Shanti Devi & Ors. vs State and Ors.

At issue in this L.P.A is the legality and validity of the judgment dated April 21,1987 of the learned Single Judge dismissing the writ petition of the

appellants wherein they had prayed for the issuance of writ quashing the imposition of Dharat tax. by the Notified Area Committee, Rajouri,

respondent No.2.

A broad, brush factual backdrop will help delineate the contours of a pristinely forensic controversy.

The appellants petitioners, are carrying on business in the sale of Indian made foreign liquor and Beer at Rajouri. The contractor appointed by

respondent No.2 was demanding Dharat tax on the Indian made foreign liquor and Beer imported by the petitioners within the area of respondent

No. 2 for sale on their liquor vends. The appellants challenged the demand of Dharat tax on the ground that the Notified Area Committee,

respondent No.2 has not been validly and legally constituted; that the provisions of section 77 of the Jammu and Kashmir Municipal Act, 2008,

(for short, 'the Act' ) had not been applied under section 284 to respondent No. 2; the State Govt. did not under section 284 (1) impose the

Dharat tax and the 'StateGovt. had exempted the liquor imported by the appellantspetitioners from payment of Octroi duty under Cabinet order

No. 428C of 1955 dated 7.4.1955.

The writ petition was resisted by respondents 1 & 2. They filed seperate objections. It was pleaded inter alia that the Notified Area Committee has

been legally and validly constituted. Provisions of section 77 and other sections of the Act had been validly applied to respondent No.2.

Respondent No.2 was fully competent to and legally imposed the Dharat Tax and that the Cabinet order of 1955 exempted payment of Octroi

duty only imposed under the J&K Octroi Act and not the Dharat tax imposed in pursuance of the provisions of section 77 of the Act.

The learned single judge did not find any merit in the writ petition and dismissed the same holding that the Notified Area Committee had legall and

validly imposed the Dharat tax Mr. Joginder Singh, learned counsel for the appellant has reiterated the submissions made in the writ petition

recounted earlier, He very fairly conceded that he could not substantiate his submission that the Notified Area Committee had not been legally and

validly constituted.

There is no force in the second contention of the appellantpetitioner that respondent No.2 was not competent to impose .the Dharat tax because

provisions of section 77 of the Act have not been applied to it and the State Govt. did not impose this tax.

Mr. R.S. Thakur learned counsel for the respondents has drawn our attention to SRO 528 dated 2lst October, 1974, which reads :

In exercise of the powers conferred by clause (5) of section 284 of the Jammu and Kashmir Municipal Act, Samvat 2008, and in partial

modification of notification SRO107 dated 12.3.1973, the Government hereby direct that the previsions of the said Act specified in column 1 of

the subjoined Schedule shall extend to the Notified Areas constituted under section 283 of the said Act. and shown in Annexure 'A' to this

notification, and subject to the modifications directed to be made therein in Column 2

It is evident from the schedule that the State Govt. had directed that provisions of various sections of the Act including section 77 shall extend to

the Notified Area Committees constituted under section 283 of the Act. This SRO is a complete answer to the second submission of the appellant.

Since respondent No.2 had been invested with the powers under section 77 of the Act, it was fully competent to levy and collect the Dharat Tax.

In this view of the matter there was for need for the State Govt. to impose the Dharat tax within the area of respondent No.2

A bare perusal of Cabinet order No.428C of 1955 dated 7.4 1955 makes it manifest that it had been issued in exercise of powers conferred by

section 6 of J&K Octroi Act, 1958 read with section 23 of the Customs Act. The State Govt had exercised the powers invested in it and by the

aforementioned statutory provisions and had exempted among others, those articles an which an excise duty under the J&k Excise Act Iiad been

paid. Exemption. Exemption had been granted only from payment of octroi under the J&K Octroi Act. This notification, however, does not

exempt the excise contractors from payment , of Dharat tax imposed under section 77 of the Act. The provisions for exemption of 'axes imposed

under section 77 of the Act are contained in section 87 of the Act. Section 87 (1) provides :

The Government may by order exempt in whole or in part from the payment of any such tax any person or class of persons or any property or

description of property.

The Government has not issued any orders granting exemption from payment of Dharat under the aforementioned provision. In the result, we find

no merit in the appeal and the same is dismissed, the interim directions are vacated.