The District Council of the Jowai Autonomous Distt., Jowai and Ors. Vs. Dwet Singh Rymbai etc.
In April 1968, the Executive Committee of the District Council issued a notification levying royalty on red pine, white pine and log pine timber grown in the private forests situated within the jurisdiction of the District Council. In the writ petitions challenging the competence of the District Council to levy the royalty in accordance with the Notification on the timber that came from private forests within its jurisdiction, the High Court found that the forests in question were private forests and further held that the District Council had no Constitutional authority to impose either royalty or tax or fee on private forests and that the Notification issued under section 8 of the Act was ultra vires and not sanctioned by the Sixty Schedule of the Constitution.
(ii) In the true sense what is sought to be recovered under the Act is not royalty since the forest does riot belong to the District Council. The amount claimed by way of royalty under the notifi-cation is a compulsory exaction of money by a public authority for public purposes enforceable by law and is not a payment for services rendered. It is truly,in the nature of a tax.
(iii) This levy cannot be sustained as any other kind of tax on land since the royalty payable as no reference to the extent of the land andthe nature of the land and its potentialities. It is a tax only on the timber which is brought from private forests. The notification in unambiguous terms says that the royalty shall be on the squared log pines. It has no reference to the land on which those trees have grown. In pith and substance it is a tax on forest produce grown on private lands.The District Council has no power to levy such a tax on forest produce under paragraph 8 of the Sixth Schedule to the Constitution.
(iv) Even though there is no express provision to levy such fees, the District Council can levy fees under paragraph 3. Unless the levy satisfies the true characteristics of fee as laid down by this Court in Commissioner, Hindu relious Endowments V. Lakshmindra Thirtha swamiar of Sri Shiru Mutt, ((1954) S.C.R. 1005.) it cannot be upheld even as a fee.
2. Moopil Nair v. State of Kerala, 1961 (3) SCR 77
3. District Council of United Khasi & Jaintia Hills & Ors etc. v. Miss Sitimon Sawian Etc, (1972) 1 SCR 398 at page 407
4. Om Parkash Agarwal & Ors. v. Giri Raj Kishori & Ors. 1986 (1) SCC 722
Civil Appeal Nos. 2069 of 1972 and 2070 of 1972 by special leave are filed against the common judgment dated July 31, 1972 in Civil Rule Nos. 477 of 1968 and 483 of 1968 respectively on the file of the high, Court of Asharn, Nagaland, Meghalaya, Manipur and Tripura. Since common questions of law anse for consideration in these two case, they are disposed of by this common judgment.
The respondents in th two appeals are forest contractors and they were operating in two forests called Lum Langkaraw and Lumkhliem Mcriap alleged to be belonging to Joseph and Kailla Rymbai. These forests are situated within the jurisdiction of the District Council of the Jowai Autonomous District, Jowai (hereinafter referred to as ‘the District Council’) – appellant 1 herein. On April 20, 1968 the Secretary of the Executive Commit-tee of the District Council issued a notification levying royalty in exercise of its power under the United Khasi and Jaintia Hills Autonomous District (Management and Control of Forests) Act, 1958 (Act 1 of 1959) (hereinafter referred to as ‘the Act’) on red pine, white pine and log pine timber grown in the private forests situated within the jurisdiction of the District Council at the rates specified therein. The notification reads thus :
No. JADFOR6826 Dated, Jowai, April 20, 1968.
In exercise of the power conferred under Section 8 of the U.K. and J. Hills Autonomous District (Management and Control of Forests) Act, 1958 as adopted under the Jowai Autonomous District (Administration) Act, 1967, the Executive Committee of the Jowai Autonomous District Council is pleased to fix a flat rate of royalty for both red pine and white pine @ 80 p. per cubic foot for all the squared long pine timber irrespective of the girth classes other than the pine timber that come from private forests, for the squared log pine timber from the private forests that are to go outside the Jowai Autonomous District for trade purposes, the rate of royaltv is fixed at half of the above scheduled rate i.e. Re 40 p. per aft. The above rates will take inunediate effect and modify Rule 2 of the U.K. and J. Hills Autonomous District (Management and Control of Forests Rates of Royalty) Rules, 1959 as far as its application to white pines and red pines is concerned. This supersedes all orders on the subject.
