Court declares Committee's bye-laws restricting wholesale dealer's business rights as illegal and ultra vires

The Court held that the respondent Committee's bye-laws, which effectively prohibited the petitioner, a wholesale dealer, from conducting business by granting a monopoly to a contractor, infringed the petitioner's fundamental right under Article 19(1)(g). The imposition of fees by the Committee was deemed illegal as it exceeded their legal authority and was not justified by valid law. The Court declared the bye-laws ultra vires and directed the Committee to allow the petitioner to continue business until valid bye-laws were enacted, with costs awarded to the petitioner.

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Issues Involved:
1. Infringement of Fundamental Right under Article 19(1)(g)
2. Legality of Imposition of Tax by Respondent Committee
3. Validity of Bye-laws Framed by Respondent Committee

Issue-wise Detailed Analysis:

1. Infringement of Fundamental Right under Article 19(1)(g)
The petitioner, a wholesale dealer in fresh vegetables and fruits, claimed that his fundamental right to carry on his business was infringed by the respondent Committee. The Committee had framed bye-laws granting a monopoly to a contractor for the collection of commission on the sale of vegetables and fruits. This effectively prohibited the petitioner from carrying on his business, as he would have to pay the prescribed fee to the contractor, making it economically unviable. The Court observed that although the bye-laws did not explicitly prohibit business, they effectively brought about a total prohibition in a commercial sense. The petitioner would either have to charge higher fees, driving away customers, or act as a tax collector without profit. This was deemed an infringement of the petitioner's fundamental right under Article 19(1)(g).

2. Legality of Imposition of Tax by Respondent Committee
The petitioner contended that the respondent Committee had no legal authority to impose the fee, arguing it was in the nature of a sales tax rather than a license fee. The Court noted that while an illegal tax imposition could be challenged in a suit, a license fee on a business, which restricts the right to carry on business, could be challenged under Article 32. The Court held that if the license fee could not be justified by any valid law, it would be an unreasonable restriction on the petitioner's right under Article 19(1)(g).

3. Validity of Bye-laws Framed by Respondent Committee
The Court examined the U.P. Town Areas Act and relevant sections of the United Provinces Municipalities Act, which were extended to the respondent Committee. It was found that the bye-laws did not align with the powers conferred under these sections, as they imposed fees on wholesale dealers irrespective of any use of immovable property vested in or managed by the Committee. The Court concluded that the bye-laws were ultra vires the powers of the respondent Committee and therefore invalid. Consequently, the imposition of fees under these bye-laws was an illegal restraint on the petitioner's right to carry on his business.

Judgment:
The Court directed the respondent Committee not to prohibit the petitioner from carrying on his business within the limits of the Jalalabad Town Area Committee until valid bye-laws were framed. The respondent Committee was also ordered to pay the costs of the application to the petitioner.

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