CHAURASIA BROTHERS Vs. STATE OF BIHAR

JUDGEMENT

(1.) This is an application by Messrs Chaurasia Brothers and another, filed under Articles 226 and 227 of the Constitution of India for directing the respondents not to collect supplementary taxes under Section 47 of the Bihar Panchayat Raj Act, 1947 (hereinafter referred to as the 'Act').

(2.) In order to appreciate the points involved in this application, it would be necessary to state briefly the facts. The petitioner No. 1 is a dealer in foodgrains and oil-seeds and several other commodities, carrying in its business in village Dhandiha, whereas petitioner No. 2 is a petty dealer dealing in oil-seeds and different varieties of pulses. Petitioner No. 2 purchases oil-seeds and pulses from cultivators by moving from place to place and thereafter supplies the same to petitioner No. 1 at its business premises at Dhandiha by bringing the said goods either on horse or on bullock-carts. Petitioner No. 1 mostly makes purchases of foodgrains, oil-seeds and other foodgrains from different dealers, like petitioner No. 2, who bring their goods on different types of vehicles and animals to its business premises for sale. On the 18th April, 1975, the Mukhiya of Dhandiha Gram Panchayat issued a notice, purporting to act under the powers conferred under Section 47 (c) of the Act, informing the villagers of the Panchayat area that the right to collect taxes on ferry (ferrywalia) shall be settled with the highest bidder. A true copy of the said notice is marked as annexure '1' to the petition. In accordance with the said notice, the said right of collecting tax from persons bringing their goods in the Dhandiha Gram Panchayat area was settled with Sri Jairam Singh (respondent No. 3), and since then the respondent No. 3, according to the petitioners, was illegally, forcibly and arbitrarily collecting taxes from the persons who come to sell their goods at the business premises of petitioner No. 1. The petitioners further submitted in their application that the imposition and collection of fee by respondent No. 3 depends on his sweet will and the tax so collected varies between 25 paise to Rs. 4/- for a bullock-cart containing goods for sale. As an illustration, petitioner No. 2 has annexed various receipts of payment of such taxes by him. Those receipts are annexed as annexures 2, 2/1, 2/2 and 2/3 on different dates. They also submitted that no guideline having been provided for, in Section 47 of the Act as to the rate of tax and fees, which could be levied under the said provision, it leads to vesting of an arbitrary power in the Gram Panchayat, and as such the said provisions are bad also for excessive delegation and, in that view of the matter, the said provisions are unenforceable. Due to compulsory imposition and realisation of taxes from petty dealers, most of the petty dealers, who used to bring their goods for sale to petitioner No. 1, have stopped coming to his business premises, thus adversely affecting the business of petitioner No. 1 and, therefore, the action of the respondents amounts to infringement of the petitioners' right.

(3.) A counter-affidavit has been filed on behalf of respondent No. 1, namely, the State of Bihar on the 14th January, 1976, wherein, inter alia, it is stated that the Bihar Panchayat Account Rules 1949 (hereinafter referred to as the 'Rules") has come into force from 2nd May, 1949, and Section 47 (1) (d) read with Rule 54 empowers the Gram Panchayat to levy and collect such taxes.