Full Judgment Text
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PETITIONER:
AHMEDABAD URBAN DEVELOPMENT AUTHORITY
Vs.
RESPONDENT:
SHARAD KUMAR JAYANTIKUMAR PASAWALLA & ORS.
DATE OF JUDGMENT15/05/1992
BENCH:
RAY, G.N. (J)
BENCH:
RAY, G.N. (J)
PUNCHHI, M.M.
MOHAN, S. (J)
CITATION:
1992 AIR 2038 1992 SCR (3) 328
1992 SCC (3) 285 JT 1992 (3) 417
1992 SCALE (1)1212
ACT:
Gujarat Town Planning and Urban Development Act, 1976
Sections 119(1) and 119(2)(c)-Levy and recovery of
development fee-Whether valid and authorised-Specific
provision whether necessary.
Constitution of India, 1950-Articles 14, 19, 21-
Constitutional validity of sections 119(1) and 119(2)(c) of
the Gujarat Town Planning and Urban Development Act, 1976-
Levy and recovery of development fee-Validity of.
HEADNOTE:
The respondents filed a writ petition in the High Court
challenging the Constitutional validity of Section 119(1)
and 119(2)(c) of the Gujarat Town Planning and Urban
devopment Act, 1976 and the regulations made under the Act,
contending that levy of devlopment fee was not authorised by
the statute and therefore the action of respondent No.1 in
collecting various amounts from the petitioners in the form
of development fee was not authorised; that no development
fee could be charged even by the State Government because
there was no provision in any Entry in List II of Schedule 7
to the constitution; that the levy of development fee was
ultra vires as the same did not fall under Section 119 of
the Town Planning Act and the regulations made by the
Development Authority were unauthorised, illegal and voil;
and that even if there was any power to levy such fee by the
State Legislature in the absence of delegation of such
power, the Development Authority could not impose any
development fee.
The High Court allowed the writ petition holding that
as there was no express provision for imposition of fee and
the State Government had not delegated any such power to the
Development Authority to impose fees for development, the
regulations framed for such imposition of fees and the
demands made therefore were wholly unauthorised and illegal.
The appellant, the Development Authority, in its appeal
by special leave, made against the High Court’s judgment,
contended that for implementing various schemes of
development, the development or betterment fee was required
to be imposed and collected, such imposition of fee,
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therefore, must be held be incidental to the development
activities; that in such state of affairs, even if, there
was no specific provision for imposition of betterment or
development fee, such power must be held to be implied under
the Act; that the development authority could impose such
fee and such power to impose fees was ancillary to the
development activities and was implied in the Act; that if
the State Legislature was competent to impose fees, the
Development Authority by virtue of the delegated legislation
also could impose betterment fee or the development fee and
simply because imposition of such fee by the Development
Authority could not impose any betterment fee or development
fee even though such fee was essential for the development
activities and had been imposed with reference to
development effected; that the High Court was not justified
in holding that such imposition of fee by framing
regulations was wholly unauthorised and as such illegal and
void.
Dismissing the appeal of the Urban Development
Authority, this Court,
HELD: 1.01. In a fiscal matter it will not be proper to
hold that even in the absence of express provision, a
delegated authority can impose tax or fee. Such power of
imposition of tax and/or fee by delegated authority must be
very specific and there is no scope of implied authority for
imposition of such tax or fee. [336 E]
1.02. The delegated authority must act strictly within
the parameters of the authority delegated to it under the
Act and it will not be proper to bring the theory of implied
intend or the concept of incidental and ancillary power in
the matter of exercise of fiscal power. [336 F]
1.03. Whenever there is compulsory exaction of any
money, there should be specific provision for the same and
there is no room for intendment. Nothing is to be read and
nothing is to be implied and one should look fairly to the
language used. [337 B]
The Hingir Rampur Coal Company Limited v. State of
Orissa, AIR 1961 SC 459; Sri Jagannath Ramanuj Das v. State
of Orissa, AIR 1954 SC 400; Delhi Municipal Corporation v.
Mohd. Yasin, AIR 1983 SC 617 and Lilawati v. State of
Bombay, AIR 1957 SC 521, referred to.
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District Council of the Jowai Autonomous District,
Jowai and others v. Dwet Singh Rymbai etc., AIR 1986 SC 193;
Khargam Panchayat Samiti and Anr. v. State of West Bengal
and Ors., [1987] 3 SCC 82, distinguished.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 10111
of 1983.
From the Judgment and Order dated 22.8.1983 of the
Gujarat High Court in Special Civil Application No. 3494 of
1980.
P.K. Goswami and P.H. Parekh for the Appellants.
