Full Judgment Text
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PETITIONER:
DISTRICT COUNCIL OF THE JOWAI
Vs.
RESPONDENT:
DWET SINGH RYMBAI ETC.
DATE OF JUDGMENT14/08/1986
BENCH:
VENKATARAMIAH, E.S. (J)
BENCH:
VENKATARAMIAH, E.S. (J)
OZA, G.L. (J)
CITATION:
1986 AIR 1930 1986 SCR (3) 569
1986 SCC (4) 38 JT 1986 146
1986 SCALE (2)240
CITATOR INFO :
D 1992 SC2038 (5,6)
ACT:
United Khasi and Jaintia Hills Autonomous District
(Management and Control of Forests) Act, 1958-ss. 3, 4, 8,
11 & 13 and Jowai Autonomous District (Administration) Act,
1967-Royalty on timber brought from private forests-Whether
in the nature of a tax-Whether constitutionally valid.
Constitution of India, Art. 244 (2)/Sixth Schedule,
Paragraphs 3 and 8-Nature and scope of powers of District
Councils-Competency to levy fees.
HEADNOTE:
The Autonomous District of Jowai, which was previously
as subdivision of the United Khasi Jaintia Autonomous
District, took the shape of an autonomous district with
effect from December 1, 1964 pursuant to a notification
issued by the Governor of Assam on November 23, 1964.
The District Council came into being on March 23, 1967
and in that very year it passed the Jowai Autonomous
District (Administration) Act, 1967. By virtue of s. 3 of
that Act, the United Khasi and Jaintia Hills Autonomous
District (Management and Control of Forests) Act, 1958 and
the Rules framed under it, were adopted and made applicable
to the Autonomous District of Jowai. Subsequently, on April
20, 1968 the Secretary of the Executive Committee of the
District Council issued a notification in exercise of its
power under s. 8 of the latter Act fixing the rates of
royalty chargeable on red pine, white pine and log pine
timber grown in the private forests situated within the
jurisdiction of the District Council.
The respondents having become liable to pay the
royalty, as specified in the Notification, instituted writ
petition in the High Court, questioning the competence of
the District Council and its Executive Committee and
officers to levy royality on the timber that came from
570
private forests within its jurisdiction, contending that the
royalty, in question, which was in the nature of tax was not
leviable by the District Council since it had no authority
under the Constitution and the laws made thereunder to
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impose the said levy.
The District Council contested the writ petitions
contending that since the private forests were also under
its management and control under the provisions of the law
in force in that area, it was open to it to levy the royalty
even though it may be in the nature of a tax, and that even
though a tax cannot be levied on the trees grown in private
forests, since the District Council had the competence to
levy tax on lands and buildings, the trees in the private
forests being grown on such land the C. tax in question
could be treated as tax on land which it was entitled to
levy. It was further contended that even if it could not
levy a tax, such amount can be realised by way of fee in
order to meet the expenses incurred by the District Council
m connection with the management and control of the private
forests; that the forests in question were not private
forests and so the respondents could not maintain the
petition at
The High Court found that the forests in question were
private forests and held that the District Council had no
constitutional authority to impose either royality or tax or
fee on these forests and that the notification dated 20th
April, 1968 issued under s. 8 of the Act was ultra vires and
not sanctioned by the Sixth Schedule of the Constitution,
and issued a writ of mandamus restraining the District
Council from realising royalty from the petitioner-
respondents in respect of timber extracted by them from the
two private forests situated within the jurisdiction of the
District Council.
In the appeals to this Court by special leave by the
District Council, on the question of the constitutional
validity of the Notification dated April 20, 1968 and
whether the royalty levied could be realised by the District
Council in respect of trees in private forests.