Sd,- D. Passah
Secretary, Executive Committee
Jowai Autonomous District, Jowai
As the respondents became liable to pay the royalty, as specified in the notification, they instituted the writ petitions in the. Iiiah Court, out of which these appeals arise, questioning the competence of the District Council and its Executive Committee and, officers to levy the royalty in accordance with the notifi-cation on the timber that came from private forest,, within its jurisdiction. The respondents, among other pleas contended that the royalty, in question, which was in the nature of tax was net leviable by the District Council since it had no authority under the Constitution and the laws niad- thereunder to impose the said levy. On behalf of the District Council it was contended that since the private forests were also under the management and control of the District Council under the provisions of the law in force in that area, to which a detailed reference would be made hereafter, it was open to it to levy the royalty even though it may be in the nature of a tax. It was next contended on behalf of the District Council that even though a tax cannot be levied on the trees grown in private forests, since the District Colincil had the competence to levy tax on lands and buildings and the trees in the private forests were grown on the land the tax in question could be treated as tax on land which it was, therefore, entitled to levy. It was next contended that even if it could not levy a tax, such amount can be realised by way of fee in order to meet the expenses incurred by the District Coun-cil in connection with the management and control of the private forests. Lastly it was contended that the forests in question were not private forests and so the respondents could not main-tain the petition at all. After hearing the learned counsel for the parties, the High Court found that the forests in question were private forests and further held that the District Council had no constitutional authority to impose either royalty or tax or fee on private forests and that the notification dated April 20, 1968 issued under Section 8 of the Act was ultra vires and not sanctioned by the Sixth Schedule of the Constitution. As a consequence of the above finding, the High Court issued a writ of mandamus to the appellants (responddnts in the writ petitions) restraining them from realising, royalty from the respondents in respect of timber extracted by them from the two forests, re-ferred to above.
Aggrieved by the judgmentsorders passed by the High Court in the said writ petitions, the District Council and others who were respondents in the writ petitions, have preferred these appeals to this Court by special leave.
The Autonomous District of Jowai was previously a sub-divi-sion of the United Khasi Jaintia Autonomous District and took the present shape of an autonomous district with effect from December 1, 1964 pursuant to a notification issued by the Governor of Assam on November 23, 1964. The District Council came into being on March 23, 1967 and in that very year it passed the Jowai Auto-nomous District (Administration) Act, 1967. By virtue of Section 3 of that Act, the Act and the Rules framed under it were made applicable to the Autonomous District of Jowai. Subsequently’, on April 20,. 1968 the Executive Committee of the District Coun-cil issued the impugned Notification which is set out above in exercise of its powers conferred by Section 8 of the Act, fixina the rates of royalty chargeable on the different types of timber mentioned therein at the rates specified in it.
In these appeals we are concerned with the constitutional validity of the abovesaid notification. The area which lies within the jurisdiction of the District Council is a tribal area, which originally formed part of the State of Assam. Part X of the Constitution provides for the administration of the Scheduled and Tribal Areas. Clause (2) of Article 244 of the Constitution, is it was oriyinally enacted, read thus
244. (2) The provisions of the Sixth Schedule shall apply to the administration of the tribal areas in the State of Assam.
By the Assam Reorganisation (Meghalaya) Act, 1969 (Act 55 of 1969) the autonomous State of Mcghilaya was formed within the State of Assam comprising the territories which formed part of the Autonomous District of United Khasi-Jaintia Hills including Jowai Autonomous District and the Garo Hills. Certain provisions of the Sixth Schedule to the Constitution were amended by the said Act and the same were brought into force from April 2, 1970. By the North Eastern Areas (Rocrganisation) Act, 1971 the new State of Meghalava was created comprising the territories of the autonomous State of Meghalaya and the cantonment and municipality areas of Shillong town. The said State was inaugurated on Janu-ary 21, 1972.
Article 244(2) of the Constitution, with effect from January 21, 1972, reads thus :
244. (2) The provisions of the Sixth Schedule shall apply to the administration of the tribal areas in the States of Assam, Meghalaya and the Union Territory of Mizoram.
