Ramaprasada Rao, CJ.
1. The writ petitioner is a company incorporated under the Indian Companies Act. It is a textile mill and a private limited company. For the year 1970-71, the petitioner paid Rs. 4, 318. 22 towards property tax, water tax and library cess to the Town Panchayat, Thachanallur, Tirunelveli district, which is the first respondent in the writ petition. For the year 1971-72, a general revision of the tax payable by the petitioner, among others, to the Panchayat was undertaken, and the tax was increased from Rs. 4, 318-22 to Rs. 5, 834-79. On representations made by the petitioner, a fresh assessment was made demanding a sum of Rs. 6,724-32, which comprised of property tax, water-tax and library cess, reckoned in the ratio of 1:0.50: 0.50. On further representations, the tax was reduced to Rs. 6,081 38. Inter alia this amount represents a sum of Rs. 1,736.20 towards water tax. While this was the position, another notice of demand was issued on 28th October, 1972, whereby a sum of Rs. 7,059-68 towards all the three taxes was demanded. This included a sum of Rs. 2,942 towards water-tax. It is the admitted case that the tax on water has been increased from the ratio of 0.50 to 0.75. The increase, according to the Panchayat, was due to the water supply scheme undertaken by the Panchayat at a cost of Rs. seventeen lakhs which was under execution. The petitioner again protested. In particular, the petitioner's case, so far as the increase in water tax was concerned, was that, since the Town Panchayat had at no time provided any water facility to the petitioner mills and as the water requirements of the entire mills was met from a big well inside the campus, there was no warrant for the levy of water tax at all. The petitioner has therefore come up to this Court for the issuance of a writ of mandamus as against the Panchayat restraining them from levying and collecting the sum of Rs. 2, 942, as water-tax under the relevant provisions of the Tamil Nadu Panchayats Act read with those under the Tamil Nadu Public Health Act.
2. The first contention of the petitioner is that, even assuming that such a levy is conceivable under the provisions of both the Acts, it is only in the nature of a fee for services to be rendered and that the levy is premature since no such service has been provided on the date when the impugned notice of demand was issued and that, in any event, the fee claimed cannot be said to be commensurate with the services which the Panchayat is likely to render to the petitioner mills.
3. Without prejudice to the above contentions, it is stated that, as a tax can be imposed only with the authority of law and as Entry 49 among other Entries, in List II of the Seventh Schedule to the Constitution of India does not enable the State Legislature to levy a tax on water or water supply by a Public Authority, such a levy is not authorised, and that, even assuming that the Acts referred to above enabled the first respondent to demand such a tax, such an imposition is beyond the legislative competence of the State Legislature.
4. It is also specifically alleged that Section 25 of the Public Health Act violates the fundamental right of the petitioner under Articles 14 and 19 of the Constitution.
5. In the counter affidavit filed on behalf of the first respondent as well as the second respondent, which is the State of Tamil Nadu, represented by the Secretary to Government, R.D.L.A. department, the fact that the demand was made as stated in the affidavit is not denied. In so far as water tax is concerned, reference is made to the proposal to execute a water supply scheme at a total cost of Rs. 17,00,000, and it is stated that, in order to augment the resources of the Panchayat and for the proper execution and maintenance of such a water supply scheme, it became necessary to increase the rate of water tax from 50 per cent to 75 per cent. It is further stated that the Panchayat is authorised to levy water tax with the prior sanction of the Government and that such a sanction has been obtained. (It is not disputed in this case that the water tax levied was so authorised by the Government). It is also stated that the water supply being intended for the general welfare of the people within the Town Panchayat and as it is one of the obligations of the Town Panchayat to provide protected water supply, the petitioner cannot deny such a service voluntarily by himself on the foot that it has enough and copious supply of water from its own well. It is for the petitioner to seek service connection for water from the Panchayat, but on that ground it cannot deny its liability to pay water tax
6. It will be convenient to refer to the relevant provisions of the Tamil Nadu Panchayats Act (XXXV of 1958) and the Tamil Nadu Public Health Act (III of 1939) for, the purpose of appreciating the relative contentions of the parties. Chapter III of the Panchayats Act deals with the functions and powers of the Panchayat. Section 63 (g) says that it is the duty of the Panchayat to make resonable provision for carrying out the requirements of the village or town in respect of the sinking and repairing of wells, the execution, repair and maintenance of ponds or tanks and the construction and maintenance of water works for the supply of water for Washing and bathing purposes etc Section 64 (j) of the Act deals with the power of the Panchayat to make such provisions as it thinks fit for carrying out the requirements of the village or town and inter alia refers to the construction of works of public utility and the provision of other facilities, for the safety, health, etc., of the inhabitants of the village or town. The Panchayats Act, as such, does not enumerate or enunciate as to what a water tax is, though Sections 120, 121 and 122 refer to house tax, profession tax and vehicle tax.
