JUDGMENT
S. Siri Jagan, J.
1. Thrissur Municipal Corporation has filed this Writ Petition challenging Ext. P3 common order of the Consumer Disputes Redressal Forum, Thrissur in O.P. Nos. 463, 464, 465, 466, 467 and 468 of 2005 wherein the Forum directed the Corporation to cancel the notices issued by the Corporation to the complainants in those OPs demanding property tax under the Kerala Municipality Act and directed payment of Rs. 1000/- each to the petitioners as costs which has to be adjusted against future tax on the ground that the demands for properly tax were barred by limitation prescribed under Section 539 of the Kerala Municipality Act.
2. The Municipal Corporation challenges the said order on three grounds viz, (1) the demand for tax is a sovereign function. Therefore, the same does not come within the purview of service and the complainants in the petitions before the Forum are not consumers of the Corporation and therefore the order of the Forum is without jurisdiction (2). The Kerala Municipality Act provides for a hierarchy of appellate and revisional authorities and therefore the jurisdiction of the Forum under the Consumer Protection Act is impliedly excluded. (3) In any event, Section539 of the Kerala Municipality Act does not apply to the present case. Even if it applies, the property tax being a charge on the property itself, the period of limitation can only be 12 years and not 3 years under Section 539.
3. Although, notices were accepted by the respondents and the 2nd respondent appeared through counsel, nobody was present on the two days when the matter was taken up for hearing. I have heard the learned Counsel for the petitioner-corporation.
4. The question as to whether statutory authorities, local bodies etc., are amenable to the jurisdiction of the authorities under the Consumer Protection Act has been subject matter of several decisions of the Supreme Court. I shall refer to two of them here. First one is Lucknow Development Authority v. M.K. Gupta. . In that case, the jurisdiction of the authorities under the Consumer Protection Act was invoked in relation to the activities of the Lucknow Development Authority, Delhi Development Authority and the Bangalore Development Authority in the matter of delay in delivery of possession of houses to allotees, non-completion of the flat within a stipulated time, defective and faulty construction etc. The question which was posed before the National Consumer Dispute Redressal Commission from whose decision the case came up before the Supreme Court was as to whether the Lucknow Development Authority, Delhi Development Authority and Bangalore Development Authority constituted under the State Acts to carry on planned development of the cities are amenable to the jurisdiction of the authorities under the Consumer Protection Act. The Supreme Court, in paragraph 5 of the said decision held as under:
5. This takes us to the larger issue if the public authorities under different enactments are amenable to jurisdiction under the Act. It was vehemently argued that the local authorities or government bodies develop land and construct houses in discharge of their statutory function, therefore they could not be subjected to provisions of the Act. The learned Counsel urged that if the ambit of the Act would be widened to include even such authorities it would vitally affect functioning of official bodies. The learned Counsel submitted that the entire objective of the Act is to protect a consumer against malpractices in business. The argument proceeded on complete misapprehension of the purpose of Act and even its explicit language. In fact the Act requires provider of service to be more objective and caretaking. It is still more in public services. When private undertakings are taken over by the government or corporations are created to discharge what is otherwise State’s function, one of the inherent objectives of such social welfare measures is to provide better, efficient and cheaper services to the people. Any attempt, therefore, to exclude services offered by statutory or official bodies to the common man would be against the provisions of the Act and spirit behind it. It is indeed unfortunate that since enforcement of the Act there is a demand and even political pressure is build up to exclude one or the other class from operation of the Act. How ironical it is that official or semi-official bodies which insist on numerous benefits, which are otherwise available in private sector, succeed in bargaining for it on threat of strike mainly because of larger income accruing due to rise in number of consumers and not due to better and efficient functioning claim exclusion when it comes to accountability from operation of the Act. The spirit of consumerism is so feeble and dormant that no association, public or private spirited, raises any finger on regular hike in prices not because it is necessary but either because it has not been done for sometime or because the operational cost has gone up irrespective of the efficiency without any regard to its impact on the common man. In our opinion, the entire argument found on being statutory bodies does not appear to have any substance. A government or semi-government body or a local authority is as much amenable to the Act as any other private body rendering similar service. Truly speaking it would be a service to the society such bodies instead of claiming exclusion subject themselves to the Act and let their acts and omissions scrutinised as public accountability is necessary for healthy growth of society.
