P.Ramakrishnam Raju, J.:-

(1) Some of the rate - payers association, citizens welfare associations and other residents of visakhapatnam municipal corporation are the petitioners in these writ petitions who are challenging the g. O. Ms. No. 44 ma dated 19 - 1 - 1993 issued by the government revising the water charges and the consequential notification issued by the municipal corporation.

(2) The visakhapatnam municipal corporation was constituted in 1979 by act 19 of 1979. Water charges were collected at the rate of rs. 6/ - per domestic tap per month up to 31 - 3 - 1991 under the bye - laws framed by the visakhapatnam municipality. Thereafter, it was increased to rs. 10/ - and from 1 - 4 - 1991 to 31 - 3 - 1993, it was collected accordingly. While so, the government issued g. O. Ms. No. 44 ma dated 19 - 1 - 1993 directing all the municipalities in the state to fix the water charges at a minimum rate of rs. 40/ - in the first grade municipalities and of rs. 30/ - in the second and third grade municipalities in orders to make the municipalities self sufficient. The special officer and commissioner of visakhapatnam municipal corporation, acting in pursuance of the aforesaid government order and without amending the bye - laws, issued notification r. C. No. 997/93/r4 dated 14 - 7 - 1993 enhancing the water charges to rs. 40/ - per month per domestic tap from 1 - 4 - 1993 and published the same in newspapers. This notification is mainly challenged in these writ petitions on the ground that the special officer who is functioning as municipal corporation is bound to act on the basis of a resolution under section 186 of hyderabad municipal corporation act - hereinafter referred to as h. M. C. Act, and he should publish anotice under section 198 (1) of the hm. C. Act in the a. P. Gazette and in the local newspapers and fix a reasonable period of not less than one month for filing objections and after considering the said objections pass a resolution specifying the rate and the date from which the tax shall be levied the corporation is bound to publish a notification under section 198 (2) of the act and this procedure has not been followed before issuing the impugned notification dated 14 - 7 - 1993 enhancing the water tax. There was no publication of the resolution or the notification as provided under sub - sections 1 and 2 of section 198 and therefore it is contended that imposing water tax at the enhanced rate of rs. 40/ - per domestic tap per month from 1 - 4 - 1993 is wholly unauthorised and illegal. Hence, these writ petitions.

(3) In the counter - affidavit filed by the commissioner, municipal corporation, visakhapatnam, it is stated that water charges for domestic tap connections have been enhanced fromrs. 10/ - to rs. 40/ - per month in accordance with g. O. Ms. No. 44 m. A. Dated 19 - 1 - 1993 issued by the government. Although the government issued the said go. , instructing all the municipalities in the state to revise water charges as indicated therein, later it was made applicable to the municipal corporations in the state by a memo no. 80/a1/92 - 1, m. A. , dated 30 - 3 - 1993. Adopting the rates prescribed by the government in the said government order, a formal notification was also issued by the corporation in the local dailies on july 17, 1993 and july 19,1993 for the in formation of the public about the notification of the revised rates. The procedure prescribed under sections 198 (1) and (2) is applicable only for the taxes leviable under section 193 (1) of the hyderabad municipal corporation act, 1955. Tariffs for supply of water through domestic service connections by pipeline from the water resources is not a tax which falls under section 199 of the hyderabad municipal corporation act. Hence a formal notification is sufficient. Therefore levy of enhanced water tax is in accordance with law. In view of the abnormal increase in the power tariff, equipment and maintenance charges, increased cost of chlorine and other articles, the government have prescribed the minimum rates in the impugned go. , in order to ensure that the municipalities and municipal corporations are self - sufficient in augmenting their resources to maintain supply of water. The procedure prescribed under section 198 of the municipal corporation of hyderabad need not be followed. Therefore, the writ petitions are devoid of merit and they are liable to be dismissed.

