CHINTAMONI SAHU Vs. CUTTACK MUNICIPALITY

JUDGEMENT

(1.) The petitioner, a firm of businessmen, prays for the issue of a Writ of Prohibition against the opposite party, the Municipality of Cuttack, forbidding it from collecting certain license fetes levied under Section 290, Orissa Municipal Act 23 of 1950. The petitioner's firm carries on business on a wholesale basis in grains', chillies, tamarind and other commodities. By a Notification No. 224, dated 28-1-1953, the Chairman of the Cuttack Municipality called upon the wholesale dealers doing business within its limits to take out licenses for doing business in articles mentioned in the schedules attached to the Notification. The Notification prescribes different rates of fees for stocking or selling different varieties of commodities and a graded scale is prescribed for different quantities. The petitioner complains that the levy of the fees prescribed by the Municipality is out of all proportion to the services rendered by it, and is in fact a tax intended to augment the revenues of the Municipality. The petitioner refused to take out a license as required by the Notification and a criminal case has been started against him in the Court of the Magistrate, III Class, Cuttack, under Sections 343 and 337, Orissa Municipal Act. The fees required to be paid by the petitioner under the Notification in respect of the different commodities he trades in, amount in the aggregate to Rs. 144/-. The petitioner has, therefore, prayed that the proceedings pending in the Court of the Magistrate be quashed as the demand is unreasonably excessive and illegal.

(2.) It has to be stated at the outset that the learned Advocate appearing for the Municipality conceded that there is no separate establishment maintained by the Municipality for the grant of licenses or for attending to the supervision of licensed premises. There is no separate account maintained of the amounts collected by way of license fees and the amounts spent for the purpose. It was also conceded that in view of the recent pronouncement of the Supreme Court in --'Shirur Mutt's case, Commr. Hindu Religious Endowments, Madras v. Lakshmindra Thirthe Swamiar', AIR 1954 SC 282 (A), the levy of fees disproportionate to the services rendered by the Municipality may amount to a tax, and the correctness of that principle is no longer open to debate. It was contended, however, that the petitioner cannot carry on business without applying for a license in respect of each of the commodities in which he is dealing. In view of the importance of the question raised, we have been called upon to examine the provisions of the Orissa Municipal Act, empowering the Municipal Council to levy taxes and fees so that the Municipal Council may make suitable amendments to the Notification.

(3.) Chapter 13, Orissa Municipal Act is entitled "Municipal Taxation" and deals with imposition of taxes. Section 131 says that the Municipal Council may impose within the limits of the Municipality certain specified taxes or fees. Clause (1) of Sub-section (1) of Section 131 runs thus: