TaxTMI 
TaxTMI 
2007 (5) TMI 687
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....espondent/Opposite Party in A.P.O. No. 228 of 2005, A.P.O.T. No. 138 of 2005, G.A. No. 687 of 2005 and W.P. No. 1261 of 2003, Mr. Saktinath Mukherjee, Mr. Subrata Kumar Basu, Mr. Sanjib Kumar Mal, Mr. Bimalendu Das, Mr. M. Khatua for Respondent/Opposite Party in A.P.O. No. 144 of 2005, A.P.O.T. No. 194 of 2005, W.P. No. 1261 of 2003, Mr. Saktinath Mukherjee, Mr. Subrata Kumar Basu, Mr. Sanjib Kumar Mal, Mr. Bimalendu Das, Mr. Amiya Narayan Mukherjee, Mr. Sourav Bandyopadhyay, Mr. Dip Narayan Mukherjee for Respondent/Opposite Party in A.P.O. No. 34 of 2004, A.P.O.T. No. 23 of 2004, W.P. No. 741 of 2003, A.P.O. No. 36 of 2004, A.P.O.T. No. 25 of 2004, W.P. No. 108 of 2003, A.P.O. No. 37 of 2004, A.P.O.T. No. 26 of 2004, W.P. No. 81 of 2003, A.P.O. No. 38 of 2004, A.P.O.T. No. 27 of 2004, W.P. No. 2067 of 2002, A.P.O. No. 39 of 2004, A.P.O.T. No. 28 of 2004, W.P. No. 961 of 2003, A.P.O. No. 40 of 2004, A.P.O.T. No. 29 of 2004, W.P. No. 2139 of 2002, A.P.O. No. 41 of 2004, A.P.O.T. No. 30 of 2004, W.P. No. 740 of 2003, Mrs. Vijaya Bhalia for Respondent/Opposite Party in A.P.O. No. 35 of 2004, A.P.O.T. No. 24 of 2004 and W.P. No. 1003 of 2003 JUDGMENT Bhaskar Bhattacharya, J. 1....
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....ion with the sanction of the Building Plan. According to the writ-petitioners, there is no provision in the Kolkata Municipal Corporation Act, 1980 and the Rules and Regulations framed thereunder, enabling the Kolkata Municipal Corporation Authority to demand any amount by way of Drainage Development Fees for sanction of the Building Plan. The writ-petitioners, therefore, prayed for declaration that the circular No. 08 of 2002-2003 issued by the Commissioner of the Kolkata Municipal Corporation was ultra vires the Constitution of India and the Kolkata Municipal Corporation Act and the Building Rules framed thereunder and consequently, prayed for quashing of the said circular and the resulting demand of money on the basis of such circular. 6. Those writ-applications were contested by the Kolkata Municipal Corporation by filing affidavits-in-opposition and the defence taken by the Corporation was that the year's budget estimate of the Corporation regarding rates, taxes, fees and charges to be levied by the Corporation contained a specific provision for realization of the fees for Drainage Development and specific rates were mentioned therein and the Mayor with the concurrence ....
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.... 289. Right of owner or occupier of premises to drain into municipal drain. - (1) .... (2) Any person desirous of availing himself of the provisions of sub-section (1) shall give to the Municipal Commissioner notice of his proposals, and at any time within one month after receipt thereof the Municipal Commissioner may grant permission or by notice to him refuse to permit the communication to be made, if it appears to him that the mode of construction or condition of the house-drain in such that the making of the communication would be prejudicial to the drainage system, and for the purpose of examining the mode of construction and condition of the house-drain he may, if necessary, require it to be laid open for inspection. (3) .... 290. Connections with municipal drains not to be made except in conformity with section 289. - No person shall without complying with the provisions of section 288 or section 289 and the regulations made thereunder make or cause to be made any connection of a house-drain belonging to himself or to some other person with any municipal drain and the Municipal Commissioner may close, demolish, alter or remake any such con....
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.... the sanction of the Mayor-in-Council, and such fee shall be payable by the person to whom the licence or the written permission is granted. 6(h)(ii) supply pipes, or any underground water reservoir, for conveying to the premise the supply of wholesome or unfiltered water from the service mains of the Corporation, and pipes, septic tanks, house drains or other means of communication with any Municipal drain, or the traps or apparatus connected therewith, with reference to section 313. 7(d) a plan showing the position of pipes, underground and overhead reservoirs of water supply and house drains, septic tanks, if any, or means of communication with any municipal drain or the traps or apparatus connected therewith in conformity with section 313. 24. Notice for covering up drains, etc. - (1) Before proceeding to cover up drains or appliances connected with the drainage, the applicant shall give a notice to the Municipal Commissioner in the form as specified in Schedule XI stating that such drains or appliances are ready for inspection and shall specify the date and hour not being a date earlier than seven days from the date of the notice on which he....
