K PUNDALIKA NAYAK Vs. CITY MUNICIPAL COUNCIL MANGALORE

JUDGEMENT

(1.) The Petitioner is a dealer in radios in Mangalore Town. The first respondent is the City Municipal Council, Mangalore. By a Notification dt.31st August 1968 published in the Mysore Uazette dt.14th November, 1968, issued by the Commissioner, Cixy Municipal Council, Mangalore (Respondent 2) under S.256 of the Mysore Municipalities Act, 1964, hereinafter referred to as the Act, licence fees were levied on radio dealers at double the monthly rental of the premiss used or the assessed property tax whichever is higher, subject to a maximum of Rs.500. The monthly rental of the premises of one of the shops of the petitioner under the name 'Melody House' is Rs.100 and that of another place of business under the name 'Kalpana Radios' is Rs.200. In respect of the said places of busuiess, the petitioner became liable to pay annually a licence iee of Rs. 200 and Rs.400 respectively. The petitioner has challenged the validity of the levy under the Notification dt.31st August 1968. The relief of declaration that S.256(4) of the Act is unconstitutional was not pressed at the hearing. Sub-sec. (1) of S.256 of the Act provides that no one shall use any premises for any of the purposes mentioned in clauses (a), (b), (c) and (d) of the said sub-section without a licence granted by the Municipal Commissioner. Sub-sec. (4) of S.256 empowers the Municipal Council to fix a scale of fees to be paid in respect of the premises licensed under sub-sec. (1) subject to a maximum of Rs.500 per annum. The relevant provisions of Section 256 run thus :

(2.) The relevant portion of the Notification issued by the Municipal Commissioner under S.256 runs thus-

(3.) The case of the petitioner was that the impugned levy is a tax in disguise on places of business and that the procedure for imposition of tax as provided under Chapter VI not having been followed, the levy is Illegal and ultra vires of the Act It was argued by Sri U L Narayana Rao for the petitioner that under the powers conferred by S.256(4), the Municipal Council is competent to levy only licence fees which does not exceed the ccst of issuing licences and the cost of inspection and supervision of the premises licensed and that in the instant case the levy has no correlation to such expenses In the counter-affidavit filed by the Municipal Commissioner it has been submitted that sab-sec (4) of S 256 empowers the Municipal Council to fix a fee to be levied on each trade specified m Schedule XIII of the Act and the quantum of fees has been fixed taking into consideration the nature of the trade, the income and turnover etc of the business This is what has been stated in paragraph 6 of the counter affidavit dt. 10-12-69: