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TMI Blog2014 (10) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... ating the arguments of the parties, the facts in Writ Petition No.2720/2013 are referred to. 3 The challenge in this Writ Petition is to the legality and validity of Section 127(2)(aaa), Section 99 (partly) and Section 152T of the Bombay Provincial Municipal Corporations Act, 1949 and now the Maharashtra Municipal Corporations Act. The provisions as particularly indicated in the prayer clauses together with Notifications are impugned as being ultra vires Part IXA of the Constitution of India and particularly Articles 243W and 243X. The prayers read as under:- "(a) This Hon'ble Court may be pleased to invoke it's writ jurisdiction under Article 226 of the Constitution of India and be pleased to issue a writ of mandamus or a writ, direction or order in the nature of mandamus and be pleased to; (i) hold and declare that Sections 127(2)(aaa), 99(partly) and S.152-T of the Bombay Provincial Municipal Corporation Act, 1949 unconstitutional and ultra vires the provisions of Part IXA and Article 243W and Article 243X in particular of the Constitution of India and be struck down. (ii) hold and declare that Sections 127(2)(aaa), 99 (partly) and 99C (partly), 99D and 152T of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Associations so as to initiate action to do away with Octroi and to replace the same with a system more beneficial to them. In furtherance of it's object to help the traders, the Respondent No.1 vide a Notification dated 21st October, 2008 sought to impose cess on the D-Class Municipal Corporations governed under the provisions of the said Act in place of Octroi. There are 16 such Municipal Corporations which fall under D-Class in the state of Maharashtra. The Respondent No.1, however, realized the mistake in implementation of cess as the same would be totally non feasible and against the interest of the Municipal Corporations. The Respondent No.1 vide a Notification dated 15 th November 2008 cancelled the levy of the Cess which was to replace Octroi. This was done on account of various representations by the D Class Municipal Corporations as also the adverse effect noticed on the financial stability of the said Municipal Corporations. 6 It is submitted that it is a matter of record that all the Municipal Corporations have raised protest against such an action of the Respondent No.1 to bring about any change in the existing levy of Octroi. By letter dated 17.11.2009 address ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Body Tax by the State Government. Section 99C dispenses with the application of Section 99B when the Local Body Tax is to be first levied. The impugned Act also amends Sub Section (2) of Section 127 to incorporate Section 127(2)(aaa) so as to include Local Body Tax to be levied by the Municipal Corporations on the entry of goods into the limits of the city for consumption, use or sale therein in lieu of Octroi or Cess if so directed by the State Government by Notification in Official Gazette. Furthermore by incorporation of Section 149A, an additional stamp duty of 1% on certain transfers of immoveable properties in Municipal areas has been incorporated so as to make a provision to purportedly compensate the loss of revenue which the Corporations may suffer on account of dispensation of Octroi. By incorporating Chapter XI-B to the said Act, provisions are made as regard 'levy' of Local Body Tax. Section 152T as introduced illegally confers power on the State Government to make Rules by Notification in the Official Gazette to carry out the purposes of the Act. The Respondent No.1 by a Notification published in the Official Gazette dated 1st January 2010 published the Draft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances the Respondent No.1 deciding that publication of draft rules in Government Gazette would suffice and was sufficient is, therefore, erroneous. Thus the impugned Notification of 2010 being conclusive proof of there being no previous publication as required under section 152T, therefore, cannot be accepted and/or presumed. Thus the impugned Notification of Rules 2010 is illegal and bad in law for there being no previous publication as provided by Section 24 of the Bombay General Clauses Act, 1904. That the Impugned Rules 2010 are, therefore, finalized without abiding with the legal requirement of previous publication. That the impugned Rules, therefore, are illegal and bad-in- law. The Petitioners stated that the whole procedure undertaken is per se illegal and bad-in-law. That the Respondent No.1 has not yet finalized the rates to be charged under the Rules and a letter dated 25.02.2013 has been issued belatedly to call upon the Corporations to come for a hearing upon the said issue on 02.03.2013. Annexure C is a copy of the said letter. It is, therefore, apparent that the Respondent No.1 has illegally issued the impugned Notification dated 25.03.2010 for illegally forcin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and opposed the Respondent No.1's impugned decision of discontinuing Octroi by *11* wp.2720.13.group.as.lbt substituting with Local Body Tax and have corresponded regarding the illegality of the same with the Respondent No.1. The Petitioners have pointed out how the same would bring about a situation of emergency due to financial break down of the Municipal Corporations. The Petitioners have immediately contacted their counterparts