K. N. Singh, J. - This is a petition under Article 226 of the Constitution challenging the validity of toll tax imposed by the Farrukhabad-cum-Fatehgarh Municipal Board.
2. Farrukhabad-cum-Fatehgarh Municipal Board is a municipality constituted under the U.P. Municipalities Act, 1916 (hereinafter referred to as the Board). The Board took decision to impose toll-tax on vehicles took decision to impose toll-tax on vehicles and other conveyances, animals and laden coolies entering the limits of the municipality as contemplated by S. 128(1) (vii) of the Act. The Board adopted a special resolution, prepared draft rules, invited objections, and submitted the same to the Prescribed Authority, namely, the Commissioner, Allahabad for his sanction. The Prescribed Authority sanctioned the proposals but it directed the Board to reframe rules in accordance with the model rules framed by the State Government. The Board thereupon again passed a special resolution framing proposals and draft rules and published the same in local newspapers inviting objections. After the necessary procedure as contemplated by Ss. 128 to 132 was followed, the Board submitted the draft rules and proposals again to the Prescribed Authority. The prescribed Authority published the draft rules and proposals inviting objections. Since no objections were filed, the prescribed Authority sanctioned the rules. The Board by its special resolution directed that the toll-tax imposed with effect from 1-11-1974. On receipt of the copy of the special resolution of the Board, the Prescribed Authority in exercise of its power under S. 135(2) of the Act issued a notification in the Official gazette dated 19-10-1974 notitying that the toll-tax shall be imposed by the Board with effect from 1-11-1974.
3. Under the Toll Tax Rules, every stage carriage, lorry or bus entering the municipal limits of the municipality is liable to pay toll-tax at the rate of Rs. 6/- per entry. Similarly, each taxi, tempo or motor car is required to pay Re. 1/- per entry. The petitioners hold permits for plying stage carriages under the provisions of the Motor Vehicles Act, 1939. While plying their vehicles on the routes for which they hold permits, the petitioners pass through the municipal limits of the Board. The respondent Board charges toll-tax from the petitioners on the entry of their stage carriages at the rate prescribed by the Toll Tax Rules. Aggrieved, the petitioners have challenged the validity of the imposition and relaisation of toll-tax from them.
4. Sri S. K. Dhaon, learned counsel for the petitioners, urged that the Prescribed Authority, namely, the Commissioner, Allahabad, had no authority in law to sanction the imposition of the tax or to notify the same under S. 135(2) of the Act, as these powers could be exercised by the State Government only. The respondent Board is a city municipality, hence the Commissioner had no jurisdiction to sanction the imposition of the tax.
5. S. 128 enumerates taxes which a Board may impose within the municipal limits. No tax can be imposed unless the procedure prescribed under Ss. 131 of 135 is complied with, which require framing of proposals and rules by the Board, giving opportunity of objection and sanction of the Prescribed Authority or the State Government and publication of final notification under S. 135 of the Act. Ss. 133, 134 and 135(2) confer authority on the State Government as well as on the Prescribed Authority to exercise powers relating to sanction and issue of final notification relating to tax imposed by the Board. The Prescribed Authority as defined in S. 2(17) (ii) means an officer or a body corporate appointed by the State Government in this behalf by notification in the official gazettee, and, if no such officer or body corporate is appointed, the Commissioner. It is not disputed that in the instant case the Commissioner was the Prescribed Authority while within the meaning of S. 2(17) (ii), S. 133 requires that in the case of a municipality other than a city if the proposed tax falls under clauses (i) to (xii) of sub-S. (1) of S. 128, the proposals as framed under S. 131 along with the decision on the objections under S. 132, shall be submitted to the Prescribed Authority for sanction of the proposals. S. 133 (2) lays down that in the case of City Municipality, the Prescribed Authority shall submit the proposals to the State Government which may pass orders sanctioning or modifying the same. Powers under Ss. 132 to 135 relating to sanction of the levy and imposition of tax as proposed by a municipality are conferred on the Prescribed Authority and the State Government. In case of a city municipality those powers vest in the State Government while in case of other municipalities those posers vest in the Prescribed Authority.
