We take up the first preliminary question for
consideration, namely availability of alternate efficacious remedy,
as contended by learned counsel for the respondent no.2. It is
true that Section 169 of the Municipal Act provides for an appeal
to the Magistrates or Committee. The question, however, relates
to the applicability of Section 49A of the Act in the matter of
engagement of an agency for carrying out the duties in the matter
of assessment of taxes, and preparation and finalization of
assessment list, which question cannot be gone into in the said
appeal. The further question is about violation of various
provisions of the Act as projected before us by the petitioners, on
the ground that the action impugned in the Writ Petition violates
the fundamental rights of the petitioners guaranteed under Article
14 of the Constitution of India. There is a further question also
whether the Appellate Court or the Committee would be able to
consider the matters raised in the instant petition. We do not wish
to undertake a deeper exercise, since the said question has been
decided by the Constitution Bench of the Apex Court in the case of
New Manek Chowk Spinning & Weaving Mills Co., Ltd. [cited
supra]. In our opinion, it would be sufficient if we quote
paragraph 14 and extracted portion of para 16 from the said
judgment, which read as under:-
“14. Mr. Setalvad argued that at that stage
there is only a proposal and even if the municipality
had acted arbitrarily it was open to the assessees to
take objection thereto and have proper valuations
made and the assessment book prepared properly.
We cannot accept this argument. If the
municipality fails in its initial duty to act in terms of
R. 9 (b) it does not lie in its mouth to say that any
irregularity, however, patent on the face of it, is
open to correction. Moreover, the methods of
correction in this regard are really illusory. The
Small Causes Court cannot decide the applicability
of Art. 14 of the Constitution and according to the
judgment of the Bombay High Court in Balkrishna v.
Poona Municipal Corporation (1963) 65 Bom LR
119, (by which the District Judge would be bound):
“.....the words used in S. 406 (1) of the Act..... do
not cover the vires of the tax or the legality of the
tax which is sought to be levied.”
Earlier, the learned Judges had pointed out after
noting Ss 406 to 413 that :
“the decision of Judge aforesaid upon any appeal
against any such value or tax if no appeal is made
therefrom under S. 411 and if such appeal is made
the decision of the District Court in such appeal
shall be final.”
From this it follows that it would be useless for the
assessee to take objections or file appeals against
the decision on rateable value to the authorities
prescribed by the Act if he was challenging the
determination of the rateable value as being
violative of Art. 14 of the Constitution. It is no
answer to such a charge to say that the rateable
value could be determined properly by the
municipal authorities acting under the Act and the
rules thereunder when they do not resort to any of
the well-known methods of valuation and cannot
justify their arbitrary method.”
“16. The net result of all this is that unless the
assessee pays the amount of tax demanded, his
appeal cannot be heard so that if he questions the
rateable value or the levy of the tax, he must in
any event, deposit the amount demanded. In
effect, the Act and the appeal rules do not make
any provision for relief to an assessee who
complains that the assessment book has been
prepared in violation of the law. .....”
Article 265 of the Constitution reads thus:-
“265. Taxes not to be imposed save by authority
of law.- No tax shall be levied or collected except by
authority of law.”
As held in the case of Municipal Council, Khurai & another Vs.
Kamal Kumar & another [1965 Mh.L.J. 225], we find that the
procedure for imposing the liability to pay a tax has to be strictly
complied with. Where it is not so complied with, the liability to pay
the tax cannot be said to be according to law. That apart, reading
of the appellate provision under Section 169 of the Act, to our
mind, does not at all encompass the legal challenges raised in the
instant Writ Petition, on the ground that the action impugned is
contrary to the various provisions of the Act and that the same is
also in violation of Article 14 of the Constitution.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR
Writ Petition No.2585 of 2013
consideration, namely availability of alternate efficacious remedy,
as contended by learned counsel for the respondent no.2. It is
true that Section 169 of the Municipal Act provides for an appeal
to the Magistrates or Committee. The question, however, relates
to the applicability of Section 49A of the Act in the matter of
engagement of an agency for carrying out the duties in the matter
of assessment of taxes, and preparation and finalization of
assessment list, which question cannot be gone into in the said
appeal. The further question is about violation of various
provisions of the Act as projected before us by the petitioners, on
the ground that the action impugned in the Writ Petition violates
the fundamental rights of the petitioners guaranteed under Article
14 of the Constitution of India. There is a further question also
whether the Appellate Court or the Committee would be able to
consider the matters raised in the instant petition. We do not wish
to undertake a deeper exercise, since the said question has been
decided by the Constitution Bench of the Apex Court in the case of
New Manek Chowk Spinning & Weaving Mills Co., Ltd. [cited
supra]. In our opinion, it would be sufficient if we quote
paragraph 14 and extracted portion of para 16 from the said
judgment, which read as under:-
“14. Mr. Setalvad argued that at that stage
there is only a proposal and even if the municipality
had acted arbitrarily it was open to the assessees to
take objection thereto and have proper valuations
made and the assessment book prepared properly.
