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Gopalaswami Vari Temple, Timmapuram and ors. Vs. the Commissioner for Hindu Religious and Charitable Endowments, Andhra Pradesh, Hyderabad and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petn. Nos. 883, 1052, 1058, 1176, 1318, 1332 and 1474 of 1958
Judge
Reported inAIR1961AP216
ActsConstitution of India - Article 265; Madras Hindu Religious and Charitable Endowments Act, 1951 - Sections 76(1) and 100; Madras Hindu Religious and Charitable Endowments (Amendment) Act, 1955; Madras Hindu Religious and Charitable Endowments Rules - Rule 2
AppellantGopalaswami Vari Temple, Timmapuram and ors.
RespondentThe Commissioner for Hindu Religious and Charitable Endowments, Andhra Pradesh, Hyderabad and ors.
Appellant AdvocateI.V. Narasimha Rao, Adv.
Respondent AdvocateP. Ramachandra Reddy, 3rd Govt. Pleader
DispositionPetition dismissed
Excerpt:
trust and societies - nature of payment - section 100 of madras hindu religious and charitable endowments act - petitioner 'archakas' of temple - whether section 76 intra vires and commissioner to indicate nature of service rendered by defendant to petitioner temple in notice issued calling for contribution - commissioner to indicate notice for nature of service done - religious institution to pay expenses for service rendered - held, section 76 is intra vires and expenses paid are fees and not tax. - - they may effectively prevent the department from having recourse to section 76(2) by not producing their accounts at all for audit......76(1) as unconstitutional.12. he next fell back upon the contention that rule 2 as made by the state government made it incumbent upon the commissioner to state in the demand notice what supervision and control were exercised by his department and what administrative functions were performed by him or the deputy commissioners or the assistant commissioners under the act in respect of that institution and also what services were rendered to the institution.in our opinion, this argument is unsubstantial all that that rule envisages is that before the commissioner could assess the contribution payable by any temple, he should take into account the various circumstances enumerated in the rule. he is not required to specify these services in the demand notice or to establish in a court of.....
Judgment:

P. Chandra Reddy, C.J.

1. The questions to be decided by the Full Bench are: (i) whether Section 76(1) of the Hindu Religious and Charitable Endowments Act (Madras Act XIX of 1951) (hereinafter referred to as the Act) is intra vires; if the answer is in the affirmative, whether the Commissioner has to indicate the nature and quantum of services rendered by the Department to the particular temple in the notice issued calling for contribution; and (ii) whether the audit fee could' be collected from a temple only after the audit is done.

2. The petitioners in all these cases are archakas of some of the temples situated in East Godavari. District. As they have been in possession and enjoyment of lands belonging to the temples and as they have not paid either the contribution or the audit fee for a number of years, the Commissioner for the Hindu Religious and Charitable Endowments was obliged to require the petitioners to pay the arrears, of contribution and the audit fee. The petitioners filed objections questioning the jurisdiction, of the Commissioner to make this demand. As this had no effect on the officers concerned, they have approach ed this Court for the issue of Writs of mandamus to restrain the Commissioner from enforcing the notice, under Section 76 of the Act.

3. It is urged in support of these petitions that as the contribution levied under Section 76(1) partakes of the character of 'tax', it should be struck down as ultra vires. Alternatively, it is stated that before the Commissioner could make an assessment in this behalf, he should indicate in the notice the nature of the services rendered by him and this not having been done in the instant cases, it was beyond the competency of the Commissioner to call upon the petitioners to pay the particular amounts by way of contribution.

