Madras High Court
M/S.Samsung India Electronics Pvt Ltd vs State Of Tamil Nadu on 25 June, 2025
W.P.No.11435 of 2011
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 25.06.2025
CORAM :
THE HON'BLE Mrs. JUSTICE N.MALA
W.P.No.11435 of 2011
and
M.P.Nos.1 & 2 of 2011
M/s.Samsung India Electronics Pvt Ltd.,
Regional Office-South,
24, Rajasekaran Street,
Off.Dr.Radhakrishnan Salai,
Mylapore, Chennai-600 004.
Rep.by its Branch Commercial Head ... Petitioner
Vs.
1.State of Tamil Nadu,
Rep.by the Secretary to Government,
Local Administration Department,
New Secretariat,
Omanthurar Thottam,
Chennai-600 002.
2.The Commissioner,
Greater Chennai Corporation, Chennai.
3.The Zonal Officer, Zone-3,
Greater Chennai Corporation, Chennai.
(R2 and R3 are impleaded as per order dated 09.12.2024 in
WP.No.11435/2011 by DBCJ) ... Respondents
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W.P.No.11435 of 2011
Prayer: This Writ petition has been filed under Article 226 of the
Constitution of India, praying to issue Writ of Declaration declaring that
Notification bearing Na.Ka.No.7077/2008/H1 dated 06.01.2009 issued by
the second respondent and published in the Tiruvallur District Gazette
dated 05.02.2009, in so far as it relates to item Nos.16(15) and 16(16)
viz., 'storage of electronic goods and domestic consumable goods with
storage area upto 1000 sq.ft' and 'storage of electronic goods and
domestic consumable goods with storage area of above 1000 sq.ft' and all
proceedings pursuant thereto is arbitrary, illegal, unconstitutional and is
violative of the provisions of the Tamil Nadu District Municipalities Act,
1920 in so far as the petitioner is concerned.
For Petitioner : Mr.Surya Narayanan
For R1 : M/s.P.Aishwarya
For R2 & R3 : Mr.G.T.Subramanian
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W.P.No.11435 of 2011
ORDER
This Writ Petition is filed by the petitioner declaring that Notification bearing Na.Ka.No.7077/2008/H1 dated 06.01.2009 issued by the second respondent and published in the Tiruvallur District Gazette dated 05.02.2009, in so far as it relates to item Nos.16(15) and 16(16) viz., 'storage of electronic goods and domestic consumable goods with storage area upto 1000 sq.ft' and 'storage of electronic goods and domestic consumable goods with storage area of above 1000 sq.ft' and all proceedings pursuant thereto is arbitrary, illegal, unconstitutional and is violative of the provisions of the Tamil Nadu District Municipalities Act, 1920 in so far as the petitioner is concerned.
2.The case of the Writ Petitioner is that the petitioner company is incorporated under the Indian Companies Act, 1956 and is engaged in the business of manufacturing and selling of consumer durables, home appliances, IT products and Mobile phones. The petitioner has a wide network offices all over the country. The petitioner, inter alia, has two storage areas earmarked for storing their electronic goods which are located at 200 feet road, comprised in S.Nos.714/1B, 714/2, 715/1B, 716/2B, 717/2 and 718/2 and in S.Nos.673/1, 673/2, 674/1, 674/2 and 675 3/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 in Madhavaram Village. The said storage places are being used by the petitioner for storing its products such as consumer durables, home appliances, IT products and mobile phones which are of small in sizes are packed securely and kept in the said places in an orderly manner. The petitioner received two notices dated 19.03.2010, both bearing Na.Ka.No.955/2010/H1 from the second respondent, stating that the petitioner has stored electronic goods in its premises within the limits of Madhavaram Municipality; that no licence for the same was obtained by the petitioner and hence license fee has to be paid by the petitioner to the Municipality. In regard to the storage unit in S.Nos.714/1B, 714/2, 715/1B, 716/2B, 717/2 and 718/2, the total fee amount payable is Rs.5,26,120/- and in regard to the storage unit in S.Nos.673/1, 673/2, 674/1, 674/2 and 675, the total fee amount payable is Rs.2,42,304/-. In all, the second respondent raised a total demand of Rs.7,68,424/- in respect of both storage units of the petitioner company.
