YADLAPATI VENKATESWARLU versus STATE OF ANDHRA PRADESH AND ANR.

Citation: [1990] SUPP. 1 S.C.R. 381 · Decided: 11-09-1990 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed

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Judgment (excerpt)

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YADLAPATI VENKATESWARLU 
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v. 
STATE OF ANDHRA PRADESH AND ANR. 
SEPTEMBER 11, 1990 
[SABYASACHI MUKHARJI, CJ. AND K.N. SAIKIA, J.] 
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Andhra Pradesh Municipalities Act, 1965: Andhra Pradesh 
(Andhra Areas) District Municipalities Act, 1920-Sections 2( 11), /l6, fi7 
and 391-Vijayawada Municipal Council-Assessment and levy of 
property tax under the old and new Acts-Validity of. 
Vijayawada Municipality of Andhra Pradesh earlier levied pro-
perty tax under the Andhra Pradesh (Andhra Areas) District Munici-
palities Act, 1920. That Acl'was repealed and the new Act known as the 
Andhra Pradesh Municipalities Act, 1965 came into force on 2.4.1965. 
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U oder the old act property tax was levied on the basis of gross annual 
rental value, whereas under section 87 of the new Act the basis of 
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assessment in owner occupied building was the capital value thereof to 
be determined in the prescribed manner. Section 389 of the new Act 
provided that. that Act was to be read subject to-Schedule IX which 
contained transitional provisions in the rules. Rule 12 thereof dealt with 
levy .of taxes etc. The Government under Rule 12 issued a G.O. 
Ms. No. 749 M.A. directing that all Mnnicipal Councils shall with effect 
from 1.4. 70 levy the property tax as per the provisions of the new Act, 
which date by a subsequent G.O ... was changed to 1..10.1970. By 
another G.O.Ms. No. 81 M.A. dated 30.1.71, the Government directed 
the Vijayawada Municipal Council to continue to levy the -property tax 
under the provisions of the old Act as rate payers had filed writ peti-
tions in the High Court and obtained stay. However, by G.O.Ms. 675 
M.A., the G.O.No. 81 was rescinded and the Vijayawada Municipal 
Council '!as directed to collect revised taxes under ihe provisions of the 
new Act with effect from 1.10.70. This G.O. was rescinded and by G.O. Ms. 
No. 255 M.A. dated 15.6. 73 the Government directed the Vijayawada 
Council to levy the property tax under the old Act. As a consequence, 
the Vijayawada Municipal continued to levy and enhance the property 
tax under the old Act. 
The validity of G.O.Ms. No. 255 dated 15.6.73 was challenged by 
house property owners in the High Court in two writ petitions seeking 
an order restraining the Vijayawada Municipal ConncU from enlorcing it, 
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and declaring the same illegal and void. The petitioners' contention 
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381 
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382 
SUPREME COURT REPORTS 
[1990] Supp. 1 S.C.R. 
amongst others was that the Government having directed that the taxes 
be levied nnder the new Act, the transitional power under rule 12 stood 
exercised, and the power to levy tax under the old Act had ceased and it 
was no longer open to the government to rescind the previous orders. 
The High Court accepted the said contention, but held that in view of 
the provisions of section 4(1) of the Andhra Pradesh Municipalities 
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(Fourth Amendment) Act (23 of 1975), which validated the actions 
taken, those could not be challenged as invalid. The writ petitions were 
therefore dismissed. Appeals to the Division Bench, having failed, this 
appeal has been filed after obtaining special leave. 
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Dismissing the appeal, this Court, 
HELD: The State's power to tax is derived from the Constitution, 
and the municipality's power to tax is derived from the State Legisla-
ture, which could delegate that power in the manner the Constitution 
permits to the municipal council, an agent of the State Government and 
the municipality cannot refuse to raise taxes as directed. The proper 
authority to determine what should and what should not constitute a 
public burden is the Legislature of the State. This is not only true for the 
State itself, but it is also true in respect of each municipality of the 
State; these inferior corporate bodies having only such authority in this 
regard as the legislature shall confer upon them. [202E-F) 
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A statute will not be declared unconstitutional unless it is specifi-
cally challenged and the principle is equally applicable to an enact-
ment authorising levy of a tax for a public purpose. The power to 
tax is a sovereign power and is legislative in character and it has to 
be exercised within the constitutional limitations. The statutes relat-
ing to municipal taxes may be changed according to the existing legis-
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lative rules of State policy unless forbidden by the Constitution from 
doing so. [202G-H] 
Irregular assessment may also be regularised with retrospecti

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