Holding

A cantonment board’s power to levy any tax is co‑extensive with the corresponding power of the municipality; since Bihar municipalities lack authority to levy entry tax on mechanically‑propelled vehicles, the Ramgarh Cantonment Board cannot levy such tax.

Issues considered

Whether the Ramgarh Cantonment Board has the authority under Section 60 of the Cantonments Act, 1924 to levy an entry tax on vehicles entering the cantonment area.
Whether the power of a cantonment board to levy tax is dependent on the corresponding power of the municipality under the Bihar and Orissa Municipal Act, 1922.

Legislation cited

Bihar and Orissa Municipal Act, 1922s. 137, s. 150, s. 326, s. 3(30), s. 3(30-A), s. 82
Cantonments Act, 1924s. 60
Madhya Pradesh Municipalities Act, 1961s. 127

Subjects

Cantonment BoardEntry taxVehicle taxMunicipal powerSection 60Bihar and Orissa Municipal ActTaxation jurisdictionSupreme Court

Judgment

\ I
[2008) 4 S.C.R. 686

A RAMGARH CANTONMENT BOARD & ANR.
v.
STATE OF JHARKHAND & ORS~
(Civil Appeal No. 4498 of 2002).
MARCH 11, 2008
B
[ASHOK BHAN AND DALVEER BHANDARI, JJ.]

Cantonments Act, 1924 - s. 60 - Bihar and Orissa
Municipal Act, 1922 - 'ss. 82, 137 and 326 - Entry tax on 'f ~
c vehicles entering into Ramgarh cantonment area - Power of
Cantonment Board to impose· - Held: Taxing power of
Cantonment a·oard is dependent upon and co-extensive. with
any such corresponding power vested in municipality - Once
municipality is vested with the power to levy entry tax under
relevant enactment, Cantonment Board can also exercise the
D . same power - Municipaiities in Bihar has no power to levy
entry tax on mechanically propelled vehicles under 1922 Act,
thus, Cantonment Board Ramgarh, Bihar cannot levy vehicle
entry tax for vehicles entering into Ramgarh Cantonment r ..
E Board Area - Municipalities.
The question which arose for consideration in this
appeal was regarding the power, competence and
authority of the Cantonment Board to levy entry tax on
vehicles entering into the cantonment area .
.F Appellant No.1-Ramgarh Cantonment Board invited
tender for collection of vehicle tax entering into Ramgarh
Cantonment Area. Respondent no.3 was awarded the
contract and was asked to realize the vehicle tax from
each goods vehicle entering into the Ramgarh
G Cantonment Area for six months. A formal agreement was
executed. Respondent no.3 deposited the earnest money.
Subsequently, appellant no. 1 restrained respondent no.3.
from coUecting vehicle entry tax on the directions -of the
Deputy Commissioner, Hazaribagh, Bihar. The
H 686
~
' RAMGARH CANTONMENT BOARD & ANR. v. STATE 687
OF JHARKHAND & ORS.

Cantonment Board was entitled to collect only those taxes A
which could be realized by the municipality. Respondent
No.3 filed writ petition. The Single Judge of High Court
quashed the order of Deputy Commissioner placing
restriction on collecting entry tax. The State of Jharkhand
filed appeal which was allowed. Hence the present appeal. B
Dismissing the appeal, the Court
HELD: 1.1 A bare reading of sub-section (1) of section
' y
60 of the Cantonment Act, 1924 clearly reveals that the
power to levy any tax is dependent upon and co-extensive c
with any such corresponding power which may vest in
the municipality being relatable to and dependent upon
legislative enactment concerning, governing or regulating
the powers of such municipality. The Division Bench of
High Court rightly held that sub-section (1) of section 60
D
of the Act, is not totally an independent provision by itself,
in the sense that the power by itself has not been given to
~
the Board to levy tax and the provision is related to and
dependent upon any corresponding analogous provision
in a legislative enactment of the municipality. In other
words, if the municipality in an area has the power to levy E
tax under a relevant enactment, by virtue of the power
created under sub-section (1) of section 60, the same
power would vest in a Cantonment Board. [Paras 7 and
8] [692-C-F]
F
1.2 Section 326 of the Bihar and Orissa Municipal Act,
l 1922 provides that all vehicles plying for hire have been
specifically excluded from levying of tax by the
municipality and consequently the Cantonment Board
also has no power or competence to levy entry tax on
G
vehicle which ply for hire. [Para 13] [695-E]
1.3 From the bare reading of the sections 3(30) and
3(30-A) of the 1922 Act defining vehicle and motor car, it is
' ~ abundantly clear that the municipality has no power to
levy any entry tax on mechanically propelled vehicles. H
\ I