P.C. Kapur (NP) and M.N. Shroff (NP) for the
Respondents.
The Judgment of the Court was delivered by
G.N. RAY, J. This appeal is directed against the
judgment of the High Court of Gujarat dated August 22, 1983
in Special Civil Application No.3494 of 1980. The said
Special Civil Application No.3494 of 1980 arose out of a
Writ petition moved in the High Court of Gujarat by the
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respondents Nos. 1,2,3 inter alia for declaration that the
provisions of Sections 119(1) and 119(2)(c) of the Gujarat
Town Planning and Urban Development Act, 1976 (hereinafter
referred to as the Town Planning Act) are ultra vires and
the impugned regulations purported to have been made under
the Town Planning Act are ultra vires Articles 14, 19 and 21
of the Constitution and the said regulations are also ultra
vires the Town Planning Act itself. The Writ Petitioners
also made a prayer before the High Court for appropriate
writ, order or direction directing the Ahmedabad Urban
Development Authority (hereinafter referred to as the
Development Authority) not to enforce or implement the said
regulations and not to levy or recover any amount as
development fee under the said regulations. A prayer was
also made for appropriate writ, order or direction directing
the Development authority to refund the amount of
development fees realised from the Writ Petitioners.
It was contended by the Writ Petitioners that;
(a) levy of development fee is not authorised by
the statute and therefore the action of respondent
No.1 in collecting various amounts from the
petitioners in the forms of development fee was not
authorised.
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(b) No development fee could be charged even by the
State Government because there is no provision in
any Entry in the List II of Schedule 7 to the
Constitution.
(c) The levy of development fee is ultra vires as
the same does not fall under Section 119 of the
Town Planning Act and the impugned regulations made
by the Development Authority are unauthorised,
illegal and void.
(d) Even if there is any power to levy such fee by
the State Legislature in the absence of delegation
of such power, the Development Authority could not
impose any development fee.
The High Court of Gujarat has held that Entry 66 of
List II of VIIth Schedule to the Constitution deals with
fees in respect of any of the matters in the said List but
not including any fee taken in any Court. Entry 5 of List
II of that Schedule refers to Constitution and powers of
improvement trust and other local authorities for the
purpose of local self government or village administration.
The High Court has held that under Entry 66, the State
Legislature has legislative competence to make provisions
for fees to be imposed by the Development Authority
constituted under Section 31 of the said Act. The High
Court has, however, held that simply because there is
legislative competence for the State Government to charge
fees for the Urban Development Authority, it cannot be held
that demands for the development fee and/or imposition of
the same by the Development Authority under the impugned
regulations is legal and valid. The High Court has
indicated that it is to be seen whether under Town Planning
Act, a specific power has been given to the Development
Authority to impose such development fee. After
scrutinising the provisions of the Town Planning Act, the
High Court has come to the finding that the Development
Authority or as a matter of fact any other authority under
the Act has not been vested with the power to charge
betterment or the development fee.
The High Court has referred to the decisions of this
Court in The Hingir Rampur Coal Company Limited v. State of
Orissa, AIR 1961 SC 459 and Sri Jagannath Ramanuj Das v.
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State of Orissa. AIR 1954 SC 400. This Court has held that
between a tax and a fee there is no generic difference
because in a sense both are compulsory exactions of money by
public authority but in a tax imposed for public purpose, no
service need be rendered in return of such tax. A fee is
however levied essentially for
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services rendered and as such there is an element of quid
pro quo between the person paying the fee and the public
authority imposing the same. It has been further indicated
that whenever there is any compulsoty exaction of any money
from a citizen, there must be a specific provision for
imposition of such tax and/or fee. There is no room for any
intendment for imposition of compulsory payment. whenever
there is any compulsory exaction of money from a citizen,
nothing is to be read and nothing is to be implied. One
should look fairly at the language used. The High Court has
also referred to another decision of the Court in the case
of Delhi Municipal Corporation v. Mohd. Yasin, AIR 1983 SC
617 wherein the compulsory nature of exaction by way of tax
and fee partaking the character of tax has been reiterated
and it has been held that there is no generic difference
between tax and fee though broadly a tax is compulsory
exaction as part of a common burden without promise of any
special advantages to classes of tax payers whereas a fee is
a payment for services rendered or benefit provided or
privilege conferred. The High Court has held that since
there is no express provision for imposition of fee and the
State Government has not delegated any such power to the
Development Authority to impose fees for development, the
regulations framed for such imposition of fees and the
demands made therefore are wholly unauthorised and illegal.
