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2004 DIGILAW 579 (KER)

P. S. Rajesh v. Aluva Municipality

2004-11-24

K.S.RADHAKRISHNAN, M.N.KRISHNAN

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Judgment :- Radhakishnan, J. The only question that has come up for consideration in this case is whether the Municipal Council has followed the mandatory procedure prescribed under Section 347 (20)(a) and (b) of the Kerala Municipalities Act, 1960, as amended by the Municipalities Act, 1994. 2. The Alwaye Municipal Council published Ect.P1 tender noticed dated 13.07.2004 for auctioning the right to collect fee for bringing ice blocks into the market for sales. Municipal Council has fixed fee for exposing ice blocks in the market and its sale at the rate of Rs.5/- and published the same. On the basis of Ext.P1 tender notice second respondent quoted an amount of Rs.73,000/- and the right to collect fee was awarded to him. Second respondent had paid one third of the amount and executed the agreement with the Municipality. Period of the licence is from 15.08.2004 to 31.3.2005. 3. Writ Petitioner is a dealer engaged in the business of selling ice to fish vendors of the market in Alwaye. According to him, demand of Rs.5/- per ice block towards fee is illegal since mandatory procedure contemplated under the proviso to Clause 23 of the Notification was not followed before fixing the said fee. 4. Counsel for the writ petitioner Sri. V. Giri took us through the various provisions of the Municipalities Act, 1994 and submitted that the tender notice cannot be sustained on the basis of those provisions. Counsel also referred to the decision of the apex court in Nagar Mahapalika, Varanasi v. Durga Das Bhattacharya (AIR 1968 S.C. 1119) and contended that the Municipality has committed illegality is not following the mandatory procedure. Counsel also submitted that fixation of fee is arbitrary and illegal. 5. Counsel appearing for the Municipality Sri V.M. Kurien on the other hand contended that the Municipality has fixed the fee after taking into consideration all the relevant facts. Counsel submitted that ice is different from other items. Which will melt and water will cause unhygienic conditions and nuisance. Under such circumstances, Municipal Council resolved to auction the right to collect fee for bringing ice blocks into the market for sales. Counsel submitted that there is no illegality in the publication of tender notice. We find it difficult to accept the stand of the Municipality. Municipality was in error in not bearing in mind the difference between the tax and the fee. Counsel submitted that there is no illegality in the publication of tender notice. We find it difficult to accept the stand of the Municipality. Municipality was in error in not bearing in mind the difference between the tax and the fee. Distinction between tax and fee has been succinctly stated by the apex court in Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (AIR 1954 S.C. 282) and held as follows: “In bringing out the essential features of a tax this definition also assists in distinguishing a tax from a fee. It is true that between a tax and a fee there is no generic difference, both are compulsory exactions of money by public authorities, but whereas a tax is imposed for public purposes and is not supported by any consideration of service rendered in return a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it.” The above dictum was followed by the apex court in Nagar Mahapalika’s case supra (AIR 1968 S.C. 1119). It is in line with the above mentioned principle, Municipality has framed bye-laws under Section 347 (20) (a) and (b) of the unamended Municipalities Act 1960. Bye-law 23 is extracted below for easy reference. 23. The dealers should pay the prescribed fees and stall rent. The rates of fees and the stall rent to be levied from the different markets shall be determined by the council by resolutions from time to time, under the Kerala Municipalities Act. Provided that the Municipal Council shall before fixing the rates of rents and fees or revising such rates publish the proposed rates for general information and the proposal will be finalized and given effect to only after fifteen days of such publication and after considering the objections or suggestions, if any, received within the said period of 15 days. Section 575 of the Kerala Municipalities Act 1994 stipulates that byelaws framed by the Municipalities be followed unless it is varied or annulled. Section 567 (2) states that Council may make byelaws not in consistent with the provisions of the Act and the Rules made thereunder or under any other law to provide for the time and mode of collecting taxes and duties under the Act. Section 567 (2) states that Council may make byelaws not in consistent with the provisions of the Act and the Rules made thereunder or under any other law to provide for the time and mode of collecting taxes and duties under the Act. Facts would evidently show that the Municipalities has not followed the above mentioned procedure before fixing the fee before issuing the tender notice. In such circumstances, we are in agreement with the Writ petitioner that the fixation of Rs.5/- is without following the mandatory procedure and is illegal and liable to be set aside. We do so as far as the petitioner is concerned. Petitioner is the only person who has challenged the fixation of the fee. Hence the benefit of this judgment would be available only to him. Petitioner need pay only the pre-revised rate unless it is varied by following the procedure laid down. The appeal is allowed as above.