Full Judgment Text
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PETITIONER:
CORPORATION OF THE CITY OF BANGALORE
Vs.
RESPONDENT:
KESORAM INDUSTRIES AND COTTON MILLS LTD.DUNLOP INDIA LTD. AN
DATE OF JUDGMENT08/12/1989
BENCH:
FATHIMA BEEVI, M. (J)
BENCH:
FATHIMA BEEVI, M. (J)
OZA, G.L. (J)
CITATION:
1990 AIR 322 1989 SCR (2) 443
1989 SCC Supl. (2) 753 JT 1989 (4) 491
1989 SCALE (2)1265
ACT:
City of Bangalore Corporation Act. 1949: Section 98,
Octroi-Levy of--Consideration of objections by the Corpora-
tion against the levy--Court--Whether can examine the manner
of consideration.
Taxation--Essentials of valid taxation--What are--Proce-
dure for imposition of tax--Court--Whether to presume com-
pliance with--Noncompliance with condition--Precedent of
levy of tax--Burden of proof On whom.
Words and phrases: ’Consideration’--Meaning of.
HEADNOTE:
The City Corporation of Bangalore invited objections
from the public to the proposed levy of octroi on certain
items. In a meeting of the Corporation after placing the
objections on the Table and circulating the Notes of the
Commissioner analysing the objections, a unanimous resolu-
tion was passed levying the octroi.
The respondents challenged the validity of the Resolu-
tion contending that it was passed in violation of Section
98(1) of the City of Bangalore Corporation Act, 1949.
The High Court declared the Resolution invalid holding
that because of shortage of time, the condition precedent
for passing the resolution i.e. real consideration of the
objections was not satisfied. Hence these appeals by the
Corporation.
Setting aside the judgment of the High Court and allow-
ing the appeals, this Court,
HELD: 1. Taxation in order to be valid must not only be
authorised by a statute, but also be levied or collected in
strict conformity with the statute which authorises it.
Where a condition precedent is laid down for statutory power
being exercised it must be fulfilled before a sub-ordinate
authority can exercise delegated power. When the
444
statute requires that delegated power may be exercised on
fulfilment of certain conditions precedent, the Court would
presume the regularity of the order including the fulfilment
of the condition precedent. It is 1or the party who chal-
lenged the legality to show that the condition precedent was
not in fact complied with by the authority. [446H; 447B]
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2. The Municipal Administration is coordinated to secure
the vital interest of the general public. It is the function
of the representative body to ascertain the local opinion
and decide thereon before imposition of the tax. It has,
therefore, to be assumed that local representatives who had
taken note of the objections received in pursuance of the
notice published have consciously reached the decision. Once
it is clear that there had been consideration of the objec-
tion, it is not for the Court to examine the manner in which
the legislative will had been indicated. [447C-D]
3. The Court has no jurisdiction to examine the validity
of the reasons that goes into the decision or the motive
that induced the delegated authority to exercise its powers.
No judicial duty is laid on the authority in discharge of
the statutory obligations, and, therefore, the only question
to be examined is whether the statutory provisions have been
complied with. [447H; 448A]
4. The High Court was not justified in assuming from the
time factor alone that there could not have been a consider-
ation of the objections. It is not the function of the Court
to probe into the details of the discussions and the delib-
erations before legislative will is seen expressed by pass-
ing the resolution. The connotation of the word ’considera-
tion’ occuring in sub-section (1) of Section 98 comprehends
’taking note of’ or ’paying heed to’ depending upon the
nature of the subject. It may be open to the councillors to
express their views even within the limited time available.
No standard can be prescribed in such matters. When it is
shown that the council had the opportunity to consider the
objections received, it has to be deemed, that they had
taken note of the same before reaching a decision. [448H;
449A-B]
Municipal Board, Hapur v. Raghuvendra Kripal and Others,
[1966] 1 S.C.R. 956; Sundarjas Kanyalal Bhatija & Ors. etc.
v. The Collector, Thane, Maharashtra & Ors., [1989] 3 Judg-
ment Today 57; Swadeshi Cotton Mills Co. Limited v. The
State of U.P. and Others, [1962] 1 S.C.R. 422; Gopal Narain
v. State of Uttar Pradesh & Another, A.I.R. 1964 S.C. 370,
followed.
