1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD. WRIT PETITION NO. 2450 OF 1994 1] Ashok Bansilal Mutha, Aged about 49 yes, Occu. Agril & Business, Resident of 83, Manik Nagar, Pune- Nagar Road, Ahmednagar. 2] Sharad Mansukhlal Mutha, Aged 45 years, Occu. Agriculturist and business, resident of 83, Manik-Nagar, Nagar-Pune Road, Aurangabad. .. PETITIONERS. VERSUS 1] The State of Maharashtra (Secretary, Rural Development, Mantralaya, Bombay) Through the Government Pleader, High Court Building, Aurangabad Bench, Aurangabad. 2] Collector of Ahmednagar, Collectorate, Ahmednagar. 3] Zilla Parishad, Through its Chief Executive Officer, at Ahmednagar ..RESPONDENTS ... Shri R.R. Mantri, Advocate for Petitioners. Shri V.D. Rakh, A.G.P. for respondent State Shri S.T. Shelke, Advocate for respondent No. 3. WITH WRIT PETITION No. 2626 of 1994 Shetkari Sanghatana, Kopergaon. (through it’s President Shri : Manikrao S/o Prabhakar Deshmukh) Age 45 years, Occu. 2 Agril, R/o Dahegaon Bolka, Tq. Kopergaon, Dist. Ahmednagar .. PETITIONER. VERSUS 1] The State of Maharashtra (Copy to be served on Govt. Pleader, High Court, Aurangabad.). 2] The Secretary, Rural Development Department, Government of Maharashtra, Mantralaya, Bombay. 3] The Collector, Ahmednagar. 4] The Tahasildar, Kopergaon, Tal : Kopergaon, Dist. Ahmednagar. 5] Zilla Parishad, Ahmednagar (Through its Chief Executive Officer.) ..RESPONDENTS Shri U.B. Dube, Advocate for Petitioner. Shri V.D. Rakh, A.G.P. for respondents State Shri S.T. Shelke, Advocate for respondent No. 5. CORAM :- B.R.GAVAI AND S.V. GANGAPURWALA JJ. Date of Reserving Judgment 16th June, 2010 Date of Pronouncement of Judgment 29th July, 2010. JUDGMENT : (Per S.V. Gangapurwala, J.) These petitions take exception to the Resolution dated 06/11/1993 passed by the respondent No. 3 and the notification dated 01/03/1994 issued by the respondent No. 1, 3 thereby increasing the cess and the additional cess leviable Under Section 144 & 155 of the Zilla Parishad and Panchayat Samiti Act, 1961. 2. The petitioners are the residents of Ahmednagar District and owners of agricultural lands. It is the case of the petitioners that respondent Nos. 1 to 3 have unlawfully increased additional cess on land revenue under the provisions of Section 144 and 155 of the Zilla Parishad and Panchayat Samiti Act, 1961 (Here-in- after referred to as “Act,1961). According to them a cess is collected on the land revenue under Section 144 of the Act of 1961, to augment the said income and to meet the additional expenditure and a machinery was created Under Section 155 of the said Act, 1961 for raising additional cess. According to the petitioners by Maharashtra Act I of 1993 which came into force on 01-04-1993, the cess Under Section 144 of the said Act of 1961 has been increased to 200 paise from 20 paise while the maximum limit of additional cess was increased up to 700 paise as determined by the procedure adopted Under 4 Section 155(1) of the said Act, 1961. The petitioners have challenged the notifications increasing the said cess and the additional cess. 3. The contour of the arguments of Shri R.R. Mantri, learned counsel for the petitioner can be detailed as under. A] To determine the cess, its quantum and the period is prerogative of the Commissioner, but the decision has been taken at the behest of the Government. B] Proper procedure as contemplated under the relevant Statute, Rules and the Code has not been followed. C] The quantum of the tariff is too exorbitant and it also does not specify special purpose for which the proceeds of the increase in the rate are to be utilised. D] The cess could not have been levied with the retrospective effect. 4. Shri Shelke learned counsel for the respondent submitted that 1] when the respondents have the power to pass a resolution, they also posses power to cancel the same. He relied on Section 21 of 5 the General Clauses Act. While passing resolution dated 06/11/1993 it has cancelled the earlier resolution, and as such there was no impediment for them to pass a fresh resolution, increasing the cess. 2] There is no bar in the Statute prohibiting them to pass the resolution from enhancing the cess for the said period. According to him, the agriculture year is from 1st August to 31st July and as such it is to be charged during the said period and same is not retrospective. 3] The cess is increased after a period of 20 years. Pursuant to increase in the cess, the Government also increased the local cess matching grant vide its notification in the Gazette dated 22-06-1994. The reference to Section 21 of the General Causes Act would be relevant. 