3.The petitioner has challenged the validity of notification of the second respondent in Na.Ka.No.7077/2008/H1 dated 06.01.2009 published in Thiruvallur District Gazette on 05.02.2009 and the consequential two demand notices dated 19.03.2010 bearing 4/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 Na.Ka.No.955/2010/H1 issued by the second respondent alleging default by the petitioner in payment of the license fee for storage on electronic goods in the petitioner's premises within the limits of Madhavaram Municipality.
4.The learned counsel for the petitioner would submit that on 30.10.2008, in an ordinary meeting of the Municipal Counsil of Madhavaram Municipality it was discussed and decided by the second respondent to increase the license fee for the trades coming under the Dangerous and Obnoxious trade. In the note for Agenda under item No.28 which was placed before the Council meeting wherein it was stated that license fees are being collected under sub-sections of Sections 249, 255, 258, 259 and 270 of the Tamil Nadu District Municipalities Act, 1920 at the rates fixed as on 18.02.1990 and that the said license fees were not revised after 1990. The said note also stated that Madhavaram Municipality is a developing town adjoining Chennai and new factories and new trades have been in the town and hence fees for new trades are to be fixed and the old fees are also to be refixed. The said note, after stating that the fees have been refixed in the adjoining Tiruvotriyur Municipality, placed a proposal for fixing new license fees for various dangerous and 5/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 obnoxious trades as stated in the said note. In terms of item No.16(15) and 16(16) of the tabular statement provided in the note to the said Agenda, it was proposed to fix a license fee for storage of electronic goods and domestic use goods under Section 249 read with item (n) of Schedule-V to the Tamil Nadu District Municipalities Act, 1920 at the rate of Rs.5,000/- per annum in respect of the storage area upto 1,000 sq.ft., and at the rate of Rs.100/- per annum per sq.ft., or part thereof over and above the area of 1000 sq.ft.
5.The learned counsel would further submit that the second respondent Municipality issued a publication in the daily newspaper on 03.12.2008 informing the general public and inviting objections/suggestions, if any, to its proposal to refix license fees for the existing trades and to fix licence fee for new trades and inviting objections, if any, for the same from the general public. Thereafter, a notification bearing Na.Ka.No.7077/2008/H1 dated 06.01.2009 was issued by the second respondent which was published in Tiruvallur District Gazette dated 05.02.2009 wherein it was stated by the second respondent that there were no objections/suggestions from the public and hence, the public was informed that the refixed rates of license fee as 6/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 stated in the table annexed to the notification shall come into effect from 01.04.2009. In the above table annexed to the said notification also, the licence fee in respect of storage of electronic goods has been specified under Serial Nos.16(5) and 16(6) at the rates already stated herein above.
6.It is further submitted that the second respondent's notification dated 06.01.2009 as published in the District Gazette on 05.02.2009, reveals that the second respondent has now, for the first time, arbitrarily and without authority sought to fix the licence fee for the storage of electronic goods which is evident from the following facts.
7. The Chapter XII of the Tamil Nadu District Municipalities Act, 1920 deals with licences and fees leviable and recoverable by the Municipalities in the State of Tamil Nadu, Section 249 under the heading 'Industries and Factories' provides that the Municipal Council may publish, by notification in the District Gazette and by beat of drum that no place within municipal limits shall be used for any one or more of the purposes specified in Schedule V without a licence. The said section is extracted here below:
“...249. Purpose for which places may not be 7/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 used without licences:- (1) The council may publish a notification in the district gazette and by beat of drum that no place within municipal limits or at a distance within three miles of such limits shall be used for any one or more of the purposes specified in Schedule V without the licence of the executive authority and except in accordance with the conditions specified therein;
Provided that no such notification shall take effect -
(a) until sixty days from the date of publication, and
(b) except with the previous sanction of the State Government in any area outside the municipal limited.
(2) The owner or occupier of every such place shall, within thirty days of the publication of such notification, apply to the executive authority for a licence for the use of such place for such purpose (3) The executive authority may, by an order and under such restrictions and regulations as he thinks fir, grant or refuse to grant such licence.
(4) Every such licence shall expire at the end of the year unless for special reasons the executive authority considers it should expire at an earlier date, when it shall expire at such earlier date as may be specified therein.
