1. The law makers realising the importance of local self governance units in building the nation, brought to the fore by the 73rd Amendment to the Indian Constitution the role of Village Panchayats or Village Councils. The 73rd Amendment incorporated Part IX in the Constitution and required the States to bring into existence laws for implementation of three tier Panchayat Raj system. After this amendment, the Kerala Panchayats Act, 1960 is repealed and the Kerala Panchayat Raj Act, 1994 is enacted and has been in force for the last 13 years. The Act and the Rules together provide for almost all contingencies arising in the implementation of the Scheme for Local Self Government. The local self governments need funds for the development of village panchayat and grama panchayats. The State Government has framed several rules and regulations, by enforcement of which the local self governments may generate funds for their developmental activities.

2. In these proceedings, the petitioners/appellants are primarily challenging the increase in the licence fee under the provisions of the Kerala Panchayat Raj Act (Issue of Licences to Dangerous and Offensive Trades and Factories) Rules, 1996