Pipleshvar Diesel Service vs State Of Gujarat
2021 Latest Caselaw 17727 Guj

      C/SCA/16578/2016                                         ORDER DATED: 25/11/2021



      IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
             R/SPECIAL CIVIL APPLICATION NO.16578 of 2016

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                          PIPLESHVAR DIESEL SERVICE
                                    Versus
                          STATE OF GUJARAT & 3 other(s)
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Appearance:
MR SHALIN MEHTA, SR COUNSEL with MS SHIKHA PANCHAL with MS
VIDHI J BHATT(6155) for the Petitioner(s) No. 1
MR MEET THAKKAR, AGP (1) for the Respondent(s) No. 1,2
MR RB THAKOR(6743) for the Respondent(s) No. 3,4
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     CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
                      Date : 25/11/2021
                       ORAL ORDER

1. Heard learned advocates for the respective

parties and perused the record.

2. In this petition, under Article 226 of the

Constitution of the India, the following relief is

sought for by the petitioner:

"(A) Your Lordships may be pleased to issue a writ of certiorari or any other writ of mandamus, order or direction directing the opinion dated 19.9.2015 passed by the respondent No.2 Development Commissioner, the letter dated 22.09.2015 issued by the respondent No.1 the State of Gujarat and the communication dated 29.09.2015 issued by the respondent No.2 - Development Commissioner to the respondent No.3 - Banaskantha District

C/SCA/16578/2016 ORDER DATED: 25/11/2021

Panchayat are arbitrary, capricious, illegal and bad in law and quashing and setting aside the same."

3. Facts in a brief are as under :

3.1. A resolution No.27 was passed by the

respondent no.4 - Gram Panchayat namely;

Kotda Deyodar Gram Panchayat under the Act

for levying of octroi. The case of the petitioner is

that the resolution was inconsistent with the

rules of the Gujarat Gram and Nagar Panchayat

Taxes and Fee Rules, 1964. Levy of octroi,

therefore, was challenged by the petitioner

before the District Panchayat, which quashed a

resolution of the Panchayat levying octroi. The

Gram Panchayat went in appeal before the State

and failed is resulted the Panchayat in filing a

petition being SCA No.5885 of 1997 before this

Court.

3.2. The petitioner filed SCA No.7661 of

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1997 challenging the notice of the Panchayat

levying octroi. The Panchayat's petition being

SCA No.5885/1997 was dismissed whereas that

of the petitioner was allowed. While allowing the

petition, by the the judgment and order dated

3.4.2007 passed in SCA No.5885 of 1997, the

Court has observed as under:

"24. In view of the findings recorded by this Court that Kotda Deyodar Gram Panchayat was not entitled to recover the octroi, Thakker Jagdishbhai Jayantilal - petitioner of Special Civil Application No.7661 of 1997 would be entitled to refund of the amount which has been recovered by Deyodar Gram Panchayat - petitioner of Special Civil Application No.7661 of 1997, under the cover and authority of octroi. The said amount shall be refunded by the Deyodar Gram Pancayat within a period of three months from today, if the same is not refunded within the period aforesaid, then the Deyodar Gram Pancayat would be liable to pay interest at the rate of 12% p.a. on the said amount from the date of recovery till its payment."

4. Obviously, therefore, the Court directed the

Deyodar Gram Panchayat to refund the amount

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of octroi that was illegally collected. Aggrieved

by the order of the learned Single Judge, the

Panchayat filed two appeals being LPA Nos.1178

and 1179 of 2009. By judgment dated

19.10.2010, the learned Single Judge's judgment

was upheld.

5. Despite the appeals being dismissed, since the

octroi amount that had to be refunded to the

petitioner was not so refunded, a notice was

issued to the Gram Panchayat. The Panchayat by

its communication dated 6.12.2010 responded

inter alia stating that the amount of octroi which

was collected had already been spent towards

development work and salary and, therefore, the

Panchayat was not in a position to honour the

directions of the Court of refunding the amount.

At this point, it may be stated that the total

amount that the Panchayat owes to the petitioner

towards refund of octroi is Rs.27,56,616/-.