445
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
1216(N)of 1975.
WITH
Civil Appeal Nos. 509 641(N) of 1977.
From the Judgment and Order dated 26.2.1975 of the
Karnataka High Court in W.P. No. 371 of 1975.
A.S. Nambiar and M. Veerappa for the Appellant.
K.N. Bhat, Vineet Kumar and K.M.K. Khan, for the Re-
spondents.
The Judgment of the Court was delivered by
M. FATHIMA BEEVI, J. 1. These connected appeals by
special leave arise from the common judgment of the High
Court of Karnataka. The Writ Petitions filed by the respond-
ents against the appellant, the Corporation of the City of
Bangalore were allowed and the resolution dated the December
30, 1974 passed by the Corporation levying octroi on certain
additional items under Section 98 of the City of Bangalore
Corporation Act, 1949 (shortly stated as ’the act’) was
declared as invalid.
2. Section 98 of the Act requires the Corporation before
passing any resolution imposing a tax or duty for the first
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time to publish a notice in the Official Gazette and in the
local newspapers of its intention and inviting objections.
The Corporation may, after considering the objections, if
any, received within the period specified determine by
resolution to levy the tax or duty.
3. On the recommendation of the Standing Committee to
levy octroi on certain new items of goods the appellant
published a notice as contemplated under Section 98(1) of
the Act inviting objections from the public and the said
notice was published in the Gazette dated 17-9-1974. Several
objections were received in pursuance of the said notifica-
tion. The subject was included in the supplementary agenda
at the meeting held on 30-12-1974. It was taken up as Item
No. 146 and the resolution was passed unanimously. The
Commissioner thereafter issued notification.
446
4. The respondents challenged the validity of the reso-
lution on the ground inter alia that there had not been
consideration of the objections before passing the resolu-
tion and, therefore, the mandatory provision under Section
98(1) was violated. The High Court in allowing the Writ
Petitions has taken the view that what is contemplated
trader the statute is a real consideration of the objections
and not a mere pretence and since the time was too short
there was no opportunity for such consideration and on
account of non-consideration of the objections to the pur-
posed levy the condition precedent for the passing of the
resolution was not satisfied and therefore, the resolution
is invalid.
5. The learned counsel for the appellant submitted that
the objections have been placed on the table after the
Commissioner had prepared a note of the several objections
analysing the nature of the objection, setting out the legal
conditions regarding the levy and containing the answers to
the objection, distributed cyclostyled copies of the note
before the meeting, and the subject was taken up and passed
unanimously. The text of the resolution it is submitted
indicated that there was proper application of-mind by the
council. Relying on the decision of this Court in Municipal
Board, Hapur v. Raghuvendra Kripal and Others, [1966] 1
S.C.R. 956 the learned counsel maintained that the High
Court should not have ventured into the question of the
manner in which consideration was given to the item in the
agenda and the presumption that the statutory authority has
followed the prescribed procedure should prevail. It was
also pointed out that the Mayor of the Corporation and one
of the councillors have filed affidavits affirming that the
objections along with the note were placed on the table and
the objections were taken note of before reaching the deci-
sion. The respondents’ learned counsel submitted that con-
sideration of the objections is a condition precent for
imposition of the levy and the High Court having been satis-
fied of the non-compliance with this mandatory requirement,
has rightly invalidated the tax.
6. The admitted facts are that the resolution had been
passed on 30-12-74 after placing the objections on the table
and, distributing notes of the Commissioner, analysing the
objections and containing answers to the same. The subject
was in the urgent agenda and the record of proceedings
revealed that the resolution had been passed unanimously-
7. Taxation in order to be valid must not only be
authorised by a statute, but also be levied or collected in
strict conformity with the
447
statute which authorises it. Where a condition precedent is
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laid down for statutory power being exercised it must be
fulfilled before a sub-ordinate authority can exercise
delegated power. When the statute requires that delegated
power may be exercised on fulfilment of certain conditions
precedent, the Court would presume the regularity of the
order including the fulfilment of the condition precedent.
It is for the party who challenged the legality to show that
the condition precedent was not in fact complied with by the
authority.