We cannot accept this argument. If the
municipality fails in its initial duty to act in terms of
R. 9 (b) it does not lie in its mouth to say that any
irregularity, however, patent on the face of it, is
open to correction. Moreover, the methods of
correction in this regard are really illusory. The
Small Causes Court cannot decide the applicability
of Art. 14 of the Constitution and according to the
judgment of the Bombay High Court in Balkrishna v.
Poona Municipal Corporation (1963) 65 Bom LR
119, (by which the District Judge would be bound):
“.....the words used in S. 406 (1) of the Act..... do
not cover the vires of the tax or the legality of the
tax which is sought to be levied.”
Earlier, the learned Judges had pointed out after
noting Ss 406 to 413 that :
“the decision of Judge aforesaid upon any appeal
against any such value or tax if no appeal is made
therefrom under S. 411 and if such appeal is made
the decision of the District Court in such appeal
shall be final.”
From this it follows that it would be useless for the
assessee to take objections or file appeals against
the decision on rateable value to the authorities
prescribed by the Act if he was challenging the
determination of the rateable value as being
violative of Art. 14 of the Constitution. It is no
answer to such a charge to say that the rateable
value could be determined properly by the
municipal authorities acting under the Act and the
rules thereunder when they do not resort to any of
the well-known methods of valuation and cannot
justify their arbitrary method.”
“16. The net result of all this is that unless the
assessee pays the amount of tax demanded, his
appeal cannot be heard so that if he questions the
rateable value or the levy of the tax, he must in
any event, deposit the amount demanded. In
effect, the Act and the appeal rules do not make
any provision for relief to an assessee who
complains that the assessment book has been
prepared in violation of the law. .....”
Article 265 of the Constitution reads thus:-
“265. Taxes not to be imposed save by authority
of law.- No tax shall be levied or collected except by
authority of law.”
As held in the case of Municipal Council, Khurai & another Vs.
Kamal Kumar & another [1965 Mh.L.J. 225], we find that the
procedure for imposing the liability to pay a tax has to be strictly
complied with. Where it is not so complied with, the liability to pay
the tax cannot be said to be according to law. That apart, reading
of the appellate provision under Section 169 of the Act, to our
mind, does not at all encompass the legal challenges raised in the
instant Writ Petition, on the ground that the action impugned is
contrary to the various provisions of the Act and that the same is
also in violation of Article 14 of the Constitution.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR
Writ Petition No.2585 of 2013
Sandeep Inderchand Gandhi Vs The State of Maharashtra,
CORAM : A.B. CHAUDHARI AND
P.R. BORA, JJ.
Pronounced on : 12th Dec., 2014.
[Per A.B. Chaudhari,J.]:
Citation;2015(2) ALLMR628
01. Rule. Rule is made returnable forthwith. Learned Asstt.
Govt. Pleader Mrs. S.S. Jachak waives service on behalf of
respondent no.1, and learned Adv. Mr. Anjan De, for respondent
no.2. By consent of rival parties, this Writ Petition is taken up for
final hearing and disposed of by this Judgment and Order.
02. By the present Writ Petition, the petitioners, who are the
tax payers to Municipal Council, Hinganghat, have put to challenge
the implementation and methodology of assessment of Municipal
Tax/Property Taxes through a private agency for the period from
2012-13 to 2015-16 being in violation of the provisions of the
Maharashtra Municipal Councils, Nagar Panchayats & Industrial
Townships Act, 1965 [hereinafter referred to as “the Maharashtra
Municipalities Act”, for short], so also the Resolution dated 1st
October, 2010 passed by the respondent no.2, Municipal Council,
Hinganghat.
F a c t s :
03. The petitioners are resident of various wards within the
municipal limits of Municipal Council, Hinganghat. It is a ‘B’ Class
Municipal Council within the meaning of Section 9 (2) of the
Maharashtra Municipalities Act. The last assessment had taken
place for the period from 2006-07 to 2009-10, i.e., for four years.
The work for assessment for 2010-11 to 2013-14 was undertaken
and Resolution No.7 was passed by the General Body of the
Municipal Council on 14th July, 2009, to get the work of
assessment done through a private agency. The assessment is
obviously required to be done as per Sections 114 to 124 of the
Municipalities Act. The work was finally given to M/s. Core
Projects, Amravati, by Resolution dated 16th November, 2009.
