Kerala High Court
M/S.Sree Sakthi Paper Mills Ltd vs State Of Kerala Represented By on 9 April, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
FRIDAY, THE 09TH DAY OF APRIL 2021/19TH CHAITHRA, 1943
WP(C).No.4755 OF 2013(T)
PETITIONER:
M/S.SREE SAKTHI PAPER MILLS LTD.,
'SREE KAILAS', 39/2724-A, PALIAM ROAD,
KOCHI-682 016, REP.BY ITS EXECUTIVE
DIRECTOR SRI. A.PADMANABHAN.
BY ADVS.
SRI.R.LAKSHMI NARAYAN
SMT.NISHITHA B.BHAT
SMT.R.RANJANIE
RESPONDENTS:
1 STATE OF KERALA REPRESENTED BY
ITS PRINCIPAL SECRETARY, DEPARTMENT OF
IRRIGATION AND WATER RESOURCES,
GOVT.SECRETARIAT,
THIRUVANANTHAPURAM-695 001.
2 CHIEF ENGINEER, OFFICE OF THE
CHIEF ENGINEER, IRRIGATION DEPARTMENT,
THIRUVANANTHAPURAM-695 001.
3 EXECUTIVE ENGINEER, OFFICE OF THE
EXECUTIVE ENGINEER, ADDITIONAL IRRIGATION
DIVISION, THRISSUR-680 001.
4 ASST. ENGINEER,
IRRIGATION DEPARTMENT,
CHALAKKUDY-680 307.
BY SR. GOVERNMENT PLEADER SMT.DEEPA NARAYANAN
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY
HEARD ON 09-04-2021 ALONG WITH WP(C).21134/2013(N),
WP(C).5019/2015(B), THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
W.P.(C) Nos.4755/2013 & Connected cases
:2:
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
FRIDAY, THE 09TH DAY OF APRIL 2021/19TH CHAITHRA, 1943
WP(C).No.21134 OF 2013
PETITIONER:
M.R.F. LTD., POST BOD NO.2,
VADAVATHOOR P.O., KOTTAYAM 686 010,
REPRESENTED BY ITS PLANT HEAD
SRI.SAJI VARGHESE.
BY ADVS.
SRI.M.PATHROSE MATTHAI (SR.)
SMT.MARIAM MATHAI
SRI.SAJI VARGHESE
RESPONDENTS:
1 THE GOVERNMENT OF KERALA
REPRESENTED BY ADDITIONAL CHIEF
SECRETARY TO GOVERNMENT (WRD),
WATER RESOURCES (MI) DEPARTMENT,
GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM.
2 THE CHIEF ENGINEER (I & A)
PROJECT I & II, IRRIGATION &
ADMINISTRATION, GOVERNMENT OF KERALA,
THIRUVANANTHAPURAM.
3 THE EXECUTIVE ENGINEER,
IRRIGATION DIVISION, KOTTAYAM.
BY SR. GOVERNMENT PLEADER SMT.DEEPA NARAYANAN
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY
HEARD ON 09-04-2021 ALONG WITH WP(C).4755/2013(T),
WP(C).5019/2015(B), THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
W.P.(C) Nos.4755/2013 & Connected cases
:3:
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
FRIDAY, THE 09TH DAY OF APRIL 2021/19TH CHAITHRA, 1943
WP(C).No.5019 OF 2015
PETITIONER:
THE FERTILISERS AND CHEMICALS
TRAVANCORE LTD., UDYOGAMANDAL
PIN - 683 501 THROUGH ITS DULY
CONSTITUTED ATTORNEY MR.DILIP MOHAN,
MANAGER (LEGAL SERVICES).
BY ADVS.
SRI.M.GOPIKRISHNAN NAMBIAR
SRI.P.BENNY THOMAS
SRI.K.JOHN MATHAI
SRI.JOSON MANAVALAN
SRI.KURYAN THOMAS
RESPONDENTS:
1 STATE OF KERALA, REPRESENTED BY
THE SECRETARY TO GOVERNMENT,
WATER RESOURCES DEPARTMENT,
GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM - 695 001.
2 THE EXECUTIVE ENGINEER,
OFFICE OF THE EXECUTIVE ENGINEER,
IRRIGATION DIVISION ERNAKULAM
CIVIL STATION, KAKKANAD, COCHIN - 30.
3 THE ASSISTANT EXECUTIVE ENGINEER,
OFFICE OF THE ASSISTANT EXECUTIVE
ENGINEER, IRRIGATION (INV),
SUB DIVISION, ALUVA -683 101.
