P. Kesavan v. Commissioner, Cochin Corporation — 1973 DIGILAW 260 (KER)

JUDGMENT P. Subramonian Poti, J. The question for consideration in this petition is whether the petitioner who is the proprietor of the Central Lodge and Hotel Ajantha situate within the Corporation area, Cochin, is liable to pay licence fee to the Corporation in respect of the hotels and lodging houses run by him. According to him, he is not, because, there is no return for the licence fee demanded. No special services are said to have been rendered by the Corporation to the petitioner or to his class, namely hotels, restaurants and lodging houses. In 1968, it is said the licence fee was enhanced from Rs. 50/- to Rs. 175/- but according to the petitioner there was no justification for such enhancement. He would say that a demand was made on him for payment of licence fee at a higher rate for the years 1967-68 and 1968-69 and prosecution also was launched before the Sub-Magistrate, Ernakulam. The prosecution was contested by him. To the demand made for payment of licence fee for the year 1969-70 the petitioner is said to have objected and so was the case with the demand of licence fee for the year 1970-71. The petitioner has also a complaint that for non-payment of licence fee the water supply to the petitioner's premises was cut off by the first respondent, the Commissioner of the Cochin Corporation and this is illegal. Of course by interim orders passed by this Court supply of water has been restored. The first respondent has, in the counter affidavit, attempted to show that the levy of licence fee is justified as there was proper return not to the petitioner as such but to the licences in general by way of special services rendered to them. According to the counter-affidavit the Corporation is spending more than what it realises as licence fee towards various services to the licencees. It is averred: A greater volume of sanitary work is required to remove the huge waste that is dumped into the premises by the hotel people like the petitioner. The premises will have to be kept clean as otherwise the sanitary condition of the locality will be badly affected and even wide spreading diseases would be caused. It is averred: A greater volume of sanitary work is required to remove the huge waste that is dumped into the premises by the hotel people like the petitioner. The premises will have to be kept clean as otherwise the sanitary condition of the locality will be badly affected and even wide spreading diseases would be caused. In addition to the removal of the waste and the filth the sanitary staff is also spraying disinfectants around the premises very often and at least once in a week and in larger quantities than in ordinary places. Frequent inspections have to be conducted for checking the premises and to give necessary directions to these licences from time to time and top prevent them from doing any activity which is detrimental to the public interest. The general sanitary services rendered to the City as a whole is of a lesser degree than in respect of the licensee's premises. A number of Health Inspectors and Licence Inspectors, Food Inspectors and Health Assistants are employed in the staff of the Corporation for performing the aforesaid services. Their salary itself comes to a fairly big amount. In addition to that a very large amount is spent every year for purchasing disinfectants. The totality of such expenditure as shown in the budget estimate for the year 1971-72 is Rs. 3,97,810/- as against the income from licensees amounting to Rs. 3,87,500/-. A true copy of the extract from this budget is produced herewith and marked as Ext. R1. 2. It is necessary in this connection to refer to the statement in Ext. R1 relating to the Receipts and Expenditure; CORPORATION OF COCHIN Appropriation of License Fee 1971-72 The first respondent has thus attempted to show that to the licencees in general there has been a return in excess of the licence fee collected by way of special services. 3. The attack by the petitioner against the stand taken by the first respondent is two-fold. According to him the statement produced as Ext. R1 is irrelevant and it does not in any way indicate the special services done to the hoteliers from out of the licence fee collected from them. 3. The attack by the petitioner against the stand taken by the first respondent is two-fold. According to him the statement produced as Ext. R1 is irrelevant and it does not in any way indicate the special services done to the hoteliers from out of the licence fee collected from them. Secondly it is said that to justify the levy of a licence fee the special services to be shown are not such services as the auto levying the licence fee is statutorily obliged to render but additional services for the trade which is being licenced and there has been no attempt to indicate that the services said to have been rendered to the petitioner in this case are not services which the first respondent was bound to render under the provisions of the Kerala Municipal Corporations Act, 1961. My attention is particularly invited to Section 208 of the said Act. 4. That there must be return by way of special services for a licence fee levied is a proposition well settled. A Full Bench of this Court in the decision reported in Sankaran Nair Vs. Vaniamkulam Panchayat, (1971) KLJ 171 after referring to this principle and decisions relevant thereto referred to the decision in Nagar Mahapalika Varanasi Vs. Durga Das Bhattacharya and Others, AIR 1968 SC 1119 . The Supreme Court was in that case considering the levy of licence fee imposed on owners of rikshaws and on rikshaw drivers which was sought to be justified by reference to expenses incurred for (1) laying of by lanes ,(2) street lighting, (3) providing parking grounds, and (4) payment of salary to the staff maintained for issuing licences to the respective rikshaws. The expenditure on the first two of those items was considered by the Supreme Court as that incurred by the Municipal Board in the discharge of the statutory duties which it owed to the general public and therefore that was not treated as special services to the licencees. In a similar case before a single judge of this Court in O. P. 5123 of 1970 my learned brother Nambiyar J. considered the imposition of licence fee on the Milk Trade. It is seen that counter in this is in similar terms as that filed in that case. The same services as were rendered to the hoteliers were said to have been rendered to the Milk Trade also. It is seen that counter in this is in similar terms as that filed in that case. The same services as were rendered to the hoteliers were said to have been rendered to the Milk Trade also. It is also seen from the reported case in Dr. Sadanandan v. Commissioner, Corporation of the Cochin & others ( 1972 KLT 717 ) that even in a case where a homeopath approached this Court challenging the levy of licence fee in respect of his premises, a similar counter was filed and the Corporation averted that the sanitary staff employed by the Corporation had to inspect the premises of these homeopaths very often and remove the waste products, spray disinfectants around these premises at least once in a week and in larger quantities than in other premises. How it applied to homeopaths as in the case of hoteliers is not easy to understand. But that apart, it is seen that more or less the same counter is seen filed in cases of attack to licence fee. 5. Ext. R1 statement does not answer the issue. That does not indicate how the amount is returned to the hoteliers by way of special services to the extent of the licence fee collected from them. The statement of expenditure shown is expenditure concerning the licencees in general and even that cannot be of any practical use. It is not evident that the first respondent had any data to indicate that there was return by way of special services to the petitioner and the other licencees of his group to the extent of the amount of license fee collected from them. 6. It is also evident that from the counter it is not possible to say that the services which are said to have been rendered by the Municipal Corporation are not such services which they are not statutorily bound to render to the general public. Reference is made to the removal of rubbish from the premises and spraying disinfectants once in a week. This is not a special service done to the hoteliers. Section 200 of the Kerala Municipal Corporation Act, 1961 specifies the duties of a Commissioner. He has to arrange for removal of rubbish and filth accumulated in large quantities on premises. Reference is made to the removal of rubbish from the premises and spraying disinfectants once in a week. This is not a special service done to the hoteliers. Section 200 of the Kerala Municipal Corporation Act, 1961 specifies the duties of a Commissioner. He has to arrange for removal of rubbish and filth accumulated in large quantities on premises. In fact Section 101 indicates that the property tax levied by the Corporation is inclusive of scavenging tax to provide for expenses connected with the removal of rubbish, filth or the carcasses of animals from private premises Similar provision for sanitation and hygiene of the premises within a Municipality is found in Section 202 to Section 208. It is the duty of the first respondent to indicate in this connection that the special services rendered are those other than what they were bound to perform statutorily and those additional services costs the Corporation the amount to be collected from the licensees belonging to the petitioner's class. There has been no attempt to prove this. In the circumstances the decision must be the same as in the case where my learned brother Nambiar J. considered the levy of such fee in regard to milk trade. 7. Reference has been made to the decision in Kesavan Vaidiyan Vs. Municipal Commissioner, Thiruvalla, (1970) KLJ 1054 as supporting the case of the first respondent. From paragraph 9 of the judgment it is evident that in that case there was no difficulty to sustain the licence fee because the amount of fee collected had been separately shown and in the face of that statements as to the particular services to render which the disputed licence fee was collected the levy could be upheld. It is seen that in the decision in Dr. Sadanandan v. Commissioner, Corporation of Cochin & others ( 1972 KLT 717 ) also the question of absence of quid pro quo was not seriously urged. This is indicated by the observation in the Judgement. There cannot also be any serious contest that the amount collected does not bear a reasonable proportion to the services rendered because the amount is only Rs. 15/- per year. Nor was it urged in either of these cases that the special services, if any, rendered were not shown to be other than the statutory services which the local authorities were bound to render. 15/- per year. Nor was it urged in either of these cases that the special services, if any, rendered were not shown to be other than the statutory services which the local authorities were bound to render. I must therefore hold that the attempt to sustain the levy of licence fee on lodging houses, hotels and restaurants has failed and the levy of such licence fee is illegal. There will be no attempt at collection of licence fee from the petitioner and the prosecution, if any, pending against him as indicated by Ext. P4. shall stand quashed. The parties will suffer costs in the circumstances.