Important Point
Section 406(2)(e) of the Bombay Municipal Corporations Act as applicable to Ahmedabad in State of Gujarat which prescribes depositing of 75% tax as a condition for maintainability of appeal is not violative of Article 14 of the Constitution of India.

Headnote:Bombay Provincial Municipal Corporations Act, 1949-Section 406(2)(e) as applicable to Ahmedabad in State of Gujarat-Constitution of India-Article 14-Constitutional validity of Section 406(2)(e) -Depositing of 75% tax as a condition for maintainability of appeal -Does not violate Article 14 of Constitution - Any challenge to constitutional validity on ground that onerous conditions have been imposed and right to appeal has been illusory must be negatived.
       Held : By the Amending Act 1 of 1979 discretion of the Court in granting interim relief has now been limited to the extent of 25% of the tax required to be deposited. It is, therefore, contended that earlier decision of this Court in Anant Mills Co. Ltd. v. State of Gujarat & Ors., (1975) 2 SCC 175 may not have full application. We, however, do not think that such a contention can be raised in view of the law laid by this Court in Anant Mills case. This Court said that right of appeal is the creature of a statute and it is for the legislature to decide whether the right of appeal should be unconditionally given to an aggrieved party or it should be conditionally given. Right of appeal which is statutory right can be conditional or qualified. It cannot be said that such a law would be violative of Article 14 of the Constitution. If the statute does not create any right of appeal, no appeal can be filed. There is a clear distinction between a suit and an appeal. While every person has an inherent right to bring a suit of a civil nature unless the suit is barred by statute. However, in regard to an appeal, position is quite opposite. The right to appeal inheres in no one and, therefore, for maintainability of an appeal there must be authority of law. When such a law authorises filing of appeal, it can impose conditions as well. When the statement of law is so clear, we find no difficulty in upholding the vires of clause (e) of sub-section (2) of Section 406 read with proviso thereto. Any challenge to its constitutional validity on the ground that onerous conditions have been imposed and right to appeal has become illusory must be negatived. (Paras 8 & 10)
       We also note that under clause (c) of sub-section (2) of Section 406, a complaint lies to the Municipal Commissioner against imposition of any property tax and only after that when the complaint is disposed of that appeal can be filed. Appeal to the Court as provided in clause (e) may appear to be rather a second appeal. Then under Section 408 of the Act provisions exist for referring the matter to arbitration. Under sub-section (1) of Section 408 where any person aggrieved by any order fixing or charging any rateable value or tax under the Act desires that any matter in difference between him and the other parties interested in such order should be referred to arbitration, then, if all such parties agree to do so, they may apply to the Court for an order of reference on such matter and when such an order is made provisions relating to arbitration in suits shall apply. That apart, if a person cannot avail of the right of appeal under Section 406 of the Act, other remedies are available to him under the law. In that case, it may not be possible for the Municipal Corporation to contend that an alternative remedy of appeal exist under Section 406 of the Act. (Para 11)

Judgment

D.P. Wadhwa, J.-This batch of appeals arises out of judgment dated October 9, 1980 passed by the Division Bench of the Gujarat High Court holding that Section 406(2)(e) of the Bombay Provincial Municipal Corporations Act, 1949 in its application to Ahmedabad in the State of Gujarat was a valid piece of legislation. Section 406 of the Act we may set out here and now:

“406. (1) Subject to the provisions hereinafter contained appeals against any rateable value or tax fixed or charged under this Act shall be heard and determined by the Judge.

(2) No such appeal shall be entertained unless-

(a) it is brought within fifteen days after the accrual of the cause of complaint;

(b) in the case of an appeal against a rateable value a complaint has previously been made to the Commissioner as provided under this Act and such complaint has been disposed of;

(c) in the case of an appeal against any tax in respect of which provision exists under this Act for a complaint to be made to the Commissioner against the demand, such complaint has previously been made and disposed of;

(d) in the case of an appeal against any amendment made in the assessment book for property taxes during the official year, a complaint has been made by the person aggrieved within fifteen days after he first received notice of such amendment and his complaint has been disposed of;

(e) in the case of an appeal against a tax, or in the case of an appeal made against a rateable value, the amount of the disputed tax claimed from the appellant, or the amount of the tax chargeable on the basis of the disputed rateable value, up to the date of filing the appeal, has been deposited by the appellant with the Commissioner.

Provided that where in any particular case the judge is of the opinion that the deposit of the amount by the appellant will cause undue hardship to him, the judge may in his discretion, either unconditionally or subject to such conditions as he may think fit to impose, dispense with a part of the amount deposited so however that the part of the amount so dispensed with shall not exceed twenty five per cent of the amount deposited or required to be deposited.”

2. ‘Judge’ is defined in Section 2(29) of the Act to mean in the City of Ahmedabad the Chief Judge of the Court of Small Causes or such other Judge of the Court as the Chief Judge may appoint in his behalf and in any other City the Civil Judge (Senior Division) having jurisdiction in the City. Section 406 suffered some amendments. In sub-section (2) for the words “shall be heard” were substituted by “shall be entertained”. Proviso to clause (e) of sub-section (2) was first added by Gujarat amendment 5 of 1970. This proviso (as it now exists) was then substituted by Gujarat Amendment 1 of 1979.

3. Appellants in all these appeals own properties in the City of Ahmedabad. They are liable to pay property tax which is a tax on buildings and lands in the City Property tax is revisable every four years. When last revision took place, appellants challenged those assessments in appeals which they filed before the Judge under Section 406(1) of the Act after bills were presented by the Municipal Corporation to them. During the pendency of appeals before the Judge, appellants prayed for stay of recovery of the property tax. In view of proviso to clause (e) of Section 406(2) of the Act, the Judge could not give effective interim relief to the appellants as exemption from payment of property tax could not be more than 25% of the amount of the property tax demanded from the appellants. The appellants therefor challenged the constitutional validity of clause (e) of sub-section (2) of Section 406 contending that it was violative of Article 14 of the Constitution.

4. The Division Bench who heard the writ petitions considered the earlier history of amendments to clause (e) of Section 406(2) of the Act. Clause (e), as it originally stood at

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1999 Supreme(SC) 553

Important PointSection 406(2)(e) of the Bombay Municipal Corporations Act as applica­ble to Ahmedabad in State of Gujarat which prescribes depositing of 75% tax as a condition for maintainability of appeal is not violative of Article 14 of the Constitution of India.

Cases Referred (6)

Important Point
Section 406(2)(e) of the Bombay Municipal Corporations Act as applicable to Ahmedabad in State of Gujarat which prescribes depositing of 75% tax as a condition for maintainability of appeal is not violative of Article 14 of the Constitution of India.