M PERUMAL UDAYAR Vs. GOVT OF T N

JUDGEMENT

(1.) The petitioners herein challenge the levy of the local cess and local cess surcharge on the ground that the said levy was illegal and without any authority.

(2.) The petitioners were granted licence to remove Aralai, Jelly and sholing stones from Stone Quarry in S.F. No. 28/2 Bit 1, Bit 3 and Bit 2 measuring an extent of 1.62.0, 0.50.5 and 1.01.0 hectares for Faslis 1402 to 1404 respectively. This was in pursuance to an auction held on 8-3-1993. The petitioners remitted the bid amount along with local cess and local cess surcharge. The local cess is in pursuance of the Tamil Nadu Panchayat Act and it is at the rate of 100% while the local cess surcharge is at the rate of 500%. The petitioners challege the demand and sought for an injunction and the injunction was granted by an order dated 13-7-1993. The claim of the petitioners is more or the less based on the reported ruling in India Cement Limited v. State of Tamil Nadu, AIR 1990 SC 85, where it is found that S.115(1) of the Madras Panchayat Act, 1958 was vitiated by the lack of legislative competence on the part of the state Government. The section as it stood then had required the payment of local cess at the rate of 0.45 paise on every rupee of the land revenue payable to the Government in respect of any land for every fasli. An explanation to the said section was added and deemed always to have been incorported by Tamil Nadu Act 18 of 1964 which provided inter alia that in S.115 and 116 'land revenue' includes Royalty provided that the land revenue remitted shall not be deemed to be land revenue payable for the purpose of this section. It was this levy which was successfully challenged on the ground that in fact this levy could have been only by the parliament and not by the State Government by the impugned provisions S. 115 and 116 of Madras Panchayat Act.

(3.) Learned counsel for the petitioners therefore urges that the levy in this case which was based on S.115 and 116 was bad. Now, in fact the petitioner has not mentioned S.115 and 116 of the 1958 Act, but has actually suggested that the levy is as per the Tamil Nadu panchayat. Amendment Act (Act 27 of 1992) which introduced the changes in the rate of the local cess and local cess surcharge.