# MAHAPALIKA OF CITY OF AGRA v. AGRA BRICKKILN OWNERS' ASSOCIATION & ORS

- **Citation:** [1976] 3 S.C.R. 827
- **Court:** Supreme Court of India
- **Decided:** 1976-03-23
- **Bench:** Y. V. Chandrachud, V. R. Krishna !Yer
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/mahapalika-of-city-of-agra-v-agra-brickkiln-owners-association-ors-6838
- **Pages:** 5

## Headnote

Constitution of India, 1950, Art. 276, Government of India
Act,
1935,
s. 142A(2) and U.P. Nagar Mahapalika Adhiniyam (U.P. 2 of 1959), s. 172,
proviso-Scope of.
In 1947 the State Government issued a notification imposing a tax under
s. 128(1) (ii) of the U.P. Municipalities Act,
~916, on brick manufa~turers.
The affected assessees filed a suit for a declaration that the tax was void and
not exigible. The suit was decreed.
The appellant appealed to the
High
Court.
By that time the U.P. Nagar Mahapalika Adhiniyam, 1959, had come
into force, replacing the 1916-Act.
Section 172 of the 1959-Act corresponds
to s. 128 of the 1916-Act providing for the levy of various types of taxes on
professions, trades and callings. The proviso to s. 172 provided that
where
any tax was being lawfully levied in the area before the commencement of the
Constitution, such tax may continue to be levied until provision to the contrary
is made by Parliament. Construing the proviso, the High Court held that the
maximum tax leviable under s. 172(2), after the 1959-Act had come into force
on Feb. 1, 1960 was only Rs. 50/- since that was the quantum of tax levied
before the commencement of the Constitution. Section 142A(2)
of
the
Government of India Act, 1935, provided that the total amount payable in
respect of any one person to any one municipality by way of taxes on professions etc., shall not exceed R.s. 501- per anhum.
Allowing the appeal of the Mah;::palika to this Court in part,
HELD : The period before the Constitution of India had come into force,
that is, before January 26, 1950, will be governed by the maximum of Rs. 50/-
fixed by the Government of India Act.
Article 276 of the Constitution also
sets a ceiling on such taxes, but, the maximum is not Rs. 50/- but Rs. 250/-.
Therefore, for the period from January 26, 1950, to the date when the 1959Act came into force, the maximum tax leviable will be Rs. 250/-
As regards
the l?eriod after Feb. l, 1960, the interpretation put by the High Court on the
proviso to s. 172 that it was only the quantum of tax and not its description
that was kept alive and that, therefore. the valid tax is only up to the maximum
of Rs. 50/- mentioned in s. 142A of the Government of India Act is erroneous.
The words 'such tax' in the proviso to s. 172 relates to 'any tax' and saves all
species or classes of taxes and does not merely preserve the quantum of rate
of such tax. Since the class or species of tax is the correct connotation of
the expression 'such tax' and 'any tax' the tax on the trade or calling is saved,
and its rate is as fixed in the Notification, subject to a maximum of Rs. 250/-.
Therefore. the period after Feb. 1. 1960 will also be controlled by the same
col!sti~tional maximum of Rs. 250 /-, unless any supervening parliamentary
legislation, as contemplated by s. 172 of the 1959-Act, comes into being.
[829
B, C, G; 830 D-G]
CML APPELLATE JURISDICTION: Civil Appeal No. 2446 of 1969.
Appeal by special leave from the Judgment and Order dated 7th
October, 1968 of the Allahabad High Court in S.A. No. 2001/64.
R. N. Sharma and C. P. Lal for the Appellant.
B. P. Maheshwari and Suresh Sethi for the Respondents.

## Text

I
t
827
MAHAPALIKA OF CITY OF AGRA
A
v.
AGRA BRICKKILN OWNERS' ASSOCIATION & ORS.
March 23, 1976
[Y. V. CHANDRACHUD AND V. R. KRISHNA !YER, JJ.]
Constitution of India, 1950, Art. 276, Government of India
Act,
1935,
s. 142A(2) and U.P. Nagar Mahapalika Adhiniyam (U.P. 2 of 1959), s. 172,
proviso-Scope of.
In 1947 the State Government issued a notification imposing a tax under
s. 128(1) (ii) of the U.P. Municipalities Act,
~916, on brick manufa~turers.
