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HIGH COURT OF MADHYA PRADESH : JABALPUR
W.P. No. 17301/2007
South Eastern Coalfields Ltd.
Vs.
State of M.P. and another
W.P. No. 363/2008
South Eastern Coalfields Ltd.
Vs.
State of M.P. and another
DB : Hon. Arun Mishra & Hon. S.C. Sinho, JJ
Shri P.S.Nair, Sr. Counsel with Shri Rajas Pohankar for
petitioner.
Shri Deepak Awasthi, Government Advocate for State.
Shri K.K. Pandey, Counsel for respondent No. 2.
ORDER
(7.7.2010)
As Per : Arun Mishra, J.
1. In these writ petitions, petitioner South Eastern Coalfields
Ltd. has prayed for declaring notification dated 24th May,
1979 and notification dated 20th April, 1982 as ultra vires of
Article 243Q of the Constitution and Section 5 of the
Municipality Act, 1961. Alternative prayer has been made
that it be held that coal mines of Jamuna and Kotma are out
side the territorial jurisdiction of Pasan Municipality and the
definition of village does not cover coal mines. Prayer has
also been made to quash demand notice (P-4) demanding a
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sum of Rs. 57,72,800/- for a period of 10 years towards
lighting charges, general fire tax and general sanitary tax
under section 127 (c ), (d) and (e) of the Municipalities Act,
1961.
2. Facts are similar in both the writ petitions, they are being
narrated from W.P. No. 17301/2007. It is averred in the
petition that erstwhile Rewa Durbar granted a lease for
coalmining purpose to M/s ACC company in the year 1941,
later on the coal mines were nationalized under the Coal
Mines Nationalization Act, 1973 (hereinafter referred to as
the Act of 1973). Under section 11 of the Act of 1973, the
mine can be vested in the Central Government Company and
the Government Company will be entitled to exercise all
such powers and do all such things as the owner of the coal
mines is authorized to exercise and do. These powers have
been vested in the petitioner in the year 1986. In exercise of
power under section 340 of the M.P. Municipalities Act,
1961, the State Government issued notification declaring the
local area of Pasan Village in Sohagpur Tehsil as notified
area w.e.f. 24.5.1979. The State Government in exercise of
the power under section 5(4) of the Municipalities Act, 1961
declared the notified area as Municipal Area and declared
Pasan village as territory of municipal area. Notification
dated 20.4.1982 was issued for Jamuna and Kotma area.
There are two coal mines called Kotma colliery and Jamuna
colliery. Kotma colliery was acquired under the provisions of
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Coal Mines Nationalization Act, and Jamuna Colliery was
obtained under the provisions of Coal Bearing Areas
(Acquisition and Development) Act, 1957. Notification
created Municipality of Pasan, neither Kotma colliery nor
Jamuna colliery are included in the notification. Even
otherwise these collieries could not have been included in
the municipal area.
3. Under section 17 of the Municipalities Act, 1961, the
Municipal Council is required to erect and maintain the
boundary marks, it has not been done. There are no
permanent boundary marks showing the boundary in the
area of Pasan. The Municipality is demanding consolidated
tax chargeable under section 127 (c ), (d) and (e) of the
Municipalities Act. The coal mines is governed by various
enactments. The entire jurisdiction for development,
regulation of coal mines vest with the Central Government
and in the Government company. The property is vested in
the Central Government under Article 285 of the
Constitution of India and cannot be taxed by the State
Government or instrumentality of the State Government
under the Municipalities Act. Kotma and Jamuna collieries
are not part of the Municipal area. A part of the area is in
reserved forest. Municipality cannot exist in reserve forest
area. The purpose of Municipalities Act is to carry out non
forest activities. Demand has been illegally raised by the
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Municipal Council. Thus aforesaid provisions be declared as
ulra vires.
4. In W.P. No. 363/2008, prayer has been made to hold the
establishment of Municipality Kotma including Govinda and
Meera Colliery/Colonies is ultra vires of Article 243(Q) of the
Constitution of India and Section 5 of the Municipalities Act,
1961. Thus the Municipality had no right to demand the tax
under the aforesaid provisions. The consolidated demand
under section 127 (c ), (d) and (e) is Rs. 26,66,500/- for a
period of 10 years.
