TMI Blog1964 (10) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... at the tax is not validly imposed must fail. Appeal dismissed. - Civil Appeal No. 23 of 1964 - - - Dated:- 30-10-1964 - GAJENDRAGADKAR, P.B. (CJ), WANCHOO, K.N., HIDAYATULLAH, M., DAYAL, RAGHUBAR AND MUDHOLKAR, J.R., JJ. For the Appellant: M. C. Setalvad, K. C. Jain and B. P. Maheshwari For the Respondent: S. N. Andley, Rameshwar Nath and P. L. Vohra JUDGMENT Wanchoo J. This is an appeal on a certificate granted by the Allahabad High Court. The appellant is a public limited company and owns two sugar factories situate in the city of Rampur. The factories comprise a number of buildings including some for residential purposes also. The Municipal Board of Rampur (hereinafter referred to as the respondent) decided to impose water tax in Rampur as provided under S. 128(1) (x) of the U.P. Municipalities Act, No. 11 of 1916 (hereinafter referred to as the Act). The procedure for the imposition of tax by the Municipal Board under the Act is provided in ss. 131 to 135 of the Act Section 131 provides that when a Board desires to impose a tax, it shall by special resolution frame proposals specifying the tax, the persons or class of persons to be made liable, and the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the date to be specified in the resolution. Section 135 then provides that a copy of the above resolution has to be submitted to the State Government or the prescribed authority, as the case may be. Upon receipt of such copy, the, State Government or the prescribed authority, as the case may be, has to notify in the official gazette the imposition of the tax from the appointed day and the imposition of the tax is in all cases subject to the condition that it has been so notified under s. 135 (2). Then comes s. 135 (3), which reads as follows "A notification of the imposition of a tax under subsection (2) shall be conclusive proof that the tax has been imposed in accordance with the provisions of this Act." Section 94 (3) which provides for the manner of publication reads thus :- "Every resolution passed by a Board at a meeting shall, as soon thereafter as may be, be published in a local paper published in Hindi and where there is no such local paper, in such manner as the State Government may, by general or special order, direct." According to the respondent, it followed the procedure provided under the Act for the imposition of the tax and after following the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be realised; and (2) the tax could not be levied on most of the premises belonging to the appellant as there was no standpipe or other waterwork whereat water was made available to the public by the respondent within 600 feet of all of the buildings of the appellant. We shall first consider the ground as to publication and three questions fall to be decided in that behalf : (first), is publication as provided in s. 131 (3) mandatory or directory, for it is contended on behalf of the respondent that publication under s. 131(3) is merely directory; (secondly), was the publication in this case strictly in accordance with the manner provided in s. 94(3); and (thirdly), if the publication was not strictly in accordance with the manner provided in s. 94(3), is the defect curable under s. 135(3)? The question whether a particular provision of a statute which on the face of it appears mandatory, inasmuch as it uses the word "shall" as in the present case-is merely directory cannot be resolved by laying down any general rule and depends upon the facts of each case and for that purpose the object of the statute in making the provision is the determining factor. The purpose for which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here the jury., lists had not been revised as required by law. Following the principle laid down in that case, this Court held that Art. 320(3) (c) itself contemplates three grounds: (i) that the proviso to Art. 320 itself contemplates that regulations may be made specifying matters in which either generally, or in any particular class of cases or in particular circumstances it shall not be necessary for a Public Service Commission to be consulted; (ii) that the advice of the Public Service Commission was not binding on the Government, and in the absence of such binding character it was difficult to see how non-compliance with the provisions of Art. 320(3) (c) could have the effect of nullifying the final order passed by the Government; and (iii) that Art. 311 was not in any way controlled by Art. 320 and there was no provision in the Constitution expressly or otherwise providing that the result of non-compliance with Art. 320(3) (c) would be to invalidate the proceedings ending with the final order of the Government. It was also pointed out in that case that an examination of the terms of Art. 320 showed that the word "shall" appeared in almost every paragraph and every clause or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manner of publication and that manner is according to s' 94(3). We shall first deal with what we have called the first part of S. 131(3). This provision deals with taxation. The object of providing for publication of proposals and draft rules is to invite objections from the inhabitants of the municipality, who have to pay the tax. The purpose of such publication obviously is to further the democratic process and to provide a reasonable opportunity of being heard to those who are likely to be affected by the tax before imposing it on them. It is true that finally it is the Board itself which settles the proposals with respect to taxation and submits them to Government or the prescribed authority, as the case may be,, for approval. Even so we have no doubt that the object behind this publication is to find out the reaction of tax payers generally to the taxation proposals, and it may very well be in a particular case that the Board may drop the proposals altogether and may not proceed further with them, if the reaction of the tax-payers in general is of disapprobation. Further the purpose served by the publication of the proposals being to invite objections, in particular from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is substantial compliance with that the purpose of the mandatory part of s. 131(3) would be served. In this connection we may refer to K. Kamaraja Nadar v. Kunju Thevar([1959] S.C.R. 583). In that case, a question arose whether s. 117 of the Representation of the People Act (No. 43 of 1951) was mandatory or directory. That section required that a petitioner filing an election petition had to enclose with the petition a Government Treasury receipt showing that a deposit of one thousand rupees had been made by him either in a Government Treasury or in the Reserve Bank of India in favour of the Secretary to the Election Commission as security for the costs of the petition. This Court analysed this provision and observed that it consisted of three parts : namely, (i) the Government Treasury receipt must show that such deposit had been actually made in a Government Treasury or in the Reserve Bank of India; (ii) it must also show that it had been made in favour of the Secretary to the Election Commission; and (iii) it must further show that it had been made as security for the costs of the petition. The question then arose whether the words 'in favour of the Secretary to the Elect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the