TMI Blog2011 (4) TMI 1416X X X X Extracts X X X X X X X X Extracts X X X X ..... forced from the date of publication in the Gazette and has been extended to every Municipal Corporation of Uttar Pradesh. A plain reading of the rule shows that the purpose of the rule is to impose 'advertisement tax' and provide the mode of recovery and initiate penal action in the event of contravention of rules by the advertising agencies as well as other related persons. HELD THAT:- The impugned Rules could not have been framed by the Government in the manner it has been done. At the most, the proposed Rule or the Model Rules could have been sent to the Corporation and it was for the Corporation to consider the proposal of State Government in pursuance to power conferred by Section 202 and thereupon the Corporation could have directed for imposition of tax w.e.f. the date to be specified in resolution and consequential notification issued u/s 203. In the event of failure on the part of Corporation, government has got option to take recourse in pursuance to power conferred u/s 205 and 206. The other issues are also decided and answered. That State Government has got legislative competence to frame rules but subject to fulfilment of necessary conditions and procedur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with Section 192, 219, sub section (1) of Section 540 and Section 550 of the Act and Section 21 of the U.P. General Clauses Act ( hereinafter referred to as the General Clauses Act) and in super session of all the previous rules and order with regard to advertisements had notified the impugned Rules on 27.2.2008 as required by sub Section (2) of section 540 of the Act. The Rule has been enforced from the date of publication in the Gazette and has been extended to every Municipal Corporation of Uttar Pradesh. A plain reading of the rule shows that the purpose of the rule is to impose 'advertisement tax' and provide the mode of recovery and initiate penal action in the event of contravention of rules by the advertising agencies as well as other related persons. 6- Under the definition clause the word advertiser, advertising sign, tax have been defined which makes it abundantly clear that all advertisements made through advertising sign by the advertiser shall fall within the domain of Rules. The meaning with regard to word 'tax' is provided in clause (h) of sub-section (2) of Section 172 of the Act. According to Rule 3, there shall be a Committee in ever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n where it is to be erected, the manufacturer's name and address and where applicable, the number of lights and electrical details of the same; (b) such Form shall be accompanied by a location plan indicating the position of the sign on site drawn to a scale of 1:500 and by full detail drawing drawn to a scale of 1:20 or an exact multiple thereof in ink or on prints including, if required by the Municipal Commissioner, an elevation showing the sign in relation to the facade; (C) in the case of roof signs, projecting signs or ground signs supporting frameworks and anchorages, and, if required by the Municipal Commissioner, the necessary design calculations shall be furnished with the application; (d) any other particulars as may be required by the Municipal Commissioner; (e) in the case of balloons signs, necessary information as required by the Municipal Commissioner may be supplied; (3)If the advertisement is sought to be exhibited or displayed on the side of any public road or in any private premises, by affixing any structure, then the following details shall also be furnished alongwith such application:- (a) the details of the advertisement and the size of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... members. 10- Power to reject application is conferred by Rule 9 and the payment of property tax is referred to in Section 172 of the Act. It further provides that no advertisement shall be made without the permission of Municipal Commissioner. Rule 17 of the impugned Rule is re-produced as under:- No advertisement on any shop shall without prior permission of Municipal Commissioner and prior payment of tax be exhibited by hanging card board, pasting stickers, painting, writing or displaying in any other manner. Explanation:- (i)If the name of the shop or the names of articles or goods to be sold have been displayed or exhibited by hanging a board, painting, or in any manner whatsoever, the same shall not be treated as advertisement and shall not be taxable under these rules, and (ii)if there is mention of any article describing its qualities etc along with the name of shop or independently attracting the common public as advertisement, the same shall be under these rules. 11- Under rule 26 it has been provided that annual tax specified in Schedule-II shall be payable in single installment. No hoarding or advertisement shall be erected until full payment is made. