G.P.Singh, C.J. - (1.) The petitioner in this petition under Article 226 of the Constitution carries on the business inter alia of manufacture of viscose staple fibre in its staple fibre factories situated at Birlagram, Nagda (M. P.) and Birlakootam, Mavoor (Kerala), The petition pertains to the levy of fees under Rule 21 of the Textile Committee Rules, 1965, on viscose staple fibre manufactured by the petitioner. The petitioner prays for quashing of the notice of demand dated 11th July 1969 and for refund of Rupees 9,66,994.12 recovered as fees from the petitioner under Rule 21.
(2.) The Textile Committee Act, 1963, was enacted by Parliament on 3rd December 1963. The object of the Act as disclosed in the long title, is to provide for the establishment of a Committee for ensuring the quality of textiles and textile machinery and for matters connected therewith. Section 2 (f) of the Act defines 'textile machinery' to mean the equipment employed directly or indirectly for the processing of textile fibre into yarn and for the manufacture of fabric therefrom by weaving or knitting and to include equipment used either wholly or partly for the finishing, folding or packing of textiles. Section 2 (g) defines 'textiles'. This definition as originally enacted read as follows; "(g) Textiles' means any fabric or cloth or yarn made wholly or in part of cotton, or wool or silk or artificial silk or other fibre." The above definition of 'textiles' was substituted by a new definition by Act No. 51 of 1973 which came into force on 1st January 1975. The new Section 2 (g) reads as follows: "(g) 'textiles' means any fabric or cloth or yarn or garment or any other article made wholly or in part of- (i) cotton; or (ii) wool; or (iii) silk; or (iv) artificial silk or other fibre, and includes fibre." Section 3 of the Act provides for establishment of the Textiles Committee by the Central Government. Section 4 deals with the functions of the Committee. The functions of the Committee as stated in Section 4 generally are to ensure by such measures as it thinks fit, standard qualities of textiles both for internal marketing and export purposes and the manufacture and use of standard type of textile machinery. Section 7 of the Act provides for constitution of a fund called the textiles fund. Fees recovered under the Act form part of this fund. The moneys in the fund are applied for meeting the pay and allowances of the officers and other employees of the Committee and other administrative expenses of the Committee and for carrying out the purposes of the Act. Section 11 confers on the Committee the power of inspection. In exercise of this power, the Committee may on application or otherwise, direct an officer specially authorised in that behalf, to examine the quality of textiles or the suitability of textile machinery for use at the time of manufacture or while in use in a textile mill and submit a report to the Committee. On receipt of the report of inspection the Committee may tender such advice as it may deem fit to the manufacturer of textiles, the manufacturer of textile machinery and the applicant; Section 12 provides for levy of fees for inspection and examination. The Section reads as follows; "12. (1) The Committee may levy such fees as may be prescribed- (a) for inspection and examination of textiles, (b) for inspection and examination of textile machinery, (c) for any other services which the Committee may render to the manufacturers of textiles and textile machinery Provided that the Central Government may by notification in the Official Gazette, exempt from the payment of fees, generally or in any particular case. (2) Any sum payable to the Committee under Sub-section (1) may be recovered as an arrear of land revenue." (The section quoted here is as it stood before its amendment by Act 51 of 1973). Section 22 (1) confers on the Central Government power to make rules for carrying out the purpose of the Act. In particular, Section 22 (2) (e) empowers the Central Government to make rules providing for "the scale of fees that may be levied for inspection and examination under Section 12," Section 22 (3) contains a laying clause which reads as under; "22 (3). Every rule made under this section by the Central Government shall be laid as soon as may be after it is made before each House of Parliament while it is in session for a total period of 30 days which may be comprised in one session or in two successive sessions, and if before the expiry of the session in which it is so laid or the session immediately following both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule." In exercise of the powers conferred by Section 22, the Central Government made the Textile Committee Rules, 1965. Rule 21, as amended by the Textile Committee (Amendment) Rules, 1966, in so far as relevant, reads as follows: "21. Fee for Inspection, Examination and other services rendered by the Committee: (1) The Committee may with effect from 1st March 1965 levy and collect for inspection and examination of textiles and textile machinery specified in column 2 of the table below, the fee specified in the corresponding entry in column 3 of that table: S. No. Description of Textitles and Textile Machinery Fee 1 2 3 5. (a) Man-made cellulosic fibre cut to staple length 1 paisa per manufactured. 2 kgs. (b) Man-made non-cellulosic fibre cut to staple length 2 paisa manufactured. per kg. ... ... (2) The Committee may levy and collect for any other service rendered by it to the manufacturers of textiles and "textile machinery, such fee as it may fix with the approval of the Central Government."
(3.) Learned counsel for the petitioner submitted that the definition of 'textiles' as it stood prior to 1st January 1975 did not include fibre and, therefore, viscose staple fibre manufactured by the petitioner did not fall within the definition of textiles and the respondents were not entitled to charge any fee under Section 12 or Rule 21 for inspection from the petitioner. It was further submitted by the learned counsel that the petitioner never applied for inspection and even otherwise no inspection was ever carried out of the staple fibre manufactured by the petitioner and, therefore, there was no occasion for levy of inspection and examination fee under Section 12 or R, 21, The learned counsel also submitted that manufacturers of man-made fibres had not been receiving any benefit directly or indirectly and no services were ever rendered to them by the Committee and there was thus complete absence of quid pro quo and the levy of fees on this ground also was invalid. Learned counsel lastly submitted that the rules were not laid as required by Section 22 (3) in Parliament and for this reason they were invalid. The learned counsel for the respondents in reply submitted that the definition of textiles covered yarn, and fibre was included in yarn; that it was not necessary to show for supporting the fee that any particular service was rendered to each individual manufacturer and the service rendered to the textile industry as a whole was sufficient to support the fee and that the requirement of laying contained in Section 22 (3) was merely directory which did not affect the coming into force of the rules.;