Pramatha Nath Talugdar v. Seve Renian Sarkar Kepur J.
December 21,
366 SUPREME COURT REPORTS [192] SUPP"
The argument that this Court gave Special Leave in the case of Pramode Ranjan Sarkar and therefore there were points of importance is, in the circumstances of this cage, a neutral circumstance and that fact cannot be used as 4 point in favour of the respondent.
Tn these ciroumstanoes, we are of the opinion that the bringing of the fresh complaint is a gross abuse of the process of the Court andis not with the object of furthering the interests of justice.
Tn regard to the power of reference to a larger Bench, we are in agreement with 8. K. Das, J., and in the circumstances it is unnecessary to express an opinion as to the spplicability of 8. 196A Criminal Procedure code to the facts of this case.
For these reasons we allow the appeals, set aside the order of the High Court and of the learned Chief Presidency Magistrate. and dismiss the oomplaint.
By Courr : In accordance with the judgment of the majority, the appeal is allowed.
Appeal allowed. THE MUNICIPALITY OF ANAND #.
STATE OF BOMBAY
(B. P. Suva, C. J., A. K. Sarxar, K. C. ‘Das Gupta, N. Rayagorpara AyyanosaR and J. R. MoupxHorxar, JJ.)
Ociros Tax—Imposition by Municipality—Order by Government probibiting imposilion—Validity of—Bombay District Municepal Act, 1901 (Bom. of I901), ». 59—Conatitution of India, Art. 14.
After following the procedure prescribed by the Bombay District Municipal Act, 1901, and after obtaining the requisite sanction of the Government, the appellant imposed an octroi tax on milk brought within its limits for consumption, use or sale therein. Shortly afterwards the Government passed an
2 §.0.R. SUPREME COURT REPORTS 367 order directing that the octrot tax shall not be leviable by the appellant. The appellant contented that the Government had no power to control the imposition of the tax once It had been properly imposed.
Held, that the Government was competent under s. 59 of the Act to pass the order. Section 59 provided that subject to any general or special orders which the State Government may make, a Municipality may “impose” the tax after following the procedure laid down and after obtaining the sanction of the Government. The word “impose” ins. 59 meant the actual levy of the tax after authority to levy it had been acquired by rules duly made and sanctioned and this imposition was subject to the general or special orders of the Government. The general and special orders under s. 59 could not be confined to orders under s.73 which gave. the Government power to suspend the tax in certain cases.
Held, further, that the order of the Government was not discriminatory. Subsequently the Government had prohibited all municipalities from levving octroi tax on milk. For the same reason no question of mala fides could arise.
Per Ayyangar, J.—Imposition of tax was a continuing power eriving vitality from the power of the authority to impose it. The power of the Government to issue special or general order under s. 59 was therefore not exhausted after “imposition” of the tax. There were provisions in ss. 47, 73 and 74 for other contingencies but except for the opening words of s. 59 there was no provision to enable Government tointervene in cases where the continued levy was against public interest. Theopening words of s. 59 clothed the Government with power to direct a municipality to desist from imposing a tax.
Civ, APPELLATE JURISDICTION: Civil Appeal No. 211 of 1956.
Appeal from"the judgment and order dated July 19, 1955, of the Bombay High Court in Special Civil application No. 976 of 1955.
A. V. Viswanatha Sastri, S. N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant.
M. OC. Setalvad, Attorney-General for India, C.K. Daphtary, Solicitor-General of India and B. Sen, for respondent No. 1.
Vithalbhai B. Patel and J. N. Shroff, for respon lent No. 2.
The Municipality of Anand
Vv, State of Bombay
The Municipal: ef yieity ad v. & tate of Bombay Sarkar J,
1961, December 21. The Judgment of Sinha C. J., Sarkar, Das Gupta and Mudholkar JJ., was delivered by Sarkar J. Ayyangar J., delivered a separate judgment.
SarkaR J.—The appellant is a City Municipality within the meaning of the Bombay District Municipal Act, 1901 and is governed by that Act. It had by a resolution duly passed by it, made a rule under s. 60 of the Aot selecting for the purpose of an octroi tax of -/4/-. annas per Bengali maund, milk brought within ite octroi limits for consumption, use or eale therein. On November 29, 1954, the Government of Bombay had given its sanction to the rule under s. 61 of the Act. The appellant Municipality thereafter published the rule and the sanotion as required by 8.62 of the Act and the tax was accordingly imposed with effect from January 1, 1965. On April 4, 1955, the Government of Bombay passed an order directing that the octroi tax shall not be leviable by the appellant Municipality. This order has given rise to the present proceedings.
