26 October 1970
Supreme Court


Case number: Appeal (crl.) 134 of 1968






DATE OF JUDGMENT: 26/10/1970


CITATION:  1971 AIR  439            1970 SCC  (2) 901

ACT: U.P. Municipalities Act II of 1916, s. 128(1)-If  authorises collection of a toll-tax levied on vehicles from  passengers travelling in a vehicle.

HEADNOTE: While  the  first  respondent  was  travelling  by  a   U.P. Government  Road. ways bus from Bhowali to Nainital in  May 1967,  toll-tax  was demanded from him  at  the  appellant’s municipal  toll  barrier  but  he  declined  to  pay.    The Executive  Officer,  Municipal  Board,  Nainital,  thereupon filed  a complaint against him under s. 190(1) (c)  la.P.C., for  breach of rule 1 of the Rules made under s.  153(a)  of the  U.P. Municipalities Act, 1916.  The first  respondent’s contention  was that the levy of toll-tax by  the  Municipal Board on passengers was ultra viruses the taxing pow& of the Board.   During  the pendency of these  proceedings,  on  an application  made,,, by the first respondent under s.  561A, Cr.P.C.,  the High Court quashed those  proceedings  holding that clause (vii) of s. 128(1) of the Municipalities Act did not authorise the levy of toll-tax on passengers and that  a connected notification also levied tax only on vehicles  and not  on passengers.  The Rule imposing an obligation on  the passengers  to  pay the toll was therefore  struck  down  as ultra vires. In  appeal  to this Court it was contended inter  alia  that toll imposed on the vehicle entering the Municipality  could legally  be  realised  from the  passengers  carried  by  it because of their nexus with the entry of the vehicle. HELD:Dismissing the appeal, The  toll  imposed on the laden vehicles is  expressly  made payable  by  the  person-in-charge  of  such  vehicles.   No liability  has been fixed on the passengers for  payment  of the  tax imposed on the vehicles carrying them and  entering the  Nainital Municipality.  There was no precedent  or  any principle  in support of the submission that merely  because the  passengers  were carried by the vehicles  the  toll-tax imposed  on  the entry of the vehicles  into  the  municipal limits could be demanded from them [704 D-G] When  the impugned levy was outside the-Act, s. 164  of  the Act  could not operate to bar the jurisdiction of  the  High



Court  to quash the proceedings relating to the  levy  which was ultra virus the taxing power of the Board. [704 H]

JUDGMENT: CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 134  of 1968. Appeal  from the judgment and order dated April 16, 1968  of the Allahabad-High Court in Criminal Misc.  Case No. 3403 of 1967. Yogeshwar Prasad, for the appellant 0.   P. Rana, for respondent No. 2.                701 The Judgment of the Court was delivered by Dua,  J.  The short point requiring  determination  in  this appeal-on  certificate of fitness granted by  the  Allahabad High  Court  under  Art. 134(1)(c) of  the  Constitution  is whether  tolltax  on laden motor vehicles  levied  under  s. 128(1)(vii)  of  the, U.P., Municipalities Act  11  of  1916 (hereinafter described as the Act) on their entry within the limtis  of  Nainital Municipality can be realised  from  the passengers carried by them. The relevant facts which lie within a narrow compass may now be  briefly stated.  Brij Mohan Chandra,  Vice-President  of the  Notified  Area Committee,  Bhowali,  District  Nainital (respondent no. 1 in this Court) traveled in U.P. Government Roadways Bus from Bhowali to Nainital on 17th, 26th and 29th May,  1967.  At Kaila Khan Municipal toll barrier one and  a half mile from Nainital on the Bhowali-Nainital Road,  toll- tax  was  demanded  from him but he declined  to  pay.   The Executive Officer, Municipal Boad, Nainital, thereupon filed a  complaint against him under s. 190(1)(c) of the  Code  of Criminal Procedure on the allegation that he had by entering the  municipal  limits of Nainital without paying  the  toll dues  committed breach or r. (1) of the Rules made under  s. 153(a)  of  the Act for the ’assessment  and  collection  of tolls  within  the  municipality of  Nainital.   Brij  Mohan Chandra’s contention in reply was that the levy of  toll-tax by  the  Municipal Board on passengers was ultra  vires  the taxing  power  of  the Board.  During the  pendency  of  the proceedings  in  the  court  of  Sub-Divisional  Magistrate, Nainital,  Brij Mohan Chandra applied to the High  Court  of Judicature  at  Allahabad  under  s.  561A,  Cr.   P.C.  for quashing those proceedings.  The High Court (S.  D. Singh J) on  April 16, 1968 quashed the proceedings by  the  impugned order holding that cl, (vii) of s. 128(1) of the Act did not authorise  levy  of  toll-tax on  passengers  and  that  the relevant  notification also levied tax only on vehicles  and not  on passengers.  The rule imposing an obligation on  the passengers  to pay the toll was, therefore, struck  down  as ultra vires. In this Court Shri Yogeshwar Prasad, learned counsel for the appellants (the Municipal Board, Nainital and the  Executive Officer  of the Board) at the outset attempted obliquely  to seek support for the validity of the levy on passengers from cl.  (xiv)  of  s. 128(1) as pleaded in  the  memorandum  of appeal lodged in this Court under O.21, r. 12 of the Supreme Court  Rules. But this attempt was soon abandoned  and  Shri Yogeshwar Prasad felt constrained to concede that in view of the clear and precise position taken on behalf of the  Board in the High Court that it had never been intended to  impose toll-tax on passengers, it was not 702 open to him in this Court to rely on cl. (xiv).  Shri O.  P.