4. The first branch of the argument is founded on the decision of the Supreme Court in Commissioner of Hindu Religious Endowments, Madras v. Lakshmindra Thirtha Swamiar, : [1954]1SCR1005 . It was there laid down by their Lordships that since Section 76 of the Act did not contemprate the setting up of a separate fund but the contribution went into the consolidated fund out of which the emoluments payable to the Commissioner and his staff employed in the Department should be paid, it could not be regarded as 'fee' but was more in the nature of 'tax' and, consequently, Section 76(1) was invand and had to be struck down. The reasoning of their Lordships in this behalf is contained in the following observations:

'Section 76 of the Madras Act speaks definitely of the contribution being levied in respect oi the services rendered by the Government ; so far it has the appearance of fees. It is true that religious institutions do not want these services to be rendered to them and it may be that they do not consider the State interference to be a benefit at all. We agree, however, with the learned Attorney-General that in the present day concept of a State, it cannot be said that services could be rendered by the State only at the request of those who require these services. It in the larger interest of the public, a State considers it desirable that some special service should be done for certain people, the people must accept these services whether willing or not. It may be noticed, however, that the contribution that has been levied under Section 76 of the Act has been made to depend upon the capacity of the payer and not upon the quantum of benefit that is supposed to be conferred on any particular religious institution. Further, the institutions which come under the lower income group and have income less than Rs. 1,000/- annually, are excluded from the liability to pay the additional charges under Clause (2) of the section. These are undoubtedly some of the characteristics of the 'tax' and the imposition bears a close analogy to income-tax. But the material fact which negatives the theory of fees in the present case is that the money raised by levy of the contribution is not ear-marked or specified for defraying the expenses that the Government has to incur in performing the services. All the collections go to the Consolidated Fund of the State and all the expenses have to be met not out of these collections but out of the general revenues by a proper method of appropriation as is done in case of other Government expenses. That in itself might not be conclusive, but in this case there is total absence of any co-relation between the expenses incurred by the Government and the amount raised by contribution under the provision of Section 76 and in these circumstances the theory of a return or counter payment or quid pro quo cannot have any possible application to this case. In our opinion, therefore, the High Court was right in holding the contribution levied under Section 76 is a tax and not a fee and consequently it was beyond the power of the State Legislature to enact this provision'.

It is to get over the difficulty created by this judgment that the Andhra State Legislature introduced amendments to Section 76 in 1955 providing for the contributions constituting a separate fund ear-marked for the services to be rendered to the institutions in the State by the Department which had been created for the purpose of carrying out the objects of the statute.

5. We will pause here to read Section 76 both as it originally stood prior to the decision of the Sirur Mutt's case, : [1954]1SCR1005 and after it was amended in 1955, in so far as it is relevant for the present enquiry.

76(1): 'In respect of the services rendered by the Government and their officers, every religious institution shall, from the income derived by it, pay to the Government annually such contribution not exceeding five per centum of its income as may be prescribed.

X X X X 4. The Government shall pay the salaries, allowances, pensions and other beneficial remuneration of the Commissioner, Deputy Commissioners, Assistant Commissioners and other officers and servants (ether than executive officers of religious institutions) employed for the purposes of this Act and the other expenses incurred for such purposes, including the expenses of Area Committees and the cost of auditing the accounts of religious institutions.'

It is not necessary for us to recite the amendments carried out in 1954 as they were replaced by those in 1955.

6. Section 2 of Act XIII of 1955 which amended Section 76 is in these words:

'In Section 76 of the Madras Hindu Religious and Charitable Endowments Act, 1951 (Madras Act XIX of 1951) hereinafter referred to as the principal Act--(i) for Sub-section (1), the following Sub-section shall be sustituted, namely: '(1) In respect of the services rendered by the Government and their officers, every religious institution shall, from the income derived by it, pay to the Government annually for meeting the cost of such services, such contribution not exceeding five per cent of its income as may be prescribed. The contribution so paid shall be kept and administered as a separate fund.''

Section 3 of the amendment Act enacted:

'After Section 76 of the principal Act, the following section shall be inserted, 76-A{2) The Government shall pay into the fund referred to in Sub-section (1) of Section 76, the balance, if any, remaining out of the aggregate of the contributions paid or realized before the commencement, of the said Act, in pursuance of Sub-section (1) of Section 76 after deducting therefrom the sums paid under Sub-section (4) of Section 76 (except in so far as such payments relate to the cost of auditing the accounts'.