The agency, namely Core Projects, Amravati, entered into an
agreement with the Municipal Council dated 6th January, 2010
[Annex.G to the petition]. The authorized Valuation Officer of the
State Govt. approved the assessment and the valuations made by
the Agency were sent through him to the Chief Officer, Municipal
Council, Hinganghat, on one single day upon receipt thereof, i.e.,
on 20th October, 2010. The petition was filed in this Court on 8th
May, 2013.
04. In response to the petition, the Municipal Council,
Hinganghat, has filed short submissions on 23rd January, 2014 and
the stand taken is that it is entitled to get the work of assessment
delegated to agency and the Chief Officer of Municipal Council has
power to get it done through any agency under his supervision
and authority. A Preliminary Objection is raised about availability
of alternate efficacious remedy under Section 169 of the
Maharashtra Municipalities Act, with a further submission that the
petitioners have, in fact, availed of the said remedy. It is also
stated that the works of spot inspection, measurement of
properties, preparation of maps, getting photographs were done
through Core Projects, Amravati, the agency that was employed
as per the agreement as aforesaid. Reliance is also placed on
Standing Instruction No. 36 dated 29th December, 2005, issued by
the Directorate of Municipal Administration, Mumbai, as to the
procedure for the tender process wherein it is stated that the
duties provided by Section 49 of the Maharashtra Municipalities
Act can be performed through the agency. Respondent No.2 has
also filed documents on 19th November, 2014 with a Pursis, in
order to show that the Assessment Lists have been finalized after
the objections were raised, heard and decided and, thus,
everything has been completed in accordance thereof and nothing
remains to be done by now. Petitioners-objectors have submitted
their objections, including objections raised in the present petition
and, therefore, the petitioners can very well pursue the same by
taking resort to the alternate efficacious appellate remedy
provided by Section 169 of the the Maharashtra Municipalities Act.
All the stages have been completed and, therefore, this Court
should not interfere in the matter of taxation and, thus, there is a
prayer to dismiss the Writ Petition.
A r g u m e n t s :
05. In support of the Writ Petition, learned Senior Adv. Mr.
M.G. Bhangde with Mr. V.V. Bhangde made the following
submissions:-
[a] The objection about availability of alternate
remedy under Section 169, raised by the
respondent no.2, is liable to be rejected, since
the issues raised in the present petition are
about the violation of the provisions of the the
Maharashtra Municipalities Act while
undertaking the assessment of taxes and the
action being in violation of Article 14 of the
Constitution of India, which cannot be
examined within the scope and ambit of
Section 169 of the Maharashtra Municipalities
Act providing for the remedy of appeal. He
relied on the decision of the Supreme Court in
the case of New Manek Chowk Spg. & Wvg.
Mills Co., Ltd., etc. Vs. Municipal Corporation of
the City of Ahmedabad & others [AIR 1967 SC
1801] [Five- Judge Bench].
[b] The ground of delay and laches canvassed by
the Municipal Council is also not available,
because the petitioners came to know, for the
first time, about the assessment, in question,
whey they received notices under Section 119
(1) of the Maharashtra Municipalities Act, and
at a later stage came to know about
appointment of a private agency for carrying
out work of assessment and, thus, for lack of
knowledge about internal happenings in the
Municipal Council about appointment of a
private agent etc., the petition was filed
immediately after receipt of knowledge and
this Court had issued notice on 9th May, 2013.
The petition was filed after spending some
time for collection of relevant documents etc.
and hence it does not suffer from any delay
and laches. Learned Senior Adv. for the
petitioners relied on the decision in the case of
Bar Council of Delhi & ors. Vs. Surjeet Singh &
ors. [(1980) 4 SCC 211].
[c] Learned Senior Adv. then invited our attention
to the various provisions of the Maharashtra
Municipalities Act, namely Sections 2 (5) (6),
49 (2) (v), 49A, 77 (1) (a), 77 (2), 105, 114,
115 (1) (2) and Section 117.
[d] Placing reliance on the aforesaid provisions,
the learned Senior Adv., for the petitioners
submitted that the only provision in the the
Maharashtra Municipalities Act for outsourcing
of work , that is framed by the State
Legislature, is Section 49A of the Act and
there is no other provision to appoint any
private agency for performing duties under the
Act. According to learned Senior Adv., Section
49A contemplates appointment of any agency
for performance of any duty or function
imposed on a ‘Council’ entrusted with the
implementation of the scheme. It does not
authorize Chief Officer of the Municipal Council
to get the duties of Chief Officer
performed/implemented by any agency.
