MUNICll'AL BOARD, HAPUR v. RAGHUVENDRA KRll'AL AND OTHERS September 23, 1965 [P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO, M. HIDAYATULLAH, J.C. SHAH ANDS. M. SIKRI, JJ.) U.P. Municipalities Act (2 of 1916). ss. 131 to 135-Sections 131 to 134 whether mandatory-Section 135(3) whether ultra vires-Whether suffers from excessive delegation or discrimination-Whether bad as con· Je"ing judicial functions on State Government.
The appellant Board passed a special resolution on September 28, 1956, imposwg water-tax in Hapur and a notification by the Uttar Pradesh Gov- ernment was published in the Uttar Pradesh Gazelle under s. 135(2) of the U.P. Municipalities Act (2 of 1916) notifying the resolution. Fifteen house-owners of llapur "·ho received notices from the appellant lloard for the payment of the tax petitioned to the High Court under Art. 220 of the Constilution and asked for a writ or order preventing the appel- lant Board from realising the tax.
'lne main objections were (a) that the resolution of the appellant Board framing the proposal was not pub- lished in a local paper of Hapur published in Hindi and ( b) that the rules framed for the imposition of the tax did not accompany the resolution which was affixed on the notice board at the office of the appellant Board in purported compliance with the requirement> for publication. The
imposition was also challenged on the ground that Arts. 14 and 19 of the Constitution were violated. A single judge of the High Court held that the tax was illegal inasmuch as the mandatory requirements of the Muni- cipalities Act were not complied with by the appellant Board while im- posing the tax and thats. 135(3) of the Act (which cures all defects in the imposition of the tax by making the notification of Gover1)ment conclu- sive evidence of 1hc legality of the imposition) was iiltra vire.-r Art. 14 of the Constitution because it created a bar against proof and left no remedy to the lax payers thereby making a discrimination hetwecn them and other litigants.
He further held that the sub-section by making Government the sole judge of compliance with the Act conferred judicial power on Government contrary to the intendment of the Constitution. The appellant Board appealed under the Letters Patent. The Di\isional Bench upheld the order of the single judge. The case was however certi- fied as fit for appeal under Art.
133 and the Board appealed to thio Court. The contentions raised in appeal were : (i) s.135 (3) shut> out all enquiry into the procedure by which a tax had been imposed and there- fore suffered from exce-;sive delegation of legislative function: (ii) The tAX had not been validly imposed as there had been non–0bservance of rnandatorv provisions; (iii) s. 135(3) was discriminatory; and (iv) the aulHlection was also bad because it conferred judicial functions on the State Government.
HELD : Per Gajendragadkar, C.J .. Hidayatullah, Shah and Sikri. JJ.-(i) The rule of conclusive evidence in s.135(3) does not 'hut out all enquiry by court_s. There are certain matters which cann~ b~ estab~
lished by a notification under s.135(3). For example no nollficatton can issue unless there is a special resolution under s. 134. The special resolu- JI c II c MUNI. BOARD V. RAGHUVENDRA
tion i.o a sine qua non for the notification. Again the notification cannot authorise the imposition of a tax not included in s. 128 of the Municipali· ties Act. Neither the Municipal Board nor the State Government can
exercise snch power. What the section does is to put beyond question the procedure by which the tax is imposed, that is to say the various steps taken to impose it. A tax, not authorised, can never be within the pro- tection afforded to the procedure for imposing taxes. Such a tax may be challenged, not with reference to the manner of imposition but as an illegal impost. [958 A-DJ
(ii) There can be no doubt that some of the provisions of ss. 131 to 134 of the Act are mandatory. But all of them are not of the same character. In the present case, as in Raza Buland Sugar Co. Ltd. and in Berar Swadeshi Vanaspati, the provisions not observed were of a directory character and therefore the imposition had the protection of s. 135(3). [958 HJ
Raza Buland Sugar Co. Ltd. v. Municipal Board, Rampur. [1965] l S.C.R. 970 and Berar Swades/Ji Vanaspati v. Municipal Committee, Com- mittee Sheogaon & Anr. [1962] 1 S.C.R. 596, relied on.