in other Municipal Corporations and Municipalities to gather information and have gathered all the information. The Petitioners have also immediately submitted their representation inter alia pointing out that it would be inappropriate, arbitrary and illegal for the Respondent No.1 to discontinue the levy of octroi and imposition of Local Body Tax upon the Municipal Corporations. It was, therefore, requested by the Petitioners to the Respondent No.1 that a hearing be accorded to them so that all the evils which would arise if the impugned act is implemented, can be demonstrated. Annexures D, E and F to the Petition are copies of the said representations dated 22.02.2010, 03.03.2010 and 04.03.2010, respectively. However, the Respondent No.1 has not g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is also against the basic objects and reasons of the 74th Amendment Act, 1992. That the same amends the Constitution of India and incorporates Part IX-A dealing with Municipalities in the Constitution of India. It is stated that the impugned Amendment Act 2009 is also in direct conflict with the existing provisions of Sections 99, 149, 455, 457 of the said Act as set out in detail in the body of this Writ Petition. By the impugned Act, the Respondent No.1 has taken away, *13* wp.2720.13.group.as.lbt deprived and/or abdicated the Municipal Corporations functioning under the said Act of its powers to choose and levy appropriate taxes as per the provisions of the said Act. In short, by the impugned Act the Respondent No.1 has foisted upon the Municipal Corporations the Local Body Tax which is wholly against the financial interest, financial viability and the stability and/or existence of the Municipal Corporations. The impugned legislation has been enacted disregarding the Constitutional mandate only to favour the demand of the traders to do away with Octroi. In so doing, the Respondent No.1 has closed its eyes to number of vital issues which are agitated from time to time by the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so the Respondent has clearly transgressed the constitutional mandate as contained in Part IX-A of the Constitution. 15 It is, therefore, stated that the above Constitutional mandate is not being considered and the Respondent No.1 has gone ahead and issued impugned Notification dated 25.02.2013 directing the Respondent Nos.2 to 6 to impose the Local Body Tax from 01.04.2013 in their Corporation limits by discontinuing the Octroi collections. The Respondent No.1 appears to be hell-bent and adamant to impose the levy of Local Body Tax despite the legal position being that the impugned Act, Rule & Notification are ultra vires, illegal, unreasonable, null and void. That in fact almost all the Municipal Corporations wherein the Respondent No.1 has imposed Local Body Tax in lieu of Octroi by issuing identical *15* wp.2720.13.group.as.lbt Notifications previous to the presently impugned one have approached this Hon'ble Court by challenging the impugned Act and Rules as also the Notifications identical to the presently impugned one dated 25.02.2013. That all the said Writ Petitions have been entertained with interim stay being granted and further permissions to the said Petitioner Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Legislation. It is at the instance of the Trader Community and who devised ways and means to circumvent and avoid the Octroi Post/Check Naka that the Government has stepped in. 19 Ms.Karnik has invited our attention to the then BPMC Act, 1949 and now styled as the Maharashtra Municipal Corporation Act. She submits that by Chapter-X what has been indicated is firstly the borrowing powers and thereafter, the provisions whereunder there are powers conferred in the Municipal Corporations to borrow the money. The provisions as are incorporated under Chapter-X of the said Act and now under the Maharashtra Municipal Corporation Act under the same heading, would indicate that the Municipal funds and other funds which have to be generated, augmented and maintained are not enough for the purpose of discharging the diverse functions and duties. In that regard, Ms.Karnik submits that by Section 109A of the said Act there are restrictions on utilisation of funds created by the Corporation and it states *17* wp.2720.13.group.as.lbt that notwithstanding anything contained in Section 109, except with the prior approval of the State Government, neither any internal loan shall be taken by the Muni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce is apparent from the language of Section 127(2)(aaa) by which it is imperative for the Corporation to shift to levy, assess and recover the Local Body Tax. Thus, earlier provision of Section 127(2) with it's language in comparison did not amount to such an interference with independence and autonomy of the Corporation. There, the Corporation had discretion to levy Octroi or in lieu of Octroi a Cess on the goods brought within the limits of the city for consumption, use or sale thereof. This could have been levied in lieu of Octroi with the previous sanction of the State Government. In juxtaposition the language of clause (aaa) of Section 127(2) is peculiar and leaving no discretion or option at all. If there is direction by the Government which is published in the Official Gazette to impose Local Body Tax on the entry of goods for consumption, use or sale in the city, then, it means that Octroi or Cess has to be replaced necessarily by such Local Body Tax. Thereafter, no Octroi or Cess can be imposed. By such drastic measure the Government has virtually taken away the freedom, autonomy and independence guaranteed by the Constitutional provisions. Ms.Karnik also invites our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wp.2720.13.group.as.lbt Ms.Karnik invites our attention to Sections 99B, 99C and 99D which have been brought in by the amendment. She submits that this would show that the entire regime of Local Body Tax is controlled and regulated by the State Government. The Corporation cannot, even if the tax is named as Local Body Tax, do anything in relation to levy and imposition of this tax. Such being the mandate of law, now there is no alternative but to hold that the impugned provisions contravene the Constitutional mandate as emphasized above. 