Holding

The royalty imposed on timber from private forests is a tax, and the District Council lacks constitutional authority under the Sixth Schedule to levy it, rendering the notification ultra vires.

Summary

The District Council of Jowai issued a notification fixing a royalty on timber harvested from private forests within its jurisdiction. Forest contractors challenged the levy, arguing it was a tax that the Council was not empowered to impose under the Constitution’s Sixth Schedule. The Supreme Court examined whether the levy constituted a royalty, fee, or tax and whether the Council had authority under Paragraphs 3 and 8 of the Sixth Schedule to collect it. It held that the amount was a compulsory exaction in the nature of a tax and that the Council lacked constitutional power to levy such a tax on private forest produce. Consequently, the notification was declared ultra vires and the appeals by the Council were dismissed, although the Court clarified that fees could be levied under Paragraph 3 if justified.

Issues considered

Whether the District Council of Jowai has authority under the Sixth Schedule to levy a royalty on timber from private forests.
Whether the levy imposed is a royalty, fee, or tax within the meaning of Paragraph 8 of the Sixth Schedule.
Whether the Council can levy fees for services rendered under Paragraph 3 of the Sixth Schedule.
Whether the forests in question qualify as private forests under the 1958 Act.
Whether the notification issued under Section 8 of the 1958 Act is ultra vires.

Legislation cited

Assam Forest Regulation, 1891
Assam Reorganisation (Meghalaya) Act, 1969
Constitution of Indias. Art. 244(2), s. Sixth Schedule (Paragraphs 3 & 8)
Jowai Autonomous District (Administration) Act, 1967
North-Eastern Areas (Reorganisation) Act, 1971
United Khasi and Jaintia Hills Autonomous District (Management and Control of Forests) Act, 1958s. 11, s. 13, s. 3, s. 4, s. 8

Subjects

taxroyaltyprivate forestSixth ScheduleDistrict Councilconstitutional validityfeeforest management

Judgment

A

DISTRICT COUNCIL OF THE JOWAI
v.
DWET SINGH RYMBAI ETC.
B
AUGUST 14, 1986

[E.S. VENKATARAMIAH AND G.L. OZA, JJ.]

United Khasi and Jaintia Hills Autonomous District (Manage-
ment and Control of Forests) Act, 1958-ss. 3, 4, 8, 1{ & 13 and Jowai
Autonomous District (Administration) Act, 1967-Royalty on timber
c
brought from_p~ivate forests-Whether in the 'nature of a tax-Whether
constitutionally valid.

Constitution of India, Art. 244' (2)/Sixth Schedule, Paragraphs 3
and 8-Nature and scope of powers of District Councils-Competency D
to levy fees.

The Autonomous District of Jowai, which was previously as sub-
division of the United Khasi Jaintia Autonomous District, took the
shape of an autonomous district with effect from December 1, 1964
pursuant to a notification issued by ·the Governor of Assam on E
November 23, 1964.

The District Council came into being on March 23, 1967 and in
that very ye!ll' it passed the Jowai Autonomous District (Administra-
tion) Act, 1967. By virtue of s. 3 of that Act, the United Khasi and
J aintia Hills Autonomous District (Management and Control of F
Forests) Act, 1958 and the Rules'..framed under it, were adopted and
made applicable to the Autonomous District of Jowai. Subseq11ently, on
April 20, 1968 the Secretary of the Executive Committee of the District
Council. issued a notification in exercise of its power under s. 8 of the
latter Act fixing the rates of royalty chargeable on red pine, white pine
and log pine timber grown in the private forests situated within the G
jurisdiction of the District Council. . ' .
The respondents having become liable to pay the royalty, as
specified in the Notification, instituted writ petition in the High Court,
questioning the oompetence of the District Council and its Executive
Committee and Officers to levy royality on the timber that came frorr H

569
570 SUPREME COURT REPORTS [1986] 3 S.C.R.

A private forests within its jurisdiction, contending that the royalty, in
question, which was in the nature of tax was not leviable by the District
Council since it had no authority under the Constitution and the laws
made thereunder to impose the said levy.

