Back
1961 Supreme(Gau) 10
Manipur High Court
T. N. R. TIRUMALPAD, J.
Oinam Apabi Singh
Versus
Imphal Municipal Board
Civil Writ Appln. No.16 of 1960
Decided On : 09-02-1961
R. K. Manisana Singh, for Petitioner; N. Budhachandra Singh and R. K. Jhalajit Singh, for Respondent.
The power of Municipal Board to levy tax on holdings and the validity of the resolutions passed by the Municipal Board in exercise of the powers conferred by S.68(1)(a) and S.80 of the Assam Municipal Act, 1956.
Headnote:
TAXATION - Power of Municipal Board to levy tax on holdings - Whether S.68(1)(a) and S.80 of the Assam Municipal Act, 1956 ultra vires the Constitution - Whether the resolutions passed by the Municipal Board in exercise of the powers conferred by S.68(1)(a) and S.80 of the Act are in accordance with the provisions of the Act.
Fact of the Case:
The petitioner, a land-holder within the Imphal Municipal Area, challenged the two resolutions passed by the Imphal Municipal Board levying a tax on holdings within the newly extended Municipal area. The petitioner contended that the resolutions were passed in violation of Article 265 of the Constitution and opposed to the provisions of the Assam Municipal Act, 1956. The respondent contended that the resolutions were passed in accordance with the provisions of the Act and that the petitioner had no right to challenge the Board's Resolutions.
Finding of the Court:
The Court held that S.68(1)(a) and S.80 of the Assam Municipal Act, 1956 are intra vires the Constitution. The Court further held that the resolutions passed by the Municipal Board in exercise of the powers conferred by S.68(1)(a) and S.80 of the Act were not in accordance with the provisions of the Act.
Issues: 1. Whether S.68(1)(a) and S.80 of the Assam Municipal Act, 1956 are ultra vires the Constitution? 2. Whether the resolutions passed by the Municipal Board in exercise of the powers conferred by S.68(1)(a) and S.80 of the Act are in accordance with the provisions of the Act?
Ratio Decidendi: 1. The Court held that S.68(1)(a) and S.80 of the Assam Municipal Act, 1956 are intra vires the Constitution. The Court observed that the legislature has laid down the policy in S.68 as to what are the taxes, like the holdings tax, water tax, drainage tax, electricity tax etc. to be levied by the Municipal Boards. The various sections which follow upto S.99 lay down the manner of implementation and enforcement of the various taxes. The Court further observed that the delegation of power to fix the rate of tax was not within permissible limits of subordinate legislation and that it involved a matter of policy. However, the Court held that in our present case the power to fix the rate has been given to the Municipal Boards as such and that the legislature has laid down that the tax is of holdings and it is to be assessed on the annual value. The manner of calculating the annual value has also been laid down. Only the percentage is left to the Municipal boards to be decided in accordance with their needs. 2. The Court held that the resolutions passed by the Municipal Board in exercise of the powers conferred by S.68(1)(a) and S.80 of the Act were not in accordance with the provisions of the Act. The Court observed that the resolution Annexure-A was not in accordance with the provision of S.68. The Court further observed that the resolution Annexure-D was also not in accordance with the power given to the Municipality under S.68. The Court held that the Board had not held two separate meetings, in imposing a flat rate instead of a percentage of the annual value and in making the tax applicable from the middle of a financial year, the resolution was dead against the provisions of S.68 and S.80.
Final Decision: The Court allowed the petition and issued a writ of mandamus setting aside the two resolutions and directing the respondent to follow the provisions of the statute in the matter of taxation of holdings.
2. Imphal Municipal Board was constituted in 1956 under the Assam Municipal Act 1923, which was extended to Manipur after it became a Union Territory. Subsequently the Assam Municipal Act 1956 (Assam Act XV of 1957 hereinafter to be referred to as the Act) was enacted in Assam and it was extended to Manipur by the Notification Annexure-I dated 12-2-1960. On 17-3-1960, the Chief Commissioner by another order Annexure-II extended the boundaries of the Imphal Municipality by including an area of 5 and odd sq. miles lying contiguous to the existing area within its limits. The term of office of the members of the existing Municipal Board was also extended by another notification Annexure-III upto 31-3-1961, so that the Electoral rolls for the newly extended area may be prepared and the election of the new Municipal Board may be held on the basis of the extended area to allow the inhabitants of that area to participate in the election.
3. On 19-7-1960, notice was issued by the Chairman for a meeting of the Municipal Board to take place on 5-8-1960 to consider certain subjects. We are only concerned with the 3rd subject which was "3. To consider the mode of assessment and census of the newly extended Municipal area" (Annexure-IV). Accordingly, the meeting took place and the following resolution on the subject was adopted unanimously as seen from Annexure-V (which is the same as Annexure-A):
"In order to give privilege to the people living inside the extended Municipal area for being a voter in the next Municipal election under Assam Municipal Act, 1956, it is resolved that Municipal tax on holding at the flat rate of Rs.10/- per year per holding will be levied from the people of such area with effect from the October, 1960. Immediate action may be taken up for assessment of the said tax."
Then notice was published in the local papers on 14-12-1960 signed by the Area Officer cum Inspector of Taxes, Imphal Municipality calling upon all the pattadars resident within the newly extended Municipal Area to pay the tax of Rs.10/- per holding in 4 quarterly instalments of Rs.2.50 each, the first instalment to be paid on or before 31st December, 1960 (Annexure-B). Personal notices were also served on the proposed assessees stating that the Imphal Municipal Board had resolved to levy a sum of Rs.10/- per annum as holding tax in respect of the assessees land under section 80 of the Act and calling upon him to pay the tax of Rs.2.50 for the first quarter beginning from 1st October, 1960 on or before the 31st December, 1960 (Annexure-C).
4. Then notice was given on 14-12-1960 by the Chairman for another meeting of the Municipal Board to be held on 20-12-1960 to consider certain subjects of which we are only concerned with the 5th subject namely "To consider the matter for taxation of shop sites in Singjamei Bazar" - (Annexure-7). This subject was subsequently amended by Annexure 8 to read "To consider the matter for taxation of Singjamei Bazar and others". At the meeting held on 20-12-1960 the following resolution was passed as seen from Annexure-IX which is the same as (Annexure-D):
"(a) In partial modification of resolution No.3 dated 5-8-1960 and in exercise of the powers conferred upon the Board by section 80 of the Assam Municipal Act, 1956 as extended to Manipur the Board resolve to determine the percentage on the valuation of holdings payable by the owners of such holdings as follows:
One percent on the annual value of holdings".
5. Thereafter a notice Annexure-F was published on 21-12-1960 by the Assessor of the Municipality calling upon all owners and occupiers of holdings to furnish returns of the annual value thereof. Similar individual notices were also sent. They were
