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of <h1>Supreme Court invalidates Urban Development Cess by Punjab State, emphasizing procedural compliance.</h1> <h3>STATE OF PUNJAB & ORS. Versus NARANJAN DASS DOOMRA RICE & GEN. MILLS & ORS.</h3> The Supreme Court ruled on the imposition of Urban Development Cess by the State of Punjab under the Punjab Municipal Act, 1911, during President's Rule. ... - Issues:1. Imposition of Urban Development Cess by the State of Punjab under the Punjab Municipal Act, 1911.2. Challenge to the levy and collection of the cess through writ petitions in the High Court of Punjab & Haryana.3. Interpretation of Section 62A(1) and (3) of the Punjab Municipal Act, 1911.4. Application of Section 62(12) in determining the legality of the imposition of the cess.5. Comparison of the present case with previous legal judgments on tax imposition.Analysis:The Supreme Court examined the case involving the imposition of Urban Development Cess by the State of Punjab under the Punjab Municipal Act, 1911, during the period of President's Rule. The President of India issued an order exempting certain goods from octroi and directed Municipal Committees to impose the cess on specific goods. However, the Municipal Committees failed to impose the cess, leading to the State Government not imposing it under Section 62A(3) of the Act. The Court clarified that the order did not directly impose the tax but directed the Municipal Committees to do so, emphasizing the procedural requirements under the Act for tax imposition.The Court analyzed Section 62A(1) and (3) of the Act, which empower the State Government to require Committees to impose taxes and provide for State intervention if Committees fail to act. It highlighted that the conclusive evidence of tax imposition under Section 62(12) applies only when the tax is imposed following the Act's procedures. In this case, as the cess was not imposed by the Municipal Committees or the State Government as per the Act's requirements, its collection was deemed unauthorized and without legal basis.Reference was made to legal precedents, including the judgment in Atlas Cycle Industries Ltd. v. State of Haryana, emphasizing the necessity of formal notification for tax imposition. The Court rejected arguments based on previous judgments and upheld the High Court's decision, dismissing the appeals. It ordered the refund of collected amounts with interest to the respondents, emphasizing the lack of legal authority for the cess collection. The Court concluded by directing no costs to be awarded in the matter.
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