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per year 'A' Class : ₹ 2000/- per square metre per year 'B' Class : ₹ 1500/- per square metre per year 'C' Class : ₹ 1000/- per square metre per year (5)Posters ₹ 300/- per hundred pieces (6)Hand Bills ₹ 600/- per thousand pieces (7)Banners ₹ 100/- per banner one time (8) Glow sign with electric or electronic device/variable message signs. Super Class : ₹ 1200/- per square metre per year 'A' Class : ₹ 1200/- per square metre per year 'B' Class : ₹ 1200 per square metre per year 'C' Class : ₹ 1200 per square metre per year (9) Balloons : ₹ 500/- per day (10)Canopy : ₹ 500/- per day (11)Unipole : as in article 1 above Explanation:- (1)The rate of tax specified this Schedule shall be deemded to be enhanced by ten percent after the expiry of two financial years following the financial years in which these rules come into force. Thereafter, similar enhancements shall be effective after the expiry of every two financial years. (2)For the purposes of computation of enhancement of tax under Explanation (1) above, the fra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en framed in due exercise of powers conferred upon the State Government under section 540 read with sections 550, 219, 227 of the Act after considering the objections received. The legislative competence of the State Government to frame the impugned Rules is not disputed nor it is alleged that the impugned Rule is in conflict or repugnant to the Act or any other statute. A subordinate legislation like the Rules in question are open to challenge primarily on the ground, for want of legislative competence, being ultra vires to the provisions of the Act under which they have been framed or the Constitution or being in conflict with any other statutes or being arbitrary and violative of Articles 14 and 16 or 21 of the Constitution. But such pleas were not raised in the case of Taj Advertisement. The procedure laid down in Sections 199 to 203 have not been followed. The State Government has framed the Rules in exercise of powers under Section 540 read with section 227 of the Act. It is held that the power has been conferred upon the State Government to frame Rules for the purpose of Act specially with regard to collection of taxes. Reliance placed by the petitioners in the case repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax, the owner of the building concerned would pay the tax, etc. can be said to be unreasonable and unfair to be adhered to and are liable to be struck down? (8)Whether vesting of all the powers (as discussed in this order in relation to putting of hoardings and as given under the Rules, 2009) on private properties, in special areas etc. and in 'no hoarding zones' into the sole authority of the Municipal Commissioner, that too with no guidelines and without providing any superior forum of appeal/revision against his decision, suffers from the vice of excessive delegation and in any case absolutely arbitrary and unreasonable? Apart from referring the questions referred to here-in-above, the Division Bench has opined that the writ petition in its entirety may be heard by a larger Bench to decide the aforesaid questions and the writ petition on merit. 18- After hearing the learned counsel for the parties and going through the record, we are of the view that the questions may be decided only to the extent of conflict between the opinion expressed in the case of Taj Advertising (supra) and in the case of Purvanchan Advertising Association (supra) whereby the referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been defined which is as under:- Advertisement means any word, letter, model, sign, placard, board, notice, device, or representation whether illuminated or not, in the nature of and employed wholly or in part for the purpose of advertisement, announcement or direction and includes any hoarding or similar structures used or adapted to be used for the display of advertisement. Under Section 2(11-A) definition of Corporation or Municipal Corporation has been given, which is as under:- Corporation or Municipal Corporation means the Municipal Corporation constituted for a city under Sub-clause (c) of Clause (1) of Article 243-Q of the Constitution. Under Section 2(39) of the Act meaning of the Municipal Commissioner has been given, which is re-produced as under:- Municipal Commissioner' means the Municipal Commissioner appointed under Section 58 and includes an Additional Municipal Commissioner appointed under the said section, a 'Deputy Municipal Commissioner and a Assistant Municipal Commissioner appointed under Section 107 while exercising powers and performing duties under Section 112. 22- According to Section 4 a Corporation shall be a body ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 193, the beneficiaries shall be held responsible for whom or whose purpose the advertisement has been erected. For convenience, Sections 172, 173, 192, 193, 194, 195 and 196 are re-produced as under:- Section 172. Taxes to be imposed under this Act:- (1) For the purposes of this Act and subject to the provisions thereof and of Article 285 of the Constitution of India, the Corporation shall impose the following taxes, namely.