8/32
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10. The petitioner states that Schedule V to the Act provides a list of purposes for which premises may not be used without a licence under Section 249. The said Schedule - V is extracted herebelow:
(a) Washing soiled clothes or keeping soiled clothes for the purpose of washing them or keeping washed clothes;
(b) boiling paddy or camphor;
(c) melting tallow or sulphor;
(d) storing or otherwise dealing with manure, offal, blood, bones, rags, hides, fish, horns or skins;
(e) washing or drying wool or hair;
(f) making fish-oil;
(g) making soap, dyeing, boiling or pressing oil, burning bricks, tiles, pottery, or lime;
(h) manufacturing or distilling sago, manufacturing artificial manure, manufacturing beedies or cigars;
(i) manufacturing gun powder or fire works;9/32
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(j) keeping a public halting place, choultry or other rest house for travellers other than a choultry or rest house maintained by the Government or local authority, a hotel, restaurant, eating house, coffee house, boarding house or lodging house other than a student's hostel under public or recognized control; (jj) keeping a shaving or hair-dressing saloon:
(k) keeping together twenty or more sheep or goats or ten or more pigs or head of cattle;
(l) preparing flour or articles made of flour for human consumption or sweetmeats;
(m) manufacturing ice or aerated waters;
(mm) brewing beer, manufacturing arrack or other spirit containing alcohol whether denatured or not, by distillation;
(n) selling or storing timber, firewood, thatching materials, hay, grass, straw, fibre, coal or charcoal;
(o) selling wholesale or retall, or storing for wholesale or retail trade or for purposes other than private or domestic use, grain, groundnut, tamarind, chillies, jaggery, pulses, flour, bran, oil-cakes or agricultural produce which is likely to attract rats;
(p) manufacturing jaggery, sugarcandy or syrup otherwise than as cottage industry by tappers or persons in enjoyment of the trees carried on in their own premises;
(q) storing any explosive or combustible materials;
Provided that no licence shall be required for 10/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 storing petroleum and its products quantities exceeding those to which the operation of the Act is limited by the provisions of the Petroleum Act 1934 or the rules or notifications issued thereunder; (qq) selling cotton wholesale or retail or storing cotton for wholesale or retain trade or for conversion into yarn;
(r) manufacturing anything from which offensive or unwholesome smell arise;
(s) using for any industrial purpose any fuel or machinery other than such machinery as may by notification, be exempted by the State Government from time to time; and
(t) in general, doing in the course of any industrial process anything which is likely to be dangerous to human life or health or property;
11. The petitioner states that Section 305 of the Act provides powers for the State Government to make rules for altering, adding to or canceling any of the Schedules - II, III, IV, V and VI of the Act. The said section is extracted herebelow:
305. Power of State Government to alter schedules.- (1) The State Government may make rules whether prospectively or retrospectively altering, adding to or canceling any of the following Schedules to this Act, namely -Schedules II, III, IV, V and VI.
Sub-section (3) of Section 305 states as follows:
"(3) All references made in this Act to any of the 11/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 aforesaid Schedules shall be construed as referring to such Schedules as for the time being amended in exercise of the powers conferred by sub-section (1) or sub-section (2), as the case may be."
12. Section 307 of the Act provides for giving retrospective effect of bye-laws of the Municipal Council in respect of certain matters only. The said section reads as follows:
“307. Power to give retrospective effect to certain by-laws. By-laws with regard to drainage of, and supply of water to, buildings and water- closets, earth-closets, privies, ashpits and cess-pools in connection with buildings and the keeping of water-closets supplied with sufficient water for flushing may be made so as to affect buildings erected before the passing of the by-laws or this Act."
Section 310 of the Act provides for the mandatory requirement of confirmation by the State Government of all by-laws or cancellation of alteration of by-laws. The said section is extracted herebelow:
“310. Confirmation of by-laws by State Government.- (1) No by-laws or cancellation or alteration of a effect until the same shall have been approved and confirmed by the State Government. (2) Any by-law or cancellation or an alteration of a by-law when it shall have been duly confirmed shall be published in the district gazette in English and shall come into operation three months after is has 12/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 been so published."