7. It is immediately clear that the objectionable features of Section 76(1) which were responsible for the Supreme Court striking it down as invalid were removed by the amendment. Therefore, the contribution levied under Section 76(1) could no longer be regarded as invalid.

8. This matter was considered by a Bench of this Court in Basavalingaswami v. Commr. of Hindu Religious and Charitable Endowments, 1959 Andh LT 794 after the amendment of section hi 1935. There, it was ruled that the contributions imposed were primarily intended for meeting the expenses connected with the office of the Commissioner for the Hindu Religious and Charitable Endowments and that the imposts were made for special services rendered for the benefit of institutions from which the payments were demanded. The doctrine of this case was followed subsequently in a number, of cases. The contention that the contributions levied under the section should not exceed the actual expenses incurred in connection with the services is devoid of force.

9. The fees collected by the Government could only be approximate to the expenses incurred by them in rendering any particular, kind of service. In this view of ours, we are supported by the judgment of their Lordships of the Supreme Court in Ratilal Panchand Gadhi v. State of Bombay, : [1954]1SCR1055 . Their Lordships observed:

'It may not be possible to prove in every case that the fees that are collected by the Government approximate to the expenses that are incurred by it in rendering any particular kind of services or in performing any particular work for the benefit of certain individuals. But in order that the collections made by the Government can rank as fees, there must be correlation between the levy imposed and the expenses incurred by the State for the purpose of rendering such services.'

After the passing of the amendment Act (XIII of 1955), it cannot be disputed that such correlation exists between the contribution and the levy imposed by the department (sic).

10. The corner stone of the argument of Sri Narasimha Rao, counsel for the petitioners, that Section 76(1) is unconstitutional is the unreported judgment of Umamaheswaram J, in W. P. No. 58 of 1953, which according to' him was approved impliedly by the Bench that heard the appeal against his order in W. A. No. 68 of 195G. The basis of the opinion of the learned Judge is 1954 SCJ 335: (AIR 1934 SC 282).

Obviously, the attention of the learned Judge was not drawn to the amendments that were made subsequent to the Sirur Mutt's case, : [1954]1SCR1005 by Andhra State Legislature, nor were they brought to the notice of the Bench which threw out the appeal preferred against the judgment of Umamaheswaram, J. in limine. Therefore, the view of Umamaheswaram, J. could no longer be regarded as sound having regard to the state of law as it exists today.

11. When Sri Narasimha Rao realised that this argument ignores the amendments made in 1955, he did not persist in attacking the vires of Section 76(1) as unconstitutional.

12. He next fell back upon the contention that rule 2 as made by the State Government made it incumbent upon the Commissioner to state in the demand notice what supervision and control were exercised by his Department and what administrative functions were performed by him or the Deputy Commissioners or the Assistant Commissioners under the Act in respect of that institution and also what services were rendered to the institution.

In our opinion, this argument is unsubstantial All that that rule envisages is that before the Commissioner could assess the contribution payable by any temple, he should take into account the various circumstances enumerated in the rule. He is not required to specify these services in the demand notice or to establish in a Court of law the nature and quantum of services rendered by him.

It is for the Commissioner to have regard to the considerations set out in that rule in fixing the amount of contribution payable by each of the institutions. Of course, if any institution feets that the contribution payable by it is excessive, it is open to it to urge the objections before him and it is for the Commissioner to consider that matter. It is not within the province of the Courts to go into these questions. For these reasons, this contention is negatived.

13. It is next urged by Sri Narasimha Rao that Section 79(1) Authorises the levy of contribution with retrospective effect only for a period of three years preceding the fasli in which the assessment was made. The petitioners have not placed any material before us to show that such assessments were not made in the prior years. However, as this matter has not been investigated so far by the authority, we think that it has to be enquired into by the Commissioner.