Rana,  the learned counsel for the respondent State of  U.P. supporting the appeal, also did not rely on cl. (xiv).  We, therefore,  do  not purpose to express any  opinion  on  the question  whether or not a toll-tax on passengers  would  be permissible under cl. (xiv). The only point seriously pressed on behalf of the appellants as  also by Shri O. P. Rana on behalf of the State  of  U.P. was that  the  toll imposed on the  vehicle  entering  the municipality  could legally be realised from the  passengers carried  by it because of their nexus with the entry of  the vehicle.  Before examining this contention we may in passing turn to cl. (vii) of s. 128 ( 1 of the Act which reads:               "128(1)  Subject  to  any  general  rules   or               special  orders  of the State  Government,  in               this  behalf,  the  taxes which  a  board  may               impose in the whole or part of a  municipality               are-               (vii) a    toll   on   vehicles   and    other               conveyances,   animals,  and   laden   coolies               entering the municipality; This clause in clear and unambiguous terms speaks of a  toll on vehicles and other conveyances, animals and laden coolies ,entering  the  municipality.  It does not take  within  its Cold  the, passengers carried by vehicles to be taxed,  with the  result  that  imposition of tax on  passengers  by  the Municipal Board would be incompetent under this clause.  And this in fact was not ,disputed at the Bar. The argument of nexus was also raised in the High Court: but it was repelled by that Court which observed as follows               "It was urged that when a tax on conveyance is               levied, some provision has to be made for  the               assessment and collection of that tax and some               provision  made  about the persons  from  whom               that tax may be recovered and that if there               is  any reasonable or rational  nexus  between               the levy of the tax and the persons from  whom               that tax may be recovered, the Municipal Board               would be within its rights to realise the  tax               from  the persons so named.  It is  difficult,               however, to apply the nexus theory in a manner               so as to enable the Municipal Board to recover               the toll-tax from the passengers travelling in               a  bus otherwise there will be no  distinction               left  between a vehicles-tax and  a  passenger               tax.  When a toll-tax is               703               levied on a vehicle, it is levied at the point               of its entry within the municipal limits.   It               is obviously, therefore, the person, who is in               charge of the vehicle or who makes an  attempt               to  take  the  vehicle  inside  the  municipal               limits,    who   takes   upon   himself    the               responsibility  for the payment of  the  toll-               tax.  There is no question of there being  any               nexus  between  the  levy of the  tax  on  the               vehicle  and  the persons sitting  inside  the               same.  In the case of ,vehicles plying on hire               the driver or conductor of the vehicle can, of               course, charge the amount of tax which has  to               be  paid, from the passengers in  addition  to               the fare which is normally charged from them." The  same argument was repeated before us.  The  submisssion seems to be based largely on the policy of the law to ensure the collection of taxes by preventing fraudulent evasion. in order to, appreciate its cogency we may appropriately advert



