# [1965] 2 S.C.R. 653

- **Citation:** [1965] 2 S.C.R. 653
- **Court:** Supreme Court of India
- **Decided:** 1964-12-18
- **Case number:** Civil Appeal No. 97 4 of 1964
- **Bench:** A. K. Sarkar, M. Hidayatullah, J. R. Mudholkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1965-2-s-c-r-653-3432
- **Pages:** 8

## Headnote

Madhya Pradesh Municipalities A.ct, 1961, ss. 78, 137 and 141De/egation of powers to sub-committee-Validity-Revision of assessment
list--Opportunity to assessee-Necesslty /or.
An assessment list of house and conservancy taxes was prepared on
the basis that a slab system Gf taxation would apply, and was published
by the appellant under s. 136 of the M.P. Municipalities Act, 1961. The
assessees filed objections to it under s. 138(2). The appellant later revoked the slab system and reverted to the old rate of assessment.
A
sub-committee appointed by the appellant, considered the objections filed
to the list and completed it! revision. The final list was published
after authentication. When some complaints of partiality in its preparation were made, the list was suspended. The appellant then decided to
amend the list under s. 141 and, after issuing notices to some assessees and
after bearing their objections a new list was authenticated and published.
The respondent! having preferred an appeal against the new assessment list under the Act, also challenged it in writ petition to the High
Court. The High Court allowed the petition.
On appeal to the Supreme Court.
HELD : The assessment list authenticated by the Chief Municipal
Officer was not prepared according to law and therefore, the provisions of
s. 141 were not available to the appellant. [660 E]
( i) Article 265 of the Constitution, implies that the procedure for
imposing the liability to pay a tax bas to be strictly complied with. Since
in the instant case, the objections which the assessees had filed were in
respect of the list compiled on the basis that the slab system would apply
and not in pursuance of what the liability would be upon the reversion
to the old rate of tax, it could not be said that the opportunity as contemplated by the Act was given to the assessees for lodging their objections
as required by s. 137 of the Act.
[659 E-G]
(ii) Assuming that under s. 78, the appellant council could delegate
the power to hear objections against a proposed list under s. 138(2) to
its vice-president or certain other officers, this power could not be delegated to a sub-committee. (660 B.C]
(iii) Though an alternate remedy is open to an aggrieved party the
High Court has jurisdiction under Art. 226 to give relief to such a party
in appropriate cases. [657 E-FJ

## Text

A
MUNICIPAL COUNCIL, KHURAI AND ANOTHER
B
c
D
E
F
G
H
v.
KAMAL KUMAR & ANOTHER
December 18, 1964
(A. K. SARKAR, M. HIDAYATULLAH AND J. R. MUDHOLKAR, JJ.)
Madhya Pradesh Municipalities A.ct, 1961, ss. 78, 137 and 141De/egation of powers to sub-committee-Validity-Revision of assessment
list--Opportunity to assessee-Necesslty /or.
An assessment list of house and conservancy taxes was prepared on
the basis that a slab system Gf taxation would apply, and was published
by the appellant under s. 136 of the M.P. Municipalities Act, 1961. The
assessees filed objections to it under s. 138(2). The appellant later revoked the slab system and reverted to the old rate of assessment.
A
sub-committee appointed by the appellant, considered the objections filed
to the list and completed it! revision. The final list was published
after authentication. When some complaints of partiality in its preparation were made, the list was suspended. The appellant then decided to
amend the list under s. 141 and, after issuing notices to some assessees and
after bearing their objections a new list was authenticated and published.
The respondent! having preferred an appeal against the new assessment list under the Act, also challenged it in writ petition to the High
Court. The High Court allowed the petition.
On appeal to the Supreme Court.
HELD : The assessment list authenticated by the Chief Municipal
Officer was not prepared according to law and therefore, the provisions of
s. 141 were not available to the appellant. [660 E]
( i) Article 265 of the Constitution, implies that the procedure for
imposing the liability to pay a tax bas to be strictly complied with. Since
in the instant case, the objections which the assessees had filed were in
respect of the list compiled on the basis that the slab system would apply
and not in pursuance of what the liability would be upon the reversion
to the old rate of tax, it could not be said that the opportunity as contemplated by the Act was given to the assessees for lodging their objections
as required by s. 137 of the Act.
[659 E-G]
(ii) Assuming that under s. 78, the appellant council could delegate
the power to hear objections against a proposed list under s. 138(2) to
its vice-president or certain other officers, this power could not be delegated to a sub-committee. (660 B.C]
(iii) Though an alternate remedy is open to an aggrieved party the
High Court has jurisdiction under Art. 226 to give relief to such a party
in appropriate cases. [657 E-FJ
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 97 4 of
1964.