The Sixth Schedule of the Constitution, as it now stands, is entitled “Provisions as to the Admiristration of Tribal Areas in the States of Assam and Meghalaya and in the Union Territory ef Mizoram”. The provisions of that Schedule with which we are concerned have not undergone any material change although there have been several amendments in that Schedule since the commence-ment of the Constitution. They are applicable to the tribal areas witliin the jurisdiction of the District Council of Jowai – appellant 1 in these appeals.
Paragraph 1 of the Sixth Schedule to the Constitution provides that subject to the provisions of that paragraph, the tribal areas in each item of Parts I, II and III of the table appended to paragraph 20 of that Schedule shall be an autonomous District. If there are different Scheduled Tribes in an auto-nomous district, the Givrtier may, by public notification divide the area or areas inhabited by them into autonomous regions. The Governor has been given power to after the boundaries of the autonomous districts and the predure fci doincr reorganisation of the autonomous district is in sub-paraghrap (3) of paragraph 1 of the Sixth Schedule to the Constitution Paragraph 2 of that Schedule provides that there shall – a District Council for each autonomous district consisting of not more than thirty members, of whom not more than four persons shall be nominated by the Governor and the rest shall be elected on the basis of adult suffrage. There shall be a separate Regional Council for each area constituted an autonomous region under sub-paragraph (2) of paragraph 1 of that Schedule. Each District Council and each Region Council shall be a body corporate by the nine respectively of “the District Council of (name of district)” and “the Regional Council of (name of region)”, shall have perpectual succession and a common seal and shall by the said name sue and be sued. Subject to the provisions of that Schedule, the administration of an autonomous district hall, insofar as it is not vested under that Schedule in any Regional Council within such district, be vested in the District Council for slch district and the adminis-tration of an autonomous region shall be vested in the Regional Council for such region. In an autonomous district with Regional Councils, the District Council shall have only such powers with respect to the areas under the authority of the Regional Council as may be delegated to it by the Regional Council in addition to the powers conferred on it by that Schedule with respect to such areas. The District Council of Jcwai Autonomous District – appellant 1 is one such District Council. But as mentioned earlier it was a part of the United Khasi-Jaintia Hills Auto-nomous District prior to December 1, 1964.
Paragraphs 3 and 8 of the Sixth Schedule to the Constitution read thus :
3. Powers of the District. Councils and Regional Councils to make laws. — (1) The Regional Council for an autonomous recion in respect of all ar,,as within such region and the District Council for an autonomous district in respect of all areas within the district except those which are under the authority of Regional Councils. if any, within the district shall have power to make laws with respect to —
(a) the allotment, occupation or use, or the setting apart, of land, other than any land which is a reserved forest for the purposes of agriculture or grazing or for residential or other ncn-agricultural purpo or for any other purpose likely te, promote the interests of the inhabitants of any village or town :
Provided that nothing in such laws stall prevent the compul-sory acquisition of any land, whether occupied -,r unoccupied, for public purposes (by the government ef the State concerned) in accordance with the law for the time being in force author-ising such acquisition
(b) the management of any forest not being a reserved forest ;
(c) the use of any canal or water-course for the purpose of agriculture ;
(d) the regulation of the practice of jhum or other forms of shifting cultivation ;
(e) the establishment of village or town committees or councils and their powers ;
(f) any other matter relating to village or town administra-tion, including village or town police -.nd public health and sanitation
(g) the appointment or succession of Chiefs or Headmen
(h) the inheritance of property
(i) marriage and divorce
(j) social customs.
(2) In this paragraph, a ‘reserved forest’ means any area which is a reserved forest under the Assam Forest Regulation, 1891, or under any other law for the time being in force in the area in question.
(3) All laws made under this paragraph shall he submitted forthwith to the Governor and, until assented to by hiiii, shall have no effect.
8. Powers to assess and collect land revenue and to impose taxes. — (1) The Regional Council for an autonomous region in respect of all lands within such region and the Disttict Coun-cil for an autonomous district in respect of all lands within the district except those which are in the areas under the authority of Regional Councils, if any, within the district, shall have the polver to assess and collect revenue in respect of such lands in accordance with the principles for the time being followed by the government of the State in assessing lands for the purpose of land revenue in the State generally.
