1952 (2) TMI 21 - SC - Indian Laws

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

MOHAMMAD YASIN Versus. THE TOWN AREA COMMITTEE, JALALABAD AND ANOTHER.

The Court held that the respondent Committee's bye-laws, which effectively prohibited the petitioner, a wholesale dealer, from conducting business by ... Application under article 32 of the Constitution made by Mohammad Yasin for the protection of his fundamental right of carrying on his business which, according to him, is being infringed by the respondent Held that:- The bye-laws which impose a charge on the wholesale dealer in the shape of the prescribed fee, irrespective of any use or occupation by him of immoveable property vested in or entrusted to the management of the Town Area Committee including any public street, are obviously ultra vires the powers of the respondent Committee and, therefore, the bye laws cannot be said to constitute a valid law which alone may, under article 19(16) of the Constitution, of impose a restriction on the right conferred by article 19(1) (g). In the absence of any valid law authorising it, such illegal imposition must undoubtedly operate as an illegal restraint and must infringe the unfettered right of the wholesale dealer to carry on his occupation, trade or business which is guaranteed to him by article 19(1) (g) of our Constitution. In this view of the matter the petitioner is entitled to a suitable order for protection of his fundamental right. The proper order would be to direct the respondent Committee not to prohibit the petitioner from carrying on the business of a wholesale dealer in vegetables and fruits within the limits of the Jalalabad Town Area Committee until proper and valid bye-laws are framed and thereafter except in accordance with a licence to be obtained by the petitioner under the bye-laws to be so framed. Appeal allowed. Issues Involved:1. Infringement of Fundamental Right under Article 19(1)(g)2. Legality of Imposition of Tax by Respondent Committee3. Validity of Bye-laws Framed by Respondent CommitteeIssue-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 CommitteeThe 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 CommitteeThe 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.