THE STATE OF PUNJAB AND ORS. versus NARANJAN DASS DOOMRA RICE AND GEN. MILLS AND ORS. ETC.

Citation: [1997] SUPP. 5 S.C.R. 453 · Decided: 25-11-1997 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Dismissed
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Judgment (excerpt)

.. 
THE STATE OF PUNJAB AND ORS. 
v. 
NARANJAN DASS DOOMRA RICE AND 
GEN. MILLS AND ORS. ETC. 
NOVEMBER 25, 1997 
[S.P. BHARUCHA AND S.C. SEN, JJ.] 
A 
B 
Punjab Municipal Act, 19/J: Sections 62-A(J), (3), 62(12) and 71(1)-
President's order dated 30th Nov./3rd December 1990-Kapas, Narma and C 
Oilseeds-Exemption from payment of octroi-Direction to Municipal 
Committee to impose Urban Development Cess-levy and collection of Cess-
Held, in the absence of imposition of cess by Municipal Committees or State 
Govt., levy and collection of cess was without any authority of laW-:-Refund 
allowed. 
During the President's Rule in the State of Punjab, the President of D 
India by an order dated 30th Nov./3rd Dec.1990 exempted Kapas (raw cotton), 
Narma and Oilseeds from the payment of octroi. On the very day, the President 
directed all the Municipal Committees in the State of Punjab to impose 
Urban Development Cess on the sales/purchases of the above mentioned 
items. Pursuant thereto, a memo was issued by the appellants to Municipal E 
Corporations, Municipal Committees and Notified Area Committees, giving 
directions in regard to the manner in which the Cess was to be collected. 
Accordingly, the Cess was levied and collected. It was challenged before the 
High Court which directed the appellants to refund the Cess collected with 
interest. Hence the present appeal. 
The contention of the appellants was that the Cess had been imposed 
in lieu of octroi and that by virtue of Section 62(12) of Punjab Municipal Act, 
1911 the notification of the imposition of the Cess was conclusive evidence 
that the Cess had been imposed in accordance with the provisions of the said 
Act 
Dismissing the appeal, this Court 
F 
G 
HELD : l. The order dt 30th November/3rd December, 1990 does not 
impose the Cess. It directs the Municipal Committees to impose the Cess. 
This is in accord with the terms of Section 62A(l) of the Punjab Municipal 
453 
H 
454 
SUPREME COURT REPORTS [1997] SUPP. 5 S.C.R. 
A Act, 1911 under which the order is issued. That there is no imposition of 
a tax by reason of an order issued under the provisions of sub-section(I) of 
Section 62A of the Act is clear from the provisions ofsub-section(3) thereof, 
Sub-section(3) states that if the Municipal Committee has failed to carry out 
an order that has been passed under sub-section(I ), the State Government 
B may itself notify the imposition of the tax; such imposition operates as if it 
were a resolution duly passed by a Municipal Committee under the provisions 
of Section 62 of the Act. Section 62(12) of the Act comes into operation when 
a Municipal Committee has imposed a tax after following the procedure laid 
down in section 62 of the Act. It is then that the notification of the tax is 
conclusive evidence that it has been imposed. Alternatively, ifthe Municipal 
C Committee has failed to act as required by an order under sub-section(l) of 
Section 62A of the Act and the State Government has imposed the tax under 
sub-section(3) thereof, the provisions of Section 62(12) of the Act would then 
f:!perate because an order passed by the State Government under Section 
62A(3) of the Act operates as if it were a resolution duly passed by a 
Municipal Committee. [456-G-H; 457-A-B[ 
D 
E 
Atlas Cycle Industries ltd. v. State ofHaryana & Anr., [1972) I SCR 
127, held inapplicable. 
Shri Krishan Kumar Sanam and Ors. v. The Punjab State and Anr., 74 
P.L.R. (1972) 149, disapproved. 
2. The appellant shall refund to the respondents the amount collected 
from them as and by way of cess with interest at the rate of 12 per cent per 
annum from the dates of collection till the dates of payment. [458-B) 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4451-68 of 
F 
1991 Etc. 
From the Judgment and Order dated 19.8.91 of the Punjab & Haryana 
High Court in C.W.P. Nos. 838-40, 713-15, 901-04, 983,986, 1081, 2578, 3456, 
2981/91 and 16924 and 16764 of 1990. 
G 
M.R. Sharma, (Ms. Puja Anand) and G.K. Bansal for the Appellant for 
the State of Punjab. 
Jayant Dass and B.P. Singh for the Appellant. 
M.S.Ganesh and Yogeshwar Prasad, Mrs.Urmila Sirur, P.N.Puri (M.K.Dua) . 
H (NP) and Mrs.Sheela Goel for the Respondents. 
- J 
STATE v. NARANJAN DASS DOOM RA RICE GEN. MILLS [BHARUCHA, J.] 
455 
The Judgment of the Court was delivered by 
A 
BHARUCHA, J. On 30th November/3rd December, 1990, when the State 
of Punjab (the appellant) was under Presi9ent's Rule, an order was issued 
under the
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