# Pr.,, tlt• N:tth T•l•qtiM v. 8,rt; Rtn1i«n S"'U' - **Citation:** [1962] Supp. 2 S.C.R. 366 - **Court:** Supreme Court of India - **Decided:** 1962 - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/pr-tlt-n-tth-t-l-qtim-v-8-rt-rtn1i-n-s-u-2612 - **Pages:** 14 ## Headnote 1141 Pr.,,..tlt• N:tth T•l•qtiM v. 8,rt; Rtn1i«n S"'U' ,..,,., J. 1961 366 SUPREME OOURT REPORTS (l9tl2] SUP!'" The e.rgument the.t this Court ga.ve Specie.I Lea.ve in the case of Pre.mode Ra.njan Sarkar and there· fore there were points of importance is, in the cir· cums ta.noes of this case, a neutral circumstance and that fact ce.nnot be used as a point in favour of the !espondent. In these circumstanoes, we are of the opinion that thf'I bringing or the fresh compla.int is a gross abuse of the process of the Court and is not with the object of furthering the interests of justice. In regard to the power of reference to a larger Bench, we are in agreement with S. K. Da8, J., and in the circumetancea it is unnecessary to erpre88 an opinion as to the applicability of s. 196A Criminal Procedure .oode to the facts of this e&ee. For these reMone we allow the appeals, set a.side the order of the High Court and of the learned Chief Presidency Magistrate. and diemisa the oomplaint. Bv CoURT : In accordance with the judgment of the' majority, the appeal is allowed. A pptal allotDtd. THE MUNICIPALITY OF ANAND STATE OF BOMBAY (B. P. SINHA, c. J., A. K. SARKAR, K. c. ·DAS 0Ul'TA, N. R~AGOPA.LA AYYANOAR and J. R. MUDHOLEiR, JJ.) OrJroi T...,_l"'J>OlilW. by MHicipal.it11-0rck• by Gow"'""'"' pro'ftihUi"'1 i•~V aliditv of-Bo,..ba11 Dia/.riQ Jt1.,&iciptilAcl, 1901 (Boa. t:/ 1901), •· 69-00Mlit• tio.,. of lt&dia, Art. U. ~ Mirr folloWiog the prooed~ prtteribed by the Bombay Dl1trict Municii-1 Act, 1901, and al'lrr obtaining the requisite oanction of the Government, the apptllant lm)><*d an octroi tax on milk brought within itl limlta for conmmption, uae or aale therein. Shortly afterward1 the Government passed an • 2 S.C.R. SUPREME COURT REPOHTS 367 order directing that the octroi ta« shall not he leviable by the appellant. The appellant contented that the Governmen_t had no power to c0ntrol the irriposition 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 provide l that snhject to any general or speCial orders which the Sllte Government may make, a 1funicipality may Himpose" t1'e tax after foll~w .. ing the procedure laid down and after ohtaining the S;\IlCtton of the Government. Th~ word "impose" in s. 59 meant the actual levy of the tax aftOlilW. by MHicipal.it11-0rck• by Gow"'""'"' pro'ftihUi"'1 i•~V aliditv of-Bo,..ba11 Dia/.riQ Jt1.,&iciptilAcl, 1901 (Boa. t:/ 1901), •· 69-00Mlit• tio.,. of lt&dia, Art. U. ~ Mirr folloWiog the prooed~ prtteribed by the Bombay Dl1trict Municii-1 Act, 1901, and al'lrr obtaining the requisite oanction of the Government, the apptllant lm)><*d an octroi tax on milk brought within itl limlta for conmmption, uae or aale therein. Shortly afterward1 the Government passed an • 2 S.C.R. SUPREME COURT REPOHTS 367 order directing that the octroi ta« shall not he leviable by the appellant. The appellant contented that the Governmen_t had no power to c0ntrol the irriposition 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 provide l that snhject to any general or speCial orders which the Sllte Government may make, a 1funicipality may Himpose" t1'e tax after foll~w .. ing the procedure laid down and after ohtaining the S;\IlCtton of the Government. Th~ word "impose" in s. 59 meant the actual levy of the tax aftrn· ~~nt in the case of City Municipal1t1es· ....... ................................... . and subject to such modifkations or conditions as under section 61 the State Government ................... . in accoraing such sanction, deems fit, may impose, for the purposes of this .Act, any of the following taxes, that is to say, 0 f 0 o o o 0 0 0 o o "-0 0 0 0 0 0 0 0 0 0 0 0 o Io o o • o 0 o o 0 0 o o o • o o o o o • o o o o o 0 000 0 0 0 0 0 0 0 0 0 Io 0 o o 0 00 o o o o o o o o o o 0 o o o o 0 o 0 o o o o' o o o (iv) 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 imposinq a tax .. · It requires that first a resolution shall he passed at a meeting to the Municipality sel(loting 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 llif 1 Thi Munici •l-1.J •/ Ar.ontt v. Sta:1 of Bon b11J +f•rlur J. 1981 TM Municif>ality of A,,aruf v. Stat1 of Bombay ,<\arkar J, 370 SUPREME OOURT REPORT5 [1962] SUPP. area. to submit within a month their objections, if a.ny, to the tax. After the objections have Ct>me in, they a.re to b9 con>id 'red by a committetl of the Municipality and unleAS on the report •>f the committee the Municipality decides to abandon tho tax, it has (,o submit tho objections with itR opinion thereon, any nndifir.ations it desires to ma.kc and the rules prescri'·ing the tax to the State Government. Section 61 pruvidcs that on receipt of tho rules a.nd tho other things mentiontid in s. 611 fmm tho Municipa.lity, the Govtn nment maj refuse to sanction the rules, or return th«m to thli Municipality for further consideration or sanctioned them with or without moDS or subject to conditions prescribed. Section 6Z lays down that the rules a.s sanctioned by the Government she.II be published by the '.lfunicipality and tlw tax shall. from tho de.le which shall be specified in tho notice publishiug the rules, be imposed accordingly. It is not in con•r,.,versy tha.t in the pro;ent case the procedure prescribed in tho sections m<'ntioned above bad been complied with. The Government's contention is that the order made by it we.a competent a.s it was ord..r which was a.nthoriscd bys. 59, subject to which only a tax could be imposed tiy a :'.