1960 (8) TMI 101 - HC - Indian Laws

Summary

Issues Involved:
1. Legality of the municipal water-tax demand.
2. Requirement of an assessment list for water-tax.
3. Imposition of water-tax on non-users of municipal water.
4. Compliance with Section 129(b) of the U.P. Municipalities Act.
5. Legislative competence of the U.P. Legislature to impose water-tax.
6. Delegation of legislative power to the executive regarding the radius for water-tax applicability.

Detailed Analysis:

1. Legality of the Municipal Water-Tax Demand:
The petitioners challenged the legality of the municipal demand for water-tax imposed by the Saharanpur Municipal Board at a rate of 10% on the annual valuation of lands and buildings. The court noted that the Board imposed the water-tax with effect from January 1, 1957, and the assessments were made based on quinquennial assessment lists. The court concluded that the demand was made in accordance with the material provisions of law.

2. Requirement of an Assessment List for Water-Tax:
The petitioners contended that the Board failed to prepare an assessment list specifically for water-tax. The court referred to Sections 142 and 143 of the U.P. Municipalities Act, which do not expressly require a separate assessment list for water-tax. The court held that since water-tax is also assessed on the annual valuation of lands and buildings, the existing assessment list prepared for land and building tax suffices. Therefore, the Board was not required to prepare a separate list for water-tax.

3. Imposition of Water-Tax on Non-Users of Municipal Water:
The petitioners argued that the water-tax was invalid as it was imposed on persons not using water supplied by the Board. The court found that the petitioners did not provide evidence that they were among those not using the municipal water supply. Additionally, this ground was not raised in the petitions. Consequently, the court ruled that the petitioners had no locus standi to challenge the imposition of water-tax on this basis.

4. Compliance with Section 129(b) of the U.P. Municipalities Act:
The petitioners claimed that the water-tax was imposed not solely for defraying expenses related to municipal water-works but for increasing municipal revenues, contrary to Section 129(b) of the Act. The court noted that the Board followed the statutory procedure for imposing the tax, including inviting and considering objections. The court further held that the presumption is that the Board acted within its statutory powers, and the petitioners failed to prove otherwise. The counter-affidavit provided by the Board detailed the financial aspects and expenditures related to the water-works, supporting the Board's compliance with Section 129(b).

5. Legislative Competence of the U.P. Legislature to Impose Water-Tax:
The petitioners contended that Clause (x) of Section 128(1) of the Act, which authorizes the imposition of water-tax, was beyond the legislative competence of the U.P. Legislature. The court examined the historical context and constitutional provisions, including entries in List II of the Seventh Schedule to the Constitution. The court concluded that the U.P. Legislature had the competence to enact the provision under entries related to local government, water supply, and fees. The court also distinguished between tax and fee, concluding that the water-tax, despite its nomenclature, functioned as a fee due to its specific allocation for water-works expenses.

6. Delegation of Legislative Power to the Executive Regarding the Radius for Water-Tax Applicability:
The petitioners argued that the delegation of power to the State Government to fix the radius within which water-tax would be applicable amounted to impermissible delegation of legislative power. The court held that the Legislature had not delegated an essential legislative function but had provided broad policy and principles, leaving flexible details to the executive. The court emphasized the necessity of such delegation for practical governance and local self-government. The court also noted procedural safeguards, including public objections and scrutiny, ensuring that the delegation did not amount to an abdication of legislative power.

Conclusion:
The court dismissed the petitions, upholding the legality of the water-tax imposed by the Saharanpur Municipal Board. The petitioners were ordered to pay costs of Rs. 201/- to the Municipal Board in each case.