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Hirabhai Ashabhai Patel And Ors. vs State Of Bombay And Ors.

Dated:- 28-7-1954 - Chagla Dixit, J. JUDGMENT Chagla, C.J. 1. The petitioners are the owners of a building situated on the Marine Drive and their main grievance is that the Municipality of Bombay, instead of levying a water-tax upon this building, is charging them for water according to measurement, and their contention is that Section 169, City of Bombay Municipal Act, 1888, which confers that power upon the Commissioner, is invalid. 2. It appears that up to 1952 water-tax was levied upon these .....

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the sum due within a certain time and intimating to them that in default of payment a warrant of distress would be issued for the recovery of the amount. On receiving this notice, the petitioners approached this Court and contended by their petition that the threat held out by the Municipality to issue distress was without Justification in law. 3. Now it is necessary to look at the scheme of the Bombay Municipal Corporation Act in order to understand the contentions of the petitioners and also .....

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icipal waterworks by means of communication pipes and It also applies to premises where water is available from municipal water-works and in respect of which the Commissioner has given public notice. Now, Section 141, which deals With the water-tex, is subject to the provisions of Sectoion 169 and that Section gives the discretion to the Commissioner to charge for the water supplied to such premises by measurement at such rate as shall from time to time be prescribed by the Standing Committee in .....

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ground is that the Section offends against Article 14 of the Constitution; and the third ground is that It constitutes, delegation of legislative function by the Legislature to the Standing Committee or the Commissioner. We have to examine each one of these grounds which have been urged before us by Mr. Purshottam on behalf of the petitioners. 4. Turning to the first ground, the competence of the Legislature must clearly be looked at from the point of view of the Constitution Act in force when .....

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rities and other local authorities -for the purpose of local self-government or village administration." The Entry is very wide in Its terms and legislation is permissible to the State Legislature with regard to any subject of local government and It is also permissible to the State Legislature to confer powers upon a local authority provided the power is for the purpose of local self-government. Now, there can be no doubt that the power of taxation conferred upon the Bombay Municipality is .....

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gain not disputed that the State Legislature is competent to impose the water-tax. But what is argued is that It is not competent to the Legislature to empower the Municipality to levy a tax in respect of which no limit is indicated in the legislation Itself. Now It is difficult to appreciate this argument in the context of competence. If the State Legislature is competent to confer upon the local authority the power to tax, Its competency cannot be affected because the power that has been confe .....

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Committee to determine what are the premises generally which should be charged for the water supplied to them by measurement or to determine any particular specific property which should be charged for water supplied, and It is urged that in permitting the Standing Committee to determine this by a general or special order equality of law is denied to all property-owners in Bombay. Now, what we have to consider is whether the classification which the Legislature has permitted the Standing Commit .....

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oted that the ultimate power of applying this Section was left to the Commissioner and the real grievance of the petitioners is, not that there is discrimination in the legislation, but that there is discrimination in the exercise of the power by the Commissioner. What is urged by the petitioners is that the Commissioner has not exercised this power reasonably and fairly, but that in exercising the power he has discriminated between one landlord and another in the city of Bombay and even one lan .....

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ed out that in 1907 a decision was taken that water-charges should be recovered under Section 169 with respect to certain premises only, and as years went by the class of premises was gradually extended. In April 1950, the suburbs of Bombay were merged into Greater Bombay and It was then discovered that, while in the suburbs the charge for supply of water was always made on measurement, in most parts of Greater Bombay It was done on a flat water-tax, and this Itself seemed to indicate that a par .....

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aken in hand first. The Commissioner also points out that if meters were to be supplied to all the premises and this mode of recovering water-charges was to be put into force, It would involve a capital outlay of ₹ 1,89,00,000. Therefore, in effect and in substance, the affidavit of the Commissioner comes to this, that there is a decision that all property-owners will ultimately have to pay for water supplied to them by measurement, but this is a very big ambitious scheme and that scheme c .....

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hority upon whom the power is conferred to achieve the object or to carry out the social reform in stages or by instalments, and the Court will not hold that there is no equality of law because certain members of the class are affected and others are not. If It is reasonably clear that ultimately the whole class will come within the purview of the law, then the mere fact that at a particular point of time only certain members of the class are affected will not make the legislation or the exercis .....

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r capriciously, but that they have had the misfortune of being singled out first because the Municipal Commissioner has to start somewhere and in this case he has started with the petitioners for the very good reason that he has started with a locality where the consumption of water is very high. 6. The third ground of challenge is that Section 169 constitutes the delegation of legislative function to the Standing Committee or the Commissioner. It is pointed out that the Legislature has given no .....