Section 78(2) clothes every institution with a right to file objections within fifteen days from the date of receipt of notice to the levy of contribution in regard to any particular year. Instead of choosing this course, the petitioners challenged the jurisdiction of the Commissioner to levy the contribution. However, having regard to the representation that the judgment of Umamaheswaram J., led the petitioners to take that course, we think that in the interests of justice the petitioners should be permitted to file objections in respect of the various faslis for which the demands were made.

14. Coming to the second question, the foundation for the argument that before audit fee could be levied, the audit must be actually carried out is the order of Umamaheswaram, J. dated 13-9-1955 in W. P. No. 58 of 1953. Here also the argument is that this opinion must be deemed to have been affirmed by the Bench in W. A. No. 68 of 1956. The learned Judges have not considered this aspect of the matter at all except to say:

'So far as the audit fee for faslies 1355 to 1361: is concerned, a writ of prohibition is also issued'

The reasons why the Writ of prohibition should issue are not mentioned. Therefore, this is not of much help to us in considering the principles underlying this decision. Perhaps, the learned Judge thought that the decision in the Sirur Mutt's case, : [1954]1SCR1005 has that effect also. But, in the judgment of the Madras High Court in Lak-shmindra Theertha Swamiar v. Commr. Hindu Religious Endowments, Madras, : AIR1952Mad613 which was affirmed by the Supreme Court in regard to the interpretation of Section 76 of the H.R. and C. E. Act, Satyanarayana Rao, J. who spoke for the Court observed at p. 595 of the report: (at p. 642 of AIR) as follows:

'The audit fee prescribed by Section 76(2) stands on a different footing and it cannot be treated as tax'. That apart, the language of Section 76(2) does not warrant the proposition that the services should be first rendered before the audit fee is imposed. We will look at that section here:

'(2) Every religious institution, the annual income of which, for the fasli year immediately preceding as calculated for the purposes of the levy of contribution under Sub-section (1) is not less than one thousand rupees, shall pay to the Government annually, for meeting the cost, of auditing its accounts such further sum not exceeding one and a half per centum of its income as the Commissioner may determine'. .

All that Section 76(2) says is that every religious institution in enjoyment of a certain amount of income will be required to pay audit fee for meeting the cost of auditing its accounts. In other words, this fee is to be collected from the various institutions in the State to enable the Department to meet the expenses of auditing the accounts.

Nowhere in the section is it indicated that the actual auditing should precede the demand for the audit fee. If effect is to be given to this contention, it should lie within the powers of the archakas to evade payment of the audit fee. They may effectively prevent the department from having recourse to Section 76(2) by not producing their accounts at all for audit. Surely, that could not have been the intention of the legislature, in making this provision. It is true the Department is under no obligation to have the accounts of every institution audited as and when they are produced by persons in charge of accounts.

Rule 5 framed under Section 100 of the Act makes it incumbent upon the trustees to produce the accounts before the Commissioner who will forward them to the auditor appointed in this behalf. But the recourse to Section 76(2) need not be postponed till the production of the books by the trustees and the audit thereof. It follows that it is not a condition precedent to the levy of audit fee that the accounts of every institution should have been in fact audited. This contention also is equally inadmissible and has to be rejected.

15. The argument that in fact no auditors have been appointed by the Department does not deserve any consideration. For one thing, this was not set out as a ground for the issue of a Writ of Mandamus and, therefore, the Commissioner had no opportunity of meeting this allegation. Even otherwise, it is stated in one of the counter affidavits that, in fact, auditors were appointed district wise and they had been paid remunerations for auditing the accounts of all institutions.

16. For the reasons, we dissent from the view expressed by Umamaheswaram, J. in W. P. No. 58 of 1953. In appeal, this view of the learned Judge does not seem to have been canvassed. Their attention does not even seem to have been drawn to- the last sentence that the Writ is issued even with regard to the audit fee.

17. In the result, these Writ petitions are dismissed with costs. Advocate's fee Rs. 100/- in each.


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