\lunicipality. The appellant Municipality does not dispatJ that it can imptiso a. ta.x only under s. 59 but it contents that tho general or special orders mentioned in the section subject to which it has the power to impose tax, aro orders which were in exin why we think that the appellant Munici· pality's contention is unte11able. The imposition contemplated by s. 59 is clearly not the passing of the resolutions under 1961 Th< Mrmi&ipali{)> of Anand v. State of Bomb construe the word "impose" in 1. 59 m the seme in which it has clearly been used in a connected proviaion, that is, 8. 62. Hence, in our view, "impese" in s. 59 means the actual levy of the tax after authority to levy it has been acquired by rules duly made and sanctioned, and it ill mob impOlition that is made subject lo the general or special order11 of the GoYernment. Therefore, the Gove.rnmen~ can at any time by any 1JUoh order prohibit the imposition of the tax. 2 S.C.R. SUPREME COURT REPORTS 878 Mr. Sastri for the appellant aaid 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 1>mpower 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 s. 59 must be understood as confined to such orders. Section 73 cannot help in intnpreting the words "general or special orders" ins. 59. A third objection to the validit,y of the order was that it was discriminatory. It was said that uo other Municipality had been prohibited from collecting a similar tax which it had power under its rules to collect. Apart from the very interest, ing question raised by the learned Attorney General that the Municipality being a local authority, was a 'tate, and was not therefore anti.tied to the benefit of Art. 14, as to which we think it unnecessary to express any. opinion. we are on the f:tcts satisfied that there is no discrimination. The Gvvernment has now, it is not disputed, prohibited all Municipalities from levying any octroi tax on milk. Fctrthermore, it has not been shown to us that all Municipalities stand on the same footing with reg a rd to milk. Tho last objection was that the order had been m'thi fide made. This grievance is completely without foundation. The Government had earlier requested. the appeJlant Municipality to drop the tax on the. ground, among others, that milk was really being putch11sed for the Government and that the Government was not li11ble to be JHJ Tiu MuniciμIU, of A.nan' •• Slw of Bomi•J 8111tcr·J, 1961 TM M .,.:,,J>alil:J •f .dnand •• S,.,, of Bomb•y SarwJ. 374 SUPREME OUURT REl'OltTS [1962] SUPP. taxed by a Municipality. It mn.y be that this ground wa.s not justified on the facts, but as to this we do not come to any finding. It is clear to us that even if this stand taken by the Government was not tenable, that is no reason for think· ing that the order was made ma/a fide. It wa.s sa.id that the Government had made this order to benefit respondent No. 2, a co-operative union, dealing in milk. Thia is a bare allegation and is not supported by fa.eta. In any event, since similar orders have now been made in· respect of· all Municipalities within the State, no question of ma/a fide can pol!Sibly arise. We think thn.t the challenge to the order dated April 4, 1955 ia without any foundation. In our view, the order was perfectly legitimate and must be upheld. We acoordingly dismiss , the appeal with costs. AYYANGAR J.-1 have had the advantage of pernsing tho judgment just delivered and I agree with order paSBed. The relevant facts and the statutory provisions which bear on tho points arising in the appeal have 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 l, 1955 wa.s lawful because tho requirements of ss. 59-62 were sa.tisfied when tho levy was made. No general or special order of the State Government etood in the way of the municipality making the parti· cular levy and tho sanction of the· State Government under s. 59 ( 1) (b) had been accorded to it, and the relevant rules·had conformed to the proce· dural and other requirements of these aoctions. The power of the municipality in the matter of tho levy of the tax is, however, not absolute but is made subject, apt.rt from other prm·ipions to whi~b I 2 S.C.R. SUPREME COURT REPORTS 375 shall advert, to such general and special orders as the State Government might pass by virtue of the opening words of s. 59 of the Act. The argL1ment strenuously pressed by Mr. Visvanatha Sastri was this: l'he Government had nr) 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 restrictinn~ 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. I am 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·rcason of a municipality impos· ing a tax in conformity with an order as it stood at a particular date. The limitation suggested must, therefore, be deduced as a 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 : "If 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 obj,•ction which appears to it to exist to the said tclX, 1951 TM Mw1icipality of .t!nand v. State of B1mbay Ayyangar J. 1161 IAt Jlu.'Jiub li!J· •/ ...... •V, s,-. •/ u ••. 