Madhya Pradesh High Court
South Eastern Coalfields Ltd. vs The State Of Madhya Pradesh on 7 July, 2010
(1)
HIGH COURT OF MADHYA PRADESH : JABALPUR
W.P. No. 17301/2007
South Eastern Coalfields Ltd.
Vs.
State of M.P. and another
W.P. No. 363/2008
South Eastern Coalfields Ltd.
Vs.
State of M.P. and another
DB : Hon. Arun Mishra & Hon. S.C. Sinho, JJ
Shri P.S.Nair, Sr. Counsel with Shri Rajas Pohankar for
petitioner.
Shri Deepak Awasthi, Government Advocate for State.
Shri K.K. Pandey, Counsel for respondent No. 2.
ORDER
(7.7.2010) As Per : Arun Mishra, J.
1. In these writ petitions, petitioner South Eastern Coalfields Ltd. has prayed for declaring notification dated 24th May, 1979 and notification dated 20th April, 1982 as ultra vires of Article 243Q of the Constitution and Section 5 of the Municipality Act, 1961. Alternative prayer has been made that it be held that coal mines of Jamuna and Kotma are out side the territorial jurisdiction of Pasan Municipality and the definition of village does not cover coal mines. Prayer has also been made to quash demand notice (P-4) demanding a (2) sum of Rs. 57,72,800/- for a period of 10 years towards lighting charges, general fire tax and general sanitary tax under section 127 (c ), (d) and (e) of the Municipalities Act, 1961.
2. Facts are similar in both the writ petitions, they are being narrated from W.P. No. 17301/2007. It is averred in the petition that erstwhile Rewa Durbar granted a lease for coalmining purpose to M/s ACC company in the year 1941, later on the coal mines were nationalized under the Coal Mines Nationalization Act, 1973 (hereinafter referred to as the Act of 1973). Under section 11 of the Act of 1973, the mine can be vested in the Central Government Company and the Government Company will be entitled to exercise all such powers and do all such things as the owner of the coal mines is authorized to exercise and do. These powers have been vested in the petitioner in the year 1986. In exercise of power under section 340 of the M.P. Municipalities Act, 1961, the State Government issued notification declaring the local area of Pasan Village in Sohagpur Tehsil as notified area w.e.f. 24.5.1979. The State Government in exercise of the power under section 5(4) of the Municipalities Act, 1961 declared the notified area as Municipal Area and declared Pasan village as territory of municipal area. Notification dated 20.4.1982 was issued for Jamuna and Kotma area. There are two coal mines called Kotma colliery and Jamuna colliery. Kotma colliery was acquired under the provisions of (3) Coal Mines Nationalization Act, and Jamuna Colliery was obtained under the provisions of Coal Bearing Areas (Acquisition and Development) Act, 1957. Notification created Municipality of Pasan, neither Kotma colliery nor Jamuna colliery are included in the notification. Even otherwise these collieries could not have been included in the municipal area.
3. Under section 17 of the Municipalities Act, 1961, the Municipal Council is required to erect and maintain the boundary marks, it has not been done. There are no permanent boundary marks showing the boundary in the area of Pasan. The Municipality is demanding consolidated tax chargeable under section 127 (c ), (d) and (e) of the Municipalities Act. The coal mines is governed by various enactments. The entire jurisdiction for development, regulation of coal mines vest with the Central Government and in the Government company. The property is vested in the Central Government under Article 285 of the Constitution of India and cannot be taxed by the State Government or instrumentality of the State Government under the Municipalities Act. Kotma and Jamuna collieries are not part of the Municipal area. A part of the area is in reserved forest. Municipality cannot exist in reserve forest area. The purpose of Municipalities Act is to carry out non forest activities. Demand has been illegally raised by the (4) Municipal Council. Thus aforesaid provisions be declared as ulra vires.
4. In W.P. No. 363/2008, prayer has been made to hold the establishment of Municipality Kotma including Govinda and Meera Colliery/Colonies is ultra vires of Article 243(Q) of the Constitution of India and Section 5 of the Municipalities Act, 1961. Thus the Municipality had no right to demand the tax under the aforesaid provisions. The consolidated demand under section 127 (c ), (d) and (e) is Rs. 26,66,500/- for a period of 10 years.
