Upadhyaksh Byapar Mandal v. State of U. P — 1991 DIGILAW 1034 (ALL)

JUDGMENT S.D. Agarwala, J. - This is a petition under Article 226 of the Constitution of India. 2. Before admission Sri Ashok Khare accepted notice on behalf of Town Area, Raya, district Mathura and learned Standing Counsel accepted notice on behalf of the State of U.P. Counter-affidavit arid rejoinder affidavit has been filed Parties are agreed that the petition itself be disposed of at this stage as the entire record is complete and it is likely to aiglet large number of persons living in the Town Area, Raya, district Mathura. 3. The petitioner, Byapar Mandal, Raya, district Mathura, has field the present petition challenging the amended byelaws of the Town Area Committee, Raya which have came into effect from -5-1990 by virtue of which rates of Tahbazari as well as method of realisation oi Tahbazari have been modified. It is not disputed between the parties that the Town Area, Raya, district Mathura, hereinafter referred to as 'Town Area' did have byelaws levying Tahbazari. These byelaws were named as Tahbazari Byelaws Town Area Committee, Raya, Mathura, hereinafter referred to as Tahbazari Byelaws. These byelaws wore amended with effect from 2-5-1990, The amended byelaws are subject-matter of the challenge in the present petition. 4. The case of the petitioner is that Town Area has not followed the procedure laid down by Sections 15-A and 15-B of the U.P. Town Areas Act, 1914, hereinafter referred to as the 'Act' before amending Tahbazari byelaws. Section 15-A. of the Act provides the manner in which preliminary proposals for taxes have lo be made. Section 15-B lays down how the tax shall be imposed. 5. ln the counter-affidavit filed on behalf of the Town Area Committee by Sri Ram Kumar Upadhyaya who is Member of the Town Area Committee in paragraph 4, the procedure which has been followed by the Town Area, has been categerically stated. It is quoted below 'Town Area Committee took a decision for framing fresh byelaws and accordingly the draft of the byelaws was published in the news paper 'Parashuram Shakti' dated 13-2-89 whereby objections were invited to the draft byelaws. In pursuance to the aforesaid publication several objections were received which were considered by the Town Area Committee and thereafter all the papers forwarded to the District Magistrate for his sanction. The District Magistrate, Mathura by means of his order dated 2-5-90 granted sanction and approved the aforesaid byelaws. In pursuance to the aforesaid publication several objections were received which were considered by the Town Area Committee and thereafter all the papers forwarded to the District Magistrate for his sanction. The District Magistrate, Mathura by means of his order dated 2-5-90 granted sanction and approved the aforesaid byelaws. The final byelaws were again published in the news paper 'Parshuram Shakti' dated 4-6-90 notifying the same." 6. The question, therefore, is whether the provisions of Sections 15-A and 15-B of the Town Areas Act have been complied with or net. Section 15-A and 15-B of the Town Area Act are quoted below :- 15-A. Preliminary proposals for taxes. - 1) subject to any rules made in this behalf by the State Government the Committee established for any town area, shall by resolution, frame proposal specifying - (a) the tax being one of the taxes described in Section 14, which it desires to impose ; (b) the amount or rate leviable from any person or class of persons liable or to be made liable for the tax except where and in so far as any such amount or rate has not already provided for in Section 14; (c) any other matter which the State Government may by rule require to be specified. (2) The committee shall also prepare a draft of the rules which it desires the State Government to make in respect of the matter referred to in Section 39. (3) The Committee shall, thereafter publish in the manner prescribed, the proposal framed under sub-section (1) and the draft rules framed under sub-section (2). (4) Any inhabitant of the town area may, in the prescribed manner, file an objection in writing on such proposal and the Committee shall take into consideration the objections so filed and finally settle its proposals. (5) The proposals so settled along with the draft rules shall be submitted to the Prescribed Authority or if none is appointed the District Magistrate." "15-B. Imposition of tax. - (I) The Prescribed Authority or if none is appointed, the District Magistrate may either reject the proposals or sanction them whether with or without modifications. (2) Where the proposals are sanctioned with or without modification by the Prescribed Authority or if none is appointed the District Magistrate shall forward a copy of the draft rules on the subject to the State Government. (2) Where the proposals are sanctioned with or without modification by the Prescribed Authority or if none is appointed the District Magistrate shall forward a copy of the draft rules on the subject to the State Government. (3) After the rules have been framed by the State Government, a copy thereof shall be forwarded to the Prescribed Authority or if none is appointed to the District Magistrate and the