Section 363 of the Act empowers the State Government to delegate its powers exercisable by the State Government under this Act in favour of any person. The said section reads as follows:
363. Delegation of powers by the State Government:- (1) The State Government may by notification authorize any person to exercise any one or more of the power vested in them by this Act, except the powers mentioned in Chapters II and III, the power to determine the amount of contribution under section 156, the power to make rules under sub-section (2) of section 77-A and sections 303 and 305 and that the power to sanction prosecution under section 353-A and may in like manner withdraw such authority. (emphasise supplied)
13. The petitioner respectfully states and submits that in order to enable the second respondent Municipality to levy and collect licence fee, the following requirements are to be satisfied:
i. The trade for which licence fee is proposed to be collected should have been included in Schedule - V to the Act.
ii. The council shall first publish a notification to the effect that no place within its limits shall be used for any one or more of the purposes specified in Schedule - V without the licence of the council.
iii. The said notification shall have effect only after expiry of 60 days from the date of the 13/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 notification.”
8.The learned counsel would further submit that in order to enable the second respondent Municipality to levy and collect licence fee, the following requirements are to be satisfied:
i. The trade for which licence fee is proposed to be collected should have been included in Schedule- V to the Act.
ii. The council shall first publish a notification to the effect that no place within its limits shall be used for any one or more of the purposes specified in Schedule-V without the licence of the council iii. The said notification shall have effect only after expiry of 60 days from the date of the notification.
9.It is further submitted that on a bare reading of Section 305 of the Act, it is clear beyond any pale of doubt that it is only the State Government which has power to make rules whether prospectively or retrospectively altering, adding to or cancelling any of the following Schedules to this Act, viz., Schedules II, III, IV, V and VI. In the present case, while the purpose for which the licence fee has been proposed by the second respondent viz., 'storage of electronic goods' does not find a 14/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 place in any of the entries in Schedule-V to the Act, a perusal of the notification dated 06.01.2009, as published in the district gazette dated 05.02.2009 reveals that the second respondent has sought to trace its power to levy licence fee for storing electronic goods under item Nos.16(1) and 16(2) to entry (n) of Schedule-V to the Act. However, as already stated herein above, entry (n) of Schedule-V to the Act relates to 'selling or storing timber, firewood, thatching materials, hay, grass, straw, fibre, coal or charcoal' which is unrelated in any manner to storing of electronic goods.
10.The learned counsel would further submit that the very action of the Municipality in passing a resolution to levy and demand licence fee in respect of storing of electronic goods is without authority and hence the impugned notices issued by the second respondent is ultra vires the provisions of the Tamil Nadu District Municipalities Act, 1920. Section 363 of the Act provides for delegation of powers by the State Government under the Act. It is clear that any addition, alteration, deletion of purposes mentioned in Schedule-V to the Act shall be made only by a notification of the State Government and the same cannot be made by the action of the second respondent. In the present case, the 15/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 action of the second respondent in fixing the license fee for the purpose of 'storage of electronic goods' is tantamount to inclusion of the said purpose in Schedule-V to the Act which is clearly without authority of law.
11.It is further submitted that even assuming that the Municipality has power to decide on levying, demanding and collecting licence fee in respect of 'storing electronic goods' within its municipal limits, the same cannot be resorted to by the municipality unless such purpose is included by means of an enactment and the subsequent notification by the State Government by including it in Schedule-V to the Act. In the present case, the second respondent has sought to impose the licence fee for a purpose which does not find a place in Schedule-V to the Act. Hence, the impugned action of the second respondent suffers from the vice of malafide and colourable exercise of power besides being without authority of law.
12.The second respondent has fixed the licence fee for storage of electronic goods under item Nos.16(15) and 16(16) of the impugned notification. Under column No.3 relating to the said entry, the second respondent has traced its power of imposition of the licence fee by 16/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 referring to item No.(n) of Schedule-V to the Act. As already extracted in herein above, the item (n) of Schedule-V pertains to 'Selling or storing timber, firewood, thatching materials, hay grass, straw, fibre, coal or charcoal' which is unrelated in any manner to storing of electronic goods.
Thus, it is a clear evidence of the fact that the impugned notification of the second respondent not only suffers from lack of authority but also from total non-application of mind on the part of the petitioner herein.
13.The counter affidavit has been filed by the second respondent Municipality on 05.08.2011 which has been subsequently merged with Corporation of Chennai in October 2011. Hence, the second respondent is deleted from the cause title and The Commissioner, Greater Chennai Corporation, Chennai is merged and the Zonal Officer, Zone-3, Greater Chennai Corporation, Chennai has been impleaded as the second and third respondents respectively.