5. In the return filed in W.P. No. 17301/2007, it is contended that earlier petitioner had preferred two writ petitions in which aforesaid grounds were not raised. The effort is to any how prolong recovery. The area in question falls within the Municipal Limits, the petitioner is bound to pay fee imposed by the Municipal Council. Petitioner is a registered company, hence is bound to make the payment of fees. The whole area of Pasan and Jamuna colliery is included in Municipal Council Pasan. The Municipal Council renders the services and collects the fees. The petitioner is bound to pay it. Various documents have also been filed indicating that area in question falls within the municipal limits.
6. Shri P.S.Nair, learned Sr. Counsel with Shri Rajas Pohankar appearing for petitioner has submitted that the provisions of Section 127 (c ), (d) and (e) of the Municipality Act with respect to cleanliness of the city, lighting of public (5) streets and fire fighting are applicable to city not to the coal mines. The Municipality cannot carry out any function in coal mines. Conservancy is the function of the coal mines under section 20 of the Mines Act. Coal mines are also responsible for cleanliness of canteen and its precincts under Mines Rules, 1967. Under Mines Rules 33, 34, 35, 36, 37, 38 and 39 details of standard of construction, signboard, provision of water for washing, underground latrines, sanitation, obligation of work person etc. have been provided. Rule 38 specifically provides for sanitation. It is a duty of coal mines to provide general lighting, safety lamp etc under Rule 151 of Coal Mines Regulations, 1957. Fire services are also provided by coal mines. There is no public street in the mines. The Municipality has not given the details how they arrived at the amount. Coal mines cannot be said to be smaller area under Article 243Q of the Constitution of India. Pasan Municipality is declared as scheduled area. After period of one year, there can be no municipality. Municipality cannot impose tax on coal mines in view of the decision rendered in State of Orissa and another Vs. M/s M.A. Tulloch and Co. - AIR 1964 SC 1284,The India Cement Ltd. Etc. etc. Vs. State of Tamil Nadu etc. - AIR 1990 SC 85, Tata Iron and Steel Co. Ltd. Vs. State of Bihar and others - 1991 Supp. (1) SCC 430, District Mining Officer and others Vs. Tata Iron and Steel Co. and another - (2001) 7 SCC 358. He has (6) further submitted that decision rendered by the Apex Court in State of West Bengal Vs. Kesoram Industies Ltd. and others - (2004) 10 SCC 201 cannot be said to have laid down correct law. Judgment is per incuriam and not binding.
7. Shri Purushendra Kaurav, learned Dy. Advocate General and Shri K.K. Pandey, learned counsel, appearing on behalf of respondents have submitted that the area in question falls within the area of Pasan and Kotma Municipal Council. They are entitled to recover the fee as per decision rendered by the Apex Court in State of West Bengal Vs. Kesoram Industries Ltd. and others (supra), Union of India and others Vs. State of U.P. and others - 2007 AIR SCW 7393 and decision of this Court in Shrimal Dal Mills (Firm) and others Vs. Krishi Upaj Mandi Samiti, Sarangpur - 1990 MPLJ 431. They have submitted that once the area falls within the Municipal Councils of Pasan and Kotma and services are being provided in the colonies of the collieries as well as other services are also being provided in the area, the demand raised by the Municipal Council is proper.
8. First we advert to the question whether on facts colliery/ area in question falls within the municipal limits of Pasan and Kotma Municipal councils. With respect to the local area of Pasan and Jamuna, a notification was issued on 24.5.1979 including all the villages within the notified area w.e.f the date of notification. The State Government vide notification (7) (P-2) dated 24.11.1979 extended the provisions of sections of Municipalities Act as laid down in schedule II from the date of publication of the notification. Vide notification (P-3) dated 20.4.1982, the State Government declared the notified area as Pasan Municipality and entire area which was included in the previous notification, was included within the municipal limits. Notification (R-2/8) dated 19.7.1996 relating to constitution of wards has also been placed on record by the Municipal Council. The description of boundaries of Ward No. 15 Indira Gandhi Ward, Ward No. 16 Shri Ram Manohar Lohia Ward, Ward No. 18 Madan Mohan Singh Ward and that of other wards proved beyond doubt that the collieries and the entire colliery area is within the municipal limits.
