Patna High Court
Anil Kumar Ray and OrsversusThe State Of Bihar and Ors
- Decided
- Disposal
- DISPOSED
- Bench
- ANIL KUMAR SINHA
Holding
The State Government's 2008 directive was prospective and could not be applied retrospectively, so the petitioners are entitled to the 10% commission.
Summary
The petitioners were appointed as tax collectors by the Nagar Parishad, Khagaria in 1989 with a commission of 7.5% of the municipal tax collected. In 2011 and again in 2015, the Parishad's empowerment committee increased their commission to 10%. The State Government issued a 2008 directive mandating a 4% commission for tax collectors, and the Parishad later sought to reduce the petitioners' commission to that rate. The petitioners contended that the directive was prospective and could not be applied retrospectively to diminish their earned commission. The Court examined the nature of the State directive and the contractual expectations created by the earlier decisions, concluding that the directive could not be applied retroactively. Accordingly, the Court ordered the Parishad to continue paying the petitioners (or their heirs) a 10% commission, effective from 7 September 2011, and dismissed the petition to reduce it.
Issues considered
- Can the State Government's 2008 directive to pay a 4% commission to tax collectors be applied retrospectively to reduce the commission of existing tax collectors?
- Does the Nagar Parishad have the authority to unilaterally reduce the commission of the petitioners from 10% to 4% despite prior empowerment committee decisions?
- Are the petitioners entitled to continue receiving the 10% commission as per the empowerment committee resolutions of 2011 and 2015?
Subjects
- tax collector
- commission
- municipal tax
- retrospective application
- State directive
- empowerment committee
- writ jurisdiction
- high court
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.18669 of 2016
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1. Anil Kumar Ray and Ors Son of Sri Ram Sagar Ray, Resident of Naya Tola
Rahimpur, P.S. Mufassil, District Khagaria.
2. Ajay Kumar Gupta Son of Sri Suresh Prasad Sah, resident of Village Karua
Rupani, P.O. and P.S. Chautham, District Khagaria.
3.1. Chanda Devi Wife of Late Amrendra Kumar, Resident of Mohalla - Dan
Nagar, Ward No. 3, P.S. and District- Khagaria.
4. Mani Bhushan Singh, Son of Late Ramdeo Singh, resident of Village and
P.O. Meghaul, P.S. Khodawandpur, District Khagaria.
... ... Petitioner/s
Versus
1. The State of Bihar and Ors.
2. Collector, Khagaria
3. Nagar Parishad Khagaria through its Chairman, Nagar Parishad, Khagaria.
4. Executive Officer, Nagar Parishad, Khagaria.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr. Ajay Kumar Thakur, Advocate
Ms. Vaishnavi Singh, Advocate
Mr. Ritwik Thakur, Advocate
Mr. Mudit Meet, Advocate
Mr. Md.Imteyaz Ahmad, Advocate
For the State : Ms. Vagisha Pragya Vacaknavi, AC to SC-9
For Nagar Parishad : Mr. Krishna Chandra, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE ANIL KUMAR SINHA
ORAL ORDER
10 06-01-2026 Heard learned counsel for the parties concerned.
2. The petitioners were appointed as a Tax Collector
by the Nagar Parishad, Khagaria for collection of holding tax in
the year 1989. The commission provided at the time of the
appointment of the petitioners as Tax Collector was 7.5% of tax
collected. Subsequently, the Nagar Parishad, Khagaria took a
decision in its empowerment committee meeting dated
07.09.2011 as well as in the general meeting held on 12.12.2015
Patna High Court CWJC No.18669 of 2016(10) dt.06-01-2026
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by which the Parishad decided to pay commission to the
petitioners by name @ 10% of the amount collected as a tax.
3. Learned counsel for the petitioners submits that in
the appointment letter issued by the then Executive Officer,
Nagar Parishad, Khagaria vide letter no. 217 dated 06.04.1989,
it has been specifically mentioned that on the basis of payment
of commission of 7.5% against the collection of municipal tax,
the petitioners have been appointed as Tax Collector in Nagar
Parishad. The petitioners worked for about one decade and
thereafter a conscious decision was taken by the Nagar Parishad
to enhance the commission of the petitioners from 7.5% to 10%
on 07.09.2011 and the same was reiterated in the decision of the
empowerment committee/its general meeting on 12.12.2015. It
has been submitted by the petitioners that after rendering about
more than 20 years of service and in the fag end of their life, the
commission of the petitioners have been sought to be reduced
from 10% to 4% citing directive of the State Government. The
percentage of commission according to the petitioners cannot be
reduced at the latter half of their life when they have already
rendered a continuous satisfactory service to the Nagar Parishad
and have diligently collected the tax.
4. On the other hand, learned counsel for the Nagar
Patna High Court CWJC No.18669 of 2016(10) dt.06-01-2026
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Parishad, Khagaria and the State jointly argued that in the year
2008, the State Government issued a directive to all municipal
bodies to pay commission @ 4% of the tax collected. Referring
to Rule 10(4)(a) of the Empowered Standing Committee
Conduct of Business Rules 2010, learned counsel submits that
the Empowered Standing Committee has no authority to pass a
resolution or take a decision in any matter/issue which is against
the rules, laws and directives of the State Government.
5. On the other hand, Mr. Ajay Kumar Thakur, learned
counsel appearing for the petitioners in reply submits that the
directive of the State Government is prospective in nature and
that cannot be applied retrospectively against the petitioners as
the petitioners have been working as tax collectors on a
particular rate of commission since 1989 and out of four, two of
them have retired, one has died and one is still working. He
further submits that the Nagar Parishad, Khagaria has recently
given the work of tax collection and other works to an agency
for realization of tax of property at the door step of the citizen.
Percentage of commission has been fixed and is being paid to
the agency @ 9.97%. This decision/agreement between the
agency and the Nagar Parishad has been taken on 18.01.2025.
6. I have learned counsel for the parties and have gone
Patna High Court CWJC No.18669 of 2016(10) dt.06-01-2026
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through the materials on record.
7. Undisputedly, the petitioners have been working for
the last about 35 years. It is not disputed that the petitioners
were being paid 7.5% of the collected tax as commission. There
is only four petitioners one of them has already died and one
perhaps has retired who have been claiming the commission @
10% as per the decision of the Empowerment Committee which
was taken in the year 2011 and reiterated in 2015. In the fag end
of their life and on the basis of subsequent letter/directive of
State Government of the year 2008, the rate of commission paid
to the petitioners, cannot be reduced to their disadvantage
particularly when the directive of the State Government to pay
4% of the commission to the Tax Collector was not made
retrospective in nature.
8. Accordingly, in the opinion of this Court, the
petitioners are entitled to be paid commission @ 10% which is a
minor increase of 2.5% of the commission which they were
getting since their appointment as Tax Collector in 1989. In the
result, this writ application is allowed. The respondent, Nagar
Parishad is directed to pay commission to the petitioners and or
his/their legal heirs @ 10% of the tax collected with effect from
07.09.2011.
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9. Since the specific decision for the petitioners only
was taken by empowerment committee in 2015, this direction
will confine to the petitioners only and shall not apply to any
other tax collectors.
10. Accordingly, this writ application stands disposed
of with the aforesaid direction and observation.
(Anil Kumar Sinha, J)
Siwani/-
U
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