Judgement

HIDAYATULLAH, J. : The Municipal Board, Hapur (shortly the appellant Board) passed a Special Resolution (No. 296) on September 28, 1956 imposing water tax in Hapur from April 1, 1957 and a notification by the Government of Uttar Pradesh was published in the Uttar Pradesh was published in the Uttar Pradesh Gazette under S. 135 (2) of the U. P. Municipalities Act (Act 2 of 1916) dated December 11, 1956 notifying the resolution. Fifteen house owners of Hapur who received notices from the appellant Board for the payment of the tax assessed in respect of their houses, petitioned to the High Court at Allahabad under Art. 226 of the Constitution and asked for a writ or order preventing the appellant Board from realising the tax. Their contention was that the tax was illegal as it was imposed in contravention of the provision of the Municipalities Act. The main grounds of Objection were (a) that the resolution of the appellant Board framing the proposal was not published in a local paper of Hapur printed in Hindi, and (b) that the rules framed for the imposition of the tax did not accompany the resolution which was affixed on the notice board at the office of the appellant Board in purported compliance with the requirements for publication. The imposition was also challenged on the ground that Arts. 14 and 19 of the Constitution were violated.

2. The petition was heard by Mr. Justice James who decided all the points against the appellant Board. He held that the tax was illegal inasmuch as the mandatory requirements of the Municipalities Act were not complied with by the appellant Board while imposing the tax, and that S. 135 (3) of the Act (which cures all defects in the imposition of tax by making the notification of Government conclusive evidence of the legality of the imposition) was ultra vires Art, 14 of the Constitution because it created a bar against proof and left no remedy to the tax payers thereby making a discrimination between them and other litigants. He further held that the sub-section, by making Government the sole judge of compliance with the Act conferred judicial power on Government contrary to the intendment of the Constitution. The appellant Board was accordingly ordered not to collect the tax from the petitioners. The appellant Board appealed under the Letters Patent. The Divisional Bench hearing the special appeal agreed with Mr. Justice James. The case was, however, certified as fit for appeal to this court and the present appeal has been filed. Since it will be necessary to consider whether the appellant Board complied with the requirements of the Municipalities Act or not and, if not to what extent, it is necessary to analyse the provisions in the Municipalities Act for the imposition of a tax and then to follow that up with a narration of the steps taken by the appellant Board.

3. Section 128 of the Municipalities Act confers on the Municipalities in Uttar Pradesh the power to levy taxes and enumerates the kinds of taxes. One such tax mentioned in Cl. (x) of sub-s. (1) of the section reads: "a water tax on the annual value of the building or land or both". This was the tax which the Municipality had attempted to impose in Hapur. There can be no question that the appellant Board had the competence to impose this tax and so the first question is whether it went about the business in the wrong way and, if it did, what is the effect. Section 129 specifies certain restrictions on the imposition of water tax. We need not refer to them because no objection was raised that the restrictions there prescribed had not been observed. Sections 131 to 135 lay down the procedure for the imposition of tax. Section 131 provides that when a Board desires to impose a tax it shall, by special resolution, frame a proposal specifying the tax, the person or class of persons to be made liable and the description of the property or other taxable things or circumstances in respect of which they are to be made liable, the amoun