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2021 DIGILAW 1065 (GUJ)

PIPLESHVAR DIESEL SERVICE v. STATE OF GUJARAT

2021-11-25

BIREN VAISHNAV

body2021
ORDER : 1. Heard learned advocates for the respective parties and perused the record. 2. In this petition, under Article 226 of the Constitution of the India, the following relief is sought for by the petitioner: “(A) Your Lordships may be pleased to issue a writ of certiorari or any other writ of mandamus, order or direction directing the opinion dated 19.9.2015 passed by the respondent No.2 Development Commissioner, the letter dated 22.09.2015 issued by the respondent No.1 the State of Gujarat and the communication dated 29.09.2015 issued by the respondent No.2 – Development Commissioner to the respondent No.3 – Banaskantha District Panchayat are arbitrary, capricious, illegal and bad in law and quashing and setting aside the same.” 3. Facts in a brief are as under : 3.1. A resolution No.27 was passed by the respondent no.4 – Gram Panchayat namely; Kotda Deyodar Gram Panchayat under the Act for levying of octroi. The case of the petitioner is that the resolution was inconsistent with the rules of the Gujarat Gram and Nagar Panchayat Taxes and Fee Rules, 1964. Levy of octroi, therefore, was challenged by the petitioner before the District Panchayat, which quashed a resolution of the Panchayat levying octroi. The Gram Panchayat went in appeal before the State and failed is resulted the Panchayat in filing a petition being SCA No.5885 of 1997 before this Court. 3.2. The petitioner filed SCA No.7661 of 1997 challenging the notice of the Panchayat levying octroi. The Panchayat’s petition being SCA No.5885/1997 was dismissed whereas that of the petitioner was allowed. While allowing the petition, by the judgment and order dated 3.4.2007 passed in SCA No.5885 of 1997, the Court has observed as under: “24. In view of the findings recorded by this Court that Kotda Deyodar Gram Panchayat was not entitled to recover the octroi, Thakker Jagdishbhai Jayantilal – petitioner of Special Civil Application No.7661 of 1997 would be entitled to refund of the amount which has been recovered by Deyodar Gram Panchayat – petitioner of Special Civil Application No.7661 of 1997, under the cover and authority of octroi. The said amount shall be refunded by the Deyodar Gram Pancayat within a period of three months from today, if the same is not refunded within the period aforesaid, then the Deyodar Gram Pancayat would be liable to pay interest at the rate of 12% p.a. on the said amount from the date of recovery till its payment.” 4. Obviously, therefore, the Court directed the Deyodar Gram Panchayat to refund the amount of octroi that was illegally collected. Aggrieved by the order of the learned Single Judge, the Panchayat filed two appeals being LPA Nos.1178 and 1179 of 2009. By judgment dated 19.10.2010, the learned Single Judge’s judgment was upheld. 5. Despite the appeals being dismissed, since the octroi amount that had to be refunded to the petitioner was not so refunded, a notice was issued to the Gram Panchayat. The Panchayat by its communication dated 6.12.2010 responded inter alia stating that the amount of octroi which was collected had already been spent towards development work and salary and, therefore, the Panchayat was not in a position to honour the directions of the Court of refunding the amount. At this point, it may be stated that the total amount that the Panchayat owes to the petitioner towards refund of octroi is Rs.27,56,616/-. 6. Inaction in refunding the amount compelled the petitioner has filed SCA No.8671 of 2011, which petition, by an order dated 5.8.2011 was not entertained in view of the alternative available to the petitioner. The order was carried in appeal being LPA No.540 of 2013 and this Court by an order dated 23.7.2017 observed as under: “4. Learned counsel for the petitioner was unable to seriously dispute the Panchayat’s stand that Panchayat simply does not have funds at its command to be able to pay such sizable amount. As noted above, the direction for refund of octroi is already passed and such decision of Single Judge is confirmed by the Division Bench. We see no purpose in issuing such directions afresh in the second round of litigation. Counsel for the appellant also submitted that the State Government may provide sufficient funds to Panchayat to enable the Panchayat to refund such amount. We are unable to see any such scheme in Panchayat Act where the State Government would irrespective of nature of dues of Panchayat is duty bound to weigh the burden of Panchayat. Counsel for the appellant also submitted that the State Government may provide sufficient funds to Panchayat to enable the Panchayat to refund such amount. We are unable to see any such scheme in Panchayat Act where the State Government would irrespective of nature of dues of Panchayat is duty bound to weigh the burden of Panchayat. Panchayats are seen as an autonomous body of self governance having recognition under Constitution as well. Nevertheless, we direct the Panchayat to account for such debt in its next budgetary proposal to be forwarded to the Government and the State Government to consider the same as per its policy while undertaking the exercise of approving the budget of Panchayat and allocating the grant to the Panchayat.” 