Decided on December 07,1973



S.H.SHETH - (1.)The Associated Cement Companies Ltd. has filed this petition against Chhaya Gram Panchayat under the following circumstances. The petitioner-Company is running a cement factory which is situate partly within the limits of the Gram Panchayat and partly within the limits of Porbandar Municipality in Junagadh District. The total area which the Companys factory and quarters occupy is 278 acres out of which 140 acres fall within the limits of the Gram Panchayat where the factory is situate and 138 acres fall within the limits of Porbandar Municipality where the residential quarters for the officers and servants of the Company are situate. In June 1956 the Company undertook the construction of its factory. On 3rd January 1959 Chhaya Gram Panchayat was constituted. On 17th May 1961 the Panchayat decided to levy octroi duty. On 18th February 1964 the Gujarat Panchayats (payment of lump sum contribution by factories in lieu of taxes) Rules 1964 came into force. In August 1966 the factory commenced production. On 24th December 1969 the Company made an application to the Panchayat for fixation of lump sum payment of the octroi duty which would be payable by it during the period commencing from 1st November 1969 and ending on 31 March 1972. The Company stated in its application that its total annual liability in respect of the octroi duty payable to the Panchayat would be Rs. 82 16.08 p. It also stated that it had been spending some amount on the four amenities which it had been providing to its employees in its premises. They were health and sanitation sports club and other recreation facilities street lighting and water supply. On 12th January 1970 the Panchayat replied to the Company that the latter was not entitled to any remission from the octroi duty on account of the amounts which it had been spending on providing amenities because they were not provided in the area of the Company under the Panchayat but were provided in the area of the Company under Porbandar Municipality. On 5 June 1970 the Company by its letter offered to pay to the Panchayat Rs. 21000.00per annum in lump sum for the aforesaid period. On 6th June 1970 the Panchayat by its resolution fixed the lump sum payment by the Company in respect of its liability to pay octroi duty to it at Rs. 40 0 per annum. On 22nd July 1970 the Company made an application to the State Government for fixing a reasonable amount of lump sum because it thought that the Panchayat had been demanding from it more than it should demand. That application was made under sec. 179 of the Gujarat Panchayats Act 1961 read with Rule 8 of the aforesaid Rules. On 31st August 1971 the State Government after hearing the parties made an order fixing the lump sum payment by the Company In respect of the octroi duty payable to the Panchayat at Rs. 70 0 per annum for the aforesaid period.
(2.)It is this order which is called in question in this petition.
(3.)Mr. K. S. Nanavaty appearing for the petitioner has raised before me two contentions which are as follows:
1 The State Government had no jurisdiction or authority to fix the amount of lump sum contribution in excess of the amount fixed by the Gram Panchayat by its resolution dated 6th June 1970.

2 The State Government while making the impugned order ought to have taken into account the facilities which the Company actually provided to its employees on its premises particularly because the Gram Panchayat did not provide them.


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