IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision:
11. 3.2013 CWP No.7848 of 2012 Ludhiana District Cooperative Milk Producers Union ......Petitioner versus State of Punjab and another .....Respondents CORAM: - HON’BLE Mr.JUSTICE HEMANT GUPTA HON'BLE Ms.JUSTICE RITU BAHRI Present: - Mr.D.S.Patwalia, Advocate for the petitioner.
Ms.Radhika Suri, Addl.
A.G., Punjab for respondent No.1.
Mr.Ashok Bajaj, Advocate for respondent No.2......Challenge in the present petition is to the notification dated 20.4.1999 (Annexure P-2).whereby the State Government alleged to have imposed tariff on discharge of domestic and industrial effluent within municipal limits.
The State Government vide notification dated 2.9.1994 directed all the Municipal Corporations in the State of Punjab to charge tariff with immediate effect from Industrial/Commercial and Institutional Consumers who have their own independent source of water supply.
The said notification reads as under: In continuation to notification issued vide TN/DCFA-DLG- 93/26311 dated 11th August, 1993 and in exercise of the powers conferred by Section 90 of the Punjab Municipal Corporation Act, 1976 (Punjab Act 42 of 1986) and all other powers enabling him in this behalf, the Governot of Punjab is pleased to direct all the Municipal Corporations in the State of -2- Punjab to charging tariff with immediate effect from Industrial/Commercial and Institutional consumers who have their own independent sources of water supply as under: - Sr.Description Rate No.1 Commercial/Industrial Rs.1.20 Per Kl 2 Domestic Rs.0.60 Per Kl Charitable-Institutions and Government aided Rs.0.60 Per Kl 3 Hospitals and Educational Institutions It appears that none of the Municipal Corporations in the State acted in pursuance of the directions issued.
Therefore vide a notification dated 20.1.1995 (Annexure R/1).the State Government directed the Municipal Corporations to start charging tariff w.e.f.2.9.1994.
The said notification reads as under: - In continuation of Notification issued vide No.2/75/94-3LGIII/10118 dated 2nd September 1994 and in exercise of the powers conferred by sub-section 90(5) of the Punjab Municipal Corporation Act, 1976 (Act No.42 of 1976) and all other powers enabling me in this behalf, the Governot of Punjab is pleased to direct all Municipal Corporations in the State to start charging tariff with effect from 02.09.94 from Industrial, Commercial and Institutional consumers who have their own source of water supply and discharge their sewage in the sewerage system of Corporations.
Subsequently, another notification dated 20.4.1999 was issued by the State Government to impose tariff on industries which dispose off their effluent in the municipal limits.
The said notification reads as under: Government of Punjab has decided to impose tariff on industries which dispose off their effluent in the municipal limits as under: - i) Industries discharging domestic and cooling effluent only- Rs.400/- per year/per KL of daily flow.
-3- ii) Industries discharging easily bio-degradable effluent only- Rs.600/- per year/per KL of daily flow.
iii) Industries discharging effluent which is not easily bio-degradable- Rs.800/- per year/per KL of daily flow.
Above rates are applicable for the industries who have obtained the consent of Punjab Pollution Control Board for operating the effluent outlet.
In case the industries have not obtained the consent of Punjab Pollution Control Board then above rates may be doubled.
Learned counsel for the petitioner vehemently argued that the State Government has imposed tax without following the proper procedure prescribed under the Punjab Municipal Corporation Act, 1976 (for short the 'Act').therefore, the levy is illegal.
Reliance is placed upon a Division Bench judgment of this Court reported as M/s Niranjan Dass DooMr.Rice and General Mills versus State of Punjab , 1992(1)PLR 173.affirmed by the Hon'ble Supreme Court in a judgment reported as The State of Punjab and others versus Naranjan Dass DooMr.Rice and Gen.
Mills and otheRs.AIR 199.Supreme Court 537.
On the other hand, Ms.Suri, learned Addl.