22 Our attention is then invited by Ms.Karnik to Section 152P of the said Act. She submits that apart from inherent contradiction and irreconciliation as between Section 127(2) and Section 127(2)(aaa), additionally Chapter XI-B has been brought in the statute book. "Provisions relating to Local Body Tax" is the title of this Chapter. All the provisions from Sections 152P to 152T appearing therein would indicate as to how the authority and power of the Corporation is taken over by the State Government. Now the State Government alone has the power to levy Local Body Tax. It is only the collection thereof which is left to the Corporation. There is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the Government Resolution dated 28.12.2011 for finding any better taxation policy other than Local Body Tax and this fact is not denied by the Respondents in their reply. However, the conclusions of the said study *22* wp.2720.13.group.as.lbt Group are not placed before this Court. It is, therefore, submitted that the decision to impose Local Body Tax is arbitrary. That the Schedule D Rule 288 of the Octroi Rules provides for an account-based system and the said power ought to have been better regulated so that the objections by small traders regarding paper work could have been ameliorated by checking at entry point & alleged harassment of medium and big traders could have been taken care of under Rule 288. This double filtered checking system would have benefited the Corporation, whereas impugned decision now puts this crucial Muncipal tax at the mercy of self-declaration of the traders. Ms.Karnik has further submitted that the reasons for introducing Local Body Tax are set out in the statement & object and it is stated in paragraph 1 thereof that the method of levy and collection of Octroi often leads to disruption of free movement of goods and is a major deterrent to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given to the objections raised to the levy of Local Body Tax. It is pointed out as to how these objections can be said to be frivolous and without any basis. Mr.Shinde has invited our attention to the affidavit of Mr.Govind Appasaheb Lokhande, Deputy Secretary, Urban Development Department, Mantralaya, Mumbai dated 28.07.2014. Mr.Shinde submits that this Writ Petition has been filed only by the representatives of employees in Thane, *24* wp.2720.13.group.as.lbt Pune, Pimpri Chinchwad, Nagpur and Navi Mumbai Municipal Corporations. The direction of the State is issued to several Municipal Corporations. Pertinently none of the Municipal Corporations are aggrieved and have come forward to challenge imposition of levy far from it's legality and constitutionality. The Corporations have a distinct legal identity and independent of their employees. It is capable of suing and being sued in it's own name. It has not come forward to assail the legal provisions. Therefore, the employees and Unions who have a vested interest in retention of earlier regime of octroi have for their own benefits filed such petitions and which deserve to be dismissed. The argument of Mr.Shinde is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from 1996 i.e. after the constitutional amendment, but none has complained that it falls foul of the constitutional provisions referred by Ms.Karnik. In such circumstances there is no substance in the contentions of Ms.Karnik that absence of proviso as appearing below clause (aa) in the newly added and inserted clause (aaa) makes much difference. By sub-section (2) of Section 127 there is discretion in the Corporation to impose any additional taxes. However, the discretion ends the moment there is a direction from the State to levy the cess on entry of goods into the limits of the city for consumption, use or sale therein in lieu of octroi. Hence, what one finds by insertion of clause (aaa) is that the State has brought in the Local Body Tax on the entry of goods into the limits of the city for consumption, use or sale therein in lieu of octroi or cess if so directed by the State Government. This provision is similar to the proviso below clause (aa) of *26* wp.2720.13.group.as.lbt Section 127 of the said Act. 29 Mr.Shinde has submitted that in the affidavit the entire rational and reasoning for imposition of Local Body Tax in lieu of octroi has been set out and in that behalf he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x and replacement of octroi therewith. The number of traders who have registered themselves is increasing. The difference is that the Local Body Tax is collected on the basis of accounts maintained by the traders while the octroi was collected directly from the transporters