2010 (1) TMI 1110 - HC - VAT and Sales Tax

Tenders for a settlement for collection of entry tax from loaded commercial trucks referred to therein for the period September 15, 2009 to March 31, 2010 - Held that - The challenge projected against the impugned settlement on the ground of lack of authority has to be upheld. The petition deserves to succeed. Ordered accordingly. The impugned settlement is hereby interfered with and is set aside.

Issues Involved:
1. Authority of the Bijni Town Committee to impose entry and exit tax.
2. Compliance with the Assam Municipal Act, 1956.
3. Validity of the sanction from the Bodoland Territorial Council.
4. Applicability of the Sixth Schedule to the Constitution of India.
5. Requirement of public notification for applicability of state laws.

Detailed Analysis:

1. Authority of the Bijni Town Committee to Impose Entry and Exit Tax:
The primary issue was whether the Bijni Town Committee had the authority to impose entry and exit tax on loaded commercial trucks. The petitioners argued that the Committee lacked lawful authority to invite tenders and settle the process for tax collection. They contended that the Assam Municipal Act, 1956 did not permit the imposition of such a tax without government sanction.

2. Compliance with the Assam Municipal Act, 1956:
The petitioners referred to Section 68 of the Act, arguing that no tax on entry and exit of goods-carrying commercial vehicles was permissible without the sanction of the Government of Assam. They emphasized that the realization of the entry tax was illegal and without jurisdiction due to the absence of government sanction and lack of a gazette notification.

3. Validity of the Sanction from the Bodoland Territorial Council:
The Council, in its defense, claimed authority based on a tripartite memorandum of settlement and pending its own legislation, adhered to the Assam Municipal Act, 1956. The Council argued that the power to grant sanction under Section 68(1)(n) of the Act vested in it, which extended to imposing entry and exit tax on vehicular movement. However, the court noted that the letter dated July 21, 2009, from the Council's Urban Development Department did not constitute valid sanction, as the sanctioning power was vested in the Principal Secretary of the Council, not any other executive functionary.

4. Applicability of the Sixth Schedule to the Constitution of India:
The court examined the applicability of the Sixth Schedule, which governs the administration of tribal areas, including the area under the Bodoland Territorial Council. The Sixth Schedule mandates that any Act of the Legislature of the State of Assam can only apply to autonomous districts or regions if the District Council issues a public notification to that effect. The court found no evidence of such a public notification, rendering the Assam Municipal Act inapplicable to the area involved.

5. Requirement of Public Notification for Applicability of State Laws:
The court highlighted the necessity of public notification by the District Council for the applicability of state laws as per paragraph 12 of the Sixth Schedule. The office memoranda dated October 22, 2004, and October 25, 2004, did not meet this requirement. Therefore, the plea of the applicability of the Assam Municipal Act to the area in question could not be sustained.

Conclusion:
The court concluded that the Bijni Town Committee lacked the authority to impose the entry and exit tax, as the necessary preconditions under the Assam Municipal Act, 1956 were not met. The purported sanction from the Bodoland Territorial Council was invalid, and the Sixth Schedule's requirements for public notification were not fulfilled. Consequently, the impugned settlement was set aside, and the petition was allowed. The parties were directed to bear their own costs.

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