2008 Supreme(Kar) 38

2008 (1) KLO 915
IN THE HIGH COURT OF KARNATAKA
N. Kumar, J.
Writ Petition No. 2603 of 2002 C/w Writ Petition No. 712 of 2002
Sudarshan and Others - Petitioner
Vs.
BDA & Another - Respondents
Decided on

Headnote:(A) Bangalore Development Authority Act, 1976 - Section 28-B (As amended by Act 6 of 1993) - Validity of - Upheld by Supreme Court - Hence, competence of State Legislature is beyond challenge.

       (B) Bangalore Development Authority Act, 1976 - Section 28-B - Explanation to - Object of - Legislature has intended by introducing the explanation to hold that property tax which the authority is competent to levy under Section 28-C would be imposed without rendering any service and it is not in the nature of fee requiring service.

       Held: When the language employed in the Section is simple and a literal interpretation of the words used in the said Section leads to the said conclusion, namely that the authority is competent to impose tax without rendering any service, it cannot be said that the said Section is unconstitutional. Merely because the word “tax simpliciter” is not defined or is not use~ in any taxing statute that by itself would not render an enactment invalid. In fact by the explanation the Legislature is trying to explain the meaning of the word “tax simpliciter”. Though the word tax simpliciter is not defined under Section 2 of the Act, the weaning of the word tax simpliciter is given in explanation to Section 28B. In so construing the said word this Court is not legislating for the first time about the meaning of the word “tax simplicitor”. It is not exceeding its jurisdiction conferred under the Constitution of India and making any legislation. Understanding the word tax simpliciter in the aforesaid manner, amounts to interpreting the said provision. It is the Court alone which is competent to do so.

        What the Legislature intended by introducing this explanation is to be position clear. When by Section 2 8(c)(2), the power is conferred on the authorities to impose property tax, by explanation it was made clear that property tax before it could be imposed there need not be any service rendered for the said imposition of tax. Therefore, by adding an explanation, no tax is levied for the first time. The said explanation is only clarificatory in nature. That clarification is to be understood in the context of the earlier judgment of this Court where it has struck down the imposition of tax on the ground that no service is rendered by the authority before imposition of tax. What the Legislature intended to do by introduction of explanation was to state that for imposition of tax, no service need be rendered. In other words, that is how they wanted to wipe out the basis of the judgment of this Court, so that, their liability to refund the tax may be avoided. The Legislative competency of the State Legislature to pass such legislation has already been up held by the Supreme Court. It is also held that Legislative competency includes passing the law retrospectively, which also has been upheld. (Para 18, 23)

       (C) Bangalore Development Authority Act, 1976 - Section 28-B and 28C - Property tax - Imposition by authority - Legislative competence - Held, legislature is competent.

       Held: Article 265 of the Constitution provides that no tax shall be f levied collected except by authority of law. Entry 49 of List II Schedule VII to the Constitution empowers the State Legislatures to pass laws in respect of tax on lands and buildings. It is in pursuance of this power conferred, the Karnataka State Legislature has passed Karnataka Municipal Corporation Act, 1976, which provides for assessment and collection of property tax. The Karnataka State Legislature also has passed the Bangalore Development Authority Act, 1976 and the Amendment Act 1993, where under, the provisions of the Karnataka Municipality Act, 1976 shall mutatis mutandis apply to the assessment and collection of property tax. This power is conferred on the authority under the Act for levy and collection of property tax. The words used in both these enactment is ‘property’ tax’. Now by the proposed explanation, the word, ‘property tax’ used in the aforesaid statutes has been further explained to mean, ‘tax simpliciter’, requiring no service at all and not in the nature of fee requiring service. (Para 20)

       (D) Bangalore Development Authority Certain Other Law (Amendment) Act, 2002 (Act 19 of 2002) - Section 4 - Validity - Authority imposing property tax - Court holding that it had no power - Legislature amending parent Act and empowering authority to impose tax - As a result, every basis of court’s judgment is removed and court’s ruling has become ineffective - Validition provisions cannot be termed as fraud on constitution.

