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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.