(iii) Mandatory provisions must be fully complied with, and directory provisions should be substantially complied with. In either case 1he agency for seeing to this compliance is the State Government. It is hardly ro be expected that the State Government would not do its duty or that it would allow breaches of the provisions to go unrectified. In cases of minor departure from the letter of the law especially in matters not fundamental, it is for the Government to see whether there bas been substantial or reasonable compliance. Once GC>Vernment COO· dones the departure, the decision of the Government is rightly made final by making the notification conclusive evidence of the compliance with the requirements of the Act. [959 H-960 DJ
(iv) The power to tax belongs to the State Legislature but is exercised by the local authority under the control of the State Government. It is impossible for the State Legislature to impose taxes in local areas because local conditions and needs must vary. The power must be delegated. The taxes ho\vever are predetermined and a procedure for consulting the wishes of the people is de\ised.
But the matter is not left entirely in the hands of the Municipal Boards. As the State Legislature cannot supervise the due observance of its laws by the municipal Boards power is given to the State Government to check their actions.
The proceedings for the itn~ position of the tax must come to a conclusion at some stage after \vhich it can be said that the tax has been imposed. That stage is reached, not when the special resolution of the Municipal Board is passed but when the notification by Government is issued.
After the notification all en … quiry must cease. This is not a case of excessive delegation unless one starts with the notion that the State Government may collude with the Municipal Board to disregard deliberately the provisions for the imposi· tion of the tax. There is no warrant for such a supposition. The pro–
v1s1on making the notification conclusive evidence of the proper imposi- tion of the tax is conceived in the best interest of compliance of the provisions by the Board and not to facilitate their breach. [960 F"961 E] Excessive delegation is most often found when the legislature does not perform all the essential legislative functions and leaves them to some other agency. The Legislature here performs all essential functions in the imposition of the tax. The selection of the tax for imposition in a muni … cipal area is by the legislative will expressed in s. 128. Neither the Muni …
eipa1 Board, nor the Government can go outside the list of taxes therein includedl. The procedure for the imposition of the tax is also laid down SUPRE.ME COURT REPORTS (1966] I S.C.R.
by the Legislature for the Municipal Board lo follow and the State Govern· mcnt is there to ensure due ob9Crvance of that procedure. In view of all this :here was no excessive delegation or conferral or legislatlve functions on the appellant Board or the State Government. [961 F-962 CJ (v). There a:e numerous statutes including the Evidence Act, in which a fact is taken to be conclu.'>ively proved from the c."tisrenl.'.e of some other fact.
The law is full of fictions and irrehuttable presumptions which also mvol~e proof of facts. 'fhe t~LX payers in the t\.1unicipality arc alto\ved '? object to the proposal for the tax and the rules and to have their objec- Uons considered.
They cannot be allowed to keep on agitating. Section U5('J. which only concludes objections against the procedure followed 1n the 1mpos1uon of the tax cannot be said to be discriminatory and ,;oJa~ ;ive of Ari. 14. [962 D-H]
l vi) The ( ujecrion that the impugned sub-section involves the exercise of judi~ial functions not open to the legislature is wholly erroneous. The sub-section only shuts out further enquiry and makes the notification final. [962 HJ
/'er Wanchoo. J. (dissentin~) (i) Sec'ion 135(3) bars enquiry by courts into all p~occdural provhions relating to imposition of taxes and lhereforc it ba·s enquiry into any motter covered bys. 131 10 •· f35(1) of the Act.
It cannot be read down as barring enquiry only into some procedural provisions i.e. from s. 131 to s. 133 and not into the other procedural prov;sions i.e. s. 134 ands. 135(1). [968 Dl
Section 135(3) is not a rule of evidence; it is a substantive pro\ision wh;ch lay\ d0\\'11 in effect that once a notific-..ition under s. 135 (2) L'i illucd it will be conclusively presumed that the tax is in accordance with all the procedural provisions with respect to
the impoeition thereof. [969 El lslzar Ahmad Khan v. Urriorr of India. [1962] Supp. 3 S.C.R. 235, r~ !erred to. The effect of s. 135(3) is that the procedural provisions are given the go by in the ma:tcr of irnoosition of tax and as soon as a notifica"ion under s. 135(2) is shown to the court, the court is helpless in the matter oven though none of the provisions of s. 131 to s. 135(1) may have been complied with. [969 I!]