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It in different language, if the Legislature, without laying down the policy, permits the carrying out of a particular activity or a particular function by some authority, then It might be said that the Legislature has abdicated Its own functions. Now it, may be pointed out, as was rightly indicated by the Solicitor General, that even with regard to the levying of a water-tax no limit has been placed by the Legislature. In the case of halalkhor-tax the limit is there : It cannot exceed 5 per cen .....

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the Legislature which passed this law in 1888 could not possibly decide what it would cost the Municipality to provide a water supply for Bombay; and therefore, the only indication that the Legislature gave as to the limit of the power of taxation of the Municipality with regard to water-tax was that it shall levy a water-tax of so many per centum of the rateable value as the Corporation shall deem reasonable for providing a water supply for Greater Bombay. Therefore, the Water-tax was to be le .....

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of the Municipality. When we turn to Section 169, which is an alternative to Section 140 Sub-clause (a), it provides for an alternative method of realising the water-tax; and, in our opinion, the limitation that is placed upon the levying of the water-tax must also be held to have been placed upon charging for water supplied according to measurement. Therefore, this is not a case where a power was delegated by the Legislature without laying down the policy. The policy is clearly and explicitly l .....

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n of legislative function by the Legislature is untenable. 7. There are various other points urged by Mr. Purshottam with which we must deal, although we have dealt with the challenge to Section 169, broadly as has been urged by Mr. Purshottam. In the first place, it is pointed out - and with some justification that the result of changing over from the mode of levying a water-tax to charging for water by measurement inflicts a very serious hardship upon the petitioners as landlords. Now the posi .....

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s it on to his tenant under Section 173. Therefore, the grievance of the landlord is, as we said, a Justifiable grievance, that whereas he can recover the water-tax from his tenant as soon as the Municipality adopts the alternative mode of recovering water charges he has got to pay the water-charges himself and he cannot recover the water charges from his tenant, although the property may be in the occupation of the tenant, although he may not use the water at all and although all the water supp .....

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hich the landlords would be enabled to recover the water-charges from their tenants. Mr. Purshottam has also drawn our attention to the fact that even under the Rent Act landlords are prevented from recovering, these water-charges from the tenants and even from making a contract when the tenancy is formed that the tenant shall pay these water-charges to the landlord. Perhaps it would have been better, before the Municipality decided upon this new mode of recovering water-charges, that the necess .....

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onstruing a taxing statute, The principle is that in a taxing statute, wherever there is ambiguity of language, the ambiguity must be resolved in favour of the person to be taxed rather than the taxing authority. But when a legislation advisedly confers upon the taxing authority two modes of taxation, and the authority chooses a mode which makes it possible to realise a larger amount, it cannot be urged that the second mode is unlawful because the first mode is more beneficial to the citizen. Th .....

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is being taxed more because the Municipality is exercising its power under Section 169 and not under Section 140(a) There was a suggestion that the Municipality should not make profit by resorting to its powers under Section 169 when it could more naturally and more justly impose a tax under Section 140(a). It is difficult to understand how the word "profit" is appropriate to a local authority like the Bombay Municipality. As we have already pointed out, the object of levying a water- .....

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uggest that the Municipality is trying to make profits by devious methods and by circumventing the clear provision of levying a water-tax under Section 140(a). It may also be pointed out that, apart from the limitation implied in Section I40(a) upon the power . of the Municipality of levying a water-tax, there is this further limitation that the Municipal Corporation is an elected body and the Standing Committee which ultimately decides under Section 169 is also a committee of that elected body, .....

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and disposal by a municipal agency of all excrementl-tious and polluted matter from privies, urinals and cesspools, and also for maintaining and repairing the municipal drains constructed or used for the reception or conveyance of such matter. Now, the municipal agency for removing excre-mentitious and polluted matter was in evidence when the flushing system was not Introduced. Now practically over the whole of Bombay there is a flushing system and the flushing system is - certainly in force as .....

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he argument with regard to double taxation. The answer to the argument is that the water-tax that is levied under Section 140(a) or the water charge that is made under Section 169 is for the use of water. Neither Section provides that the tax will be levied or the charge made provided the water is used for any particular purpose. To whatever use the water may be put, as far as Section 169 is concerned the charge is according to measurement. Therefore, the first answer to Mr. Purshottam's con .....

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ate. It may well be that in fixing the halalkhor-tax at a particular rate the Municipality might take into consideration the fact that it no longer has to supply sweepers to every house for removal of excrementitious matter and that that purpose is now being served by the flush, The Municipality might also well take into consideration, in fixing the water-tax or the water-charge, that part of the water which the owner of the premises uses is for a purpose which helps the Municipality in carrying .....

