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TMI Blog1961 (12) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... section 59. This is the first reason why we think that the appellant municipality's contention is untenable. The imposition contemplated by section 59 is clearly not the passing of the resolutions under section 60 selecting the tax and making the rule prescribing the tax to be levied in terms of section 46(1), for section 56(1)(a) expressly makes the imposition something happening after section 60 has been complied with. This seems to us to be another reason for not accepting the appellant municipality's contention. " Impose " in section 59 means the actual levy of the tax after authority to levy it has been acquired by rules duly made and sanctioned, and it is such imposition that is made subject to the general or special orders of the Government. Therefore, the Government can at any time by any such order prohibit the imposition of the tax. Apart from the very interesting question raised by the learned Attorney-General that the municipality, being a local authority, was a State, and was not therefore entitled to the benefit of article 14, as to which we think it unnecessary to express any opinion, we are on the facts satisfied that there is no discrimination. The Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icipalities. It will be necessary also to consider section 46. Section 46 gives power to a municipality to make rules for various purposes as specified in the several clauses contained in it. Under clause (1) of this section, a municipality has power to make rules for the purpose of " prescribing, subject to the provisions of Chapter VII, the taxes to be levied ". Section 59 is the section on which the decision of this case will really turn and we, therefore, think it right to set out that portion of it which is relevant for our purpose. " 59. (1) Subject to any general or special orders which the State Government may make in this behalf, any municipality --- (a) after observing the preliminary procedure required by section 60 and (b) with the sanction of the State Government in the case of city Municipalities ......... and subject to such modifications or conditions as under section 61 the State Government ......... in according such sanction, deems fit, may impose, for the purposes of this Act, any of the following taxes, that is to say, (iv) an octroi on animals or goods, or both, brought within the octroi limits for consumption, use or sale therein ". Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty's power to tax arises only under section 59. Under that section, it has been given the power to impose a tax after following the procedure prescribed but subject always to the general or special orders of the Government. The appellant municipality can succeed in this appeal only if the word " impose " in section 59 means the acquisition of the power to tax by following the procedure laid down in sections 60 to 62. Its appeal must otherwise fail. It seems to us that the word " impose " in section 59 has not the meaning for which the appellant municipality contends. It would have been noticed that under section 59 a municipality may impose a tax only after it has framed a rule under section 60 prescribing the tax to be levied and the Government has given its sanction to that rule under section 61. It is this imposition which is made by section 59 " subject to any general or special orders which the State Government may make in this behalf ". Therefore, it is the imposition after the making of the rule authorising the tax, that is subject to the Government's orders and not the making of the rule itself which authorises the tax. It is plain from section 59 that the control over a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders of the Government. Therefore, the Government can at any time by any such order prohibit the imposition of the tax. Mr. Sastri for the appellant said that the general or special orders in section 59 refer to orders that can be made under section 73, but the present order had admittedly not been made under that section. Section 73 does not empower an order prohibiting the imposition of a tax altogether as the order in the present case does. It only gives power to suspend the levy of the tax authorised till the objections to the tax which the Government required to be removed had been removed. Because section 73 gives a power to suspend the tax, it is, in our opinion, no argument that the general or special orders in section 59 must be understood as confined to such orders. Section 73 cannot help in interpreting the words " general or special orders " in section 59. A third objection to the validity of the order was that it was discriminatory. It was said that no other municipality had been prohibited from collecting a similar tax which it had power under its rules to collect. Apart from the very interesting question raised by the learned Attorney-General that the municipal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity in the matter of the levy of the tax is, however, not absolute but is made subject, apart from other provisions to which I shall advert, to such general and special orders as the State Government might pass by virtue of the opening words of section 59 of the Act. The argument strenuously pressed by Mr. Viswanatha Sastri was this : The Government had, no doubt, a power to prescribe and control by general or special orders the right of a municipality to impose a tax. These general or special orders would again, no doubt, be subject to modification from time to time to suit the changing needs of particular areas, or of particular interests which would be affected by the tax-levy, but the exercise of the power of modification or this power to prescribe conditions and restrictions is exhausted when a municipality does, by conforming to the orders then in force, impose a levy which has come into force under section 62. I am unable to agree with this construction of the opening words of section 59(1). On its language there is nothing to warrant the doctrine that it gets exhausted by reason of a municipality imposing a tax in conformity with an order as it stood at a particular d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any special or general order " in relation to a tax after it has once been " imposed " because the power to prescribe conditions or restrictions by general or special order is with reference to the " imposition " of the tax. I feel unable to accept this construction. The whole foundation of the argument is based on a denial of the premise that a power to impose tax is a continuing power. In my judgment the " imposition " of a tax is a continuing power in the sense that so long as it is in force, it points to the existence of and derives vitality from the power of the authority to impose it. When the municipality levies the tax in the sense of quantifying it with reference to an ascertained person and thereby creating a statutory debt payable by the taxpayer, it is in reality exercising the power to " impose " the tax, for it is the continued existence of the imposition that furnishes the legal basis for the levy when made. When the power to impose is withdrawn the imposition falls to the ground. That is the ratio of saving provisions which enable taxes to be levied and collected notwithstanding the deprivation of the right to impose taxes for the future. In this view it is clear th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the provisions in sections 59 to 62, the municipality itself could revoke the tax if the rules so provide, for section 47 of the Act enacts : " (1) Subject to the requirements of clause (a) of the proviso to section 46 every municipality may, except as otherwise provided in clause (b) of the proviso to section 74, at any time for sufficient reason, suspend, reduce or abolish any existing tax by suspending, altering or rescinding any rule prescribing such tax under the provisions of clause (1) and of the first clause of the proviso to section 46. (2) The provisions of Chapter VII relating to the imposition of taxes shall, so far as may be, apply to the suspension, reduction or abolition of any tax and to the suspension, alteration or rescission of any rule prescribing a tax." But for the opening words of section 59(1) there is no specific provision in the Act to enable Government to intervene in cases where the continued levy of a tax is contrary to public interest. I do not consider that any such gap was intended and in my judgment the opening words in sectiom 59(1) are both apt and sufficient to clothe Government with power to direct by " special order " a municipality ..... X X X X Extracts X X X X X X X X Extracts X X X X
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