MP HC Bins Plea Challenging Probe Into Illegal Toll Tax Collection By Gram Panchayat, Flags Ambiguity Over Types Of Vehicles In Statute

The Madhya Pradesh High Court has dismissed a writ petition filed by the Gram Panchayat Hargarh, challenging the Sub Divisional Officer's directive to investigate illegal toll tax collection. The Panchayat had sought to quash the letters dated April 13 and 21, 2023, which prompted the enquiry into tolls imposed by the Panchayat on vehicles entering the area.

Justice Vishal Dhagat examined Entry 8 of Schedule II under Section 77-A(2) of the M.P. Panchayat Raj Avam Gram Swaraj Adhiniyam, which authorizes Panchayats to collect fees on vehicles other than motor vehicles.

The Court observed “Taxes can only be imposed upon vehicles other than motor vehicles,… Now a days all vehicles are motor vehicles. They are propelled by motors and motor vehicles are exempted from tax under Entry 8, therefore, Gram Panchayat could not have levied fees on Dumpers and Trucks which fall within definition of Motor Vehicles Act which enter the village.”

The court further emphasized the ambiguity in Entry 8 of Schedule II, stating that while the provision allows taxation on non-motorized vehicles, it fails to specify the type of vehicles clearly.

The court discussed that the definition of motor vehicle under the Motor Vehicles Act, 1988 includes all vehicles which are mechanically propelled or adapted for use on roads but the Panchayat Raj Avam Gram Swaraj Adhiniyam, 1993, does not have the term “vehicles”.

Court said that the power to impose optional tax is vested in Gram Panchayat on vehicles other than motor vehicles which enter the Gram Panchayat area, thus leading to confusion.

Justice Dhagat stated, “Entry 8 is ambiguous, and it does not clearly lay down that fees can be collected on what type of vehicles. Nowadays, all vehicles are motor vehicles. They are propelled by motors, and motor vehicles are exempted from tax under Entry 8.”

Background

In the petition, the Gram Panchayat argued that it had lawfully imposed tolls per Section 77-A(2) of the M.P. Panchayat Raj Avam Gram Swaraj Adhiniyam, 1993.

Counsel for the petitioner contended that the resolution passed by the Gram Sabha was legitimate and that the SDO had no authority to question or interfere with such resolutions, except through the appellate authority under the Madhya Pradesh Gram Sabha Appeal Rules, 2001.

However, the State's Government Advocate raised objections, arguing that the petition lacked proper authorization from the Panchayat members and was premature, as no final order had been passed.

The court concluded that no adverse order had been issued against the petitioner and only communication was made for enquiry on the imposition of Tax by Gram Panchayat.

Hence it dismissed the plea.

Case title: Gram Panchayat Hargarh Versus The State Of Madhya Pradesh And Others

Citation: 2024 LiveLaw (MP) 216

Case no: WRIT PETITION No. 28195 of 2023

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