1999 (10) TMI 125 - SC - Indian Laws

The Municipality purporting to invoke the proviso to the section 127-A(2) of the Act aggregated the annual letting value of all the buildings and levied property tax on the deemed annual letting value so aggregated. The assessment order was followed by the demand notice. - Held that - the proviso to clause (b) of sub-section(2) of section 127-A of the Act being contrary to the charging section is struck-down as ultra vires. The intention of the Legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic results sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plain, unambiguous language of the statute. Words cannot be added to or substituted so as to give a meaning to the statute which will serve the spirit and intention of the legislature.

Summary

Issues Involved:
1. Vires of the proviso to clause (b) of sub-section (2) of Section 127-A of Madhya Pradesh Municipalities Act, 1961.
2. Levy and collection of property tax in respect of buildings owned by the appellant.
3. Interpretation of Section 127-A and its interaction with other relevant provisions of the Act.
4. Constitutional validity of the proviso to sub-clause (b) of Section 127(A)(2) of the Act.
5. Determination of the rate of tax for properties with an annual letting value not exceeding Rs. 1800.

Issue-wise Detailed Analysis:

1. Vires of the Proviso to Clause (b) of Sub-section (2) of Section 127-A:
The case questions the vires of the proviso to clause (b) of sub-section (2) of Section 127-A of the Madhya Pradesh Municipalities Act, 1961. The proviso aggregates the annual letting value of all buildings owned by a person within a municipality for the purpose of levying property tax. The Supreme Court ultimately found this proviso to be ultra vires, as it contradicts the charging section of the Act.

2. Levy and Collection of Property Tax:
The Municipal Council, Raigarh, aggregated the annual letting value of multiple properties owned by the appellant and levied property tax based on this aggregated value. The initial appellate authority quashed the assessment order and demand notice, but the District Judge, Raigarh, on revision, confirmed the assessment. The High Court upheld the assessment, but the Supreme Court set aside the High Court's judgment, finding the proviso to be unconstitutional.

3. Interpretation of Section 127-A and Related Provisions:
Section 127-A(1) specifies the rates of property tax based on the annual letting value of properties. The proviso to Section 127-A(2)(b) deems the annual letting value of properties below Rs. 1800 to be the aggregate annual letting value of all properties owned by the same person in the municipality. The Supreme Court emphasized that the plain language of the statute must be followed and that the interpretation should not extend beyond what is explicitly stated.

4. Constitutional Validity of the Proviso:
The High Court had upheld the constitutional validity of the proviso, relying on previous judgments. However, the Supreme Court found that the proviso, by aggregating the annual letting values, imposes a tax without a clear rate specified in the charging section. This ambiguity makes the proviso unconstitutional, as it fails to meet the requirements of a clear and unambiguous tax law.

5. Determination of Tax Rate for Properties with Annual Letting Value Not Exceeding Rs. 1800:
The Supreme Court noted that the Table in Section 127-A(1) starts with properties having an annual letting value exceeding Rs. 1800, indicating no tax for properties below this threshold. The proviso attempts to tax these properties by aggregating their values, but the Act does not specify the rate of tax for such aggregated values. This lack of clarity further supports the Court's decision to strike down the proviso as ultra vires.

Conclusion:
The Supreme Court allowed the appeal, setting aside the High Court's judgment and striking down the proviso to clause (b) of sub-section (2) of Section 127-A as ultra vires. The Court emphasized the necessity of clear and unambiguous language in taxation statutes and held that any ambiguity in the tax law means there is no tax in law. There was no order as to costs.