8. The Municipal Administration is coordinated to secure
the vital interest of the general public. It is the function
of the representative body to ascertain the local opinion
and decide thereon before imposition of the tax. It has,
therefore, to be assumed that local representatives who had
taken note of the objections received in pursuance of the
notice published have consciously reached the decision. Once
it is clear that there had been consideration of the objec-
tion, it is not for the Court to examine the manner in which
the legislative will had been indicated. We shall only refer
to the recent decision of this Court in Sundarjas Kanyalal
Bhatija & Ors. etc. v. The Collector, Thane, Maharashtra &
Ors., Judgments Today [1989] 3 S.C. 57:
"It must be noted that the functions of the
Government in establishing a Corporation under
the Act is neither executive nor administra-
tive. Counsel for the appellants was right in
his submission that it is legislative process
indeed. No judicial duty is laid on the Gov-
ernment in discharge of the statutory duties.
The only question to be examined is whether
the statutory provisions have been complied
within they are complied with, then, the Court
could say no more. In the present case the
Government did publish the proposal by a draft
notification and also considered the represen-
tations received. It was only thereafter, a
decision was taken to exclude Ulhasnagar for
the time being. That decision became final
when it was notified under Section 3(2). The
Court cannot sit in judgment over such deci-
sion. It cannot lay down norms for the exer-
cise of that power. It cannot substitute even
"its juster will for theirs."
The Court has no jurisdiction to examine the validity of
the reasons that goes into the decision or the motive that
induced the delegated authority to exercise its powers. No
judicial duty is laid on the authority in discharge of the
statutory obligations and, therefore,
448
the only question to be examined is whether the statutory
provisions have been complied with.
9. In The Swadeshi Cotton Mills Co. Limited v. The State
of U.P. and Others, [1962] 1 S.C.R. 422 this Court held
that:
"Where a condition precedent has to be satis-
fied before a subordinate authority can pass
an order, (executive or in the nature of
subordinate legislation), it is not necessary
that the satisfaction of the condition should
be recited in the order itself, unless the
statute requires it, But it is desirable that
it should be so mentioned for then the pre-
sumption that the condition was satisfied
would immediately arise and the burden would
be on the persons challenging the order to
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show that the recital is not correct. Even
when the recital is not made in the order, it
will not become void ab initio and only a
further burden is cast on the authority pass-
ing the order to satisfy the court by other
means, e.g. by filing an affidavit, that the
condition precedent was satisfied."
10. In Gopal Narain v. State of Uttar Pradesh & Another,
A.I.R. 1964 S.C. 370, this Court held that:
"There is a presumption, when a statutory
authority makes an order for imposition of
tax, that it has followed the prescribed
procedure. The said presumption is not in any
way weakened by the long acquiescence in the
imposition by the residents of the locality.
Nonetheless no tax shall be levied or collect-
ed except in accordance with law. If it is not
imposed in accordance with law, it would
infringe the fundamental right guaranteed
under Art. 19(1)(f) of the Constitution. While
the long period of time that lapses between
the imposition of the tax and the attack on it
may permit raising of certain presumptions
where the evidence is lost by efflux of time,
it cannot exonerate the statutory authority if
it imposes a tax in derogation of the statuto-
ry provision."
11. The High Court was not justified in assuming from
the time factor alone that there could not have been a
consideration of the objections. It is not the function of
the Court to probe into the details of the discussions and
the deliberations before legislative will is seen
449
expressed by passing the resolution. The connotation of the
word ’consideration’ occuring in sub-section (1) of Section
98 comprehends ’taking note of’ or ’paying heed to’ depend-
ing upon the nature of the subject. It may be open to the
councillors to express their views even within the limited
time available. No standard can be prescribed in such mat-
ters. When it is shown that the council had the opportunity
to consider the objections received, it has to be deemed,
that they had taken note of the same before reaching a
decision.
We are, therefore, of the view that the High Court has
committed an error in assuming on account of the shortage of
time alone and that there had been non-compliance with the
requirements under the statute. We set aside the judgment of
the High Court and allow the appeals. In the circumstances
of the case we make no order as to costs.
T.N.A. Appeals
allowed.
450