5. In the return filed in W.P. No. 17301/2007, it is contended
that earlier petitioner had preferred two writ petitions in
which aforesaid grounds were not raised. The effort is to any
how prolong recovery. The area in question falls within the
Municipal Limits, the petitioner is bound to pay fee imposed
by the Municipal Council. Petitioner is a registered company,
hence is bound to make the payment of fees. The whole area
of Pasan and Jamuna colliery is included in Municipal
Council Pasan. The Municipal Council renders the services
and collects the fees. The petitioner is bound to pay it.
Various documents have also been filed indicating that area
in question falls within the municipal limits.
6. Shri P.S.Nair, learned Sr. Counsel with Shri Rajas
Pohankar appearing for petitioner has submitted that the
provisions of Section 127 (c ), (d) and (e) of the Municipality
Act with respect to cleanliness of the city, lighting of public
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streets and fire fighting are applicable to city not to the coal
mines. The Municipality cannot carry out any function in
coal mines. Conservancy is the function of the coal mines
under section 20 of the Mines Act. Coal mines are also
responsible for cleanliness of canteen and its precincts
under Mines Rules, 1967. Under Mines Rules 33, 34, 35, 36,
37, 38 and 39 details of standard of construction, signboard,
provision of water for washing, underground latrines,
sanitation, obligation of work person etc. have been
provided. Rule 38 specifically provides for sanitation. It is a
duty of coal mines to provide general lighting, safety lamp
etc under Rule 151 of Coal Mines Regulations, 1957. Fire
services are also provided by coal mines. There is no public
street in the mines. The Municipality has not given the
details how they arrived at the amount. Coal mines cannot
be said to be smaller area under Article 243Q of the
Constitution of India. Pasan Municipality is declared as
scheduled area. After period of one year, there can be no
municipality. Municipality cannot impose tax on coal mines
in view of the decision rendered in State of Orissa and
another Vs. M/s M.A. Tulloch and Co. – AIR 1964 SC
1284,The India Cement Ltd. Etc. etc. Vs. State of Tamil
Nadu etc. – AIR 1990 SC 85, Tata Iron and Steel Co.
Ltd. Vs. State of Bihar and others – 1991 Supp. (1) SCC
430, District Mining Officer and others Vs. Tata Iron
and Steel Co. and another – (2001) 7 SCC 358. He has
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further submitted that decision rendered by the Apex Court
in State of West Bengal Vs. Kesoram Industies Ltd. and
others – (2004) 10 SCC 201 cannot be said to have laid
down correct law. Judgment is per incuriam and not binding.
7. Shri Purushendra Kaurav, learned Dy. Advocate General
and Shri K.K. Pandey, learned counsel, appearing on behalf
of respondents have submitted that the area in question
falls within the area of Pasan and Kotma Municipal Council.
They are entitled to recover the fee as per decision rendered
by the Apex Court in State of West Bengal Vs. Kesoram
Industries Ltd. and others (supra), Union of India and
others Vs. State of U.P. and others – 2007 AIR SCW
7393 and decision of this Court in Shrimal Dal Mills
(Firm) and others Vs. Krishi Upaj Mandi Samiti,
Sarangpur – 1990 MPLJ 431. They have submitted that
once the area falls within the Municipal Councils of Pasan
and Kotma and services are being provided in the colonies
of the collieries as well as other services are also being
provided in the area, the demand raised by the Municipal
Council is proper.
8. First we advert to the question whether on facts colliery/
area in question falls within the municipal limits of Pasan
and Kotma Municipal councils. With respect to the local area
of Pasan and Jamuna, a notification was issued on 24.5.1979
including all the villages within the notified area w.e.f the
date of notification. The State Government vide notification
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(P-2) dated 24.11.1979 extended the provisions of sections of
Municipalities Act as laid down in schedule II from the date
of publication of the notification. Vide notification (P-3)
dated 20.4.1982, the State Government declared the notified
area as Pasan Municipality and entire area which was
included in the previous notification, was included within
the municipal limits. Notification (R-2/8) dated 19.7.1996
relating to constitution of wards has also been placed on
record by the Municipal Council. The description of
boundaries of Ward No. 15 Indira Gandhi Ward, Ward No. 16
Shri Ram Manohar Lohia Ward, Ward No. 18 Madan Mohan
Singh Ward and that of other wards proved beyond doubt
that the collieries and the entire colliery area is within the
municipal limits.
