Judgment : Heard Sri K.V.Simhadri, learned Standing Counsel representing the appellant-3rd defendant and Sri S.Nageswara Rao, learned Standing Counsel representing the first respondent. 2. This appeal is filed by the A.P.Industrial Infrastructure Corporation rep. by its Industrial Development Officer, Guntur, the 3rd defendant in the suit, being aggrieved of the decree and judgment made in O.S.No.95 of 1983 on the file of the Subordinate Judge, Bapatla. The first respondent as plaintiff instituted the said suit O.S.No.95 of 1983 aforesaid for recovery of Rs.82,556.32 ps., towards the tax payable by the defendants to the plaintiff Municipality for the years 1976-77 to 1981-82 and for statutory charges over the schedule property and for future interest at 6% per annum and for costs of the suit. The learned Subordinate Judge, Bapatla in the light of the respective pleadings of the parties, having settled the issues, recorded the evidence P.Ws.1 and 2, D.W.1 and marked Exs.A-1 to A-15 and Exs.B-1 to B-4 and ultimately came to the conclusion that the first respondent plaintiff was able to establish its right to recover the dues of tax arrears and further recorded finding that the suit is within limitation and, accordingly, decreed the suit with costs as prayed for with future interest at 6% per annum from the date of suit till the date of realization. Aggrieved by the same, the present appeal had been preferred. 3. Contentions of Sri K.V.Simhadri: Sri K.V.Simhadri, learned Standing Counsel representing the appellant-3rd defendant Corporation, had taken this Court through the respective pleading of the parties and the evidence available on record and would maintain that as far as the question of limitation is concerned, the trial court instead of answering the question how the suit to be taken as having been filed i.e., period of limitation under Section 365 of the Andhra Pradesh Municipalities Act, 1965, hereinafter in short referred to as 'the Act' for the purpose of convenience, recorded certain vague findings. The counsel also explained how the suit is barred by limitation. Even otherwise the counsel would contend that the procedure prescribed under the Act for the levy of tax or enhancement of tax had not been followed. The counsel also explained how the suit is barred by limitation. Even otherwise the counsel would contend that the procedure prescribed under the Act for the levy of tax or enhancement of tax had not been followed. The counsel also had taken this Court through the oral and documentary evidence available on record and would maintain that even if the evidence of P.Ws.1 and 2 and D.W.1 is carefully examined, it is clear that the procedure contemplated by Sections 81 and 83 of the Act had not been followed and in the light of the same the other questions inclusive of the question of limitation need not be seriously considered and the appeal to be allowed. The learned counsel placed strong reliance on certain decisions. 4. Contentions of Sri S.Nageswara Reddy: Per contra, Sri S.Nageswara Reddy, learned Standing Counsel representing the first respondent-plaintiff would maintain that the clear evidence of P.Ws.1 and 2 is available on record and apart from this oral evidence, Exs.A-1 to A-8, property tax receipts of the 2nd defendant issued by the plaintiff Municipality and further Ex.A-9 letter from the 2nd defendant to the Municipal Commissioner, Bapatla Municipality and the other correspondence by Exs.A-10, A-11, A-12, A-13, A-14 and A-15 as well, would go to show that the concerned officers of the Corporation had knowledge of these proceedings and only with a view to evade payment of tax or arrears and tax due to the concerned Municipality such peculiar defence had been taken in the written statement. Even otherwise, in the light of conduct of the officers of the said corporation as well reflects from the correspondence and also the evidence of D.W.1, the findings recorded by the trial court cannot be found fault. Incidentally, the counsel also had pointed out to the relevant provisions of Sections 81, 83 and 365 of the Act and would maintain that in the light of the language of these provisions inasmuch as there is clear assertion relating to the following of procedure by P.W.1, the findings are to be confirmed and the appeal to be dismissed. 5. Heard the counsel. Perused the oral and documentary evidence available on record and the findings recorded by the trial court as well. 6. 5. Heard the counsel. Perused the oral and documentary evidence available on record and the findings recorded by the trial court as well. 6. Before taking up the further discussion relating to the points, which arise for determination in this appeal, for the purpose of convenience it may be appropriate to have a glance at the respective pleadings of the parties, the issues settled, the evidence available on record and the findings recorded by the trial court in nutshell. 7. Respective pleadings of the parties: Averments made in the plaint: The first respondent-plaintiff Bapatla Municipality, Bapatla, represented by its Commissioner, instituted the suit for recovery of arrears of tax dues and for other appropriate reliefs. The averments in the plaint are as hereunder: The 1st defendant through the agency of 2nd defendant raised structures calling it as industrial estate. Subsequently in 1977 cyclone hose structures said to have been demolished. Prior to the cyclone the 2nd defendant has been assessed to house tax for the period 1976-77, 2nd half the arrears are Rs.5,223.68 ps. Subsequently, vacant site tax was levied and demands have been regularly served. Yet the defendants have not chosen to pay the arrears due. When served with registered notices the second defendant sent in a reply disowning its liability. The particulars of arrears due from the defendants are as follows: For the year 1976-77 as the tax is payable by 31st March, the claim is in time. 8. Averments made in the written statement of the 3rd defendant: The first defendant filed memo of adoption adopting the written statement of the 3rd defendant. The 2nd defendant had not chosen to file any written statement. In the written statement filed by the 3rd defendant, the following averments were made: It was averred that the land in question and described in the plaint schedule was acquired and was taken