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TMI Blog1990 (9) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... econstitution in accordance with the provisions of this Act, of a council in existence at the commencement thereof, and otherwise in first giving effect to the provisions of this Act, this Act shall be read subject to the rules in Schedule IX. " Schedule IX to the new Act contained the transitional provisions in the rules therein. Rule 12 thereof dealt with levy of taxes, etc., and said: " 12. Levy of taxes, etc. -Any tax, cess or fee which was being lawfully levied by or on behalf of any council at the commencement of this Act and which may be lawfully levied under this Act, shall notwithstanding any change in the method or manner of assessment or levy of such tax, cess or fee be levied by or on behalf of the council at such rate as may be prevailing at such commencement or at such other rate as may be determined by the council from time to time, by a resolution for the year in which this Act is brought into force, and unless the Government by general or special order otherwise direct, for subsequent years also." The result was that tax lawfully levied and continued to be levied under the old Act had to be continued unless the council by a resolution determined such other ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment Orders, the Government having directed that taxes should be levied under the new Act, the transitional power under rule 12 had been already exercised and the power to levy any tax under the old Act, therefore, ceased and it was not open to the Government to rescind the previous orders and re-direct that taxes are to be levied under the old Act. That contention was accepted observing: "The language of the rule is clear that once the Government by general or special order, otherwise directs, the power to levy tax under the old Act is exhausted." Even so, it was held that, in view of the provisions in section 4(1) of the Andhra Pradesh Municipalities (Fourth Amendment) Act (23 of 1975) which validated the actions taken, those could not be challenged as invalid. The submissions that the Amendment Act was not retrospective and that the enhancement of the tax was not made following the procedure prescribed by law, were also negatived holding that the procedure prescribed under the old Act was followed inasmuch as, under the old Act, the property tax was levied on the basis only of the rental value whereas under the new Act it was on the basis either of the rental value or of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the single Bench and that finding was not challenged before the Division Bench. Consequently, it is submitted that, during the period from 1969 to 1973, there was no valid law to enable the Municipal Council to levy taxes under the old Act and the actions under the Government Orders are sought to be validated by the Fourth Amendment Act of 1975, but unless the substantive law relating to the method of assessment was also amended retrospectively, the invalid actions could not be validated, as that law could not be deemed to have been in existence by a legal fiction. Counsel submits that section 87 of the new Act relating to levy of property tax was amended so as to bring it in conformity with the corresponding provision of section 20 of the old Act which prescribed the rental value as the basis for assessment. It is pointed out that section 3 of the Fourth Amendment Act did not contain any indication that the said amendment was retrospective so as to bring it on the statute book by a legal fiction prior to 1973 when the invalid assessment was made. The Fourth Amendment Act came into force only from June 10, 1975, which was the date of the Ordinance. The amendment of section 87 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmediately following that in which the order is published, as may be specified in the order. (2) When an order under sub-section (1) has been published, the provisions of this Act relating to property tax shall apply as if the council had, on the date of publication of such order, by resolution, determined to levy the tax at the rate and with effect from the date specified in the order and as if no other resolution of the council under section 81 determining the rate at which and the date from which property tax shall be levied, had taken effect. (3) A council shall not alter the rate at which the property tax or any class of such tax is levied in pursuance of an order under sub-section (1) or abolish such tax except with the previous sanction of the Government." Section 87(1) of the new Act provided: "87(1). Every building shall be assessed together with its site and other adjacent premises occupied as an appurtenance thereto unless the owner of the building is a different person from the owner of such site or premises." By section 3 of the Fourth Amendment Act in sub-section (2) of section 87 of the new Act, the following words were substituted, namely : "(2) The annu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the commencement of this Act by such of the municipalities as have come into existence after the commencement of the principal Act shall continue to be levied and collected by or on behalf of the municipal council of any such municipality for the year commencing on the 1 St April, 1975. " Admittedly, the validity of the Fourth Amendment Act had not been challenged in the High Court. In fact, it was passed during the pendency of the writ petitions in the High Court. Mr. Subba Rao's submission is that section 3 of the Fourth Amendment Act having not been made retrospective, section 4 of the Act could not have said that the levy and collection of property tax made in pursuance of such action for all purposes be deemed to be and to have always been made in accordance with law. It is true that only sub-section (2) of section 87 of the new Act was substituted as stated above by the Fourth Amendment Act. However, once the amendment substituted sub-section (2) of section 87, it formed a part of that section. This amendment only provided the basis of assessment and it itself did not provide for the commencement of such calculation which however might be taken from the other prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining Local Board, Chhindwara and its successor-body the Janapada Sabha, Chhindwara, the appellant, constituted under the C. P. and Berar Local Government Act, 1948. Section 2(b) defined "cess" to mean "a cess imposed by the Independent Mining Local Board, Chhindwara, or its successor". Section 3(1) of that Act provided that "notwithstanding a judgment of any court, cesses imposed, assessed or collected by the Board in pursuance of the notification specified in the Schedule shall, for all purposes, be deemed to be, and to have been validly imposed, assessed or collected as if the enactment under which they were issued stood amended at all material times so as to empower the Board to issue the said notification." In the Schedule were specified three notifications enhancing the rate of cess. On the question whether the enhanced levy was validated by the 1964 Act, this court held that the Act did not give legal effect to the imposition of cess at the enhanced rates. It was pointed out that the text or even the nature of the amendments was not disclosed though section 51(2) of the 1920 Act could not be deemed to have been repealed by the 1964 Act, because the latter Act, in terms, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and unequivocal language of the section. The rule is that an Amendment Act must be read as if the words of the amendment had been written into the Act except where that would lead to an inconsistency. (Shamarao V. Parulekar v. District Magistrate, Thane [1952] 3 SCR 683, 689). The power of the Legislature to pass a law includes the power to validate actions retrospectively, of course, within constitutional limitations. It is apt to remember that the State's power to tax is derived from the Constitution and the municipality's power to tax is derived from the State Legislature which could delegate that power in the manner the Constitution permits to the municipal council, an agent of the State Government, and the municipality cannot refuse to raise taxes as directed. The proper authority to determine what should and what should not constitute a public burden is the Legislature of the State. This is not only true for the State itself but it is also true in respect of each municipality of the State, these inferior corporate bodies having only such authority in this regard as the Legislature shall confer upon them. A statute will not be declared unconstitutional unless it is specifical ..... X X X X Extracts X X X X X X X X Extracts X X X X
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