nature of tax on entertainments falling within the ambit of sub Section

(3) Of Section 77 of the Act. In the first case the tax can be levied without the prior sanction of the Government whereas in the second case the

prior sanction is a condition precedent for its imposition. Admittedly no prior sanction has been obtained from the Government.

(4) At a later stage, however, prayer for amendment of the petition was made so as to include another ground of attack. The requisite amendment

was allowed by me on payment of costs. The petition has been amended and an additional ground has been taken. The additional ground taken is

that assuming that the levy is in the nature of tax on persons practicing any profession the same is repugnant to the provisions of Article 276 of the

Constitution of India.

(5) The case of the respondent is that the tax in question has been levied under Section 77 (1) (11) of the Act and is in the nature of tax on persons

practising the profession of exhibition of cinematographs. It is also stated that no previous sanction of the Government was required to impose the

said tax. As regards the bar contained in Act. 276 (2) act is stated that the Municipal Council could impose a tax on profession even though it

could not recover from any person any sum exceeding Rs. 276/ per annum.

(6) Article 276 (2) of the Constitution of India reads as under :

(2) The total amount payable in respect of any one person to the State or to any one municipality, district board, local board or other local

authority in the state by way of taxes on professions, trades, callings and employments, shall not exceed two hundred and fifty rupees per annum.

Provided that if in the financial year immediately preceding the commencement of this Constitution there was in force in the case of any State or

any such municipality, board or authority at a tax on professions trades, callings or employments the rate, or the maximum rate, of which exceeded

two hundred and fifty rupees per annum, such tax may continue to be levied until provisions to the contrary is made by Parliament by law, and any

law so made by Parliament may be made either generally or in relation to any specified states, municipalities, boards or authorities.

(7) Assuming therefore, that the tax in question was leviable under clause (ii) of subsection 1 of Section 77 of the Act without the previous sanction

of the Government the imposition has to confirm to the provisions contained in Art276 (2) of the Constitution of India. The contention of Mr. R. C.

Nanda on behalf of the respondents that Art. 276(2) prohibits not the imposition of the tax but recovery thereof does not appear to me to be

sound. There is no fun in imposing a tax which cannot be recovered. It is somewhat fantastic to say that a tax in the nature of a tax on profession

exceeding Rs. 250/ can be imposed by the Municipal Council but it cannot recover a sum exceeding Rs. 250/ per annum from any person. The

imposition of a tax creates a corresponding liability of the person taxed. If the imposition is bad in law being violative of a constitutional provision

the Liability to pay must also cease to exist. It is not explained by Mr. Nanda as to how such a tax when admittedly the amount of tax comes to

about Rs. 10,000/ annually was imposed by the Municipal Council without Hl having a right to recover any sum in excess of Rs. 250/ per annum. ^

(8) It was next contended by Mr. Nanda that the levy may be upheld to the extent of Rs. 250/per annum and the council be restrained from

recovering from any person a sum more than Rs. 250/as tax on profession. I am not, however, inclined to accept this argument. The resolution of

the Municipal Council, imposing tax is not separable into parts. The demand made by the Executive Officer of the Municipal Council relates to a

sum far in excess of Rs. 250/. If the resolution is bad being repugnant to Article 276 (2) of the Constitution of India it is bad in its entirety. That will

not however debar the Municipal Council from imposing any tax consistently with the provisions of the Municipal Act and those of the Constitution

of India.

(9) In this view of the matter I hold that the imposition .of the tax is invalid being repugnant to Article 276 (2) of the Constitution of India. It is

unnecessary to decide the question as to whether the imposition falls under Section 77 (1) (ii) or Section 77 (2) (i) of the Act. That question is left

upon and I express no opinion in regard there to.

(10) In the result this petition succeeds and is accordingly allowed, the imposition of the tax by the Municipal Committee Jammu vide the resolution

No : 144 dated 1331974 at the rate of Rs. 10/ per show is quashed. An amount deposited by the petitioner in this court vide order of the court

dated 1391974 shall be refunded to the depositors.