MUNICIPAL CORPORATION OF DELHI versus BIRLA COTTON, SPINNING AND WEAVING MILLS, DELHI AND ANOTHER

Citation: [1968] 3 S.C.R. 251 · Decided: 23-02-1968 · Supreme Court of India · Bench: K.N. WANCHOO · Disposal: Appeal(s) allowed

Cited by 18 judgment(s) · cites 4 · see the full citation network in Lexace

Judgment (excerpt)

A 
ll 
c 
D 
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F 
G 
H 
MUNICIPAL CORPORATION OF DELHI 
v. 
BIRLA COTION, SPINNING AND WEAVING MILLS, DELHI 
AND ANOTHER 
February 23, 1968 
[K. N. WANCHOO, C.J., M. HIDAYATULLAH, J.C. SHAH, 
S. M. S!KRI, V. RAMASWAMI, J.M. SHELAT 
AND C. A. VAIDIAL!NGAM, JJ.j 
Delhi Municipal Corporation Act 66 of 1951 ss. 113 and 150-Powcr 
to Corporation under ss. 113(2) and 150 to levy optional taxes subject to 
Ce111ral Governmenfs approval-if excessive delegation and therefore ultra 
vi:res. 
Dtlhi Municipal Corporation (Validation of Electricity Tax) Act 35 
of 1966-Wlrether effectively validated levy of tax between July I, 1959 
and March 31, 1966. 
Constitution of India, Art. 11-Centrcl Governmenfs sanction signed 
by Deputy Secretary without the words "By order oJ the President'• or 
similar words-Whether deficiency made up by subsequent affidavit sta.tin~ 
approval given by minister-If Deputy Minister assigned certain work 
can give effective approval-or whether matter must go to Cabinet 
Minister also. 
On February 9, 1959, the appellant Corporation passed a resolution 
under section 150(1) of the Delhi Municipal Corporation Act 66 of 1957 
for the levy of certain taxes including a tax on the consumption or sale of 
electricity, Under s. 150(2) the Central Government sanctioned the l'!J< 
with'effect from July I, 1959 and also modified the rates of tax. The 
Corporation resolved on June 24, 19S9 under s. 150(3 )' to determine the 
rates sanctioned by the Central Government as the rates at which the tax 
would be leviable for the year 1959-60. The respondent challenged the 
levy of the tax by a writ petition which was allowed in appeal and it was 
held, inter alia, that the Central Government could not modify the rates 
but only withhold .or &fant sanction. 
Parliament th<'n passed Act 35 of 1966 te> validate the levy of the elec-
tricity tax from July I, 1959 to March 31, 1966. On February 17, 1965, 
the Corporation passed another resolution under s. 150(1) providing for 
the maximum rates fdr the Ievv of tax on electricity and after obtaining 
the Central Governmenes sanction, passed a second resolution on Decen1-
ber 27, 1965, under s. 150(3) fixing the maximum rates as the actual rates. 
The respondents filed two writ petitions challenging the levy of tax by the 
resolutions of February 17, and December 27, 1965, and the vires of the 
Validation Act. The High Court allowed the petitions holding that though 
the Validation Act validated the levy and collection of tax from July !. 
1959 to March 31. 1960 it did not do so for the period from April I, 1960 
to March 31, 1966. It also held that section 150 suffered from the vice 
of excessive delegation of legislative power and was therefore ultra virt.~. 
The respondent appealed to this Court. 
· HELD: (i) (By the Full Court) : The Validation Act 35 of 
1966 
validly levies and imposes tax on consumption Or sale of electricity till 
March 31, 1966. 
(Per Wanchoo, C. J.. and Shelat, J.) : The High Court was in error 
in holding that levy and collection of the tax was not validated for the 
252 
SUPREME COURT REPORTS 
[1968] 3 S.C.R. 
period from April I, 1960 to March 31, 1966 and that the Validation Act 
meiely validatc,d the fixation of the rate of tax for that period. 
When 
~cction 2(1) lays down that the rates deducible from the resolution of 
June 24, 1959 shall be the actual rates of tax for the entire period from 
July l, 1959 to March 31, 1966 it must be understood to sanction the 
Icvy and collection of tax at the rates· fixed. This is implicit in the word 
''actual'' which governs the words 
11rates oj the tax". Even if there was 
some doubt in the matter from the words of s. 2(1), that doubt is resoJv .. 
cd by the words of s. 2(2), which lays down that "all taxes on the con .. 
sumption or sale of electricity levied or collected or purporting to have 
h.::en Jevie<l or collected in pursuance of the resolution referred to in sub--
section (I) shllll, for all purposes, be deemed to be, and to have always 
beep. validly levied or collected." This clearly shows that the vali<latlo11 
was not merely of the rate of tax hut of levy and collection also for the 
entire period from July I, 1959 to March 31, 1966, A reading of s. 2(1) 
;md s. 2(2) together shows that Parliament not only validated what was 
done but also itself impoo>d the rates deducible from the resolution of 
June 24. 1959 and authorised the levy and collection thereof for the entire 
period from July 

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