TaxTMI 
TaxTMI 
1981 (2) TMI 200
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....yment of bonus by filing Civil Writ Petition No. 1139/79 in the Delhi High Court. The High Court allowed the Writ Petition and the Union of India and the Delhi Development Authority have preferred this appeal, after obtaining special leave of this Court under Art. 136 of the Constitution. The expression 'Local Authority' is not defined in the payment of Bonus Act. One must, therefore, turn to the General Clauses Act to ascertain the meaning of the expression. S.3(31) defines Local Authority as follows: "Local Authority shall mean a Municipal Committee, District Board, Body of Port Commissioners or other authority legally entitled to, or entrusted by the Government with the control or management of a municipal or local fund". 'Local Fund' is again not defined in the General Clauses Act. Though the expression appears to have received treatment in the Fundamental Rules and the Treasury Code, we refrain from borrowing the meaning attributed to the expression in those rules as it is not a sound rule of interpretation to seek the meaning of words used in an Act, in the definition clause of other statutes. The definition of an expression in one Act must not be imported ....
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....ay say that they may be entrusted with the performance of civic duties and functions which would otherwise be Governmental duties and functions. Finally, they must have the power to raise funds for the furtherance of their activities and the fulfillment of their projects by levying taxes, rates, charges, or fees. This may be in addition to moneys provided by Government or obtained by borrowing or otherwise. What is essential is that control or management of the fund must vest in the authority. In Municipal Corporation of Delhi v. Birla Cotton, Spinning & Weaving Mills Delhi & Anr., Hidayatullah, J., described some of the attributes of local bodies in this manner: "Local bodies are subordinate branches of governmental activity. They are democratic institutions managed by the representatives of the people. They function for public purposes and take away a part of the government affairs in local areas. They are political sub divisions and agencies which exercise a part of State functions. As they ale intended to carry on local self-government the power of taxation is a necessary adjunct to their other powers. They function under the supervision of the Government". In Valjibha....
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....al thereto". Sec.7 requires the Authority to carry out a civic survey of, and prepare a master plan for, Delhi. The master plan is to define various zones into which Delhi may be divided for the purposes of development and indicate the manner in which the land in each zone is proposed to be used (whether by the carrying out thereon of development or otherwise) and the stages by which any such development shall be carried out. The master plan may also provide for any other matter which is necessary for the proper development of Delhi. Sec.8 provides for the preparation of zonal development plans and Sec.8(2) prescribes what a zonal development plan may contain or specify. Sec.9 provides for the submission of all plans to the Central Government by the Authority for approval. Sec. 12 empowers the Central Government to declare any area in Delhi to be a 'development area' for the purposes of the Act. It further provides that after the commencement of the Act no development of land shall be undertaken or carried out, without the permission of the Authority, if the area is a development area, and without the approval or sanction of the local authority concerned if the area is a....
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....eral of India. Sec. 26 requires the Authority to prepare a report of its activities and submit the same to the Central Government. Sec. 27 provides for the constitution of pension and Provident Funds. Sec. 28 empowers the authority to authorise any person to enter into or upon any land or building with or without assistance of workmen for the purposes specified in the Section. Sec. 29 provides for penalties for persons undertaking or carrying out development in contravention of the master plan or zonal development plan or without permission, approval or sanction required by Sec. 12. Sec. 30 provides for the making of an order of demolition of a building where development has been commenced or completed in contravention of the master plan, zonal plans or the permission, approval or sanction referred to in Sec. 12. Sec. 31 enables the Authority to make an order requiring development to be discontinued where development has been commenced in contravention of the master plan or zonal development plan or without obtaining permission, approval or sanction as required by Sec. 12. Sec. 33 provides that all fines realised in connection with prosecutions under the Act shall be paid to the Au....
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.... to be laid before each House of Parliament by Sec. 58. Sec. 59 empowers the Central Government to dissolve the authority if it is satisfied that the purposes for which the authority was established have been substantially achieved so as to render unnecessary its continued existence. We see that the Delhi Development Authority is constituted for the specific purpose of 'the development of Delhi according to plan'. Planned development of towns is a Governmental function which is traditionally entrusted by the various Municipal Acts in different States to municipal bodies. With growing specialisation, along with the growth of titanic metropolitan complexes, legislatures have felt the need for the creation of separate town-planning or development authorities for individual cities. The Delhi Development Authority is one such. It is thus an authority, to which is entrusted by Statute a Governmental function ordinarily entrusted to municipal bodies. An important feature of the entrustment of Governmental function is the power given to the Authority to make regulations (which are required to be laid before Parliament). The power to make regulation is analogous to the power usually....
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.... that one of the attributes of a local authority is the power to raise funds by the method of taxation, taxation is to be understood not in any fine and narrow sense as to include only those compulsory exactions of money imposed for public purpose and requiring no consideration to sustain it, but in a broad generic sense as to also include fees levied essentially for services rendered. It is now well recognised that there is no generic difference between a tax and a fee; both are compulsory exactions of money by public authority. In deciding the question whether an authority is a local authority, our concern is only to find out whether the public authority is authorised by Statute to make a compulsory exaction of money and not with the further question whether the money so exacted is to be utilised for specific or general purposes. In the second place the Delhi Development Authority is constituted for the sole purpose of the planned development of Delhi and no other purpose and there is a merger, as it were, of specific and general purposes. The statutory situation is such that the distinction between tax and fee has withered away. In the third place we see no reason to hold that t....
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....ent Authority is endowed with all the usual attributes and characteristics of a 'local authority' and there is no reason to hold that it is not a 'local authority'. Another submission of the learned counsel which was pressed upon us was that every statute dealing with municipalities and providing for their supersession and/or dissolution invariably provided for reconstitution of the municipality after a stipulated period whereas dissolution in the case of the Delhi Development Authority meant a complete extinction of the authority since the Act did not provide for its reconstitution. Our attention was drawn to the municipalities Acts of various States. We are unable to see the force of the submission. The very nature of the work entrusted by the legislature to the development authority is such that its life can be but transient. When the work is accomplished and there is no need for its continued existence it is dissolved and its life becomes extinct. It is by what it is during its life and not by the consideration whether there is life after death and whether it can have many lives, that we determine whether the Delhi Development Authority is a local authority a....