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High Court Of Rajasthan
Judgename : K.N.Wanchoo,Jagat Narayan
JETHMAL - Appellant
Versus
STATE OF RAJASTHAN - Respondent
Civil Writ Case 135 Of 1957
Decided On : 02/04/1958
TAXATION - PANCHAYAT TAX - IMPOSITION OF TAX ON WOOD - REQUIREMENT OF PREVIOUS SANCTION OF GOVERNMENT - PUBLICATION OF TAX INTENDED TO BE IMPOSED - SPECIFICATION OF DATE FOR IMPOSITION OF TAX - INTERPRETATION OF RELEVANT PROVISIONS OF RAJASTHAN PANCHAYAT ACT AND RULES.
Fact of the Case:
The applicants, Jethmal and 19 others, challenged the imposition of a tax on wood by the Village Panchayat Chandarun, with the sanction of the State Government, alleging that the tax was not legally imposed and they were not bound to pay it. The Panchayat claimed that the tax was imposed with the previous sanction of the Government and that all necessary procedures were followed.
Finding of the Court:
The court held that the tax was invalid on several grounds: (1) The Panchayat did not obtain the "previous sanction" of the Government before considering the imposition of the tax, as required by Section 64 (1) of the Rajasthan Panchayat Act. (2) There was no proper publication of the tax intended to be imposed, as required by Rule 24 (1) of the Rajasthan Panchayat (General) Rules. (3) The Government did not specify a date for the imposition of the tax, as required by Rule 24 (5) of the Rules.
Issues: 1. Whether the Panchayat obtained the "previous sanction" of the Government before considering the imposition of the tax. 2. Whether there was proper publication of the tax intended to be imposed. 3. Whether the Government specified a date for the imposition of the tax.
Ratio Decidendi: 1. The court interpreted the term "previous sanction" in Section 64 (1) of the Act and held that it requires the Panchayat to obtain the Government's sanction before taking any steps to impose a tax. In this case, the Panchayat passed a resolution to impose the tax and then sought the Government's sanction, which was not in accordance with the requirement of "previous sanction." 2. The court held that the publication of the tax intended to be imposed was not proper because the notice to the public did not accurately reflect the Panchayat's resolution. The resolution proposed an octroi tax on the import of wood for sale, but the notice stated that there would be a "sales tax" on the sale of wood. 3. The court held that the Government's order sanctioning the tax did not specify a date for its imposition, as required by Rule 24 (5) of the Rules. The Government's subsequent order purporting to fix a retrospective date for the imposition of the tax was not valid.
Final Decision: The court allowed the application and directed that the Panchayat would not realize the tax as it was invalid. No order as to costs was passed.
K. N. WANCHOO, C. J.
( 1 ) THIS is an application under Article 226 of the Constitution by Jethmal and 19 others against the State of Rajasthan, Village Panchayat Chandarun and Kanaram, sarpanch of the Panchayat challenging the imposition of a tax on wood imposed by the Panchayat with the sanction of the Government,
( 2 ) THE case of the applicants is that they received a notice from the Panchayat on 2-9-1957 in which they were told that a tax of 3 naye paise per maund had been imposed on all wood imported within the Panchayat Circle with the sanction of the government. Consequently, they were asked to pay the tax at that rate on all wood in stock with them. They-were also told that they would have to pay the tax on any fresh wood received by them. The present application was made soon after this notice was received by the applicants. Their case is that the tax has not been legally imposed and they are not bound to pay it. They have also said, that in any case it was not open to the Panchayat to tax the stock of wood with them on 2-11-1957.
( 3 ) THE reasons put forward by the applicants in support of the invalidity of the tax are these;
1. No previous sanction of Government as required by Section 64 (1) of the Rajasthan Panchayat Act, (Act No. XXI of 1953) (hereinafter called the Act) was received by the Panchayat before it considered the imposition of the tax. 2. No publication, as required by rule 24 of the Rajasthan Panchayat (General) Rules (hereinafter called the Rules) was made of the tax desired to be imposed and of the tax actually imposed. 3. No date was specified as required by rule 25 for the imposition of the tax.
( 4 ) THE application has been opposed on behalf of the Panchayat and it has traversed the points on which the applicants claim that the tax is invalid. We shall take these points one by one.
( 5 ) THE first point refers to the interpretation of the words "previous sanction" appearing in Section 64 of the Act. The relevant portion of Section 64 is in these terms:
"subject to the prescribed rules and any orders made by the State government in this behalf, a Panchayat may with the previous sanction of the State Government impose one or more of the following taxes, namely:. . . . . (j) any other tax with the previous sanction of the State Government. "
( 6 ) THE facts which have been brought on the record on behalf of the Panchayat show that the Panchayat passed a resolution on the 8th of October 1956 in which they said that they proposed to impose a tax on the import of wood within the panchayat Circle for sale and that this would be realised from the seller of wood, thereafter followed publication with which we shall deal later. Then the Panchayat took up the matter again on the 22nd of November 1956 and, after considering the objections, decided to impose the tax which they had proposed in the meeting of the 8th of October. This proposal was then submitted to Government and was approved by the Government by their order dated the 11th of July 1957 which was eventually communicated to the Panchayat in August 1957.
( 7 ) NOW the question arises whether in these circumstances, this tax has been imposed with the previous sanction of the Government. There is a well understood distinction in law between cases where a tax is imposed with the "sanction" of government and cases where the tax has to be imposed with "previous sanction". Where the imposition of the tax is with the "sanction" of Government, all that is required is that after the necessary procedure has been followed by the body imposing the tax, it sends the final proposal to Government for sanction. Where, however, "previous sanction" is required for the imposition of a tax, the matter has! to be submitted to Government twice for sanction. In the first instance, the body, as soon as it wishes to impose a tax which requires "previous sanction, communicates its wishes to Government and must get the sanction of Government to proceed to take s
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