The
Gujarat Agro Industries Co. Ltd. Vs. Municipal Corporation of City of Ahmedabad & Ors [1999] INSC 166 (26 April 1999)
D.P.Wadhwa, N.Santosh Hegde D.P. Wadhwa, J.
This
batch of appeals arises out of judgment dated October 9, 1980 passed by the Division Bench of the Gujarat High Court
holding that Section 406(2)(e) of the Bombay Provincial Municipal Corporations
Act, 1949 in its application to Ahmedabad in the State of Gujarat was a valid piece of legislation.
Section 406 of the Act we may set out here and now :
406.(1)
Subject to the provisions hereinafter contained, appeals against any rateable
value or tax fixed or charged under this Act shall be heard and determined by
the Judge.
(2) No
such appeal shall be entertained unless (a) it is brought within fifteen days
after the accrual of the cause of complaint;
(b) in
the case of an appeal against a rateable value a complaint has previously been
made to the Commissioner as provided under this Act and such complaint has been
disposed of ;
(c) in
the case of an appeal against any tax in respect of which provision exists
under this Act for a complaint to be made to the Commissioner against the
demand, such complaint has previously been made and disposed of;
(d) in
the case of an appeal against any amendment made in the assessment book for
property taxes during the official year, a complaint has been made by the
person aggrieved within fifteen days after he first received notice of such
amendment and his complaint has been disposed of;
(e) in
the case of an appeal against a tax, or in the case of an appeal made against a
rateable value, the amount of the disputed tax claimed from the appellant, or
the amount of the tax chargeable on the basis of the disputed rateable value,
up to the date of filing the appeal, has been deposited by the appellant with
the Commissioner :
Provided
that where in any particular case the judge is of the opinion that the deposit
of the amount by the appellant will cause undue hardship to him, the judge may
in his discretion, either unconditionally or subject to such conditions as he
may think fit to impose, dispense with a part of the amount deposited so
however that the part of the amount so dispensed with shall not exceed twenty
five per cent of the amount deposited or required to be deposited.
Judge
is defined in Section 2(29) of the Act to mean in the City of Ahmedabad the
Chief Judge of the Court of Small Causes or such other Judge of the Court as
the Chief Judge may appoint in his behalf and in any other City the Civil Judge
(Senior Division) having jurisdiction in the City. Section 406 suffered some
amendments. In sub-section (2) for the words shall be heard were substituted by
shall be entertained. Proviso to clause (e) of sub-section (2) was first added
by Gujarat amendment 5 of 1970. This proviso
(as it now exists) was then substituted by Gujarat Amendment 1 of 1979.
Appellants
in all these appeals own properties in the City of Ahmedabad. They are liable to pay property
tax which is a tax on buildings and lands in the City. Property tax is
revisable every four years. When last revision took place, appellants
challenged those assessments in appeals which they filed before the Judge under
Section 406(1) of the Act after bills were presented by the Municipal
Corporation to them. During the pendency of appeals before the Judge,
appellants prayed for stay of recovery of the property tax. In view of proviso
to clause (e) of Section 406(2) of the Act, the Judge could not give effective
interim relief to the appellants as exemption from payment of property tax
could not be more than 25% of the amount of the property tax demanded from the
appellants. The appellants therefor challenged the constitutional validity of
clause (e) of sub- section (2) of Section 406 contending that it was violative
of Article 14 of the Constitution.
The
Division Bench who heard the writ petitions considered the earlier history of
amendments to clause (e) of Section 406(2) of the Act. Clause (e), as it
originally stood at the time when the Act was made applicable to the City of Ahmeadbad, read as under :
No
such appeal shall be heard unless- ... ... ...
in the
case of an appeal against a tax or in the case of an appeal made against a rateable
value after a bill for any property tax assessed upon such value has been presented
to the appellant, the claimed from the appellant has been deposited by him with
the Commissioner.
