1971 (5) TMI 72 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of the Professions Tax Limitation (Amendment and Validation) Act, 1949.
2. Validity of Section 131 of the U.P. Zila Parishad Act.
3. Validity of the assessment order dated 25th March, 1968.
4. Legislative competence of the Federal Legislature.
5. Compliance with procedural rules for tax assessment.
6. Validity of the appointment of the Kar Adhikari.

Detailed Analysis:

1. Validity of the Professions Tax Limitation (Amendment and Validation) Act, 1949
The petitioners challenged the validity of the Professions Tax Limitation (Amendment and Validation) Act, 1949, arguing it was beyond the legislative competence of the Federal Legislature. The Court found no merit in this contention. The Act was deemed valid as it amended the Professions Tax Limitation Act, 1941, to include items 3-A and 3-B in the Schedule, which validated the imposition of certain taxes on circumstances and property in the United Provinces. The Court held that the Federal Legislature had the power to amend the tax rates from time to time, as indicated by the phrase "unless for the time being provision to the contrary is made by a law of the Federal Legislature."

2. Validity of Section 131 of the U.P. Zila Parishad Act
No arguments were advanced on the validity of Section 131 of the U.P. Zila Parishad Act, and the Court did not express any opinion on this matter.

3. Validity of the Assessment Order Dated 25th March, 1968
The petitioners challenged the assessment order of Rs. 2,000 imposed by the Kar Adhikari, Zila Parishad Muzaffarnagar, arguing procedural irregularities and the invalidity of the Kar Adhikari's appointment. The Court found that the assessment was invalid due to the improper appointment of the Kar Adhikari, as it was not done in consultation with the Public Service Commission as required by Section 43 of the U.P. Kshettra Samithis and Zila Parishads Adhiniyam, 1961. The Court quashed the assessment order.

4. Legislative Competence of the Federal Legislature
The petitioners argued that the Central Act LXI of 1949 was beyond the legislative competence of the Federal Legislature. The Court rejected this argument, stating that the Federal Legislature had the authority to legislate on tax matters and could amend tax rates from time to time. The Court cited the case of M.P.V. Sundararamier & Co. v. The State of Andhra Pradesh to support its view that legislative power includes the authority to enact laws retrospectively.

5. Compliance with Procedural Rules for Tax Assessment
The petitioners contended that the rules framed under the District Boards Act became inconsistent and unworkable under the U.P. Zila Parishads Act. The Court found no merit in this argument, stating that the assessment could still be carried out by the assessing officer even if the circle members refused to cooperate. The Court also rejected the argument that the time schedule mentioned in the rules was mandatory, holding that it was merely directory.

6. Validity of the Appointment of the Kar Adhikari
The petitioners argued that the appointment of the Kar Adhikari was invalid as it was not done in consultation with the Public Service Commission. The Court agreed, stating that the appointment was not in compliance with Section 43 of the U.P. Kshettra Samithis and Zila Parishads Adhiniyam, 1961. The Court noted that the appointment, even if regarded as temporary, could only be effective for two years, and the assessment was made beyond this period. Therefore, the assessment was held to be invalid.

Conclusion
The Court quashed the assessment order of Rs. 2,000 dated 25th March, 1968, due to the invalid appointment of the Kar Adhikari. The Court did not find merit in the other major points raised by the petitioners. No order as to costs was made due to the divided success in the writ petition.