possession of, by the A.P.Industrial Infrastructure Corporation in the year 1976 for the purpose of developing industrialization in the area and for allotting plots to the intending entrepreneurs. The land was previously unoccupied and unproductive and as such no tax was levied on it. After the 3rd defendant took possession of the said land, four sheds were constructed in the same which were given for rent to the Food Corporation of India. It was for the first time that the property was assessed to tax in the year 1976-77. After the 3rd defendant took possession of the said land, four sheds were constructed in the same which were given for rent to the Food Corporation of India. It was for the first time that the property was assessed to tax in the year 1976-77. But there was no notification as contemplated under the A.P. Municipalities Act, and no notice was served on this defendant. It is not known on what basis and data the tax had been levied. This defendant was put to dark for a long time about the assessment of the tax, disabling him to prefer any revision or take other steps against the said levy of the tax. The assessment of tax is itself arbitrary and against all cardinal principles, guidelines and set procedure under the A.P.Municipalities Act, and it is most in-discretionary. The sheds that were constructed in the land collapsed to the ground level during November, 1977 when there was a big cyclone. The sheds were removed and no new buildings were erected. Since then the land has been lying vacant, unoccupied and it is unproductive. Even at the time of levying vacant site tax no notice was given to this defendant and it is also not known on what basis and data this vacant site tax was levied and no notice was served on this defendant at the time of the said levy so as to enable him to put forth any objections. Even after the levy no notice was served for a long time on this defendant to take steps to get it reduced or cancelled. It is surprising to note that as revealed from the plaint that the vacant tax site is much more than the building tax, which itself shows the arbitrary nature in which the vacant site tax was levied. When the tax was being assessed and enhanced to a higher amount than that existing previously, the plaintiff should have issued a special notice to this defendant as contemplated under the A.P.Municipalities Act, and that notice is absent in this case. The plaintiff did not follow any set procedure and the rules and principles laid down under law and the levy of tax in question is therefore arbitrary, illegal and against natural justice. The vacant site in question is also of poor quality for which a nominal rate of value is fixed. The plaintiff did not follow any set procedure and the rules and principles laid down under law and the levy of tax in question is therefore arbitrary, illegal and against natural justice. The vacant site in question is also of poor quality for which a nominal rate of value is fixed. This defendant did not receive any demand notice previously. Under the circumstances the demand of such a huge amount towards tax of vacant site which is useless and unproductive, is unjust. The plaint also does not disclose the particulars and data and on what basis the tax was assessed. The suit should therefore fail for the vagueness of and non-mention of the necessary particulars in the plaint. 9. Issues settled by the trial court: The following issues had been settled by the trial court: 1. Whether the plaintiff is entitled for the suit amount? 2. Whether the amount claimed in the suit is arbitrary and cannot be recovered from the defendant as pleaded by the defendants? 3. Whether the suit is barred by limitation? 4. Whether the suit is bad for mis-joinder of the 2nd defendant on the ground that the 2nd defendant is not existing? 5. To what relief? 10. Evidence available on record: Witnesses examined on behalf of the plaintiff: P.W.1 C.Satyanarayana, Municipal Commissioner P.W.2 D.V.Reddy, Municipal Commissioner. Witnesses examined on behalf of the defendant: D.W.1 M.Ganapathi. Documents marked on behalf of the plaintiff: Ex.A1/6.2.79: Property tax receipt of 2nd defendant issued by plaintiff municipality. Ex.A2/6.2.79: -do- Ex.A3 -do- Ex.A4 -do- Ex.A5 -do- Ex.A6 -do- Ex.A7 -do- Ex.A8 -do- Ex.A9/17.3.81: Letter from 2nd defendant to the Municipal Commissioner, Bapatla Municipality. Ex.A10/Office copy of registered notice given by plaintiff's advocate to defendant. Ex.A11/4.3.83: Reply registered notice given by defendant's advocate to plaintiff's advocate. Ex.A12/2.11.78: Letter addressed by the defendants 2 and 3 to the plaintiff Ex.A13/15.2.79: Letter addressed by defendants 2 and 3 to plaintiff. Ex.A14/12.3.79: Copy of letter addressed by defendants 2 and 3 marking copy to the plaintiff. Ex.A15/12.3.79: Letter written by Industrial Corporation to plaintiff. Documents marked on behalf of the defendants: Ex.B1/7.4.89: Letter addressed by Law Officer to advocate for defendants 2 and 3 Ex.B2/17.3.81: Letter addressed to the Municipal Commissioner, Bapatla by Agricultural Development Officer, APIIC Ltd., Guntur. Ex.B3/19.2.83: Notice issued by Standing Counsel of plaintiff to the defendants. Ex.B4/8.3.83: Reply registered notice send by the Standing Counsel for D-3 to plaintiff's advocate. Documents marked on behalf of the defendants: Ex.B1/7.4.89: Letter addressed by Law Officer to advocate for defendants 2 and 3 Ex.B2/17.3.81: Letter addressed to the Municipal Commissioner, Bapatla by Agricultural Development Officer, APIIC Ltd., Guntur. Ex.B3/19.2.83: Notice issued by Standing Counsel of plaintiff to the defendants. Ex.B4/8.3.83: Reply registered notice send by the Standing Counsel for D-3 to plaintiff's advocate. 