Full Judgment Text
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PETITIONER:
CANTONMENT BOARD, MHOW, SAUGOR & ANOTHER
Vs.
RESPONDENT:
M.P STATE ROAD TRANSPORT CORPN,REWA TRANSPORT SERVICES, REWA
DATE OF JUDGMENT: 10/04/1997
BENCH:
G.N. RAY, G.B. PATTANAIK
ACT:
HEADNOTE:
JUDGMENT:
WITH
CIVIL APPEAL NOS.6160, 6161, 6162, 6242, 6243/83
J U D G M E N T
PATTANAIK, J.
These six appeals raise a common question and are
directed against the judgment of the Madhya Pradesh High
Court, the said common question of law being whether the
Cantonment Board is entitled to levy entry tax on Motor
Vehicles? The High Court of Madhya Pradesh by the impugned
judgments has come to the conclusion that in view of the bar
of imposition of tax by any local authority contained in
Section 6(1) of the Madhya pradesh Motor Vehicles Taxation
Act, 1947 (hereinafter referred to as the ‘Municipality
could not have imposed the entry tax on Motor Vehicles
conferred under Section 127 of the Madhya Pradesh
Municipalities Act, 1961 (hereinafter referred to as the
‘Municipalities Act’ ) and consequently the Cantonment Board
in exercise of its power under Section 60(1) of the
Cantonment Act cannot impose the entry tax on motor vehicles
, the said power be co-extensive with the power of a
Municipality under Section 127 of the Municipalities Act.
The broad facts leading to the impugned judgments of
Madhya Pradesh High Court may be briefly stated as under:-
To consolidate and amend the law relating to the
administration of cantonments the cantonments Act 1924 (Act
2 of 1924) was enacted in place of the earlier Cantonment
Act (Act 15 of 1910 and the Cantonment Code of 1912) to
bring the law relating to the Administration of Cantonments
in conformity with the ordinary Municipal Law. Cantonments
is defined in Section 3 of the said Act to mean any place or
places in which any part of the Forces is quartered to be
declared and notified in the official Gazette by the Central
Government. Under Section 10 of the said Act for every
Cantonment there shall be a Cantonment Board and the said
Board is a body corporate having perpetual succession and a
common seal with power to acquire and hold property both
moveable and immovable as provided under Section 60 of the
Act is a General Power of taxation which may be extracted
herein Below:-
60. General Power of taxation: (1)
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The Board may, with the previous
sanction of the Central Government,
impose in any cantonment any tax
which under any enactment for the
time being in force, may be imposed
in any municipality in state
wherein such cantonment is
situated.
(2) Any tax imposed under this
section shall take effect from the
date of its notification official
Gazette or where any later date
specified in this behalf in the
notification, from such later date.
The Madhya Pradesh Motor Vehicles Taxation Act, 1947
(M.P. Act No. VI. of 19470 provide for the levy of a tax on
Motor Vehicles in Madhya Pradesh. Section 3(1) the said Act
entitled the Taxation Authority to levy tax on motor
vehicles used or kept for use at the rate specified in the
First Schedule read with sub-section (2) of section 3 of the
said Act. While the Taxation Act was in force the Madhya
Pradesh legislatures enacted the law relating to
Municipalities and to make better provision for organisation
and administration of Municipalities in Madhya Pradesh
Called the Madhya Pradesh Municipalities Act, 1961 (M.P. Act
No. 37 of 1961). The aforesaid municipalities Act repealed
the earlier law relating to Municipalities in different
parts of Madhya Pradesh, namely, the central Provinces and
Berar Municipalities Act, 1922, the Madhya Bharat
Municipalities Act, 1954, the Vindhya Pradesh Municipalities
Act, 1946, and the Bhopal State Municipalities Act, 1955.
Section 127(1)(iii) of the said municipalities Act which has
direct bearing in deciding the controversy that has arisen
in these appeals may be extracted hereinafter in extenso for
better appreciation of the point in issue.
127. Taxes which may be imposed-(1)
A council may, from time to time,
and subject to the provisions of
this Chapter, and any general or
special order which the state
Government may make in this behalf,
impose in the whole or in any part
of the Municipality any of the
following taxes, for the purposes
of the Act, namely:-
(iii) a tax on vehicles, boats and
animals used as aforesaid entering
the limits of the Municipality but
not liable to taxation under clause
(ii).