According to Mr. Bhangde, what is spoken of
under Section 49A is that an agency can be
appointed for performance of any duties or
functions of a ‘Council’ and not for performing
the duties and functions of the Chief Officer.
[e] Inviting our attention to the Agreement dated
6th January, 2010, he argued that the very first
paragraph of the agreement, in terms,
provides for the agency to make a survey/resurvey
of the properties within the municipal
limits of Hinganghat, take measurements,
draw maps and digital colour photographs,
make valuation of the rateable value of the
property, prepare lists of rateable value of the
properties ward-wise, prepare notices under
Section 119 of the Act and after the authorized
Valuation Officer finalizes the lists, to prepare
the final lists ward-wise and then put all the
properties in computerized manner and having
regard to provisions of Section 113 to 123,
150, 169 and 170 of the Maharashtra
Municipalities Act within a period of three
months.
[f] The learned Sr. Counsel then invited our
attention to the communication dated 20th
October, 2010 issued by the authorized
Valuation Officer to the Municipal Council,
Hinganghat with reference to the letter dated
20th October, 2010, i.e., of even date, in
relation to the approval to assessment of taxes
and the lists, and submitted that the
authorized Valuation Officer received the Lists
of all the properties in the area of Municipal
Council, Hinganghat on 20th October, 2010 and
on the same day, he approved all the
proposals, which clearly shows total nonapplication
of mind on the part of authorized
Valuation Officer.
[g] Learned Sr. Counsel for the petitioners also
invited our attention to the documents on
record, by which the agency had prepared the
charts for assessment of taxes showing the
category of construction made and the
assessed value for the purposes of taxation
which is as per the agreement with the
Agency.
06. Learned Sr. Counsel for the petitioners, therefore,
submitted that the entire process of assessment of municipal
taxation made by the respondents is contrary to law, arbitrary and
in violation of Article 14 of the Constitution of India. He,
therefore, submitted that the assignment of job to the agency
being totally illegal, the entire action of assessment of taxation is
liable to be struck down.
07. Per contra, Dr. De, learned counsel for respondent no.2,
Municipal Council, and the learned AGP for the State, supported
the actions challenged in the present Writ Petition.
08. Learned counsel for the respondents vehemently
submitted that Section 105 of the Act provides a duty on the part
of Council to impose the Property Taxes which are compulsory
taxes and, therefore, according to learned counsel for the
respondents, read in the light of Section 115 of the Act for
carrying out the function under Section 105, the Chief Officer or
the person under his authority, is entitled to make Assessment
List. According to Dr. De, the lists were prepared under the strict
supervision of the Chief Officer, though by the Agency that was
appointed. He, therefore, submitted that the Chief Officer is
bound to implement the Resolution of the Municipal Council which
was passed for appointment of the Agency for assessment of
taxes and, therefore, no fault can be found out in implementing
the resolution of the Municipal Council. Learned counsel further
argued that there is no want of authority in the Council even as
per reading of Section 49A to appoint an agency for preparation of
Assessment Lists for the purpose of general taxation, and the duty
being of the Council as enunciated under Section 105 of the Act,
there is no warrant for the proposition that no agency could be
appointed to make assessment of general taxes or Property Taxes.
The counsel for the respondents further submitted that it is not
physically possible for the Chief Officer to undertake the
survey/re-survey, measurements, maps etc., and, therefore, the
job was got performed from the agency with which no fault can be
found out, nor any prejudice is shown by the petitioners for
carrying out the job of assessment. At any rate, according to
learned counsel for the respondent no.2, petitioners have already
approached the competent court by filing appeals under Section
169 of the Act and they were also heard by the Authorized
Valuation Officer and thereafter the objections were considered.
The petition is liable to be dismissed on the ground of delay and
laches and the availability of alternate efficacious remedy. Mr. De
relied on the decision of this Court in Ketan Ranjit Maaganlal &
ors. Vs. Panaji Municipal Council & others [2000 (2) Bom.C.R. 746
(Panaji Bench)].
