S. RAJAGOPALAN v. CORPORATION OF TRIVANDRUM — 1970 DIGILAW 214 (KER)

Judgment :- 1. The petitioners are timber merchants carrying on business within the Corporation of Trivandrum. S.126 of the Kerala Municipal Corporations Act, 1961 (hereinafter referred to as the Act) empowers the Corporation Council to levy a tax on timber brought into the city. That Section reads: "126. Tax on Timber (1) If the Council by a resolution determines that a tax shall be levied on timber brought into the city, such tax shall be levied at such rates, not exceeding five rupees per ton, and in such manner as may be determined by the Council: Provided that no tax shall be levied on any timber brought into the city in the course of transit to any place outside the city and directly removed out of the city by rail, load or water. (2) No timber shall, except in the case referred to in the proviso to sub-section (1), be brought into the city unless the tax due thereon has been paid. (3) The tax shall be levied on timber kept within the city for sale if the Commissioner has reason to believe that the tax if any, due thereon has not been paid: Provided that the tax shall not be levied if the person keeping the timber for sale produces satisfactory proof of the previous payment of the tax thereon. (4) The Commissioner may call for the accounts of any person keeping timber for sale for the purpose of levying the tax under sub-section (3). (5) If the Commissioner is satisfied that any person has wilfully evaded the payment of any tax leviable under this section, the Commissioner may direct that such person shall, in addition to such tax, pay by way of penalty a sum Dot exceeding the amount of such tax. Such penalty shall be recoverable in the same manner as the tax. (6) The Council may make bye-laws for the seizure and sale of timber in respect of which the tax due is not paid and otherwise for carrying out all or any of the provisions relating to the levy of tax on timber." 2. The Corporation of Trivandrum, the first respondent herein, issued a public notification, Ext. (6) The Council may make bye-laws for the seizure and sale of timber in respect of which the tax due is not paid and otherwise for carrying out all or any of the provisions relating to the levy of tax on timber." 2. The Corporation of Trivandrum, the first respondent herein, issued a public notification, Ext. P-1 dated 2 51967 under S.100(1) of the Act, stating that its Council at its meeting held on 29-3-1967 had resolved to impose and levy a tax on timber under S.126 at the rates mentioned therein, and inviting objections and suggestions, if any, to b2 made within one month for the consideration of the Council. This was followed by another notification, Ext. P-2 dated 12 31968, by the Commissioner of the Corporation under S.100 (2) of the Act stating that the Council had resolved at its meeting held on 13 21968 to impose and levy a tax on timber brought into the city under S.126 with effect from 141968 at the rates specified in the said notification. Ext. P-3 dated 27 31969 is a bill issued by the Commissioner to one of the petitioners under S.126 (1) of the Act demanding payment of a sum of Rs. 1300/- as timber tax. The petitioners contend that S.126 of the Act in unconstitutional, that the notification, Ext. P-2, is violative of Art.14 of the Constitution, as it fixes a uniform rate of tax in respect of all timber, except bamboo, and that the proceedings for levy and collection of tax are unauthorised, as no legal machinery has been created under the Act for the said purpose. This writ petition has, therefore, been filed to quash Ext. P-2 and the demand bills issued to the petitioners, and to direct the respondents, the second respondent being the State of Kerala to forbear from imposing, levying and collecting the tax under S.126 of the Act. 3. The Supreme Court has upheld the constitutional validity of S.126 of the Act in Jothi Timber Mart v. Calicut Municipality (AIR. 1970 SC. 264). In the light of the above decision, counsel for the petitioners did not press the first point. 4. In support of his contention that Ext. P.2 is violative of Art.14 of the Constitution, the petitioners' counsel referred to" the decisions of the Supreme Court in Moopil Nair v. State of Kerala (AIR. 1961 SC. 1970 SC. 264). In the light of the above decision, counsel for the petitioners did not press the first point. 4. In support of his contention that Ext. P.2 is violative of Art.14 of the Constitution, the petitioners' counsel referred to" the decisions of the Supreme Court in Moopil Nair v. State of Kerala (AIR. 1961 SC. 552) and State of Kerala v. Haji Kutty Naha (AIR 1969 SC. 378). In the first case, the Supreme Court held that S.4 of the Travancore-Cochin Land Tax Act, 1958, which imposed a uniform rate of tax on all lands in the State violated Art.14 of the Constitution, on the ground that the imposition of a uniform rate of tax on lands falling into different classes creates inequality. In the second case, the Supreme Court held that the Kerala Buildings Tax Act, 1961 which imposed a tax on buildings based on the floor area without making a rational classification offended the principle of equality guaranteed under Art.14 of the Constitution. The Court said that where objects, persons or transactions essentially dissimilar are treated by the imposition of a uniform tax, discrimination may result, as refusal to make a rational classification