RAMGARH CANTONMENT BOARD & ANR. versus STATE OF JHARKHAND & ORS

Citation: [2008] 4 S.C.R. 686 · Decided: 11-03-2008 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Dismissed

Judgment (excerpt)

[2008) 4 S.C.R. 686 
A 
RAMGARH CANTONMENT BOARD & ANR. 
B 
v. 
STATE OF JHARKHAND & ORS~ 
(Civil Appeal No. 4498 of 2002). 
MARCH 11, 2008 
[ASHOK BHAN AND DALVEER BHANDARI, JJ.] 
Cantonments Act, 1924 - s. 60 - Bihar and Orissa 
\ 
I 
Municipal Act, 1922 - 'ss. 82, 137 and 326 - Entry tax on 
'f 
~
c vehicles entering into Ramgarh cantonment area - Power of 
Cantonment Board to impose· - Held: Taxing power of 
Cantonment a·oard is dependent upon and co-extensive. with 
any such corresponding power vested in municipality - Once 
municipality is vested with the power to levy entry tax under 
relevant enactment, Cantonment Board can also exercise the 
D . same power - Municipaiities in Bihar has no power to levy 
entry tax on mechanically propelled vehicles under 1922 Act, 
thus, Cantonment Board Ramgarh, Bihar cannot levy vehicle 
entry tax for vehicles entering into Ramgarh Cantonment 
r ... 
E Board Area - Municipalities. 
. F 
The question which arose for consideration in this 
appeal was regarding the power, competence and 
authority of the Cantonment Board to levy entry tax on 
vehicles entering into the cantonment area . 
Appellant No.1-Ramgarh Cantonment Board invited 
tender for collection of vehicle tax entering into Ramgarh 
Cantonment Area. Respondent no.3 was awarded the 
contract and was asked to realize the vehicle tax from 
each goods vehicle entering into the Ramgarh 
G Cantonment Area for six months. A formal agreement was 
executed. Respondent no.3 deposited the earnest money. 
Subsequently, appellant no. 1 restrained respondent no.3. 
from coUecting vehicle entry tax on the directions -of the 
H 
Deputy Commissioner, Hazaribagh, Bihar. The 
686 
~ ' 
RAMGARH CANTONMENT BOARD & ANR. v. STATE 
687 
OF JHARKHAND & ORS. 
Cantonment Board was entitled to collect only those taxes 
A 
which could be realized by the municipality. Respondent 
No.3 filed writ petition. The Single Judge of High Court 
quashed the order of Deputy Commissioner placing 
restriction on collecting entry tax. The State of Jharkhand 
filed appeal which was allowed. Hence the present appeal. 
B 
Dismissing the appeal, the Court 
HELD: 1.1 A bare reading of sub-section (1) of section 
' 
y 
60 of the Cantonment Act, 1924 clearly reveals that the 
power to levy any tax is dependent upon and co-extensive c 
with any such corresponding power which may vest in 
the municipality being relatable to and dependent upon 
legislative enactment concerning, governing or regulating 
the powers of such municipality. The Division Bench of 
High Court rightly held that sub-section (1) of section 60 
D 
of the Act, is not totally an independent provision by itself, 
in the sense that the power by itself has not been given to 
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the Board to levy tax and the provision is related to and 
dependent upon any corresponding analogous provision 
in a legislative enactment of the municipality. In other 
E 
words, if the municipality in an area has the power to levy 
tax under a relevant enactment, by virtue of the power 
created under sub-section (1) of section 60, the same 
power would vest in a Cantonment Board. [Paras 7 and 
8] [692-C-F] 
F 
1.2 Section 326 of the Bihar and Orissa Municipal Act, 
l 
1922 provides that all vehicles plying for hire have been 
specifically excluded from levying of tax by the 
municipality and consequently the Cantonment Board 
also has no power or competence to levy entry tax on G 
vehicle which ply for hire. [Para 13] [695-E] 
1.3 From the bare reading of the sections 3(30) and 
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3(30-A) of the 1922 Act defining vehicle and motor car, it is 
abundantly clear that the municipality has no power to 
levy any entry tax on mechanically propelled vehicles. H 
688 
SUPREME COURT REPORTS 
[2008] 4 S.C.R. 
A When the municipality has no power or competence to 
levy entry tax on mechanically propelled vehicles, 
obviously the Cantonment Board cannot exercise this 
power because taxin'g power of the Cantonment Board 
is dependent upon and co-extensive with any such. 
B corresponding power vested in the municipality. [Paras 
14 and 15] [695~F-H; 696-B-C] 
·1.4 In section 137 of the 1922 Act, it has been 
determined that a .tax on the vehicles, horses and other 
anirn.al~ $pecified in the First Schedule alone can be : 
C~ imposed and the First Schedule, clearly excludes all 
mechanically propelled vehicles. According to section 
137, the. words that the tax can be levied on every vehicle, 
horse or other animal of the kind specified

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