Similar is the position with respect to Municipal Council Kotma. There are notifications placed on record including that of formation of wards. The entire area of concerned villages was included within the notified area and thereafter Municipality was formed. The notification of constitution of wards makes it clear that area in question is included in municipal limits of Kotma. Thus the submission raised by Shri Nair that it is not established that area of coal mines and colonies fall within the limits of Municipal Council, is not acceptable. Considering the notification of notified area and constitution of Municipal Council and formation of wards, we reject the aforesaid submissions. Though Municipal Council (8) may not have erected the boundary marks, acting as per mandate of Section 17 but that does not advance the case of the petitioner in the instant case. Beyond pale of doubt, it is established that area in question falls within the Municipal Limits of Pasan and Kotma.
9. Coming to the submission raised that coal mines are exclusively covered under MMRD Act & Rules and that under rules 33, 34, 35, 36, 37, 38, 39 and 67 of Mines Rules, it is the duty of coal mines to make the provisions for cleanliness of canteen, to maintain the standard of construction, signboard, provision of water for washing, sanitation etc and under section 20 of the Mines Act, conservancy is also the function of coal mines.
It is not in dispute that colonies are also attached to these coal mines in which services are rendered by Municipalities. Merely by providing certain facilities for the work for operation of the coal mines, it could not be said that coal mines are exempted from making the payment of requisite charges to the local bodies under the provisions of Section 127 (c ), (d) and (e) of the Municipalities Act. A general sanitary tax is levied under section 127(c) for construction and maintenance of public latrines and for removal and disposal of refuse and general cleanliness of the city. A general lighting tax is levied under section 127 (d) for lighting of public streets and public places. A general fire tax is levied under section 127 (e) for the conduct and (9) management of the fire service and for the protection of life and property in the case of fire. There need not be any quid pro quo in the fees charged and service rendered.
10. The Apex Court in Union of India and others Vs. State of U.P. and others (supra) has laid down that the service charges can be collected by Water Department for supply of water and maintenance of sewerage system of Railway colonies. In order to maintain these services, Jal Sansthan has to incur expenditure for the same. Though expression tax has been used but in fact it is in the nature of fee for the service rendered by Jal Sansthan.
11. Coming to the question whether levy of charges entrench upon regulation of Coal Mines under the MMRD Act. The Apex Court in State of West Bengal Vs. Kesoram Industies Ltd. and others (supra) considered the taxing power of Union and States. The Apex Court emphasized that there is no overlapping anywhere in the taxing power and the Constitution gives independent sources of taxation to the Union and the State. Methodology or mechanism adopted for assessment and quantification could be similar for taxes. There, could be no overlapping in law. It has also been laid down that so long as a tax or fee on mineral rights remains in pith and substance a tax for augmenting the revenue resources of the State or a fee for rendering services by the State and it does not impinge upon regulation of mines and mineral development or upon control of industry by the (10) Union, it is not unconstitutional. In the instant case it cannot be said that the charges realized under section 127(c), (d) and (e) for rendering the services entrench upon the regulation of Mines and Minerals in any way or upon control of industry by the petitioner. Thus no sustenance can be derived by Shri Nair by relying upon the various provisions of Mines Rules and akin provisions. The Apex Court in State of West Bengal Vs. Kesoram Industries Ltd. and others (supra) has also considered the question of levy of cess by the local Government authority and levy of cess was held to be valid. The Apex Court has further laid down that The Central Government is empowered under Section 25 of Tea Act, 1953 to levy a duty or cess upon tea or tea leaves for the purposes of that Act, can in no manner deprive the State Legislature of its power to tax the land comprised in a tea estate. In the context of cess imposed by the local Government body on the dispatches of minor mineral from mineral bearing land other than coal bearing land cess was held to be justified as fee for rendering such services as to the infrastructure and general development of the area. In the instant case the area in question falls within the municipal limits as such for general development of area, the Municipal Council is empowered to realize the charges under section 127(c), (d) and (e) of the Municipalities Act. Thus we are not impressed by the submission raised by Shri Nair, learned counsel appearing for the petitioner based (11) upon section 20 of the Mines Act and the aforesaid Mines Rules and provision of Rule 121 of Coal Mines Regulations, 1957.