(ii) In the field of local taxation relating to municipal boards and district boards and similar other bodies there aro reasons for delegating fixation of rote to such bodies subject to proper safeguards. This
is aactly what has been done under the Act subject to the safeguards con,. ta.ined in s~. 13 l to s. 135 ( 1). If those safeguards are folknvcd the dele- gation would he proper de~eg:Hion and could not be challenged as ultra vires on the grolmd of excessive dclega'ion. But if the legislature after laying down with great care saf~uards .as to the impositi?n of tax includ- ing its rate makeo; a blanket prov1s1on likes. 135(3), which at one stroke does away with all tho.e safeguards-and this is whats. 135(3) has done in the present case-the position that results is that there i.') delegation of even the essential function of fixing the rate to the subordinarc au1ho- rity without any safeguard.
Such a delegation would he excessive dele- gation and would be ultra vires. (972 D-Fl (iii) Section 135(31 inasmuch as it makes the delegation con•ained ill ss. 128 to I 35 (2) e'cessive must be severed from the rest of 1he eectioru \\:hich are othen~:ise a proper delegation of legislative au 1hority and should be struck down on the ground of ex.,.,ssivc delegation. [973 BJ c
c MUNI. BOARD V. RAGHUVENDRA (Hidayatullah, J.) 953' CIVIL APPELLATE JURISDICTION: Civil Appeal No. 583 of 1962 . Appeal by special leave from the judgi;nent and o!'1er, dat?'1, November 23, 1959, of the Allahabad High Court m
Special Appeal No. 524 of 1958. S. V. Gupte, Solicitor-General, Guru Dayal Srivastava and T. Satyanarayana, for the appellant. B. R. L. Iyengar and A. G. Ratnaparkhi, for respondent$
Nos. 1, 2, 4, 8 & 12 to 14. C. B. Agarwal and 0. P. Rana, for Intervener No. 1. A. V. Rangam, for Intervener No. 2. G. C. Kasliwal, Advocate-General, for the State of Rajasthan· and R. N. Sachthey, for Intervener No. 3.
I. N. Shroff, for Intervener No. 4. The Judgment of GAJENDRAGADKAR, C.J., HIDAYATULLAH, SHAH AND SIKRI, JJ was delivered by HIDAYATULLAH, J. WANCHOO· J. delivered a dissenting Opinion.
Hidayatollah J. The Municipal Board, Hapur (shortly the appellant Board) passed a Special Resolution (No. 296) on September 28, 1956 imposing water tax in Hapur from April l, ~957 and a notification by the Government of Uttar Pradesh was. published in the Uttar Pradesh Gazette under s. 135(2) of the U. P. Municipalities Act (Act 2 of 1916) dated December 11, JI'
1956 notifying the resolution. Fifteen house owners of Hapur who received notices from the appellant Board for the payment of the tax assessed in respect of their houses, petitioned to the· Htgh Court at Allahabad under Art. 226 of the Constitution and' asked for a writ or order preventing the appellant Board from realising the tax. Their contention was that the ta"{ was illegal as it was imposed in contravention of the provisions of the Munici- palities Act.
The main grounds of objection were (a) that the resolution of the appellant Board framing the proposal was not published in a local paper of Hapur printed in Hindi, and (b) that the rules framed for the imposition of the tax did not accompany the resolution which was affixed on the notice board at the office of the appellant Board in purported compliance with the require- ments for publication.
The imposition was also challenged on the ground that Arts. 14 and 19 of the Constitution were violated .. SUPREMB COURT REPORTS [1966] I S.C.R. The petition was heard by Mr. Juslice James who decided all the points against the appellant Board.
He held that the tax was illegal inasmuch as the mandatory requirements of the Municipalities Act were not complied with by the appellant Board while imposing the tax, and that s. 135(3) of the Act (which cures all defects in the imposition of tax by making the notification of Government conclusive evidence of the legality of the imposi- lion) was ultra vires Art. 14 of the Constitution because it created a bar against proof and left no remedy to the tax payers thereby making a discrimination between them and other litigants.
He further held that the sub-section, by making Government the sole judge of compliance with the Act conferred judicial power on Government contrary to the intendment of the Constitution. The C appellant Board was accordingly ordered not to collect the tax from the petitioners.
