Orissa Cement Limited vs Grama Sasan of Katanga and Others

G.K. Misra, C.J.—The Petitioner is a company registered under the Indian Companies Act, 1956. They carry on business of manufacture of cement, refractories and cement products at their factories in Rajgangpur. They possess and operate limestone quarries Lanjiberna in Sundargarh district from which they utilise limestone as raw material in manufacture of cement. The said quarries at Lanjiberna are situate within the territorial Jurisdiction of the Grama Sasan of Katauga (opposite. party No. 1) The Sarpanch Copp. party No. 2) (If Katanga Grama Panchayat issued a notice (Annexure-5) for the year 1971-72 calling upon the Petitioner to deposit Rs. 1, 000/ - as licence-fee in respect of the machineries employed in the quarry. The company challenged the jurisdiction of opposite parties 1 and 2. A second notice in Annexure-II for the years 1971-72 and 1972-/3 was issued calling upon the Petitioner to deposit Rs. 2, 000/ - as licence-fee. The Petitioner carried an appeal u/s 102 of the Orissa Grama Panchayats Act, 1964 (hereinafter to be referred to as the Act) to Sub divisional Officer, Sundargarh (opp party No. 3). The appeal was dismissed. The writ application is filed under Articles 226 and 227 of the Constitution to quash the notices in Annexures-5 and 11.

In the counter filed by opposite-party No. 3 the impost is sustained on the theory that it is a tax and not a fee. It is admitted that there is no quid pro quo involved in calling upon the Petitioner to pay fees.

The sole question urged at the time of hearing was that the impost under Annexure-11 for the impugned two years can be justified as a tax.

To answer the question it would be appropriate to present a comprehensive picture as to the power of the Grama panchayat to impose the impost either as a fee or as a tax. Section 55 of the Act authorises the Grama Panchayat to issue licence under various items enumerated therein, which prescribes that with the previous sanction of the Collector and notwithstanding anything contained in any other law for the time being in force, a Grama Panchayat may notify that no place within the local area of the, Grama Sasan shall be used in the course of any trade business or calling without a licence granted by it and except in accordance with the condition specified in such licence, for any one or more of the purposes mentioned therein. Section 55(1)(w) gives one of the purposes as ''using for any industrial purpose any fuel or machinery''.

Under Section 57 of the Grama Panchayat may, subject to such maximum as may be determined by the State Government by notification in that behalf, levy a fee in respect of any licence or permission under Sections 55 and 56 and the renewal thereof and may impose such conditions and restrictions on such licence as it may think necessary. On the basis of Section 57 read with Section 55 and the authority given by the State Government in Annexure All licence-fee of Rs. 2, 000/ - was asked for under Annexure_11. In Annexure-All several items have been mentioned and the maximum licence-fee to be collected annually against each item has been noted in column-3. In respect of engines of different horse-powers different licence-fees have been prescribed upto a maximum of Rs. 500/ - per annum. On the accepted position in the counter-affidavit that no quid pro quo is involved in granting the licence to the Petitioner, opposite parties 1 and 2 are not entitled to recover, any licence-fee in respect of the machineries worked by the Petitioner in the quarry.

The next question is whether impost can be justified as a tax. Article 276(2) of the Constitution lays down that the total amount payable in respect of anyone person to the State or to anyone municipality, district board, local board or other local authority in the State by way of taxes on profession, trades, callings and employments shall not exceed two hundred and fifty rupees per annum. Ex-facie in Annexure-All the State Government could not have authorised the Grama Panchayat to impose a tax for more than Rs. 250/ -. Annexure All cannot therefore be construe as authorising the Grama Panchayat to impose tax contrary to the provisions of Section 276(2) of the Constitution and the import cannot be justified as a tax. It is not necessary to refer to entries 5 and 60 in List II of the Seventh schedule as justifying the imposition of a tax by the Grama Panchayat in certain cases. In this particular case under Annexure_A/1 opp. parties 1 and 2 have not been conferred with jurisdiction to impose tax.

Annexures-5 and 11 are therefore quashed. A writ of certiorari be issued accordingly. A writ mandamus be issued directing opp. parties 1 and 2 not to demand any levy from the Petitioner on the authority of Annexure_A/1 unless corresponding services are rendered to justify imposition of fees. The writ application is allowed with costs against opp. parties 1 and 2. Hearing fee of Rs. 200/ - (two hundred).

P.K. Mohanti, J.

I agree.