5. The Supreme Court again in the decision of Regional Provident Fund Commissioner v. Shiv Kumar Joshi, , considered the question as to whether the provident fund organisation is amenable to the jurisdiction of the authorities under the Consumer Protection Act. In this decision, the Supreme Court was considering the question as to whether the Regional Provident Fund Commissioner under the Employees Provident Funds and Miscellaneous Provisions Act, is providing any service to the members of the provident fund. In that decision also, the Supreme Court entered a finding that a statutory authority not invested with sovereign function while discharging its statutory functions provides service and would be liable under the Act in case of any deficiency in such service.
6. From the above two decisions, I find that the Supreme Court has chosen to divide the function of a statutory authority into ordinary commercial activity and sovereign function and held that as distinct from sovereign function, if the statutory authority performs any ordinary commercial activity, services in respect of such commercial activity may relate to service in respect of which certainly the statutory authority is amenable to the jurisdiction of the authorities under the Consumer Protection Act. Going by that decision, simply because the Municipal Corporation is a statutory authority, all of its functions cannot be taken out of the purview of the Consumer Protection Act. Under the Kerala Municipality Act, the Corporation does have two kinds of functions, one, a sovereign function and the other, a function relating to services to the public. One of the sovereign functions relates to collection of tax. The functions relating to services are activities such as providing of amenities to the public. While providing amenities to the public would constitute services, the function of levy of collection of taxes would squarely come within the sovereign functions of the statutory authority, which would be outside the purview of the Consumer Protection Act. In fact, the Supreme Court had occasion to deal with the question of applicability of Consumer Protection Act in respect of some such activities in two decisions to which I shall presently advertto.
7. In Chairman, Thiruvalluvar Transport Corporation v. Consumer Protection Council, , the Supreme Court considered the question as to whether the claim for compensation arising out of a motor accident can be adjudicated by the authorities under the Consumer Protection Act. In paragraph 6 of the judgment, while holding that the National Commission does not have jurisdiction to entertain such claim, the Supreme Court stated as follows:
6. The question which then arises for consideration is whether the National Commission had jurisdiction to entertain the claim application and award compensation in respect of an accident involving the death of Shri K. Kumar caused by the use of a motor vehicle. Clearly the Claims Tribunal constituted for the area in question, had jurisdiction to entertain any claim for compensation arising out of the fatal accident since such a claim application would clearly fall within the ambit of Section 165 of the 1988 Act. The 1988 Act can be said to be a special Act in relation to claims of compensation arising out of the use of a motor vehicle. The 1986 Act being a law dealing with the question of extending protection to consumers in general could, therefore, be said to be a general law in relation to the specific provisions concerning accidents arising out of the use of motor vehicles found in Chapter XII of the 1988 Act. Ordinarily, the general law must yield to the special law. Besides, the complaint in question cannot be said to be in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided to the deceased. The expression “service” as defined by the 1986 Act means service of any description which is made available to potential users and includes the provision of facilities inter alia in connection with transport. The accident that occurred had nothing to do with service provided to the deceased. This becomes obvious when one reads the provision along with the definition of complaint in Section 2(c), and service in Section 2(o) of the 1986 Act. Complaint according to Section 2(c) means any application in writing in relation to an unfair trade practice or as a restrictive trade practice adopted by any trader or in relation to goods bought by him or agreed to be bought by him. Both these clauses have no application whatsoever. The third clause relates to the services hired or availed of or agreed to be hired or availed of by a consumer. Therefore, at best, it can be said the complaint in question related to the service hired or availed of by the deceased. The complaint in the instant case cannot be said to be in relation to any service hired or availed of by the consumer because the injury sustained by the consumer had nothing to do with the service provided or availed of by him but the fatal injury was the direct result of the accident on account of which he was thrown out of his seat and dashed against an iron handle of the seat in front of him. We have, therefore, no manner of doubt that this case squarely fell within the ambit of Section 165 of the 1988 Act and the Claims Tribunal constituted thereunder for the area in question had jurisdiction to entertain the same. As pointed out earlier, the 1988 Act and in particular, the provisions in Chapter XII thereof creates a Forum before which the claim can be laid if it arises out of an accident caused by the use of a motor vehicle. That being a special law would prevail over the relevant general law such as the 1986 Act but in the instant case even that question does not arise for the simple reason that the dispute in question did not attract the jurisdiction of the National Commission whatsoever and the National Commission has not shown how it had jurisdiction….
