M/s Tarai Biotech Pvt. Ltd v. State of Uttarakhand and others

The applicant is a proprietor firm, namely, M/s Tarai Biotech Pvt. Ltd. situated at B-5 Industrial Estate, Bazpur Road, Kashipur, District Udham Singh Nagar. The applicant is manufacturer of cattle feed, poultry feed and veterinary health products in the name and style of said company at the above noted address; the aforesaid 1 unit of the applicant is situated in a Notified Industrial Area and is under the control of the District Industries Centre.

3. The counsel for the applicant submits that the applicant is an industrial unit established under the notified Industrial Area in District Udham Singh Nagar and is aggrieved by the proceedings initiated by the Zila Panchayat, Udham Singh Nagar invoking the provisions of Section 240 of the Zila Panchayat Act. Counsel for the applicant further submits that under the misconception of law and facts and on the same being misconstrued by the respondent no. 2, the applicant took an annual license under the provisions of Zila Pancahayt Act in respect of the establishment of industry at the said address, however did not get the same being renewed afterwards as there is no necessity of obtaining a license from the respondent no. 2 for the reasons of the applicant industry being situated in an industrial area and the Zila Panchayat authorities have no jurisdiction to grant license or to levy or collect any license fee or tax in an industrial area . The Zila Panchayat authorities in that respect wrongly relied upon their bye-laws dated

06.12.2005, notified on 24.12.2005 and bye-laws dated

06.09.2006 notified on 09.09.2006.

4. Counsel for the applicant thus submits that the unit of the applicant being situated in a notified Industrial area, the Zila Panchayat Authorities have no jurisdiction to grant license or to levy or collect any license fee or tax from an industry operating in industrial area. The Zila Panchayat Authorities without any authority filed a complaint against the applicant 2 before the Chief Judicial Magistrate, Udham Singh Nagar purported to be under Section 240 of the Zila Panchayat Act, and the learned Magistrate in a mechanical manner without applying judicial mind summoned the applicant.

5. Learned counsel for the applicant submits that the issue as to whether the Zila Panchayat has any authority to grant license or permission or to levy tax in a notified Industrial Area has been considered by the learned Coordinate Bench of this Court in Writ Petition No. 342 (M/S) of 2012 Kumaon Garhwal Chamber of Commerce and Industry vs. State and others and Writ Petition No. 636 (M/S) of 2014 M/s Revati Print Pack vs. State. In Writ Petition No. 636(M/S) of 2014, the Coordinate Bench has held as under: “Undisputedly, SIDCUL is not under the control of Zila Panchayat, Haridwar and all the roads, drains, sewers and street lights are being installed, developed and managed by the SIDCUL within the territory of SIDCUL township Roshanabad Haridwar. No amenity or facility is being provided by the Zila Panchayat within the SIDCUL township Roshanabad, Haridwar. Coordinate Bench of this Court in the case of Kumaon Garhwal Chamber of Commerce and Industry Chamber House Vs. State of Uttarakhand reported in 2011 (1) U.D. 106 also had occasion to deal with the issue and has opined that Zila Panchayat shall have no jurisdiction over the area which falls within the territory of any municipality, town area and notified area or Industrial Area notified, developed and managed by the agencies other than Zila Panchayat. I am in full agreement with the view expressed by the learned Singh Judge in the case of Kumaon Garhwal Chamber of Commerce and Industry Chamber House (Supra). In view of the discussion made 3 hereinbefore, I find that Zila Panchayat has absolutely no authority under the law to impose, levy or collect tax from any industry or person within the area of municipality, town area, notified area or SIDCUL area. Therefore, impugned notices asking the petitioners to pay tax do not sustain in the eyes of law.”

6. Learned counsel for the applicant further submits that on the basis of the aforesaid order, the Coordinate Bench of this Court in C-482 Petition No. 1116 of 2016 M/S Mahaveer Packaging Industries vs. State of Uttarakhand, in para 5 has held as hereunder: “5. Heard learned counsel for the parties and perused record. The Zila Panchayat have jurisdiction to levy license fee in respect of area under its jurisdiction, which is outside the area earmarked as industrial area. This controversy has already been decided by Coordinate Bench of this Court in WPMS No.636 of 2014 and connected cases, decided on

28.03.2014, wherein the Court held that Zila Panchayat has absolutely no authority under the law to impose, levy or collect tax from any industry or person within the area of municipality, town area, notified area or SIDCUL area and proceeded to hold that the impugned notice, asking the petitioner to pay tax, do not sustain in the eyes of law and quashed the impugned notices.”

7. Having heard learned counsel for the parties, this Court is in agreement with the view taken by the Coordinate Bench of this Court in the judgements referred above. 4

8. Once an area has been declared as a notified industrial area then the authorities of the Zila Panchayat have no jurisdiction to levy or collect tax from an industry situated in the said notified area. Admittedly, in the present case, the petitioner unit is situated in a notified industrial area, as such, the authorities of Zila Panchayat had no jurisdiction to levy or to collect tax from the applicant. Moreover, perusal of the impugned order reveals that it is a cyclostyle order and the said order has been passed in a mechanical manner without applying judicial mind.

9. The Hon’ble Apex Court in the case of Pepsi Food Ltd. And another vs. Special Judicial Magistrate and others, reported in (1998) 5 SCC 749, has held in para 28 of the judgment as hereunder: “Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and 5 then examine if any offence is prima facie committed by all or any of the accused.”

10. In view of the observations made in the preceding paragraphs, the C-482 application is allowed. Accordingly, the summoning order dated 19.02.2016 as well as the entire proceedings of Criminal Case No. 987 of 2016, Zila Panchayat, Udham Singh Nagar vs. M/s Tarai Biotech Pvt. Ltd., Under Section 240 of the U.P. Kshettra Panchayat and Zila Panchayat Act, 1961, pending in the Court of learned Chief Judicial Magistrate, Udham Singh Nagar, are hereby quashed. (SUBHASH UPADHYAY, J.) Dated: 06.11.2025 Kaushal 6