11. Findings recorded by the trail court in nutshell: The trial court appreciated the evidence of P.Ws.1 and 2 and also D.W.1 and the documentary evidence of Exs.A-1 to A-15 and Exs.B-1 to B-4 and came to the conclusion that the 2nd defendant was not in existence at all at the time of filing of the suit and the 3rd defendant-Industrial Development Officer's post had been redesignated as the Regional Manager of 3rd defendant. The trial court also further observed that the 3rd defendant did not receive any notice from the municipality to the effect that they intend to levy tax over 3rd defendant properties, the property was levied to tax for the first time in 1976-77 for the second half of the year, as they were not informed about the levy of tax for a long time they could not prefer any revision against the taxation, the municipality did not give any notice for levying tax on vacant land after the sheds were collapsed, no special notice was served upon the 3rd defendant by the municipality, on the date of cyclone apart from the above sheds there were two industrial units in the 3rd defendant site and certain further particulars also had been referred to. Further a finding had been recorded that before filing the suit the plaintiff got issued legal notice through their advocates and the 3rd defendant also sent a reply. The trial court also referred to Section 365(1) of the Act and referred to certain decisions and recorded a finding that suit having been instituted within the period of six years and the same is within the period of limitation. Further the trial court while answering issues 1 and 2 recorded reasons in detail at para 10 and ultimately decreed the suit as specified above. Further the trial court while answering issues 1 and 2 recorded reasons in detail at para 10 and ultimately decreed the suit as specified above. The specific contention of the defendants that they had not received any special notice from the plaintiff municipality and it is not known on what basis the tax had been levied, had been discussed at length and the contentions of the officers also had been discussed and ultimately a finding had been recorded that in the light of the facts and circumstances explained especially exhibit A series, the stand taken by the appellant cannot be upheld and, accordingly, decreed the suit. 12. Points for determination: The undernoted points for determination arise for consideration in this appeal: 1. Whether the findings recorded by the trial court relating to the following of the procedure under the provisions of Act to be confirmed or liable to be set aside in the light of the provisions of A.P.Municipalities Act and also in the light of the oral and documentary evidence available on record? 2. If so, to what relief the parties would be entitled to? 13. Point No.1: The respective pleadings of the parties, the issues settled, the evidence available on record and the findings recorded by the trial court already had been referred to above. The main ground of attack as can be seen even from the specific pleas taken in the written statement of the appellant-D-3 is to the effect that the mandatory procedure under the provisions of the Act had not been followed. 14. P.W.1 deposed that he worked as Commissioner of Bapatla Municipality from 23.8.1978 to 21.10.1981. There is an industrial estate in Bapatla. There were some structures in that area. By the time of taking charge by him the said structures were in existence. He had assessed the structures and vacant site to property tax. He had inspected personally. After assessing the tax for the vacant land, he had issued demand notices regularly for payment of tax. Exs.A-1 to A-8 are the receipts retained by the municipality. The receipt and demand will be the same leaf with perforation. After service of the demand the only receipt will be with the municipality. During his tenure of service the first defendant consulted the authorities for payment of tax. For 1976-77 the assessment is Rs.5226.68 paise for second half of the half year. The receipt and demand will be the same leaf with perforation. After service of the demand the only receipt will be with the municipality. During his tenure of service the first defendant consulted the authorities for payment of tax. For 1976-77 the assessment is Rs.5226.68 paise for second half of the half year. For 1977-78 is the same assessment. For 1978-79 for 1st half he had revised the tax for four structures and assessed vacant land tax. It is Rs.8400.69 paise for vacant land. This witness also deposed about other particulars of issuing demands accordingly. This witness also deposed that defendants wanted for some remission for the earlier period and also for vacant site. He had received Ex.A-9 from the 2nd defendant requesting to send duplicate bills for arranging payment of said tax. As per records, he had sent duplicate bills. ON 19.3.1981 duplicate bills were dispatched. Despite sending duplicate bills as per Ex.A-9, they had not paid the tax. In the industrial estate, the names of industries also had been furnished by this witness. By the time of his inspection the above industries were in existence. At the time of his first inspection, four go-downs were there and subsequently the other two came up. When he executed demand notice, they did not seek any exemption. In the cross-examination of D.W.1, P.W.1 deposed that the land was acquired for industrial estate in the year 1977 for development of industries. He does not know whether prior to it, it was vacant land and he does not having any record now to show the assessment of the said land prior to 1977. At the time of his first inspection, he found four structures and they were constructed by D-3 and given them on lease to the F.C.I. At that time there were no industries at that place. This witness also deposed that they will issue only special notice for assessing tax and not any separate notification. P.W.1 deposed that it is not true to say that no notice was served on D-3 with regard to assessment of tax. It is not true to say that no notice was served on any of the defendants. A-1 to A-8 do not reveal that they were served on D-3. It is not true to say that no special notice was issued to the defendants in respect of enhancing the tax. It is not true to say that no notice was served on any of the defendants. A-1 to A-8 do not reveal that they were served on D-3. It is not true to say that no special notice was issued to the defendants in respect of enhancing the tax. While enhancing tax no special notice is issued. It is not true to say that no notice was served on defendant for levying the property tax. P.W.1 also further deposed that during cyclone 1977 all the constructions were collapsed. The said fact had been informed to the authorities. The land in question is sandy land, not that land alone but the entire Bapatla is sandy track. On the basis of the rate mentioned by D-4 they had levied the property