The affected assessees filed a suit for a declaration that the tax was void and
not exigible. The suit was decreed.
The appellant appealed to the
High
Court.
By that time the U.P. Nagar Mahapalika Adhiniyam, 1959, had come
into force, replacing the 1916-Act.
Section 172 of the 1959-Act corresponds
to s. 128 of the 1916-Act providing for the levy of various types of taxes on
professions, trades and callings. The proviso to s. 172 provided that
where
any tax was being lawfully levied in the area before the commencement of the
Constitution, such tax may continue to be levied until provision to the contrary
is made by Parliament. Construing the proviso, the High Court held that the
maximum tax leviable under s. 172(2), after the 1959-Act had come into force
on Feb. 1, 1960 was only Rs. 50/- since that was the quantum of tax levied
before the commencement of the Constitution. Section 142A(2)
of
the
Government of India Act, 1935, provided that the total amount payable in
respect of any one person to any one municipality by way of taxes on professions etc., shall not exceed R.s. 501- per anhum.
Allowing the appeal of the Mah;::palika to this Court in part,
HELD : The period before the Constitution of India had come into force,
that is, before January 26, 1950, will be governed by the maximum of Rs. 50/-
fixed by the Government of India Act.
Article 276 of the Constitution also
sets a ceiling on such taxes, but, the maximum is not Rs. 50/- but Rs. 250/-.
Therefore, for the period from January 26, 1950, to the date when the 1959Act came into force, the maximum tax leviable will be Rs. 250/-
As regards
the l?eriod after Feb. l, 1960, the interpretation put by the High Court on the
proviso to s. 172 that it was only the quantum of tax and not its description
that was kept alive and that, therefore. the valid tax is only up to the maximum
of Rs. 50/- mentioned in s. 142A of the Government of India Act is erroneous.
The words 'such tax' in the proviso to s. 172 relates to 'any tax' and saves all
species or classes of taxes and does not merely preserve the quantum of rate
of such tax. Since the class or species of tax is the correct connotation of
the expression 'such tax' and 'any tax' the tax on the trade or calling is saved,
and its rate is as fixed in the Notification, subject to a maximum of Rs. 250/-.
Therefore. the period after Feb. 1. 1960 will also be controlled by the same
col!sti~tional maximum of Rs. 250 /-, unless any supervening parliamentary
legislation, as contemplated by s. 172 of the 1959-Act, comes into being.
[829
B, C, G; 830 D-G]
CML APPELLATE JURISDICTION: Civil Appeal No. 2446 of 1969.
Appeal by special leave from the Judgment and Order dated 7th
October, 1968 of the Allahabad High Court in S.A. No. 2001/64.
R. N. Sharma and C. P. Lal for the Appellant.
B. P. Maheshwari and Suresh Sethi for the Respondents.
The Judgment of the Court was delivered by
KRISHNA IYM, J.-A crudely drafted plaint, with little legal light
to make out a good cause of action, somehow resulted in a decree as
B
c
D
E
F
G
H
A
B
c
D
E
F
G
H
828
SUPREME COURT REPORTS
[1976) 3 S.C.R.
prayed for at the trial stage and in appeal. But the defendant who is the
appellant before us, the Mahapalika of the City of Agra, pursued the
matter m Second Appeal where, regardless of the scope of the suit or \
the precise ground alleged in the plaint, an adverse judgm~nt was
rendered affecting the municipality in a general way.
Naturally, the
appellant Mahapalika has come to this Court by special leave under
Art. 136 of the Constitution, overstepping the limits of law. a little,
as will presently appear.
The brief facts necessary to appreciate the contentions on which
the High Court has pronounced may now be stated, although, in so
doing, we have to depart from the pleadings.
Indeed, the questions
are of general public importance and so,, apart from Lechnical bounds,
we proceed to declare the law.
,, The Agra Municipal Board was governed by the U.P. Murucipalities Act, 1916 (Act. II of 1916). In 1947, the State Government
issued a notifioation imposing a tax under s. 128 ( 1) (ii) oil the said +
Act.
The levy was on brick manufacturers carrying on that trade,
at the rate of 14 annas per 1000 bricks.