       Held: After noticing the infirmity, the State Legislature passed Karnataka Act 6 of 1997 introducing Section 28(A) 28(B) and 28(E) in the Act. Now the Constitutional validity of all these three sections has been up held by the Supreme Court. Section 28(B) expressly provides that the authority may levy tax on lands or building or on both situated within its jurisdiction, the property tax on the same rates on which the said tax is levied by the Corporation within its jurisdiction. Sub-Section (2) makes it clear that the provisions of the Karnataka Municipalities Act, 1976 shall mutatis-mutandis apply to the assessment and collection of the property tax. However, Section 7 which dealt with the validation of levy and collection of property tax, annulled all the judgments rendered on the aforesaid basis. It is in that context the said Sections were struck down by the Supreme Court on the ground that the Legislature has no competency to pass law and annul the judgments of the Court without wiping out the basis for the said judgment. Therefore, the impugned Act is passed adding an explanation to Section 28(c) clarifying that the property tax referred to in Section 28 is a “tax simpliciter” requiring no service at all and not in the nature of fee which required service. Thus, the basis of the Courts’ judgments that the authority is not entitled to tax. as they have not rendered any service is taken away. If the authority has the power to impose tax. without rendering any service and if the law is made retrospective, notwithstanding the judgment of this Court or the Supreme Court, the authority is entitled to collect tax without rendering service and the tax so collected need not be refunded. Therefore, the judgments rendered by these Courts in view of the impugned enactment has become ineffective.

        The State Legislature though has no power to pass the~ legislation retrospectively to annul a judicial pronouncement, has the’ power to pass a law retrospectively altering the basis upon which the said judicial pronouncement is made. If the judicial pronouncement is to be made on the basis of this amended’ provisions, the judgment of’ the Court would have been different. This is the whole object of this amendment.

        Therefore, it cannot be said that the validation Section is invalid or unconstitutional or it amounts to fraud on the constitution as contended by the learned Counsel for the petitioners.

       (Para 35,36,37)

       (E) Bangalore Development Authority and Certain Other Law (Amendment) Act, 2002 - Section 4 - Nature and scope - Will it prevent a litigant from approaching court for any relief? No.

       Held: As is clear from the wordings used, the words used are, ‘any such tax, i.e, which is collected without rendering any service. Therefore, -it cannot be construed as, a litigant is prevented from going to a Court for refund of any amount which is legitimately due to him. All that it means is, if tax is collected by the authority without rendering any service, on that ground he cannot approach the Court for refund of the tax. That is the whole object of this amendment. Therefore, I do not find any merit in this contention as well.

       (Para 39)

       (F) Constitution of India - Article 265 and Schedule VII, List II, Entry 49 - Property tax - Legislature providing for imposition of property tax by development authority without rendering any service - If competent.

       (G) Constitution of India - Article 226 - Judicial review - Scope - Intention of legislature - Is beyond pale of judicial review.

       Held: In other words the validity of the statute cannot be challenged on the ground of its intention being not bona fide. The intention of the legislature would be of great assistance to the Courts in understanding the object of the legislation and in interpreting the provision in the Act, if there is any ambiguity. (Para 32)

       (H) Interpretation of Statutes - Definition clause - Word defined under - Courts have to extend meaning of that word - Occasion to interpret would only arise when a word is not defined or if there is any ambiguity in understanding a defined word.

       (I) Interpretation of Statutes - Definition clause - Interpretation of - Scope - It is a method by which true sense or meaning of the word is understood - It does not amount to legislation by Court - It also not a case where court is giving some meaning to a word which legislature never intended.

       (J) Interpretation of Statutes - Words of statute - How construed - First be understood in their natural, ordinary or popular sense - Phrases and sentences - Be construed according to their grammatical meaning, unless that leads to some absurdity or unless there is something in the context or object of the statute to the contrary.

       (K) Statutes law - Competency of legislature - Legislature has no power to pass a law to anul a judgment of a court - But, it is compe tent to pass a legislation taking away the basis of that a judgment.

       (L) Property Tax - Imposition of - Legislature providing for imposition of property tax by development authority without rendering any service - If competent.

       (M) Taxation Law - Tax and fee - Distinction between.

       (N) Precedents - Binding effect of - A judicial precedent has a binding effect unless the very basis upon, which it is given is so altered that, said decision would not have been given in the changed circumstances or altered legal position.

       (O) Statute Law - Competency of legislature - It is open to legislature to alter law retrospectively so also to make law prospectively.

       (P) Statue Law - Powers of legislature - Scope - It cannot by legislation declare a particular judicial pronouncement as invalid.