Summary
TISCO contested demands for water drawn from the Subarnarekha River. The Court held that fees, like taxes, require legislative authority under Article 265; legislative competence alone was insufficient. Because the High Court had not decided the asserted statutory or contractual bases, it remanded both appeals and stayed the demand pending that consideration.
Issues
- Whether a State could sustain the water demand as a fee without legislative authority and whether the asserted enactments or agreement supplied a valid basis.
Provisions considered
- Articles 265 and 366(28), Constitution of IndiaThe Court read taxation to include fees for the requirement of legislative support, following the approved constitutional interpretation. (¶ 18–22)
Held
- A fee is included in taxation for Article 265 purposes and requires authority of law. The existence of a legislative-list entry did not itself supply the law authorising this demand. (¶¶ 14, 20–22)
- The High Court had not conclusively determined whether the irrigation enactments authorised the levy or whether a concluded agreement created liability. Those questions required proper pleadings and adjudication on remand. (¶ 23–30)
- The Supreme Court may entertain a pure legal question raised for the first time, but is not obliged to do so in every case. It declined to act as the first-instance forum on the inadequately considered local-law issues here. (¶ 26)
- The State’s cross-appeal concerning different rates for industrial and domestic water use was also left open for argument before the High Court. (¶ 31–32)
Result
Impugned judgment set aside and matter remitted to the High Court with opportunity for further pleadings and arguments. Both appeals disposed of; impugned demand stayed during the High Court proceedings.