TaxTMI 
TaxTMI 
TaxTMI 
2011 (4) TMI 1416
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.... and 19 (1)(g) of the Constitution of India. Rule has been also impugned being framed in contravention of statutory provisions contained in the U.P. Municipal Corporation Act, 1959 (hereinafter referred to as the Act.). 3- While making reference vide order dated 28.10.2010, the Division Bench of this Court at Lucknow had shown its disagreement to a judgment of another Division Bench delivered at Allahabad whereby identical writ petition was dismissed. The case is reported in 2010 (4) ALJ 293 Taj Advertising & others vs. State of U.P. & others. It would be convenient to set out briefly at the outset the material facts on which the bunch of writ petitions were filed and the reference has been made to the larger Bench. 4- Petitioner no. 1 of Writ Petition No. 2716 (M/B) of 2010 is the advertiser having business of advertisement in various forms whereas the petitioner no. 2 is the Secretary and petitioner no. 3 is the President. 5- The State Government in pursuance to power conferred by Section 227 read with Section 192, 219, sub section (1) of Section 540 and Section 550 of the Act and Section 21 of the U.P. General Clauses Act ( hereinafter referred to as the General Clauses Act) ....
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.... building shall give undertaking in writing and in case of any default he will be liable to pay the tax. Rule 5 of the impugned Rule is reproduced as under:- (1)Every application for obtaining permission shall be made in the prescribed Form, specified in Schedule-1, which shall be obtained from Municipal Corporation office by paying Rupees five hundred or can be downloaded from the website of the Corporation, however, the receipt of the cost of application shall be submitted alongwith the application at the time of submitting the application. (2)Every application, referred to in sub rule (1), shall contain detailed information about the land, building or place where the proposed advertisement or hoarding is sought to be erected, exhibited, displayed, stuck, pasted, written, drawn or hung alongwith the site plan of such land, building or place and shall include the following information:- (a) full specification showing the length, height, and weight of the sign, the location where it is to be erected, the manufacturer's name and address and where applicable, the number of lights and electrical details of the same; (b) such Form shall be accompanied by a location plan in....
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....be granted subject to such conditions as may be imposed by the Municipal Commissioner in the interest of public safety and decency; (9)Every application shall be accompanied by the full amount of premium offered; 9- Under rule 6 it has been provided that the permission so granted shall be effective only for the period for which it was granted, provided that tax or taxes with premium has been paid and deposited in the Municipal Fund. It further provides that the advertisers shall remove or wipe off the advertisement within one week from the expiry of the period for which the permission was granted and the advertiser shall be abide by these rules and regulations laid down by the Municipal Commissioner. Under rule 7 it has been provided that the Municipal Commissioner shall fix the minimum premium amount for every site and the site for advertisement shall be decided by the allotment committee under the Chairmanship of Municipal Commissioner consisting of other members. 10- Power to reject application is conferred by Rule 9 and the payment of property tax is referred to in Section 172 of the Act. It further provides that no advertisement shall be made without the permission of Mun....
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....on:- Super Class : Rs. 2000/- per square meter per year 'A' Class : Rs. 1200/- per square meter per year 'B' Class : Rs. 1000 per square meter per year 'C' Class : Rs. 800 per square meter per year (2)If such hoarding or advertisement is reflected by electrical or electronically controlled light devices (including L.C.D.) then the rate shall be fifty percent extra over and above the rate specified in article 1 above. (3) (1) Advertisement on power driven four wheeler vehicle (Excluding road show) Light vehicle Rs. 5000/- per year per vehicle Heavy vehicle Rs. 20,000/-per year per vehicle Road show at the following rates:- (1) Three wheeler : Rs. 50/- per day (2) Four wheeler : Rs. 500/- per day (3)Six wheeler : Rs. 1000/- per day (4) Hoarding boards on Electric or other poles: Super Class : Rs. 3000/- per square metre per year 'A' Class : Rs. 2000/- per square metre per year 'B' Class : Rs. 1500/- per square metre per year 'C' Class : Rs. 1000/- per square metre per year (5)Posters Rs. 300/- per hundred pieces (6)Hand Bills Rs. 600/- per thousand pieces (7)Banners Rs. 100/- per banner one time (....