Committee, and then the Committee shall, as soon as may be by a resolution direct the imposition of the tax with effect from a date to be specified and forward a copy of the resolution to the Prescribed Authority or if none is appointed the District Magistrate who shall notify in the same manner prescribed. (4) The notification under sub-section (3) shall be conclusive proof that the tax has been imposed in accordance with the provisions of this Act." 7. Section 15-A of the Act provides that initially preliminary proposals shall be made by the town area Committee by means of passing a resolution. In the said proposal it is to be specified as so whether the proposal is in regard to one of the taxes described in Section 14 which it desires to impose as also the amount or rate leviable from any person or class of persons liable or to be made liable for the tax. the Committee has to further prepare a draft of the rules which it desires the State Government to make in respect of the matter referred to in Section 30. The Committee has to further publish in the manner prescribed the proposal framed under sub-section (I) and the draft rules framed under sub-section (2). Thereafter under sub-section (4) of Section 15-A any inhabitant of the town area has been given the right to file an objection in writing on such proposal, and the Committee is obliged to take into consideration the objections so filed and finally settle its proposals. The proposals so settled along with the draft rules are to be submitted to the District Magistrate. 8. Under Section 15-B of the Act it is open to the District Magistrate to reject the proposals or sanction them whether with or without modification. After the proposals are sanctioned, a copy of the draft rules have to be forwarded to the State Government. 8. Under Section 15-B of the Act it is open to the District Magistrate to reject the proposals or sanction them whether with or without modification. After the proposals are sanctioned, a copy of the draft rules have to be forwarded to the State Government. Sub-section .(3) of Section 15-B of the Act specifically provides that rules have to be framed by the State Government and the said rules have to be forwarded to the District. Magistrate and then Town Area committee has to pass a resolution imposing tax with effect from the date which is to be specified. This resolution has to be forwarded to the District Magistrate who shall, thereafter notify the same in the manner prescribed. 9. From the reading of these provisions it is clear that one of the mandatory requirement is that the draft rules have to be sent to the State Government for its approval and it is only when the State Government frames rules then those rules have to be accepted by the Committee by means of a resolution. In the instant, case, from the contents of the counter affidavit, it is patently clear that the draft rules amending Tahbazari byelaws and increasing rates were never sent to the State Government. The resultant effect is that undisputedly the mandatory requirement of the framing of the rules by the State Government have not been done in this case. In the circumstances, in our opinion, there is a clear violation of Sections 15-A and 15-B of the Act. 10. Learned Counsel for the Town Area Committee has raised two contentions defending the validity of the impugned byelaws. His first contention is that in view of a notification issued under Section 38(1) of the Act in 1928 by virtue of which the provisions of Sections 301(2) and 301(5) of the U. P. Municipalities Act 11 of 1316 have been extended to all the town areas U. P. in modified form and as such it was not necessary for the town area committee to comply with the provisions of Sections 15-A and 15-B of the Act. His contention, in effect, is that byelaws made by the Committee shall come into effect immediately after they have been considered by the District Magistrate and receives his approval and it is not necessary that the proposed byelaws be referred to 1he State Government. 11. His contention, in effect, is that byelaws made by the Committee shall come into effect immediately after they have been considered by the District Magistrate and receives his approval and it is not necessary that the proposed byelaws be referred to 1he State Government. 11. The second contention of the learned Counsel is that even if Sections 15-A aad 15-B of the Act are applicable then too since in the Amended Byelaws there is a mere change of rates in tahbazari, consequently it was not necessary to follow the procedure laid down by Sections 15-A and 15-B of the Act. 12. In Vyapar Martdal v. State, 1991 A. L. J. 545 : 1991 (1) UPLBEC 147, a Division Bench of this Court viz. Hon'ble A.P. Misra and Hon'ble R.R.K. Trivedi, JJ. had an occasion to consider exactly the same argument which has been raised as the first contention by the Counsel for the Town Area Committee. After considering the provisions of Sections 301 f2) of the U. P. Municipalities Act as modified by the notification of the year 1928, the Bench came to the conclusion that since Sections 15-A and 15-B of the Act were introduced by means of an amendment brought in 1950 while the said notification was issued in the