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Judgment
B.N. Marlapalle, J.—This writ petition filed under Article 226 of the Constitution of India has brought in question the legality and validity of the Government Resolution No. L.F.C. 1094/PRAKRA. 2542/24 dated 1st June, 1995 as well as Government Resolution No. VPA-1095/K No. 17/22 dated 7th April, 1995. It is very specifically contended that the first resolution dated 7th April, 1995 is ultra vires of the provision of Section 127(1) of the Bombay Village Panchayats Act, 1958 (Village Panchayats Act, for short) and second Resolution dated 1st June, 1995 is ultra vires of the provisions of Section 155 of the Maharashtra Zilla Parishads and Panchayat Samitis Act (Zilla Parishads Act, for short).
The Satara Zilla Parishad (Respondent No. 6) had passed a resolution recommending to the State Government to charge the general cess at the rate of 20 paise for every one rupee of the land revenue and increased cess at the rate of 180 paise. Thus taking the total of the cess amount to 200 paise for every rupee of land revenue. This rate was to be operative for the period from 1st August, 1988 to 31st July, 1998. Pursuant to the said recommendation of the Zilla Parishad the State Government accepted the proposed increase in the cess rates. However, the State of Maharashtra by Amendment Act Maharashtra - I of 1993 amended the provisions of Section 144 of the Zilla Parishads Act and the amended Section states that the State Government shall levy, on the conditions and in the manner therein after described, a cess within a district at the rate of two hundred paise or at such increased rate not exceeding seven hundred as may be determined by the State Government u/s 155, on every rupee of sum payable to the State Government as ordinary land revenue, except sums payable on account of any of the charges mentioned in the Fourth Schedule, and on every sum which would have been payable on any land as land revenue had there been no alienation of land revenue. Pursuant to the said amendment, the Government of Maharashtra vide communication dated 3rd May, 1993 advised all the Zilla Parishads to forward a proposal for increase in cess to be levied under the provision of Section 144 read with Sections 151, 152 and 155 of the Zilla Parishads Act. 11 was also made clear that the increased rate of cess shall be made applicable from 1st April, 1993. The same advice was also communicated through another letter dated 19th May, 1993 and pursuant to this communication the Respondent No. 6 Zilla Parishad passed a resolution on 4th February, 1994 and forwarded it to the State Government on 28th February, 1994 wherein it was recommended that the general cess to be charged at the rate of two hundred paise and the increased cess rate to be fixed at five hundred paise for every rupee of land revenue thereby taking a total revenue charged to seven hundred paise on every rupee. By the impugned resolution dated 1st June, 1995 the recommendations of the Zilla Parishad were accepted by the State Government and in para 3 of the said resolution the State Government specified the departmental activities for which the income out of the cess could be utilized. On 7th April, 1995 the Government issued the G.R. stating therein that cess u/s 127 of the Village Panchayats Act shall be levied at 100 paise in place of 20 paise on every rupee of land revenue with effect from 2nd October, 1992.
The challenge to both these Resolutions is on the following grounds: -
(a) The Zilla Parishad has the power to levy the cess either at 200 paise or the cess will be at such increased rate as may be approved but not exceeding 500 paise u/s 144 of the Zilla Parishads Act and it cannot be levy a general cess at 200 paise and an increased cess at the rate of 500 paise on every rupee of land revenue.
(b) As per the original rate fixed by the Zilla Parishad and approved by the State Government on 26th July, 1988 the total cess chargeable at 200 paise for every rupee of land revenue was for the period 1st August, 1988 to 31st July, 1998, whereas by the impugned resolution dated 1st June, 1995 the increased cess rate totalling to 700 paise has been made effective retrospectively from 1st August, 1993. There is thus overlapping of the period which is not permissible and if at all the Zilla Parishad had the right to increase the cess, that could have been done either from the date of resolution or from 1st August, 1998. There cannot be overlapping of period for taxation.
(c) The cess amount which is actually in the nature of secondary tax has exceeded the original land revenue amount itself.
(d) The action of the State Government in levying two different amounts of cess is nothing but a sort of double taxation which is contrary to law.
(e) The Village Panchayat cess u/s 127 of the Village Panchayats Act has been levied illegally.
(f) While issuing the impugned resolution no opportunity of hearing was given to the Petitioner and therefore there was violation of principles of natural justice.