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.... nature and does not completely oust the petitioners from carrying on business of advertisement. 14- Paras 3 and 4 of the Taj Advertisement judgment (supra) are reproduced as under:- 3- The contention of learned counsel for the petitioners is that they have a fundamental right to carry business of advertising. The impugned Rules infringe their above right and as such are ultra vires. Secondly, the procedure prescribed under Sections 199 to 203 of the U.P. Municipal Corporation Act, 1959 (hereinafter referred to as an Act) has not been followed in enacting the aforesaid Rules. 4- The respondents have defended the aforesaid Rules on the ground that they are only restrictive in nature and does not completely oust the petitioners from carrying on business of advertisement. The Rules have been framed in due exercise of powers conferred upon the State Government under section 540 read with sections 550, 219, 227 of the Act after considering the objections received. The legislative competence of the State Government to frame the impugned Rules is not disputed nor it is alleged that the impugned Rule is in conflict or repugnant to the Act or any other statute. A subordinate legislat....
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....ourse to Section 206 of the Act? (3)Whether delegation of power could be made under the Rules framed by the State Government to the Central Government? (4)Whether the licence for putting hoardings/advertisements on public properties, owned by private owners, can be given by public auction ? (5)Whether the impugned rules are ultra vires to the provisions of Articles 14, 19(1) (a) and 19(1)(g) of the Constitution of India? (6)Whether the Rules, 2009 are invalid, they having been framed without following the provisions of Sections 199 to 203 of the Act? (7)Whether the provisions of the Rules, 2009, such as- requiring the owner of the building, where the advertisement is to be set up, to give an undertaking that in the event of default by the advertising company/firm to pay the tax, the owner of the building concerned would pay the tax, etc. can be said to be unreasonable and unfair to be adhered to and are liable to be struck down? (8)Whether vesting of all the powers (as discussed in this order in relation to putting of hoardings and as given under the Rules, 2009) on private properties, in special areas etc. and in 'no hoarding zones' into the sole authority of the....
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....f the Corporation and Corporation Authorities (VI) Property and Contracts and Chapter VI-A- Finance Commission (VII) Corporation and other Funds (VIII) Borrowing Powers (IX) Corporation Taxation (X) Drains and Drainage (XI) Water supply (XII) Streets (XIII) Building Regulations) (XIV) Improvement Scheme (XV) Sanitary Provisions (XVI) Regulation of Markets, Slaughter-Houses, Certain Trades and Acts, Etc. (XVII) Vital Statistics (XVIII) Compensation (XIX) Penalties (XX) Proceedings Before Judge, District Judge, Magistrate and others (XXI) Recovery of Taxes and other Corporation dues (XXII) Control (XXIII) Rules, bye-Laws and Regulations (XXIV) Miscellaneous (XXV) Transitory provisions repeals and amendments. 21- Under Section 2(1) of Definition Clause, advertisement has been defined which is as under:- "Advertisement" means any word, letter, model, sign, placard, board, notice, device, or representation whether illuminated or not, in the nature of and employed wholly or in part for the purpose of advertisement, announcement or direction and includes any hoarding or similar structures used or adapted to be used for the display of advertisement. Under Section 2(11-A) definition of ....
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....ard to Item provided under Chapter VIII of the Act. 24- The matter with regard to corporation tax has been dealt with under Chapter IX of the Act. Section 172 deals with the tax to be imposed under the Act conferred by the provisions contained in Chapter IX of the Act. Section 192 deals with the matter with regard to advertisement. Section 193 empowers the Municipal Commissioner not to grant any permission in case advertisements contravenes any bye-law made by the Corporation. Section 194 further provides that permission granted under Section 193 shall be void in case it contravenes any bye-law made by the Corporation. Section 195 further provides that for contravention of any provision contained in the Act as provided under Sections 192 and 193, the beneficiaries shall be held responsible for whom or whose purpose the advertisement has been erected. For convenience, Sections 172, 173, 192, 193, 194, 195 and 196 are re-produced as under:- Section 172. Taxes to be imposed under this Act:- (1) For the purposes of this Act and subject to the provisions thereof and of Article 285 of the Constitution of India, the Corporation shall impose the following taxes, namely.- (a) Property ....