- (a) Property taxes; (b) a tax on vehicles other than mechanically propelled vehicles, and other conveyances plying for hire or kept within the City or on boats moored therein: (c)a tax on helicopters or any other type of planes, when they land on or take off from the helipads, airports, airstrips or places made for this purpose situated within the Corporation. The tax so imposed shall be paid by the airport authority or person or persons, or managers, or director or institution or department or agency involved in the maintenance, management and supervision of the airport, airstrip, helipad or the place as the case may be; (d)a tax on trades and professions; (e) a tax on deeds of transfer of immovable property situated within the city; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l not be less than 7.5 per cent and not more than 12.5 per cent, the drainage tax shall not be less than 2.5 per cent and not more than 5 per cent and the conservancy tax shall not be more than 2 per cent of the annual value.] Section 192. Tax on advertisements.-- Where a Corporation imposes a tax mentioned in Clause (h) of Sub-section (2) of Section 172, every person who erects, exhibits, fixes or retains upon or over any land, building, wall, hoarding or structure any advertisement or who displays any advertisement to public view in any manner whatsoever, in any place whether public or private, shall pay on every advertisement which is so erected, exhibited, fixed, retained, or displayed to public view, a tax calculated at such rates and in such manner and subject to such exemptions as may be provided by the Act or rules made thereunder: Provided that no tax shall be levied under this section on any advertisement or a notice-- (a) of public meetings, or (b) of an election to any legislative body or the Corporation, or (c) of a candidature in respect of such an election: Provided also that no such tax shall be levied on any advertisement which is not a sky-sign a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in certain cases.- The permission granted under Section 193 shall become void in the following case, namely : (a) if the advertisement contravenes any bye law made by the Corporation under [Clause (48) of Section 541; (b) if any addition to the advertisement be made except for the purpose of making it secure under the direction of the Municipal Commissioner; (c) If any material change be made in the advertisement or any part thereof; (d) if the advertisement or any part thereof falls otherwise than through accident; (e) if any addition or alteration be made to, or in the building, wall or structure upon or over which the advertisement is erected, exhibited, fixed or retained if such addition or alteration involves the disturbance of the advertisement or any part thereof; and (e) if the building, wall or structure upon or over which the advertisement is erected, exhibited, fixed or retained be demolished or destroyed. Section 195-- Beneficiary from advertisement to be deemed responsible:-- Where any advertisement shall be erected, exhibited, fixed or retained upon or over any land, building, wall, hoarding or structure in contravention of the provisions of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re and in so far as any 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 219 which the State Government requires by rule to be specified. (2) Upon a resolution being passed under Sub-section (1) the Executive Committee shall frame the proposals and also prepare a draft of the rules which it desires the State Government to make in respect of the matters referred to in Section 219. (3) The Executive Committee shall, thereafter, publish in the manner prescribed by rule the proposals framed under Sub-section (1) and the draft rules framed under Sub-section (2) alongwith a notice in the form to be prescribed by rule. Section 200-- Procedure subsequent to framing proposals--(1) Any inhabitant of the city may, within two weeks from the publication of the said notice, submit to the Corporation an objection in writing to all or any of the proposals framed under the preceding section, and the Corporation shall take any objection so submitted into consideration and pass orders thereon by special resolution. (2) If the Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Clauses (b) and (C) of Sub-section (1) of Section 199 shall, so far as may be, be the procedure prescribed by Sections 199 to 202 for the imposition of a tax. Section 205- Power of State Government to remedy or abolish tax- (1) Whenever it appears, on complaint made or otherwise to the State Government, that the levy of any tax is contrary to the public interests or that any tax is unfair in its incidence, the State Government may, after considering the explanation of the Corporation concerned, by order require such Corporation to take measures within a time to be specified in the order, for the removal of any defect which it considers to exist in the tax or in the method of assessing or collecting the tax. (2)Upon the failure or inability of the Corporation to comply, to satisfaction of the State Government,with an order made under Sub-section (1), the State Government, may by notification, suspend the levy of the tax, or of any portion thereof, until the defect is removed, or may abolish or reduce the tax. Section 206:-Power of State Government to require Corporation to impose taxes:- (1) The State Government may, by general or special order, published in the offici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7- Chapter