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Full Case Details
R.S. PATHAK, J. -This appeal by special leave raises the question whether the rules for the
levy of a rate on buildings and lands can be said to be published under Section 77 of the
Bombay Municipal Boroughs Act, 1925 if the notice published in a newspaper reciting the
sanction of the State Government to the rules mentions that the rules themselves are open to
inspection in the municipal office and that copies of the rules can also be purchased there.
- The Rajkot Borough Municipality framed draft rules for the levy of rates on buildings and
lands in Rajkot. The draft rules were published and objections were invited, and thereafter the
State Government accorded its sanction to the rules. In the issue dated November 28, 1964 of
“Jai Hind”, a Gujarati newspaper published from Rajkot, a notice was published purporting to
be under Section 77 of the Bombay Municipal Boroughs Act, 1925 as adopted and applied to
the Saurashtra area of the State of Gujarat for the information of persons holding buildings
and immovable property within the municipal limits of Rajkot that the municipality had
resolved to enforce the “Rules of the Rajkot Borough Municipality for the levy of the Rate
(Tax) on Buildings and Lands” sanctioned by the State Government of Gujarat with effect
from January 1, 1965. The notice recited the date and serial number of the sanction. It also
stated:
These rules can be inspected at the office of the municipality on all days other than holidays
during office hours; moreover copies of the rules can be purchased at the municipal office.
It appears that thereafter an assessment list was prepared and steps were taken to demand the
tax. - The appellant, a registered partnership firm, instituted a suit in the court of the learned Civil
Judge, Senior Division, Rajkot, praying for a declaration that the aforesaid rules were invalid,
and that the consequent assessment list and the related notices of demand were without
authority of law. A permanent injunction was also sought to restrain the municipality from
giving effect to the rules. The trial court decreed the suit and granted the declaration and
injunction prayed for. An appeal against the decree of the trial court was dismissed by the
learned Extra Assistant Judge, Rajkot. A second appeal was filed by the Municipal
Corporation of Rajkot (the Municipal Borough of Rajkot having been so renamed) in the
High Court, and at the time of admission a learned Single Judge of the High Court formulated
three questions of law arising in the appeal. The appeal was referred subsequently to a larger
Bench. A Bench of three learned Judges of the High Court took up the case and observed at
the outset that the only question which required consideration at that stage was whether the
courts below had erred in striking down the rules on the ground that they had not been
published as required by Section 77 of the Act. The learned Judges held that the courts below
had taken an erroneous view of the statute and that, in their opinion, the conditions of Section
77 of the Act had been satisfied in the case. The case was sent back to the learned Single
Judge with that opinion for disposal in accordance with law. - Chapter VII of the Act provides for municipal taxation. While the different taxes which can
be levied by a municipality are enumerated in Section 73, Sections 75 to 77 detail the
procedure to be observed when the municipality proposes to levy a tax. Before imposing a tax
the municipality is required by Section 75 to pass a resolution deciding which one or other of
the taxes specified in Section 73 would be imposed and to approve rules specifying the
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classes of persons or property or both which are proposed to be made liable, the amount or
rate proposed for assessment, the basis of valuation on which such rate on buildings and lands
is to be imposed and other related matters. The rules so approved by the municipality are
required to be published with a notice in a prescribed form. Objections are invited from the
inhabitants of the municipal borough, and the municipality is required to take the objections
into consideration, and if it decides to pursue tile levy it submits the objections with its
opinion thereon and any modifications proposed by it, together with the notice and rules to
the State Government. Section 76 empowers the State Government to sanction the rules with
or without modification, or to return them to the municipality for further consideration.