(4) Sri m. S. R. Subrahmanyam, the learned counsel for some of the writ petitioners who addressed the leading arguments in this batch of cases, submitted that under article 243 - wread with item 5 to the xii schedule of the constitution, the municipalities and the municipal corporations are bound to supply water, that section 112 (7) of the hyderabad municipal corporations act also indicates that the corporation is under an obligation to supply water, that legislature has no power to levy anything other than the tax or fee and there is no provision in the act read with hyderabad municipal corporations act to levy fee for water supplied. He further contends that water charge is nothing but tax and the procedure for levying tax prescriberd under section 198 (1) and (2) is not followed. On the other hand, if it is a fee, there is no provision which empowers levy and collection of fee and mere is also no quid pro quo for such step increase and, therefore, it is illegal.

(5) The thrust of the argument of the learned counsel for the petitioners is that the levy and collection of new tax or fee or increase in rates there of should only be done under a specific provision of law and can be done only in accordance with the procedure prescribed as per that law. It is not open to the corporation to increase the rates of water charges by a mere resolution passed by the special officer. It is also contended that in the absence of amendment of existing bye - laws continued by virtue of section6 (3) of the act by following the due procedure, the corporation has no power to enhance the water rates based on the directives issued by government to the municipalities. Learned counsel has also drawn our attention to the wording of the resolution itself in which the words "subject to the procedure under existing bye - laws" isused. The learned counsel relied on a decision of the supreme court in nagar mahapalika, varanasi v. Durga das (1) air 1968 sc 1119 in support of his contention wherein the supreme court observed thus:

"it is true mat between a tax and a fee, there is no generic difference; both are compulsory exactions of money by public authorities; but whereas a taxis imposed for public purposes and is not supported by any consideration of service rendered in return, a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it. But the imposition of such a tax can only be lawfully made by the municipal board after following the procedure prescribed under section 131 to 135 of the act (u. P. Municipalities act)."

(6) He next relied upon synthetics and chemicals ltd. V. State of u. P. (2) air 1990 sc 1927. In the said decision it is observed as follows:

"right to tax or levy imposts must be in accordance with the provisions of the constitution. "

Continuing the same line of argument, the learned counsel next relied on state of karnataka v mahabaleshwar gourya naik (3) air 1992 sc 2038, wherein it is held as follows :

". It appears to us that in a fiscal matter, it will not be proper to hold that even in the absence of express provision, a delegated authority can impose tax or fee. In our view, such power of imposition of tax and/or fee by delegated authority must be very specific and there is no scope of implied authority for imposition of such tax or fee."

The learned additional advocate - general mr. Chalmeshwar who represented the corporation in the connected writ petitions filed by bulk consumers and the standing counsel for the municipal corporation mr. K. Nageswara rao, have relied on section 7 (1) of the act, which reads as follows:

"7. Application of the provisions of the hyderabad municipal corporations act, 1955 (act ii of 1956) to the corporation : - (1) save as otherwise expressly provided therein, all the provisions of the hyderabad municipal corporations act, 1955 (hereinafter in this section called 'the said act') including the provisions relating to the levy and collections of any tax or fee are hereby extended to and shall apply mutatis mutandis to the corporation and the said act shall, in relation to the corporation be read and construed as if the provisions of the act had formed part of the said act."

According to the respondent's counsel, by virtue of section 7 (1) , it is permissible to apply the provisions of the hyderabad municipal corporations act which were in force on the date of commencement of the visakhapatnam municipal corporation act, 1979. Though the said provisions were subsequently repealed in the year 1982 with the enactment of hyderabad metro water supply and sewerage board act in 1982 reliance is placed on section 227 of the hyderabad municipal corporations act repealed by a. P. Act no. 6/1982 and section 352 (also repealed by the same act) to sustain the levy and enhancement of the impugned water charges. Section 227 (1) (a) and (b) and section 352 of the hyderabad municipal corporations act read as follows:

"227. A charge by measurement or a periodical lump payment may be substituted for the water tax : - (1) the commissioner may - (a) in such cases as, the standing committee shall generally approve, instead of levying the water tax in respect of any premises liable there to, charge for the water supplied to such premises by measurement at such rate as shall from time to time be determined by the said committee in this behalf or by the size of the water connection with the municipal main and the purpose for which the water is supplied at such rates as shall from time to time be determined by the corporation and the charge so made shall hereafter be referred to as 'water charges':