XII deals with the Construction, Maintenance and Improvement of Streets and Section 272 relates to vesting of public streets in Corporation and Sections 305 and 306 deal with the making of Regulation for sky-signs and control of advertisements. Section 314 deals with the power of State Government to make Rules for the purpose of carrying into effect the provisions of this Chapter. For convenience, Sections 305, 306 and 314 are re-produced as under:- Section 305:- Regulation as to sky-signs:- (1) No person shall, without the written permission of the Municipal Commissioner, erect, fix or retain any sky-sign of the kind prescribed by rules whether existing on the appointed day or not. Such written permission shall be granted, or renewed, for any period not exceeding two years from the date of each such permission or renewal, subject to the conditions that such permission shall be deemed to be void if- (a) any addition is made to the sky-sign except for the purpose of making it secure under the direction of the Municipal Commissioner; (b) any change is made in the sky-sign or any part thereof.; (c) the sky-sign or any part thereof fall either through accide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he business of any railway administration; (d) is exhibited within any railway station or upon any wall or other property of a railway administration, except any portion of the surface of such wall or property fronting any street. Section 314:- Power to make rules:- (1) The State Government may make rules for the purpose of carrying into effect the provisions of this Chapter. (2) Without prejudice to the generality of the foregoing powers such rules may provide for-- (a) manner in which the Corporation shall sanction the closing of any public street and the disposal of the site of such street under Section 273; (b) manner in which the sanction of the Executive Committee to prescribe a fresh street line in place of any existing line shall be given under Section 279; (c) manner in which a person shall give notice of his intention to sell, let, etc. land for building purposes or to lay out a private street under Section 287 and the procedure to be adopted by the Municipal Commissioner in dealing with such notice including, asking for more information or authenticated plan, etc. (d) steps to be taken under Section 301 by the Municipal Commissioner for safety and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that while interpreting statutory provisions or sections meaning should be given to each and every word and section of the Statute as a whole. 30- Maxwell in his famous treatise on the interpretation of Statutues (12th edition page 36) observed as under:- A construction which would leave without effect any part of the language of a statute will normally be rejected. Thus, where an Act plainly gave an appeal from one quarter sessions to another, it was observed that such a provision, though extraordinary and perhaps an oversight, could not be eliminated . 31- The Supreme Court in Grasim industries ltd. vs. Collector of Custom (2002) 4 SCC297 held that while interpreting any word of a statute every word and provision should be looked at generally and in the context in which it is used and not in isolation. 32- In Deepal Girish bhai soni vs. United India insurance ltd. (2004) 5 SCC 385 Supreme Court has held that a statute to be read in entirety and purport and object of Act to be given its full effect by applying principle of purposive construction. 33- In Pratap Singh vs. State of Jharkhand (2005) 3 SCC 551 the Supreme Court held that Interpretation of a statute dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this Part, unless the context otherwise requires:- (a) 'Committee' means a Committee constituted under article 243 S; (b) 'district' means a district in a State; (c) 'Metropolitan areas' means an area having a population of ten lakhs or more, comprised in one or more districts and consisting of two or more Municipalities or Panchayats or other contiguous areas, specified by the Governor by public notification to be a Metropolitan area for the purposes of this part; (d) 'Municipal area' means the territorial area of a Municipality as is notified by the Governor; (e) 'Municipality' means an institution of self-government constituted under article 243-Q; (f) 'Panchayat' means a Panchayat constituted under article 243 B; (g) 'population' means the population as ascertained at the last preceding census of which the relevant figures have been published; Article 243 Q:- Constitution of Municipalities:- (1) There shall be constituted in every State-- (a) a Nagar Panchayat (by whatever name called) for a transitional area, that is to say, an area in transition from a rural area to an urban area. (b) a M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Metropolitan area; (ii) matters of common interest between the Municipalities and the Panchayats, including co-ordinated spatial planning of the area, sharing of water and other physical and natural resources, the integrated development of infrastructure and environmental conservation; (ii) the overall objectives and priorities set by the Government of India and the Government of the State; (iv) the extent and nature of investments likely to be made in the Metropolitan area by agencies of the Government of India and of the Government of the State and other available resources whether financial or otherwise; (b) consult such institutions and organizations as the Governor may, by order, specify. (4) The Chairperson of every Metropolitan Planning Committee shall forward the development plan, as recommended by such Committee, to the Government of the State. 