may itself in some cases operate as denial of equality. Ext. P-2 imposes a uniform rate of tax of Rs. 5/- per metric ton on all timber, except bamboo for which the rate of tax is fixed at Re. 1/- per metric ton. It is doubtful whether bamboo is a timber. Whatever that may be, it is well-known that there are numerous varieties of timber whose price per metric ton would differ to very large extent, depending upon their qualities. There is considerable force in the contention that imposition of a uniform rate for tax on all classes of timber, whose value varies largely is violative of the principles of equality. But I refrain from deciding this question, as the petitioners are, in my view, entitled to succeed on the ground that no tax can be levied or collected from them, as no valid machinery has been set up under the Act for the said purpose. 5. But I refrain from deciding this question, as the petitioners are, in my view, entitled to succeed on the ground that no tax can be levied or collected from them, as no valid machinery has been set up under the Act for the said purpose. 5. With regard to this matter, the first petitioner stated as follows in Para.9 of his affidavit filed in support of this writ petition: "There is no machinery prescribed for determining the tax payable or for giving an opportunity to the tax payer to make any representation regarding the weight of the timber or the non-liability to pay the tax etc. Everything is done on a rough and ready basis, without regard to the circumstances under which the timber is transported and to the other factors relating to the imposition. At no stage of the imposition and collection of tax is the tax payers given an opportunity to show that he is not liable or that be is liable only to a certain extent. There is no provision for an appeal against the imposition nor is there any provision either in the Act or anywhere else empowering the assessee to take the matter to a court of law as is generally provided in all taxing statutes." Again he stated in Para.13 of his affidavit: "The timber tax is to be collected when the timber is brought into the city and at that point. No machinery is made available to collect it at that point. Check posts are not located at the entrances to the city. In the absence of check posts at the entrances to the city for taxing the timber brought to the city and machinery provided for collection no tax can be levied on timber kept for sale within the City. The provision under S.126(3) can be resorted to only if there is a machinery for taxation and to prevent evasion of tax at the entry point. In the absence of that the steps calling for returns and a demand by issue of bills like Ext. P-3 on the petitioners are legally unsustainable." The first respondent has field a counter-affidavit dated 12 71970 which has been sworn to by one Shri. P. S. Bhaskaran, the Manager of the Corporation. In the absence of that the steps calling for returns and a demand by issue of bills like Ext. P-3 on the petitioners are legally unsustainable." The first respondent has field a counter-affidavit dated 12 71970 which has been sworn to by one Shri. P. S. Bhaskaran, the Manager of the Corporation. With regard to the averments in Para.9 of the first petitioner's affidavit, Shri Bhaskaran stated as follows in Para.7 of his counter-affidavit: "Under S.126(1) the tax shall be levied on such rate in existence and under S.126 (6) the Council may make by-laws for carrying out any of the provisions relating to the levy of tax of Timber, So the statement that no machinery is provided for determining the tax payable is denied. The statement that there is no right of appeal against the imposition of levy is not admitted. Under the by-laws framed by the Corporation Council, under S.126 (6) of the Act, Bye-law 15 (1) gives a right of appeal to an aggrieved person to file an appeal to the Standing Committee. Bye laws have been framed on 17 81968 and the same has been accepted by the Council." Regarding the averments in Para.13 of the first petitioner's affidavit, Sri. Bhaskaran made the following reply in Para.11 of his counter-affidavit: "With regard to averments in Para.13 and 14 it is submitted that under the byelaws machinery have been provided for to collect the timber tax. Introduction of Check posts is not material for the collection of the Timber tax. The tax is to be collected on the basis of returns to be submitted by the Dealers under the byelaws and under the byelaw every dealer carrying on business in timber is required to get registration in the office of the Corporation. Under byelaw 11 every dealer is expected to maintain a register of quantities of timber brought into the City, the quantity disposed of, their day to day disposal by sale, or otherwise and the balance in hand. Under byelaw 11 every dealer is expected to maintain a register of quantities of timber brought into the City, the quantity disposed of, their day to day disposal by sale, or otherwise and the balance in hand. In case the return submitted by the dealer is not accepted by the Commissioner under the byelaw 12 the said dealer is given an opportunity to produce the accounts before the Commissioner and to satisfy the Commissioner about the veracity of his accounts." On receiving a copy of the above counter-affidavit, the first petitioner filed a reply affidavit dated 318 1970, in which he stated that the averment in the counter-affidavit that bye-laws have been framed on 17 8 1968 was incorrect, that to the best of his enquiry and information, the Council has not framed any bye-laws, that the Corporation Commissioner has published in the Kerala Gazette dated 711969 certain draft bye-laws, and that that shows that no bye-laws would have been made till the filing of this writ petition. The first respondent then filed an additional affidavit dated 15 91970. That has been sworn to by one S. Rajappan Nair, the Revenue Inspector of the Corporation. Para.3 and 4 alone of this affidavit are relevant; and they are as follows: "3. It is true that as stated in para 3 of the reply affidavit byelaws as contemplated under S.126(6) was framed on 17-8-1968 and the same was accepted by the Council on 23-9-1968. 