Section 6 of the Zilla Parishads Act provides for establishment of Zilla Parishad and Section 7 provides for Authority and Organization thereof. Panchayat Samitis are constituted u/s 57 and the powers and duties of the Zilla Parishad and Panchayat Samiti are set out in Sections 100 and 101 of the said Act. u/s 1 of the Zilla Parishads Act the primary responsibility of the Panchayat Samitis are specified and the scheme of Sections 100 and 101 sets out the methodology of utilization of funds for different developmental activities under various heads. Chapter X of the Zilla Parishads Act provides for taxation and there are different sources for the augmentation of finance which is placed at the disposal of the Zilla Parishad concerned for the purpose of discharging its duties and the principal source of this augmentation of finance is by raising the collection of cess and increased cess under the Zilla Parishads Act. For the purpose of present Petition the provisions of Sections 144, 153, 154 and 155 are relevant. As noted earlier, Section 144 empowers the Zilla Parishad to levy cess at a minimum rate of 200 paise and at a maximum rate of 700 paise on every rupee of land revenue payable. Whereas, Section 153 provides that the cess leviable u/s 144 shall, subject to the provisions of Sub-sections (5) and (6) of Section 155, be paid by the State Government to the Zilla Parishad within the jurisdiction of which the lands are situated after deducting such proportion thereof as costs of collection, as the State Government may prescribe by rules. Section 154 provides that the State Government may on the application of Zilla Parishad to which the cess is payable, suspend or remit the collection of cess or any portion thereof in any area subject to the jurisdiction of such Zilla Parishad. Whereas Section 155 of the Zilla Parishads Act sets out the procedure to be followed to increase the rate of cess u/s 144. Sub-section (1) of Section 155 requires that the concerned Zilla Parishad should pass a resolution at a Special meeting called for the purpose to increase the cess rate and forward the same to the State Government for its consideration. Whereas Sub-section (3) of the said Section stipulates that the resolution u/s (1) shall state the reason for which such increase has been proposed and the special purpose for which the proceeds of the increase in the rate are to be utilized, and the period for which the increase in the rate shall continue. As per Sub-section (4) of Section 155, on receipt of such a resolution forwarded by the Zilla Parishad, the State Government may by Notification in the Official Gazette determine the increase in the rate of cess on land revenue in respect of the lands situated in the District or Block, as the case may be so however that the rate does not exceed 700 paise on every rupee and specify the date from which it shall take effect and the period during which it shall continue.
By Act No. 1 of 1993 enacted by the Maharashtra Legislature and assented by the President of India, the rate of general cess from 20 paise was increased to 200 paise and the increased cess was increased from 180 paise to 500 paise so that the total amount of cess did not exceed 700 paise. In the said amendment the first rider was containing the outer limit of 700 paise and the second rider was to follow the procedure as laid down u/s 155 of the Zilla Parishads Act. The said amendment u/s 144 was published in the Maharashtra Government Gazette on 12th February, 1993 after it was assented by the President of India on 4th February, 1993 and initially the appointed date for giving effect was 1st April, 1993 which was modified as 1st August, 1993. This change in the appointed date was made keeping in view the definition of the revenue area adopted by the Government of Maharashtra vide Notification dated 14th August, 1967.
As set out earlier, the Respondent No. 6 Zilla Parishad passed a Resolution in the specially called meeting held on 4th February, 1994 and submitted the resolution passed in that meeting to the State Government on 28th February, 1994 for its approval. In the resolution, the Zilla Parishad also specified the heads under which the cess amount would be utilized. The Resolution therefore complied with the requirements of Sub-sections (1) and (3) of Section 155 of the Zilla Parishads Act. The Government considered the resolution for increase in the cess amount submitted by the Zilla Parishad and approved it in the impugned resolution dated 1st June, 1995. The State Government has complied with the requirements of Sub-section (5) of Section 155. The affidavit filed on behalf of the State Government specifically states that the State Government after scrutiny of the proposal has considered the objections on the basis of the provisions mentioned in Section 100 and Section 101 read with Schedules I and II of the Zilla Parishads Act. The resolution passed by the Zilla Parishad was given effect from 1st August, 1993 so as to have continuance from earlier sanction effective till 31st July, 1993 for the recovery of cess. The said resolution is in the nature of a subordinate legislation by invoking powers u/s 155. It cannot be, for any reasons, dubbed as mala fide or suffering from lack of power or non-application of mind or arbitrariness.