The Cantonment Board Saugor by Notification No. 344
dated November 24, 1973 in exercise of power under section
60 of the Cantonment act made provision for imposition of
Vehicles Entry Tax at the rates specified in the said
Notification. Similarly the Cantonment Board, Mhow by
Notification dated 19.12.1979 imposed similar entry tax on
Motor Vehicles. The Cantonment Board, Jabalpur by
notification dated 6th May, 1978 also imposed the entry tax
on motor Vehicles in exercise of power under section 60 of
the cantonment Act. All these Notifications issued by
different Cantonment Boards were challenged before the
Madhya Pradesh High Court by filling writ petitions were
allowed by the impugned judgments of the High Court and it
was held that the Cantonment Board has no power to levy
entry tax on motor vehicles so long as the prohibitions
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contained in section 6 of the Taxation Act continues and
accordingly notifications issued by the Cantonment Board
were quashed and thus the present appeals.
Mr. Lekhi, learned senior counsel appearing for the
different cantonment Boards as well as Mr. Subba Rao,
learned counsel appearing for some of the cantonment Boards
challenged the correctness of the judgment of the Madhya
Pradesh High Court inter alia on the ground that the
Municipalities Act being a later Act than the Taxation Act,
the provisions of the later Act would prevail if there is
any repugnancy between these two. In this view of the matter
the imposition of entry tax having been provided for section
127 (iii) of the Municipalities Act, the same could be
lawfully levied by the Cantonment Board under Section 60 of
the Cantonment Act. It was further contended that though the
Municipalities Act did not expressly repeal the provisions
of the Taxation Act but the same being a later Act the
principles of implied repeal should be applied and
therefore, any embargo contained in the Taxation Act for
levy of entry tax because of section 6 of the Taxation Act
will have no application. It was also urged that the proviso
to section 7 of the Taxation Act would indicate that the
embargo contained in Section 6 of the said Act would apply
only if the Cantonment Board agrees not to recover any tax
and in the absence of any consent of the Cantonment Board
the embargo contained in imposition of tax under Section 6
of the Taxation Act will not apply. Mr. Lekhi, learned
senior counsel also urged that the Taxation Act having not
provided for any levy on the entry of Motor Vehicles as is
provided under Section 127 (1)(ii) of the Municipalities Act
there is infact no repugnancy between tow provisions and,
therefore, so far as the levy of entry tax on motor vehicles
is concerned, it must be held that the prohibitions
contained in Section 6 of the Taxation Act will not get
attracted. Lastly Mr. Lekhi argued that doctrine of
desuetude should apply in the present case in as much as the
provisions of section 7 of the Taxation Act though enacted
since 1947 has not been in use so far and no grant has ever
been given to the appellants cantonment Boards or for that
matter to any other local authorities.
Mr. Agrawal, learned senior counsel appearing for the
respondents and Mr. S.K. Mehta, learned counsel appearing
for some of the respondents on the other hand contended that
the statutory interpretation contained in the latin maxim:
leges posteriores priores conterarias abrogant is subject to
the exception embodied in the maxim : generalia specialibus
non derogant. in other words the theory that the later laws
abrogate earlier contrary laws is subject to the exception
that the general law does not derogate from a special one
and applying the said principle the Motor Vehicles Taxation
Act being a special Act dealing with levy of tax on Motor
Vehicles the later law, namely, the Municipalities Act
cannot be said to have repealed the earlier provisions of
the Taxation Act and on the other hand it must be presumed
that the situation was intended to continue to be dealt with
by the specific provision contained in the Taxation Act
rather than the later general provisions contained in the
Municipalities Act and , therefore the High Court was fully
justified in coming to the conclusion that the Cantonment
board could not have issued the Notification levying tax on
entry on Motor Vehicles. The learned counsel also urged that
the duty of the court being to put a construction by which
both the provisions could be sustained, the expression
‘vehicle’ in the Municipalities Act should be interpreted to
mean all vehicles other than Motor Vehicles for which a
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special provision has been made in the Taxation Act and so
construed the Cantonment Board would not have any
jurisdiction to levy entry tax on Motor Vehicles. The
relevant Sections of the Madhya Pradesh Motor Vehicles
Taxation Act may quoted hereunder :
"3. Levy of Tax- (2) The tax
leviable under subsection (1) shall
be paid by the owner of the motor
vehicle used or kept of use-
(i) for a whole quarter at one-
fourth of the annual rate specified
in the First Schedule , and for two
or more whole quarters, pro rata;
or
(ii) for any period expiring on the
last day of quarter and not
exceeding two months at one-sixth
or one-twelfth of the rate
specified in the First Schedule,
according as the period exceeds, or
does not exceed one month.