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....ed authority can impose tax or fee. In our view, such power of imposition of tax and/or fee by delegated authority must be very specific and there is no scope of implied authority for imposition of such tax or fee. It appears to us that the delegated authority must act strictly within the parameters of the authority delegated to it under the Act and it will not be proper to bring the theory of implied intent or the concept of incidental and ancillary power in the matter of exercise official power. 14. Bearing in mind the aforesaid principles and after going through the various provisions of the Act, the Rules and the Regulations framed thereunder, referred to by Mr. Mitra, the learned senior advocate appearing on behalf of the appellant, we do not find that either in the Act or the Rules or the Regulations framed thereunder, any right or authority has been given to the Corporation to realise Drainage Development Fees from the owners of the land or the building at the time of the sanction of the Building Plan as condition precedent for grant of permission to raise building. 15. Mr. Mitra in this connection placed strong reliance upon the provision contained in sections 307 and....
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.... landowner or the person liable to pay property-tax on the basis of budget estimate reflecting the receipt and expenditure on that account but those provisions do not authorise the Corporation to levy Drainage Development Fees for the purpose of realising "a one-time money" as condition precedent for sanction of the Building Plan of a proposed building for drainage development of the surrounding area by imposing such fees only on those persons who will apply for permission to erect building leaving other landowner or the owner of the building or the persons liable to pay property-tax. 19. We are, therefore, not at all impressed by the aforesaid contention advanced by Mr Mitra. 20. The next question is whether imposition of such fees is authorised by section 543(2) of the Act. 21. According to the said sub-section, except as otherwise provided in the Act or the Rules or the Regulations made thereunder, for every licence or written permission required to be signed by the Municipal Commissioner or any officer authorised to grant any permission, a fee may be charged at such rate as may from time to time be fixed by the Municipal Commissioner with the sanction of the Mayor-in-C....
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....ation. 27. After going through the Judgment impugned we find that the learned single Judge principally arrived at the conclusion that either the Act or the Rules or the Regulations did not authorise the Corporation to levy the Drainage Development Fees as there is no reference of such fees in those Act, Rules or the Regulations. Thereafter, His Lordship distinguished the term "fees" from "tax" by referring to the element of quid pro quo in the former and came to further conclusion that the proposed Drainage Development Fees were within the purview of the property-tax as defined in section 2(68A) of the Act and thus, the attempt on the part of the Corporation to realise further amount of revenue by way of the disputed fees really amounted to double taxation. 28. The strict concept of difference between the terms "fees" and "taxes" has undergone change in course of last forty years as it appears from the various decisions of the Apex Court cited by Mr. Mitra. The following observations of the Supreme Court in the case of The Calcutta Municipal Corporation v. M/s. Sherry Mercantile Pvt. Ltd. (supra) will be sufficient for our purpose: As noticed in the City Corporation ....
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....d on the aforesaid basis. The fee so calculated was Rs. 400/- per annum. 32. By a resolution passed on March 14, 1958 the Corporation changed the basis of assessment of the licence-fee with effect from April 1, 1958. Under the new method, the fee was to be assessed at the rates prescribed per show according to the sanctioned seating capacity of the cinema-houses. The respondent's cinema-house had 551 seats and under the changed method, it became liable to a fee of Rs. 5/- per show. In the result, it became liable to pay a fee of Rs. 6,000/- per year. 33. The respondent then moved the High Court at Calcutta under Article 226 of the Constitution for a writ quashing the resolution. The application was first heard by Sinha, J., who allowed it. This order was confirmed by an Appellate Bench of the same Court consisting of Bose, CJ. and G.K. Mitter, J. on appeal by the Corporation. Hence, the said appeal before the Apex Court. 34. Before the Supreme Court one of the points taken was that, the levy authorised by sections 443 and 548 was a fee in return for services to be rendered and not a tax and it had therefore to be commensurate with the costs incurred by the Corporation ....
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....for example, as Mitter J, pointed out, the levies authorised by sections 218, 222 and 229 are really taxes though called fees, for no services are required to be rendered in respect of them. The Act, therefore, did not intend to use the word fee as referring only to a levy in return for services. This contention is not really open to the respondent for section 548 does not use the word 'fee'; it uses the words 'licence fee' and those words do not necessarily mean a fee in return for services. In fact in our Constitution fee for licence and fee for services rendered are contemplated as different kinds of levy. The former is not intended to be a fee for services rendered. This is apparent from a consideration of Article 110(2) and Article 199(2) where both the expressions are used indicating thereby that they are not the same. In Shannon v. Lower Mainland Dairy Products Board, 1938 AC 708 : (AIR 1939 PC 36) it was observed at pp. 721-722 (of AC) : (at pp. 38-39 of AIR): if licenses are granted, it appears to be no objection that fees should be charged in order either to defray the costs of administering the local regulation or to increase the general....
