V. Giri, J.@mdashCommon issues arise for consideration in these writ petitions. Therefore, they have been heard together and are being disposed of by this common judgment. For the sake of convenience, I will refer to the facts in W.P.(C) No. 4504/06.
2. The Petitioner is a Major Port, constituted under the Major Port Trusts Act. For the purpose of handling cargo, the Port has acquired several cargo equipments, which are stated to be entirely within the premises of the Wharves in the Port. The stand taken by the Cochin Port, earlier was that these equipments which are used for vesselling of cargo did not require to be registered under the Motor Vehicles Act (hereinafter referred to as ''the Act''). But, by judgment dated 3-4-2001 a Division Bench of this Court held that such vehicles handling cargo within the premises of the Port are also exigible to tax under the Motor Vehicles Taxation Act. Accordingly, the cargo handling equipments were also required to be registered and actually registered under the Act. An amount of Rs. 2,00,67,077 was demanded as Motor Vehicles Tax on 27-1-2005. The Cochin Port Trust, the Petitioner, sought exemption from the Act, which was rejected under Ext. P-1. Thereafter, a revised demand was made as per Ext.P-2 for an amount of Rs. 1,33,78,051. The said amount was comprised of Rs. 93,33,770 by way of tax and Rs. 40,74,280 by way of additional tax. The tax component was remitted by the Petitioner, but it moVed the Government again u/s 22 of the Act seeking exemption as regards the additional tax. This was intimated to the recovery officials in Ext. P-4. Nevertheless Ext. P-6 prohibitory order was issued by the recovery officials under the provisions of the Revenue Recovery Act. Ext. P-6 was enclosed with a covering letter addressed by the Special Tahsildar to the Manager of the State Bank of India demanding a demand draft for Rs. 2,03,714 by way of collection charges. The writ petition has been filed challenging Exts.P-6 and P-7 insofar as it relates to the levy of collection charges. [Counsel submits that the writ petition is only concerned with the collection charges relatable to the Revenue Recovery Act (for short ''R.R. Act'')].
3. Insofar as W.P.(C) No. 7847/06 is concerned, the issue again is only regarding the levy of collection charges. The collection charges demanded in the said case is in relation to dues under the Agricultural Income Tax Act for the period 1998-99.
4. A counter-affidavit has been filed by the Government in both the cases supporting the levy of collection charges.
5. I heard learned Counsel for the Petitioner Sri Jayasankar and Sri Aswin Gopakumar and learned Government Pleader Sri Mathew George Vadakkel and Sri Tek Chand.
6. Learned Counsel for the Petitioner submits that the levy and demand of collection charges in both the cases is without jurisdiction. Collection Charges are demanded in terms of Rule 5 of the Kerala Revenue Recovery Rules. Rule 5 of the said Rules is not specifically sourced to any substantive provision in the plenary statute. The statutory backing for the levy of collection charges is contained only in Rule 5 and not in the provisions of the R.R. Act as such. Nevertheless, even if one goes by Rule 5 of the Rules, collection charges at the rate of 5% of the arrears to be collected is recoverable only when the arrears to be collected under the provisions of the R.R. Act is on behalf of the institution notified u/s 71 "or collected on behalf of any institution u/s 68". Counsel submits that therefore, Rule 5 would come into play only when arrears is sought to be recovered on behalf ofthe institution, either by invoking the provisions of Section 71 of the R.R. Actor where the arrears is sought to be collected on behalf of the institution, under the provisions of Section 68 of the R.R. Act. The arrears of public revenue due sought to be recovered in the present cases is statutory dues under the Motor Vehicles Taxation Act and the Agricultural Income Tax Act. In the circumstances, the amount sought to be collected by the Government is the amount due to the Government by way of tax. It is not a case where the machinery under the R.R. Act is brought into force for the purpose of effecting recovery of amounts due to any institution which is either notified u/s 71 of the R.R. Act or recovery of which is otherwise enabled under the provisions of Section 68 of R.R. Act.