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....rovided with sewer system by the Corporation; (d) a conservancy tax in areas in which the Corporation undertakes the collection, removal and disposal of excrementitious and polluted matter from privies, urinals and cesspools. (2)Save as otherwise expressly provided in this act or rules made thereunder, these taxes shall be levied on the annual value of buildings or land as the case may be: [Provided that the aggregate of the property taxes shall in no case be less than 22 per cent and not more than 32 per cent of the annual value of the building or land or both assessed to such taxes, so however, that the general tax shall not be less than 10 per cent and not more than 15 per cent, the water tax shall not be less than 7.5 per cent and not more than 12.5 per cent, the drainage tax shall not be less than 2.5 per cent and not more than 5 per cent and the conservancy tax shall not be more than 2 per cent of the annual value.] Section 192. Tax on advertisements.-- Where a Corporation imposes a tax mentioned in Clause (h) of Sub-section (2) of Section 172, every person who erects, exhibits, fixes or retains upon or over any land, building, wall, hoarding or structure any advertisemen....
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....e Corporation under [Clause (48) of Section 541, or (ii)the tax, if any, due in respect of the advertisement has not been paid. (3) Subject to the provisions of Sub-section (2) in the case of any advertisement liable to the advertisement tax, the "Municipal Commissioner shall grant permission for the period to which the payment of the tax relates and no fee shall be charged in respect of such permission : Provided that the provisions of this section shall not apply to any advertisement erected, exhibited, fixed or retained on the railway premises or relating to the business of any railway administration. Section 194.- Permission of the "Municipal Commissioner to become void in certain cases.- The permission granted under Section 193 shall become void in the following case, namely : (a) if the advertisement contravenes any bye law made by the Corporation under [Clause (48) of Section 541; (b) if any addition to the advertisement be made except for the purpose of making it secure under the direction of the "Municipal Commissioner; (c) If any material change be made in the advertisement or any part thereof; (d) if the advertisement or any part thereof falls otherwise tha....
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....ire Corporation to impose taxes. For convenience Section 199, 200, 201, 202, 203,204, 205 and 205 of the said Act are re-produced as under:- Section 199-- Framing of preliminary proposals.-- (1) When a Corporation desires to impose a tax specified in Sub-section (2) of Section 172 it shall by resolution direct the Executive committee to frame proposals specifying-- (a) the tax, being one of the taxes described in Sub-section (2) of Section 172 which it desires to impose; (b) the persons or class of persons to be made liable, and the description of property or other taxable thing or circumstances in respect of which they are to be made liable, except where and in so far as any class or description is already sufficiently defined under Clause (a) or by this Act; (c) the amount or rate leviable from each such person or class of persons; (d) Any other matter referred to in Section 219 which the State Government requires by rule to be specified. (2) Upon a resolution being passed under Sub-section (1) the Executive Committee shall frame the proposals and also prepare a draft of the rules which it desires the State Government to make in respect of the matters referred to in ....
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.... resolution passed under Section 202 shall be submitted to the State Government. (2) Upon receipt of the copy of the resolution the State Government shall notify in the official Gazette, the imposition of the tax from the appointed date, and the imposition of tax shall in all cases be subject to the condition that it has been so notified. (3)A notification of the imposition of a tax under Sub-section (2) shall be conclusive proof that the tax has been imposed in accordance with the provisions of this Act. Section 204- Procedure for altering taxes.-The procedure for abolishing a tax, or for altering a tax in respect of the matters specified in Clauses (b) and (C) of Sub-section (1) of Section 199 shall, so far as may be, be the procedure prescribed by Sections 199 to 202 for the imposition of a tax. Section 205- Power of State Government to remedy or abolish tax- (1) Whenever it appears, on complaint made or otherwise to the State Government, that the levy of any tax is contrary to the public interests or that any tax is unfair in its incidence, the State Government may, after considering the explanation of the Corporation concerned, by order require such Corporation to take....