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6. Inaction in refunding the amount compelled the

petitioner has filed SCA No.8671 of 2011, which

petition, by an order dated 5.8.2011 was not

entertained in view of the alternative available to

the petitioner. The order was carried in appeal

being LPA No.540 of 2013 and this Court by an

order dated 23.7.2017 observed as under:

"4. Learned counsel for the petitioner was unable to seriously dispute the Panchayat's stand that Panchayat simply does not have funds at its command to be able to pay such sizable amount. As noted above, the direction for refund of octroi is already passed and such decision of Single Judge is confirmed by the Division Bench. We see no purpose in issuing such directions afresh in the second round of litigation. Counsel for the appellant also submitted that the State Government may provide sufficient funds to Panchayat to enable the Panchayat to refund such amount. We are unable to see any such scheme in Panchayat Act where the State Government would irrespective of nature of dues of Panchayat is duty bound to weigh the burden of Panchayat.

Panchayats are seen as an autonomous body of self governance having recognition under Constitution

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as well. Nevertheless, we direct the Panchayat to account for such debt in its next budgetary proposal to be forwarded to the Government and the State Government to consider the same as per its policy while undertaking the exercise of approving the budget of Panchayat and allocating the grant to the Panchayat."

7. Mr. Shalin Mehta, learned Senior Counsel

appearing for the petitioner would further

submit that the order of the learned Single Judge

in the first round by which the order of refund

was to be implemented ought to have been

carried and executed in accordance with the

directions and observations of the Division

Bench, as the Division Bench had directed that

the Panchayat made account for such debt in its

next budgetary proposal to be forwarded to the

State Government and State Government to

consider the same as per its policy while

undertaking the exercise of approving the

budget of Panchayat and allocating the grant to

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the Panchayat. The District Panchayat,

accordingly approached the Development

Commissioner for allocation of such amount in

the budget.

8. By the opinion dated 22.9.2015 which is

challenged in this petition, the State Government

opined that in view of allocation of grant in lieu

of octroi over the years, it is for the Panchayat to

comply with the orders passed by the Court and

the State would in no way would be responsible

for allocating funds for the outstanding dues that

the Panchayat was required to pay to the

petitioner.

9. Mr. Meet M. Thakkar, learned Assistant

Government Pleader for the respondent - State

would invite the attention of the Court to the

affidavit which supports the opinion so

challenged before this Court. According to the

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deponent of the affidavit, the stand of the State

is that since the State is allocating financial

grant in lieu of octroi every year the Panchayat

which earns its own income through the levy of

different taxes, the opinion is appropriate and it

is responsibility of the Panchayat to honour the

directions of this Court issued in the judgment

and order dated 3.4.2007 passed in SCA No.5887

of 1997.

10. Considering the chronology of events as narrated

herein-above, it is evident that the issue whether

the Gram Panchayat had a legal backing to levy

octroi, was adjudicated by this Court and in fact

by the directions issued by this Court on

3.4.2007, it was clearly directed that the

respondent - Gram Panchayat shall refund the

amount of octroi. The directions so issued have

been reproduced herein-above.

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11. In the course of getting the order executed,

though the petitioner failed before the learned

Single Judge, before the Division Bench accepted

the fact that an observation was made that the

State Government would make appropriate

allocation of grant, the direction to refund vis-a-

vis the Panchayat still stands.

12. In view of the affidavit filed by the State that the

State is allocating grants in lieu of octroi every

year to the respondent - Panchayat, it shall be

the responsibility of the Gram Panchayat and in

turn of the District Panchayat, Banaskantha to

see that in due compliance of the directions

issued by this Court on 3.4.2007, the outstanding

amount of Rs.27,56,616/- with interest shall be

paid by the Kotda Deyodar Gram Panchayat. This

is particularly in view of the fact that the

specific stand is taken by the State that the State

Government grants Rs.6,49,300/- every year to

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the Gram Panchayat in lieu of octroi and the

Panchayat had an income of Rs.4,42,000/- at the

relevant time when the affidavit was filed.

13. In view of above, the petition is allowed. The

respondent No.4 - Kotda Deyodar Gram

Panchayat should comply with the directions

3.4.2007 passed in Special Civil Application

No.5885 of 1997 by the Division Bench of this

Court. Thereby, the outstanding amount of

Rs.27,56,616/- with interest @ 12% p.a. shall be

paid to the petitioner by the respondent No.4 -

Kotda Deyodar Gram Panchayat within a period

of six months from the date of receipt of Writ of

this order. However, looking to the budgetary

and financial constraints, the rate of interest be

calculated @ 6% p.a., instead of @ 12% p.a.

Direct Service is permitted.

[ BIREN VAISHNAV, J. ] *** VATSAL