N. H. BHATT, J. ( 1 ) * * * * ( 2 ) THE controversy for the period subsequent to 11-3-72 arises in the following manner. The panchayat had already valued the properties for the purpose of levying house tax. Panchayat had adopted capital value as the basis. The education cess is to be charged on the basis of annual letting value. The annual letting value as defined in clause (i) of sec. 2 of the Act (Gujarat Education Cess Act 1962 provides a mode of converting capital value into annual letting value for the purpose of levying education cess. The panchayat by following the proper procedure assessed the properties on the basis of capital value. Is it open to the Collector then to insist on his own assessment of annual letting value ? The fate of this petition hangs on the reply to this question one way or the other. According to Mr. Hathi for the petitioners the moment a valid assessment is prepared by the local authority concerned the State Governments power to act under proviso to sec. 15 (1) is taken away. The words that were pressed into service in support of that submission are for the time being. To me also it appears clear that the State Governments power to direct the Collector to collect the tax is confined only to two contingencies provided for in that proviso namely (1) the local authority is not for the time being levying a property tax; and (2) where a local authority has made a default in the collection of the tax or payment thereof to the State Government. In no other case the State Governments power to direct the Collector to collect the tax is there. Bantva admittedly is an urban area and under sec 15 (1) (b) Bantva nagar panchayat alone is competent to collect the education cess and ultimately transmit it to the State Government. The State Governments power to direct and the force of the said direction are operative only as long as the urban authority for the Relevant time does not levy the property tax or the local authority commits default in the collection of the tax and its payment thereof to the State Govt. The State Governments power to direct and the force of the said direction are operative only as long as the urban authority for the Relevant time does not levy the property tax or the local authority commits default in the collection of the tax and its payment thereof to the State Govt. It is nobodys case that Bantva Nagar panchayat had made a default in the collection of the tax or payment thereof and as held by me above the first situation is no longer existing since 1-4-72 because the local authority is levying properly tax since 1-4-72. It is therefore evident that since 1-4-72 the power to collect tax under sec. 12 is only of Bantva Nagar Panchayat and of the Collector acting through the Mamlatdar. Even under sec. 12 (1) education cess is to be levied and collected as a tax on lands and buildings on the basis of annual letting value and the annual letting value is the ratable value or annual letting value as determined in accordance with the relevant local authority law. So for the purpose of working out the annual letting value for the Purpose of levying and collecting education cess annual letting value is to be worked out on the basis of the ratable value of the lands and buildings as determined in accordance with the provisions of the Gujarat Panchayats Act. ( 3 ) THE grievance of the petitioners in this petition as elaborated in paragraph ll. of the petition is that the Collector and the Mamlatdar insist on their letting value despite there being a mode available to work out annual letting value in terms of sec. 2 (1) of the Act. The annual letting value in all the cases to be the rateable value or annual letting value or gross annual letting value of lands and buildings and in a case where the property tax is assessed on any building or land on its capital value such percentage of the capital value as may be determined by the State Government at is to be the annual letting value. On and from 1 the annual letting value in the case of the properties situated within the limits of Bantva Nagar Panchayat will be the one based on the percentage of capital value on the basis of which property tax is assessed by the concerned authority an its capital value. On and from 1 the annual letting value in the case of the properties situated within the limits of Bantva Nagar Panchayat will be the one based on the percentage of capital value on the basis of which property tax is assessed by the concerned authority an its capital value. On and from 1-4-72 therefore the basis of annual letting value adopted by the Collector and the Mamlatdar is without any authority of law. It is an arbitrary letting value reached by the Collector and the Mamlatdar in the face of the proviso appended to the definition of the word annual letting value in clause (1) of sec. 2 of the Act. ( 4 ) MR. M. B. Shah the learned Assistant Govt. Pleader appearing for the State however urged that when the State proceeded to revise the assessment lists by following as far as practicable the provisions of the Gujarat Gram and Nagar Panchayat (Taxes and Fees) Rules 1964 there was no assessment of property tax either on the basis of annual letting value or on the basis of the capital value. This submission of Mr. Shah is based on incorrect statement of facts As held by me above and as borne out from the resolution Annexure A Bantva Nagar Panchayat did resolve on 31-3-71 to levy the property tax and the panchayat actually started collecting the property tax on that basis on and from 1-4-72. No doubt the petitioners in their petition has spoken of 1-4-71 as the time from which the property tax was allegedly levied but I have not believed this part of their say for the obvious reason that after resolving the resolution on 31-3 71 to levy the property tax the Nagar Panchayat from the very nature of things could not have legally started levying the tax because the procedure by that time was not followed. Unless the proper procedure is followed the proposals are published objections are invited and all gamut has been gone through the tax cannot be levied. Unless the proper procedure is followed the proposals are published objections are invited and all gamut has been gone through the tax cannot be levied. It is because of this elaborate procedure to be followed as a matter of mandate of law Rule 8 of the Gujarat Gram and Nagar Panchayat (Taxes add Fees) Rules 1964 provides that a tax can be started to be collected from the beginning of any of the four quarters in the year namely 1 of April 1 of July 1 of October and 1st of January. ( 5 ) MR. Shahs next submission was that assessments are