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.... this act but not being levied at the time being. Section 227:- Power to make rules:- (1) The State Government may make rules for the purposes of carrying into effect the provisions of this Chapter. (2) Without prejudice to the generality of the foregoing power such rules may provide for- (a) matters referred to in Section 219; (b) maintenance and inspection of register regarding taxes on vehicle, boat and animal; (c) [***]3 (d) [***]4 (e) advance payment of taxes; (f) summary disposal of objections to distress and attachment; (g) the conditions on which exemptions and refunds of taxes shall be allowed; 27- Chapter XII deals with the Construction, Maintenance and Improvement of Streets and Section 272 relates to vesting of public streets in Corporation and Sections 305 and 306 deal with the making of Regulation for sky-signs and control of advertisements. Section 314 deals with the power of State Government to make Rules for the purpose of carrying into effect the provisions of this Chapter. For convenience, Sections 305, 306 and 314 are re-produced as under:- Section 305:- Regulation as to sky-signs:- (1) No person shall, without the written permission of the ....
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....such period the "Municipal Commissioner may cause it to be taken down or removed, and the expenses reasonably incurred on taking down or removal thereof shall be paid by such owner or person. (3) The provisions of this section shall not apply to any advertisement which-- (a) is exhibited within the window of any building; (b) relates to the trade or business carried on within the land or building upon which such advertisement is exhibited or to any sale or letting of such land or building or any effects therein, or to any sale entertainment or meeting to be held upon or in the same; (c) relates to the business of any railway administration; (d) is exhibited within any railway station or upon any wall or other property of a railway administration, except any portion of the surface of such wall or property fronting any street. Section 314:- Power to make rules:- (1) The State Government may make rules for the purpose of carrying into effect the provisions of this Chapter. (2) Without prejudice to the generality of the foregoing powers such rules may provide for-- (a) manner in which the Corporation shall sanction the closing of any public street and the disposal of the....
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.... authority and prohibition and regulation of advertisements. 29- While defending the impugned rules, much emphasis has been given by Shri J. N. Mathur, learned Additional Advocate General with regard to power conferred on the State by Section 540 of the Act. Section 540 of the Act provides that the State Government may frame rules for the purposes of Act or may frame model rules to be adopted by the Corporations of the State. However, while interpreting Section 540 of the Act, learned Additional Advocate General seems to have lost his sight to other provisions of the Act. It is settled law that while interpreting statutory provisions or sections meaning should be given to each and every word and section of the Statute as a whole. 30- Maxwell in his famous treatise on the interpretation of Statutues (12th edition page 36) observed as under:- "A construction which would leave without effect any part of the language of a statute will normally be rejected. Thus, where an Act plainly gave an appeal from one quarter sessions to another, it was observed that such a provision, though extraordinary and perhaps an oversight, could not be eliminated". 31- The Supreme Court in Grasim indu....
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....t of the Constitution which came into force w.e.f. 24.4.1993 by adding Part IX in Chapter VI of the Constitution of India. The another amendment was done in the constitution by the 74th Amendment which came into force from 1st June, 1993 by adding Part IX-A in Chapter VI of the Constitution of India. Article 243-P contains definition Clause, Article 243 (Q) relates to constitution of municipalities and Article 243 (ZE) relates to constitution of committee for metropolitan planning. The three Articles (supra) are reproduced as under:- "Article 243 P:- Definitions:-- In this Part, unless the context otherwise requires:- (a) 'Committee' means a Committee constituted under article 243 S; (b) 'district' means a district in a State; (c) 'Metropolitan areas' means an area having a population of ten lakhs or more, comprised in one or more districts and consisting of two or more Municipalities or Panchayats or other contiguous areas, specified by the Governor by public notification to be a Metropolitan area for the purposes of this part; (d) 'Municipal area' means the territorial area of a Municipality as is notified by the Governor; (e) 'Mun....