A
Division bench of the Gujarat High Court in SCA No.662 of 1968 decided on October 27, 1969 held that clause (e) violated
Article 14 of the Constitution. It is not necessary for us to go into the
reasons which weighed with the Court in reaching such a conclusion. By Gujarat
Act 5 of 1970 following proviso was added to clause (e) :
Provided
that where in any particular case the Judge is of opinion that the deposit of
the amount by the appellant will cause undue hardship to him, the Judge may in
his discretion dispense with such deposit or part thereof either
unconditionally or subject to such conditions as he may deed fit.
This
proviso also came to be challenged before the Gujarat High Court on the same
very plea that it violated the provisions of Article 14 of the Constitution.
This time also a Division Bench of the High Court held that clause (e) violated
Article 14 of the Constitution. This decision of the High Court was challenged
in this Court in The Anant Mills Co. Ltd. vs. State of Gujarat and Others
[(1975) 2 SCC 175]. This Court reversed the decision of the High Court and held
that clause (e) with the added proviso did not violate article 14 of the
Constitution.
Now it
is this amended clause (e) and the proviso which were subject matter of the
constitutional challenge in the High Court and by the impugned judgment, High
Court held the same to be constitutionally valid and dismissed all the petitions
filed before it.
We may
refer to the reasons which led this Court to uphold the constitutional validity
of clause (e) read with proviso which was added by Gujarat Act 5 of 1970. This
Court said :
After
hearing the learned Counsel for the parties, we are unable to subscribe to the
view taken by the High Court.
Section
406(2)(e) as amended states that no appeal against a rateable value or tax
fixed or charged under the Act shall be entertained by the Judge in the case of
an appeal against a tax or in the case of an appeal made against a rateable
value after a bill for any property tax assessed upon such value has been
presented to the appellant, unless the amount claimed from the appellant has
been deposited by him with the Commissioner. According to the proviso to the
above clause, where in any particular case the Judge is of opinion that the
deposit of the amount by the appellant will cause undue hardship to him, the
Judge may in his discretion dispense with such deposit or part thereof, either
unconditionally or subject to such conditions as he may deem fit. The object of
the above provision apparently is to ensure the deposit of the amount claimed
from an appellant in case he seeks to file an appeal against a tax or against a
rateable value after a bill for any property tax assessed upon such value has
been presented to him. Power at the same time is given to the appellate Judge
to relieve the appellant from the rigour of the above provision in case the
Judge is of the opinion that it would cause undue hardship to the appellant.
The requirement about the deposit of the amount claimed as a condition
precedent to the entertainment of an appeal which seeks to challenge the
imposition or the quantum of that tax, in our opinion, has not the effect of
nullifying the right of appeal, especially when we keep in view the fact that
discretion is vested in the appellate Judge to dispense with the compliance of
the above requirement. All that the statutory provision seeks to do is to
regulate the exercise of the right of appeal. The object of the above provision
is to keep in balance the right of appeal, which is conferred upon a person who
is aggrieved with the demand of tax made from him, and the right of the
Corporation to speedy recovery of the tax. The impugned provision accordingly
confers a right of appeal and at the same time prevents the delay in the
payment of the tax. We find ourselves unable to accede to the argument that the
impugned provision has the effect of creating a discrimination as is offensive
to the principle of equality enshrined in Article 14 of the Constitution. It is
significant that the right of appeal is conferred upon all persons who are
aggrieved against the determination of tax or rateable value. The bar created
by Section 406(2)(e) to the entertainment of the appeal by a person who has not
deposited the amount of tax due from him and who is not able to show to the
appellate Judge that the deposit of the amount would cause him undue hardship
arises out of his own omission and default. The above provision, in our
opinion, has not the effect of making invidious distinction or creating two
classes with the object of meting out differential treatment to them; it only
spells out the consequences flowing from the omission and default of a person
who despite the fact that the deposit of the amount found due from him would
cause him no hardship, declines of his own volition to deposit that amount. The
right of appeal is the creature of a statute. Without a statutory provision
creating such a right the person aggrieved is not entitled to file an appeal.
