The court permitted greater latitude to the discretion of the legislature in the matter of taxation laws and emphasized the Municipality's power to fix the rate of tax within the prescribed limits.

Shanmugam, J.

Petitioners are public sector organisation and resident of Thiruvalla Municipality. They have objected to the proposal of the Municipality to increase the rate of property tax from 13% to 15%. The Municipality in reply has stated that the property tax in Thiruvalla Municipality was collected at the same rate of13% over since 1978-79, and the Municipality is presently faced with heavy financial liabilities hampering the development activities. The O.P. is against this order.

2. The petitioners case is that enhancement of rate of tax is excessive and the Municipalities is having sufficient funds to meet requirements.

3. Learned Counsel appearing on behalf of the petitioners strenuously pleaded that the Municipality has no jurisdiction to enhance the rate of tax in between the general revisions by referring to S.238 of the Kerala Municipality Act. According to this the property tax will be assessed once in every 5 years and therefore the same principle should apply for the fixation of the rate of tax. She also submitted that the Municipality has no authority to revise the tax without prior permission of the Government. Sub-s.3 of S.279 states that the Council shall not alter the rate of tax except with the previous sanction from the Government. According to her general revision for the annual value was in the year 1994 and the rate of tax can also be revised only after 5 years.

4. Under Art.243 of the Constitution of India, the legislature may authorise a Municipality to levy, collect & appropriate taxes. S.230(1)(a) of the Kerala Municipality Act, 1994 authorises the Municipalities levy property tax. S.231 and S.232 sets out to procedure for the imposition. The resolution of the Council shall specify the rate and date from which a tax can be proposed and finalised. The maximum and minimum

rate of tax is set out under S.233. S.234 deals with the method of assessment.

5. Municipality is empowered to increase the rate of property tax and the petitioner has not stated as to how it is unauthorised and without jurisdiction. The petitioner has mixed up the issue of method of assessment, and its general revision with the rate of tax. There is no bar against fixing the rate of tax retrospective. The provisions of the Act enables the Municipality to decide the date from which the tax shall be levied. In this case, there is a public notice dated 29.6.1996 for increasing of the rate with effect from 1.4.1996 and all the procedures for the imposition is satisfied. A tax is an imposition made for public purpose without reference to any service rendered or any specific benefit conferred upon the tax payer. A tax is paid for the common benefit to raise the general revenue. Therefore, the contention that the Municipality is not providing corresponding service and deprived of property right guaranteed under Art.300A, have no force.

6. It has been well laid down principle that in the matter of taxation laws the Court permits greater latitude to the discretion of the legislature. The freedom of legislature is conceded not only in the choice of the article to be taxed but also as regards the manner and rate of taxation eg. to prescribe different rates for different categories of persons or objects.- (vide Khyerbari Tea Co. v. State of Assam (AIR 1964 SC 925). The Courts are to slow to interfere with the legislative direction in the matter of choice of a date for determining the basis of or commencement of liability for a tax, (vide Empire Industries Ltd. v. Union of India (MR 1986 SC 662)). The, Supreme Court in D.G. Gouse & Co. v. State of Kerala (AIR 1986 SC 271) held that there is adequate procedure or machinery in the three Acts eg. The Kerala Municipal 1961 & The Kerala Municipalities Act, 1960 & The Kerala Panchayat Act, 1960 for the satisfactory & proper determination of the annual value of buildings.

7. Learned counsel for the petitioners is right in contending that the property tax shall be assessed and the tax determined