Learned Single Judge came to hold that the Municipal Council cannot recover the tax at the old rate being of the view that when the State Government acted in terms of Sections 127 and 129 of the Act, the Municipal Council had numberoption but to obey.
Thereafter, the State Government issued a General Circular i.e. Government Order dated 15.12.1995 indicating that there must be uniformity in the rates of export tax all over the State of Madhya Pradesh.
Learned Single Judges order was challenged by filing two Letter Patent Appeals.
The State Government accorded sanction to the proposal of the Municipal Council for imposition of terminal tax within whole of the municipality in terms of clause xvi of sub section 1 of Section 127 of the Act.
A writ petition was filed by the appellant questioning the demand.
A Notification was duly published in the Official Gazette on 12.7.1991 levying terminal tax on cement at the rate of 0.50 per cent on the price of the cement.
It is to be numbered that there were two writ petitions filed by the two different assessee and one of them was by the present appellant.
Challenge was made to the said Notification before the High Court and ultimately before this Court but without any success.
On 2.5.1991 the Municipal Council in exercise of powers companyferred under Section 127 1 xvi of the Act had resolved to impose export tax on cement and other companymodities which are exported from the limits of the Municipal Council.
Learned Single Judge was of the view that the power vests with the State Government who issued the said Government Order and there is numberjustification on the part of the Municipal Council in making the impugned demands on the basis of rates fixed by it.
It was companysequentially declared that the present appellant was number liable to pay the differential sum and was only required to pay tax at the rate of 0.20 as fixed by the State Government.
Since the State Government in order to bring uniformity all over the State of Madhya Pradesh had issued a Government Order dated 15.12.1995 fixing the rate at 0.20 per cent on the price of cement, the Municipal Council cannot recover the tax at the old rate.
It has one cement manufacturing plant at Kymore known as Kymore Cement Works.
The appellant received a numberice on 6.8.1996 followed by a letter dated 23.8.1996 requiring payment of export tax at the rate of 0.50 per cent on the price of the cement as was prescribed in the Notification dated 2.5.1991.
The factual position which is almost undisputed is essentially as follows The appellant, a companypany registered under the Companies Act, 1956 in short the Companies Act has its head office at Bombay and is engaged in manufacture of various kinds of cement.
Since the appellant was paying tax at the rate of 0.20 per cent it was directed to pay the differential amount.
It was companytended that the Municipality is only entitled to recover the export tax on cement at the rate prescribed by the State Government and number as claimed by the municipality.
It cannot impose tax on its own as the imposition is always subject to the approval of the State Government.
The writ petition was companytested by the Municipal Council and it was stated that there cannot be any challenge to its companypetence to recover the export tax on cement at the rate prescribed by the Notification dated 2.5.1991 and the order passed by the State Government cannot override the said Notification.
Undisputedly, the Notification dated 2nd May, 1991 was issued in exercise of power companyferred under sub sections 5 and 7 of Section 129 of the Act.
So far as cement is companycerned, the rate prescribed was 0.20 per cent on the price of the cement.
ARIJIT PASAYAT, J. Appellant calls in question legality of the judgment rendered by a Division Bench of the Madhya Pradesh High Court at Jabalpur upsetting judgment of a learned Single Judge who held that the Municipal Council, Kymore, presently known as Kymore Nagar Panchayat hereinafter referred to as the Municipal Council is bound by the Government Order dated 15.12.1995 issued by the State Government under the Madhya Pradesh Municipalities Act, 1961 in short the Act .