688 SUPREME COURT REPORTS [2008] 4 S.C.R.

A When the municipality has no power or competence to
levy entry tax on mechanically propelled vehicles,
obviously the Cantonment Board cannot exercise this
power because taxin'g power of the Cantonment Board
is dependent upon and co-extensive with any such.
B corresponding power vested in the municipality. [Paras
14 and 15] [695~F-H; 696-B-C]
·1.4 In section 137 of the 1922 Act, it has been
determined that a .tax on the vehicles, horses and other
anirn.al~ $pecified in the First Schedule alone can be :
C~ imposed and the First Schedule, clearly excludes all
mechanically propelled vehicles. According to section
137, the. words that the tax can be levied on every vehicle,
horse or other animal of the kind specified in the Schedule
. which is kept or is used in the ordinary course within the
D municipality; means that the vehicle, horse or other animar
which· is kept or used in the ordinary course within the
municipality would be obliged to pay such tax. This
ol:>Viously does not include levy of entry tax for
mechanically propelled vehicles. Thus, Sections 82 and
.. E 137 or any other provision of the 1922 Act does not permit
the municipality to levy any entry tax on mechanically
propelled vehicles. Since the municipality has no such
power, competence or authority to levy tax on entry of
mechanically propelled vehicles, the Cantonment Board,
F Ramgarh, Bihar obviously cannot exercise those powers.
[Paras 18 and 19] [696-G-H; 697-A-CJ
1.5 The vehicle entry -tax levied by the municipalities
in· Madhya Pradesh is because of the specific power given
bythe Legislature to the municipalities in Madhya Pradesh
G to levy such tax. Once the municipality is vested with the
power to levy entry tax, the Cantonment Board can also
exercise the same power. No such power is given to _the
. mun_icipalities in Bihar under the 1922 Act and
consequently, the Cantonment BoarCI, Ramgarh, Bihar
H cannot levy vehicle entry tax for the vehicles entering into
\ I

RAMGARH CANTONMENT BOARD & ANR.' v. STATE 689
'OF JHARKHAND & ORS.

the ··Ramgarh Cantonment Boarcj area. On the analogy of A
the Cantonment Board, Mhow and Anr. v. M.P. State Road
Transport Corporation's case it cannot be concluded that
the Ramgarh Cantonment Board is also justified in levying
the vehicle entry tax. [Para 23] [698-B-D]
Cantonment Board, Mhow and Anr. v. MP State Road B
Transport Corporation 1997 (9) SCC 450 - distinguished.
·Avinash and Ors. v. State of Maharashtra and Ors.
2004(2) Mah. L.J. 511; The Secunderabad Cantonment
Board, Secundereabad v. Mis Allied Trading Corporation and c
Anr. 1997 (1) Andhra Weekly Reporter 160 - disapproved. ·
1.6 The Division Bench· of High Court rightly
observed that the Deputy Commissioner, Hazaribagh was
fully justified in objecti_ng to levy of impugned tax by the
Cantonment Board since similar powers were not given D
to the concerned municipalities in Bihar to levy vehicle
entry tax. In view of the legislative scheme, the
Cantonment Board was precluded from levying such an
entry tax. [Para 26] [699-G-H; 700-A]
1. 7 It is abundantly clear that the power to l""Y tax E
under section 137 for vehicle which is used in the ordinary
course within the municipality or which is kept without
the municipality and is used in th"e ordinary course within
it, is different from levyi'}g vehicle entry tax. What is
..., permissible according to Act is imposing tax within the F
parameters of section 137 for vehicles, horses and other
animals for being kept in the ordinary course within
municipality and is used in the ordinary course within it
than levying entry tax by the Cantonment Board. The
Cantonment Board did not have any authority. or G
competence to levy tax on the entry of vehicles in the
Cantonment area under section 60 of the Act. The
conclusions arrived at by the judgment of the .Division
Bench of High Court are quite justified and no interference
is called for. [Para 27] [700-B-D] H
' I