Dismissing the Appeals, the Court,
^
HELD: 1. What is sought to be recovered under the Act
is not royalty since the forest does not belong to the
District Council. The amount claimed is a compulsory
exaction of money by a public authority for public purposes
enforceable by law and is not a payment for services
rendered. It is truly, in the nature of a tax. [584C-D]
571
2. Section 4 of the United Khasi and Jaintia Hills
Autonomous A District (Management and Control of Forests)
Act, 1958 which prohibits removal of forest produce except
on payment of royalty, refers to protected Forests, Green
Blocks and Raid Forests. It does not refer to private
forests. Section 8 of the Act, under which the impugned
notification is issued merely says that the Executive
Committee may make rules fixing the rates of royalty for
each class of trees, timber or forest produce. [582G-H;
583A]
3. Paragraph 3 of the Sixth Schedule to the
Constitution does not contain any subject which authorises
the District and Regional Councils to levy taxes. It confers
powers on the said Councils to make laws only to regulate
matters specified therein. The subjects relating to taxation
are dealt with separately in Paragraph 8. [585D]
4.1 The levy in question does not come within
subparagraphs ( I) and (2) of Paragraph 8, which authorised
levy of tax on lands and buildings. If the levy is land
revenue then it should have been fixed in accordance with
the principles for the time being followed by the Government
of the State in assessing lands for the purpose of land
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revenue as required by sub-paragraph (1). It cannot be
sustained as any other kind of tax on land since the royalty
payable has no reference to the extent of the land and the
nature of the land and its potentialities. [584E-G]
K. T. Moopil Nair v. The State of Kerala & Ors., [1961]
3 S.C.R. 77, distinguished.
4.2 The royalty in question is not covered by cls. (a)
and (c) of Paragraph 8(3) either, for it cannot be said to
be a tax on profession, trade, calling and employment or a
tax on the entry of goods into the market for sale therein.
The appellants have not been able to establish that the
impugned royalty was leviable under any other provision.
[584D-E]
4.3 The levy is a tax only on the timber which is
brought from private forests. The notification in
unambiguous terms says that the royalty shall be on the
squared log pines, but it has no reference to the land on
which those trees have grown. The District Council has no
power to levy such a tax on forest produce under Paragraph
8. [584G-H]
5. Though Paragraphs 3 and 8 of the Sixth Schedule of
the Constitution follow almost the same pattern in which the
subjects in List I and List II of the Seventh Schedule to
the Constitution have been en- H
572
umerated, the legislative powers in respect of certain
topics mentioned in Paragraph 3 and the power to levy taxes
specified in Paragraph 8 of the Sixth Schedule enjoyed by
the District Councils cannot be equated with the plenary
powers enjoyed by a legislature. Their powers to make laws
are limited by the provisions of the Sixth Schedule. The
Courts cannot constructively enlarge their powers to make
laws. [580B-C]
District Council of United Khasi & Jaintia. Hills &
ors. Etc. v.Miss Sitimon Sawian Etc., [ 1972] 1 S.C.R. 398
at page 407, referred to.
6. The High Court erred in holding that even fees could
not be levied under Paragraph 3 of the Sixth Schedule. The
Act was enacted for the purpose of making provisions
regarding the management and the control of forests in
exercise of the powers conferred by Paragraph 3(1)(b). There
is no specific reference to the power to levy any fees in
respect of any matter mentioned in Paragraph 3 similar to
the corresponding provisions in the penultimate entry in
List I and the last entry in the other two Lists in the
Seventh Schedule to the Constitution. But having regard to
the nature of a fee, which is an amount levied as quid pro
quo for services rendered, 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, i.e., a tax in disguise.
Therefore, even though there is no express provision to levy
such fees, the District Council can levy fees under
Paragraph 3. But that would not save the Notification since
there is no material placed before the Court to uphold it on
that ground. In the absence of any evidence showing the
expenses incurred by the District Council towards the
services rendered and the total amount of royalty realised
by it levy cannot be upheld even as a fee. [585D-F]
The Commissioner, Hindu Religious Endowments, Madras v.
Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, [ 1954]
S.C.R. 1005 and OM Parkash Agarwal and ors. v. Giri Raj
Kishori and ors., [1986] 1 S.C.C. 722, referred to.