at the time of entry in the Municipal Limits of the Corporations. The rates of octroi and Local Body Tax are same. The revenue collected in the Municipal limits goes to the Corporation itself. The tax is charged on the turnover and therefore, there is increasing trend in the revenue received from this tax and which was not possible earlier in octroi. Similarly, the expenditure on tax collection has also reduced as few employees/ man power is required for assessment of returns received from the Traders. Mr.Shinde submits that to generate additional revenue to the concerned Municipal Corporation, the State Government grants 1% of the total stamp duty collected within the jurisdiction of such Municipal Corporation. Thus, all efforts are made not only not to harm the interest of the Municipal Corporation, but also to strengthen its economy so that it functions independently without depending on the State Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... violative of Article 14 of the Constitution of India as alleged or at all. I say that the Petitioners have not provided the details of time to time representations. It is denied that the Respondent No.1 is forcing the respective Corporations to implement the provisions of the Act and Rules as alleged. ........ 26. With reference to para 14-A of the Writ Petition, I say that Article 243W of the Constitution of India, it is not obligatory for the State legislature to make a law to endow the municipal bodies the right to levy and collect municipal taxes, but it is an enabling provision. It is denied that the impugned Act is ultra vires of the provision of Part IX-A of the Constitution and in particular Article 243W of the Constitution of India as alleged or at all. I crave leave to refer to and rely upon Article 243W, 243X and 243Y of the Constitution of India for its true interpretation and legal effect thereof. It is denied that a reading of this Articles gives power and verdict to the constitutional scheme empowers the Corporation with authority and power to function as an institution of self Government and to determine for itself as to what would be the beneficial source of reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in any manner. She submits that even other judgment of the Honourable Supreme Court of India in the case of Shanti G. Patel v/s State of Maharashtra reported in AIR 2006 SC 1104 will not assist the Respondents and therefore, the Writ Petition be allowed. 36 For properly appreciating the rival contentions we would first make reference to the position and status of the Municipalities under the Constitution of India. Part IXA of the Constitution of India contains the provisions regarding "the Municipalities". Article 243P contains the definitions and insofar as the term "Municipality", Article 243P(e) defines the term to mean an Institution of Self Government constituted under Article 243Q of the Constitution of India. Article 243Q deals with "Constitution of Municipalities" whereas Article 243R deals with it's composition. The constitution and composition of Ward Committees, etc. is dealt with by Article 243S and Article 243T provides for reservation of seats. Article 243U provides for duration of Municipalities. Article 243V deals with disqualification for membership. Then, comes Article 243W, on which strong reliance is placed by Ms.Karnik, which reads as under:- "243W. Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by, and funds of, the Municipalities - The Legislature of a State may, by law - (a) authorise a Municipality to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits; (b) assign to a Municipality such taxes, duties, tolls and fees levied and collected by the State-Government for such purposes and subject to such conditions and limits; (c) provide for making, such grants-in-aid to the Municipalities from the Consolidated Fund of the State; and (d) provide for constitution of such Funds for crediting all moneys received respectively, by or on behalf of the Municipalities and also for the withdrawal of such moneys therefrom, as may be specified in the law." 38 Therefore, what we have held above gets further reinforced and supported by Article 243X of the Constitution of India. It is the Legislature of the State and which makes the law by which Municipalities are authorized to levy, assess, collect and appropriate such taxes, dues, tolls and fees in accordance with such procedure and subject to such limits. There could be assignment of duties to the Municipalities. The State Government may assign to a Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13.group.as.lbt Provided that, the State Government may, by notification in the Official Gazette, direct the Corporation to levy the cess on the entry of the goods into the City for consumption, use or sale therein, in lieu of octroi; (aaa) Local Body Tax on the entry of the goods into the limits of the City for consumption, use or sale therein, in lieu of octroi or cess, if so directed by the State Government by Notification in the Official Gazette; (b) ......... (c) a tax on dogs; (d) a theatre tax; (e) a toll on animals and vehicles entering the City; (f) any other tax not being a tax on professions, trades, callings and employments which the State Legislature has power under the Constitution to impose in the State. (2A) Notwithstanding anything contained in sub-section (1) or sub-section (2), no tax or toll shall be levied on motor vehicles save as provided in Section 20 of the