P (PLP)

Over 5 H. P. but upto 20 H. P. Rs. 20 Over 20 but upto 50 H. P. Rs. 50 Over 50 Rs. 100 The plaintiffs protested against this, but paid the required fees under protest, then carried on correspondence, and eventually filed the present suit after giving the necessary notice of the suit. The main contention in the plaint is that section 230, clause (3) of the Karachi Municipal Corporation Act allows only a single fee and not an annual fee for permission under section 151 and that all conditions in the permission were unreasonable, illegal and ultra vires. It was also stated in the plaint that the fees demanded were extortionate and were in the nature of a tax. A number of pleas were raised in the written statement, including the one that the conditions mentioned in the permission were legal and that an annual fee was recoverable. A number of issues were raised, but the points argued before us in the appeal were (1) Whether a single fee was payable for permission granted under section 151 of the City of Karachi Municipal Act ; (2) Whether the conditions imposed by the permission were illegal, ultra vires and/or unreasonable. It appears that, in the trial Court, the case of the appellants was that the permission was granted under section 155 of the Act, but this contention was given up here by. Mr. Mahmood Hussain, who appeared for the defendants. He has conceded that the permission was not granted under section 155, but under sec tion

151. He has however, contended that, under section 230 (3) an annual fee may be charged at such rate as shall from time to time be fixed by the Chief Officer with the previous approval of the Standing Committee. The relevant portion of section 151 reads :‑ " No person shall newly establish .any factory except with the permission of the Standing Committee and in accordance with the terms and conditions stated‑in such permission. Clause (3) to section 230 reads :‑

" For every licence or permission a fee may be charged at such sate as shall from time to time be fixed by the Chief Officer with the previous approval of the Standing Committee." The permission sought in this case was to newly establish a factory. The important words in section 151 are " newly establish." Once a factory is established, its continuance cannot be called as establishing it. Section 230 clause (2) provides that a permission shall specify the period for which it is granted, in the case of a newly established factory. This will mean that the establishment of the factory would Make place within the period specified in the permission. No period has been specified in the permission granted by the Standing Committee. But it was argued that, by the mention of annual fee, it was implied that the period was to be from year to year, and that the renewal of the permission from year to .year depended on the payment of fresh fee each year. As said by the learned trial judge, what the Standing Committee did was to give the following permission: " We permit you to establish a factory. The period for which the permission is granted is as many years as you work the factory." There can, however, be no doubt that, once a factory has been established by permission and once the fee for it has been paid, by the non‑payment of an annual fee after the expiry of the first year of permission, the factory cannot be said to have been established without permission. Reading the two relevant sections, namely, section 151 and section 230 clause (3) together, we have no doubt in our minds that, for the purpose of newly establishing a factory, the act authorises only the charging of a single fee and not. an annual fee. An annual fee not being permitted by the Act, the question whether the annual fees levied on each machine constitute a tax, does not, therefore, necessarily arise in the decision, as said by the learned trial judge, though the authorities referred to clearly show that a Municipality is not entitled to regard and use fees as a method of taxation. Even the two cases reported in 1949 Mad. 236 and 1943 Mad. 193, relied on by Mr. Mahmood Hussain support this view. Coming to the conditions mentioned in the permission, the first condition says that the licensee shall conform to the terms and conditions of the licence to be issued by the Chief Officer. Section 151, however, says that it is the Standing Committee, and not the Chief Officer, who has to lay down the terms and conditions. The second condition is that the Standing Committee reserve to themselves the right to revoke the permission at any time without assigning any reason therefore. This condition was clearly unreasonable, because by this the Standing Committee could wait till the plaintiffs had established their factory and then at any time after that without assigning any reason therefore revoke the permission. There is the further point that section 151 of the Act requires that the terms and conditions, if any, must be stated in the permission. The appellants did not contend that, except in so for as Rs. 100 are leviable as the fee for such permission, this condition is legal. When the correspondence was produced in Court, it was found that the Chief Officer's notes did not suggest that each motor was required to have a separate fee levied in respect of it. There is the resolution itself to show that the Chief Officer had no power to levy fee upon each motor separately. No arguments were addressed to us on the other issues. The result, therefore, is that the judgment and decree of the lower Court is confirmed and the appeal is, dismissed with costs. A. H Appeal dismissed.