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 State; 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. Clause.1 and 4 of S.86 of the Act read:

(2.) The vires of S.86(4) itself, has not been challenged. The impost was attacked as unsustainable as a tax, for being outside the taxing entries in the Constitution; and if it were, as bad on account of noncompliance with the provisions of the Act and the Rules which prescribe the procedure 'for imposition of the various taxes sanctioned by the Act. As a fee it was attacked on the ground that there is no sufficient quie pro quo to justify the levy. For the Panchayat, the levy was sought to be sustained as a tax, and alternatively as a fee. Attempt was also made to "sustain it as a third category of impost, namely, as a licence fee.

(3.) Before examining the rival contentions, it is necessary to notice the scheme and framework of the Act. Chap.4 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. S.66A 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, S.66(2) provided for the levy of land cess. S.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. S.77 provides for expenditure debatable 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, health, education, convenience, comfort, and welfare of the inhabitants of the panchayat area. Chapter V is entitled: "Public safety, Convenience and Health". S.86 occurs in this Chapter. The Kerala Panchayat Taxation and Appeal R.1963 provide for the procedure for levy, assessment, and collection of the taxes "enumerated by the Act." R.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 in the Panchayat in respect of any public or private market, and other allied matters.