8. Again, the Supreme Court considered the question as to whether officers appointed under the Registration Act and Stamp Act are rendering any services within the meaning of the Consumer Protection Act, in S.P. Goel v. Collector of Stamps, Delhi . The Supreme Court, while holding that the authorities under the Registration Act and Stamp Act perform statutory duties which are at least quasi judicial and their acts cannot amount to under the Consumer Protection Act, held in paragraphs 31 to 33 as follows:
31. Running through the twin Acts, namely, the Registration Act and the Stamp Act, we could not, at any stage, reconcile ourselves to the idea spoused by the appellant’s counsel, that there is an element of commercialism involved in the whole process of registration of instruments or payment of Stamp Duty and that the executant of an instrument at the time of its presentation for registration becomes a “consumer” entitled to “service” within the ambit of Consumer Protection Act. The reasons are many.
32. The Registration Act as also the Stamp Act are meant primarily to augment the State revenue by prescribing the stamp duty on various categories of instruments or documents and the procedure for collection of stamp duty through distress or other means including criminal prosecution as non-payment of stamp duty has been constituted as an offence. Payment of registration fee or registration charges including charges for issuing certified copies of the registered documents or fee for the inspection of various registers or documents kept in the Registrars or Sub-Registrars office etc. constitute another component of State revenue.
33. In this situation, therefore, the person who presents a document for registration and pays the stamp duty on it or the registration fee does not become a consumer nor do the officers appointed to implement the provisions of the two Acts render any service within the meaning of Consumer Protection Act. They only perform their statutory duties (some of which, as earlier indicated, are judicial or at least quasi-judicial in nature) to raise and collect the State revenue which is a part of the sovereign power of the State.
9. While at it, I may also refer to some decisions of the National Consumer Disputes Redressal Commission as also some of the decisions of the State Commissions, although they may not be strictly binding on me. But, I find considerable force in the reasonings adopted in those decisions, some of which squarely relate to levy and collection of tax.
10. In the case of Consumer Unity and Trust Society, Jaipur v. State of Rajasthan and Ors. reported in (1991) ICPR 241, the question that arose for consideration of the National Commission was as to whether direct and indirect taxes paid to the State by a Citizen constitute ‘consideration’ for the services and facility provided to the citizen by the State. Relying on some decisions of the Supreme Court, the National Commission, in paragraphs 11 and 12 held as follows:
11. Now, we come to the important question whether the direct and indirect taxes paid to the State by a citizen constitute “consideration” for the services and facility provided to a citizen by the State. As pointed out by the Supreme Court of India in Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindro Thirtha Swamiar of Sri Shirur Mutt (supra) that “a tax is the compulsory extraction of money by public authority for public purposes enforceable by law and is not payment of service rendered.