14.Mr.G.T.Subramanian, learned standing counsel appearing for the second and third respondents would submit that one of the main functions of the Municipality is the maintenance of the public health and ensuring the maintenance of the roads and also the provisions of 17/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 necessary inspections and prevention of disasters and for these functions, the Municipality is empowered under the Tamil Nadu District Municipalities Act 1920 as amended upto date, to levy the licence fees at various rates notified by the Municipality.
15.The learned standing counsel would further submit that the challenge to the demand notices is not maintainable in view of the failure to challenge the result the resolution that actually decides to make the relevant inclusions to the licence items. He would submit that the description of the Electronic Goods is not a new inclusion for the purpose of the Schedule-V of the act. It is in fact a notification that only describes the various items that would come under the various items of the Schedule V and that the classification made in Schedule V is one that was issued in the year 1951. It does not provide for the various industrial products and manufacturing activities that are now available and which were not even known at that time. The last clause of the Schedule V includes any manufacturing activities in order to prevent the escape of the various forms of manufacturing activities that cannot be inexhaustibly described or set out in the Schedule V. It is only an inclusive definition and not an exclusive definition. Therefore the modern day developments 18/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 have to be included in the Schedule.
16.It is further submitted that various items notified under the impugned Gazzette Notifications are all that which are already derivatives of the various items that are set out in the schedule. Only that the actual articles cannot be found in the Schedule and it is a representative definition. It is further submitted that the various items of the schedule include the various components of presently Electronic Goods. The description in the impugned notification seeks to include the Electronic items and their storage for the reason that it is part of a manufacturing activity as well as trading activity, that causes a drain on the functioning of the Municipality.
17.Heard both sides and perused the materials available on record.
18.In the case on hand, the petitioner has challenged the notification of the second respondent in Na.Ka.No.7077/2008/H1 dated 06.01.2009 and the sequential two demand notices dated 19.03.2010, bearing Na.Ka.No.955/2010/H1 calling upon the petitioner to pay a sum 19/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 of Rs.5,26,120/- and Rs.2,42,304/- towards license fee and penalty for the periods for the financial year 2006-2007 to 2010-2011. The petitioner company is engaged in manufacturing and selling consumer durables, home appliances, IT products and mobile phones. The petitioner company has two storage areas earmarked for storing their electronic goods which are located at 200 feet Road, comprised in S.Nos.714/1B, 714/2, 715/1B, 716/2B, 717/2 and 718/2 and in S.Nos.673/1, 673/2, 674/1, 674/2 and 675 in Madhavaram Village. The Madhavaram Municipality on 30.10.2008 have decided to increase the licence fee for the for the trades coming under dangerous and obnoxious trade. It was proposed to fix a licence fee for storage of electronic goods and domestic use goods under Section 249 read with item (n) of Schedule-V to the Tamil Nadu District Municipalities Act, 1920 at the rate of Rs.5,000/- per annum in respect of the storage area upto 1,000 sq.ft., and at the rate of Rs.100/- per annum per sq.ft., or part thereof over and above the area of 1000 sq.ft. Thereafter, a notification was issued on 06.01.2009 and in the table annexed to the said notification, the licence fee in respect of storage of electronic goods has been specified under Serial Nos.16(5) and 16(6) at the rates already stated above. The Section 249 of the District Municipality Act under the heading 'Industries and Factories' provides 20/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 that the Municipal Council may publish, by notification in the District Gazette and by beat of drum that no place within municipal limits shall be used for any one or more of the purposes specified in Schedule V without a licence. It is pertinent to extract Section 249:
“...249. Purpose for which places may not be used without licences:- (1) The council may publish a notification in the district gazette and by beat of drum that no place within municipal limits or at a distance within three miles of such limits shall be used for any one or more of the purposes specified in Schedule V without the licence of the executive authority and except in accordance with the conditions specified therein;
Provided that no such notification shall take effect -
(a) until sixty days from the date of publication, and
(b) except with the previous sanction of the State Government in any area outside the municipal limited.
(2) The owner or occupier of every such place shall, within thirty days of the publication of such notification, apply to the executive authority for a licence for the use of such place for such purpose (3) The executive authority may, by an order and 21/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 under such restrictions and regulations as he thinks fir, grant or refuse to grant such licence.
(4) Every such licence shall expire at the end of the year unless for special reasons the executive authority considers it should expire at an earlier date, when it shall expire at such earlier date as may be specified therein.
(5) Applications for renewal of such licences shall be made not less than thirty and not more than ninety days before the end of every year and applications for licences for places to be newly opened shall be made not less than thirty and nor more than ninety days before they are opened.
