Power to abolish municipal area

(1) The State Government may, by notification, abolish any municipal area declared under section 4. (2) When a notification is issued under this section in respect of any municipal area, this Act and all notifications, rules, bye-laws, orders directions and powers issued, made or conferred under this Act shall cease to apply to the said municipal area; the balance of the municipal fund and all other property at the time of the issue of the notification vested in the municipality shall vest in the State Government. (3) Where any municipal area is abolished under sub-section (1) and subsequently the area comprising the municipal area so abolished is declared to be a Sabha area under sub-section (1) of section 3 of the Himachal Pradesh Panchayati Raj Act, 1994, the assets and liabilities referred to in sub-section (2) shall vest in the Gram Panchayat of the Sabha area from the date of its establishment under section 4 of the Himachal Pradesh Panchayati Raj Act, 1994. Explanation.- For the purpose of this sub-section, the assets shall include all arrears of tax, tolls, cesses, rates, dues and fees imposed under this Act or rule or any bye-law which fell due to the municipality of the municipal area immediately before the date of its abolition and the same shall be recoverable by the Gram Panchayat as if these were arrears due to the Gram Panchayat.