Similar is the position with respect to Municipal Council
Kotma. There are notifications placed on record including
that of formation of wards. The entire area of concerned
villages was included within the notified area and thereafter
Municipality was formed. The notification of constitution of
wards makes it clear that area in question is included in
municipal limits of Kotma. Thus the submission raised by
Shri Nair that it is not established that area of coal mines
and colonies fall within the limits of Municipal Council, is not
acceptable. Considering the notification of notified area and
constitution of Municipal Council and formation of wards, we
reject the aforesaid submissions. Though Municipal Council
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may not have erected the boundary marks, acting as per
mandate of Section 17 but that does not advance the case of
the petitioner in the instant case. Beyond pale of doubt, it is
established that area in question falls within the Municipal
Limits of Pasan and Kotma.
9. Coming to the submission raised that coal mines are
exclusively covered under MMRD Act & Rules and that
under rules 33, 34, 35, 36, 37, 38, 39 and 67 of Mines Rules,
it is the duty of coal mines to make the provisions for
cleanliness of canteen, to maintain the standard of
construction, signboard, provision of water for washing,
sanitation etc and under section 20 of the Mines Act,
conservancy is also the function of coal mines.
It is not in dispute that colonies are also attached to
these coal mines in which services are rendered by
Municipalities. Merely by providing certain facilities for the
work for operation of the coal mines, it could not be said that
coal mines are exempted from making the payment of
requisite charges to the local bodies under the provisions of
Section 127 (c ), (d) and (e) of the Municipalities Act. A
general sanitary tax is levied under section 127(c) for
construction and maintenance of public latrines and for
removal and disposal of refuse and general cleanliness of the
city. A general lighting tax is levied under section 127 (d) for
lighting of public streets and public places. A general fire tax
is levied under section 127 (e) for the conduct and
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management of the fire service and for the protection of life
and property in the case of fire. There need not be any quid
pro quo in the fees charged and service rendered.
10. The Apex Court in Union of India and others Vs.
State of U.P. and others (supra) has laid down that the
service charges can be collected by Water Department for
supply of water and maintenance of sewerage system of
Railway colonies. In order to maintain these services, Jal
Sansthan has to incur expenditure for the same. Though
expression tax has been used but in fact it is in the nature of
fee for the service rendered by Jal Sansthan.
11. Coming to the question whether levy of charges
entrench upon regulation of Coal Mines under the MMRD
Act. The Apex Court in State of West Bengal Vs. Kesoram
Industies Ltd. and others (supra) considered the taxing
power of Union and States. The Apex Court emphasized that
there is no overlapping anywhere in the taxing power and
the Constitution gives independent sources of taxation to the
Union and the State. Methodology or mechanism adopted for
assessment and quantification could be similar for taxes.
There, could be no overlapping in law. It has also been laid
down that so long as a tax or fee on mineral rights remains
in pith and substance a tax for augmenting the revenue
resources of the State or a fee for rendering services by the
State and it does not impinge upon regulation of mines and
mineral development or upon control of industry by the
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Union, it is not unconstitutional. In the instant case it
cannot be said that the charges realized under section
127(c), (d) and (e) for rendering the services entrench upon
the regulation of Mines and Minerals in any way or upon
control of industry by the petitioner. Thus no sustenance can
be derived by Shri Nair by relying upon the various
provisions of Mines Rules and akin provisions. The Apex
Court in State of West Bengal Vs. Kesoram Industries
Ltd. and others (supra) has also considered the question of
levy of cess by the local Government authority and levy of
cess was held to be valid. The Apex Court has further laid
down that The Central Government is empowered under
Section 25 of Tea Act, 1953 to levy a duty or cess upon tea
or tea leaves for the purposes of that Act, can in no manner
deprive the State Legislature of its power to tax the land
comprised in a tea estate. In the context of cess imposed by
the local Government body on the dispatches of minor
mineral from mineral bearing land other than coal bearing
land cess was held to be justified as fee for rendering such
services as to the infrastructure and general development of
the area. In the instant case the area in question falls within
the municipal limits as such for general development of area,
the Municipal Council is empowered to realize the charges
under section 127(c), (d) and (e) of the Municipalities Act.