tax. No doubt a suggestion was put to this witness that the suit is barred by limitation, but the said suggestion was denied. In the cross-examination of D-2 and D-3 this witness deposed that he had joined service in 1955 and from 1972 onwards he had been working in Municipal administration. He had got experience from 1972 onwards with regard to the assessment. By the time he took over charge in Bapatla the Bapatla municipality is functioning. There will be valuation officer being appointed once in five years and when he had taken charge at Bapatla there was no valuation officer. Unless he sees the record, he cannot say the extent of land for which the assessment was made. He assessed for the first time both lands and buildings. Unless without seeing the record, he cannot say the date on which he visited the land. At the time when he visited the land there were six go-downs at that place. That was the first time the tax was assessed. He was supposed to know the procedure with regard to the assessment of tax. There is no necessary to pass any resolution by the municipality for assessment even for the first time. But notification is necessary and the same was issued. He had not filed the said notification. This witness also deposed that he was deposing so on remembrance that the notification was issued. This witness further deposed that the provisions laid down under Section 81 of Municipalities Act were complied with in the present case. But notification is necessary and the same was issued. He had not filed the said notification. This witness also deposed that he was deposing so on remembrance that the notification was issued. This witness further deposed that the provisions laid down under Section 81 of Municipalities Act were complied with in the present case. It is for the municipality to place the said resolution before the court and not this witness. He cannot without seeing the record say that on what date the tax was levied in the present case. He had sent notice to D-3 with regard to the levy of the tax. D-3 issued a reply for the same. The said reply notice is with the municipality. No doubt the specific suggestion put to this witness relating to the issuance of notice had been denied. It is not true that D-3 got issued reply to it. This witness also further deposed that the record with regard to the service of special notice and acknowledgement for the same by D-3 will be available in the municipality. They served the said notice on the person who is in charge of D-3 at Bapatla. He does not know the name of person to whom the said notice was served. It is not necessary to publish the same in newspaper calling for objection for levying the tax for the first time in the town. This witness also deposed he had assessed the tax on the capital value of the lands and on the rental value of the buildings when the land is not leased out. In the present case the lands were not leased out. As the lands were not leased out in the present case, he assessed the tax on the capital value of the lands. D-3 department gave a data with regard to the value of the land and buildings and on that only the tax was levied. They had asked the value of the land D-3 and he did not make any separate enquiry with regard to the value of the land as D-3 simply given the value of the same. He does not remember the actual capital value that was shown by D-3. They had asked the value of the land D-3 and he did not make any separate enquiry with regard to the value of the land as D-3 simply given the value of the same. He does not remember the actual capital value that was shown by D-3. This witness also deposed that he does not remember that they were given on lease to F.C.I., and he does not remember the rental value on which the tax assessed and he does not know whether the said land was originally was forest land. The said land was not agricultural land. This witness also deposed about Exs.A-1 to A-8 and further deposed that these documents are in the name of A.P.Industrial Infrastructure Corporation, Bapatla. The demand notices concerned to Ex.A-1 to A-8 were served on the officers of D-3 at Bapatla. It is not true to say that there was no officer of D-3 at Bapatla and that he was speaking falsehood. He is not having any record to show that some officer visited before his visiting the said land and go-down at Bapatla. He had complied with the provisions of Municipalities Act. He cannot say without seeing the notification and how much percentage was levied as tax on the capital value. 25% of the rental value has to be fixed as tax, which was maximum fixed in 1977 which is for residential purpose only and if it is non-residential it is 33 1/3%. Due to cyclone in 1977 there was damage to the constructions. He assessed the tax only from 1978 onwards i.e., 1978-79 second half. This witness also deposed that it is not true to say that there no structures at that place when he visited the site in 1978. After seeing the structures in the month of September, 1978, he assessed the tax for the said structures. This witness also deposed that it is not true to say that he had not followed the procedure laid under the Act and that he arbitrarily fixed the tax. Certain other suggestions put to this witness also had been denied. 15. P.W.2 deposed that he worked as Commissioner of Bapatla Municipality during 1982-83 and during his tenure of office he got issued registered notice to defendants 1 and 2. Ex.A-10 is the office copy of the registered notice. Ex.A-11 is the reply given by D-2. Certain other suggestions put to this witness also had been denied. 