Case: Zila Parishad Moradabad Vs. Nundan Sugar Mills, Amroha

2. The relevant facts out of which this appeal arises are these: On July 28, 1925, it was notified under sub-section (2) of Section 120 of the Act that the District Board of Moradabad, in exercise of the powers conferred by Section 108 sub-section (2), of the Act has imposed the following tax with effect from September l, 1925 :"A tax on all persons ordinarily residing or carrying on business in the rural area of the Moradabad District according to their circumstances and property, at the rate of four pies per rupee on the total taxable income; provided that the total amount of tax imposed on any person shall not exceed Rs. 200. Provided also that no income once assessed shall be reassessed."On May 28, 1927, the District Board took action upon a memorandum prepared by the Chairman of the District Board. The memorandum of the Chairman pointed out :".....the maximum amount of tax recoverable from an assessee should be raised from Rs. 200 to Rs. 500 P. A. Hence proposal (c) framed under Section 115 sanctioned by G. O. No........ dated 28-7-25 be so modified as to read as under :"That there shall be a rate of tax of 4 pies in the rupee ....provided that the total amount of tax imposed on any person shall not exceed Rs. 500/- ...."3. The resolution of the Board was in these terms:"The bye-laws be modified accordingly after necessary publication and sanction. The assessing officer to assess them at 2 pies (sic) in anticipation of final sanction."4. On January 11, 1928, the Government of United Provinces issued a notification amending the rules for the assessment and collection of tax on circumstances and property in the rural areas of the Moradabad District. The following rule 16 was added :"16. The total amount of tax imposed on any person shall not in any year exceed the sum of Rs. 500/-."5. On August 31, 1931, the Board passed another resolution approving the following memorandum :"..........The words and figures Rs. 500 be substituted by Rs. 2000 in rule 16 of the rules for the assessment and collection of a tax on circumstances and property in the rural area of the Moradabad district published with Government Notification No....... dated 11-l -1928."6. The exact terms of the resolution were :"Resolved unanimously that the memo be approved and necessary action be taken on it. If publication is required, it be done and Government be moved to accord sanction for the same."On March 18, 1933, the Government of United Provinces issued a notification amending Rule 16. The amendment was in the following terms :"Rule 16 published with notification No. 33/IX-185(14-24) dated January 19, 1928 Rs. 2000 shall be substituted for Rs. 5007. It appears that no further action was taken by the District Board to enforce this amendment in rule 16 or the amendment dated January 11, 1928. Further action is contemplated by Sections 119 and 120, read with Section 121, of the Act8. It is common ground that the procedure laid down in Sections 115 to 118 has been followed by the Board. The only dispute between the parties is whether it is necessary that a resolution should be passed under Section 119 and a notification issued under Section 120 before effect can be given to a notification made under Section 118 altering the rules. In other words, was it necessary to pass a resolution under S. 119 after the issue of the notification dated March 18, 1932, or the notification dated January 11, 1928, referred to above? Both the learned Single Judge, and the Division Bench who heard the appeal from the learned Single Judge, have come to the conclusion that without a resolution under S. 119 and a notification under Section 120, no tax can be levied in pursuance of the notification dated March 18, 1932, or notification dated January 11, 1928.

Reasoning: There is no dispute that the Board could levy upon the petitioner tax up to the sum of Rs. 200we are unable to see to how that case assists him. No question of Sections 119 and 120 being directory arises in this case because in our view without a resolution under Section 119 and a notification under Section 120, no tax can be imposed13. In our view, there is no merit in these contentions. The respondent is being charged tax now. He is entitled not to be taxed except under the authority of law, vide Article 265 of the Constitution. There is no question of challenging any pre-Constitution matter. The respondent is challenging a post-Constitution action on the ground that there is no authority of law for the action14. Regarding the second point, the High Court held that an appeal to the District Magistrate under Section 128 was not likely to be of much assistance to the petitioner and rejected the contention. It is well settled that provision like Section 128 does not oust the jurisdiction of the High Court to entertain a petition under Art. 226 and it is for the High Court to exercise its discretion whether to entertain the petition or not. The learned Counsel has not pointed out anything to us to show that the discretion has not been properly exercised.