P VERMA Vs. STATE OF HARYANA

JUDGEMENT

(1.) The short question that arises for consideration in this petition filed under Art. 226 of the Constitution is whether a Municipal Council which has been directed by a special or general order of the State Government to impose tax on professions, trades, callings and employments as mentioned in Section 70 of the Haryana Municipal Act, 1973 (hereinafter called the Act), is required to follow the procedure to impose taxes as prescribed in Section 74 thereof. Since the question is purely legal, it is not necessary to refer to the facts at all.

(2.) In exercise of the powers conferred by clause (i) of sub-section (1) of Section 70 read with Section 75(1) of the Act and all other powers enabling him in this behalf, the Governor of Haryana by order dated 16/05/2000 directed that all Municipal Councils/Committees in the State of Haryana shall impose tax, within a period of 15 days from the date of publication of the order in the Official Gazette, on professions, trades, callings and employments at the rates specified against each in the schedule given in the order. In pursuance to these directions, the Municipal Council, Ambala City (for short the Council) has imposed tax, amongst others, on clinics and medical laboratories, hospitals and nursing home having up to five beds and also on those having more than five beds. This levy of tax has been challenged primarily on the ground that the Council has not followed the procedure to impose taxes as envisaged in Section 74 of the Act and, therefore, according to the petitioners, the levy is illegal and that the Council cannot recover any tax from the petitioners who are doctors by profession and are running their clinics and private nursing homes in Ambala City.

(3.) Chapter V of the Act deals with taxation. Section 69 of the Act prescribes those taxes which every Municipal Committee/Council is required to impose and there is no option not to levy any of those taxes. Before levying any tax referred to in Section 69 of the Act, a Municipal Committee/Council is required to pass a resolution at a special meeting within thirty days from the date of publication of notification under Section 69 of the Act directing the imposition of tax with effect from the date to be fixed in the resolution. Since the Municipal Committee/Council has no option but to levy the taxes, it is not required to publish its proposal for inviting objections from the residents of the municipality. If the Committee/Council fails to pass a resolution within the aforesaid period, the resolution in this behalf shall be deemed to have been passed by the Committee/Council on the expiry of the period of the said thirty days. It is thereafter that the State Government notifies in the Official Gazette the imposition of the tax from the appointed date. Section 70 of the Act then empowers the Committee or a Council to impose in the whole or any part of the municipality any of the taxes, tolls and fees referred to in clauses (i) to (xv) of sub-section (1) of Section 70 of the Act. The levy of these taxes is optional and it is open to a municipality to levy them or not to levy them. If they are levied, they are subject to any general or special order of the State Government and to the Rules framed under the Act. If a Municipal Committee/Council decides to impose any of the taxes referred to in Section 70 of the Act it has to follow the procedure that is prescribed in Section 74 of the Act. Sections 70 and 74 of the Act which have a bearing on the issue raised before us, read as under :-