6. Bar of imposition of tax by
any local authority.-(1)
Notwithstanding anything contained
in any other enactment for the time
being in force, no local authority
shall, after the commencement of
this Act, impose for enhance a tax,
toll or licence fee in respect of a
motor vehicle and if any local
authority has imposed sch tax. toll
or licence fee since before the 1st
day of April, 1942 and the same is
still in force all the commencement
of this Act any person who is
liable to pay such tax, toll or
licence fee to such authority shall
be deemed to have paid it.
(2) Nothing contained in sub-
section (10 shall affect the
imposition, enhancement or recovery
of an octroi tax levied hereafter
by any local authority or a
terminal tax levied and in force on
the 1st January , 1937 within the
local area under the jurisdiction
of any local authority .
(7) Grant to local authorities-(1)
The state Government shall at the
close of the financial year 1947-48
and of each financial year
thereafter make to every Cantonment
Board, Municipal Committee and
notified area committee which was
imposing a tax, toll or licence fee
in respect of motor vehicles,
before the 1st day of April, 1942,
a grant of the same as was being
paid by the state Government to
such board or committee immediately
before the commencement of this
Act:
Provided that no sum shall be
payable to cantonment Board unless
it agrees not to recover any tax,
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toll or licence fee in respect of
motor vehicles.
(2) Any sum payable under sub-
section (1) shall be charged on the
Consolidated Fund of the State."
The rival submission require careful examination of
different provisions of both the Acts and certain principles
of interpretation of a statute.
The admitted position that emerges from the facts
already narrated are that the cantonment Act, 1924 is the
earliest in point of time which empowered the Cantonment
Board to impose tax with the previous sanction of the
Central Government which tax could be imposed in any
Municipality in the State where such Cantonment is situated.
The Madhya Pradesh Motor Vehicles Taxation Act, 1947 is a
special provision dealing with levy of tax on motor Vehicle
which is used or kept for use. There is no provision in the
aforesaid Taxation Act for levy of any tax on entry of Motor
Vehicles alone. The Municipality Act of 1961, however ,
authorises imposition of tax on vehicles, boats and animals
entering the limits of the Municipality as provided in
Section 127 91)(iii) of the said Act. In the aforesaid
premises it is required to be considered and decided as to
whether the Cantonment Board could impose tax on vehicles
entering the limits of the Cantonments which could have
otherwise been levied by the Municipality in exercise of
power under Section 127(1)(iii) of the Municipalities Act.
It may be further noticed that the Motor vehicles Taxation
Act as well as the Municipalities Act are both enacted by
the State Legislature. The first question that arises for
consideration is whether there is any repugnancy between the
provisions of the Motor Vehicles Taxation Act and the
Municipalities Act in relation to imposition of tax on Motor
Vehicles entering the limits of the Municipality. As has
been stated earlier under the Taxation Act, Tax could be
imposed on the Motor Vehicles which is used or Kept for use
as provided in Section 3(2) of the said Act and there is no
provision for imposition of tax on vehicles which is neither
used nor kept for use but for mere entry into any municipal
limits . When the legislatures imposed a ban on levy of tax
by any local authority under section 6 of the Taxation Act
what is prohibited is levy of tax which is leviable under
section 3(2) of the Taxation Act. When the same legislature
enacted the Municipalities to impose tax on vehicles
entering the limits of the Municipality under Section 127
(1)(iii) they must be presumed to be aware of the provisions
of the Taxation Act and leviability of the tax thereunder in
respect of Motor Vehicles used or kept for use. The
expression ‘vehicle’ having been defined in Section 2(38) to
include a bicycle, a tricycle, motor car and ever wheel
conveyance which is used or capable of being used on a
public street, it is not possible for us to accept the
contention of Mr. Agrawal, learned counsel appearing for the
respondents to interpret the same expression to mean
vehicles other than the ‘motor vehicles’. Since the Taxation
Act does not provide for any imposition of tax on entry of
the Motor vehicles within Municipal limits whereas the
municipal Act authorises fr such levy under Section
127(1)(iii) we do not find any inconsistency or repugnancy
between the two provisions. In other words while under the
Motor Vehicle Taxation Act a tax could be imposed on Motor
Vehicles used or kept for use by the registering authority
including the Municipalities under section 127(1)(iii) of
the Municipalities Act. But so far as the imposition of tax
motor Vehicle entering into the Municipal limits is
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concerned, which is provided under section 127(1)(iii), of
the Municipalities Act the said provisions cannot be said to
be repugnant to the special statute in respect of Motor
Vehicles, namely the Motor Vehicles Taxation Act. It has
been stated by this court in the case of Ashoka Marketing
ltd. And another etc. etc. vs, Punjab National Bank and
others etc. etc. (1990) 4 SCC 406 that the principal of
statutory interpretation, namely, later laws abrogate
earlier contrary laws is subject to exception that a general
provision does not derogate from a special one. This would
mean that where a literal meaning of the general enactment
covers a situation for which specific provision is made by
another enactment contained in the earlier Act, it is
presumed that the situation was intended to be continued to
be dealt with by the specific provision rather than the
later general one. in other words if the Taxation Act would
have contained a provision authorising imposition of Entry
Tax on Motor Vehicle than certainly the later general Act,
namely the municipalities Act even if by making a provision
of imposition of entry tax on Vehicles entering in to the
Municipal limits would not have operated. But since the
special law, namely, the Taxation Act does not have any
provision authorising imposition of tax on entry of Motor
Vehicles. The said provision would remain valid and would be
applicable and there would be no bar for the municipality to
impose entry tax on all vehicles including Motor Vehicles
including Motor Vehicles for entering in to the limits of
the Municipalities. This Construction being the only
harmonious construction by which both the provisions remain
operative it is the duty of the court adopt such
construction. There is no dispute with the proposition
advanced by Mr. Lekhi, learned senior counsel with regard to
theory of implied repeal.
