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1973 DIGILAW 451 (ALL)

Sumer Chand Jain v. Zila Parishad

1973-10-10

H.N.SETH, HARI SWAMP

body1973
JUDGMENT H.N. Seth, J. - Petitioner Sumer Chand Jain operates his stage carriages on the Meerut-Fattapur and Meerut-Laliyama routes. By means of demand notices dt. 24-12-1972 and 13-12-1972, Karya Adhikari. Zila Parishad Meerut, demanded a sum of Rs. 1112/- as Circumstances and Property Tax, dues from the Petitioner. By means of this petition Under Article 226 of the Constitution the Petitioner prays for a direction that the Zila Parishad Meerut be restrained from realising any circumstance and property tax, as according to him, the same has not been imposed in accordance with law. 2. Relevant facts as appearing from various affidavits filed in the case and in respect of which there is no dispute between the parties are that the Distt. Board Meerut vide its resolution dt. 1-8-1924 decided to impose tax on circumstances and property, u/s 108(b) of the Distt. Boards Act. Subsequently, on 22/23-12-192 it passed a special resolution approving the draft proposal for the imposition of Circumstance and Property tax, as required by Section 115(1) of the Act. It also prepared the draft rules as required by Section 115(2) of the Act and published the same along with the proposal for the imposition of the tax as required by Section 115(3) of the Act. In due course after finally settling the proposals the Board forwarded the proposal for the imposition of the tax as also the draft rules to the State Govt. The State Govt. then published the draft rules in the State Gazette and invited objections thereon. After finalising the Rules, the State Govt. forwarded the same to the Distt. Board which on 21-12-1925 passed a special resolution as required by Section 119 of the Act specifying that the circumstance and property tax as sanctioned by the State Govt. was to be enforced with effect from 1-4-1926. A copy of the Rules which were approved by the State Govt. and after receiving which the Board passed the special resolution dt. 21-12-1925, has been filed as Annexure 1 to the writ petition. These Rules did net make any reference to the person or the class of persons who were to be made liable for the payment of Circumstance aid Property Tax. After receipt of the resolution passed by the Board u/s 119 of the Act, the Local Govt. notified the imposition of the tax with effect from 1-4-1926 vide notification dt. 13-1-1926. These Rules did net make any reference to the person or the class of persons who were to be made liable for the payment of Circumstance aid Property Tax. After receipt of the resolution passed by the Board u/s 119 of the Act, the Local Govt. notified the imposition of the tax with effect from 1-4-1926 vide notification dt. 13-1-1926. However, it was subsequently realised that the resolution of the Distt. Board dt. 21-12-1925, imposing Circumstance and Property Tax with effect from (sic)-4-1926 was in contravention of Section 119 of the Act which provided that the pate of imposition of tax should not be (sic) than six weeks from the date of the resolution. The State Govt. therefore vide notification dt. 27-1-1927, cancelled its notification dt. 13-1-1926. Thereafter the Distt. Board passed a fresh resolution dt. 28-3-1927 and resolved that the Circumstance and Property Tax be imposed with effect from 15-5-1927 and the State Govt. issued a notification dt. 22-4-1927 u/s 120(2) of the Distt. Boards Act specifying that the tax shall be imposed with effect from 15-5-1927. On 27-1-1930 the State Govt., in supersession of the earlier Rules enforced a new set of Rules for the assessment and collection of Circumstance and Property tax in the district of Meerut. In these Rules also, there was no reference to the persons or the class of persons who had been made liable for the Circumstances and Property Tax. Subsequently, the rules as enforced on 27-1-1930 were again subjected to some amendments and finally on 8-(sic)-1946 the existing rules were so amended that a new rule was added stating for the first time that every person residing or carrying on business in the rural area bf Meerut district shall be assessed to Circumstance and Property Tax. 3. Learned Counsel for the Petitioner contends that before Circumstance and Property tax can be validly imposed by means of a notification issued u/s 120(2) of the Distt. Boards Act, it is absolutely necessary that the State Govt. must, in accordance with' law, frame' Rules for assessment and collection of the Circumstance and Property Tax u/s 172 of the Distt. Boards Act. Any notification u/s 120(2) of the Act imposing Circumstance and Property Tax, without framing valid rules would be invalid. In this case, the rules promulgated by the State Govt. must, in accordance with' law, frame' Rules for assessment and collection of the Circumstance and Property Tax u/s 172 of the Distt. Boards Act. Any notification u/s 120(2) of the Act imposing Circumstance and Property Tax, without framing valid rules would be invalid. In this case, the rules promulgated by the State Govt. on 21-12-1925', as substituted by the Rules framed on 27-1-1930, amended from time to time till the amendment made on 8-6-1946 were invalid, inasmuch as they did not specify the person or the class of persons who had been made liable for the payment of Circumstance and Property tax. This specification in the rules was made for the first time on 8-6-1946 and if at all, the valid Rules came to be framed by the State Govt. on that date. Consequently, the notification issued u/s 120(2) on 27-3-1927 prior to the framing of valid ruled imposing Circumstance and Property Tax with effect from 15-5-1927 was invalid. Since no fresh notification u/s 120(2) was ever issued after the Rules had been properly amended on 8-6-1946, no Circumstance and Property Tax had been imposed by the Distt. Board Meerut and its successor Zila Parishad Meerut could not seek to recover anything from the Petitioner on that account. The demand notices dt. 24-12-1972 and 30-12-1972 are therefore invalid and are liable to be quashed. 