7. I find considerable force in the said contention. Aplain reading of Rule 5 does not lead to any other conclusion. Rule 5 of the Revenue Recovery Rules is extracted hereunder for reference:
5.(1) Collection charges at the rate of 5 per cent of the arrears to be collected under the provisions of the Act on behalf of any institution notified u/s 71 or collected on behalf of any institution u/s 68 (when the arrears does not exceed Rupees Five Lakhs and at the rate of 7-5% when the arrears exceed Rupees Five Lakhs) shall be realised from the defaulters and accounted as arrears to such institutions.
(2) The collection charges shall be deducted from the amount recovered and the balance alone shall be payable to the institution.
There are two provisions specifically referred to in Rule 5 of the Rules. First is Section 71 of the R.R. Act. Section 71 deals with the power of the Government to declare the Act applicable to any institution by which the Government may, by notification in the gazette, declare that the provisions of the Act shall be applicable to recovery of any amounts due from any person or class of persons to any specified institution or any class or classes of institutions. Therefore, when an institution is notified u/s 71 of the R.R. Act and the provisions of the R.R. Act are invoked for the purpose of recovering any amount due to such institutions. Rule 5 enables the Government to demand collection charges at the rate of 5% of the arrear from the defaulter.
8. The second category contemplated by Rule 5, in my view, would also be confined to institutions on behalf of whom the recovery is effected, insofar as Rule 5 is concerned. Mr. Mathew Vadakkel and Mr. Tek Chand, Government Pleaders submit that Section 68 of the Act does not refer to the institutions and consequently Rule 5 must be construed in such a manner as to encompass all recoveries effected u/s 68. I am unable to accept this contention. In my view, Section 68 of the Act would not be confined to amounts due to the Government on account of the quit rent or revenue other than the public revenue due on land and all monies due from any person to the Government which under a written agreement executed by such person are recoverable as arrears of public revenue due on land or land revenue under the Act. But it also will extend to cases where amounts are due to institutions other than the Government, provided such amounts can be recovered as arrears of public revenue due under the Act.
9. Learned Government Pleader submits in such cases the institutions would any way be notified under the R.R. Act and if sd, the latter part of Rule 5 would become otiose. This is not so. There could be cases where recovery is sought to be effected on behalf of institutions which are not necessarily notified u/s 71 of the R.R. Act. There are several statutory bodies, which are given the powers to recover amounts due to them by way of statutory levies, by recourse to the provisions of the R.R. Act; for eg. the bodies constituted under the Motor Transport Workers'' Welfare Fund Act, Toddy Workers'' Welfare Fund Act, Construction Workers'' Welfare Fund Act, etc. The statutory bodies constituted under the said enactments need not be notified u/s 71 of the R.R. Act inasmuch as that the provisions of the said enactment empower recovery of amounts by recourse to the provisions of the R.R. Act. But amounts due to such bodies or institutions cannot be treated as synonymous to amounts due to the Government as such, even if the reccupry is being effected by recourse to the provisions of Section 68 of the Act. Rule 3of the Rules comprehends this second category also. In my view, the levy of collection charges contemplated by Rule 5 of the Rules is available only in cases where amounts are sought to be recovered by recourse to the provisions of the R.R. Act, on behalf of institutions either notified u/s 71 of the R.R. Act or which are otherwise enabled or empowered as mentioned above. In the present cases, the provisions under the R.R. Act are invoked for the purpose of recovering amounts which are due to the Government by way of a statutory levy. Recovery is not effected on behalf of any institution as such.
10. Learned Counsel for the Petitioner has a further contention that, at any rate, the recovery proceedings in the present case, was confined to the issuance of the notice u/s 71 of the R.R. Act and in one case to a prohibitory order u/s 19 of the Act. The recovery officials have not been compelled to proceed further either by attachment of immovable properties or by bringing the same to sale. He submits, in such cases, the collection charges cannot be levied going by the decision in
For all the reasons mentioned above, the writ petitions are allowed. Exts. P-5 and P-6 in W.P. (C) No. 4504/06 to the extent to which they demand collection charges are set aside. Ext. P-11 in W.P.(C) No. 7847/06 is set aside insofar as it relates to the demand for collection changes under Rule 5 of the R.R. Rules.