This theory the learned the senior counsel advanced since
the Municipalities Act did not repeal the provisions of the
Motor Vehicles Taxation Act. It was held by this Court in
the Case of Yogender Pal Singh & others vs. Union of India &
Ors. (1987) 1 SCC 631;
"It is well settled that when a
competent Authority makes a new law
which is totally inconsistent with
the earlier law and the two cannot
stand together any longer it must
be construed that the earlier law
has been repealed by necessary
implication by the later law."
In considering the applicability of section 6 of the
General Clause Act 1897 in the case of State Of Orissa Vs.
M.A Tuloch and Co. (1964) 4 SCR 461 this court had
observed:-
"The entire theory underlying
implied repeals is that there is no
need for the later enactment has
been repealed by using any
particular set of words or form of
drafting but that if the
legislative intent to supersede the
earlier law is manifested by the
enactment provisions as to effect
such supersession, then there is
law a repeal notwithstanding the
absence of the words ‘repeal’ in
the later statute."
The aforesaid observation no doubt has been made while
analysing the effect of Section 6 of the General Clauses Act
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and the continuance of rights accrued and liabilities
incurred under the superseded enactment and thus has no
direct application to the case in hand.
In the case Commissioner of Income Tax, Bombay City I
vs. Godavari sugar Mills Ltd. (1967) 1 SCR 798 on which Mr.
Lekhi learned senior counsel placed strong reliance, the
question for consideration was whether the ordnance be
repugnant to section 23A of the Income Tax Act, 1922 it can
be said that there is an implied repeal of section 23A of
the Act. In this connection it was held by this court:-
"there is a manifest repugnancy
between the provisions of the
Ordinance and of section 23A if the
Act and it must be taken that there
is a implied repeal of Section 23
of the Act to the Extent of that
repugnancy created by Section 3 of
the Ordinance and so long as the
ordinance remain in force."
But in view of our conclusion that there is no
repugnancy between Section 3 read with Section 6 of the
Motor Vehicles Taxation Act and the provisions of Section
127(1)(iii) of the Municipalities Act and both the
provisions operate in two different fields the principle of
implied repeal will have no application. In the connection
it would be appropriate for us to notice one decision of
this court in the Case of The Western India Theatres Ltd.
vs. The Cantonment Board, Poona, Cantonment 1959 Supp. (2)
SCR 63, where the validity of levy of entertainment tax
under Entry 50 in Schedule VII of the Government of India
Act. 1935 was under consideration. The Entry in question was
to the effect:-
"taxes on luxury or entertainment or amusement"
It was contended before the Court that the tax in
question was really a tax imposed for the privilege of
carrying on any trade or calling under Entry 46 and,
therefore, the same cannot exceed Rs.100 per annum as
provided under Section 142A of the Government of India Act
1935 and Rs.250 per annum under Article 276(2) of the
Constitution. The Court repelling the argument held:-
"The entry contemplates luxuries,
entertainment, and amusements as
objects on which the tax is to be
imposed. If the words are to be so
regarded, as we think they must,
there can be no reason to
differentiate between the given and
the receiver of the luxuries,
entertainment’s or amusements and
both may, with equal propriety, be
made amenable to the tax. It is
true that economists regards an
entertainment, it does become a tax
on expenditure, entertainment’s or
amusements . The entry, as we have
said, contemplates a law with
respect to these matters regarded
as objects and a law which imposes
tax on the act of entertaining is
within the entry whether it falls
on the giver or receiver of that
entertainment. Nor is the impugned
tax a tax imposed for the privilege
of carrying on any trade or
calling."