7. The High Court rightly held that the forests in
question were private forests. It has not been shown by the
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appellants that they belong to any other category of forests
referred to in s. 3 of the Act. The Notification purports to
levy royalty on timber brought from private forests. If
there were no private forests at all the District Council
would not have issued the notification levying royalty on
timber got from private forests. [585G-H]
573
JUDGMENT:
CIVIL APPELLATE JURISDlCTION: Civil Appeal Nos A 2069-
70 of 1972
From the Judgment and order dated 31.7.1972 of the
Gauhati High Court in Civil Rule Nos. 477 and 483 of 1968.
D.N. Mukherjee and Rajan Mukherjee for the Appellants.
S.K. Nandy for the Respondents.
The Judgement of the Court was delivered by
VENKATARAMIAH, J. Civil Appeal Nos 2069 of 1972 and
2()70 of 1972 by special leave are filed against the common
Judgment dated 31.7 1972 in Civil Rule Nos. 477 of 1968 and
483 of 1968 respectively on the file of the High Court of
Assam, Nagaland, Meghalaya, Manipur & Tripura Since common
questions of law arise for consideration in these two cases,
they are disposed of by this common judgment D
The respondents in these two appeals are forest
contractors and they were operating in two forests called
Lum Langkaraw and Lumkhliem Moriap alleged to be belonging
to Joseph and Kailla Rymbai. These forests are situated
within the jurisdiction of the District Council of the Jowai
Autonomous District, Jowai (hereinafter refer- red to as
’the District Council’) -Appellant No. I herein. On April
20, 1968 the Secretary of the Executive Committee of the
District Council issued a notification levying royalty in
exercise of its power under the United Khasi and Jaintia
Hills Autonomous Districts (Management and Control of
Forests) Act, 1958 (Act 1 of 1959) (hereinafter referred to
as ’the Act’) on red pine, white pine and log pine timber
grown in the private forests situated within the
jurisdiction of the District Council at the rates specified
therein. The Notification reads thus:
"No. JAD/FOR/68/26 Dated, Jowai, April 20, 1968.
In exercise of the power conferred under
Section 8 of the U.K. and J. Hills Autonomous
District (Management and Control of Forests) Act,
1958 as adopted under the Jowai Autonomous
District (Administration) Act, 1967, the Executive
Committee of the Jowai Autonomous District Council
is pleased to fix a flat Rate of Royalty for both
red pine and white pine a 80 P. per cubit foot for
all H
574
the squared log pine timber irrespective of the
girth classes other than the pine timber that come
from private forests, for the squared log pine
timber from the private forests that are to go
outside the Jowai Autonomous District for trade
purposes, the rate of Royalty is fixed at half of
the above scheduled rate, i.e, 40 P. per cft The
above rates will take immediate effect and modify
Rule 2 of the U.K and J Hills Autonomous Distt.
(Management and Control of Forests Rates of
Royalty) Rules, 1959 as far as its application to
white pines and red pines is concerned. This
supercedes all orders on the subject
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Sd/-D. Passah
Secretary, Executive Committee
District Council
Jowai Autonomous District Jowai
As the respondents became liable to pay the royalty, as
specified in the Notification, they instituted the writ
petitions in the High Court, out of which these appeals
arise, questioning the competence of the District Council
and its Executive Committee and officers to levy the royalty
in accordance with the Notification on the timber that came
from private forests within its jurisdiction. The
respondents, among other pleas contended that the royalty,
in question, which was in the nature of tax was not leviable
by the District Council since it had no authority under the
Constitution and the laws made thereunder to impose the said
levy. On behalf of the District Council it was con tended
that since the private forests were also under the
management and control of the District Council under the
provisions of the law in force in that area, to which a
detailed reference would be made here after, it was open to
it to levy the royalty even though it may be in the nature
of a tax. It was next contended on behalf of the District
Council that even though a tax cannot be levied on the trees
grown in private forests, since the District Council had the
competence to levy tax on lands and buildings and the trees
in the private forests were grown on the land the tax in
question could be treated as tax on land which it was,
therefore, entitled to levy. It was text contended that even
if it could not levy a tax, such amount can be realised by
way of fee in order to meet the expenses incurred by the
District Council in connection with the management and
control of the private forests. Lastly it was contended that
the forests in question were not private forests and so the
respondents could not maintain the petition at all After
hearing
575
the learned counsel for the parties, the High Court found
that the A forests in question were private forests and
further held that the District Council had no constitutional
authority to impose either royalty or tax or fee on private
forests and that the Notification dated 20th April, 1968
issued under section 8 of the Act was ultra vires and not
sanctioned by the Sixth Schedule of the Constitution. As a
consequence of the above finding, the High Court issued a
writ of mandamus to the appellants (respondents in the writ
petitions) restraining them from realising royalty from the
respondents in respect of timber extracted by them from the
two forests referred to above
Aggrieved by the judgments/orders passed by the High
Court in the said writ petitions, the District Council and
others who were respondents in the writ petitions, have
preferred these appeals to this Court by special leave.
