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Judgment
Alladi Kuppu Swami
The first petitioner is an Association of Petrol and Diesel Dealers in Hyderabad. Petitioners 2 to 55 are dealers who deal in petrol and diesel oil etc. In this writ petition they pray for the issue of a writ of mandamus directing the respondents, namely, Municipal Corporation of Hyderabad and the Additional Commissioner to forbear from enforcing the notification dt. 14-4-1972 issued under sec. 521 (1) (e) (ii) and sec. 622 (2) of the Hyderabad Municipal Corporation Act, 1955 (Referred to in this Judgment as the Act) in so for as the notification relates to items 20 to 22 of Annexure 1, part II assessment on the basis of power, labour regard to factories, battery charging, (item 5) and items 5, 41, 121 of Annexure II. The impugned notification says that in exercise of the powers conferred under Sec 521(1)(e)(ii) of the Act, the Commissioner is of the opinion that the trades and operations mentioned in Annexure II to the order are dangerous to health or property or likely to create nuisance either by its nature or by reason of the manner in which or the conditions under which the same is or is proposed to be carried on and orders that no such trade or operations be carried on without licence or permission. The notification further fixes the rates of licence fee as against each item contained in Annexures I and II of the order. The notification was to corns into force from 1-4-1972. Annexure I of the order deals with the schedule of rates of licence fee. Part 11 deals with the articles which shall not be kept without a licence in or upon any premises in quantities exceeding at any one time maximum quantities stated opposite such articles respectively, Item 20 of this part is petroleum. Item 21 is dangerous petroleum and item 22 is oil. Col. 3 refers to the quantity and col. 4 gives the licence fee which varies with the quantity. Part III contains articles which shall not be kept without a licence, in or upon any premises for sale or other than domestic use. Part IV sets out trades or operations connected with trade which shall not be carried in or upon any premises without a licence. The last part of this part provides that subject to the provisions of Factories Act, 1948, no person shall newly establish in any premises or remove from one place to another, or reopen or renew after discontinuance for a period of not less than three years, or enlarge or extend the area or dimension of any factory, workshop etc, except with the previous written permission of the Commissioner. Certain licence fee is prescribed obviously for obtaining such permission either based upon the power employed or on the number of labourers employed. In regard to particulars matters specified in that part, a fixed licence fee is charged. One of them is item, 5, battery charging, for which licence fee is Rs. 25,00/-. In Annexure 11 under the heading U/s. 527 (1) (e) (ii) number of items are mentioned. Out of these we are concerned in this writ petition with items 5, Automobiles Sittings and accessories shops, item 41 Motor servicing and item 121, Motor and Motor Cycle repairing.
The main contention of the writ petitioners is that the licence fee that is levied under Sec. 622 (2) of the Act is a fee and not a tax. Such a fee must be commensurate with the services rendered by the Corporation. In this cases it is alleged that the Municipality is not providing any special service to the petitioners commensurate with the fee proposed to be levied under different heads There is no co-relation between the fee levied and the services rendered. It is also alleged that the fee which was to be levied is a fee set apart for the services should not be merged with the other public revenues collected by the Municipality. Hence, the notification leving the licence fee violates the petitioners rights under Art. 14, 19 (1) (g) and (f) of the Constitution of India as it is not a reasonable restriction in the interests of the general public on the light of the petitioners to carry on trade and is discriminatory in nature. Figures are given in the petition in order to make out a case that there is an enormous increase in the rate of licence fee, which according to the petitioners works out to more than 12,00% in some cases. The petitioners therefore; with these allegations filed this writ petition questioning the notification.
In the counter-affidavit it is denied that there is no quid proquo to the licence fee collected from the petitioners. It is stated that keeping of petrol Bunks within the area of the Municipal Corporation would raise enormous problems of public health and safety, which if not properly and periodically checked and inspected by the personnel would not only affect the interests of the public at large but also the dealers themselves. The corporation renders services to the petrol bunks both directly and indirectly by taking several measures. It is stated that the main service rendered is the improvement of sanitation and hygiene in and around the petrol bunks, like cleaning garbage, making arrangements for the out let of sewage through drainage system, spraying disinfectants etc. To supervise and to discharge functions connected with the dangerous trades and operations and to ensure public health and safety. It is stated that one Medical Officer, one Additional Medical Officer, Five Assistant Medical officers, Two Assistant Licence Officers, twelve licence Inspectors and Sub Inspectors, fifty six Sanitory Inspectors, four hundred sanitary jwans, eight hundred sweepers and three thousand kamaties are employed. It is also stated that huge amounts are spent on transport for the garbage etc. It is further submitted that the average income derived and the fee charges on the dangerous and offensive traders during the year 1969-70 and 1971-72 is to the tune of Rs. 1,16,718-00. The enhancement of fee was restored to with a view to meet the increased expenditure on account of the revised pay-scales and increase in the allowances of the staff and rise of cost of material needed for the aforesaid purposes. The revised rate cannot therefore be said to be unreasonable increase. To sum up, it is stated that the fee imposed is commensurate with the services rendered and therefore, the notification is valid.