The brick-kiln owners who
were afiecteJ, along with their Association, filed a suit for a declaration that the tax was void and not exigible. It may be, stated that,
whatever the reasons urged in the
pleadings
be,
the
arguments,
purely legal, have turned on the validity or the tax in the light of
s. 142(A) of the Government of India Act, 1935 and on Art. 276 of
the Constitution of India vis a vis the relevant provisions of the two
municipal laws and the notification already referred to.
One circumstance which occurred after the trial court had decreed the suit deserves
to be stated for a comprehension of the High Court's decision.
The
U.P. Nagar Mahapalika Adhiniyam, 1959 (U.P. Act II of 1959),
came into force on Febrnary I, 1960 repealing and replacing the ~
U.P. Municipalities Act.
While the latter Act provided for levy of
various types of taxes on professions, trades and callings under s. 128,
the former Act which followed, contained a corresponding provision
in s. 172 thereof.
Thus, today,, s. 128 of Act II of 1916 is longer
in force and i,~ is the later Act of 1960 which is extant.
To come to the point straight, there are two questions on which
the High Court has decided against the Nagar Mahapalika.
'I11is can
be understood fully only by a trifurcation by periodisation of the
municipal law's operation, viz., the pre-Constitution era and the postNagar Mahapalika Act era, with the intervening spell sandwiched in
between these two.
According to the High Court. the levy of tax
at the rate of 14 annas per 1000 bricks by virtue of the notification
Ex. H of September 18, 1947 cannot be sustained to the extent it
exceeds Rs. 50/- per person, per annum.
The groulld given-and,.
+
we think, rightly-is that s. !42A(2l of the Government of India Act
/
restricted 'the total amount payable in respect of any one person ...
to any one municipality ... by way of taxes on professions, trades.
callings and employments, shall not ... exceed Rs. '.JO/- per annum'.
To the extent to which this ceiling was exceeded, the constitutional
provision stood breached by the notific~tion and was void.
Theref~re.
without further argument, the conclusron was reached by the Htgh
Court that inevitably the Municipal Board. Agra, could not levy any
'
I
.•
MAHAPALIKA OF AGRA V. BRICKKILN OWNERS' ASSOCN.
(Krishna lyer, J.)
829
amount by way of thls tax in excess of Rs. 50/- on any one person
per annunt'.
The Government of India Act, 1935, certainly set a maximum on
the tax on trades and callings and we agree that the High Court was
right in holding that the Municipal Board's right to levy tax under
the notification Ex. H could be valid only up to Rs. 50/- per year
and, to the extent it went beyond that limit, was void.
So, we affirm
the High Court's holding for the period npto January 26,. 1950 that
no sum higher than Rs. 50/- as set out in the Government of India
Act, 1935 can be exacted under s. 128 of Act II of 1916.
From the Raj to the Republic was a big break in constitutional
law, but there was some continuity maintained.
A certain ceiling on
taxes on professions, trades, callings and employments had been set
by Art. 276 of the Constitution of India, but this maximum was not
Rs. 50/- as in the Govermnent of India Act, 1935 but Rs. 250/-. We
may as well extract sub-cl. (2) of Art. 276, in this context:
"276. Taxes on professions, trades, callings and employments.-
(1) ...
(2) The total amount payable in respect of any
one
person to the State or to any one municipality, district board,
local board or other local authority in the State by way of
taxes on professions, trades, callings and employments shall
not exceed two hundred and fifty rupees per annum;
Provided that if in the financial year immediately preceding the commencement ~f this Constitution there was in force
in the case of any State or any such municipality, board or
authority a tax on professions, trades, callings or employments, the rate, or the maximnm rate, of which exceeded
two hundred and fifty rupees per annum, snch tax may
continue to be levied nntil provision to the contrary is made
by Parliament by law, and any law so made by :Parliament
may be made either generally or in relation to any specified
States, municipalities, boards or anthorities.
(3) ...... "
A
B
c
D
E
F
Inevitably,. it follows that during the post-Constitution period nothing
by way of taxes on trades or callings above the limit so set is recoverable and hence the maximum levy from each person under the notification issued under Act II of 1916 rises to Rs. 250/-.
G
A wee-bit twilit area of law, where the High Conrt has wobbled
and gone wrong, if we may say so with respect, relates to the period
after the U.P. Nagar Mahapalika Adhiniyam, 1959, came into force.
