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Context: The Supreme Court of India has affirmed the constitutional validity of terminal tax imposed by Municipal Councils in the Scheduled Areas. The court held that the power to levy such tax is derived from the provisions of the Fifth Schedule of the Constitution, which grants special autonomy and protection to the Scheduled Areas and the Scheduled Tribes living therein.

Key Highlights of the Judgement

• The Supreme Court observed that the Fifth Schedule of the Constitution empowers the Governor of a state to make regulations for the peace and good government of any Scheduled Area in that state and to direct that any particular act of Parliament or the Legislature of the state shall not apply to such area or shall apply with such exceptions and modifications as he may specify.
• The court held that the terminal tax is not a tax on tolls, but a tax on goods or animals carried by vehicles using the toll road. Therefore, it does not amount to double taxation, as it is levied on a different subject matter and for a different purpose than toll tax.
• The court concluded that terminal tax is a reasonable restriction on the freedom of trade and commerce under Article 19(1)(g) of the Constitution, as it is imposed in the public interest and for providing civic amenities and infrastructure facilities in the Scheduled Areas.
• The court emphasized that the Scheduled Areas are inhabited by marginalized and vulnerable sections of society, who need special care and attention for their socio-economic development and cultural preservation.
• The court said that terminal tax is one of the sources of revenue for the Municipal Councils in these areas, which enables them to discharge their constitutional obligations and duties towards their citizens.

What is Schedule V of the Indian Constitution?

• The Indian Constitution is the supreme law of the land and it contains various provisions to safeguard the rights and interests of different sections of the society. One of these provisions is Schedule V, which deals with the administration and control of Scheduled Areas and Scheduled Tribes in India.
• Scheduled Areas are those regions that have a preponderance of tribal population and are considered to be backward and underdeveloped. Scheduled Tribes are those indigenous communities that are recognized by the Constitution as having distinctive cultural, social and economic characteristics.
• The purpose of Schedule V is to protect the Scheduled Areas and Scheduled Tribes from exploitation and to promote their welfare and advancement. Schedule V applies to all states of India except Assam, Meghalaya, Tripura and Mizoram, where Schedule VI is applicable.

What are the features of Schedule V?

• Schedule V has two parts: Part A and Part B.
  • Part A contains general provisions regarding the interpretation, executive power and reporting of the administration of Scheduled Areas.
  • Part B contains specific provisions regarding the Tribes Advisory Council and the law applicable to Scheduled Areas.

Some of the important features of Schedule V are:

• The executive power of a state extends to the Scheduled Areas within its territory, subject to the directions of the President of India.
• The Governor of each state having Scheduled Areas has to make an annual report to the President regarding the administration of these areas and can also make regulations for their peace and good governance.
• The Governor can direct that any act of Parliament or state legislature shall not apply or shall apply with modifications to a Scheduled Area or any part thereof.
• The Governor can make regulations for prohibiting or restricting the transfer of land by or among the members of the Scheduled Tribes or for regulating the allotment of land to them.
• The Governor can make regulations for preserving or restoring the land occupied by or allotted to the members of the Scheduled Tribes.
• There shall be a Tribes Advisory Council in each state having Scheduled Areas or Scheduled Tribes, consisting of not more than 20 members, three-fourths of whom shall be representatives of the Scheduled Tribes in the state legislature.
• The Tribes Advisory Council shall advise the Governor on matters pertaining to the welfare and advancement of the Scheduled Tribes in the state as may be referred to by him.
• The Governor can make rules regarding the number, appointment, conduct and procedure of the Tribes Advisory Council and its officers and servants.

What is the significance of Schedule V?

• Schedule V is a constitutional mechanism to ensure that the Scheduled Areas and Scheduled Tribes are not neglected or exploited by mainstream society and that their rights, culture and identity are preserved and protected. Schedule V empowers the Governor to act as a custodian of these areas and tribes and to make special provisions for their development.
• Schedule V also enables the participation of the tribal representatives in the decision-making process through the Tribes Advisory Council. Schedule V reflects the commitment of the Indian Constitution to uphold the dignity and diversity of its people.

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