Contracts not conforming with Art.299 of the Constitution are unenforceable, and the Revenue Recovery Act cannot be applied to amounts due under oral contracts not evidenced by written agreements.

1. The appeal is by the State against the decision of a learned Judge reported as Kerala Flour Mills, Mattancherry v. State of Kerala 1979 KLT. 18. The learned Judge allowed the writ petition of the respondent and declared that in respect of the dues to the Government for which revenue recovery proceedings were taken against him, the proceedings would not be valid if they are related to amount due under contracts not evidenced by written agreements. Having made this declaration, the learned Judge was further of the view that there was no need to grant the prayer asked for by the respondent to quash Ext. P.4 demand as the same was only a plain and simple demand for payment of money and not any step taken under the Revenue Recovery Act. As Revenue recovery proceedings had commenced as admitted in the counter-affidavit, and as, according to the learned Judge such proceedings were not available in respect of contracts other than written contracts, The learned Judge restrained the respondents to the writ petition (the appellants before us) from continuing revenue recovery proceedings in respect of Ext. P-4. The O. P. was allowed to the extent indicated.

2. The respondent was conducting a Wheat Roller Flour Mill in Cochin. His business is grinding wheat into rawa, atta and bran. The wheat was being supplied by the Food Corporation of India and the products were being returned at specified rates to the Corporation for distribution through recognised outlets. The Mill was to collect only the grinding charges. This arrangement was substituted by a new arrangement evidenced by Ext P-1 order. It is enough to draw attention to Clause.3 (V) of Ext. P-1, which stated:

"3 (v). The Millers will pay the Government of Kerala Rs. 2 per quintal of maida and sooji towards supervision charges".

The validity of this demand of supervision charges once came up on an earlier occasion before this Court and was dealt with in Ext. P-3 judgment. A Division Bench of this Court noticed that it was conceded before the learned Judge against whose judgment the writ appeal was preferred that the impost was neither a tax nor a fee and was not supported by any authority of law to sustain the levy as a tax or a fee. It was sought to be sustained on the basis of concluded contracts. The Division Bench observed:

"From the nature of the pleadings in those petitions and with the paucity of materials in the form of documents from which the existence or otherwise of the contract has to be spelt out it is undesirable that we launch on an enquiry whether there are obligations enforceable at law. We think that the learned Judge disposing of O.P. 2927 of 1972 has exercised his discretion, if we may say so with respect, right, in the above circumstances in declining to go into the question. The only thing we would like to do further is to make it clear that we express no opinion whatever on the existence of a contract or of any other enforceable obligations. These matters will have to be investigated and decided upon in other appropriate proceedings. We leave such questions therefore entirely open".

3. The Respondent committed default in respect of supervision charges from 1st September 1970 to 18th September 1971 On this latter date, i. e., 18th September 1971 the practice of collecting supervision charges was abolished by Ext. P-2 G. O. of the said date. Ext. P-4 demand was raised against the respondent for the amount due for the period mentioned. That was a plain and simple demand to remit the supervision charges within the specified time limit. This was replied to by Ext. P-5. In the counter-affidavit it was stated on behalf of the Government that the demand had been followed up by revenue recovery proceedings. This is what was sought to be quashed in the writ petition.

4. For the State, reliance was placed on S.68 of the Revenue Recovery Act which reads as follows: (Section omitted)

The learned Judge took the view that the amount did not fall under the first three p