The Autonomous District of Jowai was previously a
subdivision of the United Khasi Jaintia Autonomous District
and took the present shape of an autonomous district with
effect from December 1, 1964 pursuant to a notification
issued by the Governor of Assam on November 23, 1964. The
District Council came into being on March 23, 1967 and in
that very year it passed the Jowai Autonomous District
(Administration) Act, 1967. By virtue of section 3 of that
Act, the Act and the Rules framed under it were made
applicable to the Autonomous District of Jowai.
Subsequently, on April 20, 1968 the Executive Committee of
the District Council issued the impugned notification which
is set out above in exercise of its powers conferred by
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section 8 of the Act, fixing the rates of royalty chargeable
on the different types of timber mentioned therein at the
rates specified in it.
In these appeals we are concerned with the
constitutional validity of the above said notification. The
area which lies within the jurisdiction of the District
Council is a tribal area, which originally formed part of
the State of Assam. Part X of the Constitution provides for
the administration of the Scheduled and Tribal Areas. Clause
(2) of Article 244 of the Constitution, as it was originally
enacted, reads thus: G
"244 (2). The provisions of the Sixth Schedule
shall apply to the administration of the tribal
areas in the State of Assam. "
By the Assam Reorganisation (Meghalaya) Act, 1969 (Act
55 of
576
1969) the autonomous State of Meghalaya was formed within
the State of Assam comprising the territories which formed
part of the Autonomous District of United Khasi-Jaintia
Hills including Jowai Autonomous District and the Garo
Hills. Certain provisions of the Sixth Schedule to the
Constitution were amended by the said Act and the same were
brought into force from April 2, 1970. By the North-
Eastern, Areas (Reorganisation) Act, 1971 the new State of
Meghalaya was created comprising the territories of the
autonomous State of Meghalaya and the cantonment and
municipality areas of Shillong town. The said State was
inaugurated on January 21, 1972.
Article 244(2) of the Constitution, with effect from
January 21, 1972, reads thus:
"244 (2) The provisions of the Sixth Schedule
shall apply to the administration of the tribal
areas in the States of Assam, Meghalaya and the
Union Territory of Mizoram."
The Sixth Schedule of the Constitutions, as it now
stands, is entitled ’Provisions as to the Administration of
Tribal Areas in the States of Assam and Meghalaya and in the
Union Territory of Mizoram’. The provisions of that Schedule
with which we are concerned have not undergone any material
change although there have been several amendments in that
Schedule since the commencement of the Constitution. They
are applicable to the tribal areas within the jurisdiction
of the District Council of Jowai-Appellant No. 1 in these
appeals.
