1969 (4) TMI 30 - SUPREME COURT

Whether the legislature possesses competence to pass a law imposing a tax on lands and buildings on the basis of a percentage of their capital value?

Held that:- The legislature not only equated the tax collected to a tax on lands and buildings, which it had the power to levy, but also to a rate giving a new meaning to the expression " rate " and while doing so it put out of action the effect of the decisions of the courts to the contrary. The exercise of power by the legislature was valid because the legislature does possess the power to levy a tax on lands and buildings based on capital value thereof and in validating the levy on that basis, the implication of the use of the word " rate " could be effectively removed and the tax on lands and buildings imposed instead. The tax, therefore, can no longer be questioned on the ground that section 73 spoke of a rate and the imposition was not a rate as properly understood but a tax on capital value. In this view of the matter it is hardly necessary to invoke the 14th clause of section 73 which contains a residuary power to impose any other tax not expressly mentioned.

Thus these appeals possess no merit after the passing of the Validation Act and must be dismissed.