6. The crucial question which falls for determination is whether Farrukhabad-cum-Fatehgarh Municipality is a City Municipality. The term city as defined by S. 2(4) of the Act means a Municipality having a population of 100,000 or more inhabitants and any municipality which is a city by virtue of notification under S. 3. The definition contemplated a City Municipality having a population of one lac or more inhabitants, it further contemplated a City Municipality if it is so declared by a notification of the State Government issued under S. 3 of the Act. Thus a City Municipality is constituted by two methods, firstly, on the strength of the population of the municipality touching the figure of 100 000 or crossing it and secondly by the issue of a notification by the state Government under S. 3(1) (b) of the Act declaring any municipality to be a City even though it may have population of less than 100,000 inhabitants. S. 2(4) and 3(1) (b) read together contemplate that a municipality automatically acquirest he character of a City Municipality, if its population touches the figure 100,000 or more on the basis of the last census. In such a case, there is no necessity for the issue of any notification under S. 3(1) (b) of the Act. The State Government has power to declare a City Municipality under S. 3(1) (b) even if the population is less than 100, 100. In a case where no notification as contemplated by S. 3(1) (b) of the Act is issued by the State Govt., the question about the status of the municipality would depend upon the population of the municipality. S. 2(16) lays down that population with reference to any local area means the population according to the return of the most recent Government census for the time being. While considering the question whether a municipality is a City within the meaning of S. 2(4) of the Act the population of the Municipality based on the return of the latest Government census report is to be taken into account and if it is found that the population of the inhabitants of the municipality touched the mark of 100,000 or crossed the same, the municipality would automatically become City and in such a case the Prescribed Authority would have no jurisdiction to exercise powers under Ss. 133,134 or 135 to sanction the levy or imposition of any tax.
7. There is no dispute that the last census was held in 1971. A perusal of the official census report of 1971 as published by the U.P. Government shows that the population of Farrukhabad-Fatehgarh municipality was 102, 768. Since according to the return of the latest Government census Farrukhabad-Fatehgarh municipality has a population of more than 100,000 it is a City municipality within the meaning of S. 2(4) of the U.P. Municipalities Act, 1916. Since in the case of a city Municipality, the State Government has jurisdiction to sanction the levy and imposition of a toll-tax under Ss. 133, 134 or to notify the imposition of tax under S. 135(2) of the Act, the Prescribed Authority, namely, the Commissioner had no jurisdiction to sanction or notify the imposition of the toll-tax. The impugned toll-tax has not been imposed by the respondent Board in accordance with law. Consequently it is not entitled to realise any toll-tax from the petitioners.
8. Learned counsel for the Board urged that the State Government had delegated its function to the Prescribed Authority and as such the Prescribed Authority was competent to sanction the levy and impose the impugned tax. We find no merit in this contention. S. 327 empowers the State Government to delegate its powers to the Prescribed Authority in respect of any Municipality except those powers as detailed in Schedule VII to the Act. The State Government is thus authorised by the legislature to delegate its powers to the Prescribed Authority except those mentioned in Schedule VII to the Act. Schedule VII contains a list of powers of the State Government which cannot be delegated to any other authority. S. 133(2) and S. 135 (2) both are enumerated in Schedule VII. Therefore the State Government has no jurisdiction to delegate the powers conferred upon it by S. 133(2) and S. 135 (2) of the Act to the Prescribed Authority.
9. Learned Counsel then urged that In the instant case the imposition of the tax was in substance sanctioned by the State Government as contemplated by S. 132(4) and the notification in the gazette was issued under the direction of the State Government and as such the requirement of law was substantially complied with. He referred to the averment contained in paragraph 5 and 6 of the counter-affidavit filed on behalf of the Board. The averments contained in the said paragraphs show that the State Government had issued a G.O. dated July 12, 1973, directing the Prescribed Authorities not to sanction any proposals to impose toll-tax unless prior approval of the Government was obtained in the matter. In the instant case when the proposals were submitted to the Prescribed Authority it referred the matter to the State Government in accordance with the direction issued by the State Government. The Government, however, by its letter dated 27th July, 1973, Annexure I to the counter-affidavit, informed the Commissioner, Allahabad, that since Farrukhabad-Fatehgarh was not a City Municipality he had jurisdiction to accord sanction and to frame rules for the imposition of the toll-tax. The letter further stated that the State Government had no objection to the imposition of the tax. The Government further directed the Commissioner to ensure that the rules are framed in accordance with the model rules framed by the Government. In pursuance of this direction, the Commissioner had returned back the proposals to the Board with a direction that rules should be framed in accordance with the model rules framed by the Government. This direction was complied with by the Board. These facts, however do not validate the imposition of the tax. The State Government itself expressed the opinion in its letter to the Commissioner that Farrukhabad-Fatehgarh Municipality was a noncity municipality and as such the Prescribed Authority was competent to sanction the imposition of tax. The State Government itself did not exercise the powers conferred on it by Ss. 133 and 135 of the Act. Moreover provision for sanction of the proposal and Rules under S. 134 and issue on final notification under S. 135 of the Act is mandatory. These powers must be exercised by the authority concerned. Mandatory provisions relating to levy and imposition of tax must be complied with strictly according to law and any substantial compliance of the aforesaid provisions would not validate the imposition of the impugned tax.
10. In view of the above discussion, we hold that the impugned toll-tax has not been validly imposed and the respondent Board has no authority to collect the same from the petitioner. We, therefore, allow the petition and quash the notifications date 21-8-1974 and 19-10-1974 and direct the Board to restrain itself from realising any toll-tax from the petitioners on the entry of their vehicles within the municipal area. Parties shall their own costs.