Paragraph 1 of the Sixth Schedule to the Constitution
provides that subject to the provisions of that paragraph,
the tribal areas in each item of Parts I, II and III of the
table appended to paragraph 20 of that Schedule shall be an
autonomous District. If there are different Scheduled Tribes
in an autonomous district, the Governor may, by public
notification divide the area or areas inhabited by them into
autonomous regions. The Governor has been given power to
alter the boundaries of the autonomous districts and the
procedure for doing reorganisation of the autonomous
district is given in sub-paragraph (3) of Paragraph I of the
Sixth Schedule to the Constitution. Paragraph 2 of that
Schedule provides that there shall be a District Council for
each autonomous district consisting of not more than thirty
members, of whom not more than four persons shall be
nominated by the Governor and the
577
rest shall be elected on the basis of adult suffrage. There
shall be a A separate Regional Council for each area
constituted an autonomous region under sub-paragraph (2) of
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Paragraph 1 of that Schedule. Each District Council and each
Regional Council shall be a body corporate by the name
respectively of "the District Council of (name of district)"
and "the Regional Council of (name of region)", shall have
perpetual 1 succession and a common seal and shall by the
said name sue and be sued. Subject to the provisions of that
Schedule, the administration of an autonomous district
shall, insofar as it is not vested under that Schedule in
any Regional Council within such district, be vested in the
District Council for such district and the administration of
an autonomous region shall be vested in the Regional Council
for such region. In an autonomous district with Regional
Councils, the District Council shall have only such powers
with respect to the areas under the authority of the
Regional Council as may be delegated to it by the Regional
Council in addition to the powers conferred on it by that
Schedule with respect to such areas. The District Council of
Jowai Autonomous District-Appellant No. 1 is one such
District Council. But as mentioned earlier it was a part of
the United Khasi-Jaintia Hills Autonomous district prior to
December, 1, i964
Paragraphs 3 and 8 of the Sixth Schedule to the
Constitution read thus:
"3. Powers of the District Councils and Regional
Councils to make laws.-(1) The Regional Council
for an autonomous region in respect of all areas
within such region and the District Council for an
autonomous district in respect of all areas within
the district except those which are under the
authority of Regional Councils, if any, within the
district shall have power to make laws with
respect to-
(a) the allotment, occupation or use, or the
setting apart, of land, other than any land which
is a reserved forest, for the purposes of
agriculture or grazing or for residential or other
non-agricultural purposes or for any other purpose
likely to promote the interests of the inhabitants
of any village or town:,
Provided that nothing in such laws shall
prevent the compulsory acquisition of any land,
whether occupied or unoccupied, for public
purposes (by the Government of the H
578
State concerned) in accordance with the law for
the time being in force authorising such
acquisition;
(b) the management of any forest not being a
reserved forest;
(c) the use of any canal or water-course for
the purpose of agriculture;
(d) the regulation of the practice of jhum or
other forms of shifting cultivation;
(e) the establishment of village or town
committees or councils and their powers;
(f) any other matter relating to village or
town ad ministration, including village or town
police and public n health and sanitation;
(g) the appointment or succession of Chiefs
or Headmen;
(h) the inheritance of property;
(i) marriage and divorce;
(j) social customs.
(2). In this paragraph, a ’reserved forest’ means
any area which is a reserved forest under the
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Assam Forest Regulation, 1891, or under any other
law for the time being in force in the area in
question.
(3) All laws made under this paragraph shall be
submitted forthwith to the Govenor and, until
assented to by him, shall have no effect."
"8. Powers to assess and collect land revenue and
to impose taxes.-(1) The Regional Council for an
autonomous region in respect of all lands, within
such region and the District Council for an
autonomous district in respect of all lands within
the district except those which are in the areas
579
under the authority of Regional Councils, if any,
within the A district, shall have the power to
assess and collect revenue in respect of such
lands in accordance with the principles for the
time being followed by the Government of the State
in assessing lands for the purpose of land revenue
in the State generally. R
(2) The Regional Council for an autonomous region
in respect to areas within such region and the
District Council for an autonomous district in
respect of all areas in the district except those
which are under the authority of Regional
Councils, if any, within the district, shall have
power to levy and collect taxes on lands and
buildings, and tolls on persons resident within
such areas.
(3) The District Council for an autonomous
district shall have the power to levy and collect
all or any of the following taxes within such
district, that is to say- n
(a) taxes on professions, trades, callings
and employments;
(b) taxes on animals, vehicles and boats;
(c) taxes on the entry of goods into a market
for sale therein, and tolls on passengers and
goods carried in ferries; and
(d) taxes for the maintenance of schools,
dispensaries of roads.