7. The Tamil Nadu Public Health Act, 1939, which is applicable to the entire State, and which is admittedly applicable to the Town Panchayat in question, defines a local authority as well as an urban local authority. 'Local authority', as defined in Section 3(20) means, in any area In a district as defined in the Madras Local Boards Act, 1920, which is comprised within the jurisdiction of a Panchayat (constituted under the Madras Village Panchayats Act, 1950), the Panchayat concerned. 'Urban local authority', as defined in Section 3(36) would include any Panchayat notified by the Government as an urban local authority for the purpose of the Act. Chapter III of the Public Health Act specifically deals with water supply. Section 17 authorises the local authority (in this case the first respondent) if the Government so directs, to provide or arrange for the provisions of a sufficient supply of drinking water for consumption by the inhabitants of the area within its jurisdiction. Such water supply, as far as practicable, should not only be adequate, but should also be continuous throughout the year besides being wholesome and fit for human consumption. Section 18 contemplates the local authority undertaking such water works, if so directed by the Government. In fact, Section 18 (2)(a) enables the local authority with the Sanction of the Government to construct water works for such supply of water, etc. Section 25, which is the charging section, reads as follows, --
25. (1) Any local authority may, with the previous sanction of the Government, and shall, if so directed by them, levy within its area or any part thereof any tax which may be necessary for providing water supply in such area or part;
(2) Any tax levied under Sub-section (1) may be a new tax levied on such basis assessed and realised in such manner as may be sanctioned or directed by the Government, or may be a tax or additional tax levied under any head of taxation specified in any law for the time being in force governing the local authority concerned in which case all the provisions of such law relating to the incidence, assessment or realisation of a tax under such head or in any manner connected therewith shall be applicable to the tax or additional tax with such modifications and restrictions, if any, as may be prescribed;
(3)(a) The rates at which any tax may be levied under this section shall be determined by the local authority with the previous sanction of the Government in case the tax is levied by the local authority of its own motion and by the Government, in case the tax is levied at their discretion.
(b) The local authority may, with the previous sanction of the Government, and shall, if so directed by them, alter the rates at which any such tax is to be levied.
(4)(a) Every local authority levying a tax under this section shall earmark the net revenue therefrom for expenditure on the execution, maintenance and improvement of works of water supply in the local area or part thereof within which it is levied.
(b) Such revenue shall be expended in accordance with such orders as may be issued by the Government in this behalf.
(5) Nothing contained in this section shall be deemed to affect the power of the Corporation of Madras to levy a water and drainage tax under Section 99 (1)(b) of the Madras City Municipal Act, 1919, or of any municipality governed by the Madras District Municipalities Act, 1920, to levy a water and drainage tax under Section 81 (1)(b) of that Act or of any local board governed by the Madras Local Boards Act, 1920 to levy an additional house tax; under Rule 19 of Schedule IV to that Act for any purpose specified in that Rule.
This is the charging Section which enables the local authority, with the sanction of the Government, to levy such water tax which may be necessary for providing water supply in the concerned area. Section 20 (6) says that, if a water tax is levied under Section 25, the cost of carrying out the water works relatable to such area shall be borne by the local authority concerned.
8. The first challenge on the demand for water tax is on the ground that it is in the nature of a fee and not a tax. It is by now well-established that a fee in different from a tax. In the case of a fee an element of quid pro quo is always present, and the fee should reasonably be commensurate with the service rendered by the fee levying authority. If such a fee is ex facie disproportionate and arbitrary, then Courts will not hesitate to interfere and declare such a levy as an unauthorised one. Tax, however, connotes a totally different concept. It should be an imposition authorised by law and levied by the appropriate statutory authority. It takes into its told all impositions made by the appropriate authority, when authorised by the appropriate legislature. It may be against the person, privilege, occupation or enjoyment of the people, as the essential purpose of such imposition is to augment public revenue. The only test to find out whether a tax is legal or not is to see whether under the appropriate legislation, a provision for such a charging section has been made, and, if it is so found, then the imposition of such a tax slopes from the legislative competence of the State.
