C.K. Abdul Rehim, J.

M/s. Bharat Petroleum Corporation Ltd, a public sector undertaking, running the 'Kochi Refinery' which is situated within the limits of the 2nd respondent Panchayat, is the petitioner. Challenge is against Ext.P6 order of the 3rd respondent Tribunal through which a revision petition filed by the petitioner against Ext.P5 decision of the 2nd respondent Panchayat was rejected. The revision petition was filed against the appellate order passed by the Panchayat, dismissing the appeal filed against the demand for payment of fee for renewal of licence, with respect to the years 2008-2009 & 2009-2010.

2. The petitioner company had approached this court earlier challenging increase in the rate of licence fee, levied under the Kerala Panchayat Raj (Issue of Licence to Dangerous and Offensive Trades and Factories) Rules, 1996 (hereinafter referred to as the 'Rules'). Validity of the Rules was challenged therein on the ground that it is ultravires of provisions in the Kerala Panchayat Raj Act, 1994 (hereinafter referred to as the 'Act') and on the ground that there exists no 'quid pro quo' since there is no service rendered to the payer in return of the levy. The challenge was ultimately settled in the decision of this court in W.A. No.191/2004 and connected cases, vide; judgment dated 18.08.2007. Challenge against validity of the Rules were repelled and the demand was upheld. Subsequently when the 2nd respondent issued Ext.P2 demand notice for payment of balance amount of licence fee due for the period 2008-2009 & 2009-2010, the petitioner submitted Ext.P3 objections before the Secretary of the 2nd respondent, inter alia contending that, computation of capacity of the total machineries used in the factory is not correct. It was contended that the machineries kept as 'stand-by' need to be excluded. The said objection was rejected by the Secretary of the Panchayat through Ext.P4. The petitioner preferred appeal before the 2nd respondent Panchayat. But the appeal was also rejected holding that all the machineries installed in the company need to be considered as in use and the licence fee under Rule 18 need to be reckoned based on all such machineries. It is found that the licence fee demanded is not in any manner exceeding the rates prescribed under Schedule III formulated under Rule 18. The 3rd respondent Tribunal had dismissed the revision petition filed against the appellate order relying on the decision of this court in Indian Oil Corporation Ltd v. Thenhipalam Grama Panchayat [2010 (3) KLT 300].

3. Contentions of the petitioner are mainly two folded. First contention is that the fee prescribed under Schedule III cannot be levied for renewal of licence on an yearly basis. The renewal fee need to be computed based on the turnover of the establishment, as prescribed under Schedule II appended to Rules. Further contention is that the panchayat is not entitled to fix licence fee based on capacity (Horse Power) of the machineries and other systems provided as back up/stand-by facility for running the factory. The maximum fee payable ought to be computed only based on capacity of the machineries in actual utilization.

4. Question whether the machineries provided as back up/stand-by need to be computed for fixing the licence fee, stands already settled in the decision in Indian Oil Corporation's case (cited supra). It is held that Rule 18 does not stipulate that fee can be charged only based on capacity of the machinery actually used in the manufacturing process. Fee can be charged for fire pumps and Diesel Generator sets and also with respect to machineries kept as stand-by for supporting the working of the establishment, is the finding. This court observed that, under Rule 18 the local authority is empowered to charge licence fee as contemplated under Section 232 of the Act for the place where the machinery or manufacturing plant is operated. Neither Rule 18 nor Schedule III draw a distinction between the machine