The curious conclusion the learned Single Judge has
reached
is that since that date i.e. February 1, 1960>, there is to be a sudden
drop in the maximum tax Ieviable under s. 172(2) of the Mahapalika
Act to Rs. 50/- from Rs. 250/- by a rather strained process of resusH
citation of the Government of India Act, 1935.
3-725SC!/76
A
B
c
D
E
F
G
H
830
SUPREME COURT REPORTS
[1976] 3 S.C.R.
We must accept the omnipotence of the Indian Constitntion so
far as all legislations are concerned, including the
municipal laws.
Therefore, by the force of this paramountcy we have read down the
notification Ex.H to limit the
maximum contemplated
by it
to
Rs. 250/-, the ceiling set by Art. 276(2) of the Constitution.
But,
how can the gbost of the Government of India Act, which died long
ago, revive to haunt the taxing laws of the Republic now and bring
down the maximum limit from Rs. 250/- to Rs. 50/-? The learned
Judge himself felt that this seemed 'paradoxical', but thought that 'that
is the effect of this express and categorical proviso'.
What is that
proviso.
The cour.t had in mind the proviso, to s. 1 72 of the Adhiniyam.
The view of the High Cour.t stems from a simple misconstruction
of the proviso to s. 1 72 of the Mahapalika Act. The said proviso
operalles as a saving clause affecting the whole section and may, for
facility of making the point, clearly be read here :
"172 ...
Provided that where any tax was being lawfully levied in
the area included in the City immediately before the commencement of the Constitution of India such tax may continue to be levied and applied for the pur.poses of this Act until
provision to the contrary is made by Parliament."
It is plain that 'such tax', in this proviso relates to any tax under
s. 172 and saves all species or classes of taxes and does not merely
preserve the quantum or rate of such tax.
It is typology, not the
amount that is saved.
So it follows that the category of tax on trade
or calling is salvaged by the proviso and the notification Ex.H. sur.-
vives. It is clearly erroneous to hold that what is continued is the
rate, not the description, of tax.
Of cour.se, if only the quantum of
tax is kept alive on the wording of the proviso, what remains v.alid is
only upto the maximum mentioned in s. 142A of the Government of
India Act,, 1935. But if the class or species of tax is the correct connotation of the expression 'such tax' and 'any tax'-and we have no
hesitation to hold that way in the context, setting and language usedthe tax on trade or calling is saved.
The rate is as fixed in Exhibit H.
This does not mean that anything beyond Rs. 250/- [the tax freeze
under Art. 276(2)] can be levied. No. The constitutional maximum
prevails as it covers all taxes on trade or calling even today. Therefore,
until Parliament makes any other Jaw, as contemplated in the proviso
to s. 172 of the Adhiniyam, The maximum of Rs. 250/- binds.
We
have to read down the notification Exhibit H for the post-Constitution
period, in tune and conformity with the Constitution and uphold its
validity to the extent of constitutional permissibility.
We may thns snm up our conclusion.
The period before the
Constitution of India came to be enacted, i.e., prior to 26th January
1950, will be governed by the maximum fixed by the 1935 Act and
the Municipal Council of Agra will be entitled to collect tax on trade
or calling at the rate fixed in Exhibit H. bnt subject to the maximum
of Rs. 50/- per person, as already explained. For the second period
+
)
•
MAHAPALIKA OF AGRA V. BRICKK!LN OWNERS' ASSOCN.
831
(Krishna Iyer, !.)
from the dale of the Constitution up to the date of the Mahapalika
I
Act II of 1959, the maximum leviable by way of tax on trade or
calling by the Mahapa!ika will be Rs. 250/- per person.
The postMahapalika Act period will also be controlled by the same constitutional maximum of Rs. 250 /- per person, unless any supervening
parliamentary legislation, as ,ontell)plated by s. 172 of that Act, comes
into being.
In this view, we allow the appeal in part, i.e., for th.o period subsequent to the passing of the Mahapalika Act, 1959 aml permit the
Mahapalika to levy taxes-as per Exhibit H and s. 172, unto a maximum of Rs. 250/. Subject to the extent of this modification, the
appeal is ailowed.
Parties will bear their costs !hroughout.
-1
V.P.S.
Appeal partly all.owed •
A