The appellant Municipality filed a petition in the High Court at Bombay under Art. 226 of the Constitution challenging the validity of the order. This petition was diemissed by the High Court. The appellant Municipality has now come up to this Court in appea] against the decision of the High Court.
The questions that arise in this case will be stated after a few of the acctions of the Act have been referred to. Chapter VII of the Act deals with municipal taxation. We shall be concerned principally with ss. 59, 60, 61 and 62 which are all contained in this chapter and deal with imposition of taxes by Municipalities. It will be necessary also to consider s. 46.
Section 46 gives power to a Municipality to make rules for various purposes as specified in
28.0.R SUPREME COURT REPORTS 369 the several clauses contained in it. Under cl. (i) of this section a Municipality has power to make rules for the purpose of ‘‘prescribing, subject to the provisions of Chapter VII, the taxes to be levied”. Section 59 is the section on which the decision of this case will really turn and we, therefore, think it right to set out that portion of it which is relevant for our purpose.
S. 59. (1) Subject to any general or special orders the State Government may make in this behalf, any Municipality—
(a) after observing the preliminary procedure required by section 60 and
(b) with the sanction of the State Governmentin the case of City Municipa- Lities........csscsccesenceeetscnssecsceeeeneees and subject to such modifications or conditions as under section 61 the State Government......... bocereedece in according such sanction, deems fit,
' may impose, for the purposes of this Act, any of the following taxes, that is to say,
CK ecovarenanseceseens OOOO near ere neesesasnacsrees
VO TRMOR OOD Dee rset EH EOE SE HORE ESE Saeeesenneserene
(iv) 2 an octroi on animals or goods, or both, brought within the octroi limits for consumption, use or sale therein ;
Section €0 lays down the procedure to be observed by a Municipality preliminary to imposing a tax. It requires that first a resolution shall be passed at a meeting tothe Municipality selecting the tax and making rules for the proposes of cl. (i) . of s. 46 prescribing the tax. Thereafter the resolu- tion has to be published with a notice in a specified | form inviting the inhabitants of the Municipal
V
The Munici al. of Arena v. Stace of Bon bay
Sarker J.
The Municipality of Arand v. State of Bombay
Sarkar J, area to submit within a month their objections, if any, to the tax. After the objections have come in, they are to bs consid:red by a committee of the Municipality and unless on the report of the committee the Municipality decides to abandon the tax, it has to submit the objections with its opinion thereon, any modifications it desires to make and the rules prescri!ing the tax to the State Government. Section 61 provides that on receipt of the rules and the other things mentioned in 8.69 from the Municipality, the Government may refuse to sanction the rules, or return them to the Municipality for further consideration or sanctioned them with or without modifications or subject to conditions prescribed. Section 62 lays down that the rules as sanctioned by the Government shall be published by the Municipality and the tax shall, from the date which shall be specified in the notice publishing the rules, be imposed accordingly. It is not in controversy that in the present case the procedure prescribed in the sections mentioned above had been complied with.
The Government's contention is that the order made by it was competent as it was order which was authorised by s. 59, subject tv which only a tax could be imposed by a Municipality. The appellant Municipality does not dispute that it can impose a tax only under s. 59 but it contents that the general or special orders mentioned in the section subject to which it has the power to impose tax, are orders which were in existence before the rule prescri)ing the tax was framed and once a rule has been framed by it and the Government has accorded its sanction to that rule, the Government has no power to control the imposition of tax under it by any order made under s. 59. The question so raised is one of the construction of 8.59. But for such construction we have to refer also to the other sections earlier mentioned.
28.0.R. SUPREME COURT REPORTS 371
In our opinion, the Government's contention is well founded. The Municipality’s power to tax arises only under s. 5¥. Under that section, it has been given the-power of impose a tax after following the procedure prescribed but subject always to the general or special orders of the Government. The appellant Municipality can succeed in this appeal only if the word “impose” in s. 59 means the acquisition of the power to tax by following the procedure laid down in as. 60 to 62. Its appeal must otherwise fail. It seems to us that the word “impose” in s. 59 has not the meaning for which the appéllant Municipality contends.