In Southern Pharmaceuticals and Chemicals, Trichur v. State of Kerala and Ors. , the Supreme Court after considering various decisions including the one cited above distinguished “fee” from “taxes” in these words:
Fees are the amount paid for a privilege and are not an obligation, but the payment is voluntary. Fees are distinguished from taxes in that the chief purpose of a tax is to raise funds for the support of the Government or for a public purpose, while a fee may be charged for the privilege or benefit conferred, or service rendered or to meet the expenses connected therewith. Thus, fees are nothing but payment for some special privilege granted or service rendered.
The same principle has again been restated by the Supreme Court in its recent decision in the Municipal Corporation of the City of Baroda v. Babubhai Himatlal reported in Judgment Today. The identical view was again reiterated by the Supreme Court in Sreenivasa General Traders v. Andhra Pradesh and Ors. (supra) where the Court observed thus:
The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part ‘ of a common burden, while a fee is for payment of a specific benefit or privilege although the special advantage is secondary to the primary motive of regulation in public interest. If the element of revenue for general purpose of the State predominates, the levy becomes a tax.
12. In the light of the aforesaid pronouncements of the Supreme Court the legal position must now be taken to be well settled that unlike a “fee”, a “tax” in its true nature is a levy made by the State for the general purposes of Government and it cannot be regarded as payment for any particular or special service. While, it is undoubtedly true that the Government in a welfare State is under a duty to provide various forms of facilities to citizens and the expenditure incurred thereon will have to be, met from out of the consolidated funds of the State, it cannot be said that a tax levied for the general purposes of the State continues “consideration” for any specific facility, benefit or service provided by the State…..
11. In the decision of A.Srinivasa Murthy v. Chairman, Bangalore Development Authority, reported in (1992) II CPJ 395, relying on an earlier decision of the Commission, it was held by the National Commission that payment of tax which goes into the general revenue of the State or local authority will not legally constitute payment of consideration for any specific service.
12. In National Forum for Consumer Protection v. Keonjhargarh Municipality and Ors. reported in (1993) II CPJ 1109, the Orissa State Commission held that although payment for fee for any service amounts to hiring the service, since fee involves quid pro quo, payment of tax is not a consideration for any service since in tax there is no quid pro quo.
14. The Punjab State Consumer Disputes Redressal Commission in the decision of Laxmi Narain Goel v. Punjab Water Supply and Sewerage Board and Ors. reported in (1993) III CPJ 1333, considered the question as to whether payment of house tax is consideration for hire and whether while paying such house tax payer is a consumer within the purview of the Consumer Protection Act. Relying on the decision of the National Commission in Consumer Unity & Trust Societies Act (supra) the State Commission held as follows in paragraphs 4 and 5:
4. The learned Counsel for the complainant-appellant has vehemently argued that the members of the public pay house tax and other taxes to the Government and that the sewerage system is maintained by the Punjab Water Supply & Sewerage Board out of the revenue so secured and the payment of taxes is therefore, sufficient consideration for the service of maintenance of sewerage system. This argument of the learned Counsel misses the most essential feature of the concept of hire. The consideration for hire, be it called fee, charge or rent is that it is voluntary payment, it is open to a person to make the payment and hire the service or refuse to pay and forego the service. A tax on the other hand is a levy or imposition made by the Government for public purpose. There is no element of voluntariness in the payment of tax. No tax payer has the option to refuse to pay the tax legally imposed on him. It is, therefore, clear that the payment of tax to the Government cannot be construed as consideration for the services rendered by the Government
5. This point has been answered directly by the National Commission in Consumer Unity and Trust Society, Jaipur v. State of Rajasthan (1991 (1) C.P.R. 241 : II (1991) CPJ 56). It has been held in that decision that the payment of taxes cannot be regarded as consideration for service rendered by the Government. The same principle applies to taxes paid to the Municipal Committee. We, therefore, agree with the conclusion of the District Forum and hold that the complainant-appellant is not a ‘consumer’.
