The State Of Kerala Etc. Etc vs K. P. Govindan Tapioca Exporter Etc. Etc

CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 729 to 757 of 1972.

From the Judgment and Order dated the 27th September, 1971 of the Kerala High Court in O.P. Nos. 5103 and 5105/68 4261, 4329, 4369, 4518, 4580, 4618, 4657, 4769, 4829, 4837, 4870, 4948, 5919, and 5056/1969, 240-241, 433, 534, 536, 866, 869, 1559, 4982, 5050, and 5220, of 1970 and O.P. No. 3834 of 1969 (In CA No. 731/ 72 only), and CIVIL APPEAL Nos. 514 of 1973 and 515 of 1973. Appeals from the Judgments and Order dated the 28th March, 1972 and 11th February, 1972 of the Kerala High Court in Writ Petition No. 33 of 1972 and W. Appeal No. 466 of 1971 respectively.

637 M. Sinha Solicitor General for India and A. G. Pudissery for the appellants, (In, all the appeals).

Y. S. Chitale, D. V. Patel K. S. Ramamurthy, V. J. Francis, V. Hassan Koyan, P. Sankaran Kutty and A. S. Nambiar for respondent No. 1 (In CA No. 746 and 748/72) respondent No. 2 (In CA 735/72, respondent No. 3 (In CA No. 754/72) and for Respondents (In rest of the Appeals). The Judgment of the Court was delivered by UNTWALIA, J.-All these Civil appeals filed on grant of certificates of fitness by the High Court of Kerala have been heard together ,and. are being disposed of by a common judgment as their facts and the points involved in them are identical. The respondents filed various writ petitions questioning the validity of the orders of the State Government of Kerala levying administrative surcharge on the export of tapioca. Respondents are dealers in tapioca and do the business of exporting it also outside the State of Kerala. In their writ petition, they also claimed refund of the amounts realised by the State Government on the basis of the impugned orders. Writ petitions were allowed by a bench of the Kerala-High Court and Civil Appeals 729-757 of 1972 are directed against the orders in the writ Petitions. Two of the Civil Appeals namely Civil Appeals 514 and 515 of 1973 arise out. of the Appellate order of the Kerala High Court dismissing the appeals from the orders allowing the writ petitions.

In exercise of the powers conferred by sub-section (1) and subsection (2) of Section 3 of the Essential Commodities Act, 1955 (Central Act 10 of 1955), hereinafter referred to as the Act, read with the order of the Government of India dated the 9th June, 1966 and with the prior concurrence, of the, Central Government. the Govt. of Kerala made the Kerala Tapioca Manufacture and Export (Control) Order, 1966. Under clause 5 of the said order no person could export tapioca except under and in accordance with a permit issued by the Commissioner or any officer authorised by him in this behalf. Clause 6 of the order provides for the filling of applications for the grant of permits for tapioca in Form III and the permit for the export of tapioca shall be in form IV. Even before the promulgation of the Kerala Tapioca Manufacture and Export (Control) Order, administrative surcharge was levied under a Scheme formulated by the State Government, on the 15th April, 1966 published in the Kerala Gazette dated 3-5-1966. The rates of administrative charge levied on tapioca in the Scheme dated 15th April, 1966 was varied from time to time and a copy of the order dated 20th October, 1967 specifying the revised rates was Ext. P-1 in one of the writ petitions. A copy of the order dated 15th April, 1966 was given to us by the- learned Solicitor General appearing for the appellant State. The respondents' plea that the levy of, administrative charges, was ultra vires the State Government and unwarranted by law has been accepted by the Kerala High Court. Learned Solicitor General appearing for the appellant State submitted that the orders levying administrative charge on the export of. tapioca, was, in effect and substance a licence fee charged in the exercise of the police powers of the State for permitting the 638 respondents by grant of permits to export tapioca. Such a levy counsel submitted, can very well be supported with reference to the provisions of sub-section (1) or sub- section(2) of 53 the Act, whereby the State as a result of the authorisation under section 5 of the Act is empowered to regulate the transport or export of tapioca, and essential foodstuffs.

Learned Solicitor General strenuously attached the findings of the Kerala High Court that the administrative charge imposed on the export of tapioca was a fee and since it had no correlation with the service rendered by the State, the most was bad.

In the instant case it is not necessary for us to decide whether the view aforesaid of the Kerala High Court or the submission made on behalf of the appellant in that regard is correct or not. The Tapioca Export Control Order was made by the State Government on being authorised by the Central Government in its notification dated the 9th June, 1966. A copy of the said notification was placed before us at the time of hearing of these appeals. It purported to authorise the State Government to make orders under section 3 of the Act to provide for some of the matters mentioned in the various clauses. of sub-section (2) Learned counsel for the respondents submitted that it was not a general authorisation to make an order under sub-section(1). It is not necessary for us to go into this question either. We shall assume in favour of the appellant that while regulating or prohibiting the production, supply and distribution of tapioca and trade and commerce therein it has got the police power to charge licence fee for the purpose of regulating the tapioca trade or to charge fees for grant of issue of licences/permits or other documents in accordance with clause (ii) of sub-section(2) of Section 3 of the Act.

Still we find that the impugned levies have rightly been held to be bad as they were not levies of licence fees for regulating the trade or for grant of permits. The order dated 15th April, 1966 formulating the scheme was not an order under any of the provisions of section is 3 of the Act. It did not impose any licence fee or fee for grant of permit. It merely provided for levying of administrative surcharge for the export of tapioca and its products at the specified rates which varied from time to time. In substance and in effect it was an impost on export which indisputably the State had no power to do. The orders levying the administrative charge which followed the Tapioca Export Control Order did, not refer to the exercise of any power under the said Order. It was completely independent of it. The Tapioca Export Control Order did not provide for imposition of any licence fee for the grant of permit for export of tapioca. Argument put forward on behalf of the appellant that the order dated the 15th April, 1966 was in substance and in effect an order under section 3 of the Act runs counter to its case in the' petitions of appeal wherein it has been stated "That the deterioration in food position in the State of Kerala started from 1963 onwards and to avert the further won seeing of the food position, the Government, under Rule 125 of the 639 Defence of India Rules, 1962 issued the Tapioca Control Order, 1964, whereby Government imposed certain restrictions in the export of tapioca and its products from the State and permitted the export of limited quantity through selected dealers.

The State, in accordance with this order framed a scheme known as "Scheme for the export of Tapioca and its products" on 15-4-1966 whereby the Govt. clarified the manner and mode of selection of the dealer, the details regarding the submission of applications of the intending exporters, the issue of permits and the payments of Administrative Surcharge."

The stand taken in the petitions of appeal was not pursued at the time of the hearing. It is, therefore, clear that the administrative surcharge levied by the State Government on the export of tapioca,as it was bad. The realisations thereunder were without the authority of law. It will, however, be open to the State Government to impose tax or fee, as they may be advised to do in accordance with law and if permissible under it, for permitting the respondents to export tapioca outside the State of Kerala. The debatable question as to the nature of impost, its constitutional validity and legal justifiability will have to be gone into then.

On the facts as they stand in these appeals, we uphold the orders of the Kerala High Court for the reasons given by us. The appeals fail and are dismissed with costs. One hearing fee.

P.B.R. Appeals dismissed L319SupCI/75 640