15. P.W.2 deposed that he worked as Commissioner of Bapatla Municipality during 1982-83 and during his tenure of office he got issued registered notice to defendants 1 and 2. Ex.A-10 is the office copy of the registered notice. Ex.A-11 is the reply given by D-2. During his tenure of office, none of the defendants filed nay application for remission of tax. D-2 wanted before the assessment was issued, requested for the particulars of tax and the particulars were furnished to him in Ex.A-9. In the cross-examination of D-2 and D-3, this witness specifically deposed that he was not aware of whether the land was used as forest earlier. He did not visit the suit property. The structures were taxed on rental and the land was taxed on the capital value. As can be seen from the cross-examination, this witness is not aware several of the particulars. However, this witness further deposed that from 1978-79 onwards the tax was assessed only over the vacant land. In that year there is increase in tax when compared with the tax of previous periods. Before enhancing the tax a special notice has to be issued and in this case such notice was duly issued. He had not filed any such notice or acknowledgement. In 1977-78 the tax over the vacant site and structures for both periods was Rs.9,584-96 ps. For the years 1976-77 and 1977-78, no tax was levied over the vacant site. This witness no doubt deposed that it is not correct to say that no notice was given for assessing the vacant site for taxation. After levying the tax the municipality will issue notice to the assessee and if there is any objection for the assessment the appeal must be preferred within 30 days from the date of issue of notice. He is not aware whether municipality issued a notice to D-1 and D-2 immediately after the assessing the property to taxation. There is no need to issue any notice to assessee about the proposed levy of tax. No such notice was sent. This witness also deposed that it is not correct to state that the property was taxed without knowledge of the defendants arbitrarily. This witness also deposed in the cross-examination of D-1 that there was no correspondence between D-1 and Municipality earlier to Ex.A-10. No such notice was sent. This witness also deposed that it is not correct to state that the property was taxed without knowledge of the defendants arbitrarily. This witness also deposed in the cross-examination of D-1 that there was no correspondence between D-1 and Municipality earlier to Ex.A-10. He did not issue any notice to the Government of A.P., regarding the imposition of tax, but notice was issued to D-1 and D-3 before imposition of tax. D-3 is a corporate body. Directly the Government is not liable to pay the tax. It is only D-2 and D-3 are liable to pay the tax. This is the evidence of P.Ws.1 and 2. 16. As against these witnesses, the Assistant Manager of D-3 Corporation had examined himself as D.W.1 and this witness deposed that D-3 Corporation acquired land wherever there is industrial potentiality for the improvement of industries and they develop plots and provide amenities for starting industries for the prospective entrepreneurs. All these industries are under the control of D-3. This witness also deposed that the Government alienated Ac.54.08 in favour of D-3 under G.O.Ms.No.352, dated 23.8.1974. Out of it Ac.46.77 were handed over by Revenue Department to D-3 Corporation by Forest Range Officer. On two occasions i.e., firstly Ac.22 on 31.8.1974 and another Ac.24.77 on 2.2.1975. The land is sandy land and classified under forest land. The land was unoccupied by any one when possession was given to them. The land was not taxed. After taking possession of the land lay out got approved and they developed that area as approved by forming roads. They also constructed four sheds in that land with Nos.B-1, B-2, B-3 and B-4. They were leased out to F.C.I. on monthly rent of Rs.544.62 ps., per month per shed. B-1 shed was given on 13.11.1976, B-2 and B-3 were leased out on 26.4.1978 and B-4 was leased on 28.12.1976. All the four sheds were there till 19.11.1977. On that day there was big cyclone and the sheds were collapsed. The F.C.I. handed over the collapsed sheds to D-3 on 23.1.1978. The F.C.I. paid rents only up to 19.11.1977. The details of the rent which had been calculated also had been deposed by D.W.1. This witness specifically deposed that they have no office at Bapatla. Only one watchman was appointed to look after the property at Bapatla. The F.C.I. handed over the collapsed sheds to D-3 on 23.1.1978. The F.C.I. paid rents only up to 19.11.1977. The details of the rent which had been calculated also had been deposed by D.W.1. This witness specifically deposed that they have no office at Bapatla. Only one watchman was appointed to look after the property at Bapatla. D-3 did not receive any notice from Municipality to the effect that they intend to levy tax over D-3 properties. The property was levied to tax for the first time in 1976-77 second half of the year. They were not informed about the levy of tax for a long time and they could not prefer any revision against the taxation. This witness also specifically deposed that the Municipality did not give any notice for levying tax on vacant land after the sheds were collapsed. No special notice was served upon D-3 by Municipality. On the date of cyclone, apart from the above sheds there were two industrial units in D-3 site and they are one Vijaya-lakshmi Paper Products and Srinivasa Cement and Concrete Works. D-3 did not receive any demand notice from Municipality. After learning about the taxation, they requested the Municipality the duplicate copy of demand notice. Before filing the suit the plaintiff got issued a legal notice through their advocate. D-3 sent a reply stating that the tax levied is unjust and arbitrary. D-2 is not in existence at all. At the time of filing of suit Industrial Development Officer, but now the same post is re-designated as Regional Manager of D-3. He was not supplied any date on which the tax is levied. This witness also deposed that the suit is barred by limitation. This witness also further deposed that Ex.B-2 is the letter issued by the Assistant Development Officer, A.I.I.S.C.Limited, Guntur to the Commissioner, Bapatla Municipality. Ex.B-3 is the notice issued by the standing counsel for plaintiff Corporation to the Assistant Development Officer, Industrial Infrastructure Corporation, Guntur. Ex.B-4 is the reply registered notice sent by the counsel of the D-3 to the counsel of the plaintiff. In the cross-examination, this witness deposed that Ex.B-3 was received by the same authority and the reply was issued by the same authority. It was not mentioned in Ex.B-4 that D-3 was in-charge for the Industrial Infrastructure Development Corporation. The designation is only changed but the corporation is one and the same. In the cross-examination, this witness deposed that Ex.B-3 was received by the same authority and the reply was issued by the same authority. It was not mentioned in Ex.B-4 that D-3 was in-charge for the Industrial