(4) A Regional Council or District Council, as the
case may be, may make regulations to provide for
the levy and collection of any of the taxes
specified in sub-paragraphs (2) and (3) of this
paragraph and every such regulation shall be
submitted forthwith to the Governor and, until
assented to by him, shall have no effect "
It is seen from Paragraph 3 and Paragraph 8 of the
Sixth Schedule to the Constitution set out above that the
District Councils and Regional Councils in addition to
specified executive functions conferred on them by the other
Paragraphs in that Schedule have been
580
given legislative powers in respect of certain topics
mentioned in Paragraph 3 and the power to levy the taxes
specified in Paragraph 8 of that Schedule. The powers
enjoyed by these District Councils cannot be equated with
the plenary powers enjoyed by a legislature. Their powers to
make laws are limited by the provisions of the Sixth
Schedule. The Courts cannot constructively enlarge their
powers to make laws. (Vide District Council of United Khasi
& Jaintia Hills & ors. Etc. v. Miss Sitimon Sawian Etc.)
[1972] I S.C.R 398 at page 407. Paragraphs 3 and 8 of the
Sixth Schedule to the Constitution follow almost the same
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pattern in which the subjects in List I and List II of the
Seventh Schedule to the Constitution have been enumerated.
While the subjects relating to taxation are dealt with
separately in Paragraph 8, Paragraph 3 does not contain any
subject which authorises the District and Regional Councils
to levy taxes. Paragraph 3 confers powers on the said
Councils to make laws only to regulate matters specified
therein. Paragraph 3(1)(b) empowers the District Council to
make laws with respect to the management of any forest not
being a reserved forest. Paragraph 3(2) defines a ’reserved
forest’ as any area which is a reserved forest under the
Assam Forest Regulation, 1891 or under any other law for the
time being in force, in the area in question. It may also be
noted that there is no specific reference to the power to
levy any fees in respect of any matter mentioned in
Paragraph 3 in the Sixth Schedule to the Constitution
similar to the corresponding provisions in the penultimate
entry in List I and the last entry in the other two Lists in
the Seventh Schedule to the Constitution. But having regard
to the nature of a fee, which is an amount levied as quid
pro quo for services rendered, 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, i.e., a tax in disguise. The
Act 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 the District Council in exercise of the
powers conferred by Paragraph 3(1)(b) of the Sixth Schedule
to the Constitution.
Section 3 of the Act refers to six different kinds of
forests. That section reads thus:
"3. Classification of Forests -The forests to
which this Act applies are classified under the
following categories:
(i) (a) Private Forests-These are forests
belonging to an
581
individual or clan or joint clans which are grown
or inherited by him or them in recognised Private
lands (Ri Kynti);
(b) Law-Ri-Summar-These are forests belonging to
an individual clan or joint clans (which are)
grown (or in-herited) by him or them in a village
or common raj land.
(ii) Law Lyng-doh, Law Kyntang, Law Niam: These
are forests set apart for religious purposes and
hitherto man aged or controlled by the Lyngdoh or
other person or persons to whom the religious
ceremonies for the particular locality or village
or villagers are entrusted.
Explanation: Lyngdoh in this particular respect is
a religious head and not the administrative head
mentioned in section 2(r).
(iii) Law-adong and Law-shnong: These are village
forests hitherto reserved by the villagers
themselves for conserving water, etc. for the use
of the villages and managed by the Sirdar or
headmen with the help of the Village Durbar.
(iv) Protected Forests: These are areas already
declared protected for the growth of trees for the
benefit of the local inhabitants and also forests
that may be so declared by rules under this Act.
(v) Green Blocks: These are forests belonging to
an individual family or clan or joint clans and
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raj lands already declared as Green Block by
Governments for aesthetic beauty and water supply
of the town of Shillong and its suburbs and also
forests that may be declared by rules under this
Act.
(vi) Raid Forests: These are forests managed by
the Raid and under the control of the local
administrative head subject to rules to be
prescribed by the District Council."
