Case: Barsi Municipal Council Barsi, District Dholapur Vs. Lokamanya Mills, Barsi, Ltd., Barsi And Another(With Connec

1. The respondents in these appeals filed writ petitions in the Bombay High Court challenging the validity of the Borough Municipalities (Validation of Certain Taxes on Buildings and Lands) Act, 1965 (Maharashtra Act No. III of 1966), hereinafter called the "Validating Act", on the ground that the provisions of the Act violated their fundamental rights under Article 14 of the Constitution and for restraining the appellants from levying house tax on the mills, factories and buildings connected therewith of the respondents or collecting the same from them. A Division Bench of the High Court held that Sections 3 (b), 4 (1), 4 (2) and 5 of the Validating Act were invalid as they contravened Article 14 and granted the prayer for restraining the appellant-Municipality from levy and collecting the tax.2. These appeals, by certificate, are directed against the judgment of the Division Bench.

Court's reasoning:
9. It may be recalled that Rule 2 (c) was struck down by this Court in (1962) 1 SCR 306  = (AIR 1961 SC 1358 ) on the basis that the Boroughs Act authorised levy of house tax only on the basis of annual letting value or capital value of the land or building as the case may be, and that Rule 2 (c) as it purported to levy house tax on the basis of the floor area was ultra vires the Act.10. When the rule was struck down by this Court, the effect was, that the rule could never be deemed to have been passed. Apart from Rule 2 (c), there was no charging provision similar to Rule 2 (c) either in the Boroughs Act, or in the Validating Act for levying house tax on mills, factories and buildings connected therewith. After Rule 2 (c) was struck down, the Municipality did not frame any rule under the provision of Section 75 of the Boroughs Act for imposing house tax on mills, factories or buildings connected therewith. The Validating Act has not also revived or resurrected Rule 2 (c). Therefore, the position was that there was no charging provision for imposition of house tax on the mills, factories or buildings connected therewith. It is only if there was a charging provision for imposing house tax on the mills, factories or buildings connected therewith that any house tax could be imposed upon the mills, factories or buildings connected therewith of the respondents. All that the explanation to Section 75 substituted by the Validating Act did was to enact that, for imposing house tax, floor area will be the basis of valuation in the case of mills, factories or buildings connected therewith. The consequence is that there could be no levy of house tax on the mills, factories or buildings connected therewith of the respondents nor could any demand be made on the respondents on the basis of any levy. The High Court was, therefore, right in restraining the appellant-Municipality from levying house tax on the mills, factories or buildings connected therewith of the respondents and in quashing the demand notice issued.11. Section 4 did not resurrect Rule 2 (c) with retrospective effect in order that it might be said that there was, in the eye of law, a provision for charging house tax on mills, factories or buildings connected therewith so that the tax levied and collected might be validated. Even if Section 4 had resurrected Rule 2 (c) and said that it shall be deemed to have been passed under the Validating Act with retrospective effect, that might not have cured its invalidity on account of its being violated of Article 14 of the Constitution as it imposed a flat rate on the floor area without making any classification of the area on the basis of income, productivity, or age of building, etc. But we do not think it necessary to pass upon this hypothetical question as Section 4 did not revive or resurrect Rule 2 (c), much less, give it retrospective operation.12. In this view, we have no occasion to reach the constitutional question as regards the validity of the impugned sections of the Validating Act and we express no opinion upon it. We think that it was not necessary for the High Court to have struck down the provisions of Sections 3 (b), 4 (1), 4 (2) and 5 of the Validating Act. When Rule 2 (c) was held to be inoperative by virtue of the decision of this Court, all the reliefs claimed by the respondents in the writ petitions could have been given to them without striking down these provisions. It is a wise tradition with Courts not to decide a constitutional question if the case can be disposed of on other grounds.