TaxTMI 
TaxTMI 
1963 (9) TMI 50
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....The Municipal Board of Bareilly acquired a part of the said land and, together with some nasal land, developed it at a considerable cost. The newly developed area came to be known as the Civil Lines. The Municipal Board has provided special amenities for the residents of that area. The said facts and the particulars of the amenities provided are given in the counter-affidavit filed on behalf of the Municipal Board and a map of the Bareilly City and the Cantonment area is also annexed thereto. A glance at the map discloses that the City of Bareilly is divided into three separate blocks the old City, the Cantonment and the Civil Lines. The Civil Lines area is situated between the old City and the Cantonment. We have no reason not to accept the said facts given in the counter-affidavit as representing the division of the City of Bareilly based on its geographical features and strata of development. In the Civil Lines area, which the Municipal Board acquired and developed, the said Board imposed house tax from January 31, 1870. In the year 1916 the Act was passed in order to consolidate and amend the laws relating to municipalities in the State of Uttar Pradesh. The Act came into fo....
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....Subject to any general rules or special orders of the State Government in this behalf, the taxes which a board may impose in the whole or any part of a municipality are- (i) a tax on the annual value of buildings or lands or both; * * * * * (xi) a scavenging tax * * * * * * No general rules were made or special orders issued by the State Government in the matter of imposition of a tax in any part of a municipality. It is argued that the power conferred on the Municipal Board to impose a tax on any part of the municipality is a naked and arbitrary power, that the Act does not disclose any policy or give any guidance for making a valid classification and that, therefore, the section, to the said extent, violates the provisions of Art. 14 of the Constitution. The law on the subject is well settled. Das C.J., in Ram Krishna Dalmia v. Shri justice S. R. Tendolkar([1959] S.C.R. 279), after a consideration of the earlier decisions, pointed out that a statute which may come up for consideration on a question of validity under Art. 14 of the Constitution might be placed in one of the five classes mentioned therein. Classes (iii) and (iv), which are relevant to the present ....
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....ng of the provisions of the Act. Some Acts expressly lay down the policy to guide the exercise of discretion of an authority on ,whom a power to classify is conferred. Some Acts, though they do not expressly say so, through their provisions may indicate clearly, by necessary implication, their policy affording a real guidance for the exercise of discretion conferred on an authority thereunder. While a ,court should be on its guard not to enter into the domain of speculation with a view to cover up an obvious dificiency in 2 legislation, it may legitimately discover such a policy, if it is clearly discernible on a fair reading of the relevant provisions of the Act. This Court, in Kathi Raning Rawat v. The State of Saurashtra([1952] S.C.R. 435), found the clear policy of the Legislature on the basis of the preamble of the Act taken along with the surrounding circumstances. in P.Balakotaish v. Union of India ([1958] S.C.R. 1052), on an examination of the Act read as a whole ; and in M/s. Pannalal Binjraj v. Union of India ([1957] S.C.R. 233), from the preamble itself. This view was accepted in later decisions. But it is neither possible nor advisable to lay down precisely how a court ....
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....y also be that a part of the area, because of the nature of the soil, distance from the well-developed part of the city or for historical reasons, calls for a larger investment for development compared to other parts of the municipality. If so much is conceded, that is, different parts of a municipality may require special treatment in the matter of provisions of amenities, it would be reasonable to collate the power of taxation in a part of a municipality with such separate treatment. While the former two sections, by necessary implication, enable a municipality to provide special amenities in a part of the municipality, the latter section empowers it to impose taxes in that part. If so understood the legislative guidance is apparent from the said three provisions ; that is to say, a municipality can impose a tax in a part of a city, if that part, because of its peculiar situation or otherwise, has to be provided with special amenities throwing a heavy financial burden on the municipality. The next question is, whether the said policy offends 'Art. 14 of the Constitution. It is said that all the citizens of a city would directly or indirectly partake in the amenities provided i....
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....pugned section in permitting in the matter of taxation geographical classification which has reasonable relation to the object of the statute, namely, for providing special amenities for a particular unit the peculiar circumstances whereof demand them, does not in any way impinge upon the equality clause. The very question that we arc now called upon to decide received the attention of a Full Bench of the Allahabad High Court in Bareilly Municipality v. Kundan Lal (A.I.R. 1959 All. 562). The Full Bench by a majority, held on a construction of the provisions of the Act that the power vested in the Board to select part of the municipality within which to levy a tax was not an arbitrary power but one which is controlled by the purpose which was intended to be achieved by the Act itself. We agree with this view. The next question is whether the notification issued by the Municipal Board imposing the said taxes in the area of the Civil Lines offends Art. 14 of the Constitution. It is clear from the affidavit filed on behalf of the Municipal Board and the map annexed thereto that the area covered by the Civil Lines has been treated as a separate unit in the matter of development fr....
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....y this Act ; (c) the amount or rate leviable from each such person or class of persons ; (d) any other matter referred to in section 153, which the State Government requires by rule to be specified." The argument is that this section enables the Board to impose a tax of any amount and against any persons or class of persons without giving any guide in regard to the fixation of rate of tax or the persons or class of persons liable to pay the tax. It is said that the said power conferred upon the Municipal Board is an unguided and naked power. Section 131 does not confer any power on the Board to impose a tax. Section 128 confers such a power and that section with meticulous care enumerates. the subjects of taxation. Section 131 provides a machinery for imposing the said taxes. The said taxes cannot be imposed in vacuum. There should be some machinery for ascertaining the rate of taxation and the persons or the class of persons liable to pay the same. If s.. 131 stood alone, there may be some Justification for the coment, but if it is read along with s. 128, it posits a - reasonable nexus between the tax in respect of a subject and the rate payable and the person or class of....
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....ion. The next question of learned counsel is that the said taxes were imposed in violation of the procedure prescribed by the Act. At the outset it may be noticed that the house tax was imposed with effect from January 31, 1870 and the latrine tax was imposed with effect from May 23, 1918 and the latter tax was replaced by scavenging tax with effect from April 1, 1939. Though decades have passed by, no one has questioned till now the validity of those taxes on the ground that the procedure was not strictly followed. There is a presumption when a statutory authority makes an order, that it has followed the prescribed procedure. The said presumption is not in any way weakened by the long acquiescence in the Imposition by the residents of the Civil Lines. Nonetheless no. tax shall be levied or collected except in accordance with law. If it is not imposed in accordance with law, it would infringe the fundamental rights guaranteed under Art. 19(1)(f) of the Custom. While the long period of time that lapses between the imposition of the tax and the attack on it may permit raising of certain presumptions where the evidence is lost by afflux of time, it cannot exonerate the statutory au....