Section 4(a) of the Act provides that Private Forests
and Law-Ri-Sumar which are mentioned in section 3(i)(a) and
(b) of the Act shall
582
be managed by the owners thereof subject to the rules that
may be framed by District Council from time to time in the
general interest of the forestry of the district. Private
Forests are forests belonging to an individual or clan or
joint clans which are grown or inherited by him or them in
recognised private land (Ri Kynti). In section 4 of the Act,
as regards removal of forest produce it is provided thus:
"Removal of Forest produce: No timber or forests
produce shall be removed for the purpose of sale,
trade or business from Protected Forests, Green
Blocks, Raid Forests without the order in writing
of the Forest officer of the District Council
which order may be given only on previous receipt
of the royalty on such timber or forest produce at
rates as may be prescribed by the District
Council.
Provided:
(i) that the royalty on timbers of reserved trees
from Raid Forests shall be half the full rates in
respect of persons living in the neighbouring area
of the Forest where the timber is needed for their
own domestic use, i.e., for building purpose only;
(ii) that no royalty shall be charged for the
removal of timber from Green Blocks by the owners
thereof, or for the removal of the timber or any
forest produce from a Raid Forest by the members
of the Raid for their own domestic use;
(iii) that all royalty realised shall be credited
to the District Fund;
(iv) that the District Council shall quarterly
give to the Siemships, Dolloiships and Sirdarships
a share of the royalty at a percentage to be
prescribed by it."
It may be noticed that the above part of section 4 of
the Act refers to Protected Forests, Green Blocks and Raid
Forests and if any person wants to remove timber for sale
etc. he should pay royalty at the rates to be prescribed by
the District Council. It does not refer to Private Forests.
Section 8 of the Act under which the impugned notification
is issued merely says that the Executive Committee may make
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rules fixing the rates of royalty for each class of trees,
timber or forest A produce which shall be published in the
Assam Gazette. Section 11 of the Act refers to royalty
payable in respect of timber in Private Forests. It reads
thus:
"11. All timber or forest produce removed from
Private Forests and Law-Ri-Sumar shall be liable
to payment of half the full rates of royalty
prescribed for such timber or forest produce under
section 8 above, when exported beyond the District
or when brought to Shillong in vehicles for
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purposes of trade;
Provided that the Executive Committee may
direct that any rule made under this Section shall
not apply to any specified class of timber or
other forest produce or to any specified local
area."
Under section 13 of the Act, the Executive Committee of
the District Council may regulate felling of trees etc.
Section 13 of the Act reads thus:
"13. Powers to regulate felling of trees; etc. -
The Executive Committee shall have power to-
(a) regulate or prohibit the kindling of fires,
and prescribe the precautions to be taken to
prevent the spread of fires;
(b) regulate or prohibit the felling, cutting,
girdling, marking; lopping, tapping or injuring by
fire or otherwise of any trees, the sawing
conversion and removal and the collection and
removal of other forest produce;
(c) regulate or prohibit the boiling of catechu or
the burning of lime or charcoal;
(d) regulate or prohibit the cutting of grass and
pasturing of cattle and regulate the payment, if
any, to be made for such cutting or pasturing;
(e) regulate the sale or free grant of forest
produce; and
(f) Prescribe or authorise any forest officer to
prescribe
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subject to the control of the Executive Committee,
the fees, royalties for other payments for forest
produce, and the manner in which such fees,
royalties, or other payments are to be levied, in
transit or partly in transit or otherwise."
The question before us is whether the royalty levied by
the impugned notification can be realised by the District
Council in respect of trees in private forests. ’Royalty’
according to Jowitts’ Dictionary of English Law means ’a
payment reserved by the grantor or patent, lease of a mine
or similar right and payable proportionately to the use made
of the right by the grantee’. In the true sense what is
sought to be recovered 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 a
compulsory exaction of money by a public authority for
public purposes enforceable by law and is not a payment for
services rendered. It is truly, in the nature of a tax.