CONSIDERATION :
09. We take up the first preliminary question for
consideration, namely availability of alternate efficacious remedy,
as contended by learned counsel for the respondent no.2. It is
true that Section 169 of the Municipal Act provides for an appeal
to the Magistrates or Committee. The question, however, relates
to the applicability of Section 49A of the Act in the matter of
engagement of an agency for carrying out the duties in the matter
of assessment of taxes, and preparation and finalization of
assessment list, which question cannot be gone into in the said
appeal. The further question is about violation of various
provisions of the Act as projected before us by the petitioners, on
the ground that the action impugned in the Writ Petition violates
the fundamental rights of the petitioners guaranteed under Article
14 of the Constitution of India. There is a further question also
whether the Appellate Court or the Committee would be able to
consider the matters raised in the instant petition. We do not wish
to undertake a deeper exercise, since the said question has been
decided by the Constitution Bench of the Apex Court in the case of
New Manek Chowk Spinning & Weaving Mills Co., Ltd. [cited
supra]. In our opinion, it would be sufficient if we quote
paragraph 14 and extracted portion of para 16 from the said
judgment, which read as under:-
“14. Mr. Setalvad argued that at that stage
there is only a proposal and even if the municipality
had acted arbitrarily it was open to the assessees to
take objection thereto and have proper valuations
made and the assessment book prepared properly.
We cannot accept this argument. If the
municipality fails in its initial duty to act in terms of
R. 9 (b) it does not lie in its mouth to say that any
irregularity, however, patent on the face of it, is
open to correction. Moreover, the methods of
correction in this regard are really illusory. The
Small Causes Court cannot decide the applicability
of Art. 14 of the Constitution and according to the
judgment of the Bombay High Court in Balkrishna v.
Poona Municipal Corporation (1963) 65 Bom LR
119, (by which the District Judge would be bound):
“.....the words used in S. 406 (1) of the Act..... do
not cover the vires of the tax or the legality of the
tax which is sought to be levied.”
Earlier, the learned Judges had pointed out after
noting Ss 406 to 413 that :
“the decision of Judge aforesaid upon any appeal
against any such value or tax if no appeal is made
therefrom under S. 411 and if such appeal is made
the decision of the District Court in such appeal
shall be final.”
From this it follows that it would be useless for the
assessee to take objections or file appeals against
the decision on rateable value to the authorities
prescribed by the Act if he was challenging the
determination of the rateable value as being
violative of Art. 14 of the Constitution. It is no
answer to such a charge to say that the rateable
value could be determined properly by the
municipal authorities acting under the Act and the
rules thereunder when they do not resort to any of
the well-known methods of valuation and cannot
justify their arbitrary method.”
“16. The net result of all this is that unless the
assessee pays the amount of tax demanded, his
appeal cannot be heard so that if he questions the
rateable value or the levy of the tax, he must in
any event, deposit the amount demanded. In
effect, the Act and the appeal rules do not make
any provision for relief to an assessee who
complains that the assessment book has been
prepared in violation of the law. .....”
10. Article 265 of the Constitution reads thus:-
“265. Taxes not to be imposed save by authority
of law.- No tax shall be levied or collected except by
authority of law.”
As held in the case of Municipal Council, Khurai & another Vs.
Kamal Kumar & another [1965 Mh.L.J. 225], we find that the
procedure for imposing the liability to pay a tax has to be strictly
complied with. Where it is not so complied with, the liability to pay
the tax cannot be said to be according to law. That apart, reading
of the appellate provision under Section 169 of the Act, to our
mind, does not at all encompass the legal challenges raised in the
instant Writ Petition, on the ground that the action impugned is
contrary to the various provisions of the Act and that the same is
also in violation of Article 14 of the Constitution.
11. Second preliminary objection raised by learned counsel
for the respondent no.2 is about the delay and laches. This Writ
Writ Petition was filed in this Court on 8th May,2013 and this Court
had issued notices on the petition on 9th May, 2013. The
petitioners, for the first time, came to know about the happenings
in the Municipal Council, namely appointment of an agency and
agreement with the agency dated 6th January, 2010 and the
exercise thereafter undertaken by the agency as per the
agreement, when the petitioners received the notices under
Section 119 of the Act and then further procedure for hearing etc.,
was undertaken in October, 2012. The petitioners thereafter
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collected documents etc., obtained information and then filed the
petition. These averments are made in amended para 13-B of the
petition and we are satisfied that the petition does not suffer from
delay and laches on the part of petitioners even on facts. That
apart, paras 10 and 11 in the decision cited by learned counsel for
the petitioners in the case of Bar Council of Delhi & others Vs.