W.P.(C) Nos.4755/2013 & Connected cases
:4:
4 KERALA STATE POLLUTION CONTROL BOARD,
PLAMMODU JUNCTION, PATTOM PALACE P.O.,
THIRUVANANTHAPURAM - 695 004,
REPRESENTED BY ITS SECRETARY.
R1-R3 BY SR.GOVERNMENT PLEADER SMT.DEEPA NARAYANAN
R4 BY ADV. SRI. T.NAVEEN , SC
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY
HEARD ON 09-04-2021, ALONG WITH WP(C).4755/2013(T),
WP(C).21134/2013(N), THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
W.P.(C) Nos.4755/2013 & Connected cases
:5:
[CR]
N. NAGARESH, J.
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W.P.(C) Nos.4755 & 21134 of 2013
and 5019 of 2015
`````````````````````````````````````````````````````````````
Dated this the 9th day of April, 2021
JUDGMENT
~~~~~~~~~
In these writ petitions, the petitioners who are
Companies running Industrial Units in Ernakulam and
Kottayam Districts, challenge order GO (Rt.) No.
805/09/WRD of the Government of Kerala, Water Resources
(MI) Department, dated 25.07.2009. By the said Government
Order, the State of Kerala enhanced the fee for extraction of
water from rivers.
2. In WP(C) No.4755/2013, the petitioner-Company
states that the Company has permission granted by the Chief
Engineer, Irrigation Department, to draw water 1000 TPD
(Tons Per Day) from Chalakudy River. However, the
W.P.(C) Nos.4755/2013 & Connected cases
Company is drawing only 300 M3 per day. The Executive
Engineer required the petitioner to make a fresh application
for extraction of water from the river in terms of the G.O.
dated 25.07.2009.
3. The said G.O. marked as Ext.P5 in the writ petition
reads as follows:-
GOVERNMENT OF KERALA
Abstract
Water Resources Department - Extraction of water from
rivers/water bodies in Kerala for the purpose other than
Drinking Domestic and irrigation - Levy of Water
Cess/charges - Orders issued.
----------------------------------------------------------------------
WATER RESOURCES (MI) DEPARTMENT
G.O.(Tt)No.805/09/WRD Dated Thiruvananthapuram 25.07.2009.
----------------------------------------------------------------------
Read:- 1. No.I AU/W/III/2-1/68/2003-04/218 dated
1.8.2008 from the Accountant General (A), Kerala.
2. Lr.No.W3/General/25906/2008 dated 2.5.2009
from the Chief Engineer (I&A), Thiruvananthapuram.
ORDER
The Accountant General (Audit) Kerala while
conducting the local audit of the office of the Executive
Engineer, Irrigation Division Ernakulam for the period
from 1.1.2002 to 31.7.2003 laid observed that there is
revenue loss of Rs.77,000/- per day due to the non
collection of water cess. The Chief Engineer (I&A) has
reported that about 30 industrial concerns are
W.P.(C) Nos.4755/2013 & Connected cases
unauthorisedly extracting water without permission and
without remitting water charges. The Chief
Environment Engineer, KSPCB Regional Office
Ernakulam has also reported that 19 industrial
concerns drawing from Periyar. As per the Kerala
Irrigation Water Conservation Act, 2003 and Rules
framed in 2005 the water cess has been specified for
extracting of water for irrigation only. Hence the same
rate as applicable to water extracted for irrigation is
made applicable for other purpose also. But the
collection of cess and action against unauthorized
extraction of water for uses other than irrigation is
handicapped by the absence of proper and specific
provisions regarding the same in the Act & Rules.
Hence a proposal for amendment of the said Act, 2003
for including the above provisions is under the active
consideration of Government.
In this connection a meeting was held by the
Additional Chief Secretary (Water Resources) on 3rd
April 2009 with Chief Engineers, representatives of
State Pollution Control Board and the Additional
Secretary of Industries Department, in his chamber in
Secretariat. In the meeting it is pointed out that the
proposed amendment of the Irrigation and Water
Conservation Act, 2003 would make specific provision
to cover this lacuna. It is also decided not to wait till
the amendment is made and to issue an executive
order to address this loophole by making obligatory for
industrial establishments to take permission for
drawing water from rivers/water bodies of the Irrigation
Department.
