DALPATBHAI HEMCHAND Vs. MUNICIPALITY OF CHANASMA

JUDGEMENT

(1.) This petition is filed under Article 226 of the Constitution of India. Petitioners are proprietors of hotels situated in the town of Chanasma. Respondent No. 1 is the Municipality of Chanasma constituted under the Bombay District Municipal Act 1901 (hereafter called the Act). Respondent No. 2 is the State of Gujarat. Petitioners challenge the validity of an impost under which they are required to pay under certain rules and bye-laws to be presently mentioned a certain amount annually as a licence fee for running their hotels. Petitioners pray for a declaration that those rules and bye-laws are illegal and that a writ of mandamus should be issued commanding first respondent not to enforce them. Petitioners also pray for a writ of certiorari for quashing the said rules and bye-laws. They also pray for an injunction restraining first respondent from collecting the fee amount from any of them

(2.) We may at first state a few facts which led up to the presentation of the petition. On 27th of February 1952 the General Body of first respondent passed a resolution adopting proposed rules and bye-laws and for sending them to Government for necessary sanction. The Director of Local Authorities Northern Division sanctioned the rules and bye-laws with some modifications. One of the suggested rules provided for the levy of a tat amongst others on hotels. Amongst the modifications suggested by the Director of Local Authorities has the modification that the word tax in rule I should be substituted by the words licence fee and at all other places wherever that word tax occurred in the rules. With these modifications the rules and bye-laws were brought into force with effect from 1st April 1953. Rule 1 provided for the levy of a licence fee from among others hotels. Rule 3 fixed the licence fee at Rs. 100/per year in respect of hotels. We are told that no protest was made by any one at any of the earlier stages before or at any time after the rules and bye-laws were brought into force. On 29th March 1961 petitioners presented the present petition challenging the validity of the aforesaid levy of fees. The levy has been challenged in the petition on a number of grounds. Mr. Nanavati the learned Advocate for petitioners however confined the challenge at the time of the hearing only on one ground Therefore it is not necessary for us in this judgment to mention the other grounds on which the challenge was based in the petition. It is common ground that the Act provides for different procedures for levying a tax and a fee. It is common ground that the procedure which was followed by first respondent in making the rules and bye-laws was not the procedure provided for levying a tax. The procedure which was followed was that which was provided for levying a fee. Mr. Nanavati submits that though in the rules the levy is designated as a fee in fact it is a tax and that therefore as the tax procedure was not followed the levy is illegal and unsustainable. On the other hand respondents contend that the impost is what it purports to be namely that it is a fee and not a tax. Mr. Nanavati concedes that if the impost is a fee then it would be legal and petition would deserve to be dismissed. On the other hand the learned advocates for respondents concede that if the impost is held to be a tax then it would be illegal and the petition would deserve to be allowed. Having regard to these rival contentions and concessions both the sides are agreed that the crucial question which requires to be decided in the present case is whether the aforesaid impost is a fee as it purports to be or whether in reality it is a tax. It is on a resolution of this controversy that the fate of the present petition depends. Therefore the crucial question which requires to be considered in the petition is whether the aforesaid levy is a fee or a tax.

(3.) Before however we mention the facts on the basis of which the rival contentions are sought to be supported we may refer to two preliminary objections which were raised on behalf of second respondent by Mr. Surti the learned Assistant Government Pleader. Mr. Surti contends that the challenge to the aforesaid levy is belated and stale. He contends that the levy came into force on 1st April 1953 and the challenge is raised for the first time after a lapse of nearly eight years. He contends that during the intervening period petitioners had not only failed to challenge the levy but had paid the licence fee under the rules. Therefore Mr. Surti contends that this Court should not have entertained the petition and should have directed petitioners to have their grievance redressed by recourse to the ordinary procedure of filing a suit. The second objection of Mr. Surti is that whether the levy is a tax or a licence fee is a mixed question of law and fact and unless facts are gone into this Court will not be able to decide whether it is a tax or a licence fee and he submits that the parties are not agreed on facts as disclosed from the affidavits filed and that therefore this petition should be dismissed on the ground that the decision thereon depends upon disputed questions of fact. In regard to both these objections there is one fundamental fact which requires to be borne in mind and that is that what petitioners in effect intend to safeguard in the present petition is their fundamental right which ensures them freedom from deprivation of their property save by authority of law. The second factor which requires to be borne in mind is that the object of the present petition is not to seek a refund of the amounts which amounts have already been paid under the impugned levy but its object primarily is to prevent first respondent from recovering in future any further amounts under the impost. Therefore although the impost was levied as far back as eight years the grievance which is sought to be redressed by the petition is a present grievance and the alleged danger on the fundamental right which it seeks to remove is a present danger. It is true that when the jurisdiction of this Court is invoked under Art. 226 of the Constitution even in the matter of the protection of fundamental right it is a discretionary jurisdiction and it does not stand on the same footing as the jurisdiction which the Supreme Court exercises under Art. 32 of the Constitution. It is true that therefore the principles which govern the exercise of jurisdiction by the Supreme Court under Art. 32 for enforcement of fundamental rights are quite different from the principles which govern the exercise of the prerogative power conferred on this Court under Art. 226. But at the same time in considering an objection of delay it would but be proper for this Court to take into account that if the very same petition has been presented before Their Lordships of the Supreme Court Their Lordships would not have thrown off the petition on the aforesaid ground in view of the fact that the invocation of the jurisdiction of the Supreme Court for the protection of a fundamental right is itself a fundamental right and the Supreme Court has been constituted a guardian of that fundamental right. Another fact which is bound to weigh with us is that the present petition was not thrown off summarily on the ground of delay at the time of its presentation and that the same has been entertained a rule nisi has been issued the petition has been hanging fire in this Court for a period of nearly five years and that if we were now to dismiss the petition in limine on the ground of delay the grievance which petitioners have will not come to be redressed for several years more if they were called upon to resort to their ordinary remedy of filing a Civil suit. Therefore we do not deem it proper to dismiss the petition in limine on the first objection raised by Mr. Surti. As regards the second objection Mr. Surti is not right in stating that the resolution of the controversy depends entirely upon disputed questions of facts. As we shall presently point out the main submission of Mr. Nanavati is based upon an admitted factual position. It is true that if that main point of Mr. Nanavati comes to be rejected then there is a probability of this Court being required to enter into questions of facts. However in our judgment it will be better to undertake a consideration of this objection of Mr. Surti after we have considered the submission of Mr. Nanavati based on admitted facts and to undertake a discussion of the various facts of that question after we have reached our conclusion on the first and the main point raised by Mr. Nanavati. In undertaking a decision on the above objection of Mr. Surti we will have to consider the question of the burden of proof the question as to whether the facts do or do not disclose a prima facie infringement of fundamental right and in that is so whether it is or is not proper for this Court having regard to the fact that it is called upon to protect a fundamental right to undertake a decision even by entering into disputed questions of facts.