10. The petitioner states that Schedule V to the Act provides a list of purposes for which premises may not be used without a licence under Section 249. The said Schedule - V is extracted herebelow:
(a) Washing soiled clothes or keeping soiled clothes for the purpose of washing them or keeping washed clothes;
(b) boiling paddy or camphor;
(c) melting tallow or sulphor;
(d) storing or otherwise dealing with manure, offal, blood, bones, rags, hides, fish, horns or skins;
(e) washing or drying wool or hair;
(f) making fish-oil;22/32
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(g) making soap, dyeing, boiling or pressing oil, burning bricks, tiles, pottery, or lime;
(h) manufacturing or distilling sago, manufacturing artificial manure, manufacturing beedies or cigars;
(i) manufacturing gun powder or fire works;
(j) keeping a public halting place, choultry or other rest house for travellers other than a choultry or rest house maintained by the Government or local authority, a hotel, restaurant, eating house, coffee house, boarding house or lodging house other than a student's hostel under public or recognized control; (jj) keeping a shaving or hair-dressing saloon:
(k) keeping together twenty or more sheep or goats or ten or more pigs or head of cattle;
(l) preparing flour or articles made of flour for human consumption or sweetmeats;
(m) manufacturing ice or aerated waters;
(mm) brewing beer, manufacturing arrack or other spirit containing alcohol whether denatured or not, by distillation;
(n) selling or storing timber, firewood, thatching materials, hay, grass, straw, fibre, coal or charcoal;
(o) selling wholesale or retall, or storing for wholesale or retail trade or for purposes other than private or domestic use, grain, groundnut, tamarind, chillies, jaggery, pulses, flour, bran, oil-cakes or agricultural produce which is likely to attract rats;
(p) manufacturing jaggery, sugarcandy or syrup 23/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 otherwise than as cottage industry by tappers or persons in enjoyment of the trees carried on in their own premises;
(q) storing any explosive or combustible materials;
Provided that no licence shall be required for storing petroleum and its products quantities exceeding those to which the operation of the Act is limited by the provisions of the Petroleum Act 1934 or the rules or notifications issued thereunder; (qq) selling cotton wholesale or retail or storing cotton for wholesale or retain trade or for conversion into yarn;
(r) manufacturing anything from which offensive or unwholesome smell arise;
(s) using for any industrial purpose any fuel or machinery other than such machinery as may by notification, be exempted by the State Government from time to time; and
(t) in general, doing in the course of any industrial process anything which is likely to be dangerous to human life or health or property;
11. The petitioner states that Section 305 of the Act provides powers for the State Government to make rules for altering, adding to or canceling any of the Schedules - II, III, IV, V and VI of the Act. The said section is extracted herebelow:
305. Power of State Government to alter schedules.- (1) The State Government may make rules whether prospectively or retrospectively 24/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 altering, adding to or canceling any of the following Schedules to this Act, namely -Schedules II, III, IV, V and VI.
Sub-section (3) of Section 305 states as follows:
"(3) All references made in this Act to any of the aforesaid Schedules shall be construed as referring to such Schedules as for the time being amended in exercise of the powers conferred by sub-section (1) or sub-section (2), as the case may be."
12. Section 307 of the Act provides for giving retrospective effect of bye-laws of the Municipal Council in respect of certain matters only. The said section reads as follows:
“307. Power to give retrospective effect to certain by-laws. By-laws with regard to drainage of, and supply of water to, buildings and water- closets, earth-closets, privies, ashpits and cess-pools in connection with buildings and the keeping of water-closets supplied with sufficient water for flushing may be made so as to affect buildings erected before the passing of the by-laws or this Act."
Section 310 of the Act provides for the mandatory requirement of confirmation by the State Government of all by-laws or cancellation of alteration of by-laws. The said section is extracted herebelow:
“310. Confirmation of by-laws by State Government.- (1) No by-laws or cancellation or 25/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 alteration of a effect until the same shall have been approved and confirmed by the State Government. (2) Any by-law or cancellation or an alteration of a by-law when it shall have been duly confirmed shall be published in the district gazette in English and shall come into operation three months after is has been so published."
