- (1.) This writ petition under Article 226 of the Constitution has arisen in these circumstances. The Ludhiana Municipal Committee levies tehbazari fee under Section 173, Punjab Municipal Act, 1911. This section empowers the Municipal Committee to charge fee for giving permission to any person to make use of public street. The Municipal Committee charges this fee from hawkers and others, from persons placing takhats on public streets and for projections lover them. Thus the Municipal Committee is earning profit from this user of the pubic streets. The assessing authority. Ludhiana imposed property tax on this tehbazari fee and this order was upheld by the Excise and Taxation Commissioner by his order dated the 22nd October, 1954. The Municipal Committee had approached this Court the quash the order of assessment on the ground that tehbazari fee is not liable to property tax as this fee is not used nor was intended to be used for purposes of profit.
(2.) Shri Indar Dev Dua, learned counsel for the Municipal Committee, frankly concedes and in my opinion rightly concedes before me that this ground taken in the petition has no substance. He, however, urges that this tax is leviable only on owners of buildings and lands and that the Municipal Committee is not owner of any public street. He further urges that the public street vests in the Municipal Committee only for the purposes of the Act. I allowed him to raise this new point in view of the fact that it is a pure question of law and relates to the rights of a public body.
(3.) Now, under section 3 of the Punjab Urban Immovable Property Tax Act, 1940 (Act No. XVII of 1940) a tax is charged on buildings and lands at the rate specified in the Act. Section 4 of the Act exempts certain properties from this tax and section 4(1)(b) provides that tax shall not be leviable in respect of the buildings and lands vesting in the State Government or owned or administered by a local authority or a District Board when used exclusively for public purposes and not used or intended to be used for purposes of profit. Therefore, buildings and lands owned or administered by a local authority are exempt from payment of this tax provided the public streets are not used nor are intended to be used for purposes of profit. Under section 2(b) of this Act "local authority" means a "Municipal Committee". The question, therefore, that arises is whether under the 1940 Act the Municipal Committee can be considered to be the owner of the public street. Section 56(1)(g) of the Punjab Municipal Act lays down that all public streets "vest in and are under the control" of the Municipal Committee. Now, these words appear to have been taken from section 149 of the Public Health Act, 1875 (38 and 39 Victoria Chapter 55). When construing these words it was observed by Collins M.R. in Finchley Electric Light Company v. Finchley Urban District Council, 1903 1 Ch 437 :- "It has been decided by a long series of cases that the word 'vest' means that the local authority do actually become the owners of the street to this extent : they become the owners of so much of the air above and of the soil below as is necessary to the ordinary user of the street as a street, and of no more.";