1972 (12) TMI 90 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of Section 2(1A) Clause (i) concerning different measures of tax for different periods.
2. Validity of Proviso (c) to Section 2(1A) Clause (ii) regarding annual letting value.
3. Retrospective amendment of Section 49 and enactment of Section 13(1) of Gujarat Act 5 of 1970.
4. Validity of the proviso to Section 129(b) concerning different rates of conservancy tax for different classes of properties.
5. Validity of Sections 406(2)(e) and 411(bb) concerning the requirement of deposit for entertaining appeals.
6. Validity of the resolutions fixing conservancy tax at 9% for certain classes of properties.

Detailed Analysis:

1. Validity of Section 2(1A) Clause (i):
Section 2(1A) Clause (i) provides one measure of tax for the period prior to 1st April 1970 and another measure for the period subsequent to it. The petitioners argued that this classification is discriminatory and violates Article 14 of the Constitution. The Court found this argument unsustainable, stating that the Legislature has the right to alter the incidence of tax and determine from what date the new definition should come into operation. The Court held that providing one measure of tax for the period prior to 1st April 1970 and another for the period subsequent to it cannot be considered discriminatory.

2. Validity of Proviso (c) to Section 2(1A) Clause (ii):
Proviso (c) to Section 2(1A) Clause (ii) was challenged on the grounds of discrimination and unreasonableness. The Court held that the classification made by Proviso (c) is not arbitrary or irrational. The classification is based on whether the annual rent of the building can be easily estimated. If it cannot, the statutory formula in Proviso (c) is applied. The Court found this classification valid and not violative of Article 14.

3. Retrospective Amendment of Section 49 and Enactment of Section 13(1):
The petitioners argued that the retrospective amendment of Section 49 and the enactment of Section 13(1) of Gujarat Act 5 of 1970 were unconstitutional as they validated assessments made by the Deputy Municipal Commissioner, who had no jurisdiction at the time. The Court rejected this argument, stating that the retrospective amendment did not impose any unreasonable restriction and was not violative of Article 19(1)(f). The Court found that the retrospective amendment and the enactment of Section 13(1) were constitutionally valid.

4. Validity of the Proviso to Section 129(b):
The proviso to Section 129(b) allows the Corporation to fix different rates of conservancy tax for different classes of properties. The petitioners argued that this power is unguided and unfettered, leading to arbitrary classification. The Court held that the Legislature has provided sufficient guidance by stating that the cost of conservancy service supplied by the Corporation should be a guiding consideration in fixing different rates of conservancy tax. The Court found the proviso to Section 129(b) constitutionally valid.

5. Validity of Sections 406(2)(e) and 411(bb):
Sections 406(2)(e) and 411(bb) require the deposit of the amount of tax assessed as a condition for entertaining an appeal. The Court found that this requirement creates a discriminatory classification between appellants who can deposit the amount of tax and those who cannot. The Court held that this classification has no rational nexus with the object of providing an appeal and is therefore discriminatory and violative of Article 14.

6. Validity of Resolutions Fixing Conservancy Tax at 9%:
The resolutions fixing the rate of conservancy tax at 9% for certain classes of properties were challenged as being arbitrary and not in conformity with the guiding principle laid down by the Legislature. The Court found that the Corporation did not provide any material to show that the differential rates of tax were fixed having regard to the cost of conservancy service supplied to each class of properties. The Court held that the resolutions were ultra vires the proviso to Section 129(b) and were therefore invalid.

Judgments:
1. Section 2(1A) Clause (i) is valid for the official year 1969-70 but invalid for earlier years due to violation of Article 14.
2. Proviso (c) to Section 2(1A) Clause (ii) is constitutionally valid.
3. Section 49 and Section 13(1) of Gujarat Act 5 of 1970 are constitutionally valid.
4. The proviso to Section 129(b) is constitutionally valid.
5. Sections 406(2)(e) and 411(bb) are null and void as they contravene Article 14.
6. The resolutions fixing the rate of conservancy tax at 9% for certain classes of properties are ultra vires and invalid.