MOHAN LAL DAGA Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) THIS is a writ petition under Article 226 of the Constitution of India by one Mohanlal Daga in which the constitutionality of Section 104 of the Rajasthan Municipalities Act, 1959, has been challenged. The petition has been referred for decision by a learned Single Judge to the Division Bench. Section 104 runs as follows: 104. Obligatory taxes - -Every Board shall levy, at such rate and from such date as the State Government may in each case direct by notification in the official Gaeztte and in such manner as is laid down in this Act and as may be provided in the rules made by the State Government in this behalf, the following taxes, namely:

(2.) THE contention on behalf of the petitioner is that under the section the Legislature has practically effaced itself in the matter of fixation of rates and it did not give any guidance either under the section or under any of the provisions of the Act.

(3.) IN Gopal Narain v. State of Uttar Pradesh : [1964]4SCR869 , the validity of Section 131. of the U P. Municipalities Act was upheld inter aliaon the ground that the rate to be imposed and the persons or the class of the persons liable to pay the same are ascertained by a quasi judicial procedure after giving opportunity to the parties affected, subject to the revision by the State Government and it cannot, therefore, be said that the power conferred upon the Municipal Board is an arbitrary power offending Article 14 of the Constitution. In M/s. Devi Das v. State of Punjab : [1967]3SCR557 under Section 5 of the Punjab General Sales Tax Act, 1948, as it originally stood, power was conferred on the Provincial Government to levy every year on the taxable turnover of a dealer a tax at such rates as the said Government might direct. It was held that the Legislature practically effaced itself in the matter of fixation of rates and it did not give any guidance either under the section or under any other provisions of the Act. Section 5 was accordingly declared to be void. In this case a reference was made to the decision in Corporation of Calcutta v. Liberty Cinema : [1965]2SCR477 , which related to a levy imposed on cinema houses under the Calcutta Municipal Act. The Act left it to the discretion of the Corporation to fix the rate. The majority held in that case that guidance was found in the monetary needs of the Municipality for discharging the functions entrusted to it under the Act. Sarkar J., speaking for the majority said thus: It has to perform various statutory functions It is often given power to decide when and in what manner the functions are to be performed. For all this it needs money and its needs will vary from time to time with the prevailing exigencies. Its power to collect tax, however, is necessarily limited by the expenses required to discharge those functions. It has, therefore, where rates have not been specified in the statute to fix such rates as may be necessary to meet its needs. That, we think, would be sufficient guidance to make the exercise of its power to fix the rates valid.