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tion passed by the Standing Committee. The resolution of the Standing Committee which is attacked is that of 15-4-1953. In the petition this resolution is not set out, nor is it expressly challenged. But we accept Mr. Purshottam's contention that, inasmuch as the petitioners challenge the authority of the Commissioner to levy this charge and inasmuch as the Commissioner justifies the levy by relying upon his power under Section 169 and also the resolution of the Standing Committee, it is for .....

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, for the following classes of premises, the Commissioner may, from time to time, determine whether the water-tax shall be levied in respect of any particular premises, or whether, instead of levying such tax he will charge for the water supplied to such premises by measurement," Then various classes of premises are set out and the rates are mentioned; and we are concerned with that class of premises where the rate is annas 0-14-0 per thousand gallons. Eight classes of premises fall within .....

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lass and to apply the alternative mode of realising the water-charges to the premises so selected by the Commissioner. But that is not all. The Standing Committee has further conferred upon the Commissioner the power to decide from time to time whether any particular premises shall be charged the water-lax or there should be a charge for water supplied according to measurement. In other words, Mr. Purshottam's contention is that this resolution permits the Commissioner, not merely to select .....

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the Commissioner pursuant to this resolution is equally invalid. Now, in order to understand the implications of this resolution, we must once again look at Section 169 and consider what really the effect of the Section is. In the first place Section 169 confers the discretion upon the Commissioner to charge for the water supplied by measurement instead of levying a water-tax. It is to be noted that this power is conferred upon the Commissioner, not as a delegate, but |as an independent authori .....

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surement with regard only to those premise with regard to which the Standing Committe has passed an order or given a direction. In other words, the Standing Committee must firs determine either generally the class of premises or specially the property or properties. It is only when such a determination is arrived at that the Commissioner's discretion - if one may put it that way - can attach to those premises. Therefore, it is not open to the Commissioner to exercise his discretion under Sec .....

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me, but by stages. It is open to the Commissioner not to exercise his discretion with regard to a particular class of premises selected by the Standing Committee, because the Commissioner is not bound to carry out the direction of the Standing Committee. As we have already said, he has an independent discretion and he may take the view that notwithstanding the direction of the Standing Committee, water should not be charged according to measurement. But once he exercises his discretion with rega .....

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rievance is that the resolution of the Standing Committee does not merely permit the Commissioner to select premises from time to time from the class, but it goes further and empowers the Commissioner, not only to select premises from the class for the purpose of applying the alternative mode, but to revert with regard to those premises to the method of levying a water-tax if in his opinion he thinks that having applied the alternative mode it is more profitable or more desirable to go back to t .....

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he Standing Committee has indicated the classes of premises and it is left to the Commissioner in his discretion to select either any class out of these classes of premises or select any particular premises from any particular class. In our opinion, the effect and force of the expression "from time to time" is that the Commissioner may not apply the mode of recovering water-charges under Section 169 all at once to a particular class of premises if he selects such a class, but he may do .....

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understand why the Standing Committee should have expressly stated in the resolution that the Commissioner may exercise his/ discretion when that discretion is conferred upon the Commissioner independently of the Standing Committee and nothing that the Standing Committee can do can prevent the Commissioner from exercising that discretion. It is pure surplusage on the part of the Standing Committee to set out in its resolution a statutory provision with regard to the Commissioner's discretio .....

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legated to him by the Standing Committee. But that is not the case here. The power of the Commissioner, the discretion of the Commissioner, is a statutory power and a statutory discretion. The Commissioner is not functioning as a delegate of the Standing Committee and, therefore, the powers of the Commissioner are to be determined by a construction of Section 169 and not strictly by what the Standing Committee says are his powers. In our opinion, therefore, on a fair and reason-able reading of t .....

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harges was brought about without any notice to the petitioners and without the petitioners being heard and being allowed to show cause. We were rather surprised when it was mentioned that a responsible officer like the Municipal Commissioner should have suddenly decided to instal a meter and to charge the petitioners under Section 169 without any intimation whatsoever to them. It is true that the Section does not require the Commissioner to give any notice. But a responsible officer is not merel .....

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tion that the rules of natural justice have been violated by the petitioners not being heard or their not being allowed to show cause. It may seem rather ironical, but it is still true, that there is one matter in which every citizen is vitally affected where he is not allowed to be heard, and that is when the Legislature or any duly constituted authority decides to levy tax upon him. Perhaps it is not ironic because the reason is obvious. Although the citizen is not heard directly in his own de .....

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