year 1928, the subsequent modification in the enactment would not be held to be inconsistent and inoperative in view of Section 38(2) of the Act. It was consequently held that it was mandatory for the Town Area Committee to have followed the procedure as laid down in Sections 15-A and 15-B of the Act in case the Town Area wants to impose tahbazari in the Town Area. 13. In Udyog Vyapar Martdal v. Town Area Committee, 1990 (2) UPLBEC 1295, another Division Bench of this Court consisting of Hon'ble A. N. Verma and Hon'ble R. K. Gulati, JJ. again had an occasion to consider whether the provisions of Section 15-A of the Act would be applicable when the Town Area Committee wants to levy tahbazari in the Town Area. It was held by the Bench as follows :- "We have not the least doubt that the term 'taxes' in the context in which it appears, has been used in a comprehensive sence so as to include all imports enumerated in Section 14. It was held by the Bench as follows :- "We have not the least doubt that the term 'taxes' in the context in which it appears, has been used in a comprehensive sence so as to include all imports enumerated in Section 14. Tahbazari being one of the taxes listed in Section 14 would thus clearly be covered by Section 15-A. A combined reading of Sections 14 and 15-A therefore, leads irresistably to the conclusion that the procedure laid down under Section 15-A of the Town Area Act would be equally applicable to the imposition of tahbazari.'" 14. We respectfully agree with the view taken by the learned Judges in this case. Since the provisions of Section 15-A of the Act are applicable to the case of imposition of tahbazari, the consequential effect is that the provisions of Section 15-B of the Act would also apply. We are consequently of the opinion that if a Town Area Committee wants to levy tahbazari in the Town area it has to comply with the provisions of both Sections 15-A and 15-B of the Act. 15. In regard to the second submission made by the learned Counsel for the respondent Section 15-C of the Act is very relevant. It reads as follows . "15-C. Procedure for altering taxes. - The provisions of Sections 15-A and 5-B shall, as far as maybe apply for altering or abolishing tax already imposed under the Act." 16. This Section clearly contemplates that whenever there is a alteration of tax already imposed under the Act, the Town Area Committee is obliged to follow the procedure, as far as may be applicable, as laid down in Section 15-A and 15-B of the Act. The change of rates, in our opinion, is clearly a case of altering tax already imposed under the Act. Section 15-A (I) (b) of the Act, which has already been quoted above, is indicative of the fact that whenever the tax .as contemplated under Section 14 of the Act is contemplated to be enforced, it is necessary for the Town Area Committee to pass a resolution which includes laying down the amount or rate leviable from any person or class of persons liable or to be made liable for the tax. This resolution which includes both rates and the person or class of persons liable to pay said tax is passed, prior to sending of the proposal to the State Government. The rates of tahbazari have also 10 be approved by the State Government and rules framed therefor. Both the rates and class of persons liable have to be approved by the State Government. In case Town Area Committee wants to change the rates of tahbazari obviously it would amount to changing the Rules framed by the State Government and consequently, in our opinion, it would amount to alteration of the tax viz. Tahbazari already imposed under the Act and as such it would be necessary for the Town Area to follow the procedure laid down under Sections 15-A and 15-B of the Act. If it does not do so, the imposition of tahbazari would be invalid. The second submission, consequently, raised by the learned Counsel for the respondent also, in our opinion, is not acceptable. 17. Our conclusion consequently is that whenever a Town Area Committee wants either to impose tahbazari or to change the rates of tahbazari which had already been imposed, then before framing byelaws or amending the byelaws, the Town Area Committee has to follow the procedure prescribed by Sections 15-A. and 15-B of the Act. 18. In the instant case we have already found that the Town Area Committee has not followed the provisions of Sections 15-A and 15-B of the Act. In the circumstances, tahbazari Byelaws Town Area Committee, Raya, Mathura as amended w.e.f. 2-5-1990 are wholly invalid in law and are ultra vires the Act, and cannot, therefore, be imposed. 19. In the result, the petition is allowed. The amendment to the tohbazari of Town Area, Raya, district Mathura which have come into effect from 2-5-1990 are hereby, quashed and declared invalid, and a writ of mandamus is issued to the Town Area not to realise tahbazari in accordance with the amended Byelaws which have come into effect with effect from 2-5-1990. If any tax has been imposed and realised by the Town Area Committee in pursuance of the amended Byeiaws it is open to the members of the petitioner society to apply for refund of the same to the Town Area and the Town Area will refund the same in accordance with law.