Case: Municipal Council, Khurai And Another Vs. Kamal Kumar &amp; Another

2. The material facts are not in dispute. On December 28, 1962 the Municipal Council by a resolution, appointed aconsisting of theand two Members for hearing objections under S. 138 (2) 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 wards into which the municipal area has been divided.then taxes were levied at the rate of Rs.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 properties. 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 S. 136 of the Act. Objections were also invited from the assessees. About 2,200 objections were lodged which were considered by thebetween 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 That meeting was held on April 28, 1963 and there the resoltition of March 3, 1963 was revoked and the old rate of assessment was reverted to.3. Numerous complaints were made by assessees to the effect that thehad 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 thedated August 21, 1963 the assessment list as revised by thewas authenticated by the Chief Municipal Officer as required by S. 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 thehad shown partiality, particularly to rich assessees and invited him to suspend the revised list in exercise of his supervisory powers. On October 9, 1963 the Collector made the followingexercise of the powers delegated to me under S. 323 of the M. P. Municipalities Act; 1961 I hereby suspend the execution of the decision of theappointed by the Municipal Council, Khurai, under S. 71 (v) of the said Act for assessment of the House Tax and Latrine Tax, vide its resolution No. 2 datedas 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 revisedforwarded a copy of the order to the Government of Madhya Pradesh and requested that his Order may be confirmed under S. 323 (2) of the Act. He made the following endorsement on the copy of the order forwarded to the President of the Municipalforwarded 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 overseers valuation have been given and rich persons have been shown favour thereby. The Council 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 S. 327 (1) of the said Act and to furnish its explanation within a period of 15 days to my office.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 S. 323 (2) to show cause why the order passed by the Collector should not be confirmed. Eventually the Government confirmed the Collectors Order.4. On December 29, 1963 the Council, at a special meeting, resolved that the assessment lists should be revised under S. 141 bf 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 assessment 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 S. 140 (1) by the Chief Municipal Officer and according to the Council the assessment list then became final.5. 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 itsThe Municipal Council, Khurai, was not competent to appoint afor 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 adopting a slab system with different and varying rates in disregard of the rate of Rs.per cent at which the house tax had been initially imposed.4. When the execution of the decision of thedated 21st August, 1968 was suspended (and subsequently revoked), it was not open to the Municipal Council to have recourse to S. 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 Ss. 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.

Court's reasoning:
It is true that the High Court would not ordinarily entertain a petition under Art. 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.It is not disputed before us that the procedure laid down in Ss. 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 2,200 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 S. 140 (1). This procedure was also followed and, therefore, the assessment list became final and the Municipal Council had the power to amend it under S. 141 (1) of theis 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 S. 140.The assessment list which has to be published under S. 136 of the Act must contain full and accurate particulars specified in S. 134 (1) of theview 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 Art. 265 of the Constitution no tax shall be levied or collected except by authority of law. This clearly implies that the procedure for imposing with 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 S. 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 be said that the opportunity as contemplated the Act was at all given to the assessees for lodging their objections as required by S. 137 of the Act, Moreover, Mr. Setaldvad was not able to point out to us any provision of the Act or of the rules except S. 78, whereunder the Council could delegate its function of hearing and deciding objections to aassuming 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 S. 78 quoted above. It cannot be in favour of a Sub-Committee or a Committee. It is true that the Convener 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 are 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.