Bombay Motor Vehicles Act, 1958. (3) The municipal taxes shall be assessed and levied in accordance with the provisions of this Act and the rules. (4) Nothing in this section shall authorise the imposition of any tax which the State Legislature has no power to impose in the State under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has no choice or option, but to so impose it. 40 We do not see how the proviso to clause (aa) can be read in the manner suggested by Ms.Karnik. The Corporation has a discretion to impose and levy a cess on entry of the goods into the limits of the city in lieu of octroi, but even for that it requires previous sanction of the State Government. The Corporation can shift to such cess in lieu of octroi, but in doing away with the octroi in this manner it would require previous sanction of the State Government. Therefore, the option given to switch over to cess in lieu of octroi is also conditional upon previous sanction of the State Government. If there is no previous sanction the cess cannot be levied is clear from clause (aa). By proviso to clause (aa) it is the State Government which has discretion to issue a notification and by it direct the Corporation to levy the cess on entry of the goods in lieu of octroi. In the event the State exercising such discretion, the Corporation has no choice or freedom. It then cannot insist on continuing the octroi. If the proviso of this nature is taken as guarantee against encroachment into the independence and autonomy of the Corporation flowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State would exercise it frequently and indiscriminately or as per it's whims and fancies. The power in the State is coupled with a duty. The State is expected to exercise this power bonafide and for the reasons indicated in the statute. That is an overall control and the State is in a position of a patriarch or parent. The State would ensure that the constitutional mandate is not in any way defeated and frustrated or frittered away by the *39* wp.2720.13.group.as.lbt Municipalities and that is why the law enacted by the Legislature contains such provisions. A check and balance system in the form of supervision and control by the State is devised so as not to waste the mandate of the Constitution, but to ensure that the Municipalities act in public interest and for public good. Importantly, the power to tax is an incident of sovereignty. That under the framework of Indian Constitution only two principal bodies which have been vested with plenary powers to make laws. They are the Parliament for the Union and the State Legislatures for the State. In New Delhi Municipal Committee v/s State of Punjab reported in AIR 1997 SC 2847 the Honourable Supreme Court held as under:- "91 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Union Government and cannot be said to have an independent status. Under our Constitutional scheme, all taxation must fall within either of two categories : State Taxation or Union Taxation. Since it is axiomatic that taxes levied by authorities within a State would amount to State taxation, it would appear that the words "or by any authority within a State" have been added in Article 285(1) by way of abundant caution. It could also be that these words owe their presence in the provision to historical reasons; it may be noted that Section 154 of the 1935 Act was similarly worded. The fact that Article 289(1), which in its phraseology is different from Section 155 of the 1935 Act having been drafted by the Drafting Committee to meet specific objections, does not contain words similar to those in Article 285(1), will not in any way further the case of the appellant, because the phrase "Union Taxation" will encompass Municipal taxes levied by Municipalities in Union Territories." 43 These provisions enable the State to exercise effective and *41* wp.2720.13.group.as.lbt proper control over the functioning and performance of it's duties by the Municipal Corporation. Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot request the State that it should be given any exemption or it should be relieved from imposition or levy of Local Body Tax. The moment the notification is issued by the State Government in the official Gazette and which contains the direction to the Municipal Corporation concerned to impose and levy Local Body Tax in lieu of octroi or cess, the Municipal Corporation is obliged to do so. It must carry out and implement this direction of the State. Secondly, if one has a look at the other provisions and particularly Sections 99A, 99B, 99C and 99D in juxtaposition and in comparison with Section 99 of the said Act, then, this aspect becomes clear and unambiguous. She submits that by Section 99A the provisions of Section 99 are not to be applied to the cess to be first levied. 