STATE OF BIHAR AND ORS. versus SACHCHLDANAND KISHORE PRASAD SINHA AND ORS.

Citation: [1995] 1 S.C.R. 256 · Decided: 16-01-1995 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

A 
STATE OF BIHAR AND ORS. 
v. 
SACHCHlDANAND KISHORE PRASAD SINHA AND ORS. 
JANUARY 16, 1995 
B 
[B.P. JEEVAN REDDY AND SUJATA V. MANOHAR, JJ.] 
Constitution of India-Art. 14--Assessment of Annual Rental Value of 
Holding Rules, 1993-Rule 3(1)(a) and (c)--Patna Municipal Corporation 
Act-Classification of holding-Notification issued under Rule 3(2) classifying 
c "road''-Notification under Rule 5(1) specifying rates of rental value-
Validity--Plinciples applicable in case of taxing enactments and Art. 14--Clas-
siftcation made by Municipal Corporation-A mere possibility of a better clas-
siftcation- No ground to strike dbwn classification made by Rule as 
discliminatory-Order of High Court striking down clauses (a) & ( c) of sub-
D 
mle ( 1) of Rule 3 and also two notification as violative of equality clause-in-
supportable in law. 
Having regard to various factors under the scheme of taxation in 
vogue till the Assessment of Annual Rental Value of Holding Rules, 1993 
came into force the government felt that the system provided ample room 
E for corruption and arbitrariness. With a view to eliminate such abuse. 
corruption or arbitrariness that the 1993 Rules were made and notified in 
the Bihar Gazette. After publication of the same the Patna Corporation 
issued two notifcations dated September 8, 1992. Under the first notifica-
tion issued under Rule 3(2), the Corporation classified the roads in Patna 
F 
city into three categories. In the second notification issued under Rule 5(1), 
the Corporation has specified the rates of rental value per square foot 
depending upon the situation, use and nature of construction of the 
holdings. 
The validity of the 1993 Rules was challenged. The High Court struck 
G down clauses (a) and (c) of sub-rule m of Rule 3 as being violative of the 
equality clause enshrined in Article 14 of the Constitution of India. The 
High Court held that the classifications made under Rule 3(1), in the case 
roads and in the case of types of construction were wholly inadequate and 
incomplete and were therefore bound to lead to the result quite unrelated 
to the actual letting value of the holdings. Thi.! High Court suggested an 
H enlargement of the classification. It was then held that the division of the 
256 
( 
"'· .. 
r
_.._ 
_, 
.,., 
~I 
~·. 
STATE v. S.K. SINHA 
257 
municipal corporation area with reference to roads was bad and that it A 
should have been done on the basis of zones. Regarding the two notifica-
tions, the High Court found that they were equally indicative of the slip 
shod manner in which the scheme was sought to be implemented. It was 
held that so far as the notification issued under Rule 5(1) was concerned, 
the counter affidavit did not disclose the objective materials that went into 
consideration for determining the rates. 
Dealing with the notification issued umlrr rule 3, the High Court 
observed that the classification suffered from complete non-application of 
mind to the details. Accordingly, both the notifications were declared bad 
B 
-~d inoperative. This appeal was filed against the order of the High Court. C 
Allowing the appeal, this Court 
HELD : 1.1. A mere possibility of a better classification is no ground 
to strike down the classification made by the statutory authority, more 
particularly in the case of a taxing enactment. Saying so would be to deny D 
~ ,._ 
the range of selection and freedom in appraisal not only in the objections 
and manner of taxation but also in the determination of the rate or rates 
applicable. The objection that the municipal corporation are ought to have 
been divided on the basis of zones and not on the basis of the roads is also 
not a ground upon which the court could have invalidated the rule. 
E 
[269-E-F] 
1.2. The division with reference to roads was not shown to amount to 
hostile treatment. In case of such classification, there will always be some 
instances where one gets an advantage and other suffers a disadvantage but 
that is no ground for invalidating a statute and more particularly a taxing F 
statute. The merit of the Assessment Rules. 1993, is that they rid the 
house-owners of the harassment and the constant threat of revision of 
annual rental value by the concerned official of the corporation. Unless 
found to be offending the constitutional or statutory provisions, it must be 
allowed to be worked out. One should start with the presumption that the 
Corporation knows what is the better method of c

Excerpt shown. Read the full judgment & AI analysis in Lexace.