9911796707
TMI Blog1971 (3) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... bay Finance Act, 1932 by the State Government, but collected on its behalf by the Corporation. At the request of the Corporation made in 1960, an arrangement was arrived at between the Government and the Corporation whereunder the Government agreed not to levy the U.I.P. tax provided the Corporation increased the rate at which it was till then levying the property tax. Accordingly, in January 1961 the Corporation passed a resolution increasing the rate of the property tax with effect from April 1, 1961 under the power reserved to it by Section 127 of the Act. In pursuance of the said resolution and in accordance with the raised percentage of the general tax the Corporation served on the appellant, as also on the other rate payers, bills and demand notices. In this appeal we are concerned with the bills and notices in respect of the assessment year 1962-63. 3. The appellant, as also certain other rate payers, challenged the said bills and notices in their said writ petitions mainly on the grounds (1) that the Corporation had no authority to amend the rates with the object of including the said U.I.P. tax in the general tax so far levied by the Government under a different statute a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of the views expressed by the High Court in this judgment, as also in its earlier judgment by the combined effect of which altogether 70 writ petitions were negatived, is challenged in this appeal. 6. We need not go into all the diverse contentions raised before the High Court as counsel for the appellant raised before us the following three questions only : (1) that while making the assessment the procedure contemplated by Sections 127, 129(c) of the Act and Rules 9 to 20 of the Taxation Rules was not complied with inasmuch as no ward assessment-books were maintained, and consequently, the entries therein were not authenticated as required by Rule 19; (2) that Section 129 suffers from the vice of excessive delegation of legislative power inasmuch as the Act fails to provide either the maximum rate leviable by the Corporation or the guidelines for levying the tax (3) that in any view of the matter, in the circumstances in which the resolution raising the rate was passed, it did not impose the enhanced rate on the property of the appellant as the same was not, prior to April 1961, subjected to the U.I.P. tax. Later, Mr. Iyengar gave up the third contention. We are, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les indicating that maximum. We are unable to see how the specification of the maximum rate supplies any guidance as to how the amount of the tax, which no doubt has to be below the maximum, is to be fixed. Provision for such maximum only sets out a limit of the rate to be imposed and a limit is only a limit and not a guidance. Besides deriving support from this judgment, the High Court examined various provisions of the Act and reached the conclusion that under the Act, as under the Calcutta Act, the tax, which the Corporation could collect, would have to be for the purposes of the Act only and that fact, together with certain other controls embodied in the Act, furnished sufficient guidance preventing the vice of arbitrariness or excessive delegation. 9. Before the High Court, the contention also was that for each of the relevant years there was no valid assessment-book on the basis of which the property tax could be levied. The argument was that the Taxation Rules required the Commissioner to prepare ward assessment-book for each of the wards and not one assessment-book for the whole of the municipal limits , that that being so, the assessment made on the properties was not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Municipal Corporation of the City of Ahmedabad v. Zaveri Keshavlal 6 Guj. L.R. 701 by pointing out that that decision was under the Bombay Municipal Boroughs Acts, 1925 which had a scheme and provisions different from the present Act and the rules thereunder made. That decision had laid down that the liability of the rate payer would arise only after authentication of the assessment-book. For distinguishing that decision the High. Court, firstly, relied on Rule 30 of the Taxation Rules which provides that property tax shall accrue due on the 1st of April of each official year, and secondly, on the ground that the Boroughs Act and the rules thereunder did not have a rule corresponding to Rule 9(e) which, when read with Rule 30, shows that the liability to pay the amount of tax arises on entry under Clause (e) of that rule being made. According to the High Court, Rule 19, which provides for authentication applies only to ward assessment-books and not to a single assessment-book, that such authentication has nothing to do with the accrual of liability and is a mere rule of evidence which is not available to the Corporation where the Commissioner does not prepare ward assessment-books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m. 12. The argument was that thought Section 127(1) lays down that property taxes can be levied by the Corporation only for the purposes of the Act, that is to say, for and in respect of the functions which the Corporation must and can carry out, the Act being silent as to the maximum rate upto which the Corporation can levy, it gives unbridled and arbitrary power to levy the property tax as much and to any extent it may desire. Mr. Iyengar pointed out that amongst the discretionary functions which the Corporation can undertake under Section 66 there are such things as swimming pools, public parks, gardens, recreation grounds, construction, of dwellings for municipal officers and servants, libraries, museums etc. for undertaking which the Corporation can spend huge amounts and impose extravagant and burdensome rate of tax. According to the argument, there are no guidelines or controls in the Act which can place any limits to the spending by the Corporation on such discretionary objects, and therefore, the rate payers are exposed to being taxed in an arbitrary and uncontrolled fashion. 13. The question thus is whether the Act contains any policy or guidelines or control over the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to all the requirements of this Act." The budget estimate then has to be laid before and passed by the Corporation. Similar provisions are made in Sections 97 and 98 for budget estimate 'B' prepared by the Transport Manager. It is after all this has been done that the Corporation under Section 99 determines, on or before the 20th of February of each year, the rates at which property taxes under Section 127(1), but subject to the limitations and conditions laid down in Ch. XI, are to be levied for the next ensuing official year, under Section 100, the Corporation either sends back the budget estimates 'A' or 'B' for further consideration, or adopts them with such alterations as it deems expedient. The conditions and limitations subject to which the Corporation can fix, under Section 99, the rates at which the property taxes are to be levied are those provided in Section 127(3) and (4), i.e., they can be assessed and levied in accordance with the provisions of the Act and the rules. These provisions clearly show that the ultimate control, both for raising the taxes and incurring expenditure, lies with the councillors chosen by and responsible to the peo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e legislative power and that such a power could be delegated even to a non-legislative body. But the decision laid down that when such a power is delegated, the legislature must provide guidance for such fixation. The majority held that where rates have not been specified in the statute, the power to fix the rates as might be necessary to meet the needs of the delegate itself affords guidance. The minority view differed from the majority view, in that, according to it, the power to fix the rate of tax was an essential legislative function. But, even according to that view, such a power can be delegated provided the delegate is afforded guidance by the legislative laying down the policy and principles in the Act, It, however, disagreed with the majority view that the raising of tax co-extensive with the needs of the delegate in implementing the purposes of the Act can afford such guidance. 