Infrastructure Development Corporation. The designation is only changed but the corporation is one and the same. The information is not readily available to say that who is the officer in-charge of the corporation in 1976-77. One Watchman was there on behalf of the corporation at Bapatla. Ex.A-12 is the letter addressed by the Industrial Development Officer of the corporation to the Commissioner of Bapatla Municipality (plaintiff). According to Ex.A-13 letter the corporation requested for remission regarding to vacant site and ready to pay the amount for the other aspects. Ex.A-14 is the copy of the letter addressed by the Industrial Development Officer of the corporation, a copy of which marked to plaintiff. According to Ex.A-14 the corporation has received special notice as well as demand notice. Ex.A-15 is the letter addressed by the Industrial Development Officer to the plaintiff in which it is mentioned that they will intimate the area that was granted to the allottees and the area of land proposed to be given, the extent of green belt and roads on which the industrial estate will be intimated to them soon. They had not intimated to the plaintiff anything in furtherance of Ex.A-15. There is no evidence to show that after the entire extent of land was given to corporation, subsequently that corporation has surrendered some extent of land to the Government or to the Forest Department. The corporation preferred an appeal to the plaintiff after receipt of Ex.B-3. They addressed a letter after receipt of notice from the Municipal council for remission of tax. Even today there are structures in the corporation land and running industries. This witness also deposed that they had informed the plaintiff that the structures collapsed in November, 1977. The recent constructions started from 1986 and they had not informed about them to the plaintiff-municipality. There is only one structure pertaining to 1976 construction. Other constructions were collapsed. They are having evidence to show that they intimated to the plaintiff that certain structures were collapsed in 1977 cyclone. The recent constructions started from 1986 and they had not informed about them to the plaintiff-municipality. There is only one structure pertaining to 1976 construction. Other constructions were collapsed. They are having evidence to show that they intimated to the plaintiff that certain structures were collapsed in 1977 cyclone. This witness also deposed that it is not true to say that the plaintiff municipality informed the unit of the corporation at Bapatla about the levy of tax and after satisfying the same they addressed higher authorities for sanction of the amount to pay the tax. This witness volunteers that the tax notice pertaining to 1976-77 was received by the corporation in 1981 from the plaintiff municipality. The corporation is a limb of the State Government. This is the evidence of D.W.1. 17. Section 81 of the Act falling under Chapter IV of the Act deals with levy of ordinary taxes and the control of Government in respect thereof and the said provision reads as hereunder: (1) (a) Every council shall be resolution levy the following taxes namely:-- (i) a property tax; (ii) [ ............. ] (iii) a tax on carriages and carts; and (iv) a tax on animals (b) The council may, by resolution and with the previous sanction of the government also levy a tax on advertisements. ] (iii) a tax on carriages and carts; and (iv) a tax on animals (b) The council may, by resolution and with the previous sanction of the government also levy a tax on advertisements. (2) Any resolution of a council determining to levy a tax shall specify the rate at which and the date from which any such tax shall be levied; Provided that, before passing a resolution imposing a tax for the first time or increasing the rate of an existing tax, the council shall public a notice in at least one newspaper published in the mine language of the district having circulation in the municipality, on the notice board of the municipal office and in such other places within municipal limits as may be specified, by the council and by beat of drum, of its intention, fix a reasonable period not being less than one month for submission of objections and consider the objections if any, received within the period specified; Provided further that any resolution abolishing an existing tax or reducing the rate at which a tax is levied shall be immediately reported to the Government; and in municipalities which have an outstanding loan either from the Government or from the public or from any banking, insurance or financial corporation or from any other local authority, such abolition or reduction shall not be carried into effect without the sanction of the Government. 18. The counsel representing the appellant laid strong emphasis on the language of the first proviso of Section 81(2) of the Act wherein it is specified that before passing a resolution imposing a tax for the first time or increasing the rate of an existing tax, the council shall publish a notice in at least one newspaper published in the mine language of the district having circulation in the municipality. The learned counsel would maintain that the words "imposing of tax for the first time" and also the words "or increasing the rate of an existing tax" would assume lot of importance and even if the second limb to be applied, definitely the procedure had not been followed. Even as per the evidence of P.Ws.1 and 2 this procedure being mandatory and the levy of tax itself is illegal and hence the same cannot be sustained. 19. Even as per the evidence of P.Ws.1 and 2 this procedure being mandatory and the levy of tax itself is illegal and hence the same cannot be sustained. 19. Further, strong reliance was placed on Section 83 of the Act which deals with notification of new taxes and the same reads as hereunder: "When a council determines a subject to the provisions of Section 81, to levy any tax for the first time or at a new rate, the Commissioner shall forthwith publish a notification in the prescribed manner specifying the rate at which, the date from which and the period of levy, if any, for which, such tax shall be levied." Further emphasis had been laid by the counsel on the language of Section 83 "when a council determines a subject to the provisions of Section 81". 