In the above circumstances as reported by the
Chief Engineer (I&A) in her letter read above and as
observed by the Accountant General (A) Kerala
W.P.(C) Nos.4755/2013 & Connected cases
Government hereby insists the following terms and
conditions for the extraction of water from courses.
a) No person or agency shall extract water from
a water course by installation of any mechanical or
electrical device the capacity of which in the
aggregate, is more than five horsepower or any hose,
pipe or other similar device or by any other means
except with the previous permission of the officer
authorized by the Government in this behalf within
whose jurisdiction such device for extraction of water is
installed, provided that the Kerala Water Authority or
any local authority shall not be liable to obtain a permit.
b) The application for extraction of water for
irrigation purpose shall be submitted to the officer
authorized accompanied by a fee of rupees fifty to be
paid by means of treasury chellan.
c) The application for extrication of water for any
other purpose like generation of power, industrial use
etc., or any other purpose incidential to this but
excluding drinking, domestic and irrigation purpose
shall be submitted to the officer authorised
accompanied by a fee of rupees five thousand to be
paid by means of treasury chellan.
d) 1) The maximum quality that shall be drawn for
the purpose of irrigation shall be fixed by the authorized
officer depending on the crop pattern, crop period, area
to be irrigated and nature of soil.
2) The maximum quantity that shall be drawn for
the purpose other than drinking, domestic and irrigation
shall be fixed by the authorized other depending on the
nature of drawl in consultation with the concerned
W.P.(C) Nos.4755/2013 & Connected cases
departments, if required. The quantity fixed shall be in
conformity with the availability in that river basic or
water body and shall be computed after giving full
preference for requirements under drinking domestic
and irrigation purpose.
3) The extraction arrangements should be open
for inspection at any time by the department authorities
4) The fee for extraction of water shall be -
i) One rupee for every kilo liters and part thereof for
irrigation purpose.
ii) Two rupee for every kilo and part thereof for all
purpose other than drinking, domestic and irrigation.
5) The permission once granted shall remain
valid
i) For a period of three years for irrigation purpose.
ii) For a period from two years for all purpose other
than drinking domestic and irrigation unless it is
cancelled before the expiry of that period for valid
reason. This order shall be in force till the Kerala
Irrigation & Water Conservation Act, 2003 is amended.
Accordingly, the petitioner submitted an application on
03.02.2011.
4. The Confederation of Indian Industry requested
the Government to reconsider the enhancement of cess/fee
made as per the said G.O. The petitioner also addressed the
Minister for Irrigation & Water Resources to hold a meeting
W.P.(C) Nos.4755/2013 & Connected cases
and resolve the issue. However, the petitioner was served
with a demand notice dated 13.12.2012 of the 3 rd
respondent-Executive Engineer demanding `78,42,000/-
from the petitioner towards water charges for the period from
14.12.1994 to 31.12.2012.
5. The petitioner-Company in WP(C) No.21134/2013
has been using water from Meenanthara rivulet openly and
peaceably without interruption from 1969. By letter dated
08.06.2013 of the Executive Engineer, Irrigation Division, the
petitioner was required to pay `55,34,745/- towards Cess for
abstracted water, for the period from 1992 to 2012. The
objections filed against the demand were rejected by the
Executive Engineer by a letter dated 13.08.2013.
6. The petitioner in WP(C) No.5019/2015 is a
Central Public Sector Undertaking having its industrial unit at
Udyogamandal. On 17.10.2014, the Executive Engineer,
Irrigation Department required the petitioner to furnish details
of its monthly water consumption from Periyar River, for
remittance of water Cess. The petitioner submitted a reply to
W.P.(C) Nos.4755/2013 & Connected cases
the Executive Engineer pointing out that the Company has
been paying Water Cess as per law, to the Kerala State
Pollution Control Board. However, by a letter dated
15.10.2012, the Assistant Executive Engineer, Irrigation Sub
Division required the petitioner to obtain permission for
abstraction of water and execute an agreement in terms of
G.O. dated 25.07.2009. The petitioner challenges the said
G.O. dated 25.07.2009.
7. The learned counsel for the petitioner in WP(C)
No.4755/2013, Sri. R. Lakshmi Narayan argued that in view
of Article 265 of the Constitution of India, no tax shall be
levied or collected except by the authority of law. The
demand made by the respondents for water cess/fees
amounts to levy of tax/Cess which has no authority of law.
The learned counsel for the petitioner further argued that
assuming without conceding that the respondents are
competent to demand tax/cess, the demand cannot be
retrospective in effect. The respondents cannot demand any
arrears of tax or Cess for any period beyond three years.