- 690 SUPREME COURT REPORTS [2008] 4 S.C.R.

A 1.8 In the peculiar facts and circumstances of the
case, it is directed that the amount deposited by
respondent no.3 would be refunded to him because in
view of the restraint order, respondent no.3 could not
collect any amount towards the levy of entry tax on
B vehicles. This direction is given while keeping the legal
principle of equity, fairness and good conscience in view.
[Para 28] [700-F-G]
~

CIVILAPPELLATE JURISDICTION: Civil Appeal No. 4498
of 2002.
c
From the Judgment and Order dated 4.10.2001 of the High
Court of Jharkhand, Ranchi in LP.A. No. 556/2001
S. B. Sanyal and Ranjan Mukherjee for the Appellants.

D B.B. Singh and Nilesh Sinha forthe Respondent No. 1 &
2.
Akhilesh Kumar Pandey and Sudershan Saran for the
Respondent No. 3.

E . The Judgment of the Court was delivered by
DALVEER BHANDARI, J. 1. This appeal is directed
against the judgment passed in Letters Patent Appeal No.556
of 2001 dated 4th October, 2001 delivered by the High Court of
Jharkhand at Ranchi.
F
2 The central question which arises for adjudic~tion in this
appe.al is regarding the power, competence and authority of
the Cantonment Board to levy entry tax on vehicles entering into
the cantonment area.
G 3. Appellant No.1, Ramgarh Cantonment Board, a board
constituted under the Cantonments Act, 1924 (hereinafter
referred to as the Act), in exercise of the power vested in it under
>-
section 60 of the Act invited tender for collection of vehicle tax
entering into Ramgarh Cantonment Area. Respondent no.3 in
H this appeal, Mukesh Prasad being the highest bidder was
~ ,
RAMGARH CANTONMENT BOARD & ANR. v. STATE 691
OF JHARKHAND & ORS. [DALVEER BHANDARI, J.]

awarded the contract and was asked to realize vehicle tax at A
.. the rate of Rs.10/- from each goods vehicle entering into the
Ramgarh Cantonment Area for a period of six months starting
from 12.3.2001. Respondent no.3 deposited the earnest money.
On 8.3.200, a formal agreement was executed between
respondent no.3 and the Cantonment Board. The Cantonment B
Board immediately after executing the said agreement issued
a letter dated 11.3.2001 restraining respondent no.3 from
collecting vehicle entry tax on the directions of the Deputy
/
'
' 't'
Commissioner, Hazaribagh, Bihar.
4. The Secretary, Road Construction Department, Ranchi c
vide letter dated 30.5.2001 informed that prior permission of
the Ministry of Road Transport and the National Highway,
Government of India was necessary for the purpose of putting
barriers to collect tax on the national highway. The Cantonment
Board is entitled to collect only those taxes which can be realized D
by the municipality. In otherwords, the Cantonment Board cnnnot
levy the tax which cannot be levied by the Municipality.
...
5. On 26. 7.2001, the learned Single Judge allowed the
writ petition filed by respondent No.3 by holding that the Deputy
Commissioner, Hazaribagh could not restrain the Cantonment E
Board from levying of entry tax on goods vehicles passing
through the Cantonment Board Area. The learned Single Judge
quashed the order by which restriction on collecting entry tax
was placed by the Deputy Commissioner, Hazaribagh.

