LexMUNICIPAL CORPORATION, INDORE versus RAI BAHADUR SETH HIRALAL & OTHERS
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MUNICIPAL CORPORATION, INDORE
RAI BAHADUR SETH HIRALAL & OTHERS
October 31, 1967
[J. c. SHAH, S. M. S!KRI AND J.M. SHELAT, JJ.]
Madhya B11arGt Municipalities· Act (Act 1 of 1954) repealing !1tdorc
City Mt1nicipa/ Act 4 of 1909-S. 79 of nel\-' Act pcrn1ittin;: an .• assess-
ment lisfi for taxes on houses and lands heing prepared once in 4 years-
As1·es.nne11t list under ohf Act <ll/Opt£•d for periocl covered by neu· Act-
House tax levied on gross annual letting nature of houses (S undt•r nld
Act-New Act requiring
tax to he levied on net vtilue after .gi\-·ing
statutory allowance of 1017-b-S., 2(c) ho\v far saves old basis of taxation.
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The Madhya Bharat Municipalities Act 1954 came into forCL' on
January 26, 1954.
The Indore City Municipal Act, 1909 which had till
then governed the Indore Municipality was thereby
repealed.
Under
the repealed Act the Indore Municipality used to levy and co11ect house
tax at th·o rate of 7% of the gross annual letting value. Under s. 7'(2)
of the 1954' Act house tax was to be ass·ossed on the 'basis of the gross
annual letting value Jess l 0% statutory allowance for repairs etc.
Ho'\\'~
ever, even for the period after the passing 6f the ne'"'· Act, the Municipal
Corporation,. purporting to act under s. 79( 1) of the 1954 Act. adopted
rt.he latest as:sessment list prepared under the old Act and levied house
tax at the old rate of 7% of the gros.. annual letting value.
The respon-
dents who Were trustees of certain house property filed a suit chaHenging
'the levy on the basis of the gross annual letting value when s. ·73(2) of
the 1954 Act required the tax to be assessed on the riet value
after
dedu.ction of the statutory alloWance.
The suit was decreed
by the
· Trial Court and the appeals filed by the Corporation befort the District
Judge and th·o High Court were dismissed.
The Corporation by speciul
leave, came to this Court and urged : (i) that the levy at 7~0 of the
gross anrlual
letting value prescribed under the rules of the Indore Act
was saved by s. 2(c) of the 1954 Act; (ii) that under s. 79(1) the Cor-
poration was required to prepare a fresh assessment list only once in
four years, that it was therefore entitled to adopt for the years in ques-
tion the latest assessment list prepared under the old Act. and the said
assessment Jist having been so adopted was conclusive evidence
as to
the annual rental value of house. and the house tax imposed thereon.
}{ELD : (i) While section 2(c) saves the rules and taxes imposed
under the old Act it saves them only to the extent that they are consis-
tent with the new Act.
The saving and deeming pro-visions of s. 2(c)
can only apply if the tax is assessed in the manner consistent with the
provisions of s. 73, that is, if it is assessed on the net and not the gross
annual letting value after deducting I()% statutory allowance.
The Cor-
poration could not be allowed to go- on imposing the tax on the basis
of the gross annu~I letting value for ever despite the express provision
in s .. 73. The tax imposed by the Corporation at the rate of 7% of the
gross annual letting value was not therefore sav•ed by s. 2(c).
[129E-H]
(ii) OrdinariJy the Munic;pal Corporation has to prepare a fresh
assessment list every year.
The legislature has however by s. 79( l)
cmpriwered the Corporation to adopt the valuation and assessment con~
. tained in the assessment list Pl'Cpared in an earlier year provided. how-
'(ever, thar .jt prepares a fresh 1is~ one~ jn_ every 4 years.
But sub-s. (2)
126
SUPREME COURT Rf PORTS
( 1968) 2 S.C.R
of s. 79
~rovi<lcs ~xprcssly l~at "·hen such a
pr~vious list is adopted
for a particular offic1al year 1t can be done suh1cct to Jhc provision,
·:;;'.), 75 <in<l 76.
The list so adopted ha-. therefore
to
bt:
puhlished,
has
to
in\itc
ohjcction" / and
ha.,:
to
he
authenticated
1n
th"!
mann_er _prescribed by :-.. 76(6) afrcr Jisp~ing of the objection~ if any
and 1t
l!<I rhcn only thul it hccomc.-s conclusive evidence of the v.iluation
;ind the tax asse ... scd thereon for that particular official \'car.
If it were
othcrwi"ic .:1 housc-0"·nc.r "·oukl have no opportunity io object to the
assc,smcnt for four years even though the value of his house may have
Uccrca.licd for some reason or the other.
Section 79 has tbcrcfort.: to be
con~trucd to mean that though a Municipality need not prepare a fresh
as>essment list every year and neExcerpt shown. Read the full judgment & AI analysis in Lexace.