GANAPATHY TOWN PANCHAYAT Vs. TAXTOOL COMPANY LIMITED

JUDGEMENT

(1.) BOTH the writ appeal and the regular appeal are common based. A common question arises in both the appeals, to wit, whether the ganapathy Town Panchayat have the requisite power under the provisions of the tamil Nadu Panchayats Act, 1958 hereinafter referred to as the Act, to levy an annual fee over the machinery installed in a premises, in addition to the licence fee which they are entitled to collect in relation to the electrical or other energy used in such premises for working or energising the machinery so installed in it. The parties will now be referred to by us with reference to the original suit O. S. No. 152 of 1969 on the file of the Court of the subordinate Judge of Coimbatore out of which AS No. 323 of 1971 arises.

(2.) THE plaintiffs filed a Writ Petition, W. P. No. 3353/68 on the file of this Court stating that the defendant had not the requisite authority to claim a fee for the use of machinery by them in the industrial premises which is a textile factory situate in Ganapaty village within the jurisdiction of Ganapathy Town Panchayat in the District of coimbatore. It is common ground that the plaintiff had as may as 710 machines and the total horse power of the said machines is 3851 H. P. and the machines are run by electrical power. During the years 1966-67 and 1967-68, the defendant claimed from the plaintiffs annual licence fees for the use of such machinery exclusive of the fee which the panchayat defendant could levy under s. 111 of the Act, According to the plaintiffs, the maximum levy which the defendant could impose under S. 111 of the Act is Rs. 450/- as per the prescriptins made for the purpose besides additional fee, which is in addition to such a minimum fee, and which is attracted in cases of belated applications for licence, no other fee could be charged. But in violation of such existing prescriptions the defendant purported to act under ss. 111 and 112 of the Act and demanded and collected from the plaintiffs various sums of money from 1963. THE plaintiffs, therefore, were obliged to filed the above writ petition seeking for a writ of Certiorari to quash the notice No. 191 of 1968 dt. 19th august, 1968 calling for such a licence fee on the basis of the numerical strength of the machinery installed at the plaintiff's factory as above. THE contention of the plaintiffs in the above Writ petition was that the Panchayat had not the requisite statutory authority to depart from the prescriptions laid down in S. 159 (2) of the Act and therefor the call for such payments and the levy made in the earlier years, more particularly during the financial years 1966-67 and 1967-68 is illegal. After tracing the history of the levy which could be made and the necessary statutory provisions which could be invoked in these circumstances for making such a levy, it is contended that the impost was illegal. In the suit, repeating the same contention the plaintiffs claimed a refund of a sum of Rs. 10, 550/- in respect of the year 1966-67 and a sum of rs. 13, 200/- in respect of the year 1967-68 which according to them were attributable to the excess licence fee collected by the Panchayat without authority. After having issued the prescribed notice under S. 170 of the Act, they laid the action.

(3.) ALAGIRISWAMI, learned counsel for the Panchayat, reiterates the arguments made before the learned Judge in the writ petition as well as before the learned Subordinate Judge in the civil suit. According to him, the use of machinery in factory projects a different concept and such use being subject to a levy under the notifications issued by the Panchayat from time to time, which notifications in turn are based upon the rules issued by the State government under S. 159 of the Act, such notifications are to be held to be legal and therefore the consequential levy and collection are also to be held to be proper. Dalip Singh, learned counsel for the plaintiffs, however, would say that a fair reading of ss. 111 and 112 of the Act in conjunction with S. 159 thereof and the relevant rules and notifications issued by the appropriate authority in that behalf would not warrant a levy and much less authorise the collection of an annual licence fee as made by the defendant Panchayat. As the relative contentions of the counsel have an impact on the interpretation of the sections of the statute and the rules and notifications made thereunder, it would be convenient at this stage to them.