9. The contention of Mr. Manivannan, learned Counsel for the petitioner, is that, as the Panchayats Act, by itself, does not provide for the imposition of water tax, the power said to be derivable by invoking Section 25 of the Public Health Act which is a different Act, is neither reasonable nor plausible. As it is common to legislate by incorporation, the provisions of the Public Health Act, by reason of such incorporation have become inbuilt into the provisions of the Panchayats Act as well. We have already referred to the relevant provisions of the Public Health Act which enable the levy of water tax (Section 25). It is not in dispute in this case that the Government has sanctioned the levy and that sanction was prompted because of the fact that water works of a substantial magnitude, costing about Rs. Seventeen lakhs, has been undertaken by the Panchayat, first respondent. The Public Health Act defines 'local authority' as including the Panchayat concerned, governed by the Tamil Nadu Village Panchayats Act. It, therefore, follows that the first respondent can impose water tax, notwithstanding the fact that no specific provision for the imposition of such tax has been expressly made, as is provided for in Sections 99 to 102 of the Tamil Nadu City Municipal Corporation Act, 1919, or under Section 81 of the Tamil Nadu District Municipalities Act. The question whether it is a fee or tax is thus answered by the fact that it is a tax, because the levy or imposition is eo nomine termed as 'tax' and not as 'fee'. As early as Municipal Commissioners v. Parthasarathi I.L.R.(1888) Mad. 341. where a public levy was imposed, in similar circumstances, it was pointed out that the sole Judge was the local authority.
10. In Municipal Council v. Prasadarayudu : AIR1936Mad857 . Varadachariar, J., observed:
Under what circumstances a water and drainage tax should be permitted to be levied in connection with works to come into existence in the future is a matter for the discretion of the Municipal body and of the Government and not a matter affecting the legality of the levy of the tax, if the Municipal body chose to levy the tax.
We are unable to accept that, in such circumstances, the impost should be treated as a fee. It is in public interests that water tax is levied.
11. In a Bench decision of this Court in Corporation of Madras v. Sundaram : (1970)2MLJ348 . Veeraswami, CJ., forcibly expressed himself thus --
It is well-settled principle that, where a public body is vested with a power or discretion, it is for exercise and not for inaction, and it is especially so, when the power or discretion has been vested for the benefit of those who will be affected by its non-exercise.
It was further observed that, merely because property tax is levied inclusive of water and drainage tax, though no facilities have been provided for, it cannot be regarded as illegal and no owner of property can, on that as sumption, withhold any part of the tax as if it were attributable to water and drainage not provided for in the area in which the property is situate.
12. We are, therefore, unable to agree with the contention that the executory nature of the waterworks would not enable the Panchayat to demand the impost, provided it derives such authority to make the demand on the inhabitants within the Panchayat and so long as it has been sanctioned by the Government and if such waterworks are undertaken for the benefit of the inhabitants of the area
13. The Legislature was competent to provide for the imposition of such water-tax by virtue of the Entries in List II of the Seventh Schedule to the Constitution. We are here concerned with Entry 49 in List II which speaks of taxes on lands and buildings. On the language of the Entry, the contention of Mr. Manivannan is that provision of water is something which is independent of land and building and that, therefore, water-tax as such cannot be compartmentalised as if it were a tax on land and building. There is an inherent fallacy in this contention. We have already seen that water-tax is always made relatable to land or building. In fact, the rate per cent of water-tax is reckoned with reference to the quantum of propery tax on the land or building in question within the Panchayat, Municipality or Corporation. Though the expression 'water-tax' is loosely adopted, as if it were a tax on water, in substance and in effect it is a tax on land and building and the owners of such lands and buildings.
14. In (Morris) Leventhal v. David Jones Ltd. . a bridge tax was upheld by the Privy Councils as a land tax, because the nexus between the tax and the land and building was so demons-trably appreciable. Even so, therefore when water-tax is imposed in order to subserve public interests and in exercise of a public duty or obligation, so as to subserve the needs of the inhabitants of the Panchayat, who own lands and buildings in that area; then also it cannot be disputed that it is not a tax on land and building. A Division Bench of the Andhra Pradesh High Court in Nizam Sugar Factory v. Bodhan Municipality : AIR1965AP91 ; has squarely held that water-tax on land and building would come under Entry 49 in List II of the Seventh Schedule to the Constitution. We respectfully agree with the view of the learned Judge.
