Toll collections as State revenue: authorised bridge management receipts were held to belong to the Government, not the collecting corporation.

Toll collections made by a corporation managing State bridges under authorisation were held to be the State Government's income, because the Indian Tolls Act, 1851 vested the levy and collection of tolls in the Government and permitted collection through an authorised agent. The statutory scheme treated tolls as public revenue, and Article 266(1) required such receipts to form part of the State Consolidated Fund. A contrary description in an administrative letter could not change the legal character of the receipts, and the doctrine of overriding title could not defeat the statute and constitutional mandate.

---

---

Issues: Whether toll collections made by the assessee-corporation, while managing bridges belonging to the State Government under authorisation, constituted the corporation's income or the income of the State Government.

Analysis: The levy and collection of tolls under the Indian Tolls Act, 1851 vested in the State Government, and that Act authorised the Government to place collection under the management of such persons as it thought proper. The corporation was therefore acting only as the Government's agent in collecting tolls. The statutory scheme also treated tolls as public revenue, and by virtue of Article 266(1) of the Constitution of India such receipts formed part of the Consolidated Fund of the State. The descriptive wording in the Government's letter could not alter the real legal character of the receipt, and the doctrine of overriding title could not operate against the statute and the constitutional mandate.

Conclusion: The toll collections were the income of the State Government and not the assessee's income, and the question was answered in favour of the assessee.

Ratio Decidendi: Where a statute treats toll collections as public revenue and the collecting entity acts merely as the Government's agent, the collections cannot be characterised as the agent's income merely because an administrative communication uses contrary language.

---