(b) in such cases as the standing committee shall generally approve, compound with any person for the supply of water to any premises for a renewable term of one or more years not exceeding five, on payment of a fixed periodical sum in lieu of the water tax or water charges which would otherwise be leviable from such person in respect of the said premises. "

"352. Conditions on which water supply may be provided : - (1) subject to the provisions of sub - section (2) , (3) and (4) supply pipes for conveying to any premises a private supply of water from a municipal water work shall not connected with such water work except on the written application or with the written assent of the owner of the premises, or of the person primarily liable for the payment of property taxes on the said premises.

(2) but if it shall appear to the commissioner that any premises situate within any portion of the city in which a public notice has been given by the commissioner under clause (b) of section 200 or without a supply of pure water obtainable on the premises and adequate to the requirements of the persons, usually occupying or employed upon the said premises, the commissioner shall by written notice require, the owner of the said premises or the person primarily liable for the payment of property taxes thereon, to obtain a supply adequate as aforesaid from a municipal water - work and to provide supply and distributing pipes, cisterns and fittings and do all such works as may in the opinion of the commissioner be necessary for that purpose.

(3) if the written assent of the owner of any premises or the person primarily liable for the payment of property taxes referred to in sub - section (1) is withheld from a tenant of such premises who applies for such assent, such tenant may appeal to the commissioner who shall, if he is satisfied that the assent has been unreasonably withheld and if the provisions of sub - section (2) are satisfied, give notice as provided therein.

(4) the commissioner may refuse to grant a connection, in respect of any premises if he is satisfied that the arrangements for draining waste water from such premises are inadequate or that the supply of water through communication pipes is likely to cause such premises to be in an insanitary condition or to create a nuisance, unless such measures as he may direct are carried out for disposing of the waste water or for preventing lhe creation of insanitary conditions or a nuisance. "

The learned additional advocate - general relied on bagalkot city municipality v. Bagalkot cement co. (4) air 1963 sc 771, in which the principle of in corporation by reference was applied. Reliance is also placed by the additional advocate - general and the standing counsel on section 7 - a of the act which empowers the government to direct the corporation to levy and collect pipeline service charges from every owner or occupier of a premises. The learned counsel for the respondent further countered the arguments of the petitioners' counsel that water charges which is being collected is in the nature of water tax. It is also submitted that the procedure of amendment of bye - law need not be gone through and it is sufficient that there is due publication of the resolution for the information of the public. The increaseis sought to be justified on account of heavy expenditure on maintenance and establishment of water supply system.

(7) The contention of the learned counsel for the petitioners that the collection of water charges which is in the nature of fee, if not tax, is not authorised by any provisions of thevisakhapatnam municipal corporation act read with hyderabad municipal corporation act cannot be accepted. We find force in the contention of the learned additional advocate - general and the standing counsel for corporation that section 7 (1) of the act read with sections 352 and 227 of the hyderabad municipal corporations act gives power to the respondent - corporation to collect water charges at such rates as may be determined by the corporation from time to time. Section 352 provides that supply pipes to facilitate conveyance of water from a municipal water work to aprivate premises shall not be connected, except on the written application or with the written assent of the owner of the premises or the person primarily liable to pay the property tax in respect of the premises. Thus, the right to get supply of water from a municipal waterworkisnot an automatic right. The mostimportant provision is section 227 (1) (a) which has been extracted above. As contended by the learned additional advocate - general. section 7 (1) of the act is an instance of incorporation by reference. The provisions of hyderabad municipal corporations act, which were in force by the date of commencement of visakhapatnam municipal corporation act will apply mutatis mutandis as if the said provisions form part of visakhapatnam municipal corporation act, notwithstanding the subsequent repeal of those provisions in 1982. The decision of the supreme court in bagalcot cement company's case (4 supra) supports the view taken by us. In that case, the supreme court was dealing with bombay district municipalities act, 1901. It was held that when a bye - law was framed by the municipality that the octroi limits of the municipality shall be the same as the municipal district under the act, the said limits would remain the same not with standing the subsequent extension of municipal limits of the municipal district by the government. The octroi limits fixed by the by - law will, not with standing the subsequent extension of municipal limits, remain the same asper the earlier municipal district limits. The principle of incorporation by reference was applied in that case. Following the said decision, we have no hesitation to hold that sections 227 and 352 of the erstwhile hyderabad municipal corporation act would continue to be in force so far as the visakhapatnam municipal corporation act is concerned. If so, the argument that there is no specific provision in the hyderabad municipal corporations act to levy water charges loses its force. We are of the view that section 227 authorises the municipal corporation to fix the rates for supply of water by measurement or by the size of the pipe connection and the purpose for which the water is supplied. In our view, the prescription of water charges at a particular rate per water tap for domestic and non - domestic purposes comes within the purview of section 227 and it is within the competence of the corporation to prescribe and enhance the rates from time to time. But the exercise ofpower conferred by section 227 is subject to the condition that the water tax will no longer be levied when once the water charges are collected. It is not the case of the petitioners that water tax is being levied by the corporation as apart of property tax or other wise. The learned additional advocate - general, has stated that no water tax is being imposed or collected by the visakhapataam municipal corporation. Therefore, it must be held that the prerequisite for invoking the provisions of section 227 is satisfied.

