Yashpal Singh Chauhan vs Cantonment Board Chakrata District Dehradun

Ramesh Ranganathan, CJ

This writ petition was entertained, in public interest, on the basis of a letter addressed by an Ex-Member of the Chakrata Cantonment Board on 20.07.2011. In the said letter the power of the Cantonment Board to impose toll tax, under Section 60 of the Cantonment Act, 1924 on every vehicle which entered the area, was put in issue.

The petitioner had contended that the Cantonment Board was entitled to levy taxes in line with the taxes which could be imposed by the Municipality; the Uttar Pradesh Government had, by its order dated 01.08.1991, withdrawn the power of Municipalities to levy these taxes; the same order is applicable to the State of Uttarakhand; consequently, any right which the Cantonment Board may have had to levy such taxes under Section 60 of the Cantonment Act, 1924 came to an end; this Court had, in WPPIL No. 1018 of 2018 dated 10.05.2011, abolished levy of toll tax by all Cantonment Boards; and a direction be issued that toll tax, levied by the Cantonment Board, should be abolished.

A Full Bench of this Court had, in its order in WPPIL No. 1018 of 2008 dated 10.05.2011, held that the provisions of Section 60 of the Cantonment Act, 1924 was wholly dependent upon the provisions of Section 128 of the U.P. Municipalities Act, 1916; without the provision of Section 128, the Cantonment Board had no power to impose any tax in its cantonment area; Section 60 of the Cantonment Act, 1924 is a legislation by reference, and not legislation by incorporation; and once the power to levy tax on entry of vehicles, under Section 128 of the Municipalities Act, was withdrawn, the Cantonment Board lost its power to levy tax on entry of vehicles in the cantonment area under Section 60 of the Cantonment Act, in as much as the power to levy tax under Section 60(1) of the Cantonments Act, 1924 is dependent upon, and co-extensive with, the corresponding power given in the Municipalities Act. The Full Bench held that the earlier decision of the Division Bench in Arun Kumar Jailwal Vs. Cantonment Board, Dehradun & another 2004(2) U.D. 401 was not good law, and was over ruled.

Aggrieved by the order passed by the Full Bench, the Chakrata Cantonment Board carried the matter in appeal to the Supreme Court, and initially an interim order was passed in SLP (Civil) No. 26827-26828 of 2011 dated 28.11.2011 granting stay of the operation of the judgment. Leave was granted, and the matter was directed to be tagged along with Civil Appeal No. 2541 of 2006. Since this writ petition was entertained, during the pendency of proceedings before the Supreme Court, the hearing of the writ petition has been deferred, from time to time, awaiting final orders of the Supreme Court in this regard.

Mr. B.S. Adhikari, learned counsel for the Cantonment Board, has now placed before us a copy of the order in Civil Appeal No. 2541 of 2006 and batch dated 31.01.2019, wherein the Supreme Court observed that, in view of Section 67(e) of the Cantonment Act, 2006, the Cantonment Board is now authorized to levy "licence fee on entry of vehicles"; and the question referred to it had become academic following the enactment of the Cantonment Act, 2006 conferring power on the Cantonment Board to levy licence fee on entry of vehicles as per Section 67(e) thereof. The Supreme Court further observed that, by virtue of the interim order, the Cantonment Boards had levied and collected toll from users; and even if the question is held against the Cantonment Board, the question of refund would not arise. While declining to go into the said question, on the ground that the same has been rendered academic by the enactment of the Cantonment Act, 2006, the Supreme Court observed that no order, for refund of the tax collected earlier, ought to be made. As observed by the Supreme Court, Section 67(e) of the Cantonment Act, 2006 now authorizes the Cantonment Board to levy licence fee on entry of vehicles into the Cantonment area.

In the light of Section 67(e) of the Cantonment Act, 2006, and as the Cantonment Board has now been conferred power to levy licence fee akin to a toll tax, the relief sought for in this writ petition cannot be granted. The writ petition fails and is, accordingly, dismissed. No costs.