- '(
6. The State of Jharkhand, aggrieved by the order of the
learned Single Judge, preferred an appeal under clause 10 of
F

the Letters Patent. The Division Bench in the impugned judgment
comprehensively examined the power, authority and
competence of the Cantonment Board in levying entry tax on
G
vehicles entering into the Cantonment Area. The Cantonments
Act, 1924 is vested with section 60 which is the source of power,
authority and jurisdiction for imposition of levy of tax. Section
'"' 1 60 reads as under:-

"60. General power of taxation-(1) The Board may, with H
\ )

692 SUPREME COURT REPORTS , [2008] 4 S.C.R.

A the previous sanction of the Central Government, impose -4 .:
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
B from the date of its notification in the Official Gazette or
where any later date is sp~cified in this behalf in the
notification, from such later date." ,
'1
7. A bare reading of sub-section (1) of section 60 clearly
c reveals that the power to levy any tax is dependent upon and r
co-extensive with any such corresponding power which may vest
in the municipality being relatable to and dependent upon
. legislative enactment concerning, governing or regulating the
powers of such municipality.
D 8. The Division Bench has rightly held that sub-section (1)
of section 60 of the Cantonments Act, 1924 is not totally an
independent provision by itself, in the sense that the power by >. ...----
itself has not been given to the Board to levy tax and the provisidA
is related.Jo and dependent upon any corresponding analogous
E provision in a legislative enactment of the municipality. In other
words, if the municipality in an area has the power to levy tax
under a relevant enactment, by virtue of the power created under
sub-section (1) of section 60, the same power would vest in a
Cantonment Board. In order to find out whether the Cantonment
F Board has ·any power to levy entry tax, it is necessary to find
whether the municipality has simttar power to levy entry tax. )'

9. Chapter J¥ of the Bihar and Orissa Municipal Act, 1922
(for short 1922 Act) deals with the subject of municipal taxation.
Part-I of Chapter IV deals with the subject of imposition of taxes.
G The relevant portion of section· 82 reads as under:-
"82. Power to impose taxes;-(1) _The Commissioners
may, from time to time at a meeting convened expressly
for the purpose, of which due notice shall have been
r ,._
given subject to the provisions of this Act. and with the
H
l )
RAMGARH CANTONMENT BOARD & ANR. v. STATE 693
OF JHARKHAND & ORS. [DALVEER BHANDARI: J.]

sanction of the State Government, impose within the A
limits of the municipality the following taxes and fees,
or any of them -
xxx xxx xxx
xxx xxx 8
(f) a tax on the vehicles, horses and other animals named
in the First Schedule.
xxx xxx xxx."
10. Under section 82 taxes and fees can be imposed on C
vehicles and other animals named in the First Schedule.
Therefore, it is imperative for us to find out what has been
incorporated in the First Schedule. First Schedule of the
Municipality Act 1922 is extracted as under:-
D
"The First Schedule"
,
. TAX ON VEHICLES, HORSES AND OTHER ANIMALS
per quarter
Rs. P.
E
For every four-wheeled vehicle drawn
by two horses. 10.00
For every four-wheeled vehicle other
than those specified above. 5.00
For every two-wheeled vehicle including F
a Shampani, but excluding a bicycle. 4.00
For every bicycle 1.00
For every cycle rickshaw 2.50
For every jin rickshaw 2.00 G
For every horse other than a pony 2.00
For every pony, mule,·or donkey 1.00
For every elephant 6.00
For every camel 2.00" H
\ I

694 SUPREME COURT REPORTS [2008] 4 S.C.R.

11. Part IV of Chapter IV deals with tax on vehicles, horses ~
A
and other animals. It would be appropriate to notice the relevaRt
portion of section 137, which deals with tax on vehicles, horses
and other animals The relevant porti9n of section 137
reproduced as under:-
B "137. Tax on vehicles, horses and other animals.-
(1) When it has been determined that a tax on the vehicles,
horses and other animals specified in the First Schedule -., A

shall be imposed, the Commissioners at a meeting shall,
subject to the provisions of section 138, make an order
c that the owner of every vehicle, horse and every other
animal of the kind specified in the said schedule, which is
kept or is used in the ordinary course within the municipality,
or which is kept without the municipality and is used in the
ordinary course within it, shall pay the tax in respect of
D such vehicle, horse or other animal and shall cause such
order to be published in the manner described in section
356.
(2) xxx xxx xxx
E (3) Such tax shall not be payable in respect of -
(a) xxx xxx :xxx
(b) . vehicles and animals registered under Chapter
x·'
F (c) :xxx :xxx :xxx y