4. The averments contained in Para.4 are not entirely correct. Under S.126(1) and (4) the Corporation is authorised to collect tax on timber. The byelaws to be framed under S.126 are mainly for the purpose of seizure and sale of timber in respect of which the tax due is not paid. Hence the date of publication of the byelaws framed under S.126 (6) is not material for the matter of levy of tax." The first respondent did not yet produce a copy of the bye-laws. In the light of the controversy on the above question whether any bye-laws have been framed by the Council, I required the counsel for the first respondent to produce a copy of bye-laws, if any had been made, or atleast make a copy of the same available for my perusal. In the light of the controversy on the above question whether any bye-laws have been framed by the Council, I required the counsel for the first respondent to produce a copy of bye-laws, if any had been made, or atleast make a copy of the same available for my perusal. He then showed me copy of a notification dated 2-11-1968 by the Corporation Commissioner, notifying for the information of the public that the Corporation Council at its meeting held on 23-9-1968 has passed draft bye-laws under S.126(6) and S.369(1) and (3) of the Act for the levy of timber tax in the city. The counsel also submitted that they were no bye-laws, except the draft bye-laws attached to the above notification. This is precisely the notification published in the Kerala Gazette dated 7-1-1969 and referred to in the reply affidavit of the first petitioner. Now it is as clear as anything that the Council has not so far made any bye-laws as required by Sub-section (6) of S.126 of the Act, or laid down any procedure or created any machinery for the levy and collection of this tax. The Act or any of the rules made thereunder do not contain any provision in this respect. Sub-section (6) leaves it to the Council to make the necessary bye-laws. Levy and collection of a tax can be made only in accordance with a procedure laid down by law for that purpose. I, therefore, quash all bills of demand issued to the petitioners and other proceedings taken against them for the levy and collection of tax under S.126 of the Act, until the necessary bye-laws are made fur this purpose. The first respondent will pay the costs of the petitioners. Counsel's fee is fixed at Rs. 250/-. 6. There is one matter, which I am constrained to make notice of in this case. The question whether the Council has made bye-laws under S.126 (6) of the Act has been a material and important one for the decision of this writ petition. The first petitioner stated in his affidavit in support of the writ petition that the Council has not made any bye-laws. The question whether the Council has made bye-laws under S.126 (6) of the Act has been a material and important one for the decision of this writ petition. The first petitioner stated in his affidavit in support of the writ petition that the Council has not made any bye-laws. But Shri P. S. Bhaskaran in his counter-affidavit sworn to on behalf of the first respondent on 12-7-1970 filed in this Court on 15-7-1970 controverted the above statement, and deposed in unmistakable terms that bye-laws have been framed by the Council on 17-8-1968. The first petitioner in his reply affidavit dated 31-8-1970 reasserted that no such bye-laws have been framed by the Council and that it was also not possible for the Council to have framed any bye-laws before the tiling of this writ petition, as the draft bye-laws have been published only on 7-1-1969 in the Kerala Gazette. Then Shri S. Rajappan Nair, swore to an additional affidavit dated 15-9-1970 and filed it in this Court on the same date, reaffirming that bye-laws as contemplated under S.126(6) of the Act were framed on 17-8-1968 and accepted by the Council on 23-9-1968. I have already held that no such bye-laws have been really made by the Council. I have reason to believe that these two witnesses have intentionally given false evidence for the purpose of the same being used in this case; and I think that, for the eradication of the evils of perjury and fabrication of false evidence, and in the interest of justice it is expedient that these witnesses should be prosecuted for the offence under S.191 of the Indian Penal Code, punishable under S.193 thereof. I, therefore, call upon Shri P. S. Bhaskaran, Manager and shri. S. Rajappan, Revenue Inspector of the Trivandrum Corporation to show cause within three weeks of the receipt of notice why a complaint should not be filed against them for the said offence under S.479A of the Code of Criminal Procedure. Issue notice to them accordingly.