38- The constitution was amended to the extend more autonomy and self rule to the local bodies and corporations. The purpose was sharing of power by the common people at the lower strata of democratic polity so that it may be convenient to deal with the local problems and provide a system which may suit to loca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S JUDICIAL DICTIONARY OF WORDS AND PHRASES: SEVENTH EDITION, Page 570 the word Corporation has been defined as under:- Corporation 'Corporation' is that which the civilians call universitatem, or collegium, and is a body politick authorized to take and grant, having a common seal, c. These are constituted either by prescription, by Letters Patent, or by Act of Parliament (Cowel; see also Termes DE LA Ley; JACOB). They are either (1) spiritual, e.g. bishops, deans with their chapters, parsons and vicars; or (2) temporal, e.g. municipal corporations, and companies incorporated by charter or Act of Parliament; or (3) mixed, i.e. composed of spiritual and temporal persons, as in some colleges and hospitals. Again, they are either (1) sole, e.g. bishops, parsons and vicars; or (2) aggregate, e.g. deans with their chapters, municipal corporations, and incorporated railway, water, gas, or trading, companies. Cp. BODY CORPORATE; BODY UNINCORPORATE. The powers of a corporation, created by Act of Parliament, are limited to those which are expressly conferred by the Act, or which by necessary implication (see NECESSARY) are included in the express powers. 42- In BLACK ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontracting obligations, and of suing and being sued. 47- The Supreme Court in a case reported in (2005) 1 Supreme Court Cases 149 Virendra Kumar Srivastava vs. U.P. Rajya Karmachari Kalyan Nigam and other held that the Corporation is not engaged in any State function of vital importance making available daily needs of the Government servants which is an activity like any other commercial activity. 48- In one another case reported in (2003) 263 ITR 706 Union of India vs. Azadi Bachao Andolan, the Supreme Court held that a 'Corporation' has administrative activities, directors and managers who reside, meet and take decisions in one or several places. It has activities and carries on business. From the scheme given in the Act, it is evident that various duties have been assigned to the officers of municipalities headed by Municipal Commissioner and ultimate policy maker is the municipal body containing its members. 49- In one other case reported in 2005-III LLJ 1077, 1084 (SC) Agarwala P.C. vs. Payment of Wages Inspector, the Supreme Court observed that a 'Corporation' is an abstraction. It has no mind of its own any more than it has a body of its own; its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the word of Professor Wade (supra) in England the corporation was incorporated by royal charter in the year 1627 in the reign of King Charles I. The fact that it is incorporated by royal charter is of importance, because a corporation so constituted stands on a different footing from a statutory corporation. The difference being that the latter species of corporation can only do such acts as are authorised directly or indirectly by the statute creating it, whereas the former can, speaking generally, do anything that an ordinary individual can do. 54- In the Administrative Law by I.P. Massey the statutory public corporation has been defined as an agency created by an Act of legislature, operating a service on behalf of the government, but as an independent legal entity with funds of its own and largely autonomous in management. The learned author incapsuled the ingredients with regard to statutory corporation, (page 437 ) as under, to quote:- Statutory corporation is a creature of a statute which lays down its rights, duties and obligation. Therefore, a corporation can have those rights and exercise those functions only which are authorised by the statute either expressly o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s with regard to imposition of tax, recovery and maintenance of infrastructure. For the purpose, the government may frame rules or model rules but without violating other statutory provisions contained in the Act itself. Power of the State Government is subject to other provisions contained in the Act itself. Provision contained in Section 540 of the Act cannot be read in isolation. While considering the power of State Government to frame rules, regulations or the bye-laws, the Court has to take into account Article 243 (Q), Section 2 containing definition clause as well as provision contained in Section 172 as well as other provisions contained in Chapter IX of the Act. 57- The power conferred