(8) The next question is what is the effect of the bye - laws framed by the visakhapatnam municipality which are continued by virtue of section 6 (3) of the v. Mc. Act no doubt, allmatters relating to water supply including charging of fees or other payment can be provided for under the bye - laws as per section 586 (3) but it is not obligatory that while exercising the power under section 227, the corporation should necessarily frame a bye - law or amend the old bye - laws framed by the then municipal council in the year 1975. In our view, when once the power is exercised under section 227 (1) and the rates of water charges are determined by the corporation by passing a resolution, the old bye - laws which are in operation as a transitional measure can no longer operate in derogation of the resolution passed by the municipal corporation which is traceable to section 227. The bye - law continued under section 6 (3) insofar as it is inconsistent with the new rates prescribed under section 227 by the i municipal corporation will become i inoperative by necessary implication. We are not inclined to accept the argument of the learned counsel for the petitioners that the only way to increase the rate is to amend the bye - law according to the due procedure because, as already stated, there is nothing in section 227 which requires the determination of water supply rates only by means of bye - law.

(9) The argument of mr. M. S. R. Subrahmanyam that section 227 of the hyderabad municipal corporations act itself is subject to the bye - law which is continued under section 6 (3) of the visakhapatnam municipal corporation act because of the opening part of section 7 (1) namely, "save as otherwise expressly provided herein" cannot be accepted. We do not think that there is an express provision to the contrary in the act which excludes the application of section 227 and section 352 of hyderabad municipal corporations act. On the other hand, sub - section (3) of section 6 makes it clear that the notifications, rules, bye - laws etc. , made or issued under the a. P. Municipalities act will continue to be in force insofar as they are not inconsistent with the provisions of the act. Thus, reading section 7 (1) and section 6 (3) together, we are not in clined to place the interpretation that the bye - law framed by the erstwhile municipality will fetter the power of the newly constituted corporation to fix water charges at appropriate rates in exercise of the power conferred on it under section 7 (1) of the act read with section 227 of the hyderabad municipal corporations act. We, therefore, reject the contention.

(10) The learned counsel for the petitioners contended that on the very wording of the resolution, the water supply bye - laws (framed by the erstwhile municipality) should have been amended, does not also appeal to us. The resolution dated 31 - 5 - 1993 reads as follows : -

" approvedfor adoption with effect from 1 - 4 - 1993 as per the government order following the procedure laid down under the existing bye - laws."

The wording "following the procedure laid down under the existing bye - laws" seems to be defective. The bye - laws themselves do not prescribe any particular procedure for adopting or fixing the water supply rates. As already held by us, there is no need for the amendment of bye - laws to fix or revise water charges from time to time in exercise of power conferred under section7 (1) of the act read with section 227 of the hyderabad municipal corporations act. When once it is held that there is a specific provision which doesnot require the framing or amendment of bye - law as a condition for fixation of new rates, the petitioners cannot seek to draw support from the ambiguous language employed in the latter part of the resolution.