(2) The Regional Council for an autonomous region in re-spect of areas within such region and the District Council for an autonomous district in respect of all areas in the district except those which are under the authority of Regional Coun-cils, if any, within the district, shall have power to levy and collect taxes on lands and buildings, and tolls on persons resideit witliin such areas.
(3) The District Council for an autoiictiious district shall have the power to levy and collect all or anv of the following taxes within such district, that is to say-
(a) taxes on professions, trades, callings and employmentis
(b) taxes on animals, vehicles and boats ;
(c) taxes on the entry of goods into a market for sale therein, and tolls on passengers and goods carried in ferries ; and
(d) taxes for the maintenance of schools, disnciisaries or roads.
(4) A Regional Council or District Council, as the case may be, may make regulations to provide for the levy and collection of any of the taxes specified in sub-paragraplis (2) and (3) of this paragraph and every such regulation shall be submitted forthwith to the Governor and, until assented to by him, shall have no effect.
It is seen from paragraph 3 and paragraph 8 of the Sixth Schedule to the Constitution set c,.t above that t,e District Councils and Regional Councils in addition to specified executive functions conferred on them by the other paragraphs in that Schedule have been given legislative powers in respect of certain topics mentioned in Daragraph 3 and the r)ower to levy the taxes specified in paragraph of that Schedule.The powers enjoyed by these District Councils cannot be equated with the plenary powers enjoyed by a legislature. Their powers to make laws are limited by the provisions of the Sixth Schedule. The courts cannot constructively enlarge their powers to make laws. (Vide District Council of United Khasi & Jaintia Hills & Ors etc. v. Miss Sitimon Sawian Etc, (1972) 1 SCR 398 at page 407) Paragraphs 3 and 8 of the Sixth Schedule to the Constitution follow almost the same pattern in which the subjects in List 1 and List 11 of the Seventh Schedule to the Constitt-,+,ion have bcen enumerated. While the subjects rolating tn taxtion are’d-calt with separately in paragraph 8, pararaph 3 does not contain any subject which authorises the District and Reaional Councils to levy taxes. Para-raph 3 confers powers on the said Councils to make laws only to regulate matters specified therein. Para-craph 3(1)(b) empowers the District Council to make laws with respect to the management of any forest net being a reserved Iorest. Paragraph 3(2) d-fines a ‘ reserved forest’ as any area which is a reserved forest under the Assam Forest Regulation, 1891 or under any other law for the time being in force, in the area in’ question. It may also b3 noted that there is no specif-ic reference to the power to levy any fees in respect of any matter mentioned in paragraph ‘ in the Sixth Schedule to the Constitution similar to the corresponding provisions in the penultimate entry in List 1 and the last entry in the other two Lists in the Sventh Schedule to the Constitution. But ha,ina reaard to the nature of a fee, which is an amount levied as quid pro qlio for services rendered, the power to lety fees i n re-spect of any of the matters mentioned in paragraph 3 should be necessarily implied. But such fee should not be disproportion-ately very high, i.e., a tax in disguise. The Act was enacted for the purpose of making provisions regarding the management and the control ef forests (which are not reserved forests) in the area within the jurisdiction of the District Council in exercise of the powers conferred by paragraph 3(1)(b) of the Sixth Sched-ule to the Constitution.
Section 3 of the Act refers to six different kinds of for-ests. That section reads thus :
3. Classification of Forests. – The forests to which this Act
applies are classified under the following categories
(i) (a) Private Forests : These are forests belonging to an individual cr clan or joint clans which are grown or inherited by him or them in recognised Private lands (Ri kynti)
(b) Law-Ri-Sumar : These are forests belonging to an individual clan or joint clans (which are) grown (or inherited by him or them in a village or common raj land).
(ii) Law-Lyng-doh. Law Kyntang, Law Niam: These are forests set apart for religious purross and hitherto managed or controlled bv the Lnygodh or other person or persons to whom the religious ceremonies for the particular locality or village or villagers are entrusted.
Explatiation: Lyngdoh in this particular respect is a religi-ous head and not the administrative head mentioned in Section 2(r).
