Judgment

BACHAWAT, J.: These appeals are directed against orders of the Allahabad High Court (Lucknow Bench), quashing the imposition of a water rate imposed by the Municipal Board, Sitapur. Section 126 (1) (x) of the U. P. Municipalities Act, 1916 (U. P. No. 2 of 1916) empowers the Board to impose a water tax on the annual value of buildings or lands or of both. Sections 131 to 135 lay down the procedure for imposing the tax. The High Court held that the levy was invalid as the Board did not comply with this procedure.

2. A municipal board desiring to impose the tax is required by Section 131 sub-section (1) to pass a special resolution framing the preliminary proposal for the tax. The Municipal Board, Sitapur, passed a special resolution on January 24, 1956 framing the proposal on January 24, 1956 framing the proposal for the levy of water tax at the rate of 12 per cent per annum on the annual value of buildings and lands and exempting buildings and lands whose annual value was Rs. 24 or below.

3. Section 131 sub-section (2) requires the Board to prepare a draft of the rules in respect of the proposed tax. The Board duly prepared the necessary draft rules. Section 131 sub-section (3) requires the Board to publish in the manner prescribed in Section 94 the proposal and the draft rules along with a notice in the form set forth in Schedule III. The draft rules along with notice were published in the Rashtra Sandesh, a local paper published in Hindi. The proposal was not separately published. But the proposal was to be found in the draft rules published in the local paper. Objections against the proposal were filed by the inhabitants of the municipality. The Board duly considered the objections and passed orders thereon under Section 132 sub-section (1). After considering the objections and the recommendations of the prescribed authority under Section 133 sub-section (1), the Board decided to modify the original proposal by reducing the tax to 10 per cent on the annual value and by exempting all lands and buildings whose annual value was Rs. 36 or below. Section 132 sub-section (2) requires the Board to publish the modified proposal along with a notice indicating that it is in modification of the original proposal, and Section 132 sub-section (3) provides that the objections to the modified proposal shall be dealt with in the manner prescribed by sub-section (1). The modified proposal was not published as required by Section 132 sub-section (2). The prescribed authority acting under Section 132 sub-section (2) duly sanctioned the final proposal and made the necessary rules in respect of the tax. It may be noted that the Commissioner, Lucknow Division, was the prescribed authority, On receipt of the order of sanction and the copy of the rules, the Board acting under Section 134 sub-section (2) passed a special resolution on April 23, 1957 directing the imposition of the tax with effect from October 1, 1957 . This special resolution was not published in the manner prescribed by Section 94. On receipt of the special resolution the prescribed authority acting under Section 135 sub-section (2) notified in the official gazette dated August 3, 1957 the imposition of the tax from the appointed date. Section 135 sub-section (3) provides that "a notification of the imposition of a tax under sub-section (2) shall be conclusive proof that the tax has been imposed in accordance with the provisions of this Act."

4. The respondents raised three objections against the validity of the imposition of the water tax: (1) omission to publish the preliminary proposal separately in the manner prescribed by Sec. 131 sub-section (3) read with Section 94; (2) non-publication of the modified proposal in accordance with S. 132 sub-section (2); and (3) non-publication of the special resolution directing the imposition of the tax in accordance with Section 94. The procedure laid down by the Act was not strictly complied with before imposing the tax. But all the p