W.P.(C) Nos.4755/2013 & Connected cases
The provisions of the Limitation Act will apply for such
demand. The learned counsel further argued that even
though, under compulsion, the petitioners had paid amount
towards the alleged cess/tax, acquiescence on the part of
the petitioners cannot justify the demand by the respondents,
if the same is illegal.
8. Sri. Saji Varghese, counsel for the petitioner in
WP(C) No.21134/2013 argued that the petitioner's factory
was established in the year 1969 and has been drawing
water from the Meenanthara river since then. There are
more than 300 employees engaged by the petitioner. The
water is drawn for their personal requirements also. The
demand for water tax is without the authority of law. The levy
of tax with retrospective effect for the period from 1992 to
2009 cannot under any circumstances stand the scrutiny of
law.
9. The counsel for the petitioner in WP(C)No.
5019/2015 argued that the object of the Kerala Irrigation and
Water Conservation Act, 2003 is to regulate irrigation in the
W.P.(C) Nos.4755/2013 & Connected cases
state. The Act, 2003 cannot apply to use of water for
industrial purpose. The learned counsel further argued that
the petitioner-Company has been using water from
Meenanthara Rivulet for the last 44 years and Section 7 of
the Easement Act will apply. The illustration to Section 7 of
the Easement Act would squarely apply to the case of the
petitioner.
10. The learned counsel argued that Section 3 of the
Kerala Irrigation and Water Conservation Act is subject to
Section 218 of the Panchayat Raj Act. The Government has
no right over the Meenanthara river, in view of Section 218 of
the Panchayat Raj Act. The levy imposed now is not
supported by any legislative sanction, contended the learned
counsel for the petitioner.
11. The learned Government Pleader resisted the writ
petitions and contended that what is paid by the petitioners
to the Pollution Control Board is Cess payable to the
Pollution Control Board. The said payment has nothing to do
with water charges. The Government Order dated
W.P.(C) Nos.4755/2013 & Connected cases
25.07.2009 speaks itself as to the circumstances in which
the levy is made. The question of limitation does not arise,
because for any dues to the Government, the period of
limitation is 30 years.
12. The Government Pleader pointed out that the
Order dated 25.07.2009 has been issued considering the
fact that collection of Cess and action against unauthorised
extraction of water for uses other than irrigation, is
handicapped by the absence of proper and specific
provisions regarding the same in the Water Supply Act. The
Government considered various aspects of the case and
decided to issue an executive order making it obligatory for
industrial establishments to take permission for drawing
water from rivers/water bodies of the Irrigation Department.
13. Water is a precious resource available to the
citizens. No corporate industry can be permitted to exploit the
said resource to the detriment of the interest of the general
public. It is in such circumstances that the order impugned
by the petitioners has been issued. The Government Order
W.P.(C) Nos.4755/2013 & Connected cases
has been issued in public interest and this Court should not
interfere in the matter, in the larger public interest, contended
the learned Government Pleader.
14. I have heard Sri. R. Lakshmi Narayan, Sri. Saji
Varghese and Ms. Ramola Nayanpally, the counsel
appearing on behalf of the petitioners. I have also heard the
learned Government Pleader representing the respondents.
15. The question arising in these writ petitions is
whether the State is competent to levy Cess/tax/fee from
industrial houses for the river water lifted by them for
industrial purpose.
16. Entry 17, List II, Schedule VII to the Constitution of
India reads as follows:-
"17. Water, that is to say, water supplies,
irrigation and canals, drainage and embankments,
water storage and water power subject to the
provisions of entry 56 of List I."
Entry 56 in List I reads as follows:-
"56. Regulation and development of inter-State
rivers and river valleys to the extent to which such
regulation and development under the control of the
Union is declared by Parliament by law to be
expedient in the public interest."
W.P.(C) Nos.4755/2013 & Connected cases
17. Water supply and irrigation is within the legislative
competence of the State Legislature. In the case on hand,
the levy is sought to be justified under the Kerala Irrigation
and Water Conservation Act, 2003 (hereinafter referred to as
"the Act, 2003") and Article 162 of the Constitution. The Act,
2003 is enacted to consolidate and amend laws relating to
construction of irrigation works, conservation and distribution
of water for the purpose of irrigation and levy of betterment
contribution and irrigation Cess on lands benefited by
irrigation works in the State of Kerala and to provide for
involvement of farmers in water utilisation system and for
connected matters.
18. The Act, 2003 is intended to regulate irrigation
and water conservation in the State. The question therefore
is whether the respondents can regulate consumption of
river water for industrial purpose and levy cess thereon
under the provisions of the Act. While examining these
issues, the following provisions of the Act, 2003 are of
significance.