(iii) Law-adong and Law-shnong : These are village forests hitherto reserved by the villagers themselves for conserving water, etc. for the use of the villages and managed by the Sirdar or headman with the help of the Village Durbar.
(iv) Protected Forests : These are areas already declared pro-tected for the growth of trees for the benefit of the local inhabitants and also forest, that may be so declared by rules under this Act.
(v) Green Blocks : These are forest belonging to an individual family or clan or joint clans and rai land already declared as Green Block by governments for aesthetic beatity and water supply of the town of Shillong and its suburbs ard also forests that may be declared by rules under this Act,.
(vi) Raid Forests : These are forests managed by the Raid and under the centrel of the local administrative head subject to rules to be prescribed by the District Council.
Section 4(a) of the Act Provides that private forests and Law-Ri-Sumar which are mentioned in Section 3 (i) (a) and (b) of the Act shall be managed by the eivners thereof subject to the rules that may be framed by the District Council from time to time in the general interest of the forestery of the district. Private forests are forests belonging to an individual or clan or joint clans which are grown or inherited by him or them in recog-nised private land (Ri Kynti). In Section 4 of the Act, as regards removal of forest produce it is provided thus:
Removal of Forest Produce. — No timber or forests produce shall be removed for the purpose of sale, trade or business from Protected Forests, Green Blocks, Raid Forests without the order in writing of the Forest Ofricer of the District Council which order may be given only on previous receipt of the royal-ty on such timber or forest produce at rates as may be pre-scribed by the District Council
(i) that the royalty on timbers of reserved trees from Raid For-ests shall be half the full rates in respect of persons living in the neighbouring area of the forest where the timber is needed for their own domestic use, i.e., for building purpose only
(ii) that no royalty shall be charged for the removal of timber from Green Blocks by the owners thereof, or for the removal of timber or any forest produce from a Raid Forest by the members of the Raid for their own domestic use;
(iii) that all royalty realised shall he credited to the Dis-trict Fund;
(iv) that the District Council shall quarterly _give to the Si-mships, Dolloiships and Sirdarshing a share of the royalty at a percentage to be prescribed by it.
It may be noticed that the above part of Section 4 of the Act refer to protected forests. green blocks and raid forests and if any person wants to remove timber for sale etc. he should pay royalty at the rates to be prescribed by the District Council. It does not refer to private forest. Secticn 8 of the Act under which the impugned notification is issued merely says that the Executive Committee may make rules fixing, the rates of royalty for each class of trees. timber or forest preduce which shall be published in the Assam Gazette. Section 11 of the Act refers to rovalty pavable in respect of timber in private forests.. It reads thus :
11 – All timber or forest produce removed from Private Forests and Law-Ri-Sumar shall be liable to payment of half the full rates of royalty prescribed for such timber or forest produce under Section 8 above, when exported beyond the district or when brought to Shillong in vehicles for purposes of trade :
Provided that the Executive Committee may direct that any rule made under this section shall not apply to any specified class of timber or other forest produce or to any specified local area.
Under Section 13 of the Act, the Executive Committee of of the District Council may regulate felling of trees etc. Section 13 of the Act reads thus
13. Powers to regulate felling of trees, etc. – The Execu-tive Committee shall have power to-
(a) regulate or prohibit the kindling of fires, and prescribe the precautions to be taken to prevent the spread of fires ;
(b) regulate or prohibit the felling, cutting, girdling, mark-ing, lopping, tapping or injuring by fire or otherwise of any trees, the sawing conversion and removal and the collection and removal of other forest produce ;
(c) regulate or prohibit the boiling of catechu or the burning of lime or charcoal ;
(d) reaulate or prohibit the cutting of grass and posturing of cattle and regulate the payment, if any, to be made for such cutting or posturing
(e) regulate the sale or free grant of forest produce ; and
(f) prescribe or authorise any forest ollicer to prescribe subject to the control of the Executive Committee the fees, royalties or other payments for forest produce, and the manner in which such fees, royalties, or other payments are to be levied, in transit or partly in transit or otherwise,
The question before us is whether the royalty levied by the impugned notification can be realised by the District Council in respect. of trees in private forests. ‘Royalty’ according te Jowitts’ Dictiondry of English Law means a payment referved by the grantor of a patent. lease of a niint or similar right, and pavable proportionately to the use made of the rilrht by the grantee. In the true sense what is sought to be recovered under the Act is not royalty since the forest does riot belong to the District Council. The amount claimed by way of royalty under the notifi-cation is a compulsory exaction of money by a public authority for public purposes enforceable by law and is not a payment for services rendered. It is truly,in the nature of a tax.