The appellant Board appealed under the Letters Patent. The Divisional Bench hearing the special appeal agreed with Mr. Justice James. The present appeal has been filed by special leave of this Court. Since it will be necessary to consider whether the appellant Board complied with the require- ments of the. Municipalities Act or not and, if not, to what extent, it is necessary to analyse the provisions in the Municipalities Act for the imposition of a tax and then to follow that up with a nar- ration of the steps taken by the appellant Board.
Section 128 of the Municipalities Act confers on the Munici- palities in Uttar Pradesh the power to levy taxes and enumerates the kinds of taxes. One such tax mentioned in cl. ( x) of sub-s.
( 1) of the section reads : "a water tax on the annual value of the building or land or both". This was the tax which the Municipality had attempted to impose in Hapur. There can be no question that the appellant Board had the competence to impose this tax and so the first question is whether it went about the business in the wrong way and, if it did, what is the
effect. Section 129 specifies certain restrictions on the imposition of water tax. We need not refer to them because no objection wa.s raised that the restrictions there prescribed had not been observed. Sections 131 to 135 lay down the procedure for the imposition of the tax.
Section 131 provides that when a Board desires to impose a tax it shall, by special resolution, frame a proposal specifying the tax, the person or class of persons to be made liable and the description of the property or other taxable things or circumstances in respect of which they arc to be made liable, the amount or rate leviablc from such person or class of persons and any other matter which the State Government may require MUNI. BOARD v. RAGHUVENDRA (Hidayatullah, !.)
A by rules to be specified. The same section requires the Board to prepare a draft of the rules which it desires the State Government to make and the Board is required to publish the proposal, the draft rules so framed, and a notice in the prescribed form, in the manner laid down by s. 94. That section says that every resolu- tion passed by a Board at a meeting, shall, as soon thereafter as may be, be published in a local paper published in Hindi and where there is no such local paper, in such manner as the State Government may, by general or special order, direct. After the notice etc. are published, s. 132 enables any inhabitant of the Municipality to submit to the Board an objection in writing to c
all or any of the proposals framed by it and the Board is required to consider the objection so submitted and to pass order thereon by special resolution. If the Board decides to modify its pro- posals or any of them it must publish the modified proposals and (if necessary) the revised draft rules with a fresh notice, for objections. Any new objection so received has to be dealt with n in the same way. After the Board has finally settled the proposals, it has to submit the proposals, the objections (if any) and the orders made in connection therewith, to the prescribed authority. The prescribed authority under s. 2 ( 17) (ii) means an officer or a body corporate appointed by the Stat~ Government in this behalf by notification in the official Gazette, and, if no such officer or body corporate is appointed, the Commissioner.
It may be stated that the proposal we are considering was accepted by the Commissioner. Then follows s. 133 and it gives power to the State Government or the prescribed authority to reject, sanction or modify any proposal.
When the proposals are sought to be modified they have to be referred back to the Board f.;-r further consideration. When the proposals are sanctioned by the State Government or the prescribed authority s. 134 of the Act requires that the State Government, after taldng into consideration the draft rules submitted by the Board, shall proceed to make such rules, under its powers under s. 296 of the Act, in respect of G the tax, as the Government may consider necessary.
After the rules have been made, the order of sanction and a copy of the rules are sent to the Board and thereupon the Board by special resolution directs the imposition of the tax with effect from a date which it specifies in the resolution. This is stated in s. 13~ which may be reproduced here fully :
"135. Imposition of tax,- ( 1) A copy of the resolution passed under Sec- tion 134 shall be submitted to the State Government, SCPREME COURT REPORTS [1966) I S.C.R. if the tax has been sanctioned by the State Government,
and to the Prescribed Authority, in any other case. (2) Upon receipt of the copy of the resolution the State Government, or Prescribed Authority, as the ca e may be, shall notify in the official Gazette, the impo<i-
tion of the tax from the appointed date, and the imposi- tion of a tax shall in all cases be subject to the condirion that it has been so notified. ( 3) A notification of the imposition of a tax under
sub-section (2) shall be conclusive proof that the tax has been imposed in accordance with the provisions of this Act." The appellant Board passed a special resolution in terms of s. 131 ( 1) of the Act. The publication of the resolution was made by affixing a copy of the resolution on the notice board as provided c
by a notification dated July 5, 1916 and by beat of drum in the town of Hapur. The resolution was, however, not publi,hed in a local paper published in Hindi as required by s. 94 (3 \ of the Act.