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....nd the Government of the State and of such organizations and institutions as may be deemed necessary for carrying out the functions assigned to such Committees; (d) the functions relating to planning and coordination for the Metropolitan area which may be assigned to such Committees; (e) the manner in which the Chairpersons of such Committees shall be chosen. (3) Every Metropolitan Planning Committee shall, in preparing the draft development plan- (a) have regard to- (i) the plans prepared by the Municipalities and the Panchayats in the Metropolitan area; (ii) matters of common interest between the Municipalities and the Panchayats, including co-ordinated spatial planning of the area, sharing of water and other physical and natural resources, the integrated development of infrastructure and environmental conservation; (ii) the overall objectives and priorities set by the Government of India and the Government of the State; (iv) the extent and nature of investments likely to be made in the Metropolitan area by agencies of the Government of India and of the Government of the State and other available resources whether financial or otherwise; (b) consult such institutions and....
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....gistered under the Companies Act, 1956, is a corporation aggregate. A corporation sole is a body politic having perpetual succession, constituted in a single person, who, in right of some office or function, has a capacity to take, purchase, hold and demise lands, tenements and hereditaments as also to take and hold personal property. HALSBURY'S Laws of England, 3rd ed. vol. 9 p. 7. The Administrator General under Section 5 of the Administrator-General's Act, 1918, is a corporation sole. 41- In STROUD'S JUDICIAL DICTIONARY OF WORDS AND PHRASES: SEVENTH EDITION, Page 570 the word Corporation has been defined as under:- "Corporation" 'Corporation' is that which the civilians call universitatem, or collegium, and is a body politick authorized to take and grant, having a common seal, &c. These are constituted either by prescription, by Letters Patent, or by Act of Parliament" (Cowel; see also Termes DE LA Ley; JACOB). They are either (1) spiritual, e.g. bishops, deans with their chapters, parsons and vicars; or (2) temporal, e.g. municipal corporations, and companies incorporated by charter or Act of Parliament; or (3) mixed, i.e. composed of spiritual and tempo....
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.... Every body politic, or corporate, and person and persons include parishes. 46- In the case of Devi Dayal vs. State of Andhra Pradesh, AIR 1963 AP 479 the Hon'ble Supreme Court held that one of the tests to find out whether an institution is a corporation or a department of the Government is to enquire whether the undertaking functions as a responsible independent organization and not as part of any department of the State. Another test would be to see whether it is endowed with the capacity of contracting obligations, and of suing and being sued. 47- The Supreme Court in a case reported in (2005) 1 Supreme Court Cases 149 Virendra Kumar Srivastava vs. U.P. Rajya Karmachari Kalyan Nigam and other held that the Corporation is not engaged in any State function of vital importance making available daily needs of the Government servants which is an activity like any other commercial activity. 48- In one another case reported in (2003) 263 ITR 706 Union of India vs. Azadi Bachao Andolan, the Supreme Court held that a 'Corporation' has administrative activities, directors and managers who reside, meet and take decisions in one or several places. It has activities and carri....
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....us, the dominating source of power is Parliament i.e. constitution. The local authorities enjoy a wide 'incidental' power under the Local Government and they may do anything 'which is calculated to facilitate, or is conducive or incidental to the discharge of any of their functions. 53- A Corporation or the local body constituted in pursuance to constitutional mandate and statutory provision by Act of Parliament or State Legislature may have difference to some extent. In the word of Professor Wade (supra) in England the corporation was incorporated by royal charter in the year 1627 in the reign of King Charles I. The fact that it is incorporated by royal charter is of importance, because a corporation so constituted stands on a different footing from a statutory corporation. The difference being that the latter species of corporation can only do such acts as are authorised directly or indirectly by the statute creating it, whereas the former can, speaking generally, do anything that an ordinary individual can do. 54- In the Administrative Law by I.P. Massey the statutory public corporation has been defined "as an agency created by an Act of legislature, operating a se....
