Appeal No 974 of 1964
Appeal by special leave from the judgment and order dated September 10 1964 of the High Court in Madhya Pradesh in Misc
Petition No 113 of 1964
up165 8 654 M C Setalvad section L Jain and M section Gupta for the appellants
A V Viswanatha Sastri B R L Iyengar section K Mehta and K L Mehta for respondent No 1
The Judgment of the Court was delivered by Mudholkar J
In this appeal from the judgment of the Madhya Pradesh High Court the question which arises for decision is whether the assessment list of house tax and conservancy tax confirmed by the Municipal Council Khurai at a special meeting on February 24 1964 is effective or is liable to be quashed on the ground that it was not made in accordance with the provisions of the Madhya Pradesh Municipalities Act 1961 hereafter referred to as the Act
The material facts are not in dispute
On December 28 1962 the Municipal Council by a resolution appointed a Sub Committee consisting of the Vice President and two Members for hearing objections under section 1382 of the Act against the new assessment which the Chief Municipal Officer would propose to make
On the 30th of that month the Chief Municipal Officer was directed to prepare the assessment lists for all the 11 words into which the municipal area has been divided
Up till then taxes were levied at the rate of Rs 7 12 0 per cent
on the annual letting value of the house properties and building sites liable to be taxed
On March 3 1963 the Council considered a proposal for introducing a slab system for assessing these proper ties
Upon that one of the members Smt
Poonabai suggested a modification of the office proposal and her suggestion was accepted by the majority of the members of the Council
On March 6 1963 the assessment list prepared by the Chief Municipal Officer in pursuance of the resolution was authenticated by him
It was then duly published that day under section 136 of the Act
Objections were also invited from the assessees
About 2200 objections were lodged which were considered by the Sub Committee between April 7 1963 and April 14 1963
In the meanwhile it would appear that a suit had been instituted by some of the assessees in which the validity of the resolution of March 3 1963 varying the rate of tax and seeking a permanent injunction against the Committee restraining it from giving effect to the new basis of assessment
The Committee it would appear realised that it could not vary the old rates without obtaining the sanction of the State Government and therefore in the written statement filed on its behalf made it clear that an early meeting would be held for deciding whether the resolution of March 3 1963 should not be given effect to
That 655 meeting was held on April 28 1963 and there the resolution of March 3 1963 was revoked and the old rate of assessment was reverted to
Numerous complaints were made by assessees to the effect that the Sub Committee had shown partiality in dealing with objections to assessments and had in fact shown favour to rich persons
The President of the Council enquired into the complaints and was satisfied that there was substance in them
In the meanwhile however pursuant to a decision of the Sub Committee dated August 21 1963 the assessment list as revised by the Sub Committee was authenticated by the Chief Municipal Officer as required by section 140 of the Act and was published on August 30 1963
It would appear that notices of demand were also issued against the assessees on the basis of the revised list
The President had in the meantime intimated to the Collector that the Sub Committee had shown partiality particularly to rich assessees and in vited him to suspend the revised list in exercise of his supervisory powers
On October 9 1963 the Collector made the following order In exercise of the powers delegated to me under section 323 of the MP Municipalities Act 1961 I hereby suspend the execution of the decision of the Sub Committee appointed by the Municipal Council Khurai under section 71v of the said Act for assessment of the House Tax and Latrine Tax vide its resolution No 2 dated 28 12 1962 as the decision taken by the said Committee is not in conformity with the law is detrimental to the interest of the Council and is causing annoyance to the public
The decision shall remain suspended until the assessment is properly revised afresh
 He forwarded a copy of the order to the Government of Madhya Pradesh and requested that his Order may be confirmed under section 323 2 of the Act
He made the following endorsement on the copy of the Order forwarded to the President of the Municipal Committee  Copy forwarded to the President Municipal Council Khurai for information and immediate necessary action in respect of the demand notices issued for recovery of the taxes
Apparently the assessment has not been properly made
No reasons for not accepting the overseer s valuation have been given and rich persons have been shown favour thereby
The Council 656 has thus defaulted in performing the duty imposed on it under the said Act
The Council is therefore called upon to show cause for its  failure as required under section 3271 of the said Act and to furnish its explanation within a period of 15 days to my office After receiving this communication the President caused a proclamation to be made bringing it to the notice of the assessees that the assessment list had been suspended and intimating to them that taxes on the basis of the revised list should not be paid
The Government acting upon the communication received from the Collector issued notice to the Council on December 2 1963 under section 3232 to show cause why the order passed by the Collector should not be confirmed
Eventually the Government confirmed the Collector s Order
On December 29 1963 the Council at a special meeting resolved that the assessment lists should be revised under section 141 of the Act
On January 7 1964 the Council issued individual notices to 300 persons to show cause why the annual letting value of their properties should not be enhanced