The District Council contested the writ petitions contending that
B
since the private forests were also under its management and control
under the provisions of the law in force in that area, it was open to it to
levy the royalty even though it may be in the nature of a tax, and that
even though a tax cannot be levied on the trees grown in private forests,
since the District Council had the competence to levy tax on lands and
buildings, the trees in the private forests being grown on such land the
c tax in question could be treated as tax on land which it was entitled to
levy. It was further 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 Council in connection with the management
and control of the private forests; that the forests in question were not
private forests and so the respondents could not maintain the petition at
D
all.

The High Court found that the forests in question were private
forests and held that the District Council had no constitutional author-
ity to impose either royality or tax or fee on these forests and that the
notification dated 20th April, 1968 issued under s. 8 of the Act was ultra
E ·vires and not sanctioned by the Sixth Schedule of the Constitution, arid
issued a writ of mandamus restraining the District Council from realis-
ing royality from the petitioner-respondents in respect of timber ex-
tracted by them from the two private forests situated within the juris-
diction of the District Council.
F In the appeals to this Court by special leave by the District
Council, on the question of the colIBtitutional validity of the Notification
dated April 20, 1968 and whether the royality levied could be realised
by the District Council in respect of trees in private forests.

Dismissing the Appeals, the Court,
G
HELD: 1. What is sought to be recovered under the Act is not
royalty since the forest does not belong to the District Council. The
amount claimed is a compulsory exaction of money by a public author-
ity for public purposes enforceable by law and is not a payment for
services rendered. It is truly, in the nature of a tax. [584C-DJ
H
DISTRICT COUNCIL v. D.S. RYMBAI 571

2. Section 4 of the United Khasi and Jaintia Hills Autonomous A
District (Management and Control of Forests) Act, 1958 which pro-
hibits removal of forest produce except on payment of royalty, refers to
protected Forests, Green Blocks and Raid Forests. It does not refer to
private forests. Section 8 of the Act, under which the impugned notifi-
cation. is issued merely says that the Executive Committee may make B
· rules fixing the rates of royalty for each class of trees, timber or forest
produce. [582G-H; 58fA]

3. Paragraph 3 of the Sixth Schedule to the Constitution does not
contain any subject which authorises the District and Regional Councils
to levy taxes. It confers powers on the said Councils to make laws only
to regulate matters specified thereiii~· The subjects relating to taxation c
are dealt with separately in Paragraph 8. [585D I

( 4.1 The levy in question does not come within subparagraphs ( 1)
and (2) of Paragraph 8, which authorised levy of tax on lands and
buildings. If the levy is land revenue then it should have been fixed in D
accordance with the principles for the time being followed by the Gov-
ernment of the State in assessing lands for the purpose of land revenue .
as required by. sub-paragraph (I). It cannot be sustained as any other
kind of tax on land since the royalty pay3ble has no reference to the extent
of the land and the nature of the land and its potentialities. [584E-G]
E .
K. T. Moopil Nair v. The State of Kera/a & Ors., [1961] 3 S.C.R.
77, distinguiShed. ·

4.2 The royalty in question is not covered by els. (a) and (c) of
Paragraph 8(3) either, for it cannot be said to be a tax on profession,
trade, l;,.11ing arid employment or a tax on the entry of goods into the
market for Sale therein. The appellants have not been able to establish that F
t~e impugned royalty was leviable under any other provision. [584D-E]

4.3 The levy 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, but it has no reference to the
G
land on which those trees have grown. The District Council has no
power to levy s.uch a tax on forest produce under Paragraph 8. [S84G-H]

5. ·Though Paragraphs 3 and 8 of the Sixth Schedule of I.he Con-
stitution follow almost the same pattern in which the subjects in List I ·
and List II of the Seventh Schedule to the Constitution have been en-
H
572 SUPREME COURT REPORTS [1986] 3 S.C.R.

A umerated, the legislative powers in respect of certain topics mentioned
in Paragraph 3 and the power to levy taxes specified in Paragraph 8 of
the Sixth Schedule enjoyed by the 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. [580B-C] .
B
District Council of United Khasi & Jaintia Hills & (i)rs. Etc. v.
Miss Sitimon Sawian Etc., [1972] I S.C.R. 398 at page 407, referred to .