Appeal by special leave from the judgment and order dated
September 10, 1964, of the High Court in Madhya Pradesh in
Misc. Petition No. 113 of 1964.
'\
IASup./65-8
654
SUPREME
COURT
REPORTS
[1965] 2 S.C.R.
M. C. Setalvad, S. L. Jain and M. S. Gupta, for the appellants.
A
A. V. Viswanatha Sastri, B. R. L. Iyengar, S. K. Mehta and
K. L. Mehta, for respondent No. l.
The Judgment of the Court was delivered by
Mmlholkar, J.-In this appeal from the
judgment of .the
B
Madhya Pradesh High Court the question which arises for decision
is whether the assessment list of house tax and conservancy tax
confirmed by the Municipal Council, Khurai, at a speci~l meeting
on February 24, 1964 is effective or is liable to be quashed on tho
ground tliat it was not made. in accordance with the provisions of
the Madhya Pradesh Municipalities Act, 1961 (hereafter referred c
to as the Act).
The material facts are not in dispute.
On December 28, 1962
the Municipal Council by a resolution, appointed a Sub-Committee
consisting of the Vice-President and two Members for hearing
objections under s. 138 (2) of the Act against the new assessment
D
which the Chief Municipal Officer would propose to make.
On
the 30th of that month the Chief Municipal Officer was directed
to prepare the assessment lists for all the 11 words iuto which the
municipal area has been divided. Up till then taxes were levied
at the rate of Rs. 7-12-0 per cent. on the annual letting value of
the house properties and building sites liable to be taxed.
On
E
March 3, 1963 the Council considered a proposal for introducing
a slab system for assessing these properties.
Up.:in that one of
the member.;, Smt. Poonabai suggested a modification of the office
proposal and her suggestion was accepted by the majority of the
members of the Council.
On March 6, 1963 the assessment list
prepared by the Chief Municipal Officer in purst!ance of the reF
solution was authenticated by him. It was then duly published
that day under s. 13 6 of the Act Objections were also invited
from the assessees.
About 2,200 objections were lodged which
were considered by the Sub-Committee between April 7, 1963 and
April 14, 1963.
Int.fie mc:inwhile it would appear that a suit had
been instituted by some of the ''-'sessees in which the vzlidity of
G
the resolution of March 3, 1963 varying the rate of tax and seeking a pem1anent injunction against the Committee restraining it
from giving effect to the new basis of assessment.
The C6mmittee, it would appear, realised that it could not vary the old
rates without obtaining the sanction of the State Government and,
therefore, in the written statement filed on its behalf, made it clear
H
that an early meeting would be held for deciding whether the
resolution of March_ 3, 1963 should not be given effect to. That
MUNC. COUNCIL 11. KAMAL KUMAll (Mudholkar, /.)
655
A meeting was held on April 28, 1963 and there the resolution of
March 3, 1963 was revoked and the old rate of assessment was
reverted to.
Numerous complaints were made by assessees to the effect that
the Sub-Committee had shown partiality in dealing with objections
B to assessments and had in fact shown favour to rich persons. The
President of the Council enquired into the complaints and was
!atisfied that there was substance in them.
In the meanwhile,
however, pursuant to a decision of the Sub-Committee dated
August 21, 1963 the assessment list as revised by the Sub-Committee was authenticated by the Chief Municipal Officer as require ed by s. 140 of the Act and was published on August 30, 1963.
It would appear that notices of demand were also issued against
the. assessees on the basis of the revised list. The President had,
in the meantime, intimated to the Collector that the Sub-Committee had shown partiality, particularly to rich asses sees and invited him to suspend the revised list in exercise of his supervisory
D powers. On October 9, 1963 the Collector made the followin11
order:
F
G
H
"In exercise of the powers delegated to me under
section 323 of the M.P. Municipalities Act,
1961 I
hereby suspend the execution of the decision of the
Sub-Committee appointed by the Municipal Council
Khurai under section 71(v) of the said Act for assessment of the House Tax and Latrine Tax vide its resolution No. 2 dated 28-12-1962, as the decision taken by
the said Committee is not in confonnity with the law, is
detrimental to the interest of the Council and is causing annoyance to the public.
The decision shall remain
suspended until the
assessment is properly
revised
afre~h."
He forwarded a copy of the order to the Government of Madhya
Pradesh and requested that his Order may be confinned under
1. 323 (2) of the Act.
He made the following endorsement on
the copy of the Order forwarded to the President of the Municipal
Committee:
"Copy forwarded
to the President, Municipal
Council, Khurai, for infonnation and immediate necessary action in respect of the demand notices issued for
recovery of the taxes.