A.G., Punjab relies upon a Division Bench judgment of this Court in CWP No.25 of 1995, Bharam Dutt and others versus The State of Punjab and otheRs.decided on 24.4.1996, whereby the legality of the directions dated 2.9.1994 and of the subsequent imposition of tax vide the notification dated 20.1.1995 were upheld.
It is argued that since the notification issued by the State Government on 20.1.1995 has the effect of imposition of tax in terms of Sub Sections 1 and 2 of Section 90 of the Act, therefore, the State Government is competent to revise the tariff in terms of Sub Section 3 of Section 90 of the Act.
At this stage, Section 90 of the Act may be extracted: - -4- 90.
Taxes to be imposed by Corporation under this Act and arrangement of certain taxes collected by Government- (1) The Corporation shall, for the purposes of this Act, levy the following taxes: - (a) taxes on lands and buildings; (b) octroi; (c) a tax on vehicles and animals; (d) a tax on advertisements other than advertisements published in newspapeRs.(e) a tax on buildings payable along with the application for sanction of the building plan; and (f) a development tax on the increase in urban land values caused by the execution of any development or improvement work.
(2) Subject to the prior approval of the Government, the Corporation may, for the purposes of this Act, in addition to the taxes specified in sub section (1).levy: - (a) a tax on professions, trades, callings and employments; and (b) any other tax which the State Legislature has power to imposes under the Constitution: - provided that no tax shall be imposed under this sub-section unless an opportunity has been given in the prescribed manner to the residents of the City to file objections and the objections, if any, thus, received have been considered.
(3) The taxes specified in sub-section (1) and sub-section (2) shall be levied at such rates as may, from time to time, be specified by the Government by notification and shall be assessed and collected in accordance with the provisions of this Act and the bye-laws made thereunder.
(4) The Government may, by special or general order, direct a Corporation to impose any tax falling under sub-section (1) or sub-Section (2).not already imposed, within such period as may be specified and the Corporation shall thereupon act accordingly.
(5) If the Corporation fails to carry out any order passed under sub- section (4).the Government may be a suitable order notified in the Official Gazette impose the tax and the order so passed shall operate as if the tax had been duly imposed by the Corporation under sub-section (1) or sub- section (2).as the case may be.
(6) After the close of each year the Government may pay to the Corporation the whole or such part as it may determine of the Tax collected by it- -5- (a) under the Indian Stamp Act, 1899 on account of stamp duty on transfer of property situated within the local area of the City; (b) under the Punjab Motor Vehicles Taxation Act, 1924, from every person keeping a motor vehicle within the local area of the City; (c) under the Punjab Electricity (Duty) Act, 1958, on the energy supplied within the local area of the City; (d) under the Punjab Entertainment Duty Act, 1955 from every person admitted to an entertainment within the local area of the City; (e) under the Punjab Entertainments Tax (Cinematograph Shows) Act, 1954, from the proprietor of the premises where a public cinematograph exhibition is held within the local area of the city.
We have heard learned counsel for the parties and find no merit in the present petition.
The judgment in M/s Niranjan Dass's case (supra).was dealing with a situation where the State Government has imposed tax without issuing any direction to the Municipal Committee constituted under the Punjab Municipal Act, 1911 to impose tax.
It was in these circumstances, this Court has struck down the levy as the State Government could not proceed to levy tax without issuing a direction to the Municipal Committee to impose tax.
The relevant extract from the judgment reads as under: - “6.
Having given our thoughtful consideration to the respective arguments of the learned counsel advanced at the bar, we are of the view that the arguments of the learned counsel for the petitioners must prevail.
A combined reading of Section 62-A(1) and 62-A (3) of the Act leaves no manner of doubt that Section 62-A(1) of the Act empowers the State Government to issue notification requiring a Municipal Committee to impose a tax.
Section 62-A(1) of the Act does not authorise the State Government to impose any tax at all.