20. In Municipality, Rajahmundry v. N.J.Prasadarayudu AIR 1926 Madras 800 the learned Judge of the Madras High Court while dealing with Section 80 of the Madras District Municipal Act, 1920 held that when the Municipal Council proposes to levy a tax it must make the people understand at what rate it is going to collect the tax as provided for by the District Municipalities Act in Sch.4 or anything of the kind. In Municipal Council, Conjeevaram v. Kashi Munuswamy Mudaliar AIR 1932 Madras 1 the Full Bench of the Madras High Court while dealing with Section 80 of the Madras District Municipalities Act held that notification not mentioning specific rate leviable but calling for objections is not the notification contemplated by S.80 and the municipality has no jurisdiction to levy the tax. In Municipal Council, Anantapur v. Sangali Vasudeva Rao AIR 1931 Madras 808 the Division Bench of Madras High Court while dealing with Madras District Municipalities Act 1884 observed that it is clearly the duty of the Chairman under the rules issued a notification when he has completed his revision of the assessment books which will give the tax payers due notice that they have an opportunity of disputing his revised assessment. To give a vague notice that the council "proposes to increase the taxes" is certainly not to give a notice that he has revised the assessment of their property and that they may come in and dispute it. To give a vague notice that the council "proposes to increase the taxes" is certainly not to give a notice that he has revised the assessment of their property and that they may come in and dispute it. Where such a notification is not such as should have been issued and where the tax-payers are not as required by the rules, informed that a revision of the assessment of their property has been completed and that they have an opportunity of coming forward and disputing it as it affects them, a tax imposed without such a compliance with the Act in that respect is clearly illegal. 21. In The Vijayawada Municipal Council v. The Vijayawada Hotel Owners Association 1974 ALT 227 the Division Bench of this Court while dealing with Sections 81 to 83 of the Act, further referring to the relevant decisions on the point held the courts below found that the Municipality is not required and indeed has not been rendering any special services for collecting this licence fee. Once that conclusion is reached, the nature of the levy becomes clear. As per the provisions of the Act and its scheme, it can only be a tax, though it is given the nomenclature 'licence fee'. Once it is tax, the procedure specifically laid down by the Act for its imposition should be followed. Otherwise, the levy of tax would be illegal. The legal position is placed beyond pale of any doubt. The Act contemplates only two categories of imposts i.e., taxes and fees. A third category of impost of licence fee, which is in the nature of a tax, is not contemplated. It is, therefore, not permissible for the Municipal Board to impose a tax on hotels and restaurants under the guise of a licence fee without following the mandatory procedure for imposition of the taxes prescribed by Secs.81 to 83. 22. A third category of impost of licence fee, which is in the nature of a tax, is not contemplated. It is, therefore, not permissible for the Municipal Board to impose a tax on hotels and restaurants under the guise of a licence fee without following the mandatory procedure for imposition of the taxes prescribed by Secs.81 to 83. 22. Strong reliance was also placed on the decision of the Apex Court in Visakhapatnam Municipality v. K.Nukaraju AIR 1975 SC 2172 wherein it was observed at paras 12, 13 and 14 as hereunder: It was urged on behalf of the appellant that the first proviso to S. 81 (2) would apply only when a tax was imposed "for the first time" and since the appellant was levying property tax long before its imposition on the properties of respondents 1 to 36, it was unnecessary to follow the procedure prescribed by the proviso. It is not possible to accept this submission. The Municipality might have been levying property tax since long on properties situated within its limits but until April 1, 1966 the villages of Ramakrishnapuram and Sriharipuram were outside those limits. Qua the areas newly included within the municipal limits, the tax was being imposed for the first time and therefore it was incumbent on the Municipality to follow the procedure prescribed by the first proviso to Section 81 (2). Residents and tax-payers of those areas, like respondents 1 to 36, never had an opportunity to object to the imposition of the tax and that valuable opportunity cannot be denied to them. It is obligatory upon the Municipality not only to invite objections to the proposed tax but also to consider the objections received by it within the specified period. Such period has to be reasonable, not being less than one month. The policy of the law is to afford to those likely to be affected by the imposition of the tax a reasonable opportunity to object to the proposed levy. According to the appellant, the residents of Ramakrishnapuram and Sriharipuram had an opportunity to object to the imposition of the tax when the State Government issued a notification under Section 3(1)(b) of the Act declaring its intention to include the two villages within the limits of the Municipality. It is not possible to accept this submission either. According to the appellant, the residents of Ramakrishnapuram and Sriharipuram had an opportunity to object to the imposition of the tax when the State Government issued a notification under Section 3(1)(b) of the Act declaring its intention to include the two villages within the limits of the Municipality. It is not possible to accept this submission either. When the State Government issues a notification under any of the clauses of Section 3 (1), any resident of the local area concerned or any tax-payer of the Municipality can "object to anything therein contained" meaning thereby, anything contained in the notification. A notification issued under Section 3(1)(b) contains only the declaration of the Government's intention "to include within a Municipality any local area in the vicinity thereof and defined in such notification". The right of objection would therefore be limited