ordinarily made for four years. That is true. But when under the provisions of law a new basis is provided for there is nothing in law to insist on the said four years period to be completed. If the law requires to change the basis of assessment even during the period of four years that change has to be respected and fresh levy which is annual levy is to be based on that new basis laid down by law. On and from 1-4-72 a new basis for fixing the annual letting value for the year commencing from 1-4-72 was there holding the field and the Collector and other authorities were bound to follow that procedure for determining annual letting value even if it be held that they had authority to collect the case. ( 6 ) MR. Shahs next submission was that the petitioners were heard in the year 1974 or thereabout and they had even lodged a protest against the new assessments and this court should be loath to upset the cumbersome machinery of levy of education cess when there is belated challenge of the assessments lists prepared in the year 1974-75. If the very bottom of the assessment list is knocked out that would be an assessment without authority of law and hence a nullity and it was perfectly open to the petitioners and other citizens of Bantva to ignore the same till its sting came to be felt by them by being served with demand notices. In my view therefore there is no Delay whatsoever in filing the petition. ( 7 ) MR. Shah lastly invited my attention to sec. In my view therefore there is no Delay whatsoever in filing the petition. ( 7 ) MR. Shah lastly invited my attention to sec. 3 (1) of the Validating Act 1977 and urged that the proceedings or action taken for the purpose of such collection before the commencement of that Amending Act cannot be called in question merely on the ground that no valid or effective Rules were made or prescribed for the purpose of collection of tax or that the collector had collected the tax or penalty in such manner as he deemed reasonably proper or appropriate or in accordance with the provisions of or the principles underlying the provisions of the relevant local authority law relating to the assessment or collection of property tax etc. Said sec. 3 (1) is quoted below:" (1) Notwithstanding anything contained in any judgment decree or order of any court the Correction of any tax under sec. 15 and the recovery of any penalty under sec. 16 made before the commencement of this Act by the Collector in any urban area in pursuance of a direction issued to him by the State Government under the proviso to clause (b) of sub-sec. (1) of sec 15 shall for all purposes be deemed to be and to have always been validly made by the Collector as if at all material times when such collection or recovery was made. clause (b) of sub-sec. (2) of sec. 15 had provided that where a direction under the proviso to clause (b) or sub-sec. (g) of sec. (1) of sec 15 shall for all purposes be deemed to be and to have always been validly made by the Collector as if at all material times when such collection or recovery was made. clause (b) of sub-sec. (2) of sec. 15 had provided that where a direction under the proviso to clause (b) or sub-sec. (g) of sec. 15 has been issued the collection of the tax (including any penalty) shall be made in such manner as the Collector may having regard as far as possible to the provisions relating to the assessment and collection of property tax at the relevant local authority law consider reasonably proper and appropriate in the circumstances of the case; and accordingly (A) the validity of the collection of such tax (including any penalty) or of any proceeding or action taken or thing done or purported to have been taken or done for the purpose of such collection before the commencement of this Act shall not be called in question merely on the ground (i) that no valid or effective rules were made or prescribed for the purpose of collection of such tax or (ii) that the collector had collected the tax or penalty in such manner as he deemed reasonably proper and appropriate or in accordance with the provisions or the principles underlying the provisions of the relevant local authority law relating to the assessment or collection of property tax; (B) No suit or other proceeding shall be maintained or continued in any court against the State Government or any officer or authority whatsoever for the refund of tax or penalty the collection or recovery of which is validated by this Act; and (C) No court shall enforce any decree or order direction the refund of any such tax or penalty". Even a bare look at the initial part of that section is sufficient to convince one that what was sought to be validated was the collection of tax and also any proceedings that resulted into that collection. In other words it was to save the Government from the refund of huge amounts of education cess that the Validating Act had come to be made. Even in the statements of objects and reasons the following statement has been made: in several cases the Gujarat High Court has held as invalid the collection of tax on lands and buildings under sec. Even in the statements of objects and reasons the following statement has been made: in several cases the Gujarat High Court has held as invalid the collection of tax on lands and buildings under sec. 15 (2) (b) of the Gujarat Education Cess Act 196 by the Collector in certain urban areas where the local authority did not impose property tax on the ground that rule 3 of Gujarat Education Cess Rules 1962 prescribing the manner of collection of such tax could not be invoked as no rules were made by the concerned local authority for the purpose of assessment and collection of property tax in such cases. It was therefore considered necessary to validate the collection of such tax. As the Gujarat Legislative Assembly was not in session the Gujarat Education Cess (Validation) Ordinance 1977 was promulgated to achieve the aforesaid object. This bill seeks to replace the said Ordinance by an Act of the State Legislature. ( 8 ) IN above view of the matter the petition is required to be allowed and is hereby allowed with the clarification that it will be perfectly open to the State Government to have the realisation of education cess on the basis of annual letting value which in its turn was to be reached by working out the fixed percentage of the capital value adopted by Bantva Nagar Panchayat for the purpose of levying and collecting the property tax socalled on and from 1-4-72. The petition is therefore allowed. The prayers C D and F are accordingly granted. Rule is accordingly made absolute with no order as to costs. Petition allowed. .