15. The Gujarat State Commission rendered a decision on whether fee paid by a litigant in the form of court fee can be termed as ‘consideration’ for services hired from State and whether in relation to the same, any complaint would lie under the Consumer Protection Act for not providing adequate service in relation to the payment of fees in the decision of State of Gujarat v. Akhil Bharatiya Grahak Panchayat, reported in (1993) ICPR 327. In that decision, relying on Supreme Court decisions, the State Commission held as follows in paragraph 22:
22. To our opinion, a distinction shall have to be made between the sovereign acts and functions of the state vis-a-vis its commercial functions or activities. When the State is exercising its judicial functions through the agency of courts, and Judges are exercising its statutory functions. The court fee levied by the State is the fees for expenses which is in a nature of tax for services but the litigant is not aconsumer within the meaning of Section 2(1)(d)(ii) of the Consumer Protection Act, 1986. Even if the State is not providing adequate service in relation to the fees it recovers from the litigants, it cannot amount to deficiency in service within the meaning of the Act. The complainant can challenge in the appropriate court the rate of court fee if adequate number of Judges are not provided on the ground of inadequacy of services in relation to the fees charged by the State, but in no case it amounts to a deficiency in services under the provisions of Consumer Protection Act.
16. The Madras State Commission also came to the similar conclusion in respect of payment of house tax in the decision of The Commissioner, Mannargudi Municipality v. Consumer Protection Council, reported in (1993) I CPR 191. In that decision, the State Commission, in paragraph 5, held as follows:
…It has been pointed out by this Commission that there is an essential distinction between the consideration for hire be it called as fee, charge or rent and the payment of tax; the former is a voluntary payment and it is open to a person to make the payment and hire service or refuse to pay and forego the service. In the case of the latter, it is a levy or imposition made by the Government or the Panchayat under the Panchayat Act and there is no element of voluntariness in the payment of tax, for no tax payer has the option to refuse to pay the tax legally imposed on him. The house tax collected by the appellant/opposite party in respect of these houses of Mr. Kalyanasundaram is a tax and not a fee for any service rendered by the Municipality, in the matter of laying and maintenance of road, water supply and drainage facilities. The complainant cannot therefore be held to be a consumer within the meaning of Section 2(1)(d)(ii) of the Act and the complaint is not maintainable. The District Forum has not considered this aspect of the matter and has erred into the conclusion that the complainant is a consumer.
17. I am in complete agreement with the conclusions arrived at in the above said decisions as also the reasoning contained therein. While local bodies do certain acts as services rendered for payment of fee in respect of which there is quid pro quo coming within the purview of the Consumer Protection Act, in respect of the sovereign functions exercised by the local bodies by way of collection of taxes like property tax, profession tax and other taxes, it cannot be said that the local bodies are rendering any services, in respect of which the tax payer can maintain a complaint under the Consumer Protection Act. Therefore, in respect of payment of property tax, no complaint would lie before a Consumer Disputes Redressal Forum or Commission. Further, as held in the case of Thiruvalluvar Transport Corporation (supra), since the Kerala Municipality Act provides for a hierarchy of appellate and revisional authorities in respect of redressal of grievances of tax payers, the Kerala Municipality Act being a special law, the same would prevail over the general law of Consumer Protection Act and as such the Forum ought to have relegated the complainants to the remedies available under the Act itself instead of taking upon itself a task of deciding the complaint.
In view of my decision that in respect of levy and demand of property tax under the Kerala Municipality Act, no complaint under the Consumer Protection Act would lie, it is not necessary to decide the question as to whether the limitation prescribed under Section 539 of the Kerala Municipality Act would apply to collection of property tax. In view of my above finding, the Consumer Disputes Redressal Forum went wrong in entertaining the complaints which ended in Ext. P3 common order. Accordingly, I set aside Ext. P3 order of the Consumer Disputes Redressal Forum, Thrissur and dismiss O.P. Nos. 463,464,465,466,467 and 468 of 2005 filed before the Forum by respondents 1 and 2 herein. The Writ Petition is allowed as above.