Case: Gujarat Agro Industries Corpn. Ltd Vs. Muniicipal Corpn. Of Ahmedabad

This batch of appeals arises out of judgment dated October 9, 1980 passed by the Division Bench of the Gujarat High Court holding that Section 406(2)(e) of the Bombay Provincial Municipal Corporations Act, 1949 in its applications to Ahmedabad in the State of Gujarat was a valid piece of legislation. Section 406 of the Act we may set out here andSubject to the provisions hereinafter contained appeals against any rateable value or tax fixed or charged under this Act shall be heard and determined by the Judge.(2) No such appeal shall be entertained unless -(a) it is brought within fifteen days after the accrual of the cause of complaint;(b) in the case of an appeal against a rateable value of complaint has previously been made to the Commissioner as provided under this Act and such complaint has been disposed of;(c) in the case of an appeal against any tax in respect of which provision exists under this Act for a complaint to be made to the Commissioner against the demand, such complaint has previously been made and disposed of;(d) in the case of an appeal against any amendment made in the assessment book for property taxes during the official year, a complaint has been made by the person aggrieved within fifteen days after he first received notice of such amendment and his complaint has been disposed of;(e) in the case of an appeal against a tax, or in the case of an appeal made against a rateable value, the amount of the disputed tax claimed from the appellant, or the amount of the tax chargeable on the basis of the disputed rateable value up to the date of filing the appeal, has been deposited by the appellant with the Commissioner.Provided that where in any particular case the judge is of the opinion that the deposit of the amount by the appellant will cause undue hardship to him, the judge may in his discretion, either unconditionally or subject to such conditions as he may think fit to impose, dispense with a part of the amount deposited so however that the part of the amount so dispensed with shall not exceed twenty five per cent of the amount deposited or required to beis defined in Section 2(29) of the Act to mean in the City of Ahmedabad the Chief Judge of the Court of Small Causes or such other Judge of the Court as the Chief Judge may appoint in his behalf and in any other City and Civil Judge (Senior Division) having jurisdiction in the City. Section 406 suffered some amendments. In sub-section (2) for the words "shall be heard" were substituted by shall be entertained." Proviso to clause (e) of sub-section (2) was first added by Gujarat amendment 5 of 1970. This proviso (as it now exists) was then substitutional Gujarat Amendment 1 ofin all these appeals own properties in the City of Ahmedabad. They are liable to pay property tax which is a tax on building and lands in the City Property tax is revisable every four years. When last revision took place, appellants challenged those assessments in appeals which they filed before the Judge under Section 406(1) of the Act after bills were presented by the Municipal Corporation to them. During the pendency of appeals before the Judge, appellants prayed for stay of recovery of the property tax. In view of proviso to clause (e) of Section 406(2) of the Act, the Judge could not give effective interim relief to the appellants as exemption from payment of property tax could not be more than 25% of the amount of the property tax demanded from the appellants. The appellants therefor challenged the constitutional validity of clause (e) of sub-section (2) of Section 406 contending that it was violative of Article 14 of theDivision Bench who heard the writ petitions considered the earlier history of amendments to clause (e) of Section 406(2) of the Act. Clause (e), as it originally stood at the time when the Act was made applicable to the City of Ahmedabad, read as undersuch appeal shall be heard unless -.... ..... .....in the case of an appeal against a tax or in the case of an appeal made against a rateable value after a bill for any property tax assessed upon such value has been presented to the appellant, the claimed from the appellant has been deposited by him with theDivision Bench of the Gujarat High Court in SCA No. 662 of 1968 decided on October 27, 1969 held that clause (e) violated Article 14 of the Constitution. It is not necessary for us to go into the reasons which weighed with the Court in reaching such a conclusion. By Gujarat Act 5 of 1970 following proviso was added to clause (e)that where in any particular case the Judge is of opinion that the deposit of the amount by the appellant will cause undue hardship to him; the Judge may in his discretion dispense with such deposit or part thereof either unconditionally or subject to such conditions as he may deedproviso also came to be challenged before the Gujarat High Court on the same very plea that it violated the provisions of Article 14 of the Constitution. This time also a Division Bench of the High Court held that clause (e) violated Article 14 of the Constitution. This decision of the High Court was challenged in this Court in The Anant Mills Co. Ltd. v. State of Gujarat and others, 1975(2) SCC 175. This Court reversed the decision of the High Court and held that clause (e) with the added proviso did not violate article 14 of the Constitution. Ã¯7Â?3  ÅNow it is this amended clause (e) and the proviso which were subject matter of the constitutional challenge in the High Court and by the impugned judgment, High Court held the same to be constitutionally valid and dismissed all the petitions filed before it.

Reasoning:
It is not necessary for us to refer to other decisions asserting the same principle time and again. When the statement of law is so clear, we find no difficulty in upholding the vires of clause (e) of sub-section (2) of Section 406 read with proviso thereto. Any challenge to its constitutional validity on the ground that onerous conditions have been imposed and right to appeal has become illusory must bealso note that under clause (e) of sub-section (2) of Section 406, a complaint lies to the Municipal Commissioner against imposition of any property tax and only after that when the complaint is disposed of that appeal can be filed. Appeal to the Court as provided in clause (e) may appear to be rather a second appeal. Then under Section 406 of the Act provisions exist for referring the matter to arbitration. Under sub-section (1) of Section 408 where any person aggrieved by any order fixing or charging any rateable value or tax under the Act desires that any matter in difference between him and the other parties interested in such order should be referred to arbitration, then, if all such parties agree to do so, they may apply to the Court for an order of reference on such matter and when such an order is made provisions relating to arbitration in suits shall apply. That apart, if a person cannot avail of the right of appeal under Section 406 of the Act, other remedies are available to him under the law. In that case, it may not be possible for the Municipal Corporation to contend that an alternative remedy of appeal exist under Section 406 of theleave was granted in these appeals by order dated December 12, 1980 this Court granted stay on the condition that seventy-five per cent of the tax is deposited with the Municipal Corporation within two months from that date and on such deposit being made, the appeals be heard and disposed of (by the Judge) and we believe by this time the appeals filed before the Judge under Section 406 must have been disposedthe arguments stated in these matters, on the statement of learned Counsel for the appellant two appeals bearing Nos. 3018-19/80 were dismissed as withdrawn.