Taxing statute clarity rule defeats aggregation of small buildings' annual letting value for municipal property tax.

Annual letting value was the basis of property tax under the Madhya Pradesh Municipalities Act, but the statute also exempted buildings and lands with annual letting value not exceeding the prescribed threshold. The proviso sought to aggregate the annual letting value of all buildings owned by one person in the municipality for a small building, but the charging provision did not clearly impose tax in that manner. The text applies the principle that a taxing statute must clearly identify the subject, the person liable, and the rate of tax, and that tax cannot be imposed by implication or by adding words to the charging section. On that reasoning, the proviso was treated as ultra vires and the aggregation-based levy could not stand.

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Issues: Whether the proviso to clause (b) of sub-section (2) of Section 127-A of the Madhya Pradesh Municipalities Act, 1961 was valid, and whether property tax could be levied on multiple small buildings owned by one person by aggregating their annual letting value.

Analysis: The statutory scheme made annual letting value the basis of property tax, with a specific exemption for buildings and lands whose annual letting value did not exceed Rs. 1,800. The proviso attempted to deem the annual letting value of a small building to be the aggregate annual letting value of all buildings owned by the same person in the municipality. The charging provision, however, did not prescribe any rate for a property otherwise falling below the exemption threshold, and taxation could not be imposed by implication, inference, or by adding words to the charging section. A taxing statute must clearly disclose the subject of tax, the person liable, and the rate of tax; where any of these essentials is absent or uncertain, no tax can be levied. The construction that aggregated the values of all properties would, in effect, supplement the charge and produce arbitrary taxation beyond the plain language of the Act.

Conclusion: The proviso to clause (b) of sub-section (2) of Section 127-A was held ultra vires, and the levy based on aggregation could not stand. The challenge to the assessment succeeded.

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