Mr. Goswami, learned Counsel for the appellant, has
however, submitted that although in some cases, a fee is
essentially a tax because of its compulsory nature of
exaction, there is a defference between a tax and a fee if
examined with reference to absence or presence of element of
corresponding service rendered. He has however fairly
conceded that when pursuant to the development scheme an
area is developed under the provisions of the Act, such
development of the area does not depend on the volition of
the person concerned. Hence, when development fees are
imposed for the development effected in the area in
question, the persons coming under the scheme will have to
make such payment irrespective of the fact whether or not
such person had intended for such development Even then,
such fee is charged for the service rendered by the
Development Authority. Mr. Goswami has further contended
that the Development Authority, unlike other local
authorities, like Municipalities or Panchayats has no power
or authority to collect any tax even though it is
essentially necessary to augment its revenue for the desired
purpose of development of the area in question. precisely
for implementing various schemes of
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development, the development or betterment fee is required
to be imposed and collected. Such imposition of fee,
therefore, must be held to be incidental to the development
activities. In such state of affairs even if there is no
specific provision for imposition of betterment or
development fee, such power must be held to be implied under
the Act. In this connection, Mr. Goswami has drawn our
attention to Section 90 and Section 91 of the Town Planning
Act. Section 90 provides that:
"An appropriate authority may for the purpose of a
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development plan or for the making of execution of
a town planning scheme borrow money and if the
approriate authority is a local authority the money
shall be borrowed in accordance with the provisions
of the Act under which the local authority is
constituted or if such Act does not contain any
provision for such borrowing, in accordance with
the Local Authorities Loans Act, 1914 or as the
case may be, the Saurashtra Local Authorities Loans
Act, 1951, and any expenses incurred by an
appropriate authority or the State Governmnet under
this Act in connection with a development plan or a
town planning scheme may be defreyed out of the
funds of the appropriate authority".
Section 91 (1) and (2) have been referred to by Mr.
Goswami, which are to the following effect:
"91 (1) An appropriate authority shall have and
maintain its own fund to which shall be credited-
(a) all moneys received by the authority by way of
grants, loans, advances or otherwise;
(b) all moneys derived from its undertakings,
projections and other sources;
(c) such amounts of contributions from local
authorities as the State Government may specify
from time to time to be credited to the fund
(2) the fund of an appropriate authority shall be
applied towards meeting-
(a) expenditure incurred in the administration of
this Act;
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(b) cost of acquisition of land for the purpose of
this Act;
(c) expenditure for any development of land in the
development area;
(d) expenditure for such other purposes as the
State Government may direct.
"
Mr. Goswami has submitted that clause (a) of sub-
section (1) of Section 91 indicates that moneys received by
the authorites may come by way of grants, loans, advances"or
otherwise". He has, therefore, contended that apart from
grants, loans and advances, the appropriate authority which
is Development Authority in the instant case, can have funds
which are not by way of grants, loans and advances but from
a source different from that. He has contended that the
legal implication of the expression ‘or otherwise’ has been
noted by this Court in the case of Lilawati v. State of
Bombay, AIR 1957 SC 521. This Court in the said decision
has indicated when and under what circumstances the
principle of ejusdem generis is to be applied and has
indicated that the legislature, when it uses the word ‘or
otherwise’,apparently intends to cover other cases which may
not come within the meaning of provided clauses. Relying on
the said decision, Mr. Goswami has contended that apart from
the money received by the Development Authority by way of
grants, loans and advances, the Development Authority can
also create funds "otherwise" and the development fee is
creation of such fund otherwise than by loans, grants, etc.