:xxx :xxx x:xX'
12. Sub-clause (3) of section 137 clearly lays down that
such tax shall not be payable in respect of vehicles and animals
G registered under Chapter X. Chapter X deals with 'Vehicles
plying for hire'. Section 326 of the 1922 Act deals with power to
make bye-laws to regulate motor cars and vehicles plying for r ,
hire. Therefore, it is necessary to reproduce section 326 also. ./
The relevant portion of section 326 reads as under:-
H
',
RAMGARH CANTONMENT BOARD & ANR. v. STATE 695
OF JHARKHAND & ORS. [DALVEER BHANDARI, J.]

"326. Power to make bye-laws to regulate motor-cars A
and vehicles plying for hire - (1) The Commissioners
at a meeting may make bye-laws to regulate motor cars
and vehicles used for the conveyance of passengers which
are kept or are offered or ply for hire within the municipality
whether by times or by distance, and may by such bye-. B
laws provide for all matters relating to such motor cars
and vehicles in respect of which this Act makes no
provision or insufficient provision and provision is declared
by the Commissioners, with the sanction of the State
Government, to be necessary : c
Provided that such bye-laws shall not -
(a) apply to any vehicle used on a railway or tramway;
and
(b) impose any fees for the registration of motor cars or D
for the grant of a licence to drive a motor car.
xxx xxx XXX:'
13. According to section 326, all vehicles plying for hire
have been specifically excluded from levying of such tax by the E
municipality and consequently the Cantonment Board also has
no power or competence to levy entry tax on vehicle which ply
for hire.
14. The 'vehicle' and 'motor car' have been defined in
sections 3(30) and 3(30-A) respectively of the 1922 Act. The F
definitions contained in sections 3(30) and 3(30A) read as
under:-
"3(30). "Vehicle" means a wheeled conveyance, other than
a motor car capable of being used on a road and includes G
a tricycle, bicycle, cycle rickshaw, a jinrickshaw and a
shampani."
"3(30-A). "Motor car" means any mechanically propelled
vehicle adopted for use upon roads whether the power of
propulsion is transmitted thereto from an external or internal H
\ )

696 SUPREME COURT REPORTS [2008) 4 S.C.R.

A source and includes a chassis to which a body has not -.4
been attached and a trailer; but does not include a vehicle
running upon fixed rails or used solely upon the premises
of the owner."
.. 15.· Therefore, from the bare reading of the relevant
B provisions and definition of vehicle and motor car given in the
Act, it is abundantly clear that the municipality has no power to
levy any entry tax on mechanically propelled vehicles. When the
municipality has no power or competence to levy entry tax or:i
mechanically propelled vehicles, obviously the Cantonment
c Board cannot exercise this power because taxing power of the
Cantonment Board is dependent upon and co-extensive with
any such corresponding p.ower vested in the municipality.
16. In the impugned judgment, the Division Bench observed
that a combined reading of sections 82 and 137 and also a
D
bare look at th~ First Schedule of 1922 Act clearly suggest that
the Municipality in Bihar under 1922 Act has the power, authority
and jurisdiction to levy tax on the vehicles as are enumerated in >
the First Schedule, but such tax is leviable only in respect of
such vehicles which are kept or are used in the ordinary course
E . within the municipality. This ls fortified by the fact that in the First
Schedule the tax rate is with respect to per quarter.
17. Section 150of1922 Act defines"'used in the ordinary
course". The same is reproduced as under:
f "A vehicle, horse or other animal shall be deemed to be
used in the ordinary course within the meaning of section 'f

137 if it is used on an average thrice a week."
18. In section 137 it has been determined that a tax on the
\leh.ieles, horses and other animals specified in the First
G
Schedule alone can be imposed and the First Schedule, as
extracted above clearly excludes .all mechanically propelled
vehicles.
~ ~