to the question whether a particular area should, as proposed, be included within the Municipal limits. It would be premature at that stage to offer objections to the imposition of any tax because it is only after the final notification is issued under Section 3 (3) that the question would at all arise as regards the imposition of a tax on the newly included areas. A notification under Section 3 (3) has to be followed by a resolution under Section 81 (1) if the Municipality wants to impose a tax, and for the resolution to be effective, the procedure prescribed by the first proviso to Section 81 (2) has to be followed. The appellant municipality short-circuited this mandatory procedure and thereby deprived respondents 1 to 36 of the valuable right of objecting to the imposition of the tax. Finally, relying on Section 3 (4) of the Act, learned counsel for the appellant contended that the inclusion of the two villages within the Municipal area attracts of its own force every provision of the Act with effect from the date on which the final notification is published by the Government under S. 3.(3). This argument is said to find support in a decision of this Court in Atlas Cycle Industries Ltd. v. State of Haryana, (1972) 1 SCR 127 = ( AIR 1972 SC 121 ). Far from supporting the argument, we consider that the decision shows how a provision like the one contained in Section 3 (4) cannot have the effect contended for by the appellant. Far from supporting the argument, we consider that the decision shows how a provision like the one contained in Section 3 (4) cannot have the effect contended for by the appellant. In the Atlas Cycle case, Section 5(4) of the Punjab Municipality Act, 1911 provided that when any local area was included in a Municipality, "this Act and............ all rules, bye-laws, orders, directions and powers made, issued or conferred under this Act and in force throughout the whole Municipality at the time, shall apply to such area." The industrial area within which the factory of the Atlas Cycle was situated was by a notification included within the Municipality of Sonepat. The Municipality thereafter purported to impose octroi duty on the goods manufactured by the company without following the procedure corresponding to that prescribed by Sections 81 and 83 of the Act. It was held by this Court that since Section 5 (4) of the Punjab Act did not, significantly, refer to notifications and since Section 62 (10) of the Punjab Act spoke of "notification" for the imposition of taxes, it was not competent to the Municipality to levy and collect octroi from the company on the strength merely of the provision contained in Section 5 (4) of the Punjab Act. In the instant case, what Section 3 (4) provides is that once a notification including any area within a Municipality is published under Section 3 (3), "The provisions of this Act shall come into force in, any Municipality or part thereof on the date of publication of the notification under sub-section (3), if such date is the first day of April, or in any other case, on the first day of April immediately succeeding the date of publication of such notification." Thus, by Section 3 (4), once a notification is issued under Section 3(3), all the provisions of the Act come into force. That means that Sections 81 and 83, which are a part of the Act, would also apply to the entire Municipal area. It would then be obligatory for the Municipality to follow the procedure prescribed in these sections. Taxes can be imposed under the Act only by passing appropriate resolutions under Section 81. Section 3 (4) does not provide that on the inclusion of a new area within a Municipality, the resolutions passed by the Municipal Council before such inclusion will automatically apply to the new area. Taxes can be imposed under the Act only by passing appropriate resolutions under Section 81. Section 3 (4) does not provide that on the inclusion of a new area within a Municipality, the resolutions passed by the Municipal Council before such inclusion will automatically apply to the new area. Plainly, such could not be the intention of the legislature in view of the importance which it has attached to the right of the citizens to object to the imposition of a proposed tax. Though, therefore, by reason of Section 3 (4) the provisions of the Act would apply to the new areas included within a Municipality, it is not competent to the Municipality to take recourse to the resolution passed for imposing tax on the old areas for the purpose of levying taxes on new areas. The procedure prescribed by Sections 81 and 83 must be followed if a tax is proposed to be levied on the new areas. 23. Reliance was also placed in The Vijayawada Municipality v. Lanka Rama Murthy 1977 ALT 596 , Guntur Municipal Council v. Rate-payers' Association AIR 1971 SC 353 and The Bangalore Wollen Cotton and Silk Mills Co. v. Bangalore Corporation AIR 1962 SC 562 . 24. On a careful analysis of the oral and documentary evidence available on record, it may be that the officer concerned may have had knowledge, but that itself may not be sufficient to hold otherwise, when this is the case that the mandatory procedure under the provisions of the Act referred to above had not been followed. Even in the light of the nature of the evidence available on record, the oral evidence of P.Ws.1 and 2 and also D.W.1 and the documentary evidence of Exs.A-1 to A-15 and Exs.B-1 to B-4 relied upon by the parties, this Court is thoroughly satisfied that the mandatory procedure contemplated in the provisions of the Act had not been followed and hence the very levy of tax cannot be said to be in accordance with law and in the light of these findings, the other question as to whether the suit had been instituted within the time or not, need not be further discussed. Accordingly, the findings recorded by the trial court in this regard cannot be sustained, the said findings are hereby set aside. 25. Accordingly, the findings recorded by the trial court in this regard cannot be sustained, the said findings are hereby set aside. 25. Point No.2: In the result, in the light of the findings recorded above, the appellant is bound to succeed and, accordingly, the appeal is hereby allowed. However, in the light of the peculiar circumstances of the case, let the parties bear their own costs.