VARKEY THARAKAN Vs. ALLEPPEY MUNICIPALITY

JUDGEMENT

(1.) THESE three suits have been brought to this Court under Article 228.The suits had been filed in the District Court of Alleppey to recover amounts previously collected as tax by the Municipality of the aforesaid town under provisions to be mentioned hereafter.The defence to the claims is that the collections of the amounts,sought to be recovered,have since been validated under a later enactment,and the claimants 'reply to the defence is that the enactment is not constitutional.The issue has,therefore,arisen whether the validating enact­ment,that has justified levying the tax held earlier not to have been legally collected,is constitutional.Thereafter,jurisdiction of this Court under Article 228 has been invoked for summoning records of these cases before the aforesaid lower court;for ascertaining whether a consti­tutional issue has arisen,deciding such issue,and directing the tribunal to adjudicate according to the decision on the constitutional issue.

(2.) THE further details of how the claims came to be instituted,are as follows: - Section 77 of the Travancore District Municipalities Act,No.XXIII of 1116,enume­rates the taxes,which the local authorities can levy.The list contains seven classes,and,of these,the last is the tax on entertainments.The two subsequent sections of the aforesaid Act,relevant for the purposes of the tax,were sections 122 and 123;and the first of the sections had provided for the liability to pay the entertainments tax fixed according to the rates given by the Council and in the manner provided by the Council,with the approval of the Government.Both the sections were repealed by section 13 of the Travancore -Cochin Local Authorities Entertainments Tax Act,VI of 1951.The preamble of the later Act shows that it was passed in order to give to the local authorities power to impose a tax on amusements and other entertainments;and its section 3 confers on the local authority of the area,in which it be in force,the power to levy the tax,at a rate not less than 10 per cent,nor ex­ceeding 25 per cent,on all payments for admission to any entertainment.Section 5 enacts for permission of person to entertainment,subject to the tax;section 10 provides for penalty,and section 12 confers power to frame rules for levying the tax.This last section enacts that any local authority,before levying entertainments tax,shall make bye -laws,not inconsistent with the Act;and it is common ground that local authorities had not framed any rules,but had continued to levy the tax on entertainments according to the rates fixed under the repealed sections.Such levies were challenged by the plaintiffs in the three suits now before us,and the Travancore -Cochin High Court sustained the objections to the legality of the tax in Bhaskara Reddiar v.Alleppey Municipality 1955 K.L.T.912.The learned Judges took the view that framing the rules was sine qua non ,and the right to charge did not arise,unless the rules be framed.Joseph Vithayathil,J .,who delivered the judgment,has observed at p.920 as follows: Admittedly no bye -laws were made by the Municipality under the District Municipalities Act in respect of matters mentioned in Section 12 of Act VI of 1951.Section 12 contains a mandatory pro­vision,and until the condition laid down in the section is fulfilled,a local authority cannot levy entertainments tax under Section 3 of the Act.So long as the Alleppey Municipality has not satisfied the condition,we do not think that it can levy entertainments tax under the new Act treating the rule made by Government under Section 77(g)of the District Municipalities Act as bye -laws made by the Municipality under section 12 of Act VI of 1951."

(3.) THE Section is not only made the ground for the defence in the aforesaid suits,but has become the basis of claim­ing entertainment tax in two other suits.Those are by the Kottayam Municipal Council and are to recover the tax for later years.All these suits have been transferred to this Court under Article 228,and we propose to decide the common constitutional issue in the claims against the Municipality of Alleppey.We would then apply the decision to similar issues in the other cases,without repeating the reasons in each case for our conclusions on the issue.In reaching the decision,we have been afforded great help by the arguments of the advocates for the tax - payers as well as the local authorities,which we must acknowledge at this stage.