IMPORTANT POINTS
When a statute does not provide for procedural fairness, it may be ultra vires; and when a substantive unreasonableness is to be found in a statute, it may have to be declared unconstitutional. Principle of natural justice cannot be dispensed with on mere ipso dixit.
No statute which takes away somebody’s right and/ or imposes duties, can be upheld where for all intent and purport, there does not exist any provision for effective hearing.

Headnote:West Bengal Central Valuation Board (Amendment) Act, 1994 – Validity – Pre-decisional hearing having been done away with; the safeguards in form of legal fiction provided in section 9 being made optional at the instance of the authorities; and exorbitant increase in the tax on the public because of the arbitrary, unscientific, or haphazard manner of determining valuation of a land or building by the Municipal committee and the Valuation Board, is itself indicative of arbitrariness, and hence, violative of Article 14 of the Constitution. (Paras 13, 14, 17 and 18)
       AIR 1978 SC 597; (2007) 2 SCC 181 – Relied upon.
       West Bengal Central Valuation Board (Amendment) Act, 1994 – Validity – Section 11 makes the general valuation final – Section 12 which provided for certain safeguards has been omitted – Under the un-amended provision of Section 15, the Review Committee to be constituted by the State had the jurisdiction to make further enquiry as it thought fit and proper –Under the Amended provision the power of the State to constitute the Review Committee has been taken away and conferred upon every Corporation or Municipality, as the case may be – The Review Committee is thus not independent of the Municipality or the Board – The amended provisions are, therefore, per se unreasonable and arbitrary – It per se contravenes the values attached to the principles of natural justice. (Paras 21 to 24, 26 and 27)
       West Bengal Central Valuation Board (Amendment) Act, 1994 – Validity – The proviso appended to Section 14 of the 1978 Act provides for pre-deposit before taking recourse to the review provision – Ordinarily an order entailing civil consequences should be preceded by an opportunity of being heard – The Committee should not have consisted of the authorities of the Municipality and the officers of the Board alone – Further, the Municipality can constitute as many committees as it likes – Rationality in the decision is, thus, not guaranteed – Further, the Act has not provided any guidelines – When a statute does not provide for procedural fairness, it may be ultra vires ; and when a substantive unreasonableness is to be found in a statute, it may have to be declared unconstitutional. (Paras 28, 29, 31, 34 and 37)
       (1981) 1 SCC 664; (2003) 10 SCC 533; (1985) 1 SCC 167; (2005) 11 SCC 524; (1993) 1 SCC 78; (2003) 7 SCC 151 – Relied upon.
       (1980) 1 SCC 685 – Referred to.
       West Bengal Central Valuation Board (Amendment) Act, 1994 – Validity – Provision for review was in effect and substance a provision for appeal but, when a provision for appeal has been laid down, the same should, for all intent and purport, must provide for an effective remedy – Principle of natural justice cannot be dispensed with on mere ipso dixit. (Para 40 and 42)
       AIR 1985 SC 1416; (1991) 1 SCC 729; Civil Appeal No.1489 of 2004; 2006 (11) SCALE 28; 2006 (12) SCALE 58 – Relied upon.
       West Bengal Central Valuation Board (Amendment) Act, 1994 – Validity – A Review Committee being a quasi-judicial body was required to fulfill the requirements of the three conditions pf the principle of natural justice – Provisions for review conferred in terms of the statute for all intent and purport are illusory ones and do not satisfy the test of Article 14 of the Constitution of India – No statute which takes away somebody’s right and/ or imposes duties, can be upheld where for all intent and purport, there does not exist any provision for effective hearing. (Para 45 and 47).
       2006 AIR SCW 4911; [2007] EWCA Civ 16; 8 Co Rep 113; (1983) 2 SCC 277; (2006) 3 All ER 593 – Referred to.
       Facts of the case :
       Members of the appellant association are occupiers of lands and buildings situated within the territorial limits of the Bidhannagar Municipality. Annual valuation of lands and buildings for the purpose of assessment of municipal tax indisputably is governed by the provisions of the West Bengal Municipal Act, 1993. In terms of Section 110 thereof, the annual valuation of lands and buildings is required to be determined by the Central Valuation Board. The Board was established under the provisions of the West Bengal Central Valuation Board Act, 1978 (for short “the 1978 Act”).
       Valuation of the holdings used to be governed by Sections 10, 11 and 12 of the 1978 Act. They provided for publication of the draft valuation list, publication of the final valuation list and amendment of valuation of the list by the Board respectively.
        Principles of natural justice were to be complied with in terms of Sub-section (3) of Section 10 insofar as upon publication of the draft valuation list, objections were invited and objections, if filed, were required to be considered by the Board for determination thereof upon giving an opportunity of being heard in that behalf. Section 11 provided for publication of the final valuation list together with the amount of consolidated rate payable after determination of the objections filed under Section 10. The final valuation list, so arrived, could be subject to further review in terms of Sections 14 and 15 of the Act.
       By the impugned amendment, the provisions relating to publication of the draft valuation list of lands and buildings and finalization thereof, upon hearing objections thereto were deleted. The West Bengal Central Valuation Board (Valuation of Lands and Building) Rules, 1984 (for short “the 1984 Rules”) framed under the 1978 Act were also amended by a notification dated 30.03.1984 wherein provisions pertaining to filing objection petitions against the draft annual valuation and determination thereof were deleted. The effect of the said amendment was that the valuation made by the Board was made final, subject to review as provided for under Sections 14 and 15 of the 1978 Act.
       Findings of the Court :
       The Act is violative of Article 14 of the Constitution and contravenes principles of natural justice, hence is ultra vires. Result : The judgment of the Division Bench of the High Court was set aside and that of the learned Single Judge restored. The impugned Act was declared unconstitutional being violative of Article 14 of the Constitution. The appeals were allowed.