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....tained in Article 243 (Q) and the use of word 'Corporation' is indicative of the fact that there must be some autonomy to the local bodies and corporations, to discharge their statutory obligations in pursuance to decision taken by its Board or its elected representatives. 56- Though Section 540 of the Act empowers the State Government to make rules or model rules, but the power conferred on the State Government, would be subject to other statutory provisions with regard to imposition of tax, recovery and maintenance of infrastructure. For the purpose, the government may frame rules or model rules but without violating other statutory provisions contained in the Act itself. Power of the State Government is subject to other provisions contained in the Act itself. Provision contained in Section 540 of the Act cannot be read in isolation. While considering the power of State Government to frame rules, regulations or the bye-laws, the Court has to take into account Article 243 (Q), Section 2 containing definition clause as well as provision contained in Section 172 as well as other provisions contained in Chapter IX of the Act. 57- The power conferred on the Corporation unde....
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....nsure compliance of Rule or Bye-laws. 60- Further under Rule 7 power has been conferred on the Municipal Commissioner to fix the minimum premium amount for every site. The site of advertisement shall be decided by the allotment committee under the Chairmanship of Municipal Commissioner. Virtually, indirectly power to impose premium or tax has been conferred on the Municipal Commissioner which is against the scheme of the Act. It is for the executive body of the corporation to take decision to impose tax or premium and not the municipal commissioner under the Act. Thus, power conferred by the impugned rule on the Municipal Commissioner is in contravention of the Act. 61- A combined reading of Rule 26 with Schedule shows that by the impugned Rule, taxes have been imposed with regard to advertisement though under the Act, power to impose tax has been dealt with under Chapter IX from Section 172 to 205 of the Act. Statutory provisions contain specific provisions how the tax should be imposed. Under Section 199 of the Act, proposal should be prepared by the Corporation for imposition of tax through its executive committee. The executive committee of the Corporation shall pass resoluti....
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....t local level. 65- Keeping in view the local needs and requirements, power of the state government is subject to power exercised by the corporation to take decision in tax matters. Of course, the Government may take decision by framing model bye-laws and issuing direction by publication in the official gazette directing the Corporation to impose certain taxes only then the decision of the State Government shall be binding and lawful. 66- Needless to say that in case direction issued by the state government is not sound and affects the right of the people or violative of constitutional provision or tax proposed by the Government is not lawful, then it may invite public resentment or people may approach for judicial review against such direction or decision taken by the state government. 67- Accordingly, the power conferred on the State Government under Section 540 of the Act is subject to Sections 172, 192, 193, 194, 195 and 196 and 199 of the Act. However, the government has right to frame model rules or issue direction under Section 206 of the Act to impose certain taxes by publication in official gazette. Thus, the impugned rules seem to have been framed in contravention of st....
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....thari vs. Delimitation Commissioner and in AIR 1982 SC 1126, pp. 1133, 1134 A.V. Nachane vs. Union of India held that when the Legislature gives power to make delegated legislation and further declares that the same shall have effect even if inconsistent with any existing law, the delegated legislation has that effect, for it is by the will of the Legislature and not by the will of the delegate that the overriding effect is given to the delegated legislation. The present issue does not seem to be covered by such proposition where though final power in tax matter in the form of approval, disapproval or modification vests in the state government, but it shall always be incumbent that all such proposal should be placed before the corporation to consider it by appropriate resolution. 71- The Supreme Court in the case reported in AIR 1962 SC 1263 Bangalore Woollen, Cotton & Silk Co. Ltd. vs. Bangalore Corporation had affirmed the power of Municipal Corporation to levy octroi on 'other articles' not specified in the Schedule but 'which may be approved by the Corporation by an order in this behalf holding that it is in the nature of conditional delegation. 72- In AIR 1966 SC....
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.... the method by which the tax is to be imposed. The Legislature does not make local enquiries, hear objections and decide them- functions which are most in appropriate for the Legislature to perform. This task is delegated to the appellant Board which is the representative body of the local population on whom the tax is levied. In other words, all the essential functions of legislation are performed by the State Legislature and only the minor functions necessary for the imposition of th e tax and the inquiries which must be made to ascertain local opinion are left to the Municipal Boards. An additional check is available as Government can veto the actions of a Board if it does not carry out the mandate of the Legislature. 74- In AIR 1966 SC 249 Bharat Kala Bhandar (P) Ltd. vs. Municipal Committee, their lordships held that in the event of expressed prohibition in Statute against local authority, imposition of tax shall be bad in law. While reading Section 192-A of the Government of India Act, the Supreme Court ruled that the municipalities should act within its jurisdiction conferred by the Statute. 75- In (1969) 2 SCC 283 Shri Prithvi Cotton Mills Ltd. vs. Broach Borough Municipa....