It wopld have been noticed that under s. 59 a Municipatity may impose a tax only after it has framed a rule under s. 60 prescribing the tax to be levied and the Government has given its sanction to that rule under s. 61. Itis this imposition whichis made by s. 59 “subject to any general or special orders which the State Government may make in this behelf”. Therefore, it is the imposition after the making of the rule authorising the tax, that is subject to the Governm-nt’s orders and not the making of the rule itself which authorisies the tax itself. It is plain from s. 59 that the control over a Municipality’s pow:r to tax imposed by the requirement of the Government’s sanction of the rule prescribing the tax in contained in s, 61, is not the same thing as the contro! contempalted by the general or special orders mentioned in s. 59, for both are mentioned ins. 69. If it were not so, it would have been unnecessary to provide for the general or special orders controlling the imposition of the tax in s. 59. This is the first reason why we think that the appellant Municipality’s contention is untenable.
The imposition contemplated by s. 59 is clearly not the passing of the resolutions under
The Municipali of Viena » v.. State of Bombay
Sarkar J.
108! The Municipalit of Anand 7 v. Stats of Bombay Sarker J,
8. 60 selecting the tax and making the rule presoribing the tax to Le levied in terms of s. 46(i), for
8. 59(1) (a) expressly makes the imposition something happening after s. 60 has been complied with. This seems to us to be another reason for not accepting the appellant Municipality’s contenion.
The third reason is to be found ins. 62. As we havo earlier stated, it provides that the tax shall be imposed from the date mentioned in the notice publishing tho sanctioned rule. The choice of this date lies with the Municipality and not with the Government. The power to levy the tax is acquired by a Municipality when the rule prescribing the tax made by it is sanctioned by the Government. The Municipality at its own choice thereafter fixes a date from which it will collect the tax. Therefore, the word “impose” in s. 62 does not refer to the acquisition of power to levy & tax by making the rule but to the actual levv of the tax under the power so acquired. It is of some significance to note that in e. 46(i) the words used are “make......... rules.,....prescribing......the taxes to be levied”. What we wish to point out is that in connection with the making of the rules the Act uses the word “levied” in s. 46(i) and in connection with an actual impost, and word “impoeed” in s. 62. We, therefore, think that it would be legitimate to construe the word “impose” in s. 59 in the sense in which it has clearly been used in a connected provision, that is, s.62. Hence, in our view, “im ” in s. 69 means the actual levy of the tax after authority to levy it has been acquired by rules duly made and sanctioned, and it is such imposition that is made subject to the eneral or special orders of the Government. Thereore, the Government can at any time by any
_ such order prohibit the imposition of the tax.
2S.C.R. SUPREME COURT REPORTS 373
Mr. Sastri for the appellant said that the general or special orders in s. 59 refer to orders that can be made under s. 73, but the present order had admittedly not been made under that section. Section: 73 does not empower an order prohibiting the imposition of a tax altogether as the order in the present case does. It only gives power to suspend the levy of the tax authorised till the objections to the tax which the Government required to be removed, had been removed. Because s. 73 gives a power to suspend the tax, it is, in our opinion, no argument that the general or special orders in 8s. 59 must be understood as confined to such orders. Section 73 cannot help in interpreting the words “general or special orders” in s. 59.
A third objection to the validity of the order was that it was discriminatory. It was said that no other Municipality had been prohibited from collecting a similar tax which it had power under its rules to collect. Apart fromthe very interesting question raised by the learned. Attorney General that the Municipality being a local authority, was a ‘tate, and was not therefore entitled to the benefit of Art. 14, as to which we think it unnecessary to express any opinion. we are on the facts satisfied that there is no discrimination. The Gzvernment has now, it is mot disputed, prohibited all Municipalities from levying any octroi tax on milk. Farthermore, it has not been shown to us that all Municipalities stand on the same footing with regard to milk.
The last objection was that the order had been mals fide made. This grievance is completely without foundation. The Government had earlier requested the appellant Municipality to drop the tax on the ground, among others, that milk was really being purchesed for the Government and that the Government was not liable to be
The Municipali of cipal v. State of Bombay Sarkar J.
The Mun.cipality of Anand v. State of Bombay Sarkar J.