on the Corporation under Section 172 of the Act contains the power to impose tax on trades, professions, transfer of property, tax on vacant land and so on. Sub-section (2) of Section 172 empowers the Corporation to impose tax in addition to the tax specified in Sub-section (1) for the purposes of Act and subject to the provisions thereof. The power contained in Sub-section (1) of Section 172 is quite exhaustive and empowers the Corporation to impose tax on any matter in furtherance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... body of the corporation to take decision to impose tax or premium and not the municipal commissioner under the Act. Thus, power conferred by the impugned rule on the Municipal Commissioner is in contravention of the Act. 61- A combined reading of Rule 26 with Schedule shows that by the impugned Rule, taxes have been imposed with regard to advertisement though under the Act, power to impose tax has been dealt with under Chapter IX from Section 172 to 205 of the Act. Statutory provisions contain specific provisions how the tax should be imposed. Under Section 199 of the Act, proposal should be prepared by the Corporation for imposition of tax through its executive committee. The executive committee of the Corporation shall pass resolution with regard to tax and thereafter it shall send to the state government. The State Government may reject, sanction or modify the proposal under Section 201 of the Act. The Provisions contained in Sections 201, 202 and 203 of the Act abundantly clears that the initial proposal with regard to imposition of tax falling within the domain of corporation should be mooted from corporation. The state government may approve or disapprove the proposal with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Needless to say that in case direction issued by the state government is not sound and affects the right of the people or violative of constitutional provision or tax proposed by the Government is not lawful, then it may invite public resentment or people may approach for judicial review against such direction or decision taken by the state government. 67- Accordingly, the power conferred on the State Government under Section 540 of the Act is subject to Sections 172, 192, 193, 194, 195 and 196 and 199 of the Act. However, the government has right to frame model rules or issue direction under Section 206 of the Act to impose certain taxes by publication in official gazette. Thus, the impugned rules seem to have been framed in contravention of statutory provision contained in the Act. Hence, the judgment in Taj Advertising (supra) seems to not lay down a correct law. 68- The other aspect of the matter is that the provisions contained in the Act with regard to imposition of tax seem to be an instance of conditional legislation. Consistent with their sovereign character, Legislatures in India have been held to possess wide power of delegation. This power is, however, subject to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the delegated legislation. The present issue does not seem to be covered by such proposition where though final power in tax matter in the form of approval, disapproval or modification vests in the state government, but it shall always be incumbent that all such proposal should be placed before the corporation to consider it by appropriate resolution. 71- The Supreme Court in the case reported in AIR 1962 SC 1263 Bangalore Woollen, Cotton Silk Co. Ltd. vs. Bangalore Corporation had affirmed the power of Municipal Corporation to levy octroi on 'other articles' not specified in the Schedule but 'which may be approved by the Corporation by an order in this behalf holding that it is in the nature of conditional delegation. 72- In AIR 1966 SC 693 Municipal Board Hapur v. Raghuvendra Kripal, the Supreme Court held that when proposals are finally settled or they are submitted to the State Government for sanction and the State Government sanctioned thereafter the order sanctioning the proposal and a copy of the rules is sent to the Board which thereupon by special resolution directs the imposition of the tax with effect from a date to be specified in the resolution, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and only the minor functions necessary for the imposition of th e tax and the inquiries which must be made to ascertain local opinion are left to the Municipal Boards. An additional check is available as Government can veto the actions of a Board if it does not carry out the mandate of the Legislature. 74- In AIR 1966 SC 249 Bharat Kala Bhandar (P) Ltd. vs. Municipal Committee, their lordships held that in the event of expressed prohibition in Statute against local authority, imposition of tax shall be bad in law. While reading Section 192-A of the Government of India Act, the Supreme Court ruled that the municipalities should act within its jurisdiction conferred by the Statute. 