Summary
The Andhra Pradesh Legislature passed the Andhra Pradesh Gram Panchayat Act, 1964. The Kuthbullapur Gram Panchayat was established under the Act. The respondent constructed a factory and other buildings without the permission of the Gram Panchayat. Later on, the respondent asked for expost- facto permission. The Panchayat agreed to grant the permission on the respondent paying permission fee at 1-1/2 per cent on the capital value of the factory building and at 1 percent on the capital value of other buildings. The Panchayat also called upon the respondents to pay the house tax.
The respondents filed a Writ Petition in the High Court challenging the levy of house tax and permission fee. The High Court allowed the Writ Petition holding that the buildings constructed by the respondents did not fall within the definition of a house and further ruled that since no services were rendered, the levy of, permission fee was illegal. Section 69 of the Act authorises the Gram Panchayat to levy a house tax.The definition of house as it stood when the High Court delivered its judgment was a building or hut fit for human occupation whether as a residence or otherwise, having a separate principal entrance from the common way and included any shop, workshop or warehouse or any building used for garaging or parking of buses or as a bus stand. The High Court held that the buildings other than factory premises were not a house because their separate principal entrance was situated on the road belonging to the respondents.As regards the factory buildings, the High Court held that the legislature included shops, workshops, and warehouses, but aid not include factory within the definition of the house. The demand of house tax was held to be illegal.After the judgment of the High Court was delivered, the Legislature amended the definition of the house retrospectively to include the buildings constructed by the respondents.The appellant contended that the new definition of the house clearly includes the buildings constructed by the respondent and that the Panchayat was entitled to impose house tax on the respondent. Secondly, the Gram Panchayat lays roads, provides for drainage and lights, scrutinises the plans submitted for intended construction, and, therefore, is entitled to charge the permission fee. In the alternative, it was contended that the permission fee though called a fee is really in the nature of a tax on buildings and may be upheld as such.Respondent contended 1. By redefining the term 'houses with retrospective effect, the Legislature encroached upon a judicial function.2. Without a proper budget, the Gram Panchayat cannot impose taxes.395 3. There is no provision in the Act empowering the Gram Panchayat to levy permission fees.4. No services are rendered for which permission fees can be charged.Partly allowing the appeal,HELD : The Legislature has power to pass a law prospectively as well as retrospectively. The Legislature can remove the basis of the decision rendered by a court. The Amending Act does not ask the instrumentalities of the State to disobey or disregard the decision given by the High Court, but merely removes the basis of that decision. Under Article 246(3) read with Entry 49 in List II of the 7th Schedule, the State Legislature has exclusive power to make laws with respect to taxes on lands and buildings. Section 69 of the Act authorises the Gram Panchayats to levy house tax in the'villages under their respective jurisdiction. The house tax was rightly imposed by the Gram Panchayat. [398 B.F., 399DEF]HELD FURTHER-The argument about absence of budget was not made in the High Court and as it involves an investigation into facts, this Court cannot go into it for the first time.[400-DE]HELD FURTHER-There is no provision in the Act empowering the Gram Panchayat to levy fees on the permission to construct a building. In fact, there is no provision in the Act to obtain the permission of the Gram Panchayat for construction of building. Fees are a sort of return or consideration for services rendered which makes it necessary that there should be an element of quid pro quo in the imposition of a fee.There has to be co-relationship between the fee levied by an authority and the services rendered by it to the person who is required to pay the fee. In this case, there is no such co-relationship. Fees cannot be imposed for discharging statutory functions of public authorities. The services have to be rendered individually to the particular person on whom the fee is imposed. The very fact that the permission fee is levied at a certain percentage of the capital value of the buildings shows that the Gram Panchayat itself never intended to correlate the fee with the services rendered or intended to be rendered by it. [400-H, 401-DE, 402 c]See the full content of this document
Extract
Government Of Andhra Pradesh & Anr: VS. Hindustan Machine Tools Ltd.
PETITIONER: GOVERNMENT OF ANDHRA PRADESH & ANR: Vs.RESPONDENT: HINDUSTAN MACHINE TOOLS LTD.DATE OF JUDGMENT01/05/1975BENCH: CHANDRACHUD, Y.V.BENCH: CHANDRACHUD, Y.V.KHANNA, HANS RAJBEG, M. HAMEEDULLAHCITATION: 1975 AIR 2037 1975 SCR 394 1975 SCC (2) 274CITATOR INFO : R 1977 SC1686 (6)RF 1980 SC1008 (21)R 1987 SC2310 (14)ACT: Article 246(3) and, entry 49 in List II of 7th Schedule to Constitution--Nature of fees--Quid pro quo--Legislature amending definition retrospectively whether encroaches upon judicial functions--Andhra Pradesh Gram Panchayat Act, 1964.JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1189 of 1972.From the Judgment and order dated 6th August, 1971 of the High Court of Andhra Pradesh in W. P. No. 4223 of 1969.P. Ram Reddy and P. P. Rao, for the appellants.B. Sen and Naunit Lal, for the respondent.K. Srinivasanmurthy, Naunit Lal and Lalita Kohli, for the inter-verners.The Judgment of the Court was delivered byCHANDRACHUD, J. This is a tax dispute concerning the power of the second appellant, Kuthbullapur Gram Panchayat, to levy house-ta...
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