46 To our mind, a perusal of Section 99A would reveal that the same deals with a cess in lieu of octroi and to be levied in terms of Section 127(2)(aa). As far as the Local Body Tax is concerned the provisions are contained in Sections 99B, 99C and 99D which read as under:- "99B. Determination of categories of goods for Local Body Tax :- The State Government shall, on or before the twentieth day of the F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and for upholding the avowed object and purpose of the said Act. Further, there are inbuilt checks and safeguards in the scheme of Section 99B to Section 99D itself. When the State determines the categories of goods for Local Body Tax it is obliged to consider the proposals of the Commissioner. Further, that power is subject to the limitations and conditions prescribed in Chapter XIB which contains the provisions relating to Local Body Tax. There, the levy of Local Body Tax is by the Corporation. It levies and collects the Local Body Tax subject to the provisions of Chapter XIB and Rules. Similarly, there also the State Government is conferred with discretion vide Section 152Q not to levy the Local Body Tax on certain goods. This decision is taken by the State after consideration of the proposals of the Commissioner and by Section 152R the provisions of Chapter XIA have been made applicable to levy and collection of Local Body Tax. Meaning thereby, the provisions relating to levy, collection and recovery of cess in lieu of octroi, contained in Chapter XIA shall mutatis mutandis apply to levy and collection of Local Body Tax. There, the levy and incidence of cess, certain goods not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find any basis for this apprehension. These submissions overlook the provisions of the said Act. The said Act firstly sets out the definition of "Corporation". The "Corporation" is defined in the Constitution itself. It is an entity which comes into being in a larger urban area. The constitution of the Corporation is set out in Section 3 of *46* wp.2720.13.group.as.lbt the said Act. The municipal authorities and charged with execution of the said Act are those set out in Section 4. One such municipal authority is the Municipal Commissioner. However, the Corporation by itself is understood as a body corporate having perpetual succession and a common seal and by such name may sue and be sued. It consists of elected councillors and its composition is in terms of Section 5. The powers of the Municipal Corporation and that of the Commissioner have then to be exhaustively referred. 49 In that regard one cannot lose sight of the fact that the management of local affairs is with the Corporation. It is in the General Body of the Corporation that such power vests. The Commissioner being one of the authorities specified by the said Act thus, cannot be held to be a parallel authority and by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nik. 50 Eventually, if the Municipal governance vests in the Corporation and it is taken to be the representative body of the people residing within it's limits, then, it is the voice of the people themselves. They speak through their representatives. Ignoring the Municipal Corporation would mean ignoring the residents themselves. By no stretch of imagination any of the provisions and which are attacked by the Petitioners can be so read as taking away this position and status of the Municipal Corporation. It is a body corporate representing the people. It is a Government at the municipal level. Once it is charged with the Municipal Governance and it vests in it, then, it is performing a public *48* wp.2720.13.group.as.lbt duty and therefore, it is expected to act in public interest and for public good. 51 In that regard the role of a Municipal Councillor needs to be emphasized. In the context of a Municipal Representative and representing population of the ward or constituency the Honourable Supreme Court in AIR 2002 SC 1124 (Baldev Singh Gandhi v/s State of Punjab) held as under:- "9. .... The appellant herein is an elected municipal councilor to a democratic institution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t also is expected to ask the Commissioner to incorporate in his proposals all such views and suggestions and which may not be in tune with the Commissioner's thought process. Therefore, not only the Commissioner is obliged to incorporate in his proposals all views and suggestions and with which he agrees or otherwise, but equally the State while considering the proposals forwarded or in the event no such proposals being forwarded by the Commissioner, must insist on the Resolution of the Municipal Corporation on the subject being forwarded to it. It can call upon the Commissioner to obtain the views and suggestions of the Municipal Corporation, namely, General Body and forward the same to it within a time frame. That would guarantee respect for a divergent or different view point. That would be in the spirit of democracy and upholding the democratic traditions as well. That is how the State and the Commissioner would have to act and once they are obliged to act in this manner and to uphold the Constitutional scheme, then, there is no scope for the plea that the law falls foul of the same and in the manner *50* wp.2720.13.group.as.lbt suggested by Ms.Karnik. 