W.P.(C) Nos.4755/2013 & Connected cases
19. Section 3 of the Act, 2003 reads as follows:-
"3. Water courses and water in water
courses to be Government property-
Notwithstanding anything to the contrary
contained in any other law for the time being in force,
or in any custom or usage or in any contract or other
instrument but subject to the provisions of section 218
of the Kerala Panchayat Raj Act, 1994 (13 of 1994)
and section 208 of the Kerala Municipality Act, 1994
(20 of 1994) all water courses and all water in such
water courses in the State shall be the property of the
Government and the Government shall be entitled to
conserve and regulate the use of such water courses
and the water in all those water courses for the
purposes of irrigation and the generation of Electricity
and for matters connected therewith or for both."
Therefore, notwithstanding the provisions in the Kerala
Panchayat Raj Act, 1994 and the Kerala Municipality Act,
1994 all water courses and all water in such water courses in
the State shall be property of the Government. The
Government is entitled to conserve and regulate the use of
such water courses and water for the purpose of irrigation
and generation of electricity.
20. In view of Section 2(aq) of the Act, 2003, the term
'water course' would take in rivers also. The term 'water user'
is defined under Section 2(ar) to mean and include any
W.P.(C) Nos.4755/2013 & Connected cases
individual, body corporate, society, institution or association
using water for any purpose from a Government source of
irrigation.
21. Extent of regulation and abstraction of water from
water courses are as provided in Section 4(1), which reads
as follows:-
"4. Regulation on abstraction of water from
water courses-
(1) Save as provided in this Act, no person or
agency shall abstract Water from a water course by
installation of any mechanical or electrical device, the
capacity of which, in the aggregate, is more than five
horse power, or any hose, pipe or other similar device
or by any other means except with the previous
permission of the officer authorised by the
Government in this behalf within whose jurisdiction
such device for abstraction of water is installed and
subject to such terms and conditions and on payment
of such fees, as may be prescribed:
Provided that the Kerala Water Authority or any
local authority shall not be liable to obtain a permit
under this sub-section."
Section 4 further provides for appeals, confiscation of
devices installed for water abstraction and for taking
disciplinary action against authorised officers for their
supervisory lapses.
22. The Act, 2003 contemplated two types of levy, one
W.P.(C) Nos.4755/2013 & Connected cases
under Section 25 and the other under Section 45. Section
25 reads as follows:-
"25. Levy of irrigation cess by local
authority-
(1) A local authority may, with the previous
sanction of the Government, levy an annual irrigation
cess on lands benefited by minor irrigation works
executed by it.
(2) The rate of irrigation cess levied under sub-
section (1) shall be fixed by the Government from
time to time:
Provided that the rate of irrigation cess fixed
under sub-section (2) shall in the case of minor
irrigation works, not more than the rate at which
irrigation cess is levied by the Government on lands
benefited by medium irrigation works executed by the
Government.
(3) Where there has been failure of crops in any
area, the local authority concerned may by resolution
make an exemption or reduction in rate in respect of
the irrigation cess leviable under this section on any
land within their jurisdiction.
Section 45 reads as follows:-
"45. Levy of betterment contribution - Where
the Government are of opinion that it is necessary to
levy a betterment contribution, they may levy
betterment contribution in accordance with the
provisions of this Chapter from the owner of any land
which, in their opinion, is benefited by any major
irrigation work constructed or completed after the
commencement of this Act and of any land benefited
by an irrigation work declared to be a major irrigation
work under the provisions of this Act, whether
W.P.(C) Nos.4755/2013 & Connected cases
constructed before or after such commencement.
Explanation :- A land shall be deemed to be
benefited notwithstanding that the benefit is not
enjoyed, provided such non-enjoyment is not due to
any fault on the part of the Government."
Therefore, the Act, 2003 empowers the respondents to levy
only Irrigation Cess and Betterment Contribution.
23. Section 25 states that the Government is entitled
to levy an annual irrigation Cess on all lands. Section 25 is
clear that the levy contemplated is an annual levy and the
Cess is on lands which derive the benefit of irrigation
measures taken by the Government. It is not a levy
dependent on the quantum of consumption of water.
Sub-section (4) of Section 25 would make it further clear that
it is only those owners of land to whom a certificate has been
issued under Section 22 who are liable to pay irrigation
Cess.