Such power is vested in the State Government under Section 62-A(3) of the Act and that too only if the Committee fails to carry out the order of the State Government.
The only -6- interpretation, in our view, which can be placed upon the whole of Section 62-A of Act is that the State Government under Sub Section (1) of Section 62-A of the Act can by a special or general order notify in the Official Gazette requiring a Municipal Committee to impose a tax so mentioned in Section 61 of the Act, which tax, of course, has already not been imposed at a rate and within a particular period to be specified in the notification.”
In Bharam Dutt's case (supra).though the date of notification is not mentioned but the reading of the order shows that it was the notification dated 20.1.1995.
The relevant extract from the judgment is as under: - “....The arguments appears to be attractive on the fact of it but is without any substance is examined in the light of sub section 5 of Section 90 of the Act.
A perusal of Annexure P/1 would show that the respondent- Corporation was directed to start charging the tariff with immediate effect according to the rates specified therein.
As the Corporation failed to take any action in pursuance of the directions issued by the respondent-State, the notification under Sub Section 5 of Section 90 (Annexure R/3/3) was issued with the direction to charge the tax at the rates already specified with effect from the date of Annexure P/1.
The learned counsel for the petitioner has vehemently argued that as no direction was issued to the Corporation for imposing the tax, the earlier notification Annexure P/1 be deemed to be the imposition of tax without affording the Corporation an opportunity in terms of proviso to sub Section 2 of Section 90 of the Act.
The argument of the learned counsel cannot be accepted and is the reflection of the motive of the petitioners to play with the words in order to avoid their liability to pay the tariff intended to be imposed for the welfare of the society and for providing civic amenities to the respondents of the Ludhiana Municipal Corporation.
It is the substance and not the words which are material and are required to be taken into account while interpreting the notification or the direction issued for the purposes of levying the tax.
The dominant intention of the respondent-Corporation is demonstrated vide issuance of Annexure P/1 and R/3/3.
The tax was intended to be imposed vide Annexure P/1 and upon failure of the Corporation to take effective steps, the respondent-State had imposed the tax in terms of sub Section 5 of Section 90 of the Act vide Annexure R/3/4.
We are satisfied that as the tax was imposed under Sub Section 5 of -7- Section 90 of the Act, the Corporation was not obliged to follow the procedure prescribed under proviso to sub Section 2 of Section 90 of the Act.”
In view of the judgment of this Court in Bharam Dutt's case (supra).in respect of the same notifications, we do not find any merit in the present petition.
We find that the State Government has initially directed the Municipal Corporations in the States to impose tax with immediate effect in terms of section 90(4) of the Act.
The argument of Mr.Patwalia, learned counsel for the petitioner that the expression “with immediate effect”.
mandates the Corporations to charge tariff at the rates mentioned therein immediately and therefore, substantively, the State Government has imposed tax vide the notification dated 2.9.1994.
We do not find that any such inference is deductible from the reading of the notification when the State Government is directing the Municipal Corporations to charge tariff with immediate effect.
It only means that the direction is to the Municipal Corporations to take immediate decision to impose tax and not to sleep over the matter.
Since the Corporations have failed to impose tax within a reasonable period of the issuance of the directions, the State Government has issued notification on 20.1.1995 to impose tax.
Therefore, the expression “with immediate effect”.
in the notification dated 2.9.1994 only means the urgency with which the tax is to be imposed rather than imposition of tax itself.
In terms of Sub Section 5 of Section 90 of the Act, the imposition of tax by the State Government is the imposition of tax in terms of Sub Sections 1 and 2 of Section 90 of the Act.
Such tax imposition can be revised by the State Government in terms of Section 90(3) of the Act.
-8- Therefore, the notification dated 20.4.1999 cannot be said to be suffering from any patent illegality or irregularity which may warrant interference in the writ jurisdiction of this Court.
Dismissed.
(HEMANT GUPTA) JUDGE (RITU BAHRI) 11.3.2013 JUDGE preeti