’to the Rules made by the State Government, in 1922 under s. 296  read  with s. 153(a) of the Act, with  respect  to  the assessment   and  collection  of  tolls  in   the   Nainital Municipality.   So far as relevant for the purposes of  this appeal, according to r. (1), no person can bring within  the limits  of the Nainital Municipality any vehicle in  respect of  which the toll-tax imposed under s. 128 ( 1 )  (vii)  of the  Act is leviable until the toll due in  respect  thereof has  been paid to such muharrir and at such barrier  as  the Board may from time to time appoint.  Under r. 2(a), in  the case of laden motor vehicles the load recorded in the chalan or  invoice accompanying the vehicle has to be  accepted  by the  muharrir  for purposes of assessing the  toll.   If  no chalan or invoice accompanies the vehicle the load is to  be assumed  for  the  purposes of assessment  to  exceed  three mounds  unless it is   ascertained to be less  by  weighment undertaken  ’at the request of the person-in-charge  of  the vehicle.   The toll on a laden motor vehicle has to be  paid by  the  person-in-charge  of  the vehicle  and  toll  on  a passenger  is  to  be paid by the  passenger.   Rule  2  (b) provides  that when any person-in-charge of a laden  vehicle enters  the municipal limits such person shall pay the  toll to the muharrir at the barrier add the muharrir shall tender a  face-value-ticket with coupon attached for the amount  to the  person paying the toll.  This face value ticket can  be examined  by the official appointed for the purpose and  the person  bringing  the vehicle with the municipal  limits  is bound under r. 3 to permit such examination.  Under r. 2(c), every  driver of a motor lorry or other vehicle  plying  for ,hire  and  every driver of a private motor can  or  vehicle carrying passengers or goods has to so his lorry or  vehicle at  the  toll barrier for a reasonable time to  enable  the, toll staff to recover prover tolltax from passengers and  on the goods loaded therein.  The pro- 704 vision  contained  in r. 2(a) that the toll on  a  passenger shall  be  paid  by  the passenger  on  which  reliance  has principally  been  placed,  is  of  no  assistance  to   the appellants  beacuse  it postulates imposition  of  toll  on_ passengers and, therefore, unless a ton has been imposed  on passengers none can be demanded from them under this clause. Similarly  the notification (No. 1450/XI-476 E)  dated  19th August,  1921, according to which toll-tax under s. 128  (1) (vii)  of  the Act sanctioned by the U.P.  State  Government under S. 135(2) of the Act is levied on motor vehicles other than  cars at the rate of Re. 1/- per passenger  carried  by them and at the rate of Rs. 2/- per vehicle is unhelpful  to the appellants.  As already observed by us, no toll-tax  has been  imposed  on passengers and indeed it was  conceded  on behalf  of the appellants, both here and in the High  Court, that  the  Board  had  never intended to  impose  a  tax  on passengers.  It is also noteworthy that the toll imposed  on the laden vehicles is expressly made payable by the  person- incharge of such vehicles and according to the scheme of the rules which provide the procedure for collecting such tolls, the person bringing the vehicle within the municipal  limits (who is supposed to be the person-in-charge) is enjoined  to permit  examination of the face-value-ticket  when  demanded after   the  vehicle’s  enquiry  into,  those  limits.    No liability  has been fixed on the passengers for  payment  of the tax imposed on the vehicles carrying them ’and  entering the Nainital Municipality.  The liability for the payment of such  tax having been fixed only on the person-in-charge  of the  vehicle  and not on the passengers it is  difficult  to appreciate  how the authorities entrusted with the  duty  of



realising  the same can demand it from the passengers.   Our attention  was  not invited to any provision of  law  under which the passengers can be held liable to pay the  toll-tax imposed  on  the vehicles.  Neither any  precedent  nor  any principle was cited at the Bar in support of the  submission that  merely  because  the passengers were  carried  by  the vehicles  the toll-tax imposed on the entry of the  vehicles into  the municipal limits could be demanded from them.   On the  facts  and  circumstances  of  this  case  and  on  the arguments  addressed we are, therefore, unable to hold  that the   passengers  carried  by  the  vehicles  entering   the municipality  of Nainital can be legally called upon to  pay the tax imposed on the vehicles. As a last resort a faint attempt was made by the appellants’ counsel  to  rely  on  s.  164 of the  Act  in  bar  of  the jurisdiction of the High Court in entertaining the  petition under  s.  561A,  Cr.   P.C. and  in  holding  the  impugned assessment   and   liability  of  the   passengers   to   be unauthorised  and illegal.  This argument ignores the  vital point that if the impugned levy is outside the Act then this section  cannot  operate and the jurisdiction  of  the  High Court      705 to quash the proceedings relating to the levy which is ultra vires the taxing power of the Board under the Act cannot  be taken away to the prejudice of the aggrieved, citizen.  This submission is accordingly repelled. In the final result this appeal fails and is dismissed. R.K.P.S.      Appeal dismissed.  1694Sup.Cl/71 706