7. Mr. Shalin Mehta, learned Senior Counsel appearing for the petitioner would further submit that the order of the learned Single Judge in the first round by which the order of refund was to be implemented ought to have been carried and executed in accordance with the directions and observations of the Division Bench, as the Division Bench had directed that the Panchayat made account for such debt in its next budgetary proposal to be forwarded to the State Government and State Government to consider the same as per its policy while undertaking the exercise of approving the budget of Panchayat and allocating the grant to the Panchayat. The District Panchayat, accordingly approached the Development Commissioner for allocation of such amount in the budget. 8. By the opinion dated 22.9.2015 which is challenged in this petition, the State Government opined that in view of allocation of grant in lieu of octroi over the years, it is for the Panchayat to comply with the orders passed by the Court and the State would in no way would be responsible for allocating funds for the outstanding dues that the Panchayat was required to pay to the petitioner. 9. Mr. Meet M. Thakkar, learned Assistant Government Pleader for the respondent - State would invite the attention of the Court to the affidavit which supports the opinion so challenged before this Court. 9. Mr. Meet M. Thakkar, learned Assistant Government Pleader for the respondent - State would invite the attention of the Court to the affidavit which supports the opinion so challenged before this Court. According to the deponent of the affidavit, the stand of the State is that since the State is allocating financial grant in lieu of octroi every year the Panchayat which earns its own income through the levy of different taxes, the opinion is appropriate and it is responsibility of the Panchayat to honour the directions of this Court issued in the judgment and order dated 3.4.2007 passed in SCA No.5887 of 1997. 10. Considering the chronology of events as narrated herein-above, it is evident that the issue whether the Gram Panchayat had a legal backing to levy octroi, was adjudicated by this Court and in fact by the directions issued by this Court on 3.4.2007, it was clearly directed that the respondent – Gram Panchayat shall refund the amount of octroi. The directions so issued have been reproduced herein-above. 11. In the course of getting the order executed, though the petitioner failed before the learned Single Judge, before the Division Bench accepted the fact that an observation was made that the State Government would make appropriate allocation of grant, the direction to refund vis-a-vis the Panchayat still stands. 12. In view of the affidavit filed by the State that the State is allocating grants in lieu of octroi every year to the respondent – Panchayat, it shall be the responsibility of the Gram Panchayat and in turn of the District Panchayat, Banaskantha to see that in due compliance of the directions issued by this Court on 3.4.2007, the outstanding amount of Rs.27,56,616/- with interest shall be paid by the Kotda Deyodar Gram Panchayat. This is particularly in view of the fact that the specific stand is taken by the State that the State Government grants Rs.6,49,300/- every year to the Gram Panchayat in lieu of octroi and the Panchayat had an income of Rs.4,42,000/- at the relevant time when the affidavit was filed. 13. In view of above, the petition is allowed. The respondent No.4 – Kotda Deyodar Gram Panchayat should comply with the directions 3.4.2007 passed in Special Civil Application No.5885 of 1997 by the Division Bench of this Court. 13. In view of above, the petition is allowed. The respondent No.4 – Kotda Deyodar Gram Panchayat should comply with the directions 3.4.2007 passed in Special Civil Application No.5885 of 1997 by the Division Bench of this Court. Thereby, the outstanding amount of Rs.27,56,616/- with interest @ 12% p.a. shall be paid to the petitioner by the respondent No.4 – Kotda Deyodar Gram Panchayat within a period of six months from the date of receipt of Writ of this order. However, looking to the budgetary and financial constraints, the rate of interest be calculated @ 6% p.a., instead of @ 12% p.a. Direct Service is permitted.