24. The levy of 'Betterment Contribution' under
Section 45 is on the owners of land which are benefited by
any major irrigation work constructed or completed after the
commencement of the Act, 2003. When both the levies
W.P.(C) Nos.4755/2013 & Connected cases
contemplated under the Act, 2003, under Sections 25 and
45, are on the land and are relatable to land and irrigation,
the respondents cannot resort to Section 25 or Section 45 to
levy any fee or Cess for consumption of river water for
industrial purpose under those provisions.
25. The question remaining is whether the
respondents can regulate consumption of river water and
levy cess or tax on consumption of river water for industrial
purposes under any other provision of the Act, 2003. Section
3 provides that the Government is entitled to conserve and
regulate the use of such water courses and water in all such
water courses. As power is conferred on Government to
regulate water courses for the purpose of irrigation and water
conservation, the Government will be perfectly within its
powers to regulate or curb lifting of water from such water
courses for industrial purposes, as unrestricted usage of
water for industrial purposes can adversely affect availability
of sufficient quantity of water for irrigation purposes.
26. When Section 3 of the Act, 2003 makes the
W.P.(C) Nos.4755/2013 & Connected cases
Government owner of all water courses and water in such
water courses including rivers, and when Section 4 obligates
the Government to regulate abstraction of water from such
water courses for the purpose of irrigation and water
conservation, the petitioners do not have unbridled right to lift
water from the rivers in Kerala for industrial purposes.
27. The question then will be whether the Government
can levy Cess, Tax or Fee on industrial houses for lifting river
water for industrial consumption.
28. In State of Kerala and others v. P.J. Joseph
[AIR 1958 SC 296], the Hon'ble Apex Court held that-
"In Mohammad Yasin v. Town Area Committee
Jalalabad 1952 SCR 572 : (AIR 1952 SC 115) (A) &
again in Bengal Immunity Co. Ltd. v. State of Bihar
1955-2 SCR 603 at p.681: (S) AIR 1955 SC 661 at
p.693) (B), an impost not authorised by law cannot
possibly be regarded as a reasonable restriction and
must, therefore, always infringe the right of the
respondent to carry on his business which is
guaranteed to him by Art.19(1)(g) of the Constitution.
In this view of the matter it is not necessary to express
any opinion on the other points dealt with in the
judgment of the High Court."
29. In State of Kerala and others v. P.J. Joseph
[AIR 1958 SC 296], the Hon'ble Apex Court held that-
W.P.(C) Nos.4755/2013 & Connected cases
"Where the Govt. made an endorsement on the
reference made to it by the Board of Revenue that it
accorded sanction for extra quota of foreign liquor
being allowed to wholesale licencees in Cochin on
payment by them of a commission at 20 per cent of
the price of liquor but the endorsement did not in
terms or in form purport to be an order made by the
State in exercise of the powers conferred on it by
S.17 of the Act, and it was also not alleged by the
Govt. that the order was published in the Gazette or
was communicated to the licencee from whom the
Excise Authorities demanded the commission of 20
per cent on excess sales.
Held, that the endorsement was not a statutory
order passed by the State in exercise of the power
conferred on it by S.17. It was more in the nature of
an intimation given to the Board of Revenue that the
government accorded sanction to extra quotas of
foreign liquor being allowed to wholesale licencees in
Cochin on payment of the Commission. The
document was nothing more than what it purported to
be namely a departmental instruction that the excise
authorities might allow extra quotas to wholesale
licencees on payment of the requisite commission."
30. In the judgment in Bimal Chandra Banerjee v.
State of Madhya Pradesh etc. [AIR 1971 SC 517], the
Hon'ble Apex Court held that-
"18. No tax can be imposed by any bye-law or
rule or regulation unless the statute under which the
subordinate legislation is made specially authorises
the imposition even if it is assumed that the power to
tax can be delegated to the executive. The basis of
the statutory power conferred by the statute cannot be
transgressed by the rule-making authority. A rule-
making authority has no plenary power. It has to act
within the limits of the power granted to it."
W.P.(C) Nos.4755/2013 & Connected cases
31. In these writ petitions, though Rule 3(2)(iii)
provides that the fee for abstraction of water shall be one
rupee for every kilo litre and part thereof, since the Act, 2003
does not empower the Government to levy Fee, Cess or Tax
on consumption of water for industrial purposes, the said
Rule should be read as one applicable to abstraction of
water for irrigation purpose and not for industrial purposes.
