IMPORTANT POINT
Sections 28-B and 28-C of BDA Act incorporated by BDA (Amendment) Act, 1993 are valid as they do not suffer from the vice of excessive delegation. But that part of Section 7 of the Amending Act which validates the collection of property tax by the BDA before the introduction of Sections 28A and 28B is invalid as beyond the legislative power.

Headnote:(i) Bangalore Development Authority (Amendment) Act, 1993-Sections 28-B and 28-C incorporated in BDA Act authorising BDA to provide certain civil amenities and empowering to levy and collect property tax in the same manner as provided under Bangalore Municipal Corporation Act, 1949-Whether suffer from the vice of excessive delegation? (No). (Paras 3 to 5)
       Held : By no stretch of imagination can it be contended that this delegation is either beyond the scope of the legislative power or is in excess of the same. It cannot also be argued that the said delegation is unguided or arbitrary. (Para 5)
       (ii) Bangalore Development Authority (Amendment) Act, 1993-Section 7-Validation of collection of property tax made by BDA prior to the introduction of Section 28-B-Whether valid? (No, as it is beyond the legislative power)-Appeal allowed in part.
       Held : In our opinion, in respect of the tax collected for the period before the date of the Amendment there could have been no validation of such collection. Hence, the Amending Act so far as it validates the collection of property tax by the BDA, cannot be sustained for a period prior to the date of the Amending Act. (Para 10)
       Held : Therefore, Section 7 of the Amending Act so far as it validates collection of property tax made by the BDA prior to the introduction of Section 28-B has to be declared as invalid and beyond the legislative power. (Para 11)
       Held, however, the declaration of ours in regard to the illegality of the validation of the property tax collected prior to the Amendment, however, does not apply to the collection made by the BDA of the cesses required to be collected by it under Section 28C of the Act. The collection contemplated under Section 28C is not a levy under the BDA Act. It is a levy imposed under the Acts mentioned in that Section, namely, the Karnataka Compulsory Primary Education Act, 1961; Karnataka Health Cess Act, 1962; Karnataka Public Libraries Act, 1965; and the Karnataka Prohibition of Beggary Act, 1975. The cess in question is not for the benefit of the BDA but the same is collected by the BDA only as an agent. It is for this purpose that under Section 28A the BDA was deemed to be a local authority so that it could collect the cess under the said respective Acts. These collections as an agent do not suffer from want of legislative sanction. The only lacking part was that under the respective Acts referred to hereinabove, the said collection could be made by a local authority only, which the BDA was not until Section 28C was introduced. This lacuna was removed by introduction of Section 28C and the BDA has been made a deemed local authority for the purpose of such collection. Therefore, once the BDA has been declared as a deemed local authority with retrospective effect, we find no difficulty in accepting the validity of this collection. Hence, the validity of Section 28C has to be upheld and consequently all the cesses collected by the BDA under the Acts referred to under Section 28C have to be declared as validly collected. (Para 12)
       Held finally : For the reasons stated above, we uphold the validity of Sections 28B and 28C of the BDA Act which are under challenge while we declare that that part of Section 7 of the Amending Act which validates the collection of property tax by the BDA before the introduction of Sections 28A and 28B as invalid; consequently the said collection is liable to be refunded as directed by the court in earlier proceedings. Accordingly, this appeal is partly allowed to the extent indicated hereinabove. No costs. (Para 13)

JUDGMENT

Santosh Hegde, J.-The appellant before us along with some other petitioners had filed Writ Petition Nos.4394-4410/88 before the High Court of Karnataka at Bangalore contending, inter alia, that the Bangalore Development Authority (the BDA) had no sanction under Section 29 of the Bangalore Development Authority Act, (for short the BDA Act ) to levy any tax, cess or fee on the owners of lands and buildings situated outside the corporation limits of the Bangalore City Corporation. They had also contended that Section 29 of the Act was unconstitutional, ultra vires and void. A learned Single Judge who heard the said writ petition after examining the various provisions of the Act as well as the Bangalore Municipal Corporation Act, 1949 (the Corporation Act) came to the conclusion that under the BDA Act, there was no inherent power to assess, impose and recover taxes, cess and fees other than the betterment tax. The court also held that the power to levy and recover taxes, cess and fees has to be expressly conferred on the BDA by the BDA Act and such power cannot be presumed by mere implication. It further held that there was no material on record to hold that the BDA has been rendering any service to the members of the public who own lands and/or buildings which service should correspond to taxes, cess and fees recoverable because such tax is service related. The said finding of the learned Single Judge came to be affirmed by the appellate Bench in Writ Appeal Nos. 223-39/92. After the said judgment of the Division Bench, an Ordinance was promulgated which later became an Act of the Legislature whereby the principal BDA Act came to be amended by the Bangalore Development Authority (Amendment) Act, 1993. By this Amending Act, Sections 28-A, 28-B and 28-C were incorporated in the said Act. By these amendments, the BDA was statutorily entrusted with the obligation of providing certain civic amenities specified in Section 28A of the Act and in Section 28B, the BDA was specifically empowered to levy and collect property tax in the same manner and at the same rate as was provided in the Corporation Act. Under Section 28C, the BDA was given the status of a local body to collect the cess payable under the various Acts specified in the said Section and Section 7 of the Amending Act validated all the collection made by the BDA which was declared as without authority of law by the earlier judgment of the High Court.

2. The Amending Act was challenged again by the appellant in a writ petition on the ground that the Amending Act suffered from the vice of excessive delegation and was also arbitrary and violative of Article 14 of the Constitution. It was also argued that the Amending Act not having removed the vice pointed out by the High Court, it was beyond the legislative power to validate an invalid collection of tax. The said challenge being negatived by the High Court, the appellant is before us in this appeal.

3. Before us, the appellant contends that the delegation of power to the BDA is bad because the BDA is only a statutory body and not being an elected body, could not have been entrusted with any taxing power. For this proposition the appellant strongly placed reliance on a judgment of this Court in Municipal Corporation of Delhi v. Birla Cotton, Spinning and Weaving Mills, Delhi & Anr.1. In the said judgment the majority, while upholding the validity of the delegated legislation and negativing the contention of excessive delegation, among other factors, found that delegation to an elected body was in itself a safe way of delegation because an elected body responsible to the people including those who pay taxes would act responsibly in the exercise of the said delegated power. But this Court in that case nowhere held that delegation of a taxing power to a non-elected body would suffer from the vice of excessive delegation. Therefore, the argument of the appellant grounded solely on the ratio laid down in Birla Cotton Mills case

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2001 Supreme(SC) 619

Cases Referred (3)