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....aforesaid decision, Mr. Mitra tried to impress upon us that as section 548 of the 1951 Act corresponds to section 543 of the present Act, it necessarily follows that the imposition of fees and the rate fixed by the Corporation in these cases is sanctioned by section 543(2) of the Act and thus, cannot be challenged as ultra vires. In our view, while making such submission, Mr. Mitra totally overlooked the fact that in the case of Liberty Cinema, section 443 of the Act authorised imposition of licence-fee on the owner of the cinema hall whereas in the cases before us, there are no provisions in the Act or the Rules or the Regulations giving power of imposing Drainage Development Fees at the time of sanctioning of the building permission and as such, section 543 of the Act cannot come into play for saving the Corporation. 37. Therefore, we do not find any substance in the additional point taken by Mr. Mitra in the present appeal. 38. We, consequently, find no substance in the contentions raised by Mr. Mitra and hold that the learned single Judge rightly concluded that the imposition of Drainage Development Fees was unauthorised. 39. Now we take up the assigned writ-applicatio....
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....h, the learned single Judge rightly passed a direction for return of the money. Mr. Mukherjee further contends that in a writ-application filed by a citizen praying for declaration of a demand of money by a Statutory Corporation as illegal with consequential relief for injunction or refund of money illegally realised, once the act of such a "State" within the meaning of Article 12 of the Constitution is declared illegal and ultra vires the Statute which controls the activity of such "State", the refund of money, is a matter of course. In support of such contention, Mr. Mukherjee relies upon the following decisions: 1) The Sales Tax Officer, Banaras & Ors. v. Kanhaiya Lal Makund Lal Saraf, reported in AIR 1959 SC 135. 2) The State of Kerala v. Aluminium Industries Ltd., reported in 1965(16) ST 689. 3) State of Madhya Pradesh v. Bhailal Bhai & Ors., reported in AIR 1964 SC 1006. 4) M/s. K.S. Venkatararnan & Co. (P) Ltd. v. State of Madras, reported in AIR 1966 SC 1089. 5) Mahabir Kishore & Ors. v. State of Madhya Pradesh, reported in AIR 1990 SC 313. 6) Commissioner of Sales Tax, U.P. v. M/s. Auriaya Chamber of Commerce, Allahabad....
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....rned single Judge did not commit any illegality in passing direction for refund of the money illegitimately taken by the Corporation. 45. So far the case of Asian Leather Private Limited is concerned, it appears that the amount was paid on 22nd November, 1999 and the writ-application was filed on 25th June, 2003 and the learned single Judge by order dated November 19, 2003, during the pendency of the writ-application, declared the action of the Corporation as ultra vires. Therefore, in this case before us, there is no scope of any argument that the claim of the Asian Leather Private Limited was barred by the law of limitation. At this stage, it will not be out of place to mention the decision of the Supreme Court in the case of Sales Tax Officer, Banaras & Ors. v. Kanhaiya Lal Makund Lal Saraf (supra), where the Supreme Court in clear language stated that merely because the State has not returned the money paid as sales-tax by the assessee but has spent them away in the ordinary course of the business of the State will not make any difference to the position under the plain terms of section 72 of the Contract Act and that the assessee would be entitled to recover back the monies....
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....wards mill-levy were eligible for export under the Scheme. By an order dated July 22, 1968, pursuant to the representation of the millers for export of rice outside the black but within the State, the Government of Andhra Pradesh passed orders that permits for export of rice would be issued subject to the fulfillment of their commitments and that 'an administrative charge of Rs. 2.50/- per quintal of rice would be collected from the millers before the issue of permits. The appellants applied for and obtained permits by fulfilling the two principal considerations. Subsequently, they applied to the Government to refund the amount paid as administrative surcharge as they had paid it under mistake of law and that the latter had no right to collect it. In the petitions, they contended that the respondent Government had no legal right to collect any administrative surcharge and therefore, the amount should be refunded. The appellant alleged that they made the payments under mistake of law. The High Court held that the levy of administrative surcharge was not backed by valid legislative sanction but observed that the appellants were not entitled to any relief on three grounds. First, ....
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....of Article 265 of the Constitution of India. Therefore, these cases cannot be compared with a case where money was paid through mistake in terms of a mutual contract and that there were so many defects in the writ-application. We, therefore, find that the said decision cannot help the Corporation in this case. 49. In the case of Suganmal v. State of Madhya Pradesh & Ors. (supra), the Supreme Court held that a writ-application was not maintainable solely for the refund of tax, alleged to have been illegally collected by the State for the simple reason that a claim for such a refund can always be made in a suit against the authority which had illegally collected the money as a tax and in such a suit, it is open to the State to raise all possible defences to the claim, which, cannot in most of the cases, be appropriately raised and considered in the exercise of writ jurisdiction. In the cases before us, however, the writ-petitioners prayed for declaration that the circular issued by the Corporation was ultra vires the Statute and as a consequential measure, have prayed for refund of the money. Therefore, the principles laid down in the said case cannot have any application to the c....