A.P.SEN - (1.) IN all these appeals except the, one by special leave, and the connected transferred cases brought by the appellants, each of which is a company incorporated .under the Companies Act, 1956 engaged in the business of manufacture and sale on a very large scale of textiles generally and also of rayon yarn and staple fibre, both of which form species of what is known as man made fibre i.e. artificial silk, there is a common question as to the constitutional validity of a fee imposed under R. 21 of the Textiles Committee Rules, 1965 made by the Central Government under S. 22 of the Textiles Committee Act, 1963, by the Textiles Committee constituted under S. 3 of the Act, on the production of rayon yarn and staple fibre i.e. man made fibres manufactured by them. These appeals are against the various judgments and orders of the High Courts of Allahabad, Andhra Pradesh, Gujarat and Madras upholding the validity of the levy. The remaining appeal i.e. Civil Appeal No. 121 of 1973 is preferred by the Textiles Committee against the judgment and order of the Kerala High Court taking the view to the contrary.
(2.) THE facts in all these cases are more or less similar. It would suffice for our purposes to notice the salient features thereof. To illustrate, the appellant company in Civil Appeal No. 869 of 1973, Messrs Sirsilk Ltd., Hyderabad is a manufacturer of rayon yarn and staple fibre and has established its factory at Sirpur Kagaznagar in the State of Andhra Pradesh for the manufacture of the aforesaid man made fibres. THE Chief Inspecting Officer, Textiles Committee by his letter dated 19/05/1965 directed all the textile mills in India including the appellant to send immediately, the monthwise statements of production for March and April, 1965 and a cheque in payment of the fees due thereon. However, the Association of man made Fibre Industry, Bombay of which the appellant is a member by its letter dated 25/05/1985 advised the textile mills to keep the payment of fees in abeyance, as it made a representation dated 26/05/1965 on behalf of its members to the Ministry of Commerce, Government of India and to the Textiles Commissioner. Along with its letter, the Association forward to all its members a copy of the said representation. By a further letter dated 29/05/1965, the Association advised all the textile mills including the appellant to send a reply to the letter addressed by the Textiles Committee demanding payment of fees to the effect that the Association had already made a representation to the Ministry of Commerce and the Textiles Commissioner and as soon as a reply was received by them, they would revert to the subject and take such action as might be necessary in the circumstances. In the meanwhile, the Textiles Committee by its letter dated 10/08/1965 made a demand for payment of. the fees for the months of March to July, 1965. THE appellant in its reply expressed its inability to pay the fees in view of the pending representation made by the Association on their behalf and more so because the Association had advised the members that the fee would become payable by the textile mills only in connection with the inspection and examination and must be commensurate with the exact quantum of services rendered by the Committee. THE appellants were however informed that one of its members had already remitted the fees. Consequently, the appellant paid a sum of Rs. 40,186.37 P. towards the fee for the period from March 1, 196 5/02/1966. It however adopted the stand that the payment of the fee was under a mistake and under misconception as to its legal rights. It accordingly called upon the Association to take up the matter with the Ministry of Commerce and the Textiles Commissioner and to lodge a strong protest against the illegal exaction of the fee by the Textiles Committee from its members when, in fact, no services of any kind were being rendered. Thereafter, the Accounts Officer, Textiles Committee by letter dated 26/02/1969 called upon the appellant to remit a sum of Rs, 33,343.62 P. towards the fee in respect of production of rayon or staple fibre for the period from 1/03/1966 to Marc 31/03/1967. It was also advised to pay the fee up to April, 1968. In response thereto, the appellant by its letter dated 27/02/1969 stated that the the Association had on behalf of its members addressed a letter to the Secretary, Textiles Committee for certain clarifications and on receipt of the reply, the Association would advise its members as to the course of action. Eventually, the Secretary, Textiles Committee by a letter dated 11/03/1970, called upon the appellant that it should remit an amount of Rs. 35,138.63 P. being the amount of fee outstanding within ten days failing which the said amount would be recovered as arrears of land revenue under S. 12(2) of the Act. Aggrieved, the appellant moved the High Court of Andhra Pradesh under Art. 226 of the Constitution challenging the validity, of the fee and the threatened action for recovery. A learned single Judge (Parthasarthi, J.,) by his judgment dated 28/01/1972 dismissed the writ petition upholding the validity of the levy of the fee. On appeal being preferred by the appellant the judgment of the learned single Judge was upheld by a Division Bench (Gopalrao Ekbote, C. J. and Chermakesava Reddy, J.) by its judgment dated 22/01/1973. The High Court of Andhra Pradesh preferred to follow the view expressed by B. N. Lokur, J. of the Allahabad High Court in