Mohammad Yasin v. The Town Area Committee, Jalalabad and Another

Das J. absolutely no restriction on anybody who wants to pur-

chase or anybody who wants to ~ell; only he must pay the prescribed tax to the Town Area Committee through the Contractor. The market is open, and writ large throughout the territory of the Town Area Committee and anybody can purchase from anybody and anybody can sell to anybody, without any control or intervention by the Contractor, whose position is simply that of a tax-collector on behalf of the Town Area Committee. Instead of getting the pay, he gets the profits, if any, and runs the risk of incurring losses if his gross realisations are less than what he paid. This is clearly the posi-tion, and it is submitted, there is nothing wrong with it legally and no interference of the petitioner's rights.'" The petitioner has to his petition annexed copies of a set of bye-laws dated June 24, 1942, and a copy of a resolution of the respondent Committee dated March 16, 1950, recommending the addition of several bye-laws to the previous bye-laws. At the hearing . of the petition before us it was agreed by and between· counsel on both sides that the petition has to be dis-posed of on the basis of the bye-laws of 1942 only and learned counsel for the respondent Committee has. produced the original bye-laws of 1942 before us .. Bye-law · 1 only provides that no person shall sell or- . purchase any vegetable or fruit within the prescribed limits of the Town Area Committee, Jalalabad, by wholesale or auction, without paying the fee fixed under ,the51e li~e-Laws to the li,censee appointed by the Town Magistrate. Bye-law 4 (b) expressly provides that any person can sell in wholesale at any place in the Town Area provided he pays the prescribed fees. to the licensee. It is, therefore, clear that these bye-- laws do not, in terms, prohibit anybody from dealing~ . in veget!ables and fruits as alleged by the petitioner: f, and in this respect they materially differ from the 1952

bye-laws which this Court had to consider in the Kairana case(1) which consequently does not govern Mohammad Yasin this case. v.

Learned counsel, however, contends-and we think The Town Ared Committee, with considerable force and cogency-that although, /alalabad in form, there is no prohibition against carrying on any and Another. wholesale business by anybody, in effect and in subs-tance the bye-laws have brought about a total stoppage Das/. of the wholesale dealers' business in a commercial sense.

The wholesale dealers, who will have to pay the pres-cribed fee ,to the contractor appointed by auction, will necessarily have to charge the growers of vegetables and fruits something over and above the prescribed fee so as to keep a margin of profit for themselves but in such circumstances no grower of vegetables and fruits will have his produce sold to or auctioned by the whole-sale dealers at a higher rate of commission but all of them will flock to the contractor who will only charge them the prescribed commission. On the other hand, if the wholesale dealers charge the growers of vegetables and fruits only the commission prescrib-ed by the bye-laws they will have to make over the whole of it to the contractor without keeping any profit themselves. In other words, the whole-sale dealers will be converted into mere tax collectors for the contractor or the r~pondent Com-mittee without any remuneration from either of them.

In effect, therefore, the bye-laws, it is said, have brought about a total prohibition of the business of the wholesale dealers in a commercial sense and from a p_ractical point of view. We are not of opinion that this contention is unsound or untenable.

Learned counsel for the petitioner, however, does not leave the matter there. He goes further and urges that the respondent Comm~~tee has no legaL authority to impose this fee of one anna in the rupee on the value of goods sold or auctioned and that such imposi-tion is in the nature of a sale tax rather than a licence fee.

1952 Learned counsel for the respondent in reply takes a

preliminary objection to this line of argument. He Mohammad points out that as the levying of a tax without autho-

Yasin

v. rity of law is specifically prohibited under article 265 0'1.'he Town Area of the Constitution, article 31(1) must be construed

Committee, as referring to deprivation of property otherwise than falalabad by levying of a tax and that levying of a tax in con- ·end Another.

travention of article 265 does not amount to a breach of Das./. a fundamental right. He contends, on the authority of

'the decision of this Court in Ramjilal v. Income-tax Officer, Mohindargarh('), that while an illegal imposi-tion of tax may be challenged in a properly constitu-ted suit, it cannot be questioned by an application under article 32. This argument overlooks the dif-ference between a tax like the income-tax and a licence tee for carrying on a business. A licence fee on a busi-ness not only takes away the property of the licensee but also operates as a restriction on his right to carry on his business, for without payment of such fee the business cannot be carried on at all. This aspect of the matter was not Ta\ised or oonsidered in the case relied on by the learned counsel, and that case, ,therefore, has no application to .the facts of this case. Under article 19(1) (g) the citizen has the right to carry on any occupation, trade or business which right under that clause is apparently to be unfettered. The only restriction to this unfet-tered right is the authority of the State to make a law relating to the carrying on of such occupation, trade or business as mentioned in clause ( 6) of that article :as amended by the Const~tu~on (Fi.t\st Amend-ment) Act, 1951. If therefore, the licence fee cannot be justified on the basis of any valid law no question of its reasonableness can arise, for an illegal impost must at all times be an unreasonable restriction and will necessarily infringe the right of the citizen to carry on his occupation, trade or business under article 19 (1) (g) and such infringement can properly be made the subject-matter of a challenge under article 32 of the Constitution.