12. In State of Orissa and another Vs. M/s M.A. Tulloch and Co. (supra) the question for consideration before the Apex Court was Orissa Mining Area Development Fund Act is superseded by Mines and Minerals (Regulatioin and Development) Act, 1957. In the instant cases, levy in question is not covered by the Mines and Minerals Regulations and has independent field to operate, thus the ratio of the aforesaid decision is not attracted. Shri Nair, learned Sr. counsel has further relied upon the decision of Apex Court in The India Cement Ltd. Etc. etc. Vs. State of Tamil Nadu etc. (supra) in which cess on royalty on mineral rights was imposed, same was held to be beyond competent of State legislature. Levy of cess was declared illegal only prospectively for the aforesaid reason. The decision is not applicable to the instant case for the similar reasons as that of State of Orissa (supra).
13. Petitioners' Counsel has also relied upon the decision of Apex Court in Tata Iron and Steel Co. Ltd. Vs. State of Bihar and others (supra) in which it was held that cess on royalty charged for mining lease cannot be equated with land revenue, hence does not fall under Entry 45 of Orissa Cess Act, 1962. Cess on royalty charged for mining lease was held not be a tax on land. The aforesaid decision has no (12) application as the Municipality Act and charges realized under section 127 (c ), (d) and (e) are not having any overlapping effect with any of the regulations or provisions under which petitioner's coal mines are operated. The levy cannot be said to be overlapping in any manner in the light of the decision in Kesoram (supra).
In District Mining Officer and others Vs. Tata Iron and Steel Co. and another (supra) the question was with respect to cess and other taxes on Minerals (Validation) Act, 1992. The levy in question being entirely different in the instant case particularly in view of decision of Apex Court in State of West Bengal Vs. Kesoram Industies Ltd. and others (supra), no sustenance can be derived from the aforesaid decision. It cannot be said that the tax levied and charges realized are without authority of law.
14. We find no force in the submission of Shri Nair that Municipality could not have been constituted in the area. The industrial township can be left out of Municipal area having regard to the services proposed by industrial establishment. The Municipal Council stood established more than a decade before insertion of Article 243(Q) w.e.f. 1.6.1993 and it is not the case of the petitioner that area in question has been declared to be Industrial Township. The constitution of Municipal Councils Pasan and Kotma cannot be said to be illegal.
(13)
15. Coming to argument raised feebly with respect to scheduled area under Article 244(1) read with Article 243 ZC of Constitution of India, there being no pleading and material placed on record. The notification has not been placed on record and on such constitution of scheduled area provision of schedule 5 of constitution provide in Clause 5 as to law applicable to schedule area, no such notification has also been placed on record. Thus the submission is rejected.
16. The petitioner has also raised submission that Municipality cannot exist/operate in the forest/reserve forest area as part of collieries falls within said area. There is no bar for such area being within Municipal area, what kind of activity can be carried on is a different matter. On facts learned Sr. Counsel was unable to show that which particular area falls in the forest. The aforesaid submission has no effect on right of Municipal Council to levy and realize tax which is in nature of fees from petitioner.
17. The petitioner previously has filed four writ petitions i.e. W.P. Nos. 7844/2007, 7843/2007, 16314/2007 and 16315/2007, in which the same demand notices were impinged the grounds taken in the present writ petitions were not raised. In previous writ petitions the matters were remitted by this Court to hear the petitioner and thereafter to determine the extent of tax and charges to be realized under the aforesaid provisions. Now levy is challenged as an after thought on new grounds. Whatever that may be, we (14) have not found any merit in the instant writ petitions. In case any amount which has been deposited and has not been withdrawn by the concerned Municipal Council under the interim order of this Court, the concerned Municipal Council is free to withdraw the same.
18. Writ petitions being devoid of merits, deserve dismissal. Writ petitions are hereby dismissed. No costs.
(Arun Mishra) (S.C.Sinho)
Judge Judge
PB