the State of Kerala Etc. Etc., v. K. P. Govindan Tapioca Exporter Etc. Etc.

Judgment

CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 729 to 757 {Jf 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 onliy), and CIVIL APPEAL Nos. 514 of 1973 and 515 of 1973. Appeals from the Judgme11ts and Order dated the 28th March 19'.~ and 11th February, 1912 of the Kerala High Court in Writ Petition No. 33 of 1972 and W. Appeal No. 466 of 1971 respectively. ·KERALA v. K. 1>. OOVINDAN (Untwolja, J.) L.:N. ·Sinha, Solicitor General jorlndia and A.G. Pudissery for the appellants (In all the appeals). Y. S. Chitale, D. V. Patel .K. S. Ranwmurthy, 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 fitnes~ by the High Court of Kerala hii.ve been heard together and are Jx:ing dispOsed of by a common judgment as their facts and the points invelved in them ·are identical. The respondents filed various writ petitions questiooing the validity of th~ otders of the State Government. of Kerala levying administrative surcharge on the export of tapioca:. ·Respondents are dealers in tapioca and do the businesi: ·of exporting •it 'illso outside the State of Kerala. In their writ pe1ition, they also claimed ref;und ·of thel amounts realised by the S~ Gowmment Ollj the basis of the impugned orders. Writ petitions were al!owuVby 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 qut ofthel Appellate·order of the Kerala High Court dismissing the appeals from the orders allowing the writ petitions. In exercise of the powers conferred ~Y subilectio?. ( 1) and subsection (2) .of Section 3· of the .Easential Commodities Act, 1955 (Central Act 10 of 1955) hereinafter referred to as the Act, read with the order of the Gove~ment 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 pers.on could export tapioca e_xcept under and in accor<!8ncc. wit~ a .pe~it issued by the Commissioner or any officer authorised by him m this behalf. Oause 6 of the . order provides for the filling of applitaJjons for the grant of permits for tapioca in Form Ill and the permit for the export of tapioca shall be in form IV.

Even before the promulgation of the Kerala Tapioca Manufacture and Export (eontrol) 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 bv the Kerala High Court. .

Learned Solicitor General amiearing 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 . SU.PREME COURT. REPORTS respondents by .grant of ~ts to export tapioea. Such. a counsel subrnittea, can very well be su.Pported with refere~ 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 S of the Act is empowered to· regulate Ole transport or ~xport of tapioca, and essential foodstuffs. Learned Solicitor General strenuowly 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 ate 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. Tapioca Export Control Order was made by the .s~te Gov~rnm~nt on being authorised by the Central Government m 1ts notification dated the 9th June, 1966. A copy of the said notification wu placed before us at the time of, hearing of these appeals. It puqiorted to authorise the State Governii1ent to make orders under section 3 of the Act to provide for some of the matters mentioncxi in· the various clauses of sub-section (2). Learned counsel for the respondents submitted that it was not a gene.ral authorisation to makr 'all 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 purposo 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 ~ order under any of the provisions of section 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 substane« and in effect it was an inipost 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 und~r the said Order. It was completely independent of it. The ~ap10ca Export Control Order di~ not provide for imposition· of any licence fee for the grant of pernnt for export of tapioca. Argument put forward on behalf of the apRCllant that the order dated the 15th April, 1966 was in substance and in eff<lct an order under section 3 ?f the Act runs. counter to its case in the petitions of appeal wherein 1t has been stated "That the deterioration in food position in the State of Kerala started from 1963 onwards and to avert the further woflsening of the food position, .the Government under Rule 125 of the KER.Al.Av. K. P. GOVINl>AN (Untwa/Ja, J.)

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 submissio.n 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 th6 State Government on the export of tapioca, as it was, 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 faw. and if permissible W!,der it, for permitting the respondents to export tapioca outside the State of Kerala~ The debat~ble que&- tion as to the nature of impost, its CODStitutional validity and legal justifiability will have to be gone into the11. 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 ~o. !P.B.R. Appeals dismissed lO l,jtl)SupCI/75