Ayengar J,
374 SUPREME COURI REPORTS [1962] SUPP.
taxed by a Municipality. It may be that this ground was not justified on the facts, but as to this we do not come to any finding. It is clear to us that oven if this stand taken by the Government was not tenable, that is mo reason for thinking that the order was made mala fide. It was said that the Government had made this order to benefit respondent No. 2, a co-operative union, dealing in milk. This isa bare allegation and is not supported by facts. In any event, since similar ordera have now been made in respect of: all Municipalities within the State, no question of mala fide can possibly arise.
We think that the challenge to the order dated April 4, 1955 is without any foundation. In our view, the order was perfectly legitimate and must be upheld.
We accordingly dismiss .the appeal with costs.
AyyanGak J.—I have had the advantage of perusing the judgment just delivered and I agree with order passed.
The relevant facts and the statutory provisions which bear on the points arising in the appeal havo all been set out by Sarkar J. and do not require to be repeated.
There is no dispute that the levy of the duty by the municipality as and from January 1, 1955 was lawful because the requirements of ss. 59—62 were satisfied when tho lovy was made. No general or special order of the State Government stood in the way of the municipality making the particular levy and the sanction of the State Government under s. 59 (1) (b) had been accorded to it, and the relevant rules-had conformed to the procedural and other requirements of these sections. The power of the municipality in the matter of the levy of the tax is, however, not absolute but is made subject, apart from other provisions to which I
2S.C.R. SUPREME COURT REPORTS 375 shall advert, to such genera] and special orders as the State Government might pass by virtue of the opening words of s. 59 of the Act.
The argument strenuously pressed by Mr. Visvanatha Sastri was this: Lhe Government had no doubt, a power to prescribe and control by general or special orders the right of a municipality to impose a tax. These general or special orders would again, no doubt, be subject to modification from time to time to suit the changing needs of particular areas, or of particular interests which would be affected by the tax-levy, but the exercise of the power of modification or this power to prescribe conditions and restrictions is exhausted when a municipality does, by conforming to the orders then in force, impose a levy which has come into force under s. 62.
Tam unable to agree with this construction of the opening words of s.59 (1). On its language there is nothing to warrant the doctrine that it gets exhausted by reason of a municipality imposing a tax in conformity with an order as it stood at a particular date. ‘he limitation suggested must, therefore, be deduced asa necessary implication either from the fasciculus of sections ending with s. 62 leading to the imposition of a levy, or from other provisions of the Act.
The other provision of the Act to which learned Counsel referred was s. 73 which reads:
“Tf it shall at any time appear to the Provincial Government, on complaint made or otherwise, that any tax, leviable by a Municipality, is unfair in its incidence, or that the levy thereof, or of any part thereof, is obnoxious to the interest of the general public, it may require the said Municipality, within such period as it shall fix in this behalf, to take measures for removing any objection which appears to it to exist to the said tax,
The Municipality of cinand v. State of Bombay
Ayyangar J,
The Munirp Wty Anand of
. Vv. State of 8on-Lay
Aygenger J.
and if, within the period so fixed, such requirement shall not be carried into effect to tho satisfaction of the Provincial Government, it may, by notification in the Official Gazette, suspend the levy of such tax, or of such part thercof, until such time as the objection thereto shall be removed,
The Prcvincial Government may at any time, by a like notification, reacind any such suspension.”
It is obvious that this scction is of limited operation and confined to the subject it actually deals with. It posts the continued exaction of the impost, but points to the removal of anomalies and hardships in the details of the levy or of its administration. The existence of this provision would manifestly not suffice to negative the right of the Government to forbid the continued imposition of the tax altogether—such as haa been done inthe present case. Section 73 cannot therefore be construed as negativing by implication the right claimed by the State Government undcr s. 59, for it refers to and comprehends a totally different subject-matter.
