MATHURAM AGRAWAL versus STATE OF MADHYA PRADESH

Citation: [1999] SUPP. 4 S.C.R. 195 · Decided: 28-10-1999 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

.. 
MA THURAM AGRA WAL 
v. 
STATE OF MADHYA PRADESH 
OCTOBER 28, 1999 
[S.P. BHARUCHA, B.N. KIRPAL, V.N. KHARE, SYED SHAH 
MOHAMMED QUADRI AND D.P. MOHAPATRA, JJ.] 
Municipalities: 
MP. Municipalities Act, 1961: Section 127-A(2)(b) proviso. 
A 
B 
c 
Property tax-Rate of-Annual letting value-Less than Rs. 1800-Not 
prescribed-Levy of-By aggregating annual letting value of all properties 
owned by assessee-Permissibility of-Held: Not permissible since such 
aggregating may result at a figure which is higher than the value of the 
property itself-Such is not the intention of the legislature in the absence of D 
a specific provision in the charging Section-Hence, proviso to Section 127-
A(2)(b) struck down being ultra vires the charging Section-Thus the High 
Court erred in confirming the assessment order and dismissing·the assessee's 
writ petition. 
Constitution of India, I950: Article 265. 
E 
Taxing Statutes-Tax law-Ambiguity-Effect-Components of-Held: 
(i) subject of tax; (ii) person who is liable to pay tax and (iii) rate at which 
tax has to be paid-If there is any ambiguity with regard to these ingredients, 
there is no tax in law-It is for the legislature to do the needful in the F 
matter-Further, in a taxing Act no intention or governing purpose beyond 
that stated in plain language can be assumed-Economic results expected 
in a particular taxing provision not relevant in interpreting a fiscal statute-
Interpretation of Statutes. 
The appellant and respondents 4 to 7 were joint owners of 13 separate G 
items of house properties situated in a Municipal area. The assessment 
proceedings for levy of property tax in respect of the aforesaid properties were 
initiated by the Municipal Council under the M.P. Municipalities Act, 1961. 
The Municipal Council invoked the proviso to Section 127-A(l)(b) of the Act 
by aggregating the annual letting value of all the buildings and levied property H 
195 
196 
SUPREME COURT REPORTS [1999] SUPP. 4 S.C.R. 
A tax on the deemed letting value so aggregated. 
B 
The appellant and respondents 4 to 7 filed an appeal under Section 139 
of the Act before the Civil Judge who allowed the appeal and quashed the 
assessment order and the demand notice. However, the District Judge allowed 
the revision petition preferred by the Municipal Council. 
Thereafter the appellant and respondents 4 to 7 filed a writ petition 
before the High Court challenging the constitutional validity of the proviso to 
Section 127-A(2)(b) of the Act and also the assessment order on the ground 
that it was not in conformity with the provisions of the Act. The High Court 
C rejected the contentions and confirmed the assessment order relying on 
Dattatraya Dahan/car's case and Leelawati Mishra 's case. Hence this appeal. 
Allowing the appeal, the Court 
HELD: 1. As the annual letting value of the property escalates the rate 
D of tax increases. The very fact that no rate of tax is prescribed in the Table 
for a property the annual letting value of which is less than Rs. 1,800 clearly 
indicates the intention of the Legislature not to levy the tax on such properties. 
This position is further clarified in Section 127-A(2)(b) of the M.P. 
Municipalities Act, 1961 in which it is laid down that house, buildings and 
lands, the annual letting value of which does not exceed Rs. 1,800, are exempt 
E from property tax. (201-H; 202-A-B) 
2.1. 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 
F 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 and 
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 
G of the legislature. The statute should clearly and unambiguously convey the 
three components of the tax law i.e. the subject of the tax, the person who is 
liable to pay the tax and the rate at which the tax is to be paid. If there is any 
ambiguity regarding any of these ingredients in a taxation statute then there 
is no tax in law. Then it is for the legislature to do the needful in the matter. 

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