Having regard to the provisions of Section 144 read with Section 155 of the Zilla Parishads Act, it is clear that the Authority to levy cess at the rates not exceeding 700 paise for every rupee of land revenue is not unguided and unfettered. The procedure is governed by the provisions of Section 155. So long as the procedure set out therein is meticulously followed the Government has the power to increase the rate of cess subject to the higher limit embodied u/s 144 of the Zilla Parishads Act and it cannot be held that the Government has no such power. The contentions of the Petitioners that the Government Resolution dated 1st June, 1995 is ultra vires of the provisions of Section 154 or Section 155 are therefore without any merits.
So long as the procedure embodied u/s 155 of the Zilla Parishads Act is followed for revising the rate of cess subject to the limitation u/s 144, if followed by the Government, there is no scope for an opportunity of hearing being offered to the Petitioners, to the assessee or the land/property holders who will be affected by such increase in the rate of cess. When a Zilla Parishad or a Panchayat Samiti calls for a special meeting to pass a resolution proposing to revise the rate of cess, there is a scope for a debate between the elected members of such local authorities wherein opinions are expressed by the elected representatives either in support of increase in levy or against it. In addition, not only the regular feature of passing of resolution is sufficient but assigning of special reasons for the purpose of increase in rate are required to be specified. The Zilla Parishad has also to specify in the said resolution regarding the utilization of funds in the light of the provisions of Sections 100 and 102 read with I and II Schedules of the Zilla Parishads Act.
The notification issued by the Government on 29th July, 1988 for levying cess within the jurisdiction of the Respondent No. 6 Zilla Parishad for a period of 10 years i.e. upto 31st July, 1998, had become ineffective in view of the amendment carried out in Section 144 of the Zilla Parishads Act and pursuant to the fresh resolution being passed by the said Zilla Parishad. The Government had issued a notification which was effective till 31st July, 1993. u/s 155(4) of the Zilla Parishads Act, the State Government has the powers to specify the period as well as the date on which the increase in the rate shall be effective. The State in its wisdom has decided to increase the rate of cess with effect from 1st August, 1993 and so long as the said amount of cess does not exceed the outer limit as provided u/s 144 of the Zilla Parishads Act, the contention that there is an overlapping of period or there is an element of double taxation has no merits and such contentions raised by the Petitioner did not appeal us as correct and sound.
Learned Counsel for the Petitioners has also advanced argument that the Government Resolutions impugned in the instant petition cannot be more than an executive instructions and they can have no retrospective operation more so because executive instructions cannot be termed as a subordinate legislation. In support of this contention reliance has been placed on a Judgment of this Court (Division Bench) in the case of Narayan Deoji Koli Vs. State of Maharashtra and Others, . We are not impressed with the submissions and we have no hesitation to observe that the Judgment of this Court in the case of Narayan Deoji Koli (supra) is not applicable in the instant case. The impugned Government Resolutions are issued only in pursuance of the statutory scheme as provided u/s 155 of the Zilla Parishads Act and Section 127 of the Village Panchayats Act and they are in compliance of the said statutory procedure. They cannot be therefore termed as mere executive instructions. The said challenge is therefore devoid of merits and is hereby repelled.
Section 127 of the Village Panchayats Act states that the State Government shall levy a cess at the rate of 20 naye paise or at such increased rate not exceeding 100 naye paise as may be determined by the State Government on every rupee of every sum payable to the State Government as ordinary land revenue in the area within the jurisdiction of a panchayat and thereupon the State Government shall (in addition to any cess leviable under the Zilla Parishads Act) levy and collect such cess in such area. It is, therefore, clear that the cess u/s 127(1) of the Village Panchayats Act is distinct and in addition to the cess as may be levied u/s 144 of the Zilla Parishads Act. The said provisions of Section 127 of the Village Panchayats Act empowers the State Government to levy cess at a rate not exceeding 100 naye paise. The learned Counsel for the Petitioners, in all fairness, did not rightly press for his challenge to the Government Resolution dated 7th April, 1995.
For the reasons stated hereinabove, the challenge to the impugned Government Resolutions as raised by the Petitioners is devoid of merits and the Petition is therefore dismissed. Rule discharged with no order as to costs.
P.A. to give ordinary copy of this order to the parties concerned.
Certified copy expedited.