Decided on August 06,1971



Vaidya j - (1.)The petitioner, M/s Hindustan Machine Tools Ltd., has set up its unit at Hyderabad for the manufacure of special apparatus machines, presses etc., The factory commenced erection in 1964 and completed it in December, 1965. Before the commencement of the erection, various plans were submitted to the Chief Inspector of Factories, Andhra Pradesh State Electricity Board, Public Works Department and Water Works Department for approval. Having obtained approval from the aforesaid Departments the plant and machinery were erected and the factory commenced production in December, 1965. For the benefit of the employees working in the factory, a colony consisting of a number of houses has been constructed.
(2.)As there are no facilities, the Company had to put up water supply and drainage system. Roads were laid by the Company and they belong to the company. A dispensary, shopping centre, floor mill, barber shop, vegetable market and ration shops were put up by the company at its own cost. Even the lighting of the roads within the company area and its maintenance is met by the company. All the aforesaid facilities were provided by the Company at its own expense and the public who stay in the village also used the same facilities. The 2nd respondent, Kuthullahpur Gram Panchayat was founded in 1959 and it is alleged by the petitioner that the panchayat has no staff whatsoever and the Sarpanch who is employed elsewhere looks after the administration of the panchayat also. The panchayat also has no hospital or dispensary nor a school, nor it had provided any water supply or drainage system. No facilities are provided by the panchayat. The 2nd respondent, by its letter dated 6th April, 1967 wanted the company to pay fees for permission to construct the factory and the houses in the colony at the rate of 1 per cent of the capital value for the colony and half per cent of the value of the factory buildings. The levy was made after the completion of plant and building. By another letter dated 22nd June 1968, the Personal Assistant to the Collector, Panchayat Wing, wanted information regarding the list of employees working in the factory and their income. By a further letter dated 20th August, 1968, the Sarpanch of the village demanded payment of the property tax for the period 1956-57, 1967-58, and 1968-69; The total tax so demanded amounts to Rs. 1,83,750 at the rate of Rs. 61,250/- per year. The demand notice nowhere mentions the manner in which the aforesaid amount of tax was arrived at. The Sarpanch, by his letter dated 3rd March 1959, made a demand of Rs. 1,65,00/- by way of fees for permission i.e. Rs. 80,000/- towards fees for the construe. tion of the factory buildings and Rs. 85,000/- towards fees for permission for construction of the buildings in the colony. It is contended by the petitioner company that the aforesaid demands of the Panchayat are not warranted by law.
(3.)As regards the permission fees, it is the case of the petitioner that no such levy can be made as it is beyond the scope and purview of the Act. There is no provision under the Act or the Rules to levy such a foe and the levy is unauthorised, illegal and void. Even assuming that the fee can be levied it can be only for the services rendered by the Panchayat and for rendering such services it has to incur expenses. The Panchayat has no staff to render any service. It has not approved the plans and had also not supervised the construction. In fact it is alleged by the company that the Panchayat had done nothing until the aforesaid demand was made. In the absence of having rendered any service to enable the company to construct the factory and buildings, the panchayat has no right to levy. Further, the levy is exorbitant and beyond its proportion, any such levy should be commensurate with the service rendered by the panchayat. As regards the claim for house tax it is contended that the buildings in the colony are not within the definition of 'house' under Section 2 (15) of the Andhra Pradesh Gram Panchayat Act (hereinafter referred to as "the Act"). As regards the factory it is claimed that it is also not within the definition of the term "house".

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