32. Article 265 of the Constitution of India provides
that no tax shall be levied or collected except by the authority
of law. Tax, duty, cess or fee constituting a class denotes to
various kinds of imposts by State in its sovereign power of
taxation to raise revenue for the State. Within the
expression of each species, each expression denotes
different kind of imposts depending on the purpose for which
they are levied. This power can be exercised in any of its
manifestation only under any law authorising levy and
collection of tax as envisaged under Article 265 which uses
only the expression that no "tax" shall be levied and collected
except authorised by law. Therefore, to support a tax,
W.P.(C) Nos.4755/2013 & Connected cases
legislative sanction is essential. It cannot be levied and
collected in the absence of any legislative sanction, by
exercise of executive power of State under Article 162.
33. In these cases, Cess/charges are sought to be
imposed by Ext.P5 Government Order, which is an executive
order. It is evident that the State itself was doubtful about
impost of cess/charges without statutory support. In the
G.O. dated 25.07.2009, it has been stated as follows:-
"As per the Kerala Irrigation Water Conservation
Act, 2003 and Rules framed in 2005 the water cess
has been specified for extracting of water for irrigation
only. Hence the same rate as applicable to water
extracted for irrigation is made applicable for other
purpose also. But the collection of cess and action
against unauthorized extraction of water for uses other
than irrigation is handicapped by the absence of
proper and specific provisions regarding the same in
the Act & Rules Hence a proposal for amendment of
the said Act, 2003 for including the above provisions is
under the active consideration of Government."
Having stated so, the respondents proceeded not to wait till
the amendment is made and to issue an executive order to
address the lacuna in the Act.
34. Here, it has to be noted that the Act, 2003 in pith
and substance, relates to irrigation and water conservation.
W.P.(C) Nos.4755/2013 & Connected cases
The Act, 2003 is not intended to regulate use of river water
for industrial purposes. When water conservation is a matter
falling under the Act, 2003, the respondents may be justified
in regulating usage of river water for industrial purpose.
However, impost of tax/cess/fee/rate stands on a different
footing. Nothing can be realised by way of tax or anything
akin thereto which has not been authorised by the
legislature. The Executive cannot levy tax. To levy the
same, there should necessarily be a statutory source of
power, which is lacking in the present case.
For all the afore reasons, these writ petitions are
allowed. The impugned Government Order G.O. (Rt)
No.805/09/WRD dated 25.07.2009 of the 1 st respondent and
all other orders/demands impugned in these writ petitions are
therefore set aside.
Sd/-
N. NAGARESH, JUDGE
aks/03.04.2021
W.P.(C) Nos.4755/2013 & Connected cases
APPENDIX OF WP(C) 4755/2013
PETITIONER'S EXHIBITS:
EXHIBIT P1 THE PHOTOCOPY OF THE SANCTION LETTER DATED
14.12.1994 BY WHICH THE 2ND RESPONDENT
GRANTED PERMISSION
EXHIBIT P2 THE TRUE COPY OF LETTER DATED 3.12.2010 OF
THE 3RD RESPONDENT
EXHIBIT P3 THE TRUE COPY OF THE LETTER DATED
15.12.2010 ISSUED IN RESPONSE TO EXT.P2
EXHIBIT P4 THE TRUE COPY OF THE LETTER DATED
27.01.2011 ISSUED BY THE SOUTH INDIAN KRAFT
PAPER MILLS ASSOCIATION
EXHIBIT P5 THE PHOTOCOPY AND TYPED COPY OF THE G.O.
(Rt0805/09/WRD DATED 25.07.2009.
EXHIBIT P6 THE TRUE COPY OF LETTER ISSUED BY THE 3RD
RESPONDENT TO THE PETITIONER
EXHIBIT P7 THE TRUE COPY OF THE LETTER DATED
03.02.2011 ISSUED IN RESPONSE TO EXT.P6.
EXHIBIT P8 THE TRUE COPY OF THE LETTER DATED
23.02.2011 ISSUED BY THE CONFEDERATION OF
INDIAN INDUSTRY.
EXHIBIT P9 THE TRUE COPY OF LETTER DATED 28.9.2011
ISSUED BY THE 4TH RESPONDENT TO THE
PETITIONER
EXHIBIT P10 THE TRUE COPY OF THE REPRESENTATION DATED
08.11.2011 SUBMITTED BEFORE THE HON'BLE
MINISTER FOR IRRIGATION AND WATER
RESOURCES, GOVERNMENT OF KERALA
EXHIBIT P11 THE TRUE COPY OF THE DEMAND NOTICE DATED
13.12.2012 ISSUED BY THE 3RD RESPONDENT
EXHIBIT P12 THE TRUE COPY OF LETTER DATED 22.12.2012
ISSUED TO THE 3RD RESPONDENT
EXHIBIT P13 THE TRUE COPY OF THE REPRESENTATION DATED
02.01.2013 SUBMITTED BY THE PETITIONER
BEFORE HON'BLE MINISTER IRRIGATION,
GOVERNMENT OF KERALA
EXHIBIT P14 THE TRUE COPY OF THE LETTER DATED 7.2.2013
SUBMITTED BEFORE THE 3RD RESPONDENT.
