K P OIL MILLS Vs. COMMR PONNANI MUNICIPALITY

JUDGEMENT

(1.) Same questions arise in these two Original Petitions. So, they are disposed of by this common judgment.

(2.) The petitioners in these Original petitions are partnership firms and persons, doing business within the limits of Ponnanl Municipality. They had taken licence for carrying on the business, since under S.284 of the Kerala Municipalities Act the Municipality published notification that no place within the municipal limits should be used for any of the purposes specified in Schedule.3 without a licence issued by the Commissioner and except in accordance with the conditions specified therein. For the year 1981-82, the petitioners had taken licence on payment of the licence fee prescribed by the Municipality. In the meeting of the Permanent Committee of the Municipality held on 25-2-1982 the rates of licence fee were revised. The revision was in some cases upto three fold, Coming to know of the unreasonable and exorbitant upward revision of the fee, the Merchants Association of which the petitioners are members submitted a representation to the Municipal Chairman. The Municipal Council discussed the matter and overruled the objection. The upward revision of fee suggested by the Committee was accepted and the petitioners were directed to pay the same. The Municipality did not follow the procedure prescribed for levying a tax. The imposition can therefore be justified only as a levy of fees. For sustaining the levy as a fee, there must be special benefit to the payer of the fee in addition to what is enjoyed by the members of the general public. The special benefit should be a service rendered specially to the payer of the fee or to the class of people who pay the same. It cannot be as a service rendered to the members of the public in general, in discharge of the statutory obligations cast on the Municipality under the Kerala Municipalities Act. The first respondent is not doing anything whatsoever for supervising or controlling the oil mills and the business establishments operating within the municipal limits. Apart from providing the ordinary municipal services such as roads, street lights etc. no special service whatsoever is rendered by the Municipality either to the petitioners individually or to the mill owners as a class or to the operators of electric motors within the municipal limits. The levy is not supported by any quid-pro-quo whatsoever and therefore the levy is totally without jurisdiction and void in law. As per the decisions of the Supreme Court at least a substantial portion of the amount of fees realised must be spent for the special benefits of the payers of the fee for sustaining the levy of fees. No portion of the fee collected by the Municipality from the petitioners is spent for the benefit of the petitioners or for the benefit of other mill owners or users of motors or for the benefit of any of the classes of the licencee from whom such fee is levied. The licence fee levied by the Municipality is therefore without jurisdiction, without the authority of law and therefore null and void. The only reason for enhancing the licence fee is the desire of the Municipality to raise additional funds since the Municipality is stated to be financially in a tight corner. The necessity of raising general funds for the Municipality is not a good justification for increasing the licence fee payable by the petitioners and by persons similarly situated. The increase evidenced by the decision Ext. P2 is motivated solely by the need to find additional finance for the general activities of the Municipality. The increase of fees is not correlated to any special service done or proposed to be done by the Municipality. Therefore, the petitioners pray for quashing Exts. P2 and P5 decisions taken by the 1st respondent Municipality.

(3.) The averments made by the petitioners in these original petitions stand uncontroverted. The assertion of the petitioners that the fee has been increased only for raising the general funds of the Municipality to better the financial stability of the Municipality and not for rendering any additional service to the petitioners or the licensees is not disputed. The contention that the Municipality did not resort to any procedure for levying a tax and that the imposition of the additional fee can be sustained only if there are special benefit to the payers of the fee is also not in dispute.