M/s. Juggilal Kamalapat Cotton Spinning and Weaving Mills Co. Ltd. v. The Textiles Committee, Bombay, 1972 Tax LR 2104, and dissented from the view taken by Isaac, J. in The Travancore Rayons Ltd. v. The Textile Committee, ILR (1972) 1 Ker437: (AIR 1972 Ker 278) holding that the Textiles Committee was not entitled to levy any fee under R. 4 of the Rules so long as it was not rendering any service by way of inspection or examination of rayon yarn. Briefly stated, the facts in transferred cases Nos. 351-352 of 1983 are these. The petitioner in the first case the Century Spg. and Mfg. Co. Ltd., Bombay carry on the business of manufacture of rayon yarn and tyre-cord yard, both of which form species of what is popularly known as 'man made rayon', while the petitioners in the second Messrs Century Enka Limited, Bombay carry on the business of manufacture of nylon filament yarn. By letter dated 25/05/1968 the Accounts Officer, Textiles Committee, Bombay called upon the petitioner the Century Spg. and Mfg. Co. Ltd. to remit a sum of Rs. 5,89,187.46 P. as fees in respect of production of 29,455,373.21 Kgs. of rayon yarn for the period from 1/03/196 6/04/1968. The petitioner were also called upon to pay the fees for April, 1968. In reply, the petitioner by their letter dated 18/06/1968 stated that the Association of Man made Fibre Industry, Bombay had addressed a letter to the Secretary, Textiles Committee for certain clarification in the matter and on receipt of the reply the Association would be advising its members further. Thereupon, further correspondence ensued between the Textiles Committee on the one hand and the Association on the other. Thereafter, by letter dated 20/02/1969 the Secretary, Textiles Committee intimated the petitioner that it was proposed to initiate immediate action to recover the outstanding fees from the petitioner as arrears of land revenue as contemplated under S. 12(2) of the Act. It was further stated that in order to avoid coercive proceedings the petitioner should pay up the arrears at least up to 31/03/1967 amounting to Rs. 3,19,977.11 P. in any case before 1/03/1969 failing which the Textiles Committee would be constrained to advise the concerned Collector to enforce recovery of the outstanding fees as arrears of land revenue. The petitioner accordingly moved a petition under Art. 226 of the Constitution before the High Court of Bombay for quashing the impugned notice of demand dated 20/02/1969 complaining that they had at no time made any application for inspection and/or examination of the yarn they manufacture nor did they ever approach the said Committee to inspect and/or examine yarn manufactured by them. They averred that neither the said Committee or any one on its behalf had rendered any service whatsoever to them either at their instance or otherwise. Similarly, the petitioner Century, Enka Limited moved a petition under Art. 226 of the Constitution before the High Court of Bombay contending that the Textiles Committee was not entitled to demand or recover a sum of Rs. 78,553.15 P. or any other sum by way of fees on the nylon yarn manufactured by them, on the ground that the element of quid pro quo was totally absent inasmuch as no services at all were rendered by the Committee to them. These two writ petitions were ordered to be transferred to this Court under Art. 139 of the Constitution and numbered as transferred cases Nos. 351-352 of 1983.
(3.) SIMILAR are the facts in other cases. In transferred case No. 354/83 Messrs Nirlon Synthetic Fibres and Chemicals Limited, Bombay carry on the business of manufacture of nylon yarn and apparently paid Rs. 8,820.40 P. by way of fees on the nylon yarn manufactured by them in compliance with the notice of demand issued by the Accounts Officer, Textiles Committee dated 20/02/1969. The petitioner in the other case transferred case No. 355/83 Messrs Garware Nylons Limited, Bombay also carry on the business of manufacture of nylon yarn and paid Rs. 51, 738.89 P. by way of fee in compliance with the circular issued by the Chief Inspecting Officer, Textiles Committee, Bombay dated 19/05/1965 and assert that the payment of the said amount was under a mistake. Both these petitioners moved the High Court under Art. 226 of the Constitution challenging the validity of the levy of the fee and prayed for the issue of a writ in the nature of mandamus directing the Textiles Committee to refund the amounts recovered from them. Both these writ petitions were also transferred to this Court under Art. 139 and are numbered as transferred cases Nos. 354-355/83. In Civil Appeals Nos. 863-864/77, the appellant Baroda Rayon Corporation Limited Gujarat are engaged in the business of manufacture of rayon yarn and paid Rs. 55, 100 towards the fee in compliance with the notice of demand issued by the Accounts Officer, Textiles Committee dated 9/03/1966 for the period from March 1, 196 5/02/1966. They were further called upon by the Secretary, Textiles Committee to remit a sum of Rs. 39,211.26 P. towards the arrears up to 31/03/1967. The appellant challenged the recovery of the said amount of Rs. 55,100 as well as the threatened demand of a further sum of Rs. 39,211.26 P. by the Textiles Committee as being ultra vires by petitions under Art. 226 of the Constitution before the High Court of Gujarat. A Division Bench (S. Obul Reddy, C.J. and N. H. Bhatt, J.) by its judgment dated 18/11/1976 upheld the validity of the fee and accordingly dismissed the writ petitions.;