SANKARAN NAIR Vs. VANIAMKULAM PANCHAYAT

JUDGEMENT

(1.) THE Vaniamkulam Private Market, situated within the Jurisdiction of the Panchayat of that name, is owned by the Kavalappara Estate, now under the management and supervision of the petitioner -Receiver. It was governed originally by the Madras Local Boards and District Boards Act, while the area remained part of the Madras Estate; and since its transfer to the Kerala State, is governed, by the Kerala Panchayats Act 1960 (Act 32 of 1960) hereinafter referred to as the Act. Clauses 1 and 4 of Section 86 of the Act read:

(2.) BEFORE examining the rival contentions, it is necessary to notice the scheme and frame work of the Act. Chapter IV of the Act is entitled. 'Taxation, and Finance'. The Chapter provides for the levy of profession tax, building tax vehicles tax, service tax for sanitation, water supply street lighting etc. and a duty on transfer of property. Section 66 - -A newly introduced by the Amending Act 1 of 1969 provides for imposition of a land cess on every land in the Panchayat area other than what may be exempted by the Government in public interest. The cess is to be calculated at the rate of 1/16 percent of the capital value of the land Prior to the 1969 amendment with certain variations, section 66 (2) provided for the levy of land cess. Section 76 provides for the constitution of a Panchayat fund into which all monies received by the Panchayat shall be credited and which shall be applied and disposed of in accordance with the provisions of the Act. Section 77 provides for expenditure debitable to the Panchayat Fund. The same enacts that the fund may be applied to all objects authorised by the Act and the Rules made thereunder, and, in general, for everything necessary for safety, convenience health, education convenience, comfort, and welfare of the inhabitants of the panchayat area. Chapter V is entitled: "Public safety. Convenience and Health". Section 86 occurs in this Chapter. The Kerala Panchayat Taxation and Appeal Rules 1963 provide for the procedure for levy, assessment, and collection of the taxes "enumerated by the Act." Rule 3 requires a tax to be levied by a resolution of the Panchayat specifying the rate of tax and the date from which it is to be levied. Before passing the resolution, the inhabitants of the Panchayat have to be notified of the intention to levy a tax, and be afforded a reasonable opportunity of preferring objections to the proposed levy. Then we have the Kerala Public and Private Market Rules, 1964 which provide inter alia for the licensing of private markets, the form and particulars of the application to be made for the purpose, the powers to be exercised by the Panchayat in respect of any public or private market, and other allied matters.

(3.) WE may at this stage deal with the contention raised by Counsel for the Panchayat and the Government Pleader that the levy can well be sustained under the Police power of the State to regulate certain trades and incidentally to raise revenues in the course of such regulation. Reliance was placed for this purpose on the regent Full Bench Judgment of this court in O.P. No. 995 etc. of 1970. It is a sufficient answer to this contention to state that neither the Act nor the Rules give such a power to the Panchayat. No authority was cited to us to trace such inherent power in a Panchayt or a local body. The scheme and the provisions of the Act also seem to militate against the existence of such a power in the Panchayat.