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Thus considered, the tax leviable on Motor Vehicles
when used or kept for use under section 3(2) of the Madhya
Pradesh Motor vehicles Taxation Act is different from the
tax leviable on Motor Vehicles. Entering the limits of the
Municipality under Section 127(1) (iii) of the Madhya
Pradesh Municipalities Act, 1961 and there is no repugnancy
between the two and both the provisions can therefore
operate in its own field. Since under Section 127(1)(iii) of
the Madhya Pradesh Municipality Act, Municipality could levy
a tax on Motor Vehicles entering the limits of the
Municipality, the same could be levied by the Cantonment
Board in exercise of its power under Section 60 of the
Cantonments Act with the previous sanction of the Central
Government . Consequently, notifications issued by the
Cantonment Boards of Mhow, Jabalpur and Saugar were valid
notifications issued under section 60 of the cantonments Act
and imposition of tax on motor Vehicles entering into the
limits of the Cantonment Boards cannot be said to be invalid
or inoperative. The High court in our opinion committed
error in striking down those notifications on the ground of
repugnancy with this special legislation, namely, the
Madhya Pradesh Motor Vehicles Taxation Act.
So far as the contention of Mr. Lekhi, the learned
senior counsel with regard to the proviso to Section 7 of
the Taxation Act is concerned, we however, do not find any
force in the same in asmuchas Section 7 deals with the grant
to the local authorities and it provides that if a grant was
being paid by the state Government to any such Board or
Committee immediately before the commencement of the
Taxation Act then the said grant shall be continued to be
paid. But the Cantonment Board by virtue of the Proviso will
not be entitled to receive the said grant unless it agrees
not to recover any tax, toll or licence in respect of the
Motor Vehicles. In other words, Section 7 and proviso
thereto deals with right of the Cantonment Board and the
Municipality to receive a grant which was being paid by the
state Government prior to the commencement of the Taxation
Act and the said provision has no connection with the
imposition of tax on Motor Vehicle Which is governed by
section 3 (2) and the bar on such imposition which is
contained in Section 6 of the Taxation Act. In this view of
the matter , we are unable to accept the contention of Mr.
Lekhi, the learned senior counsel that conjoint reading of
section 6 and 7 and its proviso would lead to the conclusion
that even under the Taxation Act a Cantonment Board was
entitled to impose tax on Motor Vehicles used or kept for
use notwithstanding the bar under Section 6.
Coming to the conclusion of the applicability of
doctrine of desuetude Mr. Lekhi, the learned senior counsel
strongly relied upon the decision of this Court in Municipal
Corporation for City of Pune and another vs. Bharat forge
Company Ltd. and other (1995)3 SCC 434 and submitted that
the provisions of the Motor Vehicles Taxation Act must be
held to be of disuse as no grant as provided in Section 7 of
the Taxation Act has ever been made at any point of time
after the enactment of the said Act in 1947. This contention
is wholly unsustainable in law in asmuchas we are not
concerned with the question of grant to local authorities
and Cantonment Board as provided under Section 7 of the
Taxation Act but we are concerned with the leviability of
tax on Motor Vehicles under Section 3(2) of the Taxation
Act. it is nobody’s case that no tax was being levied on
Motor Vehicles which is used or kept for use under Section
3(2) of the Madhya Pradesh Motor Vehicle Taxation Act ,1947.
That apart to apply the principle of desuetude it is
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necessary to establish that the state in question has been
in disuse for long and the contrary practice of some
duration gas evolved. In other words to make the aforesaid
principle applicable in the case in hand it is required to
be established that the provisions of Section 3(2) of the
Motor Vehicles Taxation Act has been in disuse for a long
period and that the imposition of tax on entry of Motor
Vehicles into the Cantonment limit has been in operation
for a fairly long period. Neither of these two ingredients
has been satisfied in the case in hand and therefore the
aforesaid principle of desuetude is of no application to the
case in hand.
In the aforesaid premises, these appeals are allowed.
The impugned judgments of the Madhya Pradesh High Court are
set aside and it is held that the respective cantonment
Boards Pursuant to the notifications issued by the
Cantonment Boards in exercise of power under Section 60 of
the Cantonments Act. But in the circumstances there will be
no order as to costs.