Back
High Court Of Rajasthan
Judgename : Kansingh
JOHARI MAL - Appellant
Versus
STATE OF RAJASTHAN - Respondent
Writ Petn. 1832 Of 1964
Decided On : 07/29/1968
RAJASTHAN MUNICIPALITIES ACT, 1959 - SECTIONS 104 AND 107 - CONSTITUTIONALITY - DELEGATION OF LEGISLATIVE POWERS - ARTICLE 14 - DISCRIMINATION - VALIDITY OF GOVERNMENT NOTIFICATIONS IMPOSING OCTROI - DISPARITY IN TAX RATES - RATIONAL BASIS - JUDICIAL REVIEW.
Fact of the Case:
The petitioners, representing various municipalities in Rajasthan, challenged the vires of Sections 104 and 107 of the Rajasthan Municipalities Act, 1959, and certain government notifications imposing octroi in their respective municipalities. They contended that Section 104, which empowered the state government to direct municipal boards to levy certain taxes, amounted to excessive delegation of legislative powers and violated Article 14 of the Constitution by allowing for arbitrary and discriminatory imposition of taxes. They also argued that the government notifications, which imposed varying rates of octroi on different commodities in different municipalities, were discriminatory and lacked a rational basis.
Finding of the Court:
The court held that Section 104 of the Act was not unconstitutional on the ground of excessive delegation of legislative powers. The court reasoned that the legislature had the power to delegate certain functions to an outside agency, as long as it provided sufficient guidance and did not abdicate its essential legislative functions. In this case, the court found that the legislature had provided clear guidelines for the government to follow in imposing taxes, such as the types of taxes that could be levied, the rates at which they could be imposed, and the dates on which they could be imposed. The court also held that Section 104 did not violate Article 14 of the Constitution, as it provided a rational basis for the classification of municipalities for the purpose of imposing taxes. The court noted that the legislature could take into account various factors, such as local conditions and the capacity of the people to pay taxes, when determining the rates of taxes to be imposed in different municipalities.
Issues: 1. Whether Section 104 of the Rajasthan Municipalities Act, 1959, was unconstitutional on the ground of excessive delegation of legislative powers? 2. Whether Section 104 of the Act violated Article 14 of the Constitution by allowing for arbitrary and discriminatory imposition of taxes? 3. Whether the government notifications imposing octroi in the petitioners' municipalities were discriminatory and lacked a rational basis?
Ratio Decidendi: 1. The legislature has the power to delegate certain functions to an outside agency, as long as it provides sufficient guidance and does not abdicate its essential legislative functions. 2. A law does not violate Article 14 of the Constitution merely because it classifies persons or things for the purpose of taxation. The classification must be based on an intelligible differentia and must have a rational relation to the object sought to be achieved by the law. 3. In determining the rates of taxes to be imposed in different municipalities, the legislature may take into account various factors, such as local conditions and the capacity of the people to pay taxes.
Final Decision: The court held that Sections 104 and 107 of the Rajasthan Municipalities Act, 1959, were intra vires and did not violate Article 14 of the Constitution. The court also held that the government notifications imposing octroi in the petitioners' municipalities were valid, except for the items of silver, gold, and cloth in the notification relating to Abu Road Municipality, and the item of sugar cane in the notification relating to Municipal Board Bari. The court directed the respondents to refund the amount of octroi duty realized from the petitioners in respect of these items.
KANSINGH, J.
( 1 ) I have before me a group of four writ petitions by which the several petitioners challenge the vires of Sections 104 and 107 of the Rajasthan Municipalities Act, 1959 (Act No. 38 of 1959, hereinafter called the Act), as also certain notifications issued by the State Government in exercise of its powers under Section 104 of the act imposing octroi in the concerning municipalities. As the writ petitions raise common questions, they can conveniently be disposed of together.
( 2 ) I may give the facts with, reference to writ petition No. 1503/64 Joharimal and others v. The State of Rajasthan and another. Writ Petition No. 1533 of 1964 jaishiv and others v. The State of Rajasthan and another is identical with joharimals writ petition. Both these writ petitions relate to Abu Road Municipality. Writ Petition No. 1832 of 1964 Shivcharan Lal and others v. The State of rajasthan and another is for Bari Municipality in district Bharatpur and the fourth writ petition Prabhu Dayal and others v. The State of Rajasthan and another concerns the Municipal Board Kota.
( 3 ) JOHARIMAL states that in the Municipality of Abu Road, the Municipal Board had imposed octroi duty in the year 1951 after going through the procedure prescribed for imposition of octroi duty. According to the petitioner, the Municipal Board imposed this duty after ascertaining the public opinion. The octroi duty on cloth was 1/9 per cent, and as it was found to be high, the Municipal Board later on reduced it to 50 Paise per cent. The grievance of the petitioner is that the State government published a notification on 20th August, 1964, imposing octroi duty on various commodities including cloth, silver and gold. The notification has been placed on record and it is Ex. 6. It is dated 10th April, 1964, and has been issued by the State Government in exercise of its powers under Section 104 of the Act. Textiles and yarn occur at items Nos. 62 and 63 respectively of this notification and gold and silver bullion and articles thereof appear at item No. 81 in the notification. A perusal of these items shows that octroi duty is chargeable on them at the rate of 1 per cent. The petitioners grievance is that before issuing the notification Ex. 6, neither the State Government nor the Board had ascertained the wishes of the public. The petitioner proceeds to say that Section 104 of the Act is violative of Article 14 of the Constitution and also by this provision, the Legislature has delegated its functions of imposing tax by law to the State Government which, according to the petitioner, amounts to excessive delegation so as to be void. It is pointed out that wide and arbitrary powers have been placed in the hands of the slate Government in the matter of imposition of taxes mentioned therein without affording any guidance to the State Government as to how it has to exercise its powers. It is contended that the State Government is left to pick and choose between the various commodities which it may take for imposition of octroi and likewise it may prescribe different rates of taxes for the same commodity for different municipalities. Thus according to the petitioner, the powers granted to the State Government by Section 104 are arbitrary and are in clear contravention of the provisions of Article 14 of the Constitution. Then as regards Section 107 of the Act it is pointed out that the power of granting exemption from taxes is likewise arbitrary.
( 4 ) THEN in attacking the notification Ex. 6 it is urged that the issuing of different notifications with widely varying rates of taxes for various municipalities, amply demonstrates that Section 104 of the Act has placed unguided powers in the hands of the State Government and further the State Government has abused its powers and there is no reasonable basis for making distinction regarding the incidence of tax for the various commodities and therefore it is maintained that the notification Ex. 6 was bad on acco
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