We fail to understand as to why the Legislature while granting the right of
appeal cannot impose conditions for the exercise of such right. In the absence
of any special reasons there appears to be no legal or constitutional
impediment to the imposition of such conditions. It is permissible, for
example, to prescribe a condition in criminal cases that unless a convicted
person is released on bail, he must surrender to custody before his appeal
against the sentence of imprisonment would be entertained. Likewise, it is
permissible to enact a law that no appeal shall lie against an order relating
to an assessment of tax unless the tax had been paid. Such a provision was on
the statute book in Section 30 of the Indian Income-tax Act, 1922. The proviso
to that section provided that . . . no appeal shall lie against an order under
sub-section (1) of Section 46 unless the tax has been paid. Such conditions
merely regulate the exercise of the right of appeal so that the same is not
abused by a recalcitrant party and there is no difficulty in the enforcement of
the order appealed against in case the appeal is ultimately dismissed. It is
open to the Legislature to impose an accompanying liability upon a party upon
whom legal right is conferred or to prescribe conditions for the exercise of
the right. Any requirement for the discharge of that liability or the
fulfillment of that condition in case the party concerned seeks to avail of the
said right is a valid piece of legislation, and we can discern no contravention
of Article 14 in it. A disability or disadvantage arising out of a partys own
default or omission cannot be taken to be tantamount to the creation of two
classes offensive to Article 14 of the Constitution, especially when that
disability or disadvantage operates upon all persons who make the default or
omission.
By the
Amending Act 1 of 1979 discretion of the Court in granting interim relief has
now been limited to the extent of 25% of the tax required to be deposited. It
is, therefore, contended that earlier decision of this Court in Anant Mills
case may not have full application. We, however, do not think that such a
contention can be raised in view of the law laid by this Court in Anant Mills
case.
This
Court said that right of appeal is the creature of a statute and it is for the
legislature to decide whether the right of appeal should be unconditionally
given to an aggrieved party or it should be conditionally given. Right of
appeal which is statutory right can be conditional or qualified. It cannot be
said that such a law would be violative of Article 14 of the Constitution. If
the statute does not create any right of appeal, no appeal can be filed.
There
is a clear distinction between a suit and an appeal.
While
every person has an inherent right to bring a suit of a civil nature unless the
suit is barred by statute.
However,
in regard to an appeal, position is quite opposite.
The
right to appeal inheres in no one and, therefore, for maintainability of an appeal
there must be authority of law.
When
such a law authorises filing of appeal, it can impose conditions as well {see Smt.
Ganga Bai vs. Vijay Kumar & Ors. [(1974) 2 SCC 393]}.
In
M/s. Elora Construction Company vs. Municipal Corporation of Greater Bombay
& Ors. [AIR 1980 Bom.162], the question before the Bombay High Court was as
to the validity of Section 217 of the Bombay Municipal Corporations Act. This
Section provided for filing of appeal against any rateable value or tax fixed
or charged under that Act but no such appeal could be entertained unless :
(d) in
the case of an appeal against a tax, or in the case of an appeal made against a
ratable value the amount of the disputed tax claimed from the appellant, or the
amount of the tax chargeable on the basis of the disputed ratable value, up to
the date of filing of the appeal, has been deposited by the appellant with the
Commissioner.
It
will be seen that clause (d) aforesaid was in similar terms as clause (e) of
Section 406(2) as it originally existed. Bombay High Court upheld the
constitutional validity of Section 217 of the Bombay Municipal Corporation Act.
Calcutta High Court in Chhatter Singh Baid & Ors. vs. Corporation of
Calcutta & Ors. [AIR 1984 Cal. 283] also took the same view. There it was
sub-section (3A) of Section 183 of the Calcutta Municipal Act, 1951 which
provided No appeal under this section shall be entertained unless the
consolidated rate payable up to the date of presentation of the appeal on the
valuation determined (a) by an order under Section 182, in the case of an
appeal to the Court of Small Causes, (b) by the decision of the Court of Small
Causes, in the case of an appeal to the High Court, has been deposited in the
municipal office and such consolidated rate is continued to be deposited until
the appeal is finally decided.