53 Therefore, we ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cess and it's recovery have been mutatis mutandis made applicable to the levy, assessment and recovery of the Local Body Tax, then, all the more there is no force in the contentions of Ms.Karnik. The employees are also expected to uphold the interest of the Municipal Corporation and that of the public of which they are part of. They have enough powers and to enter upon the premises, effect searches, inspection, etc.. We have noted them exhaustively. In these circumstances we do not find any basis for the complaint that the revenue collection will be adversely affected and thereby causing strain on the budget. The municipal funds are no way decreased or burdened merely because another tax is to be imposed and in lieu of octroi. There is no vested interest of anybody in levy, assessment and collection of octroi and much less any vested right of the municipal employees. For that matter they cannot insist that the Municipal Corporation should levy a particular tax or not levy another additional or alternative tax. They cannot further insist that the Municipal Corporation cannot have alternate taxation or additional tax in lieu of cess or vice- versa. These are not matters where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and scrutinized in proper perspective, it is absolutely vivid that the Legislature of the State has been authorised by the Constitution only to authorise the Municipalities for the purpose of levy, collection and appropriation of certain taxes but there is no other power bestowed on the Legislature. The Legislation has to be in accordance with concept of institution of self-governance but the Legislature by ordaining the procedure has transgressed its limits. 21. On a bare reading of the aforesaid Article, it is perceptible that Article 243W clearly stipulates that subject to provisions of the Constitution, the Legislature of a State may, by law, endow the Municipalities with such powers. Thus the source of power rests within the State Legislature. True it is, there is some concept of self- governance but the Constitution has not empowered the Municipalities to impose taxes on its own as if it has the power to impose taxes by itself as that would have defeated and destroyed many a provision of the Constitution. Article 243X also postulates that the Legislature of a State may, by law, authorise a Municipality to collect and appropriate such taxes, duties, tolls and fees in accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction is possible and, therefore, on that score the aforesaid provisions cannot be declared as ultra vires. (ix) With regard to imposition on penalty as provided under Section 138(3) of the Corporation Act and 126(3) of the Municipalities Act, it is inappropriate to state that the authorities, have no discretion to reduce it or there is an unrebuttable presumption in that regard. If the property owner can satisfactorily show that there was bona fide error or mistake on his part, the competent assessing authority can reduce the penalty. (x) The property owner who is under legal obligation to file the return in regard to self assessment but fails to do so, would be liable to pay surcharge which is irreducible. (xi) The imposition of penalty can be assailed by way of an appeal before the Mayor-in-Council inasmuch as the assessment is done by a authority so designated under the statute and the Mayor-in-Council being the microcosm of Municipal Corporation has the competence to deal with the same in appeal. (xii) It would be incumbent on the Municipal Corporation or the Municipality to pass a resolution by fixing the rate on per square foot basis taking into consideration th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te and that has not been denied. The argument is that in addition to this the Draft Rules ought to have been published in the local newspapers. However, reliance was placed on Section 24 of the Bombay General Clauses Act, 1904 by both sides. When the reliance was placed on this provision that itself belies the stand of the Petitioners that the draft was not published. In this case the draft was published in the Government Gazette. Ms.Karnik would term this as no compliance at all and in that regard, she submits that the emphasis ought to be on the publication for information of the persons likely to be affected thereby. She submits that the Municipal Corporation, Corporators, employees of the Corporation as also public at large which was severely affected by major change in the tax regime and having wide ramifications were not informed. 60 We are not able to agree with her. Pertinently, none of the Municipal Corporations or the Corporators have come forward and raised such a plea. Secondly, this section of public is definitely well versed with publication of such drafts in the Government Gazette. Therefore, it is not possible to accept the argument of Ms.Karnik that there is no c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... averments, on some vague plea raised during the course of arguments, we cannot consider such a serious aspect. Even otherwise we do not find the Constitutional mandate is flouted in any manner. The reliance placed on the judgment of the Honourable Supreme Court in the case of Sayed Ahmed Aga v/s State of Mysore reported in (1975) 2 SCC 131 is well placed. The Petitioners have failed to show as to how they are affected by imposition of Local Body Tax. The Petitioners are the Municipal Corporation Employees' Unions. Their jobs and their salaries are not adversely affected. The restrictions which have been placed by way of service conditions upon them are not questioned by them any time. None of the traders or businessmen or industrialists have raised before us a challenge and on the footing that they were unduly hampered from carrying on their business as there are unreasonable restrictions on their fundamental rights. In these circumstances this argument need not detain us. 62 For the aforesaid reasons even the other contentions canvassed before us and faintly are without any substance. 63 In these circumstances the Writ Petitions are dismissed. Rule is discharged in each of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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