A perusal of the petition as well as the counter affidavit disclose that there is misapprehension about the exact scope of the notification on both sides. Both the parties seem to have proceeded upon the assumption that the licence fee imposed in respect of all the items partakes of the same character and is imposed in respect of carrying on of a dangerous trade, This however, is not the true position. The notification deals with different types of licence fee. In order to appreciate the true scope of the notification it is necessary to set out the relevant provisions of the Municipal Corporation Act which authorise the imposition of licence fee. Under Sec. 521 of the Act except under and in confirmitry with the terms and conditions of a licence granted by the Commissioner, no person shall--
(a) keep, in or upon any premises, for any purpose whatever;
(i) any article specified in part 1 of Schedule P.
(ii) any article specified in part II of schedule P in excess of the quantity of such article which may at one time be kept in or upon the same premises without a licence;
(b) keep, in or upon any premises, for sale or for other than domestic use, any article specified in part III of schedule P.
(c) xx xx
(d) xx xx
(e) Carry on, or allow to be carried on, in or upon any premises;
(i) any of the trades or operations connected with trade specified
in Part IV of Schedule P;
(ii) any trade or operation which in the opinion of the Commissioner is dangerous to life, health or property or likely to create a nuisance either from its nature, or by reason of the manner in which, or the conditions under which, the same, is 01 is proposed to be carried on,
(f) xx xx
Section 622 (2) provides that wherever it is provided in the Act that a licence may be given for any purpose, such licence fee may be charged at such rate as shall from time to time be fixed by the Commissioner with the sanction of the Corporation.
The scheme of section 521 can broadly be stated as follows:
Certain articles specified in part I, Schedule P cannot be kept in any premises for any purpose whatsoever except under and in confirmity with the terms and conditions of a licence. Certain other articles specified in pan 11 of schedule P can be kept upto a particular limit without a licence, but if that limit is exceeded a licence is required. Lastly, there are soma articles which cannot be kept for sale or for other than domestic use unless a licence is obtained. These are mentioned in part II of schedule P. As tar as the Articles referred to in parts I and II of schedule P are concerned the purpose for which they are kept is irrelevant; whereas as far as articles mentioned in part III of schedule P are concerned, they cannot be kept for sale or for other than domestic use. These sub-clauses therefore, deal with keeping or storing of articles in premises. Clause (e) however, refers to carrying on of trades. The trades specified in part IV to schedule P cannot be carried on except after obtaining a licence. In addition to these specified trades the Commissioner can declare other trades which in his opinion are dangerous to life, health or property or likely to create a nusiance. These trades are also, if such declaration is made, cannot be carried on unless licence is obtained.
In the impugned notification, the first part containing annexure I deals with the keeping articles in pennies. This corresponds to 521 (1) (a) and (b) of the Act. Part I deals with some of the articles specified in schedule P. which cannot be kept in or upon any premises for any purpose whatsoever. Part 11 deals with articles which correspond to Part 11 of schedule P, namely, articles which cannot be kept in excess of certain quantities. Part III deals with articles which cannot be kept in or upon any premises for sale, or for other than domestic use.
It is in Part II that items 20, 21 and 22 are mentioned. In respect of these items, the notification says that these articles cannot be kept without a licence in or upon any premises in quantity exceeding at any one time, the maximum quantities stated opposite to such articles. In regard to petroleum, the maximum quantity is 10 gallons; in regard to dangerous petroleum it is 3 gallons; and in regard to oil it is 15 gallons. Hence, ail that tile notification prescribes as far as these items are concerned is true if the petitioners desire to store or keep in their premises more than the maximum quantity they have to obtain a licence and pay the fee for such quantity as prescribed. This varies with the quantity of the articles stored. This has nothing to do with the carrying on a trade or operation in petroleum or oil. Under Sec. 521 (1)(e) certain trades or operations which cannot be carried without a licence fee is mentioned in part IV of schedule P. It is also open to the Commissioner to declare any of the trades or operations connected with the trades, which in his opinion are dangerous to life, health, property etc. In which case such trades also cannot be carried on without a licence. In the impugned notification, such a declaration is made only with reference to annexure 11. The notification says that the Commissioner is of the opinion that the trades and operations mentioned in Annexure it of the order are dangerous to health or property or likely to create nuisance either by its nature or by reason of the manner in which or the conditions under which the same is or is proposed to be carried on. In Annexure 11, there are as many items at 153, but I do not find trading in petroleum and oil is one of the items, It follows therefore that trading in petroleum or oil is neither a trade or operation referred to in part IV of schedule P, nor is it a trade which has been declared to be dangerous to life, health, property etc, in exercise of the powers contained in sec. 521 (1) (e) (ii) of the Act. Hence, there cannot be licence fee imposed at present upon the carrying on trade in petroleum and oil nor does the impugned notification purport to do so. As tar as petroleum and oil is concerned, the notification imposes licence fee only for storing of petroleum and oil. It is in this context that this court has to find out whether the licence fee charged is commensurate with the services rendered. Apparently proceeding on the footing that the licence fee charged is in regard to the carrying on of trade in petroleum and oil, it is sought to be made out in the counter affidavit that the services are being done for the purpose of keeping the premises of the petrol bunks in hygiene conditions and and all expenses incurred in connection with the cleaning of garbage, sweeping, transport of garbage, spraying disinfectants etc. have been included in in the amount which is being expended. For the same reasons reference is made to Medical Officers, Sanitary Staff and so on. In my view, however, these expenses are not relevant or necessary, if we consider the purpose for which fee is levied in this case. The purpose for which fee is levied as has been pointed out is to enable the petitioners to store petroleum or oil. Among the expenses that are referred, perhaps the expenses that are relevant or necessary would be in regard to appointment of Inspectors or officers in connection therewith. Viewing the fee as a fee only for obtaining licence for stering according to terms of the notification it could not be seriously contended on behalf of the respondent that the expenses incurred are commensurate with the licence fee imposed. The licence fee imposed varies from Rs. 20 to Rs. 500 in the case of petroleum and dangerous petroleum and Rs. 10 to Rs. 100/- in the case of oil.