1., .1,,.,.,., J. 376 Sl'PHE:ME COl:RT REPORTS [1962] SUPP. a.nd if, within the period so fixed such . ' reqmrement sha.ll not be ca.rricd into effect to the satisfaction of the Provincia.I Government, it may, by notification in the Officio.I Gazette, suspend the levy of such tax, or of suc-h pnt thereof, until such time as the ob· jection thereto shall be removed, The Prc.viuciul Government may at any time, by a like notifica.ti0n, rescind a.ny such suspension.·· It is obvious that this section is of limited operation and confined to the 8ubjcct it actually deals with. It poets the continued exaction of the impost, but points to the removal of anomalies and hardehipe in the details of tho levy or of its administration. The existence of thi~ provision would manifestly not suffice to negative the right of the Government to forbid the continued imposition of the tax alto· gether-such as ha~ been done in the present case. Section 73 camiot therPfore be construed as negativ· ing by implica.tion the right claimed by the State Government un,dcr e. 59, for it refers to and comprehends a totally different subject-matter. Coming now to the construction of RS. 59-62 as themselves supporting the theory of the exha.ustion of the power, the submission wa.s this. "The genera.I or spceinl orders" could only restrict the power of a m11nicipality "to impose a tux". On the scheme of provisions contained in PS. 59-62 a tax was "imposca" only once, though when imposed and in operation the levy s.nd collection of euoh a tax might be perio.lio and throughout the life of the imposition. Hence there was no Rcopo for the exercise of the State Government to make "a.ny special order" in relation to a tax after it has once been "imposed" because the pmn·r to prescribe conditions or restrictiuns by general or special order ia with reference to the "imposition" oftho tax. I feel unable to accept th is oonatruction. The whole foundation " 2$.C.R. SUPREME COURT REPORTS 377 of the argument is based on a denial of the premise that a ·power to impose tax is a continuing power. In iny judgment the "imprisition" of a tax is a. continuing power in the sence that so long as it is 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 irt 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 lega.l basis for tho 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 levbd and collected not withstanding the deprivation of the right to impose taxes for the future. In this view it i~ clear that there is no exhaustion of the State power under the opening words of s. 59 ( 1 ). In arril'ing at this construction I have also taken into consider.ition the scheme of the Act and the wide powers oonferrnd on the Stat.c Government in the matter of control and oupen isicn ovrr the municipalities powers designed to ensun that, subject of course to express statutory provision, municipal administration is co-ordinated to secure tho vital interest of the general public. In. this conneotion reference1U'.1V he made· to s. 7,1 of the Act which reads : · "Whenever it appcn' B to the Provincial Government that the balamc of the municipal fund of any Municiprrlity is insufficient for meeting the expenditure incurred under section I 75 or for the performano<' of any duties in respect of which they shall have been declared under section 178 to have committed default, the Provincial Governmout m:iy !Je notifica1;ion require the M·rnioipality to impose. 1961 Tiu M u11ieiJl•l ilJ •JA.,.d v. St•ti of Bamh Ayyan1•r J, 1911 Tiu MIV'litipolity •I A,,,,,,4 '.v. fflff• oj B~lu:y A).1""6" J. 378 Sl1PREME COU~T PEPORTS [1962] SUPP. within the :\fonicipal 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 tax in such manner or to such extent aH the Provincial GovernnH'Tlt considers fit, and the Municipality shall fernment 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 modifictl accordingly.' Government are thus empowered both to direct the municipality to impose tax when Government consider tho samo neressary in the interest. of municipal finance and administration as also to direct the municipality to desiRt from continuing the imposition whc·n the neC('S>ity l'er.sc>s. In cases where a. fox is imposl'd by the muni,·ipnlity by virtue of the provisions in ss. 59-62, the mnnioipality 2 S.C.R. SUPREME COURT REPORTS 3i:9 itself could revoke the tax if the rules so provide, for s. 4 7 of the Act enacts : "(I) Subject to the requirements of clause (ayofthe proviso to section 46 every Mll.nicipality 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 suspending, altering or rescinding any rul" describing such tax under the provisions of clause ( l) 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 of s. 59( 1) there is no specific provision in the Act to enable Government to intervene in cases where the continued levy of a tax i3 contrary to public interest. I do not consider that any such gap was intended and in my 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 hy 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 a.Tso stand dismissed but without any order as .to costs. Appeal dismissed. -- 1941 ~ Mn1reipality of Ananl v, Siar. of Bomb.y Ayranga,J,(