Thus we are not impressed by the submission raised by Shri
Nair, learned counsel appearing for the petitioner based
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upon section 20 of the Mines Act and the aforesaid Mines
Rules and provision of Rule 121 of Coal Mines Regulations,
1957.
12. In State of Orissa and another Vs. M/s M.A. Tulloch
and Co. (supra) the question for consideration before the
Apex Court was Orissa Mining Area Development Fund Act
is superseded by Mines and Minerals (Regulatioin and
Development) Act, 1957. In the instant cases, levy in
question is not covered by the Mines and Minerals
Regulations and has independent field to operate, thus the
ratio of the aforesaid decision is not attracted. Shri Nair,
learned Sr. counsel has further relied upon the decision of
Apex Court in The India Cement Ltd. Etc. etc. Vs. State
of Tamil Nadu etc. (supra) in which cess on royalty on
mineral rights was imposed, same was held to be beyond
competent of State legislature. Levy of cess was declared
illegal only prospectively for the aforesaid reason. The
decision is not applicable to the instant case for the similar
reasons as that of State of Orissa (supra).
13. Petitioners’ Counsel has also relied upon the decision of
Apex Court in Tata Iron and Steel Co. Ltd. Vs. State of
Bihar and others (supra) in which it was held that cess on
royalty charged for mining lease cannot be equated with
land revenue, hence does not fall under Entry 45 of Orissa
Cess Act, 1962. Cess on royalty charged for mining lease
was held not be a tax on land. The aforesaid decision has no
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application as the Municipality Act and charges realized
under section 127 (c ), (d) and (e) are not having any
overlapping effect with any of the regulations or provisions
under which petitioner’s coal mines are operated. The levy
cannot be said to be overlapping in any manner in the light
of the decision in Kesoram (supra).
In District Mining Officer and others Vs. Tata Iron
and Steel Co. and another (supra) the question was with
respect to cess and other taxes on Minerals (Validation) Act,
1992. The levy in question being entirely different in the
instant case particularly in view of decision of Apex Court in
State of West Bengal Vs. Kesoram Industies Ltd. and
others (supra), no sustenance can be derived from the
aforesaid decision. It cannot be said that the tax levied and
charges realized are without authority of law.
14. We find no force in the submission of Shri Nair that
Municipality could not have been constituted in the area.
The industrial township can be left out of Municipal area
having regard to the services proposed by industrial
establishment. The Municipal Council stood established
more than a decade before insertion of Article 243(Q) w.e.f.
1.6.1993 and it is not the case of the petitioner that area in
question has been declared to be Industrial Township. The
constitution of Municipal Councils Pasan and Kotma cannot
be said to be illegal.
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15. Coming to argument raised feebly with respect to
scheduled area under Article 244(1) read with Article 243
ZC of Constitution of India, there being no pleading and
material placed on record. The notification has not been
placed on record and on such constitution of scheduled area
provision of schedule 5 of constitution provide in Clause 5 as
to law applicable to schedule area, no such notification has
also been placed on record. Thus the submission is rejected.
16. The petitioner has also raised submission that Municipality
cannot exist/operate in the forest/reserve forest area as part
of collieries falls within said area. There is no bar for such
area being within Municipal area, what kind of activity can
be carried on is a different matter. On facts learned Sr.
Counsel was unable to show that which particular area falls
in the forest. The aforesaid submission has no effect on right
of Municipal Council to levy and realize tax which is in
nature of fees from petitioner.
17. The petitioner previously has filed four writ petitions i.e.
W.P. Nos. 7844/2007, 7843/2007, 16314/2007 and
16315/2007, in which the same demand notices were
impinged the grounds taken in the present writ petitions
were not raised. In previous writ petitions the matters were
remitted by this Court to hear the petitioner and thereafter
to determine the extent of tax and charges to be realized
under the aforesaid provisions. Now levy is challenged as an
after thought on new grounds. Whatever that may be, we
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have not found any merit in the instant writ petitions. In
case any amount which has been deposited and has not been
withdrawn by the concerned Municipal Council under the
interim order of this Court, the concerned Municipal Council
is free to withdraw the same.
18. Writ petitions being devoid of merits, deserve dismissal.
Writ petitions are hereby dismissed. No costs.
(Arun Mishra) (S.C.Sinho)
Judge Judge
PB