75- In (1969) 2 SCC 283 Shri Prithvi Cotton Mills Ltd. vs. Broach Borough Municipality, their Lordships observed as under:- Before we examine Section 3 to find out whether it is effective in its purpose or not we may say a few words about validating statutes in general. When the Legislatue sets out the validate a tax declared by a court be illegally collected under an ineffective or an invalid law, the cause for ineffectiveness or invalidity must be removed before validation can be said to take p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the power of authority to impose restriction and condition must be construed having regard to the purpose and object it seeks to achieve. Superior courts would ensure that subordinate legislation must have been framed within the four corners of the Act and is otherwise valid. The Legislature policy providing qualification or disqualification should not be uncertain and the delegate must be furnished with adequate guidelines. Their lordships further proceeded to observe that law making power may be delegated having conform to policy of parent statute and there should be transparency, openness, responsiveness and accountability on the other hand. Image of law flows from its framework with respect to its neutrality or objectivity. The law has to proceed the basic level of security by assuring that law is knowable, dependable and shielded from excessive manipulation. For convenience paras 35, 38, 39 and 40 are re-produced as under:- Para-35:- In the event a statute provides for licensing, in a case of this nature, the same must thus be found to satisfy the test of reasonableness. The standard for determining reasonableness of a statute so as to satisfy the constitutional scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal proposition. 79- Hon'ble Supreme Court had further proceeded to observe. Paras 71, 72, 73 and 74 of the judgment are re-reproduced as under:- Para-71- The law sometimes can be written in such subjective manner that it affects efficiency and transparent function of the Government. If the statute provides for pointless discretion to agency, it is in essence demolishing the accountability strand within the administrative process as the agency is not under obligation from an objective norm, which can enforce accountability in decision-making process. All law-making, be it in the context of delegated legislation or primary legislation, have to conform to the fundamental tenets of transparency and openness on one hand and responsiveness and accountability on the other. These are fundamental tenets flowing from the process requirement under Article 21, equal protection clause embodied in Article 14 and fundamental freedoms clause ingrained under Article 19.A modern deliberative democracy cannot function without these attributes. Para 72- The constitutive understanding of the aforementioned guarantees under the Fundamental Rights Chapter in the Constitution does not give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 172 read with Section 199 of the Act and other provisions, ultimate power to impose tax vests in the Corporation i.e. in its general body or Board constituted by the elected representatives. The Corporation can modify the proposal of executive body under Section 202 of the Act even after sanction of tax proposal by the State Government. It shall be necessary to place the matter for approval before the Corporation and the Corporation shall take final decision by special resolution with regard to imposition of tax. The State Government has got power under Section 205 of the Act to abolish or modify the tax imposed by the the Corporation. It does not mean that the State Government lacks power with regard to tax matter. Power conferred on the State Government is general power which may be exercised without affecting the statutory power provided to Corporation to impose and regulate tax within its jurisdiction. The government may, by notification, under Section 206 of the Act by general or special order published in official gazette, required corporations to impose any tax mentioned in Sub-section (2) of Section 172 of the Act, not already imposed at a specified rate. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing the procedure provided by the Act. 87- One of the arguments advanced by Shri J.N. Mathur, Additional Advocate General is that the Rules in question are only directory and not mandatory. It is a guidelines for corporation to implement it in accordance to law. The argument advanced by Shri Mathur seems to be misconceived. At the face of record the rule provides that it shall come into force with immediate effect i.e. from the date of notification. In the event of non payment of premium, taxes, a penal action may be taken by the Municipal Commissioner. The letter and spirit of the impugned rule makes it mandatory, therefore, the argument advanced by Shri J.N. Mathur, learned Additional Advocate General seems to be not sustainable. 88- To sum up, impugned Rules could not have been framed by the Government in the manner it has been done. At the most, the proposed Rule or the Model Rules could have been sent to the Corporation and it was for the Corporation to consider the proposal of State Government in pursuance to power conferred by Section 202 of the Act and thereupon the Corporation could have directed for imposition of tax w.e.f. the date to be specified in resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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