.6. The High Court erred in holding that even fees could not be
levied under Paragraph 3 of the Sixth Schedule. The Act was enacted
c for the purpose of making provisions regarding the management. and
the control of forests in exercise of the powers conferred by Paragraph
3(l)(b). There is no specific reference to the power to levy any fees in
respect of any matter mentioned in Paragraph 3 similar to the corres-
ponding provisions in the penultimate entry in List I and the last entry
in the other two Lists in the Seventh Schedule to the Constituti9n. But
D
having regard to the nature of a fee, which is an amount levied as quid
pro quo for services rendered, the power to levy fees in respect of any of
the matters mentioned in Paragraph 3 should be necessarily implied.
But such fee should not be disproportionately very high, i.e., a tax in
disguise. Therefore, even though there is no express provision to levy
such fees, the District Council can levy fees ·under Paragraph 3. But
E
that would not save the Notification since there is no material placed
before the Court to uphold it on that ground. In the absence of any
evidence showing the expenses incurred by the District Council towards ·
the services rendered and the total amount of royalty realised by it levy
cannot be upheld even as a fee. [5850-F]
F
The Commissioner, Hindu Religious Endowments, Madras v. Sri
Lakshmindra Thirtha Swamiar of Sri Shimr Mutt, [1954] S.C.R. 1005 and
Om Parkash Agarwal and Ors. v. Giri Raj Kishori and Ors., [1986] I
.S.C.C. 722, referred to.

7.. The Hi!l1' Court rightly held that the forests in question were
G
private forests. It has not been shown by the appellants that they belong
to any other category of forests referred to in s. 3 of the Act. The
Notification 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
H private forests. [585G-H]
DISTRICT COUNCIL v. D.S. RYMBAI [VENKATRAMIAH, J. [ 573

--_.. CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
2069-70 of 1972
A

From the Judgment and Order dated 31.7.1972 of the Gauhati
High Court in Civil Rule Nos. 477 and 483 of 1968,
B
D.N. Mukherjee and Rajan Mukherjee for the Appellants.

S.K. Nandy for the Respondents.

The Judgment of the Court was delivered by

VENKATARAMIAH, J. Civil Appeal Nos. 2069 of 1972 and 2070 c
of -1972 by special leave are filed against the common Judgment dated·
31.7 .1972 in Civil Rule Nos. 477 of 1968 and 483 of 1968 respectively on
the file of the High Court of Assam, Nagaland, Meghalaya, Manipur &
Tripura. Since common questions of law arise for consideration in these
two cases, they are disposed of by this common judgment.
D
The respondents in these two appeals are forest contractors and
they were operating in two forests called Lum Langkaraw and Lumk-
hliem Moriap 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 refer-
red to as 'the District Council')-Appellant No. 1 herein. On April 20,
E
1968 the Secretary of the Executive Committee of the District Council
issued a notification levying royalty in exercise of its power under the
United Khasi and Jaintia Hills Autonomous Districts (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
F
.the private forests situated within the jurisdiction of the District
Council at the rates specified therein. The Notification reads thus:

"No. JAD/FOR/68/26Dated, Jowai, April20, 1968.

In exercise of the power conferred under Section 8 of
G
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 Dis-
trict Council is pleased to fix a flat Rate of Royalty for
both red pine and white pine a 80 P. per cubit foot for all H
...
574 SUPREME COURT REPORTS 11986] 3 S.C.R.

A the squared log 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 Royalty is fixed at half of the above
B scheduled rate, i.e., 40 P. per cft. The above rates will
take immediate effect and modify Rule 2 of the U .K. and J.
Hills Autonomous Dist!. (Management and Control of
Forests Rates of Royalty) Rules, 1959 as far as its applica-
tion to white pines and red pines is concerned. This
supercedes all orders on the subject.

c Sd/-D. Passah
Secretary, Executive Committee
District Council
Jowai Autonomous District Jowai"

