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Issues:
The validity of toll tax imposition by Municipal Board u/s 128(1)(vii) of U.P. Municipalities Act, 1916. Summary: The Supreme Court addressed the issue of the toll tax imposed by the Municipal Board, Pilkhwa on vehicles and other conveyances, animals, and laden coolies entering the municipal limits u/s 128(1)(vii) of the U.P. Municipalities Act, 1916. The High Court upheld the levy based on a previous decision, but the Supreme Court found that the toll tax was not compensatory in nature as the Municipal Board did not provide any facilities to justify the tax. The National Highway was maintained by the Government, and the toll tax could not be justified as a compensatory tax. The Court held that the toll tax imposed by the Municipal Board was ultra vires and must be struck down. The State Government later withdrew the transit tax on vehicles and conveyances passing through the municipal limits, further supporting the Court's decision. As a result, the appeals were allowed, the judgment of the High Court was set aside, and the toll tax imposition was declared ultra vires.
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