publication to be made in a local paper and that local paper must be one published in Hindi. It further provides that where there is no such local paper, the publication may be made in such manner as the State Government may by general or special order direct. In the present case, the publication has been made in a local paper, but that local paper is not published in Hindi; it is published in Urdu, though the actual publication of the resolution in the present case was in Hindi. The contention on behalf of appellant is that this is no compliance with s. 94(3). It appears that there is a local paper published in Hindi also in Rampur, but the evidence is that it is published very irregularly. It is urged that if there was no local paper published regularly in Hindi in Rampur, then the direction of the State Government should have been sought for the manner of publication. It may be accepted that there has not been strict compliance with the provisions of S. 94(3) inasmuch as the publication has not been made in a local paper published in Hindi. We must however point out that if s. 94(3) is interpreted literally, all that it requires is that the publication must be in a local pap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive evidence of the tax having been imposed in accordance with the provisions of that Act, and it could not be challenged on the ground that all the necessary steps had not been taken. Now what happened in that case was that the necessary publication was made as required by law and objections were invited to the proposed tax. Only one objection was filed in that case and that objection was considered by the Board and rejected. The other procedural provisions were complied with and tax was imposed and a final notification made under S. 67 (7) of that Act. Imposition of the tax was challenged on the ground that the Board did not take into consideration the objections filed. The evidence in that case was that the Board had taken into consideration the objections filed and had rejected them on grounds which the appellant (in that case) thought were not proper. It was in those circumstances that this Court held that sub-s. (8) of s. 67 was conclusive. The present case is in our opinion similar to that case. Here also the publication was made, as we have already pointed out in compliance with what we have called the first part of s. 131(3). Further the manner of publication was in subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act or S. 67(8) of' the C.P. Berar Municipal Act would necessarily save such imposition. If s. 135(3) means that where there is substantial compliance with the provisions of the Act that would be conclusive proof that they have been complied with there can be no valid objection to such a provision. But if the section is interpreted to mean, as is urged for the respondent, that even if there is no compliance whatever with any mandatory provision relating to imposition of tax and the only thing proved is that a notification under s. 135(2) has been made, the tax would still be good, the question may arise whether s. 135(3) itself is a valid provision. For present purposes however it is unnecessary to decide that question. In the present case the mandatory part of s. 131(3) has been complied with and its directory part has been substantially complied with and so s. 135(3) will apply and the objection that the tax is not validly imposed must fail. This brings us to the second point raised before us. So far as that is concerned, it is enough to say that it is mainly a question of fact whether the buildings or any of them belonging to the appellant are within 600 feet of the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mittee or Board decides to impose a tax it is required to frame proposals by a special resolution [s. 131(1)] and to frame rules which it desires the State Government to make relative to the assessment, collection etc., of the tax [s. 131(2)]. Section 131(3) then provides: "The Board shall, thereupon, publish in the manner prescribed in section 94 the proposal framed under subsection (1) and the draft rules framed under subsection (2) along with a notice in the form setforth in Schedule III." This enables any inhabitant affected by the proposal to object. The Municipal Committee or the Board then considers the objections and passes orders on the objections but if it modifies the proposals or the rules it publishes them a second time and the whole procedure has to be gone through again. When there is no modification or the proposals or rules are finally settled, the original proposals and rules, if any, have to be forwarded to Government. Government may accept the proposals and the rules or may send them back for further consideration. The proposals and the rules when finally sanctioned by Government are returned to the Municipality which imposes the tax with effect from a specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the tax. the manner of its imposition and manner of its collection. Once Government has approved of the Resolution and published it in the Gazette the tax is deemed to be conclusively imposed in accordance with the procedure laid down. The legislation on the subject is then complete and the tax derives its legislative validity from the legislature's will. Now ss. 131-135 lay down the procedure. All the conditions apparently seem equally obligatory because every condition is couched in mandatory language. The crux of the problem before us is whether all the conditions are to be treated as mandatory or all of them as directory or some of them as of one kind and some of the other kind ? What is the test to apply and if a distinction is to be made, on what principle? In my opinion, the way to look at the matter is this. A tax to be valid must be imposed in accordance with the Municipalities Act. The Act lays down conditions some of which are devised for the protection of the taxpayers and some others for ministerial operations connected with the method or system of imposing the tax or for promoting dispatch, efficiency and publicity etc. All conditions of the first kind must, of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be essential to the validity of the imposition. It seems to me that it is not necessary at all to go into the niceties of the distinction between mandatory and directory provisions in general or in relation to the provisions of the U.P. Municipalities Act in particular. The legislature has itself furnished the solution by enacting s. 135(3) which indicates the consequences of an omission. It lays down emphatically a rule of evidence which precludes courts from making inquiries into the minutiae of the procedure with a view to declaring the imposition invalid. The legislature is quite content to enact that Government should review the proposals, the rules and the procedure before accepting the resolution imposing the tax and that after this is done and a notification issues all questions about the procedural part of the imposition must cease. The legislative will takes over from that stage and the tax is imposed as validly as if the legislature itself imposed it. Whether one reads s. 135(3) as enacting an absolute rule of evidence (and I am in favour of reading it as such-See: The Berar Swadeshi Vanaspati v. Municipal Committee, Shegaon) ([1962] 1 S.C.R. 596) or as merely relate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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