As the respondents became liable to pay the royalty, as specified in
D
the Notification, they instituted the writ petitions in the High 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 Notification on the timber that came
from private forests within its jurisdiction. The respondents, among
other pleas contended that the royalty, in question, which was in the
E
nature of tax was not leviable by the District Council since it had no
authority under the Constitution and the laws made thereunder to
impose the said levy. On behalf of the District Council it was con-
tended 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 hereaf-
F
ter, 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 Council 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
G
was, therefore, entitled to levy. It was text 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 Council 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 maintain the petition at all. After hearing
H
DISTRICT COUNCIL v. D.S. RYMBAI [VENKATARAMIAH, J.] 575

the learned counsel for the parties, the High Court found that the A
forests in question were private forests and further held that the Dis-
trict Council had no constitutional authority to impose either royalty
or tax or fee on private forests and that the Notification dated 20th
April, 1968 issued under section 8 of the Act was ultra vires and not
sanctioned by the Sixth Schedule of the Constitution ..As a consequ-
B
. ence of the above finding, the High Court issued a writ of mandamus
to the appellants (respondents in the writ petitions) restraining them
from realising royalty from the respondents in respect of timber ex-
tracted by them from the two forests, referred to above.

Aggrieved by the judgments/orders passed by the High Court in
the said writ petitions, the District Council and others who were res- c
pondents in the writ petitions, have preferred these appeals to this
Court by special leave.

The Autonomous District of Jowai was previously a sub-division
of the United Khasi Jaintia Autonomous District and took.the present , D
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 Autonomous 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 Autonom-
E
-0us District of Jowai. Subsequently, on April 20, 1968 the.Executive
Committee of the District Council issued the impugned notification
which is set out above in exercise or its powers conferred by section 8
of the Act, fixing the rates of royalty chargeable on the different types
of timber mentioned therein at the rates specified in it.

t In these appeals we are concerned with the constitutional validity
F
of the abovesaid notification. The area ·which lies within the jurisidc-
tion of tM District Council is a tribal area, which originally formed
part of the State of Assam. Part X of the Constitution provides for the
administratfon of the Scheduled and Tribal Areas. Clause (2) of Arti-
cle 244 of the Constitution, as it was originally enacted., reads thus:
G
"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 H
576 SUPREME COURT REPORTS [19861 3 S.C.R.

A 1969) the autonomous State of Meghalaya was formed within the State
of Assam comprising the territories which formed part of the Auto-
nomous District of United Khasi-Jaintla Hills including Jowai Auto-
nomous District and the Garo Hills. Certain provisions of the Sixth
Schedule to the Constitution were amended by the said Act and the
B same were brought into force from April 2, 1970. By the North-
Eastern Areas (Reorganisation) Act, 1971 the new State of Meghalaya
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 January 21, 1972.

Article 244(2) of the Constitution, with effect from January 21, )
c 1972, reads thus: I

"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."
D
The Sixth Schedule of the Constitutions, as it now stands, is
entitled 'Provisions as to the Administration of Tribal Areas in the
States of Assam and Meghalaya and in the Union Territory of
Mizoram'. The provisions of that Schedule with which we are con-
cerned have not undergone any material change although there have
E been several amendments in that Schedule since th~ commencement of
the Constitution. They are applicable to the tribal areas within the
jurisdiction of the District Council of Jowai-Appellant No. 1 in these
appeals.

F
Paragraph 1 of the Sixth Schedule to the Constitution provides
that subject to the provisions of thatparagraph, the tribal areas in each
item of Parts I, II and III of the table appended to paragraph 20 of that
'1
Schedule shail be an autonomous District. If there are different
Scheduled Tribes in an autonomous district, the Governor may, by
public notification divide the area or area8 inhabited by them into
autouomous regions. The Governor has been given power to alter the
boundaries of the autonomous districts and the procedure for doing
G
reorganisation of the autonomous district is given in sub-paragraph (3)
of Paragraph 1 of the Sixth Schedule to the Constitution. Paragraph 2 of
that Schedule provides that there shall be 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
H
DISTRICT COUNCIL v. D.S. RYMBAI [VENKATARAMIAH, J.] 577

rest shall be elected on the basis of adult suffrage. There shall be a A
.__"?tf .
separate ·Regional Council for each area constituted an autonomous re-
gion under sub-paragraph (2) of Paragraph 1 of that Schedule. Each
District Council and each Regional Council shall be a body corporate by
the name respectively of "the District Council of (name of district)" and
"the Regional Council of (name of region}'', shall have perpetual B .
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 shall, insofar as it is not vested under that
Schedule in any Regional Council within such district, be vested in the
District Council for such district and the administration of an auto-
- (, nomous region shall be vested in the Regional Council for such region.
In an aufonomous district with Regional Councils, the District,Council c
shall have only such powers with respect to the areas under the author-
ity 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 Jowai Autonomous
District-Appellant No. 1 is one such District Council. But as men-
D
tioned earlier it was a part of the United Khasi-Jaintia Hills Auto-
nomous district prior to December, J, i964.