(11) As far as the contention that the government is empowered to direct the corporation to levy and collect pipeline service charges under section 7 - a of the act is ; concerned, we are of the view that the said provision has no application for the simple reason that mere is no notification by the government. G. O. Ms. No. 44 dated 19 - 1 - 1993 is only with regard to the water charges payable by the domestic and industrial consumers in municipal areas. By itself, it has no application to municipal corporation. However, by a communication - memo no. 80/a/92 - 10,ma dated 30 - 3 - 1993, the joint secretary to government in formed the commissioner and special officer, vijayawada, that the minimum rates fixed in g. O. Ms. No. 44 are also applicable to the municipal corporations in the state. This communication was addressed to the commissioner of vijayawada municipal corporation only. It cannot, by any means, be treated as a notification contemplatedby section 7 - a. We cannot infer from this communication a direction to levy pipeline service charges in exercise of the power under section7 - a. It is not in dispute that the said communication was not published nor made public. The respondent cannot, therefore, derive support from section 7 - a. At the same time, we see no objection in the corporation revising the water charges in accordance with the said g. O. The g. O. Was issued with the objective of making the municipal bodies self - sufficient in meeting the cost of water supply. The g. O. Does not contravene any provisions of the act. The resolution inter alia took into account the fact that hyderabad metropolitan water works board and the vijayawada municipal corporation have already revised the water supply rates in the corporation areas in accordance with g. O. No. 44. Though the corporation is not bound by the go. , there is nothing wrong in adopting the rates in the said g. O. Unless, of course, they are fixed at an unreasonably high rate without regard to the actual or estimated expenses.

(12) The last contention to be noticed is that the charges are unreasonable and they are not commensurate with the services rendered. It is submitted that the water supply is not being given regularly and there is no justification for raising the water charges at a time from rs. 10/ - to rs. 40/ -. We find no substance in this contention. Though the increase may seem to be steep, it must be noted that there was no increase worth - mentioning for a number of years, even though the overall cost of maintenance of water works has considerably gone up. The visakhapatnam municipality was charging rs. 6/ - monthly per water tap connection from 1975 onwards. The same was continued upto 1990 when it was increased by the visakhapatnam municipal corporation to rs. 10/ - , which was quite nominal. It is seen from the material papers filed in w. P. No. 15086/1993 that although the commissioner proposed an increase for the first tap connection upto rs. 25/ - , the corporation resolved to increase the rate upto rs. 10/ - only. The averments in the counter - affidavit clearly show that the existing rates were not at all sufficient to generate funds for the maintenance of the water work system. It is not as if the corporation is making a profit out of the increase. We are quite convinced that the additional income which the corporation gets by the impugned enhancement will hardly be sufficient to meet the expenditure for maintaining the water supply system in an efficient condition. There is no basis for the argument that there is no element of quid proquo in collecting the water charges at the enhanced rates.

(13) Thus,we up hold the levy and collection of water charges at the enhanced rates as per the resolution no. 10 dated 31 - 5 - 1993 passed by the respondent - corporation. However, we find no justification in demanding the enhanced water charges with effect from 1 - 4 - 1993. The enhancement of water charges with retrospective effect is not contemplated by the act. The resolution insofar as it adopts the enhanced water supply rates with effect from 1 - 4 - 1993 is, therefore, ultra vires the powers of the corporation. The resolution can only take effect prospectively, i. E. , from the date of its publication. Admittedly, the commissioner ofthe corporation issued a notification dated 14 - 7 - 1993 notifying the public of the enhancement and got it published in the newspapers in the month of july, 1993. We, therefore, direct that the enhanced water charges fixed by the resolution no. 10 dated 31 - 5 - 1993 of the visakhapatnam municipal corporation shall come into force with effect from 1 - 8 - 1993. The words "with effect from 1 - 4 - 1993" in the said resolution are hereby struck down.

(14) The writ petitions are thus partly allowed to the limited extent indicated above. We make no order as to costs.