5. Before adverting to the rival submissions of respective counsel it would be 6 appropriate to reproduce the relevant provisions of Section 144, 147, and Sec. 155 (1) (2) (3) (4) of the Maharashtra Zilla Parishad & Panchayat Samiti Act & Section 21 of the General Clauses Act. “ Section :-144 The State Government shall levy, on the conditions and in the manner hereinafter described [a cess within a District at the rate of [two hundred paise] or at such increased rate not exceeding [seven hundred paise] as may be [determined by the concerned Divisional Commissioner] under Section 155, on every purpose of - (a) every sum payable to the State Government as ordinary land revenue, except sums payable on account of any of the charges mentioned in the Forth Schedule, and except sums payable on account of any charge which may be notified by the State Government in this behalf; and (b) every sum which would have been assessable on any land as land revenue 7 had there been no alienation of land revenue: Provided that, no cess be levied under this section on sums less than twenty five[paise}. “ Section 147 :- The cess described in section 144 shall be levied, so far as may be in the same manner, and under the same provisions of law, as the land revenue: provided that, in the case of any land in the possession of tenant, if such tenant is liable to pay cess in respect of such land under the provisions of the Bombay Tenancy and Agricultural Lands Act, 1948, such tenant shall be primarily liable for the payment of cess in respect of such land.” “Section 155 :-(1) A Zila Parishad to which the cess on land revenue is payable may pass a resolution at a special meeting called for the purpose, to the effect that in the whole of the District [or in a Block or Blocks as is or are specified in the resolution], the 8 rate of such cess leviable therein may be increased by the [concerned Divisional Commissioner] and forward that resolution to the [concerned Divisional Commissioner] for its consideration. (2) A Panchayat Samiti may, at a special meeting called for the purpose, pass a resolution to the effect that in the whole of the Block, the rate of cess on land revenue leviable in respect of lands situated therein may be increased to the extent specified in the resolution; so however that such increase does not exceed the limit specified in section 144,151 or as the case may be, 152 and forward that resolution to the Zilla Parishad for its consideration; and the Zilla Parishad shall, within three months of the date of its receipt, forward the resolution with its views thereon to the [concerned Divisional Commissioner] (3) The resolution under sub-section (1) or (2) shall state the reasons for which such increase has been proposed, and the special 9 purpose for which the proceeds of the increase in the rate are to be utilised, and the period for which the increase in the rate shall continue. [3(A) The approval to utilise the cess collected, on works and development schemes in respect of the subjects of activities enumerated in the First and Second Schedules shall be given by the concerned Divisional Commissioner and the approval to utilise the cess collected, on works and development schemes other than those enumerated in the First and Second Schedules, shall be given by the State Government]. (4) On receipt of the resolution forwarded under sub-section (1) or the resolution and the views of the Zilla Parishad forwarded under sub-section (2) the [concerned Divisional Commissioner may, notwithstanding anything contained in the relevant Code, by district local publicity media], determine the increase in the rate of cess on land revenue in respect of lands situated in the District or Block, as the case may be; so 10 however, that the rate does not exceed [seven hundred paise] on every rupee and specify date on which the increase in the rate shall take effect and the period * * * * * during which it shall continue: [Provided that, every person in a District or a Block who is liable to pay land revenue of an amount not exceeding five rupees, shall be exempted from payment of such increased cess] (5) --------------------------------- (6) ---------------------------------” “Section 21 of General Clauses Act :- Power to issue, to include to add, to amend, vary or rescind notifications, orders, Rules or bye-laws – Whether by any [Central Act} or Regulations, a power to [issue notifications] orders, Rules, bye-laws is conferred, then that power includes a power, conditions [if any] to add to amend, very or rescind any [notifications], orders, bye- laws, so [issued].” 