Mr. Goswami has contended that the funds so received by the
development authority are required to applied under sub-
section (2) of Section 91 for purposes mentioned therein
including the expenditure for any development of the land in
development area. He has, therefore, contended that the
legislature has really intended that for the purpose of
development, fund is required to be generated and such fund
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may be generated not only by way of grants, loans or
advances but also otherwise. The only limitation of
generation of such funds is to apply such fund for the
specific purposes referred to in sub-section (2) of Section
91. Mr. Goswami has contended that it is nobody’s case that
such development fee has not been utilised for the purpose
of sub-section (2) of Section 91. He has, therefore,
contended that the development authority
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can impose such fee and such power to impose fees is
ancillary to the development activities and is implied in
the Act. He has contended that if the State Legislature is
competent to impose fees, the Development Authority by
virtue of the delegated legislation can also impose
betterment fee or the development fee and simply because
imposition of such fee by the Development Authority is not
specifically mentioned, it cannot be held that the
Development Authority cannot impose any betterment fee or
development fee even though such fee was essential for the
development activities and has been imposed with reference
to development effected. Mr. Goswami has very strongly
relied on the decision of this Court in the case of the
District Council of the Jowai Autonomous District Jowai and
others v. Dwet Singh Rymbai etc., AIR 1986 SC 193. In
considering the validity of the Notification issued by the
District Council of District, Jowai under United Khasi and
Jaintia Hills Autonomous District (Management and Control of
Forests) Act. 1959, it has been held by this Court that in
the real sense what in sought to be required under the Act
is not royalty since the forest does not belong to the
District Council. The amount claimed by way of royalty
under the Notification is in reality compulsory exaction of
money by public authority for public purpose enforeceable by
law and in not a payment for service rendered. The Court
has held that there is no specific reference to the power to
levy and fee in respect of any matter mentioned in paragraph
3 in the 6th Schedule to the Constitution similar to the
corresponding provision in Entries of List II of 7th
Schedule. Considering the facts of the case, it has been
held that the power to levy fees in respect of any of the
matters mentioned in paragraph 3 should be necessarily
implied but such fee should not be disproportionately very
high, that is a tax in disguise. The Court has indicated
that the said United Khasi and Jaintia Hills Autonomous
District (Management and Control of Forests) Act 1959, was
enacted for the purpose of making provisions regarding the
management and the control of forests which are not reserved
forests in the area within the jurisdiction of District
Council in the exercise of the powers conferred by Entry
3(1)(d) of the 6th Schedule to the Constitution. It has
been held that even if there is no express provision to levy
fees, the District Council under paragraph 3 can levy fees.
Mr. Goswami has contended that it will not be correct to
conted that in no case imposition of fee can be made unless
there is specific provision for such imposition. Such power
of imposition may be implied if the provision
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of the Act are considered in the proper perspective and if
such imposition becomes essential for the activities for
which the statutory bodies are created. In this connection,
Mr. Goswami has referred to another decision of this Court
made in the case of Khargram Panchyat Samiti and Anr. v.
State of West Bengal and Ors., [1987] 3 SCC 82. It has been
held by this Court that in a statute conferment of general
statutory power also carries with it incidental and
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consequential power. Relying on the said decision, Mr.
Goswami has contended that as the development has been
effected by the Development Authority and there was
necessity for augmenting the revenue for such development
work and as Section 91 has recognised a fund to be created
otherwise than by way of grants, loans or advances and as
imposition of such fee is incidental and/or ancillary to c-
arrying on the purposes for which the Development Authority
has been constituted under the Town Planning Act, it should
be held that such power of imposition of fee is implied. He
has, therefore, contended that the High Court of Gujarat was
not justified in holding that such imposition of fee by
framing impugned regulations was wholly unauthorised and as
such illegal and void.
After giving our anxious consideration to the
contentions raised by Mr. Goswami, it appears to us that in
a fiscal matter it will not be proper to hold that even in
the absence of express provision, a delegated authority can
impose tax or fee. In our view, such power of imposition
of tax and/or fee by delegated authority must be very
specific and there is no scope of implied authority for
imposition of such tax or fee. It appears to us that the
delegated authority must act strictly within the parameters
of the authority delegated to it under Act and it will not
be proper to bring the theory of implied intent or the
concept of incidental and ancillary power in the matter of
exercise of fiscal power. The facts and circumstances in
the case of District Council of Jowai are entirely
different. The exercise of powers by the Autonomous Jaintia
Hills Districts are controlled by the constitutional
provisions and in the special facts of the case, this Court
has indicated that the realisation of just fee for the a
specific purpose by the autonomous District was justified
and such power was implied. The said decision cannot be
made applicable in the facts of this case or the same should
not be held to have laid down any legal proposition that in
matters of imposition of tax or fees, the question of
necessary intendment may be looked into when there is no
express provision for imposition of fee or tax. The other
decision in Khargram Panchayat Samiti’s case also deal with
the
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exercise of incidental and consequential power in the field
of administrative law and the same does not deal with the
power of imposing tax and fee.
The High Court has referred to the decisions of this
Court in Hingir’s case, and Jagannath Ramanuj’s case and
Delhi Municipal Corporation’s case (supra). It has been
consistently held by this Court that whenever there is
compulsory exaction of any money, there should be specific
provision for the same and there is no room for intendment.
Nothing is to be read and nothing is to be implied and one
should look fairly to the language used. We are,
therefore, unable to accept the contention of Mr. Goswami.
Accordingly, there is no occasion to interfere with the
impugned decision of the High Court. The appeal, therefore,
fails and is dismissed with no order as to costs.
V.P.R. Appeal dismissed.
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