Section 363 of the Act empowers the State Government to delegate its powers exercisable by the State Government under this Act in favour of any person. The said section reads as follows:
363. Delegation of powers by the State Government:- (1) The State Government may by notification authorize any person to exercise any one or more of the power vested in them by this Act, except the powers mentioned in Chapters II and III, the power to determine the amount of contribution under section 156, the power to make rules under sub-section (2) of section 77-A and sections 303 and 305 and that the power to sanction prosecution under section 353-A and may in like manner withdraw such authority. (emphasise supplied)
13. The petitioner respectfully states and submits that in order to enable the second respondent Municipality to levy and collect licence fee, the following requirements are to be satisfied:
i. The trade for which licence fee is proposed to be collected should have been included in Schedule - V to the Act.
iv. The council shall first publish a notification 26/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 to the effect that no place within its limits shall be used for any one or more of the purposes specified in Schedule - V without the licence of the council.
v. The said notification shall have effect only after expiry of 60 days from the date of the notification.”
19.It is crystal evident that Section 305 of the act District Municipalities Act, 1920 that it is only the State Government which has power to make rules whether prospectively or retrospectively altering, adding to or cancelling any of the following Schedules to this Act, viz., Schedules II, III, IV, V and VI. The entry (n) of Schedule-V to the Act relates to 'selling or storing timber, firewood, thatching materials, hay, grass, straw, fibre, coal or charcoal' which is unrelated in any manner to storing of electronic goods. The amendments can be made in the Schedule only by the State Government and not by the Municipality. In this case, the Municipality by way of resolution has decided to issue licence fee for the electronic goods under Section 249. Since the Entry (n) of Schedule 5 does not deal with electronic goods. The second respondent Municipality cannot levy the licence fee by relying on Schedule 5 of the District Municipalities Act since electronic goods are not mentioned in 27/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 entry (n) of Schedule of the Act. The impugned notification is liable to be set aside for the following reasons and grounds.
1.The entry 9 of Schedule V of the District Municipalities Act deals with only in order to 'selling or storing timber, firewood, thatching materials, hay, grass, straw, fibre, coal or charcoal' and does not deal with electronic goods.
2.The notification dated 06.01.2009 issued by the second respondent imposing the licence fee in respect of the storage of electronic goods which has been specified under Serial Nos.16(15), 16(16) by referring the Section 249 entry No.(n) is unsustainable for the reason that Section 249 (n) does not deals with storage of electronic goods.
3.The trade for which the licence fee proposed to be collected in Schedule V of the Act whereas the present case the electronic goods are not mentioned in entry (n) of Schedule V of the Act.
4.As per Section 305 only the State Government has got powers to alter this Schedule and to make rules whether prospectively or retrospectively altering, adding to or cancelling any of the following Schedules of this Act, viz., Schedules II, III, IV, V and VI.
5.The action of the Municipality in passing resolution of levying and demand licence fee in storage of electronic goods is without authority 28/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 since the same is not included in the Schedule V entry (n) of the Act.
6.The Municipality does not have the power to include or exclude or alter any of the entries mentioned in Schedule V of the Act.
20.In view of the above, matrix of the case, the Notification bearing Na.Ka.No.7077/2008/H1 dated 06.01.2009 issued by the second respondent and published in the Tiruvallur District Gazette dated 05.02.2009, in so far as it relates to item Nos.16(15) and 16(16) viz., 'storage of electronic goods and domestic consumable goods with storage area upto 1000 sq.ft' and 'storage of electronic goods and domestic consumable goods with storage area of above 1000 sq.ft' and all proceedings pursuant thereto is arbitrary, illegal, unconstitutional and is violative of the provisions of the Tamil Nadu District Municipalities Act, 1920 in so far as the petitioner is concerned.
21.In the result, this writ petition stands allowed. There is no order as to costs. Consequently, connected Miscellaneous Petitions are closed.
25.06.2025 (1/2) 29/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 Index: Yes/No Internet:Yes/No Neutral Citation: Yes/No tsh To
1.State of Tamil Nadu, Rep.by the Secretary to Government, Local Administration Department, New Secretariat, Omanthurar Thottam, Chennai-600 002.
2.The Commissioner, Greater Chennai Corporation, Chennai.
3.The Zonal Officer, Zone-3, Greater Chennai Corporation, Chennai.30/32
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 31/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm ) W.P.No.11435 of 2011 N. MALA, J.
tsh W.P.No.11435 of 2011 25.06.2025 32/32 https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/07/2025 03:48:07 pm )