6. Regarding the first argument of Shri 11 R.R. Mantri that it is the prerogative of the Commissioner to take decision regarding quantum and the duration of the levy of cess, cannot be subject matter of debate. Upon Perusal of Section 144 and Section 155 of the Act, 1961, it is manifest that the said cess has to be determined by the concerned Divisional Commissioner. According to learned counsel Shri Mantri, the Government vide its communication dated 16-01-1994 has compelled the authorities to pass the resolution to increase the cess. We have gone through the said communication dated 16/01/1994. In the said communication it was suggested by the Government to the concerned authorities to levy the cess, as the Zilla Parishad may deem fit. According to Shri Mantri, by virtue of this communication the authorities were compelled to pass a resolution to enhance the cess and that the said cess is increased on the dictate of the Government and not on independent determination by the Commissioner. The said argument of Shri Mantri cannot be entertained, for the simple reason that on 06/11/1993 itself vide resolution No. 357, it was resolved by the Zilla Parishad, 12 Ahmednagar to increase the cess from 20 paise to 200 paise Under Section 144(1) of the said Act, 1961 and from 200 paise to 700 paise as per Section 155(1) of the said Act, 1961. The said communication of the Government which is after a period of more than two months, after the resolution was passed by zilla Parishad proposing increase in cess could by no stretch of imagination be the reason for the concerned authorities taking decision to enhance the cess. As such the said argument cannot be sustained. Moreover, the said communication merely suggest that Zilla Parishad may increase the cess as it deems fit. It no where mandates the Zilla Parishad to increase the cess at a particular rate but leaves the discretion with the Zilla Parishad. In view of these facts the theory of acting under dictation as sought to be relied by petitioner, does not apply in the present matter. 7. Second challenge of Shri Mantri is that the procedure as laid down under the statute has not been followed. According to him as per Section 147, the cess described in Section 144 13 “shall be levied” so far as may be in the same manner, and under the same provisions of law as the land revenue. He referred to The Maharashtra Land Revenue (Assessment and Settlement of Land Revenue of Agricultural Lands) Rules, 1970 and submitted that the procedure laid down therein is not followed. This argument of Shri Mantri is not sustainable. The said Rules of 1970 referred to by Shri Mantri are concerned with ‘Assessment” and not levying of the cess. Assessment of cess and levying are two different aspects. The Term levying is wider in its meaning than the term assessment. This expression is a common expression in taxing statutes and has various sheds of fiscal meaning, depending upon the context in which it is used. An expression used in a particular statute should be construed in the context in which it is used. In the present case, in section 147 the word levying is used in the context of “imposition” and not for assessment because section 145 of the said Act, deals with assessment, and section 147 distinctly deals with “levying” cess. As such term levying is used in a different context, other than the 14 word assessment. In fact, the said Act,1961 recognises three process, first is assessment which can be looked upon as the mode of computation, secondly, comes the levy which is the procedure laid down for the realisation of the taxes and finally, comes the procedure for collection of taxes. The levy of tax is normally a legislative function, assessment is quasi- judicial function, and collection is an executive function. Though, in some statutes the word levy would embrace assessment also. But in the present statute the provisions of Section 145 and 147 leave no manner of doubt that the assessment and levy have been used differently and for distinct purposes. In this view of the matter, argument of Shri Mantri that the said Rules are not followed while levying the cess holds no water. More over the said Rules,1970 deals with the fixation of land revenue, whereas the cess i.e. levied is on the land revenue. The land revenue is fixed after observing the said Rules. 8. In the present case also initially, the Government appointed a Committee under the 15 Chairmanship of Shri P.B. Patil, which studied the problems of the autonomous bodies,as well as evaluated functioning of Panchayat Raj. The said Committee made recommendation to the Government of Maharashtra and after careful consideration of the said recommendation, the Government accepted the said recommendations, and in pursuance to the said recommendations the State Legislature amended the provisions of Section 144 & 155 of the Maharashtra Zilla Parishad and Panchayat Samiti Act, so as to enable the Zilla Parishads to increase the resources of their income and by the said amendment, the rate of cess has been increased. After the amendment in the Statute the Zilla Parishad proposed the increased rate of cess in its special meeting as is required under Section 155(1) of the Maharashtra Zilla Parishads and Panchayat Samitis Act, 1961 which also lays down the special purpose for which the proceeds of the increase in the rate are to be utilised and the powers for which the increase in rate is to be continued as is required under Section 155(3) and the said increased rate of cess is sanctioned by the 16 Government after due consideration of the proposal under Section 155(4), as such the contention that increase in rate has not been made, by following statutory provision, is without merit. 