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Kerala High Court
M.U.ISAAC
Travancore Rayons Ltd. - Appellant
Versus
Textiles Committee - Respondent
Decided On : 03/03/1972
Textiles Committee Act - Rayon Yarn - Section 2(g), Section 4, Section 11, Section 12, Rule 21 - The court held that the Textiles Committee Act empowered the Committee to levy fees for inspection and examination of textiles and textile machinery. However, the court found that the petitioner, a manufacturer of rayon yarn, was not liable to pay the fee as no services were available to them, and there was no establishment or arrangement to render any services to the manufacturers of rayon yarn. The court restrained the Textiles Committee from levying the fee from the petitioner and quashed the demand for the fee. The court also dismissed the petitioner's claim for a refund of the fee paid, as the petition was filed more than three years after the payment was made.
Fact of the Case:
The petitioner, a manufacturer of rayon yarn, was called upon to pay a fee by the Textiles Committee under Rule 21 of the Textiles Committee Rules. The petitioner contended that the levy was ultra vires of the Act and that no services were available to them, and there was no establishment or arrangement to render any services to the manufacturers of rayon yarn. The petitioner filed a writ petition seeking to declare Rule 21 as ultra vires of the Act, quash the demand for the fee, and restrain the Textiles Committee from collecting any amount as per the said demand, and to refund the sum of Rs.46.955/- paid as fee.
Finding of the Court:
The court found that the petitioner was not liable to pay the fee as no services were available to them, and there was no establishment or arrangement to render any services to the manufacturers of rayon yarn. The court restrained the Textiles Committee from levying the fee from the petitioner and quashed the demand for the fee. The court dismissed the petitioner's claim for a refund of the fee paid, as the petition was filed more than three years after the payment was made.
Issues: The main issue was whether the petitioner was liable to pay the fee under Rule 21 of the Textiles Committee Rules, and whether the levy was ultra vires of the Act. The court also considered the petitioner's claim for a refund of the fee paid.
Ratio Decidendi: The court held that a person is not liable to pay a fee if no services are available to them, and there is no establishment or arrangement to render any services to them. The court restrained the Textiles Committee from levying the fee from the petitioner and quashed the demand for the fee. The court also dismissed the petitioner's claim for a refund of the fee paid, as the petition was filed more than three years after the payment was made.
Final Decision: The court allowed the writ petition to the extent that the Textiles Committee was restrained from levying the fee from the petitioner and quashed the demand for the fee. The court dismissed the petition in other respects and made no order as to costs.
The petitioner is an in-corporated company, having a factory at Rayonpuram in Ernakulam District, wherein rayon yarn and cellulose film are manufactured. The term 'textiles' is defined in Section 2(g) of the Textiles Committee Act, 1963; and rayon yarn is a textile within the meaning of that definition. The Textile Committee Act is a Central enactment to provide for the establishment of a Committee for ensuring the quality of textiles and textile machinery and for matters connected with it. The first respondent is the Textile Committee, constituted under that Act; and respondents 2 and 3 are the Union of India and the State of Kerala respectively.
2. Section 4 of the Act lays down the functions of the Committee. Sec.11 provides for inspection and examination of textiles and textile machinery. Section 12 empowers the Committee to levy such fees as may be prescribed for such inspection or examination, or for any such service which the Committee may render to the manufacturers of textiles and textile machinery. It is necessary to notice the full ambit of the above provisions; and it is better to read them:-
'Section 4 (1) Subject to the provisions of this Act the functions of the Committee shall generally be to ensure by such measures, as it thinks fit, standard qualities of textiles both for internal marketing and export purposes and the manufacture and use of standard type of textile machinery.
(2) Without prejudice to the generality of the provisions of sub-section (1), the Committee may-
(a) undertake, assist and encourage, scientific technological and economic research in textile industry and textile machinery;
(b) promote export of textiles and paganda for that purpose;
© establish, adopt or recognise standard specifications for textile for the purposes of export and for internal consumption and affix suitable marks on such Standardised varieties of textiles;
(d) specify the type of quality control or inspection which will be applied to textiles or textile machinery:
(e) provide for the inspection and examination of-
(i) textiles;
(ii) textile machinery at any stage of manufacture and also while it is in use at mill-heads;
(f) establish laboratories and test houses for the testing of textiles;
(g) provide for testing textiles and houses other than those established under clause (f);
(h) collect statistics for any of the abovementioned purposes from-
(i) manufacturers of, and dealers in textile;
(ii) manufacturers of textile machinery; and
(iii) such other persons as may be prescribed;
(i) advise on all matters relating to the development of textile industry and the production of textile machinery;
(j) provide for such other matters as may be prescribed.
(3) In the discharge of its functions, the Committee shall be bound by such directions as the Central Government may, for reasons to be stated in writing, give to it from time to time'.
Sec. '11. (1) The Committee may, on application made to it or otherwise, direct an officer specially authorised in that behalf to examine the quality of textiles or the suitability of textile machinery for Use at the time of manufacture or while in use in a textile mill and submit a report to the Committee.
(2) Subject to any rules made under this Act, such an officer shall have power to-
(a) Inspect any operation carried on in connection with the manufacture of textiles or textile machinery in relation or inspection standards have been specified;
(b) take samples of any article or of any material or substance used in any article or process in relation to which construction particulars, marks or inspection standards have been specified;
© exercise such other powers as may be prescribed.
(3) On receipt of the report referred to in sub-section (1), the Committee may tender such advice, as it may deem fit, to the manufacturer of textiles, the manufacturer of textile machinery and the applicant'.
Sec. '12. (1) The Committee may levy such fees as may be prescribed-
(a) for inspection and examination of textiles,
(b)
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