Paragraphs 3 and 8 of the Sixth Schedule to the Constitution read
thus:
E
"3. Powers of the District Councils and Reginnal Councils
to make laws.-(1) The Regional Council for an autono-
mous region in respect of all areas within such region and the
District Council for an autonomous district in respect of all
areas withjn the district except those which are under the
·~. authority of Regional Councils; if any, within the district
F
' 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 graz1ng .or for
residential or other non-agricultural purpoiiCS or fo.r any G'
other purpose likely to promote the interests of the inhabit'
ants of any village or town:

Provided that nothing in such laws shall prevent the
compulsory acquisition of any land, whether occupied or
unoccupied, for public purposes (by the Government of the .H
578 SUPREME COURT REPORTS [1986) 3 S.C..R.

A State concerned) in accordance with the law for the time
being in force authorising such acquisition;

{b) the management of any forest not bein.g a
reserved forest;
B
( 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;

c (e) the establishment of village or town committees
or councils and their powers;

(f) any other matter relating to village or to"\11 ad-
ministration, including village or town police and public
D
health and sanitation;

(g) the appointment or succession of Chiefs or
Headmen;

(h) the inheritance of property;
E
(i) marriage and divorce;

(j) social customs.

{2). In this paragraph, a 'reserved forest' means any area
F which is a reserved forest under the Assam Forest Regula-
tion, 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 be submitted
forthwith to-the Governor and; until assented to by him;
G
shall have no effect."

"8. Powers to assess and collect land revenue and to impose
taxes.-{1) The Regional Council for an autonomous re-
gion in respect of all lands within such region and the Dis-
trict Council for an autonomous district in respect of all
H , district except those which are in the areas
.lands within the
DISTRICT COUNCIL v. D.S. RYMBAI [VENKATARAMIAH, J.l. 579

under the authority of Regional Councils, if any, within the A
district, shall have the power 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. B

(2) The Regional Council for an autonomous region in res-
pect to areas within such region and the District Council
for an auionomous district in respect of all areas in the
district except those which are under the authority of Re-
gional Councils, if any, within the district, shall have power
to levy and collect taxes on lands and buildings, and tolls on c
persons resident within such areas.

(3) The District Council for an autonomous district shall
have the power to levy and collect all or any of the follow-
ing taxes within such district, that is to say- D
(a) taxes on professions, trades, callings and emp-
loyments;

(b) taxes on animals, vehicles and boats;
E
(c} taxes on the entry of goods into a market for sale
therein, and tolls on passengers and goods carried in fer-
ries; and

(d) taxes for the maintenance of schools, dispensa-
ries of roads.
F
(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-paragraphs
(2) and (3)° of this paragraph and every· such regulation
shall be submitted forthwith to the Governor and, until G
assented to by him, shallhave no effect."

I( is seen from Paragraph 3 and Paragraph 8 of the Sixth
Schedule to the Constitution set out above that the District Councils
and Regional Councils in addition to specified executive functions
conferred on them by the other Paragraphs in that Sc)ledule have been H
580 SUPREME COURT REPORTS [1986] 3 S.C. R.