9. The third submission of Shri Mantri is that the quantum of tariff is too high. According to learned counsel, the cess can be increased only if it is required for the development schemes and no such schemes are detailed, to justify increase. The cess is a tax, which does not require the element of quid pro quo stricto sensu with the services rendered. The cess is burden on the public meant for expenditure on the development works of public utility. The resolution shows various works that are required to be under taken, for which the resolution and the notifications have been passed. The said resolution enumerates the activities that are required to be under taken. The quantum of the tariff or the cess could not be subject matter of judicial review before this Court. It is settled proposition of law that quasi-judicial / 17 administrative decision such as decision fixing rate of tax cannot be subject matter of judicial review, unless it is found that the power exercised are beyond the scope of statute or exercised in the manner which are derogatory to the provisions under the statute. 10. The last argument of Shri Mantri is that the cess could not have been levied with retrospective effect. According to Shri Mantri as per the earlier resolution dated 24/05/1989. Cess at said rate stipulated therein was to be charged up to 31-07-1994. As such, the respondents could not have changed the rate or quantum of cess before the completion of the duration provided under earlier Government Resolution. According to him, the present increased cess is pursuant to resolution dated 06/11/1993 has been levied with effect from 01/08/1993, whereas as per the notification dated 24/05/1989 the cess which is leviable was for a period of five years commencing from 01/08/1989 and ending on 31/07/1994. As such before the end of such period till 31/07/1994 the respondents could not have 18 changed the quantum of cess and further that vide resolution dated 06/11/1993 and notification dated 01/03/1994 the cess is being levied from 01/08/1993. according to him levy of cess is retrospective and same is not permissible. 11. On perusal of the scheme of the Maharashtra Zilla Parishad and Panchayat Samiti Act, 1961, it is manifest that the said Act no where imposes any restriction on the right of the authorities to enhance the cess nor puts any embargo, on the right of the authority to levy the cess from any period. In view of Section 21 of the General Clauses Act, it cannot be a matter to debate that the authorities who have power to enact or promulgate a notification also have a power to rescind the same. The Statute does not lay down any embargo on the authorities from rescinding earlier resolution. The authorities have power to cancel the earlier resolution and pass fresh one. In this case the moot question that would be required to be adjudicated is whether the 19 authorities could have levied the said cess from 01-08-1993 by resolution and notification of 11/93, dated 06/11/1993. More so, when by earlier notification of 1989 the quantum of cess as determined by the said notification was to be charged up to 31/07/1994. Shri Mantri laid much emphasis on the same, he stated that even if it is assumed that the authorities have the power to pass such resolution, still at least till 31/07/1994 the authorities could not have increased rate of cess. 12. No doubt in the present case, the cess is being increased with effect from 01/08/1993, vide resolution dated 06/11/1993 and notification dated 01/03/1994.In our opinion, the notification specifically states that it would be levying the cess with effect from 01/08/1993 and the Statute no where prohibits them from doing so, the same would be permissible. Moreover the cess would be payable at the end of the year so it cannot be said that cess is increased with retrospective effect. Even if it is assumed that cess is levied retrospectively, still the same cannot be termed 20 as illegal. The Statute no where puts any embargo on the powers of the respondents from levying cess with retrospective effect. Even the Apex Court in the case of “M/s. Hindustan Chemicals Ltd. V/s. The State of Heyaryana, reported in AIR 1985,SC, 1683, held that “levy and collection of octroi in the area which was included within the Municipal limits of Bhivani with retrospective effect in accordance with notification issued earlier is permissible. 13. In the result, the writ Petitions being sans merit are dismissed, however with no order as to costs. [S.V. GANGAPURWALA, J ] [B.R.GAVAI, J ] SDM* 2450.94 WP