4. The procedure for imposition of tax in the nature of Circumstance and Property Tax has been laid down in Sections 115 to 120 of the Distt. Boards Act. u/s 115(1), whenever the Distt. Board desires to impose tax, it has to pass a special resolution framing a proposal and specifying the tax which it proposes to impose as also the persons or class of persons who are to be made liable for the tax. Sub-section (2) the requires the Board to prepare draft Rules which it desires the Local Govt. to make in respect of matters contained in Section 123 of the Act, i.e., for providing a machinery for assessment and collection of the tax. The proposal for imposition of tax, made u/s 115(1) along with draft Rules has to be published by the Board. Section 116 then affords an opportunity to the persons concerned to object to the proposal for imposition of the tax. The proposal for imposition of tax, made u/s 115(1) along with draft Rules has to be published by the Board. Section 116 then affords an opportunity to the persons concerned to object to the proposal for imposition of the tax. After considering the objections, if any, the Board is to finalise the proposal and to forward the same to the State Govt. along with the objections received by it. The Local Govt. then considers the objections and thereafter it either refuses or sanctions the proposal, or returns the same to the Board for further consideration, or sanctions it with such modification that does not involve an increase of the amount of tax sought to be imposed. After the State Govt. has sanctioned the proposal for imposition of the tax, it proceeds to consider the draft Rules, for the assessment and collection of the tax submitted by the Board and to frame the same. After framing those rules the State Govt. sends the same to the Board. Thereafter, Section 119 of the Act requires the Board to pass a special resolution directing the imposition of the tax with effect from the date to be specified therein not less than six weeks from the date of the resolution. The special resolution u/s 119 is then forwarded to the State Govt. which publishes a notification u/s 120(2) of the Act and the tax stands imposed with effect from the appointed date. 5. Aforesaid scheme for the imposition of Circumstance and Property Tax clearly indicates that the framing of the proposal for imposing the Circumstances and Property Tax and the Rules for its assessment and collection and other matters connected therewith, are two distinct and different matters. What is to be contained in the proposal for the imposition of the Circumstance and Property Tax is contained in Section 115 of the Distt. Boards Act. According to this section the person or class of persons who are to be made liable for the tax has mention in the proposal for the imposition of Circumstance and Property Tax. Section 123 which lays down the matters which are to be governed by Rules to be framed for the purpose runs thus: 123. Rule as to assessment, collection and other matters. The following matters shall be governed by rules except in so far as provision therefor is made by this Act viz: (a) Assessment and collection of taxes. Section 123 which lays down the matters which are to be governed by Rules to be framed for the purpose runs thus: 123. Rule as to assessment, collection and other matters. The following matters shall be governed by rules except in so far as provision therefor is made by this Act viz: (a) Assessment and collection of taxes. (b) Prevention of evasion of taxes (c) The system on which refunds shall be allowed and paid, (d) The fees for notice demanding payments on account of a tax on circumstance and property and for execution of the warrant of distress, (e) The rate to be charged for maintaining distrained and (f) Any other matter relating to taxes, in respect of which this Act makes no provision or insufficient provision and provision is in the opinion of the Local Government necessary. 6. This section nowhere provides that the Rules fur assessment and Collection are also to contain the description of person or class of persons who have been made liable for Circumstance and Property Tax. Learned Counsel for the Petitioner contended that Section 123(a) requires that the matter relating to assessment of tax is to be governed by the Rules. The expression assessment of taxes is an expression of vide import and envisages the making of provision regarding the persons or class of persons who are to be made liable for the tax as well. In our opinion, this argument cannot be accepted. The opening words of Section 123 are to the effect that except in so far as provision thereof has been made by the Act, the assessment and collection of taxes would be governed by the Rules to be framed under that section. Similar indication is there in Section 123(1) when it provides that State Govt. should make rules regarding such matter relating to taxes in respect of which the Act makes no provision or mages insufficient provision. Section 115(1)(b) clearly provides that specification about ft he person or the class of persons to tie made liable for the tax, is to be made in the proposal for imposition of the tax which is to be ultimately sanctioned by the State Govt. Section 115(1)(b) clearly provides that specification about ft he person or the class of persons to tie made liable for the tax, is to be made in the proposal for imposition of the tax which is to be ultimately sanctioned by the State Govt. As the provision regarding the specification of persons or class off persons to be made liable to tax is to be found in Section 115 of the Act, it is not a matter which according to Section 123 of the Act would be governed by the rules to be framed by the State Govt. It is therefore not possible to read the expression "assessment" used in Section 123, in a sense covering within its ambit a provision regarding specification of the persons or class of persons sought to be made liable for payment of tax. Accordingly, the rules framed by the Govt. in the year 1925 as substituted by 1930 Rules and amended from time to time were not invalid merely because they did not specify the persons or the class of persons who were sought to be made liable by the Board for Circumstances and Property Tax. The specification of the persons made liable to tax is to be found in the proposal made by the Board for the imposition of tax, which was ultimately sanctioned by the State Govt. Since there was no defect in the Rules framed by the State Govt. on 21-12-1925 it could not be said that the imposition of tax, vide notification dt. 22-4-1927 issued u/s 120(2) of the Act with effect from 15-5-1927 was invalid. Any subsequent amendment (Amendment dt. 8-6-1946) made in the rules cannot invalidate the imposition and it was not at all necessary for the State Govt. to issue any further notification u/s 120(2) after the rules were amended on 8-6-1946. We accordingly find no substance in the aforesaid argument raised by the Petitioner. 7. Learned Counsel for the Petitioner did not question the validity of the tax in question on any other ground. Since the only argument raised in the case has no substance, the writ petition fails and is dismissed with colts.