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Issues Involved:
1. Competence of the Municipal Board to levy water tax. 2. Alleged discrimination in exempting the main residential palace of the Nawab of Rampur from water tax. 3. Compliance with statutory requirements for publication of tax proposals and rules. 4. Classification of the levy as a tax or a fee. 5. Applicability of the 600 ft. radius rule for water tax imposition. Detailed Analysis: 1. Competence of the Municipal Board to Levy Water Tax: The petitioner contended that the Municipal Board lacked the authority to impose the water tax. Section 128 of the U.P. Municipalities Act empowers the Board to levy taxes, including water tax, on the annual value of buildings or lands. The court noted that the State Government has the legislative competence to delegate this power to the Board under Entry No. 49 in List II of the Seventh Schedule to the Constitution, which pertains to "Taxes on lands and buildings." The court concluded that water tax, though named as such, is essentially a tax on lands and buildings and falls within the legislative competence of the State Government. 2. Alleged Discrimination in Exempting the Nawab's Palace: The petitioner argued that exempting the main residential palace of the Nawab of Rampur from water tax was discriminatory and violated Article 14 of the Constitution. The court acknowledged that while Article 14 prohibits class legislation, it allows reasonable classification. The Nawab was treated as a separate class due to historical and special circumstances, including the Merger Agreement with the Government of India, which preserved his privileges. The court found that the exemption was based on reasonable classification and did not violate Article 14. 3. Compliance with Statutory Requirements for Publication: The petitioner claimed that the special resolution and proposals for the imposition of water tax were not published according to the Act's provisions. Section 131(3) of the Act requires publication in a local Hindi newspaper. The notice was published in "Aghaz," which used Devanagari script but was primarily an Urdu paper. The court held that the publication in Devanagari script amounted to substantial compliance with Section 94(3) of the Act, especially since the petitioner regularly advertised in "Aghaz," indicating its readership among the petitioner's employees. 4. Classification of the Levy as a Tax or a Fee: The petitioner argued that the water tax was essentially a fee for water supply services, which they did not use. The court distinguished between a tax and a fee, noting that a tax is a compulsory exaction for public purposes without a direct quid pro quo, whereas a fee is a payment for specific services rendered. The court concluded that the water tax was indeed a tax, as it was imposed to fund the construction, maintenance, and extension of water works, a public purpose, without a direct quid pro quo. 5. Applicability of the 600 ft. Radius Rule: The petitioner contended that their buildings were outside the 600 ft. radius from the nearest stand-pipe, as stipulated in Section 129(a) of the Act, and thus should be exempt from the water tax. The court found conflicting affidavits regarding the distance of the petitioner's buildings from the stand-pipe. Given the lack of conclusive evidence, the court could not definitively rule on this issue but noted that some of the petitioner's buildings were within the 600 ft. radius, making the exemption argument untenable. Conclusion: The court dismissed the petition, upholding the validity of the water tax imposed by the Municipal Board. The imposition was within the Board's competence, did not violate Article 14 due to reasonable classification, complied substantially with publication requirements, was correctly classified as a tax, and the 600 ft. rule did not exempt all of the petitioner's buildings. The petition was dismissed with costs.
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