15. The subject-matter can also be considered from a slightly different perspective. In Municipal Council, Madurai v. Narayanan : 1SCR333 . Krishna lyer, J. (speaking for the Court) in his inimitable style, observed --
In Liberty Cinema : 2SCR477 . this Court had occasion to warn against reaching any conclusion, when there is a tax fee conflict, based on collocation of subjects in a statute or the placement of a provision under a certain rubric as clinching. What is telling is the totality, not some isolated indicium. A short cut is often a wrong cut and a fuller study of the statute to be construed cannot be avoided.
Once a legal nexus between the tax imposed on the land or building on which the water works are undertaken is established, then such a connection between the land and the tax thereon in a given case gives the clue to judge whether it is a tax on land or building. Undoubtedly, water-tax, which is inextricably connected with the land within the jurisdiction of the Panchayat, cannot be said to be so dissociated from such land or building.
16. In Anant Mills v. State of Gujarat : 3SCR220 . where water pipes and electric cables were implanted underneath the land, and the objection was that, because of such interception, such land or property could not be taxed under Entry 49 of the State List, the Supreme Court observed:
Mr. Tarkunde on behalf of the petitioner-company has urged that under Entry 49 of the State List in the Seventh Schedule to the Constitution, the State Legislature is empowered to enact a law relating to taxes on lands and buildings. It is submitted that the State Legislature has no competence under the above Entry to enact a law for levying tax in respect of the area occupied by the underground supply lines. The word 'land according to the learned Counsel, denotes the surface of the land and not the underground strata. We are unable to accede to the above submission. Entry 49 of List II contemplates a levy of tax on lands and buildings or both as a unit. Such tax is directly imposed on lands and buildings and bears a definite relation to it. Section 129 makes provision for the levy of property tax on buildings and lands. Section 139 merely specifies the persons who would be primarily responsible for the payment of that tax. The word 'land' includes not only the surface of the earth but every thing under or over it, and has in its legal signification an indefinite extent upward and downward, giving rise to the maxim cujusest solum efus est usque ad coelum (See pp 163 -- 73 Corpus Juris Secundum). According to Broom's Legal Maxims, 10th Edn. p. 259. Not only has land in its legal signification an indefinite extent upwards, but in law it extends also downwards, so that whatever is in a direct line between the surface and the centre of the earth by the common law belongs to the owner of the surface (not merely the surface, but all the land down to the centre of the earth and upto the heavens) and hence the word 'land' which is nomen generatissimum, includes, not only the surface of the earth, but everything under it or over it.
17. Thus it is seen that when once a levy is authorised under the relevant provisions of both the Panchayats Act and the Public Health Act, it is not for the owner of the land and building to challenge it on the only ground that such water-supply is not useful to him, having regard to the copious supply of water from his own well inside the mill campus. So long as a nexus is established between such water-works or water supply undertaken by the Panchayat, pursuant to its statutory obligations under the Act, and the land or building, and as long as it is in public interest and intended to serve the generality of the public, then the totality of the purpose and meaning of such levy has to be looked into for finding out whether it would come under Entry 49 of List II of the Seventh Schedule. We have no hesitation to hold that such tax is nut only authorised, but is also a legal one and that the Legislature had the requisite competence to impose such a tax in the exercise of their legislative power which is derived from Entry 49 as above. We, therefore, hold that Section 25 of the Public Health Act and the ancillary provisions connected with it in the Public Health Act, and in turn incorporated in the Panchayats Act, are valid and that they have been validly legislated upon.
18. For the reasons stated above, we are unable to issue a writ of mandamus as asked for by the petitioner, as a writ of mandamus is a high prerogative, writ, which is not granted for the mere asking of it. The hypothesis and the basic requirements for the issue of such a writ are that a public body is refusing to do its public duty or it is acting in excess ot its authority or is openly violating the principles of natural justice. From the records, it should be apparent that the aggrieved party has a legal right to compel or enforce the performance ot a correlative duty on the part of the public body. Such a right or duty need not always slope from the provisions of the Constitution, but may be founded on statute or law. Courts will be reluctant to issue the prerogative writ of mandamus unless the legal right ot the petitioner and the legal duty ot the respondent are of a public nature. We have already seen that the petitioner has no such legal right to compel the first respondent not to make a demand on him for water tax. Such a right to impose a levy is not only authorised under the relevant statute, as already referred to but is also a legal duty on the part of the firs, respondent to make such a demand, that being in public interest to do so.
19. The writ petition, therefore, fails and is dismissed with costs. Counsel's fee Rs. 200.