Apparently the assessment has
not been properly made.
No reasons for not accepting
the overseer's valuation have been given and rich persons have been shown favour thereby.
The Council
656
SUPREME
COURT
REPORTS
[1965] 2 S.C.R.
has thus defaulted in performing the duty imposed on
A
it under the said Act.
The Council is, therefore, called
upon to show cause for its failure as required under
section 327 (I) of the said Act and to furnish its explanation within a period of 15 days to my office."
After receiving this communication the President caused a proB
damation to be made bringing it to the notice of the assessees that
the assessment list had been suspended and intimating to them
that taxes on the basis of the revised list should not be paid. The
Government, acting upon the communication received from the
Collector issued notice to the Council on December 2, 1963 under
s. 323 (2) to show cause why the order passed by the Collector C
should not be confirmed. Eventually the Government confirmed
the Collector'~ Order.
On December 29, 1963 the Council, at a special meeting,
resolved that the assessment lists should be revised under s. 141
of the Act.
On January 7, 1964 the Council issued individual D
notices to 300 persons to show cause why the annual letting value
of their properties should not be enhanced.
The Council heard
the objections between February 16, 1964 and February 20, 1964
and revised the assessments of some or all the persons to whom
notices had been issued.
On February 24, 1964 the Council, at
a special meeting, confirmed the revised assessment as from April E
1, 1963. Its resolution was authenticated on March 4, 1964
under s. 140(1) by the Chief Municipal Officer and according to
the Council the assessment list then became final.
It is after this that the writ petition out of which the present
appeal arises was presented before the High Court by some of F
the assessees.
It was supported before it on four grounds which
have been summarised thus by the High Court in its judgment :
"(.1) The Municipal Council, Khurai, was not competent ·to appoint a Sub-Committee for the purpose of
hearing and deciding the objections made against the
G
usessment list.
(2) The notice given for lodging objections against
the assessment list was not in accordance with the provisions of the Act.
·
(3) The Municipal Council acted illegally and withH
out jurisdiction in adopting a slab system with different
and_ varying rates in disregard of the rate of Rs. 7 /13/-
MUNC. COUNCIL v. KAMAL KUMAR (Mudholkar, /.)
657
A
per cent at which the house tax had been initially
imposed.
( 4) When the execution of the decision of the SubCommittee dated 21st August, 1963 was
suspended
(and subsequently revoked), it was not open to the
)l
Municipal Council to have recourse to section 141 of
the Act for making limited amendments in the assessment list. The Municipal Council had to prepare an
assessment list de novo in accordance with the provisions of the Act including those made by sections 13 7,
138 and 140 of the Act.''
c
The High Court thought it unnecessary to consider the first
three of these grounds because in its opinion the fourth ground
was sufficient for granting relief to the assessees. According to
the High Court the assessment list which had been confirmed by
the Council on February 24, 1964 and sought to be given effect
D to was not a valid assessment list because the Municipal Council
gave notice only to 300 assessees and heard their objections and
not the remaining 1900 assessees.
Before us it is contended by Mr. Setalvad on behalf of the
Council that an appeal had already been preferred by the responJ: dents against the assessment list and, therefore, they were not
entitled to any relief under Art. 226 of the Constitution. It is
true that the High Court would not ordinarily entertain a petition
under Art. 226 of the Constitution where an alternative remedy
is open to the aggrieved pany.
Though that is so the High Court
has jurisdiction to grant relief to such a party if it thinks proper
F to do so in the circumstances of the case.
In the present case the
High Court has chosen to exercise discretion in favour of the respondents and it would not be right for us to interfere with the
exercise of that discretion unless' we are satisfied that the action
of the High Court was arbitrary or unreasonable.
Nothing has
been brought to our notice from which it could be inferred that
G the High Court acted arbitrarily in granting the writ prayed for
to the respondents.
Coming to the merits, Mr. Setalvad contends that the
list
having been authenticated by the Chief Municipal Officer under
s. 140 it became final and, therefore, under s. 141 of the Act it
H was open to the Municipal Council to amend the assessment list.
Sub-section (1) of that section, without the proviso, is the only
part which is relevant for our purpose and it reads thus :
658
~ " -«
,o-* ''i -
SUPREME
COURT
REPORTS
_[I 965] 2 s.c.a.
"The Council may at any time, amend the assessA
ment list by the inclusion, omission or substitution of
any matter."
Mr. B. R. L. -Iyengar for the respondents, however, contends
that s. 141 (1 ) can be availed of only for correcting arithmetical
errors or other similar errors and not for revising the taxes. 8
Further, according to him, this provision is available only with
respect to the amendment of a current list and that since the
assessment list had not become final under s. 142 it could not be
amended under s. 141. Then, according to him, the appropriate
provision to which resort could be had was s. 146 of the Act. Mr.