Coming now to the construction of ss. 59-62 as themselves supporting the theory of the exhaustion of the power, the submission was this. ‘The general or special orders” could only restrict the power of a municipality “to impose a tux”. On the acheme of provisions contained in es. 59-62 a tax was “imposed” only once, though when imposed and in operation the levy and collection of such a tax might be perioilio and throughout the life of the imposition. Hence there was no scopo for the exercise of the Statc Government to make “any special order” in relation to a tax after it has once been “imposed” because the powcr to prescribe conditions or restricticns by general or special order is with reference to the “imposition” of the tax. I fee! unable to accept this construction. The whole foundation
28.0.R. SUPREME COURT REPORTS 377 of the argument is based on a denial of the premise that a-power to impose tax isa continuing power. In my judgment the “imposition” of a tax is a continuing power in the sence that so long as itis in force, it points to the existence of and derives vitality from the power of the authority to impose it. When the municipality levies the tax in the sence of quantifying it with reference to an ascertained person and thereby creating a statutory debt payable by the tax payer, it is in reality exercising the power to “impose” the tax, for it is the continued existence of the imposition that: furnishes the legal basis for the levy when made. When the power to impose is withdrawn the imposition falls to the ground. That is the ratio of saving provisions which enable taxes to be levied and collected not withstanding the deprivation of the right to impose taxes for the future. In this view it is clear that there is no exhaustion of the State power under the opening words of s. 59 (1).
In arriving at this construction I have also taken into considerationthe scheme ofthe Act and the wide powers conferred on the State Government in the matter of control and supervisicn over the municipalities powers designed to ensur> that, subject of course to express statutory provision, municipal administration is co-ordinated to secure the vital interest of the general public.
In ,this connection reference. may be made. to s. 74 of the Act which reads :
“Whenever it appenis to the Provincial Government that the balance of the municipal fund of any Municipality is insufficient for meeting the expenditure incurred under section 175 or for the performance of any duties in respect of which they shail have been declared under section 178 to have committed default, the Provincial Government. may be notification require the Municipality to impose.
The Municipeli of duet 9 v. Stats of Bomba Ayyanger J,
The Municipality of Anend iy, State of Bombay
Aygangor J.
within the Municipal district, any such tax specified in the notification as may be imposed under section 59 if no such tax is at the time imposed therein, or to enhance any existing fax in such manner or to such oxtent as the Provincial Government. considers fit, and the Municipality shall forthwith proceed to impose or enhance in accordance with the requisition such tax uncer the provisions of this Chapter as ifa resolution of the Municipality had been passed for the purpose under section 60 :
Provided that :
(a) the Provincial Government shall take into cofeideration any objection which the Municipality or any inhabitant of the Municipal distriot may make against the imposition or enhancement of such tax,
(b) it shall not be lawful for the Municipality to abandon or modify or to abolish such tax when imposed, and
(c) the Provision Government may at any time cancel or modify any requisition made by it under this section, and the levy of tax or the enhancement, except as to arrears theretofore accrued due. shall thereupon cease or be modifiet! accordingly.’
Government are thus empowered both to direct the municipality to impose tax when Government consider tho same necessary in the interest of municipal finance and administration as also to direct the municipality to desist from continuing the imposition when the neccssity ceases. In cases where @ tax is imposed by the municipality by virtue of the provisions in ss. 59-62, the municipality
28.0.2. SUPREME COURT REPORTS 379 itself could revoke the tax if the rules so provide, for s. 47 of the Act enacts :
*{1) Subject to the requirements of clause (ay of the proviso to section 46 every Municipality may, except as otherwise provided in clause (b) of the proviso to section 74, at any time for any sufficient reason, suspend, reduce or abolish any existing tax hy suspendiny, altering or rescinding any rule describing such tax under the provisions of clause (1) and of the first clause of the proviso to section 46.
(2) The provisions of Chapter VII relating to the imposition of taxes shall, so far as may be, apply to the suspension, reduction or abolition of any tax and to the suspension, alteration or rescission of any rule prescribing a tax.”
But for the opening words ofs. 59(1) there is no specific provision in the Act to enable Government to intervene in cases where the continued levy of a tax 13 contrary to public interest. I do not consider that any such gap was intended and inmy judgement the opening words in s. 59(1) are both apt and sufficient to clothe Government with power to direct by ‘special order’ a municipality to desist from ‘imposing’ a tax when satisfied that public interest so requires.
The points raised regarding discrimination and malafides are without substance and for the reasons stated by Sarkar J. I would reject them.
The appeal therefore fails and has to be dismissed with costs. The Writ Petition which raises the same points as the appeal will also stand dismissed but without any order as.to costs.
Appeal dismissed.
The Muawipalit of Anand 7 vy State of Bombay
AyvangarJ §