Surjeet Singh & others [cited supra] would be apt in this context,
which read as follows:-
“10. The illegal preparation of the electoral roll
by the Delhi Bar Council on the basis of the invalid
proviso to Rule 3 (j) goes to the very root of the
matter and no election held on the basis of such an
infirmity can be upheld. There is no question of the
result being materially affected in such a case.“
“11. The contesting respondents could not be
defeated in their writ petitions on the ground of
estoppel or the principle that one cannot approbate
and reprobate or that they were guilty of laches. In
the first instance some of the contesting
respondents were merely voters. Even Shri Surjeet
Singh in his writ petition claimed to be both a
candidate and a voter. As a voter he could
challenge the election even assuming that as a
candidate after being unsuccessful he was estopped
from doing so. But to be precise, we are of the
opinion that merely because he took part in the
election by standing as a candidate or by exercise
of his right of franchise he cannot be estopped from
challenging the whole election when the election
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was glaringly illegal and void on the basis of the
obnoxious proviso. There is no question of
approbation and reprobation at the same time in
such a case. A voter could not come to the High
Court even earlier before the election was held. But
merely because he came to challenge the election
after it was held it cannot be said that he was guilty
of any laches and must be non-suited only on that
account.”
12. It is also clear from the said decision that the gravity of
the infraction of law in a particular case is equally an important
consideration for a constitutional Court to find out whether petition
should be thrown out on the ground of laches.
13. We find in the instant case that the petition on facts as
well as in law and looking to the gravity of the infraction of the
provisions of the Act does not suffer from delay and laches. Thus,
the decision, so also the Standing Instruction issued by Director,
cited by learned Adv. Mr. De in the case of Ketan Ranjit Maaganlal
& others Vs. Panaji Municipal Council & others [cited supra] has no
application in the instant case for the reasons given by us above
that the infraction of provisions of law is required to be considered
in the instant case.
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14. Now we proceed to deal with the matter on merits.
Section 2 (5) of the Act defines the “Chief Officer” as a person
appointed under the Act. Section 2 (6) defines the “Council” as a
Municipal Council constituted for a smaller urban area. Section 77
(2) of the Act provides for enabling power in the Chief Officer to
delegate any of his powers, duties and functions to any Municipal
Officer or servant. This provision does not provide for delegation
by him of his powers, duties or functions to any agency. Section
76 of the Act provides for appointment of other Officers and
servants. Chapter-IX of the Act relates to the Municipal Taxation.
Section 105 of the Act reads thus:-
“105. Imposition of compulsory taxes
(1) Subject to any general or special orders
which the State Government may make in this
behalf, a Council shall impose, for the purposes of
this Act, the taxes listed below:-
(a) to (e) .....”
Thus, Section 105 imposes an obligation, which can be said as a
function to impose compulsory taxes by virtue of Section 105 of
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the Act.
15. At this juncture, it must be noted that in the instant
case, the Municipal Council passed a resolution deciding to impose
compulsory taxes as contemplated by Section 105 of the Act and,
thus, completed its duty/obligation of imposition of compulsory
taxes as per Section 105. Section 49A reads thus:-
“49A. Performance of functions by agencies
Where any duty has been imposed on, or
any function has been assigned to a Council under
this Act or any other law for the time being in force,
or the Council has been entrusted with the
implementation of a scheme,-
(i) the Council may either discharge such
duties or perform such functions or
implement such scheme by itself; or
(ii) subject to such directions as may be
issued and the terms and conditions as may
be determined by the State Government
cause them to be discharged, performed, or
implemented by any agency:
Provided that the Council may also
specify terms and conditions, not
inconsistent with the terms and conditions
determined by the State Government for
such agency arrangement.“
16. A careful reading of the above provision, which was
inserted by Maharashtra 41 of 1994, Section 136, shows that a
Council has been empowered to appoint any agency for
performance of any duty or function assigned to a Council under
the Act. In the instant case, we are only concerned with the duty
of Council and function of Council in the matter of imposition of
compulsory taxes. The submission made by Mr. De, learned
counsel for the respondent no.2, that Section 105 obligates the
Municipal Council to impose compulsory taxes and this duty means
the duty spoken of in Section 49A of the Act which allows
appointment of any agency for implementation of that duty is
wrong and misplaced. In our opinion, there is a fine distinction
which must be analyzed while reading these provisions for
construing the provisions of Section 49A and Section 105 of the
Act. It is true that a Council has to impose as a part of its duty or
obligation under Section 105 of the Act, compulsory taxes. The
Council decided so and passed a resolution to impose compulsory
taxes. Thereafter, chief Officer comes into picture, who is
required to implement the resolution of the Council for imposition
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of compulsory taxes. Day-today responsibility to implement the
resolutions of the Council is that of Chief Officer, namely the
resolution passed by the Council as a part of its duty to decide to
impose compulsory taxes. That is what is contemplated by
Section 77 (1) (b) of the Act. There is no power, duty or function
of the Chief Officer anywhere in the Act to impose compulsory
taxes contemplated by Section 105 of the Act, but that duty is
imposed on the Council and not on the Chief Officer. In the
instant case, we are really concerned with the power, function and
duty of the Chief Officer for implementation of the resolution of
the Municipal Council that was passed by virtue of Section 105 of
the Act deciding to impose compulsory taxes. At any rate, it is
plain that for taking a decision to impose compulsory taxes
contemplated by Section 105 of the Act, no way, appointment of
any agency would be required. Thus, we are not inclined to
accept the submission made by Mr. De, learned counsel for
respondent no.2, that Section 105 providing for a duty to impose
compulsory taxes should be read with Section 49A of the Act for
appointing an agency.
