TMI Blog1963 (9) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... alidity of s. 128(1) of the Uttar Pradesh Municipalities Act, 1916 (U.P. Act No. 11 of 1916), hereinafter called the Act, insofar as it authorizes a Municipal Board to impose all or any of the taxes mentioned therein in any part of the municipality. Bareilly is an old City in the State of Uttar Pradesh. In the middle of the 19th century it consisted of small houses situated in congested localities with narrow lanes. At some distance away from the said City area there existed even then a cantonment area. Between the City area and the Cantonment area there was a tract of uneven and undeveloped land. The Municipal Board of Bareilly acquired a part of the said land and, together with some nasal land, developed it at a considerable cost. The newly developed area came to be known as the Civil Lines. The Municipal Board has provided special amenities for the residents of that area. The said facts and the particulars of the amenities provided are given in the counter-affidavit filed on behalf of the Municipal Board and a map of the Bareilly City and the Cantonment area is also annexed thereto. A glance at the map discloses that the City of Bareilly is divided into three separate blocks t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Constitution. And (4) section 131(1)(b) of the Act also violates Art. 14 of the Constitution in as much as it confers an arbitrary power on the Municipal Board to impose taxes of any amount on any person or class of persons without laying down any clear policy for classification. Mr. Pathak, learned counsel for the Municipal Board, controverts the said arguments of the petitioner. We shall deal with his contentions in appropriate places. To appreciate the first contention it would be convenient to read at the outset the relevant part of s. 128 of the Act. It reads : Section 128. (1) Subject to any general rules or special orders of the State Government in this behalf, the taxes which a board may impose in the whole or any part of a municipality are- (i) a tax on the annual value of buildings or lands or both; * * * * * (xi) a scavenging tax * * * * * * No general rules were made or special orders issued by the State Government in the matter of imposition of a tax in any part of a municipality. It is argued that the power conferred on the Municipal Board to impose a tax on any part of the municipality is a naked and arbitrary power, that the Act does not disclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uphold the law as constitutional as it did in Kathy Raning Rawat v. The State of Saurashtra ([1952] S.C.R. 435)." The question, therefore, to be considered is whether the Act has laid down a policy for the guidance of the Municipal Board in the matter of selection of any part of the municipality for the purpose of imposition of any of the taxes mentioned in s. 128 of the Act. In this context, because of a Legislature s reluctance or inadvertence to express itself clearly of its policy, a heavy and difficult burden is often placed on courts to discover it, if possible, on a fair reading of the provisions of the Act. Some Acts expressly lay down the policy to guide the exercise of discretion of an authority on ,whom a power to classify is conferred. Some Acts, though they do not expressly say so, through their provisions may indicate clearly, by necessary implication, their policy affording a real guidance for the exercise of discretion conferred on an authority thereunder. While a ,court should be on its guard not to enter into the domain of speculation with a view to cover up an obvious dificiency in 2 legislation, it may legitimately discover such a policy, if it is clearly disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipal area for the imposition of a tax or taxes. We do not agree. Sections 7 and 8 enumerate the obligatory duties and discretionary functions of a municipality. These duties and functions need not necessarily be discharged or performed in the entire area of the municipality at once. They may have to be introduced gradually, starting from one part of the area in the municipality with a view to cover the entire area in due course. It may also be that the amenities required in one part of the municipal area may be different from those required in another part of the municipality. It may also be that a part of the area, because of the nature of the soil, distance from the well-developed part of the city or for historical reasons, calls for a larger investment for development compared to other parts of the municipality. If so much is conceded, that is, different parts of a municipality may require special treatment in the matter of provisions of amenities, it would be reasonable to collate the power of taxation in a part of a municipality with such separate treatment. While the former two sections, by necessary implication, enable a municipality to provide special amenities in a part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation, provided the difference between the geographical units has a reasonable relation to the object sought to be achieved. This principle has been applied to a taxation law in Khandige Sham Bhat s Case ([1963] 3 S.C.R. 809). In hat case, this Court also accepted the principle that the legislative power to classify is of wide range and flexibility so that it can adjust its system of taxation in all proper and reasonable ways. It is indicated in "Willis, Constitutiotial Law". at p. 590, that a State can make a territory within a city a unit for the purpose of taxation. So, the impugned section in permitting in the matter of taxation geographical classification which has reasonable relation to the object of the statute, namely, for providing special amenities for a particular unit the peculiar circumstances whereof demand them, does not in any way impinge upon the equality clause. The very question that we arc now called upon to decide received the attention of a Full Bench of the Allahabad High Court in Bareilly Municipality v. Kundan Lal (A.I.R. 1959 All. 562). The Full Bench by a majority, held on a construction of the provisions of the Act that the power vested in the Board t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther s. 131 of the Act violates Art. 14 of the Constitution. Section 131 of the Act reads : (1) When a board desires to impose a tax, it shall by special resolution frame proposals specifying- (a) the tax, being one of the taxes described in subsection (1) of section 128, which it desires to impose (b) the persons or class of persons to be made liable, and the description of property or other tax thing or circumstances in respect of which to be made liable, except where and in go for as any such class or description is already sufficiently defined under clause (a) or by this Act ; (c) the amount or rate leviable from each such person or class of persons ; (d) any other matter referred to in section 153, which the State Government requires by rule to be specified." The argument is that this section enables the Board to impose a tax of any amount and against any persons or class of persons without giving any guide in regard to the fixation of rate of tax or the persons or class of persons liable to pay the tax. It is said that the said power conferred upon the Municipal Board is an unguided and naked power. Section 131 does not confer any power on the Board to impose a ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tte. It will be seen from the aforesaid provisions that the rate of tax to be levied and the persons or the class of persons liable to pay the same have a reasonable relation to the subjects taxable under the Act. The said rate to be imposed and the persons or the class of persons liable to pay the same are ascertained by a quasi-judicial procedure after giving opportunity to the parties affected, subject to revision by the State Government. We cannot therefore, say that the power conferred upon the Municipal Board is an arbitrary power offending Art. 14 of the Constitution. The next question of learned counsel is that the said taxes were imposed in violation of the procedure prescribed by the Act. At the outset it may be noticed that the house tax was imposed with effect from January 31, 1870 and the latrine tax was imposed with effect from May 23, 1918 and the latter tax was replaced by scavenging tax with effect from April 1, 1939. Though decades have passed by, no one has questioned till now the validity of those taxes on the ground that the procedure was not strictly followed. There is a presumption when a statutory authority makes an order, that it has followed the prescri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxes have been imposed in violation of any of the provisions of s. 131 and other relevant sections of the Act. The last argument relates to the scavenging tax. Section 128(1)(xi) empowers the Municipal Board to impose a scavenging tax. Clause (xii) of that section may also be noticed. It reads : "a tax for the cleaning of latrines and privies". The relevant notification imposing the tax reads: "It is hereby notified under sub-section (2) of Section 135 read with section 136 of the United Provinces Municipalities Act, 1916 (11 of 1916) that the Municipal Board of Bareilly, in exercise of the powers conferred by section 128(1) (xii) of the said Act, has imposed the following scavenging tax in the Bareilly Municipality published with notification No. 3298/XI-18 H, dated the 20th September 1933, in supersession of notification No. 628/XI- 18H, dated the 24th January, 1923, with effect from 1st April 1939. Description of the tax. A tax for the removal of nightsoil and rubbish at the rate mentioned below to be realized from the occupier or the owner of the buildings (bungalows) situated within the Civil Lines ward of the municipality." * * * * In accordance with the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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