CENTRAL COAL FIELDS LIMITED Vs. TALCHER MUNICIPALITY

JUDGEMENT

(1.) The petitioner No. 2 Is a subsidiary company of Coal India Limited, a Government of India undertaking. It has got its coal field at Talcher which is locally called Deulabera Colliery comprising of Remun and Champapasi inclines, Talcher Municipality has levied holding tak on the area under its occupation, octroi tax on goods brought by the petitioner company for use and consumption in the colliery and licence fees for using machinery for industrial purpose and producing coal within the municipal limit. Such levy of tax and fee is challenged by the petitioner company on the following grounds : (i) The area in question belongs to the Central Government having been acquired Under Section 9 of the Coal Bearing Areas (Acquisition and Development) Act, 1957, in the year 1981 and there - fore the petitioner company is exempt from payment of any tax in respect of this property, in view of Art. 285(1) of the Constitution. (ii) The underground of the colliery where the mining operations are carried on does not come within the 'municipal limit' as this expression extends only to the surface area. (iii) The municipality is not rendering any service to the colliery so as to entitle them to levy any holding tax. There being no quid pro quo, demand of fee by municipality takes the colour of tax not authorised by Orissa Municipal Act.

(2.) THE municipality in their counter assert that the impost of tax and fee has the sanction of law. They deny that since the petitioner company undertakes underground operations, no tax or fee can be levied by the municipality and claim to be rendering several services to the Colliery in quest ion.

(3.) NOW coming to the second ground, it may first be observed that holding tax and octroi tax are payable under Clauses (a) and(kk)of Sub -section (1) of Section 1.51 of the Orissa Municipal Act, 1950 (for short, 'the Act'). Licence fees are charged Under Section 290 of the Act. Under Section 131, the municipal council has the power to impose within the limits of the municipality, a tax on holdings situate within the municipality and octroi tax on goods brought within the 'limits of the municipality' for consumption, use or sale therein. Under Section 290, user of any' 'place within the municipality for any of the purposes mentioned in the section requires a licence from the Executive Officer of the Now the question arises whether the underground mining areas can be said to come within the 'limits of a municipality' or a 'place within the municipality.' Under Section 4, the State Government constitutes a local area as municipality under the Act. The words 'local area' in the context must mean land either open to the sky or covered by water or building, etc. within a specific boundary. It was argued on behalf of the petitioners that 'land means only the surface of the earth and not the underground. : meaning of the word 'land' came up for interpretation in the apex Court in the case of Ananta Mills v. State of Gujarat : AIR 1975 S. C, 1234, in connection with levy of property tax in Ahamedabad under the Bombav Provincial Municipal Corporations Act, 1949, It was argued before their, lordships that the word 'land' denotes the surface of the land and not the underground strata. This argument was not acceded to and it was held that the word 'land' includes not only the face of the earth but everything under or over it and has in its legal signification an indefinite extent upward and downward giving rise to the maxim, Cujes est Solum ejus est usque ad Coclum. Their Lordships referred to Broom's Legal Maxims wherein it is observed ; xxx not only has land in its legal signification an indefinite extent upwards, but in law it extends also downwards, so that whatever is in a direct line between the surface and the centre of the earth by the common law belongs to the owner of the surface (not merely the surface, but all the land down to the entry of the earth and up to the heavens) and hence the word land which in nornen generalissirnum, includes, not only the face of the earth, but everything under it or over it. Of course their Lordships were interpreting the word 'land3 as occurring in Entry 49 of the State List. It may be mentioned here that the Orissa Municipal Act derives its authority from Entries 49 and 52 of the State List for imposing taxes on lands and buildings and on entry of goods into local area for consumption, use or sale therein. As observed earlier, local area includes land. In view of the above authoritative decision by the apex Court, there can be absolutely no force in the argument from the side of the petitioner that no holding tax or octroi tax can be levied on the petitioner company by the municipality, because of underground operations.