JUDGMENT

S.B. SINHA, J. —

1.Validity or otherwise of certain provisions of the West Bengal Central Valuation Board (Amendment) Act, 1994 (for short “the Amendment Act”) is in question in these appeals which arise out of a judgment and order dated 24.12.2003 passed by a Division Bench of the High Court of Calcutta dismissing the writ petition filed by the appellant herein and, thus, upholding the impugned provisions thereof.

2.Members of the appellant association are occupiers of lands and buildings situated within the territorial limits of the Bidhannagar Municipality. Annual valuation of lands and buildings for the purpose of assessment of municipal tax indisputably is governed by the provisions of the West Bengal Municipal Act, 1993 (for short “the Municipal Act”). In terms of Section 110 thereof, the annual valuation of lands and buildings is required to be determined by the Central Valuation Board (for short “the Board”). The Board was established under the provisions of the West Bengal Central Valuation Board Act, 1978 (for short “the 1978 Act”).

3.Valuation of the holdings used to be governed by Sections 10, 11 and 12 of the 1978 Act. Before we embark upon a detailed analysis of the provisions thereof, we may notice that they provided for publication of the draft valuation list, publication of the final valuation list and amendment of valuation of the list by the Board respectively.

4. Principles of natural justice were to be complied with in terms of Sub-section (3) of Section 10 insofar as upon publication of the draft valuation list, objections were invited and objections, if filed, were required to be considered by the Board for determination thereof upon giving an opportunity of being heard in that behalf. Section 11 provided for publication of the final valuation list together with the amount of consolidated rate payable after determination of the objections filed under Section 10. The final valuation list, so arrived, could be subject to further review in terms of Sections 14 and 15 of the Act.

5.By reason of the impugned amendment, alterations on three principal fields were made, i.e., the provisions relating to publication of the draft valuation list of lands and buildings and finalization thereof, upon hearing objections thereto were deleted. The West Bengal Central Valuation Board (Valuation of Lands and Building) Rules, 1984 (for short “the 1984 Rules”) framed under the 1978 Act were also amended by a notification dated 30.03.1984 wherein provisions pertaining to filing objection petitions against the draft annual valuation and determination thereof were deleted. The effect of the said amendment was that the valuation made by the Board was made final, subject to review as provided for under Sections 14 and 15 of the 1978 Act.

6.Contending that the said Amendment Act is violative of Article 14 of the Constitution of India as it deprived the citizens of being heard which is the essence of the principles of natural justice as also lead to procedural unfairness, a writ petition was filed by the appellant. The said writ petition was allowed by a learned Single Judge of the High Court. In arriving at its conclusion, the learned Judge took notice of the contentions raised by the respondents in their counter-affidavits as also other factors relevant for determination thereof at some details. An intra-court appeal was preferred thereagainst in terms of Clause 15 of the Letters Patent Appeal of the Calcutta High Court and by reason of the impugned judgment dated 24.12.2003, the said appeal has been allowed.

7.The High Court opined :

(i)The requirements of compliance of principles of natural justice have not completely been taken away.

(ii)No case of substantive unreasonableness has been made out.

(iii)In the matter of collection of debt for the purpose of arriving at a general valuation as also for the purpose of determining the objections by the owners and occupiers of the lands and the buildings, the restrictions put on t

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2007 Supreme(SC) 829

Cases Referred (14)