Badar Durrez Ahmed, J.

1. In all these petitions (26 in number), there is a challenge to the unit area method of levying property taxes in Delhi introduced by virtue of the Delhi Municipal Corporation (Amendment) Act, 2003. It is prayed that the Delhi Municipal Corporation (Amendment) Act, 2003 and the Delhi Municipal Corporation (Property Tax) Bye-laws, 2004 be declared as unconstitutional and as being void ab initio. The challenge, which is common to all the petitions, is founded on the following pleas: (I) The Legislative Assembly for the National Capital Territory lacked the legislative competence to enact the Delhi Municipal Corporation (Amendment) Act, 2003; (II) The Presidential Assent in the manner stipulated in Article 239AA(3)(c) was not there; (III) the unit area method is not a recognised system of valuation; (IV) There are no guidelines for the exercise of power under the new Section 116A and for classification; and (V) A flat rate of taxation under the unit area method is arbitrary and discriminatory and is, therefore, illegal. Apart from these pleas, which have been taken by all the petitioners, there are some specific pleas with regard to private unaided schools (22 petitions).

I. Legislative competence

2. It was contended on behalf of the petitioners that the Legislative Assembly for the National Capital Territory, while enacting the Delhi Municipal Corporation (Amendment) Act, 2003 (hereinafter referred to as “the Amendment act of 2003”), lacked the legislative competence to do so. This was a twofold contention. In the first place, it was contended that the property tax regime which had been put in place by virtue of the Delhi Municipal Corporation Act, 1957 (hereinafter referred to as “the said Act of 1957”) had been done so by Parliament. As such, the property taxes levied under the said Act of 1957 constituted union taxation and therefore the same could not be altered by a legislature created for the Union Territory of Delhi and it could only be altered or varied by a law made by Parliament. For this proposition, the learned counsel for the petitioners placed reliance on the Supreme Court decision in the case of New Delhi Municipal Council v. State of Punjab: (1997) 7 SCC 339. Secondly, it was contended that by virtue of article 239AA(3)(a) of the Constitution of India, the legislative assembly of the National Capital Territory had power to make laws for the whole or any part of the National Capital Territory with respect to any of the matters enumerated in the State List or in the Concurrent List insofar as any such matter was applicable to Union territories except matters with respect to Entries 1, 2 and 18 of the State List and Entries 64, 65 and 66 of that list insofar as they relate to the said Entries 1, 2 and 18. It was contended that Entry 18 of the State List pertained to “land” and therefore property taxes fell under that entry. And, since the legislative assembly of the National Capital Territory did not have the power to make a law in respect of Entry 18 of the State List, it, consequently, lacked legislative competence while enacting the Amendment Act of 2003 by which a new regime of property taxes based on the unit area method had been put in place replacing the old regime of property taxation under the said Act of 1957 which had been enacted by Parliament. It was also contended that Entry 64 of the State List insofar as it related to Entry 18 thereof was also excluded from the legislative powers of the legislative assembly of the National Capital Territory. Entry 64 referred to offences against laws with respect to any of the matters in the said list. It was submitted that the penalties prescribed under the Amendment Act of 2003, since they related to Entry 18 of the State List, were also beyond the legislative competence of the legislative assembly of the National Capital Terr