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17. Having, thus, disposed of the contention raised by Mr.
De, we proceed further to examine the other provisions of the Act.
Heading of Chapter-IX is “Municipal Taxation” with two subheadings,
namely [1] Imposition of compulsory and voluntary
taxes, and [2] Assessment and Liability to Taxes on buildings and
lands. First is the duty of a ‘Council’. Under the second subheading,
the further process of implementation of first by making
assessment and liability to taxes on buildings and lands and the
various provisions therein fall. Section 113 speaks about
Authorized Valuation Officer. Sub-section (1) of Section 114
provides for fixation of rateable value of any building or land.
Section 115 reads thus:-
“115. Preparation of assessment list
(1) When a tax on building or land or both
is imposed, the Chief Officer shall cause an
assessment list of all buildings land or lands and
buildings in the Municipal area to be prepared in
such form as the Chief Officer may, with the
approval of the Standing Committee, determined.
(2) For the purpose of preparing such
assessment list, the Chief Officer or any person
acting under his authority may inspect any building
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or land in the municipal area and on the requisition
of the Chief Officer, the owner or occupier of any
such building or land shall, within such reasonable
period as shall be specified including the details in
respect of any or all the factors as enumerated in
items (i) to (v) of clause (a) of sub-section (3) of
section 114 in relation to such land or building or of
any portion thereof in the requisition, be bound to
furnish a true return to the best of his knowledge or
belief and subscribe with his signature the name
and place of abode of the owner or occupier or of
both and the annual rent, if any, obtained and his
estimate of the rateable value or the capital value,
as the case may be of such building or land.”
18. Perusal of Sub-Section (1) of Section 115 shows that
even a tax on building or land, or both, is ‘imposed’ [‘imposed’
means imposed under Section 105 of the Act], the Chief Officer
shall cause an assessment of list of all lands and buildings. Subsection
(2) states that the Chief Officer or any other person acting
under his authority may inspect buildings or lands. The
assessment list, thus, can be prepared by the Chief Officer or any
person acting under his authority by making inspection. The
question is who are the persons acting under his authority?
Reading of Section 49A permitting appointment of agency shows
that the said provision does not empower, permit or allow the
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Chief Officer to outsource the said job by appointing any agency,
because the said provision permits only a Council to do so and not
the Chief Officer. To repeat, the words “Chief Officer” are not to
be found in Section 49A.
19. The next question is power of the Chief Officer to
delegate his authority and that has to be seen in Section 77 (2) of
the Act, which reads thus:-
“77. Powers and duties of Chief Officer
(1) ....
(2) The Chief Officer may, with the sanction of
the President, delegate any of the powers or duties
or functions conferred or imposed upon or allotted
to him by or under this Act, to any Municipal officer
or servant:
Provided that, such delegation shall be
subject to such limitations, if any, as may be
prescribed by the Council and also to the control
and revision by the Chief Officer.”
Sub-section (2) also does not provide for or enable the Chief
Officer to delegate the duties or functions to any other person
than the Municipal officer or servant and the officers or
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servicemen contemplated by Section 76 of the Act. It is, thus,
clear that the job of Preparation of Assessment List commences
from Section 115 and the Chief Officer does not have an authority
or power under the Act to appoint any agency to commence the
process. Sections 118 and 119 of the Act then provide for
publication of notice of assessment list and public notice of time
fixed for lodging objections. Sections 120, 121 and 122 thereafter
provide for a process to authenticate the list of assessment. To
sum up, the provisions of the Municipal Act, thus, have been
discussed above and we are of the firm view that no agency could
be appointed to undertake methodology and process for
implementation of the decision to impose compulsory taxes.
Similar was the position obtainable in the case of Municipal
Council, Khurai & another Vs. Kamal Kumar & another [cited
supra]. We quote the extracted portion from para 9 of the said
decision, thus:-
“9. ........................................Moreover, Mr.