Similar
provisions existed in the Delhi Municipal Corporation Act, 1957. There it is
Section 170 which is as under :
170.
Conditions of right to appeal.No appeal shall be heard or determined under
Section 169 unless (a) the appeal is, in the case of a property tax, brought
within thirty days next after the date of authentication of the assessment list
under Section 124 (exclusive of the time requisite for obtaining a copy of the
relevant entries therein) or, as the case may be, within thirty days of the
date on which an amendment is finally made under Section 126, and, in the case
of any other tax, within thirty days next after the date of the receipt of the
notice of assessment or of alteration of assessment or, if no notice has been
given, within thirty days after the date of the presentation of the first bill
or, as the case may be, the first notice of demand in respect thereof :
Provided
that an appeal may be admitted after the expiration of the period prescribed therefor
by this section if the appellant satisfies the court that he had sufficient
cause for not preferring the appeal within that period;
(b) the
amount, if any, in dispute in the appeal has been deposited by the appellant in
the office of the Corporation.
A Full
Bench of the Delhi High Court, by majority, upheld the constitutional validity
of the aforesaid provision though there was also challenge to the same based on
Article 14 of the Constitution. Appeal against the judgment of the Delhi High
Court was taken to this Court which upheld the view of the Delhi High Court.
The decision of this Court is reported as Shyam Kishore and Ors. vs. Municipal
Corporation of Delhi & Anr. [(1993) 1 SCC 22].
This
Court relied on its earlier decisions in Ganga Bai case and Anant Mills case.
Reference was also made to another decision of this Court in Vijay Prakash D.
Mehta/Shri Jawahar D. Mehta vs. Collector of Customs (Preventive), Bombay
[(1988) 4 SCC 402] where Justice Sabyasachi Mukharji, J., speaking for the Court,
said :
Right
to appeal is neither an absolute right nor an ingredient of natural justice the
principles of which must be followed in all judicial and quasi-judicial
adjudications. The right to appeal is a statutory right and it can be
circumscribed by the conditions in the grant.
It is
not necessary for us to refer to other decisions asserting the same principle
time and again. When the statement of law is so clear, we find no difficulty in
upholding the vires of clause (e) of sub-section (2) of Section 406 read with
proviso thereto. Any challenge to its constitutional validity on the ground
that onerous conditions have been imposed and right to appeal has become
illusory must be negatived.
We
also note that under clause (c) of sub-section (2) of Section 406, a complaint
lies to the Municipal Commissioner against imposition of any property tax and
only after that when the complaint is disposed of that appeal can be filed.
Appeal to the Court as provided in clause (e) may appear to be rather a second
appeal. Then under Section 408 of the Act provisions exist for referring the
matter to arbitration. Under sub-section (1) of Section 408 where any person
aggrieved by any order fixing or charging any rateable value or tax under the
Act desires that any matter in difference between him and the other parties
interested in such order should be referred to arbitration, then, if all such
parties agree to do so, they may apply to the Court for an order of reference
on such matter and when such an order is made provisions relating to
arbitration in suits shall apply. That apart, if a person cannot avail of the
right of appeal under Section 406 of the Act, other remedies are available to
him under the law. In that case, it may not be possible for the Municipal
Corporation to contend that an alternative remedy of appeal exist under Section
406 of the Act.
When
leave was granted in these appeals by order dated December 12, 1980 this Court
granted stay on the condition that seventy-five per cent of the tax is
deposited with the Municipal Commissioner within two months from that date and
on such deposit being made, the appeals be heard and disposed of (by the Judge)
and we believe by this time the appeals filed before the Judge under Section
406 must have been disposed of.
When
the arguments started in these matters, on the statement of learned counsel for
the appellant two appeals bearing Nos.3018-19/80 were dismissed as withdrawn.
We do
not find any merit in these appeals. These are accordingly dismissed with
costs.
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