Section 77 provides: - Rules sanctioned under Section 76 with the modifications and conditions, if any, subject
to which the sanction is given shall be published by the municipality in the municipal
borough, together with a notice reciting the sanction and the date and serial number thereof;
and the tax as prescribed by the rules so published shall, from a date which shall be specified
in such notice and which shall not be less than one month from the date of publication of such
notice, be imposed accordingly,. . . - In the case of municipal taxation, the conventional procedure enacted in most statutes
requires publication of the proposed rules providing for the levy and inviting objections
thereto from the inhabitants of the municipality. Thereafter when the rules are finalised and
sanctioned by the State Government, it is mandatory that they be published so that the
inhabitants of the municipality should know how the levy affects them in its final form. The
rules, and consequently the levy, take effect only upon publication in accordance with the
statute. The object of the requirement is that a person affected’ by the levy must know
precisely the provisions of the levy and its consequences for him. Section 77 requires that the
sanctioned rules should be published by the municipality in the municipal borough together
with the notice reciting the sanction. The notice published in the newspaper mentioned that
the “Rules of Rajkot Borough Municipality for the levy of Rate (Tax) levied on Buildings and
Lands” had been sanctioned by the State Government and the notice recited also the date and
serial number of the sanction. It was open to the municipality to publish the sanctioned rules
also in the newspaper, but what it did was to state in the notice that the rules could be
inspected in the municipal office, and also that copies of the rules could be purchased at the
municipal office. In our opinion, the requirement of Section 77 was complied with inasmuch
as information was thereby given to all persons holding buildings and immovable property
within the municipal limits of Rajkot that the rules mentioned therein had been sanctioned by
the State Government and that the rules could be inspected in the municipal office. The
mandatory requirement of Section 77 was that the rules should be published and it seems to
us that the notice satisfies that requirement. The mode of publishing the rules is a matter for
directory or substantial compliance. It is sufficient if it is reasonably possible for persons
affected by the rules to obtain, with fair diligence, knowledge of those rules through the mode
specified in the notice. Had the Act itself specified the mode in which the rules were to be
published, that mode would have to be adopted for publishing the rules. In the opinion of the
legislature, that was the mode through which the inhabitants of the municipality could best be
informed of the rules. But the Act is silent as to this. Section 102 specifies the modes in which
service of a notice contemplated by the Act should be served. There is nothing in the section
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prescribing the mode for publishing the rules in question here. Nor does Section 24 of the
Bombay General Clauses Act help us. We must, therefore, fall back upon the general
principle that if the mode of publication adopted is sufficient for persons, affected by the
rules, with reasonable diligence to be acquainted with them, publication of the rules has taken
place in contemplation of the law. It is necessary to emphasis that we are dealing with a stage
defining the final shape of the rules, after objections to the draft rules have been considered
and the State Government has accorded its sanction. - Learned counsel for the appellant and learned counsel for the interveners have referred us
to Section 102 of the Act, which empowers the State Government on complaint made or
otherwise that any tax leviable by the municipality is unfair in its incidence, or that the levy
thereof, or any part thereof, is obnoxious to the interest of the general public, to require the
municipality to take measures for removing any objection which appears to it to exist to the
said tax. If, within the period so fixed, such requirement is not carried into effect to the
satisfaction of the State Government, it may, by notification in the official Gazette, suspend
the levy of the tax, or of such part thereof, until such time as the objection thereto is removed.
It is urged that the rules published under Section 77 of the Act are still open to challenge
under Section 102 of the Act and it is for that reason that Section 77 provides that the notice
published thereunder should prescribe a date, not less than one month from the date of such
publication, as the date on which the tax as prescribed by the rules shall be imposed. It is said
that this period is intended to enable persons affected by the levy to object again under
Section 102 of the Act, and therefore the rules must be set forth in the newspaper itself. We
are unable to agree. To our mind, Section 77 provides the final stage of the procedure enacted
in Sections 75 to 77 for imposing a levy. The period referred to in Section 77, after which
alone the tax can be imposed, is intended to enable persons affected by the levy to acquaint
themselves with the contents of the rules, and to take preparatory measures for compliance
with the rules. The period has not been particularly prescribed in order to enable a person to
take advantage of the benefit of Section 102 before the tax is imposed. We are of opinion that
it would have been more desirable for the municipality to have published the rules in the
newspaper along with the notice reciting the sanction, but while saying so we are unable to
hold that its omission to do so and notifying instead that inspection of the rules was available
in the municipal office does not constitute sufficient compliance with the law. - There is no force in this appeal and it is accordingly dismissed with costs.
The students are advised to read Narendra Kumar v. Union of India, AIR 1960 SC 385,
where the mode of publication – official gazette – was held to be mandatory.
