Nagar Palika, Sabalgarh vs Laxminarayan Ramparshad Vaishya of Sabalgarh

Shiv Dayal, J.

This is a Letters Patent appeal from the judgment of a learned single Judge, who decided second appeal arising out of a suit instituted by the respondent Laxmi Narayan against the appellant Municipal Committee, Sabalgarh.

Laxmi Narayan is the proprietor of a cinema talkies called Laxmi Talkies. The Municipal Committee, Sabalgarh realised from him an amount of Rs. 2.864-68P. as entertainment tax for the period between May 30, 1958 and January 11, 1959, under the Entertainment Tax Bye-Laws framed by the Municipal Committee. In his suit Laxmi Narayan challenged the power of the Municipal Committee to recover this tax from him on the ground that under the Central Provinces and Berar Entertainment Duty Act, 1936 (Act No. XXX of 1936) which had been extended to the whole of Madhya Pradesh, it was only the State Government which could levy entertainment tax and the Committee had no such power.

The bye-laws by virtue of which the impugned tax was collected from the plaintiff were published as an appendix to the Gwalior Government Gazette dated March 9, 1946. They are called Entertainment Tax Bye-laws of the Municipal Committee, Sabalgarh. They were made in exercise of the powers vested in it u/s 52 (j) of the Gwalior State Municipalities Act, Samvat 1993.

The said Gwalior State Municipalities Act was repealed by the Madhya Bharat Municipalities Act, 1954, but the bye-laws made under the repealed law continued to remain in force by virtue of the saving clause in proviso (c) to section 2.

Consequent upon the re-organisation of States the Madhya Pradesh Taxation Laws (Extension) Act No. XVIII of 1957 (hereinafter called the Extension Act) extended the Central Provinces and Berar Entertainment Duty Act No. XXX of 1936 (hereinafter called the Entertainment Act) to the entire Madhya Pradesh. By virtue of section 6 of the Extension Act every law corresponding to the Entertainment Act in force in any region of the State of Madhya Pradesh other than Mahakoshal stood repealed.

Under the Entertainment Tax Bye-laws of the Municipality, Sabalgarh which continued to be in force up to October 31, 1957, the Municipal Committee was empowered to levy and recover entertainment tax. The Entertainment Act which became applicable to Sabalgarh as well, on and from November 1, 1957, empowered only the State Government to recover entertainment tax, but not a Municipal Committee.

The question for determination before us is whether the said entertainment tax Bye-laws stood repealed "as a corresponding law within the meaning of section 6 of the Extension Act, 1957". The learned single Judge has answered this question in the affirmative and in consequence upheld the decree in favour of the plaintiff which was passed by the trial Judge and reversed the decision of the first appellate Court by which the plaintiff''s suit was dismissed.

It is urged by Shri Mungre learned counsel for the Municipal Committee that in its effect section 6 of the Extension Act did not repeal the said bye-laws. His argument is that what is repealed is "any law corresponding to any of the Acts now extended" and the Gwalior Municipalities Act, Samvat 1993 under which the bye-laws were made or the Madhya Bharat Municipalities Act 1954 under which the bye-laws were deemed to have been made and continued to remain in force, "were not corresponding laws" inasmuch as the pith and substance of those parent Acts was not taxation. While the Act extended, namely the Entertainment Duty Act, 1936, had for its pith and substance "taxation". We are unable to accept this contention. It seems quite clear to us that on the reorganisation of States and the formation of the new State of Madhya Pradesh which comprised four pre-existing States, the anxiety of the Legislature was to bring about uniformity in laws applicable to the entire territory of the new State. It is well known that several laws which were in force in a particular region of the new State of Madhya Pradesh were, by virtue of the Extension Laws Act, extended and applied to the entire State. It could not possibly be the intention of the Legislature that two different laws on the same subject could govern it in any part of the State after a uniform law was extended to the entire State. Section 6 of the Extension Act is the manifestation of that legislative intent. In the present case, it is unthinkable that the Legislature enabled the State Government to recover entertainment tax under the Central Provinces and Berar Entertainment Act, 1936, which was extended to the whole of Madhya Pradesh and at the same time did not take away the power of levying and collecting entertainment tax which was livable under any law in force in the relevant part of the State. To construe otherwise will be repugnant to all cannons of interpretation of statutes. The expression "any law corresponding" clearly refers to all such laws irrespective of whether such a law is found in an Act, Rules, Notification, Bye-laws or Order, and this is made further explicit in an inclusive definition of the word "law" for the purposes of section 6 of the Extension Act (see explanation to that section). It is undoubted that the Madhya Bharat Municipalities Act, 1954, was not repealed by the Extension of the Entertainment Duty Act, 1936, because the whole of the former Act cannot be said to be a law corresponding to the latter. But it cannot be denied that that part of the Municipal Act which dealt with entertainment tax was a law corresponding to the extended Act. We see no force in Shri Mungre''s argument that either the whole law is repealed or no part of it is repealed. A part of an Act is as much a law as the whole of it. The Madhya Bharat Municipalities Act, 1954 contained provisions for the levying and collection of entertainment tax and that was why Entertainment Tax Bye-laws of Municipality Sabalgarh continued to remain in force subsequent to the repeal of the Gwalior State Municipalities Act under which they were initially made. In this view of the matter we have not the slightest difficulty in reaching the conclusion that the bye-laws read with the relevant provisions in the Municipal Act constitute "a law relating to entertainment tax," and that law corresponded to the Central Provinces and Berar Entertainment Duty Act of 1936. We would, therefore, reject the contention raised by the Municipality.

Shri Mungre endeavoured to challenge the maintainability of the suit on the ground that no valid notice was given to the Municipality before the institution of the suit as was required under the statute. We cannot allow this point to be raised in this Letters Patent appeal.

Shri Mungre argues that the entire appeal is before the Division Bench inasmuch as the case was certified as fit for letters patent appeal by the learned single Judge suo motu. It was not as if the appellant sought leave so that it could be pinned down to the points on which the leave was sought. Now, in our opinion, apart from anything else, when the learned single Judge did not decide this question at all it is not possible to attribute to the learned single Judge the intention of having certified the case fit for appeal on a question which he did not decide. It is not known whether that question was at all raised at the hearing of the second appeal before the learned single Judge. That aside, the certificate itself mentions the point on which the certificate was granted. As was held in Ramrao v. Patte Chand AIR 1956 Nag. 241, it is not open to the Bench which hears the Letters Patent appeal to go beyond the terms of the leave granted and the whole appeal is not open when the leave is restricted.

For these reasons the appeal is dismissed with costs.

A.H. Khan, J.

I agree.

Appeal dismissed.