The learned Advocate General frankly stated that services rendered would be stated to have any co-relation to the fee only if the fee is viewed as a lee for carrying on trade in petroleum or oil. But as I have already held that according to the terms and conditions, the fee is not for carrying on trade, but only for the purpose of storing petroleum, it cannot be said that the fee imposed is compensurate with the services rendered. For the above reasons it follows that the notification in so far as it deals with items 20 to 22 Part 11 of Annexure 1 has to be set aside.
Another items which the petitioners questioned are the items of battery charging which carries a licence fee of Rs. 25/-. This item occurs towards the end of part IV which deals with Factories. Under sec. 516 of the Act, no person shall newly establish in any premises, remove from one place to another, reopen or renew alter discontinuance for a period of not less than three years, enlarge or extend the area or dimension of any factory, workshop or work place etc except with the previous written permission of the Commissioner. It is this that is dealt with in this part of part IV. In regard to obtaining permission for the above purpose, it is stated that factories which deal in specific commodities mentioned therein of which item 5 is battery charging, the licence fee is Rs. 25/-. In other cases, fee is charged on the basis of power or the number of labourers. The petitioners challenged this Part under the mistaken belief that his licence fee was also a licence fee in respect of carrying on business of battery charging. It is however seen that this fee is only for a permission to establish factory or remove factory from one place to another, or reopen or renew a factory etc. It is now realised by the petitioners that as they are not concerned with either establishing or removing from one place to another or reopening or renewing or enlarging the area or dimension of the factory etc, this fee is not applicable to them. Hence, there is no need to pronounce upon the validity of the fee in respect of this item.
The other items are those mentioned in Annexure 11 as items 5, Automobiles of fittings and Accessories shops item 41 is motor servicing and item 121 is motor cycle repairing. As has been noticed already, the items in this Annexure are the items which have been declared by the Commissioner as trades which in his opinion are dangerous to the life, health or property or likely to create nuisance. The Commissioner is therefore, entitled to levy a fee for obtaining permission to carry on these trades. The fee for item 5 is Rs. 20/- for item 41 is Rs. 25/- and for item 121 it is Rs. 40/-, Considering the nature of trade that is being carried on and the nuisance resulting to the Public by carrying on that trade, it cannot be said that fee charged for giving permission is in any way unreasonable. As this fee is levied in connection with carrying on trade, it is legitimate to take into consideration the expenses incurred by the Corporation in keeping the premises clean, which will enable the petitioners to carry on the trade more efficiently and usefully, I have no reason not to accept the figures given by the Corporation, in regard to the various officers employed for the purposes mentioned in the counter affidavit. It has already been held by a Bench of this court in W.A. No. 852/73 dt. 10-9-1974 in connection with fee levied for the purpose of carrying on business of hotels that they there is co-relation between the fee and the services rendered: Following this decision it was also held in W. P. No. 6510/73 dt. 19-12-1974 that the fee levied for storing tobacco was also reasonable.
Having gone through the affidavit and the counter-affidavit and the facts stated therein I am of the view that the fee levied in respect of these items cannot be challenged as either arbitrary, unreasonable or having no relation to the services rendered.
In the result, the notification is quashed in so far as items 20 to 22 of part II of Annexure I is concerned and is upheld with regard to the other, items challenged.
There will be no order as to costs. The writ petition is allowed in part. As it is represented that under interim orders of this court, some amounts have been deposited as licence fee, if that relates to items 20 to 22 of part II of Annexure I, the respondent will either refund those amounts or adjust them against any licence fee due from the petitioners concerned.