Iyengar also raised a third argument, which is to the effect that c
since the assessment list had been suspended by the Collector
under his Order made under s. 323 of the Act the Council had no
power to amend it under s. 141. The final argument advanced
by him was that the power of hearing objections or of revising tho
list could not be delegated to the Sub-Committee and that, therefore, the revised list was bad in law.
D
It is not disputed before us that the procedure laid down in
ss. 134, 135 and 136 of the Act for the assessment of buildings
and lands to pay the tax was duly followed.
It is also not disputed that 2,200 'objections were lodged with the Municipal
Council which were investigated and dealt with by the Sub-ComB
mittee appointed by the Municipal Council.
Mr. Setalvad, therefore, contends that having followed this procedure the next step
was the authentication of assessment lists by the Chief Municipal
Officer as required bys. 140(1). This procedure was also followed and, therefore, the assessment list became final and the
Municipal Council had the power to amend it under s. 141 ( 1) of F
the Act. Mr. Iyengar, however,
contends that the provisional
assessment list which was prepared under s. 134(1) of the Act
and published under s. 136 was upon the basis of the new rates of
taxes which had been imposed by the Municipal Council on March
3, 1963.
According to him, as the Resolution of March 3, 1963
was revoked on April 28, 1963 and the old rate of Rs. 7 /13/- per G
cent. was reverted to it was necessary to publish a fresh assessment list on its basis.
His further objection which we have
already indicated is that the objections could be dealt with not by
the Sub-Committee but by the Municipal Council as a whole. In
view of these defects the assessment list did not become final by
reason of its authentication by the Chief Municipal Officer under H
s. 140.
According to Mr. Setalvad these objections were not
urged before the High Court. But that is not quite accurate. We
MUNC. COUNCIL l'. KAMAL KUMAR (Mudholkar, /.)
659
.A
have already quoted from the judgment of the High Court the
&ummary of the grounds urged before it and the objections of
Mr. Iyengar are to be found in the first two grounds.
It is true
that the High Court did not think it necessary to deal with these
grounds upon the view which it took on the fourth ground which
was urged before it.
But that does not preclude us from consiB dering those grounds.
In our opinion, both the grounds are
substantial and strike at the very root of the finality of the assessment list which was purported to be authenticated by the Chief
Municip~I Officer under s. 140. The assessment list which has to
be published under s. 136 of the Act must contain full and accuC rate particulars specified in s. 134(1) of the Act. Amongst those
particulars are the following :
(1) Valuation of the property based on capital or
annual letting value, as the case may be, on which the
property is assessed;
D
(2) the rate of tax applicable;
( 3) the amount of tax assessed thereon.
In view of the fact that the resolution of March 3, 1963 on the
basis of which the list was published had been revoked, the particulars mentioned in the second and the third of the above items
E would necessarily be different from those which would be arrived
at after taking into account the resolution of April 28, 1963.
Under Art. 265 of the Constitution no tax shall be levied or collected except by authority of law.
This clearly implies that the
procedure for imposing the liability to pay a tax has to be strictly
F complied with.
Where it is not so complied with the liability to
pay the tax cannot be said to be according to law. The objections
which the assessees had filed in pursuance of the notification
actually published by the Chief Municipal Officer were based
upon the list published under s. 136 and not in pursuance of what
the liability would be under the Resolution of the Municipal
G Council, dated April 28, 1963. Therefore, it cannot 1-e said that
the opportunity as contemplated by the Act was at all given to
the assessees for lodging their objections as required by s. 137 of
the Act.
Moreover, Mr. Setalvad was not able to point out to
us any provision of the Act or of the rules, except s. 78, whereunder the Council could delegate its function of hearing
and
H deciding objections to a Sub-Committee.
Section 78 reads thus:
"Any powers or duties or executive functions which
may be exercised or performed· by or on behalf of the
660
SUPJ.U!MB
OOUllT
llEPORTS
(1965] 2 S.C.R.
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
B
of hearing objections could be delegated, the delegation can presumably be only in favour of the persons mentioned in s. 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 C
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 ilie 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 whore.
If there is unanimity amongst the members of the Sub-ComD
mittee 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.
For these reasons we are of opinion that the assessment list E
authenticated by the Chief Municipal Officer was not prepared
according to law and, therefore, the provisions of s. 141 were not
available to the Council. Upon the view we take we do not find
it necessary to consider whether the reason given by the High
Court is right or not.
The appeal is, therefore, dismissed with costs.
F
Appeal dismissed.