Setalvad was not able to point out to us any
provision of the Act or of the rules, except section
78, whereunder the Council could delegate its
function of hearing and deciding objections to a
Sub-Committee. Section 78 reads thus:
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“Any powers or duties or
executive functions which may be
exercised or performed by or on behalf of
the Council may, in accordance with the
rules made under this Act, be delegated
by the Council to the President or Vice-
President or to the Chairman of the
Standing or other Committees, or to one
or more stipendiary or honorary officers,
but without prejudice to any powers that
may have been conferred on the Chief
Municipal Officer by or under section 92.”
Even assuming that under this provision the power
of the Council of hearing objections could be
delegated, the delegation can presumably be only in
favour of the persons mentioned in section 78
quoted above. It cannot be in favour of a Sub-
Committee or a Committee. It is true that the
Convenor of the Sub-Committee appointed by the
Council was the Vice-President but the delegation
was not to him alone but to the Sub-Committee.
The two are not the same thing because while in
one case the right to decide an objection would be
solely exercisable by the Vice-President in the other
it will be exercisable by the Sub-Committee as a
whole. If there is unanimity amongst the members
of the Sub-Committee no prejudice may be caused.
But if the Vice-President is of one opinion and the
other two members are of a different opinion the
decision of the Sub-Committee cannot be said to be
that of the Vice-President at all. But to the
contrary.”
20. We now find that the Agreement is entered by the
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Municipal Council with the private agency, namely M/s. Core
Project, Amravati, and its relevant portion after translation reads
thus:
“AGREEMENT
Agreement executed : The Chief
in favour of Officer,
Nagar Parishad,
Hinganghat.
...Party No.1.
Agreement executed : Care Project,
by Amravati.
...Party No.2.
Agreement is executed as under:-
My tender was passed as per Resolution No.
4 in the General Meeting held on 16/11/2009 in
respect of resurvey of old property and complete
survey of new property within the jurisdiction of
Nagar Parishad, taking measurement, drawing
maps of the construction and taking digital colour
photos of the property, calculation of taxable value,
preparation of ward wise list of taxable value,
preparation of Notices under Section 119 of the
Maharashtra Municipal Councils, Nagar Panchayats
and Industrial Townships Act, 1965, preparation of
ward wise final list after the decision of Authorized
Value Assessment Authority and computerization of
total property and preparation of map of every
property on the computer etc. Subject to Sections
113, 114, 115, 116, 117, 118, 119, 120, 121, 122,
123, 150, 169 and 170 of Maharashtra Municipal
Councils, Nagar Panchayats and Industrial
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Townships act, 1965, I am ready to complete the
work within the period of 3 months as per the
following terms and conditions.”
Reading of the above Agreement, to our mind, clearly shows that
the entire job contemplated right from Sections 113 to 170 of the
Act has been entrusted to the said agency by the Chief Officer
who has entered into an Agreement as above. We find that the
aforesaid Agreement and subsequent actions taken by the
Municipal Council with the help of the agency are contrary to the
scheme of the Act as discussed above, and Section 49A of the Act
does not save any of the actions of the Chief Officer for
implementing the resolution of the Municipal Council contemplated
by Section 105 of the Act could be implemented by appointing an
agency, since Section 49A of the Act is inapplicable.
21. Having, thus, found that the impugned action is illegal,
the next question is about the grant of relief. We find from the
record that the Municipal Council has served bills pursuant to the
said exercise undertaken by the respondent no.2 and the property
owners have also preferred appeals before competent forum.
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Respondent No.2, Municipal Council, must have also collected
taxes from the property owners. In our opinion, whatever taxes
have been collected by the Municipal Council till the date of this
Judgment, the respondent no.2, Municipal Council, should be
allowed to retain the entire collection of taxes with it and it should
be allowed to undertake fresh process of making assessment
according to the provisions of the Municipal Act and thereafter to
make necessary adjustments, set off etc., in regard to the taxes
collected and to be collected. In view of the above discussion, the
following result is inevitable:-
O R D E R
[a] Writ Petition No.2585 of 2013 is allowed.
[b] Rule is made absolute in terms of Prayer Clauses
[A], [B] and [C].
[c] Respondent No.2, Municipal Council, is permitted to
take up fresh process of preparation of assessment
list for the purposes of recovery of compulsory
property taxes and complete the same within a
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period of four months from today.
[d] Respondent No.2, Municipal Council, is entitled to
retain the taxes collected so far under the
impugned assessment with it and make
adjustments/set off for recovery etc., in accordance
with the fresh assessment to be undertaken.
[e] Respondent No.2, Municipal Council, shall pay cost
of this petition in the sum of Rs.10,000-00 [rupees
ten thousand only] to the petitioners.
Judge Judge
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|hedau|
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