A recent show-cause notice issued by the Village Panchayat of Chinchinim–Deussua against a family-run fast-food business in Salcete has exposed the uneasy friction between local self-governance and the national policy for the promotion of micro-enterprises. What appears on the surface as a dispute over a signboard is, in essence, a legal flashpoint on how Panchayats are often exceeding their statutory limits under the guise of regulation, even in matters already governed by central legislation.
A lawful business under siege
The enterprise in question, Amchem Goa Arabian Fast Food, is a micro-enterprise duly registered under the Ministry of Micro, Small and Medium Enterprises (MSME) since 2022. The premises on Survey No. 163/1 in Chinchinim have a documented commercial lineage that dates back more than two decades, beginning with a tea stall authorised in 2003 through a formal No-Objection Certificate issued by the very same Panchayat and supported by sanitary clearance from the Primary Health Centre, Chinchinim.
Over the years, successive family members maintained professional-tax registration, paid trade fees, and renewed utility connections under official sanction. Even after a short-circuit fire destroyed the shop in 2020, the business was rebuilt on the same plinth with transparent intimation to the authorities. Yet, in October 2025, the Panchayat issued a fresh show-cause notice alleging “illegal hoarding” and threatening demolition despite full MSME registration and historical compliance.
Jurisdictional overlap and constitutional boundaries
The controversy strikes at the constitutional division of powers. The Goa Panchayat Raj Act, 1994 draws authority from Entries 5 and 18 of the State List under the Seventh Schedule, relating to local government and land use. The MSME Development Act, 2006, however, emanates from Entries 52 and 62 of the Union List, empowering the Union to regulate industries and economic development at the national level.
In a federal system, both statutes may operate concurrently only if they do not encroach upon one another’s purpose. Where the Panchayat Raj Act regulates sanitation or building safety, its jurisdiction is administrative. But where an enterprise is already recognised under the MSME framework, the law’s object is economic facilitation and the removal of bureaucratic impediments. In such cases, local authorities must defer to the MSME policy, for economic empowerment forms part of national industrial planning rather than village-level micromanagement.
Judicial interpretation of conflicting laws
The Supreme Court in Ashoka Marketing Ltd. v. Punjab National Bank (1990 AIR 855) held that when a special statute conflicts with a general one, the maxim Generalia specialibus non derogant applies, giving primacy to the special law. Likewise, in LIC v. D. J. Bahadur (1981 AIR 2181), it was reaffirmed that general provisions yield to specific enactments. The principle was earlier elaborated in J. K. Cotton Spinning & Weaving Mills Co. Ltd. v. State of Uttar Pradesh ([1961] 3 SCR 185), where the Court explained that when a general and a particular direction come from the same source, the latter must prevail for those matters it specifically governs.
Applying this reasoning, the MSME Act, being a later and special enactment designed to promote small enterprises, should prevail over the general administrative powers of Panchayats wherever the two conflict. The Panchayat Raj law cannot be used to defeat the national objective of enabling micro-entrepreneurs.
When compliance becomes punishment
The present case reveals a troubling inversion of priorities. A micro-entrepreneur, having complied with registration requirements under central law, is being compelled to show cause for merely displaying a signboard on his own property. This reduces compliance to a trap rather than a shield. The Panchayat’s insistence on demolition to appease local complainants, who have no proprietary or occupational connection with the property, stretches its powers beyond the statutory intent of Section 66(3)(b) of the Goa Panchayat Raj Act.
A show-cause notice is intended as a procedural safeguard, not as a weapon of intimidation. When deployed against those who have already fulfilled higher-level regulatory requirements, it undermines the credibility of governance and discourages lawful entrepreneurship, which would be the very evil that the MSME law was enacted to remedy.
Private property and third-party interference
The principle of locus standi has long been recognised in administrative jurisprudence. Third parties who neither own nor occupy a premises cannot demand demolition of a legitimate commercial structure merely to settle personal scores or display civic zeal. Such interference converts the Panchayat into an instrument of private grievance rather than public administration.
When property rights and business rights intersect, only the competent authority and the lawful occupant stand in a position of accountability. The complaint mechanism must not become a conduit for harassment. The rule of law demands that compliance be enforced proportionately and only by the authority empowered under the relevant statute, not by self-appointed watchdogs.
Economic growth versus procedural rigidity
Administrative discretion must therefore be exercised with sensitivity. Minor procedural delays in renewing a local licence or submitting a sanitary certificate cannot justify coercive measures such as demolition, especially when the enterprise’s legal identity and professional-tax payments remain intact. Compliance should be encouraged through assistance, not enforced through threat.
The balance that governance must achieve
The correct legal approach lies in harmonisation: Panchayats may verify sanitary or structural safety, but they must recognise the overriding authority of MSME registration and national policy. Coordination, not confrontation, is the constitutional expectation.
A call for regulatory sanity
A signboard erected by a licensed micro-enterprise on its own property cannot, by any stretch of reasoning, be equated with an illegal structure. When compliance is punished instead of supported, the very spirit of entrepreneurship is extinguished. The Panchayat’s task is to enable livelihoods, not to dismantle them in the name of governance.