In the High Court various claims were put forward in
support of the impugned levy. It was contended that the
royalty in question came under clauses (a) and (c) of
Paragraph 8(3) of the Sixth Schedule to the Constitution,
namely, taxes on profession, trades, callings and
employment, or taxes on the entry of goods into market for
sale therein. It being neither of the two kinds of taxes,
referred to above, the High Court rightly rejected the above
contention.
It was next urged before the High Court that the levy
came within sub-paragraphs (1) and (2) of Paragraph 8 of the
Sixth Schedule to the Constitution which authorised levy of
tax on lands on the ground that the trees were growing on
the land. The same contention is again pressed before us. We
find it difficult to agree with the above submission since
if the levy is land revenue then it should have been fixed
in accordance with the principles for the time being
followed by the Government of the State in assessing lands
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for the purpose of land revenue in the State generally as
required by sub-paragraph (1) of Paragraph 8 of the Sixth
Schedule to the Constitution. It cannot be sustained as any
other kind of tax on land since the royalty payable has no
reference to the extent of the land and the nature of the
land and its potentialities. It is a tax only on the timber
which is brought from private forests. The notification in
unambiguous terms says that the royalty shall be on the
squared log pines. It has no reference to the land on which
those trees have grown. In pith and substance it is a tax on
forest produce grown on private lands. The District Council
has no
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power to levy such a tax on forest produce under Paragraph 8
of the Sixth Schedule to the Constitution. Reliance was,
however, placed on the minority judgment of Justice Sarkar
in K.T. Moopil Nair v. The State of Kerala & Ors., [1961] 3
S.C.R. 77 in support of the plea that lands on which forests
grew could be taxed under entry ’tax on lands and
buildings’. The impugned levy being not a tax levied on land
as we have pointed out above, the said observation in the
above decision is not useful to the appellants. We may add
that the very same learned Judge has observed at page 106
that no tax could be levied by a State Legislature on
forests as such while tax may be levied on the land on which
forests grew. But we are convinced that the levy in question
is not a levy on land. This contention has, therefore, to
fail.
The appellants have not been able to establish that the
impugned royalty was leviable under any other provision. It
was no doubt true that it was argued before the High Court
that it was open to the District Council to levy fees as
quid pro quo for the services rendered by it to the forest
owners or contractors. The High Court erred in holding that
even fees could not be levied under Paragraph 3 of the Sixth
Schedule to the Constitution. We have already held that even
though there is no express provision to levy such fees, the
District Council can levy fees under Paragraph 3. But that
would not save the Notification since there is no material
placed before the Court to uphold the Notification on that
ground. No evidence is placed before the Court showing the
expenses incurred by the District Council towards the
services rendered and the total amount of royalty realised
by it. Unless the levy satisfied the true characteristics of
fee as laid down by this Court in The Commissioner, Hindu
Religious Endowments, Madras v. Sri Lakshmindra Thirtha
Swamiar of Sri Shirur Mutt, [1954] S.C.R. 1005 it cannot be
upheld even as a fee (See also Om Parkash Agarwal and Ors.
v. Giri Raj Kishori and Ors., [1986] 1 S.C.C. 722.)
Insofar as the question whether the forests from which
the respondents were bringing timber were private forests or
not, we find that the High Court after considering all the
relevant facts before it has recorded a finding that they
are private forests. It is not also shown by the appellants
that they belong to any other category of forests referred
in section 3 of the Act. The plea of the appellants in the
statement of objections before the High Court was that there
were no private forests at all in Jowai District. This
statement cannot be accepted as the Notification purports to
levy royalty on timber brought from private forests. If
there were no private forests at all the District Council
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would not have issued the Notification levying royalty on
timber got from private forests. In any view of the matter,
there is no sufficient ground to disturb the finding of the
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High Court on the above question.
In the result these appeals fail and they are dismissed
but, we however, set aside the finding of the High Court
that no fees can be levied by the District Council in
respect of matters enumerated in Paragraph 3 of the Sixth
Schedule to the Constitution.
There is no order as to costs.
P.S.S. Appeals dismissed.
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