In the High Court various claims were put forward in support of the impugned levy. It was contended that the royalty in question came under clauses (a) and (c) of paragraph 8(3) of the Sixth Schedule to the Constitution, namely, taxes on profession, trades, callings and employment, or taxes on the entry of goods into market for sale therein. It being neither of the two kinds of taxes, referred to above, the High Court rightly rejected the above contention.
It was next urged before the High Court that the levy came within sub-paragraphs (1) and (2) of paragraph 8 of the Sixth Schedule to the Constitution which authorised levy of tax on lands on the ground that the trees were growing on the land. The same contention is again pressed before us. We flind it difficult to agree with the above submission since if the levy is land revenue then it should have been fixed in accordance with the principles for the time being followed by the government of the State in assessing lands for the purpose of land revenue in the State generally as required by sub-paragraph ( 1 ) of para-graph 8 of the Sixth Schedule to the Constitution.it cannot be sustained as any other kind of tax on land since the royalty payable as no reference to the extent of the land andthe nature of the land and its potentialities. It is a tax only on the timber which is brought from private forests. The notification in unambiguous terms says that the royalty shall be on the squared log pines. It has no reference to the land on which those trees have grown. In pith and substance it is a tax on forest produce grown on private lands.The District Council has no power to levy such a tax on forest produce under paragraph 8 of the Sixth Schedule to the Constitution. Reliance was, howev-er, placed on the minority judgment of Justice Sarkar in K.T. Moopil Nair v. State of Kerala, 1961 (3) SCR 77 in support of the plea that lands on which forests grew could be taxed under entry ‘tax on lands and buildings’. The impugned levy being not a tax levied on land as we have pointed out above, the said observation in the above decision is not useful to the appellants. We may add that the very same learned Judge has observed at page 106 that no tax could be levied by a State legislature on forests as such while tax may be levied on the land on which forests grew. But we are convinced that the levy in question is not a levy on land. This contention has, therefore, to fail.
The appellants have not been able to establish that the impu gned royalty was leviable under any other provision. It was no doubt true that it was argued before the High Court that it was open to the District Council to levy fees as quid pro quo for the services rendered by it to the forest owners oror constrractors. The High Court erred in hoildingthat even fees could not be levied under paragraph 3 of the Sixth Schedule to the Constitu-tion. We have already held that even though there is no express provision to levy such fees, the District Council can levy fees under paragraph 3. But that would not save the notification since there is no material placed before the court to uphold the noti-fication on that ground. No evidence is placed before the court showing the expenses incurred by the Disrict Council towards the services rendered and the total amount of royalty realised by it. Unless the levy satisfies the true characteristics of fee as laid down by this Court in The Commissioner,Hindu relious Endowments v. Sri Lakshmindra Thirtha swamiar of Sri Shiru Mutt, (1954) SCR 1005, it cannot be upheld even as a fee. (See also Om Parkash Agarwal & Ors. v. Giri Raj Kishori & Ors. 1986 (1) SCC 722)
In sofar as the question whether the forests from which the respondents were bringing timber were private forests or not, we find that the High Court after considering a)I the relevant fa cts before it has recorded a finding that they are private for-ests. It is not also shown by the appellants that they belong to any other category of forests referred in Section 3 of the Act. The plea of the appellants in the statement of objections before the High Court was that there were no private forests at all in Jowai District. This statement cannot be accepted as the notifi-cation purports to levy royalty on timber brought from private forests. If there were no private forests at all the District Council would not have issued the notification levying royalty on timber got from private forests. In any view of the matter, there is no sufficient ground to disturb the finding of the High Court on the above question.
In the result these appeals fail and they are dismissed but, we however, set aside the finding of the Hich Court that no fees can be levied by the District Council in respect of matters enumerated in paragraph 3 of the Sixth Schedule to the Constitu-tion.
There is no order as to costs.