Learned counsd for the respondents then refers. us 1952 to the U.P. Town Areas Act (No. II of 1914) which Mohammaa: governs the respondent Committee. Section 14 of Yasin this Act requires the Committee to annually determine v. and report to the District Mag~trate the amount The Town Are1i required to be raised in any town area for the purposes Committee, /alalabad of this Act and provides that the amount so deter-ond Another mined shall be raised by the imposition of a taX to be assessed on the occupiers of houses or lands within Das/. the limits of the town area according either to their general circumstances or to the annual rental value of the houses or lands so occupied by them as the Com-mittee may determine. There were, at the time when the bye-laws of the respondent Committee were framed, five provisps to this section none of which authorised the imposition of any tax on any business and, therefore, they have no bearing on the question now under consideration. Learned counsel for the respondents, however, draws our attention to section 38 of the Act which authorises the Provincial Govern-ment by notification in the Official Gazette to extend to all or any or any part of any town area any enact-ment for the time being in force in any municipality in.

the United Provinces and to declare its extension to.

be ~ubject to such restria11ions and modifications, if any, as it thinks fit. Then he proceeds to draw oiir attention to Notification No. 397/XI-871-E, dated the 6th February, 1929, whereby in supersession of all· previous notifica,tions, the Provincial Government, in exercise of the powers conferred by section 38(1) of the United Provinces Town Areas Act, 1914, extended the provisions of sections 293(1) and 298(2) (J) (d) of the United Provinces Municipalities Act (II of 1916) to, all the town area in the United Provinces. in the modified form set forth therein. The original bye-laws produced by learned counsel purport, however, to, have been framed by the respondent Committee under· sections 298 (2) (F) (a) and 294 of the United Pro-vinces Municipalities Act (II of 1916). We have not been referred to any notification whereby: section 2941 1952 of the United Provinces Municipalities Act was extend-Mohammad ed to the respondent Committee. It appears, however,

Yasin that the bye-laws of the respondent Committee were

v. revised in September 1942 and were then said to have The Town At-ea ~en made under section 298 (2) (J) (d). It will have,

Committee, therefore, to be seen whether these bye-laws come

/alalabad ,and Another. within the purview of section 298 (2) (J) ( d) as modi-

fied in their application to the respondent Committee. ])as]. It_}:\'ill be noticed that under section 298 (2) (J) ( d)

as modified as aforesaid the respondent Committee is authorised only to make bye-laws fixing any charges or fees or any scale of charges or fees to be paid under section 293(1) and prescribing the .times at which such charges -0r fees shall be payable and designating the persons authorised to receive payment thereof. Section 293 ( 1 ), as modified, authorises the respondent Com-mittee to charge fees to be fixed by bye-laws or by· public auction or by agreement for the use or occupa-tion ( etherwise than under a lease) of any immovable property vested in, or entrusted to the management -0f the T-0wn Area Committee, including any public street or place of which it allows the use or occupation whether by allowing a projection thereon or otherwise. ·Bye-law 1 of the respondent Committee to which a reference has already been made forbids a person from 1using any land within the limits of the town area for the sale or purchase of fruits and vegetables without -paying the prescribed fee. Bye-law 4 (b), however, allows any person to sell in wholesale at any place in the town area, provided he pay~ the prescribed fees to ·the licensee. Th'8C bye-laws do not purport to fix a fee for the use or occupation of any immovable pr<> perty vested in or entrusted to the management of the Town Area Committee including any public street -0r place of which it allows the use or occupation whether by allowing a projection thereon or otherwise . . Sections 293(1) and 298(2) (J) (d) of the United Province ~Ml!lnicipalities Act, 1916, as amended at the time they .were extended to the town areas in the United Provinces do not empower the Town Area Committet .t::> make any bye-law authorising it to 'charge any fees otherwise than for the use or occupa-1952 tion of any property vested in or entrusted to the management of the Town Area Committee including A{ohammad Yasin .any public street. Therefore, the bye-laws prima v. facie go much beyond the powers conferred on the The Town Arca respondent Committee by the sections mentioned Committee, above and the petitioner complains agairu,t the en-Jalalabad and Another. forcement of these bye-laws against him as he carries on business in his own shop and not in or on any Das/. immoveable property vested in the Town Area Com-mittee or entrusted to their management. Learned counsel for the respondent Committee, however, urges that the growers of vegetables and fruits come on foot or in carts or on horses along the public street and stand outside the petitioner's shop and for such use of the public street the respondent Committee is well within its powers to charge the fees. From the way the case was formulated by the learned counsel, it is quite clear that if anybody uses the public street it is the growers of vegetables and fruits who come to the petitioner's shop to get their produce auctioned by the petitioner and the petitioner cannot be charged with fees for use of the public street by those persons.

In our opinion, the bye-laws which imp~ a charge on the wholesale dealer in the shape of the prescribed fee, irrespective of any use or oc.cupation by him of immoveable property vested in or entrusted to the management of the Town Area Committee including any; public street, are obviously ultra vires the powers of the respondent Committee and, therefore, the bye-Iaws cannot be said to constitute a valid law which alone may, under article 19(16) of the Constitution, im~e a restriction on the right conferred by article 19(·1) (g). In the absence of any valid law authorising it, such illegal imposition must undoubtedly operate as an illegal restraint and must infringe the unfettered right of the wholesale dealer to carry on his occupa-tion, trade or business which is guaranteed to him by article 19(1) (g) of our Constitution.

1952 In this view of the matter the petitioner is entitled,

to a suitable order for protection of his fundamental Mollammtul right. The prayer in the petition, however, has been,

Yasin be

v. expressed in language much too wide and cannot The To""' Area granted in that form. The proper order would be to·

Committee. direct the respondent Committee not to prohibit the /altdtlbail petitioner from carrying on the business of a whole-v .. 1. sale dealer in vegetables and fruits within the limits·

of the Jalalabad Town Area Committee until proper and valid bye-laws are framed and tl1ereafter except in accordance with a licence to be obtained by the· petitioner under the b)ie-laws to be so framed. The· respondent Committee will pay tlie costs of thj.g appli-cation to the petitioner.

Agent for the petitioner: Nan nit Lal.

Agent for the respondent: P. C. Aggarwal- ·~ ' GIPN-S3--6 S.C. India/71-12-10-72-700.