W.P.(C) Nos.4755/2013 & Connected cases
APPENDIX OF WP(C) 21134/2013
PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE LETTER OF THE EXECUTIVE
ENGINEER IRRIGATION DEPARTMENT DATED
14/11/2012.
EXHIBIT P2 TRUE COPY OF REPLY TO EXT.P1 DATED
22/01/2013.
EXHIBIT P3 TRUE COPY OF THE DEMAND NOTICE AND
CALCULATION STATEMENT DATED 8/6/2013.
EXHIBIT P4 TRUE COPY OF THE EXECUTIVE ORDER OF THE
GOVERNMENT DATED 25/07/2009.
EXHIBIT P5 TRUE COPY OF THE REPLY OF PETITIONER
DATED 31/7/2013.
EXHIBIT P6 TRUE COPY OF NOTICE DATED 13/8/2013 WITH
DEMAND NOTICE.
RESPONDENTS' EXHIBITS:
EXHIBIT R1(a) TRUE COPY OF THE SKETCH OF THE RIVER
SYSTEM AND AREAS IRRIGATED
EXHIBIT R1(b) THE CALCULATION OF RS.1/KILOLITER IS AS
PER THE GOVERNMENT ORDER NO.G.O.(MS)
NO.6/90/IRD THIRUVANANTHAPURAM DATED
28.3.1990 IN SIMILAR CASES.
W.P.(C) Nos.4755/2013 & Connected cases
APPENDIX OF WP(C) 5019/2015
PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE LETTER DATED 17.10.2004
ISSUED BY THE 2ND RESPONDENT
EXHIBIT P2 TRUE COPY OF THE LETTER DATED 2.12.2004
ISSUED BY THE PETITIONER TO THE 2ND
RESPONDENT
EXHIBIT P3 TRUE COPY OF THE LETTER DATED 12.1.2011
ISSUED BY THE 2ND RESPONDENT TO THE
PETITIONER
EXHIBIT P4 TRUE COPY OF THE LETTER DATED 15.10.2012
ISSUED BY THE 2ND RESPONDENT TO THE
PETITIONER
EXHIBIT P5 TRUE COPY OF G.O(RT) (P) NO.805/09/WRD,
DATED 25.7.2009.
EXHIBIT P6 TRUE COPY OF THE LETTER DATED 18.12.2012
ISSUED BY THE PETITIONER TO THE 3RD
RESPONDENT
EXHIBIT P7 TRUE COPY OF THE LETTER DATED 31.12.2012
ISSUED BY THE 2ND RESPONDENT TO THE
PETITIONER
EXHIBIT P8 TRUE COPY OF THE LETTER DATED 19.2.2013
ISSUED BY THE PETITIONER TO THE 2ND
RESPONDENT
EXHIBIT P9 TRUE COPY OF THE LETTER DATED 20.9.2013
ISSUED BY THE 2ND RESPONDENT TO THE
PETITIONER
EXHIBIT P10 TRUE COPY OF THE LETTER DATED 4.11.2013
ISSUED BY THE PETITIONER TO THE 3RD
RESPONDENT
EXHIBIT P11 TRUE COPY OF THE LETTER DATED 18.2.2014
ISSUED BY THE 2ND RESPONDENT TO THE CHIEF
ENGINEER OF THE PETITIONER
W.P.(C) Nos.4755/2013 & Connected cases
EXHIBIT P12 TRUE COPY OF THE MINUTES OF THE MEETING
DATED 5.3.2014 FORWARDED BY THE 2ND
RESPONDENT TO THE PETITIONER
EXHIBIT P13 TRUE COPY OF THE LETTER, D.O.
NO.5527/MPI/2014/WRD, DATED 20.5.2014
EXHIBIT P14 TRUE COPY OF THE LETTER DATED 5.7.2014
ISSUED BY THE PETITIONER TO THE
ADDITIONAL CHIEF SECRETARY TO GOVERNMENT
OF KERALA.
ncd