The Council heard the objections between February 16 1964 and February 20 1964 and revised the assessments of some or all the persons to whom notices had been issued
On February 24 1964 the Council at a special meeting confirmed the revised assessment as from April 1 1963
Its resolution was authenticated on March 4 1964 under section 1401 by the Chief Municipal Officer and according to the Council the assessment list then became final
It is after this that the writ petition out of which the present appeal arises was presented before the High Court by some of the assessees
It was supported before it on four grounds which have been summarised thus by the High Court in its judgment 1 The Municipal Council Khurai was not competent to appoint a Sub Committee for the purpose of hearing and deciding the objections made against the assessment list
2 The notice given for lodging objections against the assessment list was not in accordance with the provisions of the Act
3 The Municipal Council acted illegally and without jurisdiction in adopting a slab system with different and varying rates in disregard of the rate of Rs 713 657 per cent at which the house tax had been initially imposed
4 When the execution of the decision of the SubCommittee dated 21st August 1963 was suspended and subsequently revoked it was not open to the Municipal Council to have recourse to section 141 of the Act for making limited amendments in the assessment list
The Municipal Council had to prepare an assessment list de novo in accordance with the provisions of the Act including those made by sections 137 138 and 140 of the Act The High Court thought it unnecessary to consider the first three of these grounds because in its opinion the fourth ground was sufficient for granting relief to the assessees
According to the High Court the assessment list which had been confirmed by the Council on February 24 1964 and sought to be given effect to was not a valid assessment list because the Municipal Council gave notice only to 300 assessees and heard their objections and not the remaining 1900 assessees
Before us it is contended by Mr Setalvad on behalf of the Council that an appeal had already been preferred by the respondents against the assessment list and therefore they were not entitled to any relief under article 226 of the Constitution
It is true that the High Court would not ordinarily entertain a petition under article 226 of the Constitution where an alternative remedy is open to the aggrieved party
Though that is so the High Court has jurisdiction to grant relief to such a party if it thinks proper to do so in the circumstances of the case
In the present case the High Court has chosen to exercise discretion in favour of the respondents and it would not be right for us to interfere with the exercise of that discretion unless we are satisfied that the action of the High Court was arbitrary or unreasonable
Nothing has been brought to our notice from which it could be inferred that the High Court acted arbitrarily in granting the writ prayed for to the respondents
Coming to the merits Mr Setalvad contends that the list having been authenticated by the Chief Municipal Officer under section 140 it became final and therefore under section 141 of the Act it was open to the Municipal Council to amend the assessment list
Sub section 1 of that section without the proviso is the only part which is relevant for our purpose and it reads thus 658 The Council may at any time amend the assessment list by the inclusion omission or substitution of any matter Mr B R L lyengar for the respondents however contends that section 1411 can be availed of only for correcting arithmetical errors or other similar errors and not for revising the taxes
Further according to him this provision is available only with respect to the amendment of a current list and that since the assessment list had not become final under section 142 it could not be amended under section 141
Then according to him the appropriate provision to which resort could be had was section 146 of the Act
Mr Iyengar also raised a third argument which is to the effect that since the assessment list had been suspended by the Collector under his Order made under section 323 of the Act the Council had no power to amend it under section 141
The final argument advanced by him was that the power of hearing objections or of revising the list could not be delegated to the Sub Committee and that therefore the revised list was bad in law
It is not disputed before us that the procedure laid down in sections 134 135 and 136 of the Act for the assessment of buildings and lands to pay the tax was duly followed
It is also not disputed that 2200 objections were lodged with the Municipal Council which were investigated and dealt with by the Sub Committee appointed by the Municipal Council
Mr Setalvad therefore contends that having followed this procedure the next step was the authentication of assessment lists by the Chief Municipal Officer as required by section 1401
This procedure was also followed and therefore the assessment list became final and the Municipal Council had the power to amend it under section 141 1 of the Act
Mr lyengar however contends that the provisional assessment list which was prepared under section 1341 of the Act and published under section 136 was upon the basis of the new rates of taxes which had been imposed by the Municipal Council on March 3 1963
According to him as the Resolution of March 3 1963 was revoked on April 28 1963 and the old rate of Rs 713 per cent
was reverted to it was necessary to publish a fresh assessment list on its basis
His further objection which we have already indicated is that the objections could be dealt with not by the Sub Committee but by the Municipal Council as a whole
In view of these defects the assessment list did not become final by reason of its authentication by the Chief Municipal Officer under section 140
According to Mr Setalvad these objections were not urged before the High Court
But that is not quite accurate
We 659 have already quoted from the judgment of the High Court the summary of the grounds urged before it and the objections of Mr lyengar are to be found in the first two grounds
