- (1.) These appeals have been filed on behalf of the Cantonment Board, Mathura (hereinafter referred to as 'the Board') for setting aside the judgment of the Allahabad High court, declaring notification dated 22/11/1958, by which tax at the rate of 0. 75 p. per thousand bricks had been fixed by the Board within the cantonment area as invalid.
(2.) The respondent is the owner of a brick-kiln and was carrying on the business of manufacturing and selling of bricks. A suit was filed on behalf of the said respondent for restraining the appellant-Board from realising tax from the said respondent at the rate of 0. 75 per thousand bricks. It was alleged that previously the Board was realising the tax from the manufacturers of bricks at the rate of 0. 19 per thousand. But by the impugned notification, it raised the rate of the tax at 0. 75 per thousand bricks. It was alleged and asserted that the respondent as the manufacturer of bricks was neither deriving any advantage from the Board nor was any service being provided by the Board. As such, the realisation of the tax at the aforesaid rate was in contravention and in violation of Section 60 of the Cantonments Act, 1924 read with Section 128 (l) (ii) of the U. P. Municipalities Act, 1916 (2 of 1916. The suit filed on behalf of the respondent was dismissed by the trial court. That judgment was affirmed by the court of appeal. However, on second appeal being filed on behalf of the said respondent, the High court came to the conclusion that the ceiling and restriction imposed by Article 276 (2 of the Constitution, as applicable to the State, any municipal, district board, local board or other local authority within such State in respect of imposition of taxes on professions, trades and callings, was applicable even on the Board which had been established under the aforesaid Cantonments Act. On that finding the notification was declared to be invalid being hit by Article 276 (2 of the Constitution.
(3.) Section 3 of the Cantonments Act provides that the central government may, by notification in the Official Gazette, declare any place or places in which any part of the forces is quartered or which, being in the vicinity of any such place or places, is or are required for the service of such forces to be a cantonment for the purposes of the said Act and may by a like notification, declare that any cantonment shall cease to be a cantonment. In view of Ss. (4 of Section 3 the central government may, by notification in the Official Gazette, direct that in any place declared a cantonment under Ss. (1 the provisions of any enactment relating to local self-government other than this Act shall have effect only to such extent or subject to such modifications, or that any authority constituted under any such enactment shall exercise authority only to such extent, asmay be specified in the notification. Section 6 provides that when, by a notification under Section 3, any cantonment ceases to be a cantonment and the local area comprised therein is immediately placed under the control of a local authority, the balance of the cantonment fund and other property vesting in the Board shall vest in such local authority, and the liabilities of the Board shall be transferred to such local authority. Similarly, S. 7 and 8 make provisions in respect of cantonment fund and its property which is placed under the control of some other local authority, in view of the notification under Section 4, because of which any local area forming part of cantonment ceases to be under the control of a particular Board. Section 60 of the Cantonments Act provides: "60.General power of taxation.- (1 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 the State wherein such cantonment is situated: (2 Any tax imposed under this section shall take effect from the date of its notification in the Official Gazette or where any later date is specified in this behalf in the notification, from such later date. "because of aforesaid Section 60 the Board may with 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 the State where such cantonment is situated". For imposing any tax in exercise of the power under Section 60, two conditions have to be fulfilled and complied with (i) there must be a previous sanction of the central government to impose such tax and (ii) the tax to be imposed must be such which under any enactment for the time being in force may be imposed in any municipality in the State wherein such cantonment is situated.;