Ranjan Gogoi, C.J. - (1.) THE liability of the Petitioner -Municipal Committee (now Municipal Council), Nabha to pay cess under the Water (Prevention and Control of Pollution) Cess Act, 1977 (hereafter referred to as the 'Cess Act'), as well as interest on the amount due and the penalty imposed, has been sought to be resisted by making a challenge to the applicability of the provisions of the Cess Act to the Petitioner Committee (now Council).
(2.) THE matter lies within a short compass. According to the Petitioner, it extracts water from the tubewells which is supplied to different residents free of charge upto a particular quantity, whereafter, the residents are required to pay charges to the Petitioner -Municipal Committee on an ascending scale. According to the Petitioner, such use of water would not be exigible to the Cess under the Act which can only be levied if the water extracted is supplied to an industry having discharge of effluents. The above -said argument is sought to be fortified by referring to Section 25 of the Water (Prevention and Control of Pollution) Act, 1974 (hereinafter referred to as the 'Main Act') which co -incidentally finds a mention in the charging Section under the Cess Act, i.e., Section 3. It is contended that in the present case, Section 25 of the Main Act has no application whatsoever to the Petitioner. Therefore, it cannot be made liable under the Cess Act. A careful analysis of the provisions of the Cess Act, particularly Section 3 thereof, would go to show that under the Cess Act, cess is to be levied on an industry or any industrial activity mentioned in Column (1) of Schedule II as well as on every local authority for use of water for any of the purposes specified in the aforesaid Schedule. A reading of the Schedule to the Act would indicate that use/consumption of water for domestic purpose also have been made exigible to cess under the Act. If that be so, it is difficult to visualize as to how the Petitioner -Committee, merely being a local body, can claim be outside the purview of the Cess Act.
(3.) SECTION 25 of the main Act contemplates the requirement of grant of consent by the Pollution Control Board before the commencement of an industrial activity. Reference to Section 25 of the main Act in Section 3(2A) of the Cess Act has to be understood to be limited in operation, i.e., confined to an industry that has been engaged in industrial activity without obtaining any consent under Section 25 of the Main Act. Obviously, under the provisions of the Cess Act, there is no scope to proceed against such an industry either for its closure or to take other coercive steps. In such a situation, i.e., where an industry is operating without consent, as required under Section 25 of the Main Act, the Cess Act contemplates the levy of cess at a penal rate as specified in column 3 of Schedule II of the Cess Act. This is how, according to us, the provisions of Section 25 of the Main Act and Section 3(2A) of the Cess Act will have to be construed and understood. If so construed, it is difficult for the Court to accept the argument advanced on behalf of the Petitioner that as Section 25 of the Main Act has no application to a local body, the provisions of Section 3 of the Cess Act will not apply to the Petitioner.;