19. According to section 137, the words that the tax can
H be levied on every vehicle, horse or other animal of the kind
' '
RAMGARH CANTONMENT BOARD & ANR. v. STATE 697
OF JHARKHAND & ORS. [DALVEER BHANDARI, J.]

specified in the Schedule which is kept or is used in the ordinary A
course within ·the municipality, means that the vehicle, horse or
other animal which is kept or used in the ordinary course within
the municipality would be obliged to pay such tax. This obviously
does not include l~vy of entry tax for mechanically propelled_
vehicles. Thus, Sections 82 and 137 or any other provision of B
the 1922 Act does not permit the municipality to levy any entry
tax on mechanically propelled vehicles. Since the municipality
has no such power, competence or authority to levy tax on entry
of mechanically propelled vehicles, the Cantonment Boarg,
Ramgarh, Bihar obviously cannot exercise those powers. c
20. The learned counsel for the appellants placed reliance
on the case of Cantonment Board, Mhow & Another v. M.P.
State Road Transport Corporation (1997) 9 SCC 450. This
case was cited for the proposition that since the Cantonment
Board in Madhya Pradesh has been permitted to levy entry tax D
on motor vehicles, therefore, the Cantonment Board, Ramgarh,
Bihar in the instant case, is also justified in levying entry tax on
motor vehicles. In order to avoid any confusion or
misunderstanding, we deem it appropriate to deal with the said ·
case of Madhya Pradesh in detail. · E
21. The Madhya Pradesh State Legislature has specifically
given power under section 127 of the M.P. Municipalities Act,
1961 to the muniCipalities of Madhya Pradesh to levy entry tax .
on the vehicle. It may be pertinent to observe that no power to
levy entry tax has been given to the municipalities in Bihar under F
' y the 1922 Act.
22. Relevant portion of section 127 of the M.P.
Municipalities Act, 1961 reads as under:-
"127. Taxes which may be imposed.-(1) A Council G
may, from time to time, and subject to the provisions of
this Chapter, and any general or special order which the
State Government may make in this behalf, impose in the
whole or in any part of the MUilicipality any of the following
· taxes, for the purposes of this Act, nam~ly: H
\ )
698 SUPREME COURT REPORTS [2008] 4 S.C.R. .

A (1) * * *
{ii) * * *
(iii) a tax on vehicles, boats and animals used as aforesaid
entering the limits of the Municipality but not liable to
B taxation under clause (i1)."
23. Therefore, the vehicle entry tax levied by the
municipalities in Madhya Pradesh is because of the specific
power given by the Legislature to the municipalities in Madhya -1 ,
Pradesh to levy such tax. Once the municipality is vested with
C the power to levy entry tax, the Cantonment Board can also
exercise the same power. No such power is given to the
municipalities in Bihar under the 1922 Act and consequently,
the Cantonment Board, Ramgarh, Bihar cannot levy vehicle entry
tax for the vehicles entering into the Ramgarh Cantonment Board
D area. On the analogy of the Madhya Pradesh case, it cannot be
concluded that the Ramgarh Cantonment Board is also justified
in levying the vehicle entry tax.
24. We make it clear that levying tax on motor vehicle used
E or kept for use is entirely different from levying vehicle entry tax.
We deem it appropriate to extract para 14 of the judgment of
Madhya Pradesh case (supra) which will further clarify the legal
position.
"14. The tax leviable on motor vehicles when used or kept
F for use under Section 3(2) of the Madhya Pradesh Motor
Vehicles Taxation Act is different from the tax leviable on
motor vehicles entering the limits of the Municipality under
Section 127(1 )(iii) of the Madhya Pradesh Municipalities
Act, 1961 and there is no repugnancy between the two
and both the provisions can therefore operate in their own
G
fields. Since under Section 127(1 )(iii) of the Municipalities
Act. Municipality could levy a tax on motor vehicles entering
the limits of the Municipality, the same could be levied by
the Cantonment Board in exercise of its power under
Section 60 of the Cantonments Act with the previous
H
' )