It is true that the High Court did not think it necessary to deal with these grounds upon the view which it took on the fourth ground which was urged before it
But that does not preclude us from considering those grounds
In our opinion both the grounds are substantial and strike at the very root of the finality of the assessment list which was purported to be authenticated by the Chief Municipal Officer under section 140
The assessment list which has to be published under section 136 of the Act must contain full and accurate particulars specified in section 1341 of the Act
Amongst those particulars are the following  1 Valuation of the property based on capital or annual letting value as the case may be on which the property is assessed 2 the rate of tax applicable 3 the amount of tax assessed thereon
In view of the fact that the resolution of March 3 1963 on the basis of which the list was published had been revoked the particulars mentioned in the second and the third of the above items would necessarily be different from those which would be arrived at after taking into account the resolution of April 28 1963
Under article 265 of the Constitution no tax shall be levied or collected except by authority of law
This clearly implies that the procedure for imposing the liability to pay a tax has to be strictly complied with
Where it is not so complied with the liability to pay the tax cannot be said to be according to law
The objections which the assessees had filed in pursuance of the notification actually published by the Chief Municipal Officer were based upon the list published under section 136 and not in pursuance of what the liability would be under the Resolution of the Municipal Council dated April 28 1963
Therefore it cannot he said that the opportunity as contemplated by the Act was at all given to the assessees for lodging their objections as required by section 137 of the Act
Moreover Mr Setalvad was not able to point out to us any provision of the Act or of the rules except section 78 whereunder the Council could delegate its function of hearing and deciding objections to a Sub Committee
Section 78 reads thus Any powers or duties or executive functions which may be exercised or performed by or on behalf of the 660 Council may in accordance with the rules made under this Act be delegated by the Council to the President or Vice President or to the Chairman of the Standing or other Committees or to one or more stipendiary or honorary officers but without prejudice to any powers that may have been conferred on the Chief Municipal Officer by or under section 92 Even assuming that under this provision the power of the Council of hearing objections could be delegated the delegation can presumably be only in favour of the persons mentioned in section 78 quoted above
It cannot be in favour of a Sub Committee or a Committee
It is true that the Convenor of the Sub Committee appointed by the Council was the Vice President but the delegation was not to him alone but to the Sub Committee
The two arc not the same thing because while in one case the right to decide an objection would be solely exercisable by the Vice President in the other it will be exercisable by the Sub Committee as a whole
If there is unanimity amongst the members of the Sub Committee no prejudice may be caused
But if the Vice President is of one opinion and the other two members are of a different opinion the decision of the Sub Committee cannot be said to be that of the Vice President at all
But to the contrary
For these reasons we are of opinion that the assessment list authenticated by the Chief Municipal Officer was not prepared according to law and therefore the provisions of section 141 were not available to the Council
Upon the view we take we do not find it necessary to consider whether the reason given by the High Court is right or not
The appeal is therefore dismissed with costs
Appeal dismissed


Summary:
An assessment list of house and conservancy taxes was prepared on the basis that a slab system of taxation would apply and was published by the appellant under section 136 of the MP Municipalities Act 1961
The assessees filed objections to it under section 1382
The appellant later re voked the slab system and reverted to the old rate of assessment
A sub committee appointed by the appellant considered the objections filed to the list and completed its revision
The final list was published after authentication
when some complaints of partiality in its preparation were made the list was suspended
The appellant then decided to amend the list under section 141 and after issuing notices to some assessees and after hearing their objections a new list was authenticated and published
The respondents having preferred an appeal against the new assessment list under the Act also challenged it in writ petition to the High Court
The High Court allowed the petition
On appeal to the Supreme Court
HELD  The assessment list authenticated by the Chief Municipal Officer was not prepared according to law and therefore the provisions of s141 were not available to the appellant
660 E i Article 265 of the Constitution implies that the procedure for imposing the liability to pay a tax has to be strictly complied with
Since in the instant case the objections which the assessees had filed were in respect of the list compiled on the basis that the slab system would apply and not in pursuance of what the liability would be upon the reversion to the old rate of tax it could not be said that the opportunity as contemplated by the Act was given to the assessees for lodging their objections as required by section 137 of the Act
659 E G ii Assuming that under section 78 the appellant council could delegate the power to hear objections against a proposed list under section 1382 to its vice president or certain other officers this power could not be delegated to a sub committee
660 B C iii Though an alternate remedy is open to an aggrieved party the High Court has jurisdiction under article 226 to give relief to such a party in appropriate cases
657 FF