A given legislative powers in respect of certain topics mentioned in
Paragraph 3 and the power to levy the taxes specified in Paragraph 8 of
that Schedule. The powers en joyed 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
ll
make laws. (Vide District Council of United Khasi '& Jaintia Hills &
Ors. Etc. v. Miss Sitimon Sawian Etc.) [1972] l S.C.R. 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 I and List II of the
Seventh Schedule to the Constitution have been enumerated. While
the subjects relating to taxation are dealt with separately in Paragraph
c 8, Paragraph 3 does not contain any subject which authorises the Dis-
trict and Regional Cquncils to levy taxes. Paragraph 3 confers powers
on the said Councils to make laws only to regulate matters specified
therein. Paragraph 3(1)(b) empowers the District Council to make
laws with respect to the management of any forest not being a reserved
forest. Paragraph 3(2) defines a 'reserved forest' as any area which is a
D
reserved forest under the Assam Forest Regulation, 1891 or uuder any
other law for the time being in force, in the area in question. It may
also be noted that there is no specific reference to the power to levy
any fees in respect of any matter mentioned in Paragraph 3 in the
Sixth Schedule to the Constitution similar to the corresponding provi-
sions in the penultimate entry in List I and the last entry in the other
E
two List~ in the Seventh Schedule to the Constitution. But having
regard to the nature of a fee, which is an amount levied as quid pro quo
for services rendered, the power to levy fees i.n respect of any of the
matters mentioned in Paragraph 3 should be necessarily implied. But
such fee should not be disproportionately very high, i.e., a tax in dis-· ,~

guise. The Act was enacted for the purpose of making provisions re-
F
garding the management and the control of 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 Schedule to the Constitution.

Section 3 of the Act refers to six different kinds of forests. That
G
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 lo an
H
DISTRICT COUNCIL v. D.S. RYMBAI [VENKATARAMIAH, J.] • 581

individual or clan or joint clans which are grown or in- A
f
herited by him or them in recognised Private lands (Ri
Kynti);

(b) Law-Ri-Summar-These are forests belonging to an
individual clan or joint clans (which are) grown (or in- B
herited) 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 purpose~ and hith.erto man-
aged or controlled by the Lyngdoh or other person or
persons to whom the religious ceremonies for the particular c
locality or village or villagers are entrusted.

'. Explanation: Lyngdoh in this particular respect is a religi-
ous head and not the administrative head mentioned in
section 2(r).
D'
(iii) Lawcadong 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 headmen with the help of the Village Durbar.
E
(iv) Protected Forests: These. are areas already declared
protected fo.r the growth of trees for the benefit of the local
inhabitants and also forests that may be so declared by
rules under this Act.

(v) 'Green Blocks: These are forests belonging to an indi-
F
vidual family or clan or joint clans and raj lands already
declared as Green Block by Governments for aesthetic
· beauty and water supply of the town of Shillong and its
suburbs and also forests that may be declared by rules un-
der this Act.
G
(vi) Raid Forests: These are forests managed by the Raid
and under the control of the local adminis\rative head sub-
ject to rules to be prescribed by the District Council."

S'eciion 4(a) of the Act provides that Private Forests and Law-R·i-
Sumar which are mentioned in section 3(i)(a) and (b) of the Act shall H
582' SUPREME COURT REPORTS [1986] 3 S.C.R.

A be managed by the owners thereof subject to the rules that may be
framed by District Council from time to time in the general interest of '"I
the forestry of the district. Privaie Forests are forests belonging to an
individual or clan or joint clans which are grown or inherited by him or
them in recognised private land (Ri Kynti). In section 4 of the Act, as
B 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 Officer of
the District Council which order may be given only on pre-
c vious receipt of the royalty on such timber or forest pro-
duce at rates as may be prescribed by the District CYouncil.

Provided:

D (i) that the royalty on timbers of reserved trees from Raid
Forests 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 build-
ing purpose only;

·.E (ii) that no royalty shall be charged for the removal of
timber from Green Blocks by the owners thereof, or for the
removal of the timber or any forest produce from a Raid
'-, Forest by the members of the Raid for their own domestic
use;

F (iii) that all royalty realised shall be credited to the District ~
Fund;

(iv) that the District Council shall· quarterly give to th~
Siemships, Dolloiships and Sirdarships a share of the roy-
aliy at a percentage to be prescribed by it."
G
It may be noticed that the abov.e part of section 4 of the Act
refers 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 Forests. Section 8 of the Act under which the impugned notifi-
H cation is issued merely says that the Executive Committee may make
DISTRICT COUNCIL v. D.S. RYMBAI [VENKATARAMIAH, J.) -583

rules fixing·the rates of royalty for each class of trees, timber or fprest A
produce which shall be published in the Assam Gazette. Section 11 of
the Act refers to royalty. payable in respect· of timber in Private
Forests. It reads thus:

"11. AIJ timber or forest produce removed from Private B
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;
(
!
I Provided tbat the Executive Committee may direct c
that any rule made owder 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 the D
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-
E
(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 .;r otherwise of any
trees, the sawing conversion and removal and the collec- F
tion and removal of other forest produce;

(c) regulate or prohibit ihe boiling of catechu or the burn-
ing of lime or charcoal;

(d) regulate or. prohi bi\ the cutting of grass and pasturing G
of cattle and regulate the payment, if any, to be made for
such cutting or pasturing;

\ (e) regulate the sale or free grant of forest produce; and

(.f) prescribe or authorise any forest officer to prescribe H
584 SUPREME COURT REPORTS (1986) 3 S.C.R.
I
I . . .
A subject' to the control of the Executive Committee, the
fees, royalties for other payments for forest produce, and
the manner in which such fees, royalties, or c '.her payments
are to be levied, in transit or partly in transit or otherwise."

B . The question before. us is whether the royaity levied by the im-
pugned notifieation can be realised by the District Council in respect
of trees in private forests. 'Royalty' according to Jowitts' Dictionary of .....
English. Law means 'a payment reserved by the grantor or patent, lease
of a mine or.similar right and payable proportionately to the use made ~'.
of the right by the grantee'. In the true sense what is sought to be
r~covered under the Act is not royalty since the forest does not belong
c to the District Council. The amount claimed by way of royalty under
the Notification is a compulsory exaction of money by a public author-
ity for public purposes enforceable by law and is not a payment for
services rendered. It is truly, in the nature of a tax. ·~

D . 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 emp-
loyment, 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
E Court rightly _rejected the above contention. 't:·
' \
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
f, pressed before us. We find it difficult to agree with the above submis-
.. '- sion 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
Paragraph 8 of the Sixth Schedule to'the Constitution. It cannot be
G ·.sustained as any other kind of tax on land since the· royalty payable has
no reference to the extent of the land and the 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
H on forest produce grown on private lands. The District council has no
DISTRICT COUNCIL v. D.S. RYMBA! [VENKATARAM!AH. J.] 585

A
•' power to levy such a tax on forest produce under Paragraph 8 of the
. Sixth Schedule to the Constitution. Reliance was, however, placed on
the minority judgment of Justice Sarkar in K. T. Moopil Nair v. The
State of Kera/a & Ors., [1961] 3 S.C.R. 77 in support of the plea that
lands on which forests grew could be taxed under entry .'tax on fands
and buildings'. The impugned levy being not a tax levied on land as we B
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, th~refore,.to fail.
c
The appellants have.not been able to establish that the impugned
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 or contractors. The High Court erred in D
holding that even fees could not be levied under Paragraph 3 of the
Sixth Schedule to the Constitution. 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 up-
hol<hhe Notification on that ground. No evidence is placed before the E
Court showing the expenses incurred "by the District Council towards
the services rendered and the total amount of royalty realised by it. ·
Unless the levy·satisfied the true characteristics of fee as laid down by
this Court in The Commissioner, Hindu Religious Er.dowments,
Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, [1954]
S.C.R. 1005 it cannot be upheld even as a fee (See also Om Parkash
F
Agarwal and Ors. v. GiriRajKishoriandOrs., [1986] 1S.C.C.722.)

Insofar as the question whether the forests from which the res-
pondents were bringing timber were private forests or not, we find
that the High Court after considering all the relevant facts before it has
recorded a finding that they are private forests. It is not also shown by G
the appellants that they belong to •any other category of forests refer-
red in section 3 of the Act. The plea of the appellants in the statement
of objections before the High Court was that tliere were no private
forests at all jn Jowai District. This statement cannot he accepted as
the Notification purports to levy royalty on timber brought from pri-
vate forests. If there were no private forests at all the District Council H
586 SUPREME COURT REPORTS [1986] 3 S.C.R.

A 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
B however, set aside the finding of the High 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 Constitution.

There is no order as to costs.
I

P.S.S. Appeals dismissed.
~

•