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.... and such imposition of tax should be done in view of condition laid down by the Legislature. The Supreme Court observed that the Board has got power to impose tax but subject to general direction or approval by the State Government. 78- In (2009) 15 SCC Page 570 Global Energy Ltd. vs. Central Electricity Regulatory Commission, the Supreme Court held that when the regulatory statute is sought to be enforced, the power of authority to impose restriction and condition must be construed having regard to the purpose and object it seeks to achieve. Superior courts would ensure that subordinate legislation must have been framed within the four corners of the Act and is otherwise valid. The Legislature policy providing qualification or disqualification should not be uncertain and the delegate must be furnished with adequate guidelines. Their lordships further proceeded to observe that law making power may be delegated having conform to policy of parent statute and there should be transparency, openness, responsiveness and accountability on the other hand. Image of law flows from its framework with respect to its neutrality or objectivity. The law has to proceed the basic level of securi....
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....hermore held that when any criterion is fixed by a statute or by a policy, an attempt should be made by the authority making the delegate legislation to follow the policy formulation broadly and substantially and act in conformity therewith. (See also Ministry of Chemicals & Fertilizers, Govt. of India vs. Cipla Ltd. SCC para 4.1). There cannot be any doubt or dispute with regard to the aforementioned legal proposition. 79- Hon'ble Supreme Court had further proceeded to observe. Paras 71, 72, 73 and 74 of the judgment are re-reproduced as under:- Para-71- The law sometimes can be written in such subjective manner that it affects efficiency and transparent function of the Government. If the statute provides for pointless discretion to agency, it is in essence demolishing the accountability strand within the administrative process as the agency is not under obligation from an objective norm, which can enforce accountability in decision-making process. All law-making, be it in the context of delegated legislation or primary legislation, have to conform to the fundamental tenets of transparency and openness on one hand and responsiveness and accountability on the other. These ar....
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.... unguided and excessive power conferred on the municipal commissioners, makes the rules ultra vires to the Act as well as constitutional scheme added by 74th amendment. All these aspects of the mattes and substantial question of law were not considered by the division bench at Allahabad in the case of Taj Advertising (supra). 82- Keeping in view the statutory provisions contained in the Act under Section 172 read with Section 199 of the Act and other provisions, ultimate power to impose tax vests in the Corporation i.e. in its general body or Board constituted by the elected representatives. The Corporation can modify the proposal of executive body under Section 202 of the Act even after sanction of tax proposal by the State Government. It shall be necessary to place the matter for approval before the Corporation and the Corporation shall take final decision by special resolution with regard to imposition of tax. The State Government has got power under Section 205 of the Act to abolish or modify the tax imposed by the the Corporation. It does not mean that the State Government lacks power with regard to tax matter. Power conferred on the State Government is general power which ma....
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....ade under the Act, it may refer to for the purpose of resolving any real ambiguity in the Act. Thus, the exercise of power by the government in pursuance to the Act must be in the manner provided by the Act read with constitutional provisions and not otherwise. In the present case, the government seems to have exceeded its jurisdiction while framing the rules straightway without following the procedure provided by the Act. 87- One of the arguments advanced by Shri J.N. Mathur, Additional Advocate General is that the Rules in question are only directory and not mandatory. It is a guidelines for corporation to implement it in accordance to law. The argument advanced by Shri Mathur seems to be misconceived. At the face of record the rule provides that it shall come into force with immediate effect i.e. from the date of notification. In the event of non payment of premium, taxes, a penal action may be taken by the Municipal Commissioner. The letter and spirit of the impugned rule makes it mandatory, therefore, the argument advanced by Shri J.N. Mathur, learned Additional Advocate General seems to be not sustainable. 88- To sum up, impugned Rules could not have been framed by the Gov....