19. The Liberty Cinema case [1959] 1 SCR 427 came for consideration in Devi Das v. Punjab [1967] 3 SCR 557 where Subba Rao, C.J., speaking for the Court, said: If this decision [Liberty, Cinema case [1965] 2 SCR 477 ] is an authority for the position that the Legislature can delegate its power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld have the approval of the Government; (4) that the Act contained provisions which required adoption of budget estimates by the Corporation annually; and (5) that there was a check by the courts of law where the power of taxation is used unreasonably or in noncompliance or breach of the provisions and objects of the Act. 21. Referring to Devi Das's case [1967] 3 SCR 577 he pointed out that (1) that case did not disapprove Liberty Cinema case [1965] 2 SCR 477 was concerned with a sales tax statute and not with a statute dealing with bodies with limited purposes, such as local self governing bodies. At page 268 of the report, he observed: There is in our opinion a clear distinction between delegation of fixing the rate of tax like sales tax to the State Government and delegation of fixing rates of certain taxes for purposes of local taxation. The needs of the State are unlimited.... The result of making delegation of a tax like sales tax to the State Government means a power to fix the tax without any limit even if the needs and purposes of the State are to be taken into account. Thus, the majority view in this decision, which is binding on us, shows that the mere fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been disposed of in accordance with the provisions hereinafter contained, the amount at which each building or land entered in such portion of the assessment-book is assessed to each of the property taxes, if any, liable thereon. The rule contain other clauses, but we are not at present concerned with them. 25. Rule 10(1) provides that the assessment-book may, if the Commissioner thinks fit, be made in separate books called "ward assessment-books", one for each of the wards into which the city is for the time being divided for purposes of the elections. Clause (2) of the rule says that the ward assessment-books and the respective parts, if any, shall collectively constitute the assessment-book. Rule 10 differs from Section 157 of the Bombay Municipal Corporation Act, in that, whereas it gives an option to the Commissioner either to maintain one assessment-book for the entire city or separate ward assessment-books, Section 157 gives no such option and provides only forward assessment-books which collectively constitute, as in Rule 10(2), "the assessment-book". The Legislature, thus, deliberately made a departure from Section 157 by leaving it to the discretion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e noted in the said book of complaints and the necessary amendment shall be made in accordance with such result "in the assessment-book". 27. Rule 19, which has been the subject matter of controversy both in the High Court and before us, provides that when "all such complaints, if any, have been disposed of and the entries required by Clause (e) of Rule 9 have been completed in the ward assessment-book, the said book shall be authenticated by the Commissioner, who shall certify, under his signature, that except in the cases, if any, in which amendments have been made as shown therein, no valid objection has been made to the rateable values entered in the said book". Clause (2) provides that "the said ward assessment-book subject to such alterations as may thereafter be made therein under the provisions of Rule 20 shall be accepted as conclusive evidence of the amount of each property-tax leviable on each building and land in the ward in the official year to which the book-relates." Rule 20 empowers the Commissioner to amend the assessment-book even after it has been authenticated in certain, cases and subject to the conditions set out therein. Lastly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of taking extracts, the right to file complaints and the duty to give public notice under Rules 13 and 15 and a special notice under Clause (2) of Rule 15, as also the duty to authenticate and certify under Rule 19, are all matters vital to both the rate payers, as also the Corporation, and that it was in respect of these vital matters that Rules 13, 15 and 19 speak of ward assessment-books. Therefore, if the Legislature, which framed these rules, had contemplated one assessment-book instead of separate assessment-books for each of the wards, the language of these rules would not have been what it is. The language of these rules, therefore, show that Rule 10 must be construed to mean that the Commissioner has to maintain ward assessment-books and it is when such books are maintained that the Corporation can validly levy the tax on the basis of such books. 31. Confronted with this difficulty, the High Court construed the rules to mean that Rule 10 was discretionary and not mandatory, but that Rules 13, 15 and 19 apply only "when ward assessment-books are kept, and that when they are read together, they show that the scheme was that where ward assessment-books are prepared the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led the Legislature to make a departure from the said Section 157. 34. But a far more serious difficulty would arise if the conclusion reached by the High Court were to be accepted. If Rule 19 were to be interpreted as applying to ward assessment-books, and not where one assessment-book is kept, Rules 13 and 15 must also on the same reasoning be construed in the same way. The Legislature could not have intended that the entry under Clause (e) of Rule 9, as regards the quantum of property tax leviable on each building and land, would become conclusive evidence only where ward assessment-books are kept and not where one assessment-book is kept. Clause (e) of Rule 9 requires the Commissioner to enter in the assessment-book the amount at which each building is assessed to each of the property taxes. The object of authentication under Rule 19 is to make such entry conclusive evidence of the amount being leviable on each such building and land for the particular official year. It is the amount of tax entered under Clause (e) of Rule 9 to which is given the attribute of conclusive evidence, so that the Corporation can thenceforth proceed to issue bills for those amounts and serve demand ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