RAMGARH CANTONMENT BOARD & ANR. v. STATE 699
OF JHARKHAND & ORS. [DALVEER BHANDARI, J.]

sanction of the Central Government. Consequently, A
notifications issued by the Cantonment Boards of Mhow,
Jabalpur and S~ugor were valid notifications issued under
Section 60 of the Cantonments Act and imposition of tax
on motor vehicles entering into the limits of the Cantonment
Boards cannot be said to be invalid or inoperative. The 8
High Court in our opinion committed error in striking down
those notifications on the ground of repugnancy with this
special legislation, namely, the Madhya Pradesh Motor
Vehicles Taxation Act."
25. In the said judgment this court held that the Cantonment C
Board is entitled to levy entry tax on motor vehicles within the
limits of the Cantonment Board. This was justified on the ground
that similar power was vested in the concerned municipality. It
is again reiterated that, in the instant case, the Bihar legislature
has not given powers to the municipalities to levy entry tax, D
therefore, the Cantonment Board, Ramgarh lacks an authority
or competence to levy entry tax on motor vehicles entering into
the Cantonment Board area. In this view of the matter, Madhya
Pradesh case (supra) has no application as far as the instant
case of the appellants is concerned. E
26. The learned counsel for the appellants has also placed
reliance on Avinash & Others v. State of Maharashtra &
Others [2004(2) Mah. L.J. 511] and The Secunderabad
Cantonment Board, Secundereabad v. Mis Allied Trading
Corporation & Another [1997 (1) Andhra Weekly Reporter F
160]. Since we have already dealt with the Madhya Pradesh
case in detail, therefore, it is not necessary to deal with the facts
of the aforementioned cases in detail, but on the same analogy
it is reiterated that these cases have no application to the
controversy involved in the present case. The Division Bench ir1 G
the impugned judgment rightly observed that the Deputy
Commissioner, Hazaribagh was fully justified in objecting to levy
I °1
of impugned tax by the Cantonment Board since similar powers
were not given to the concerned municipalities in Bihar to levy
vehicle entry tax. In view of the legislative scheme, the H
\ J

700 SUPREME COURT REPORTS [2008] 4 S.C

..\
A Cantonment Board was precluded from levying such an entry
tax.·
27. We have heard the learned counsel for the parties at
length and perused the relevant provisions. It is abundantly clear
that the power to levy tax under section 137 for vehicle which is
B used in the ordinary course within the municipality or which is
kept without the municipality and is used in the ordinary course
Within it, is different from levying vehicle entry tax. What is per- '-1
missible according to Act is imposing tax within the parameters
of section 137 for vehicles, horses and other animals for being
c kept in the ordinary course within municipality and is used in the
ordinary course within it than levying entry tax by the Cantonment
Board. The Cantonment Board did not have any authority·or
competence to levy tax on the entry of vehicles in the Cantonment
area under section 60 of the Cantonment Act, 1924. The
D conclusions arrived at by the impugned judgment of the Division
Bench are quite justified and no interference is called for.
~
28. Before we part with the judgment we would like to
observe that, according to respondent No. 3, the Cantonment
Board authorised respondent no.3 vide order dated 3.3.2001
E to realize the vehicle entry tax and in pursuance to an agreement
between the Cantonment Board and respondent no.3,
respondent no.3 deposited Rs.25,000/- and in the auction
respondent no.3, being the highest bidder, deposited Rs.3.35
lacs as per the resolution of the Board of the Cantonment Board
F dated 28.2.2001. In the peculiar facts and circumstances of this '
'r
case, whatever amount has been deposited by respondent no.3
shall be refunded to him within eight weeks because according
to respondent no.3 in view of the restraint order, respondent
no.3 could not nollect any amount towards the levy of entry tax
G on vehicles. This direction is given while keeping the well known
Legal Principle of equity, fairness and good conscience in view.
No further directions are necessary.
~ ~

29. This appeal is accordingly dism_issed with costs.

H N.J. Appeal dismissed.