It is admitted that two Hindi weeklies entitled "Jnnmat" and "Bharatvarsh" and one Hindi daily entitled "Vyanar" were published at that time at Hapur. The anpellant Board did not pblish the notice etc. in these journals because, in its onin;on, non~ of these papers was a suitable JocaJ paper havin~ wid~ E circulation in the town at the time. Notification of the S•h July, 1916 provides that, where, in a Munici~ality, there is no !<>cal paper, a copy of every resolution passed hv a Board at a mee•ing 'hall. within ten days from the date of the meeting, be pa<ted up and for thirty days be kepi pasted uo on a notice board to be c~hibited for public information at the building in which the meet- ings of the Board are ordinarily held.
Two objections against the tax found favour with the High Court. The first objection arose from the non-observance of ,-. 94 ( 3) which, as already noticed, requires that the publication of the proposal etc. should be in a local newspaper published in G Hindi.
The High Court held that there was no need to take recourse to the notification of the 5th of July 1916, because the first part of s. 94(3) could be complied with. The next objection against the tax w'1s that even if the special Resolution under s. 131 was prn.,erly published. the rules which ought to a~comnany the Resolution were not exhibited. The appellant Board claimed :h3t the court was precluded from making an enquiry by reason <'f s. 135 (3) which made the notification conclusive evid 'n'e that ·C
😀 ,G \ff MUNI. BOARD v. RAGHUVENDRA (Hidayatul/ah, !.) the tax was imposed in accordance with the provisions of the · Municipalities Act. The respondents met this by challenging the legality of the sub-section.
They pleaded that it was discrimi- natory inasmuch as it did not allow one set of litigants to prove their allegations as against the general body of litigants and further that there was a conferral of judicial functions on the legislature which was contrary to the separation of powers u~der the Constitution.
The High Court accepted these contentions also. There can be no doubt that the language of s. 135 (3 \ is a5 wide as it is peremptory. Read literally it can lead to the con- clusion that even an illegal tax cannot be questioned. Prima facie, it appears that even if a Municipal Board goes outside the cate- gories of taxes mentioned in s. 128 and if the Government is persuaded to notify the imposition, all will be well. This cannot be the intent and hence not the meaning.
We must, therefore, see if the words are susceptible of another construction obvitating such a patently absurd result. There is at the very start the fundamental fact that the powe~ to tax in a State can only be exercised by the State Legislature, the extent of the power being fixed by the Constitution. The taxes which the State Legislatures are allowed to raise are enumerated in the Seventh Schedule to the Constitution. The State Legisla- ture can impose all these taxes itself but it is usual to authorise the levy of some of them by local authorities for their own pur- pose.
Taxes so raised by a local authority are not imposed by it as a legislature but as a delegate of the legislature. What is done is binding by the authority of the legislature and the tax is valid only if it is one of the taxes the delegate can raise and the delegate imposes it in accordance with the conditions laid down by the fogislature.
It is thus that we find an elaborate procedure prescribed by all the Municipal Acts. In the U.P. Municipalities Act also, as we have seen, a Board must first pass a special Resolution framing a proposal and the draft rules, invite objections, consider them, and then get them approved by Government.
After this approval there must be a final special resolution imposing the tax from a particular date and the Government then notifies the imposition of the tax. It is the duty of Government to see that
the various steps laid down for the imposition of the tax are followed. Before it notifies the resolution Government satisfies itself about the requirements. The notification is made conclu-
sive proof that the tax is imposed in accordance with the provi- SUPREME COURT REPORTS [1966] I S.C.R. · sions of the Act. The question arises : Is this rule of conclusive A evidence such as to shut out all enquiry by couns ? We have no hesitation in answering the question in the negative.
There are cenain matters which, of course, cannot be established conclu- sively by a notification under s. 135(3). For example, no notifi- cation can issue unless there is a special resolution. The special resolution is the sine qua 11011 for the
notification. The State Government cannot impose a tax all by itself by notifying the imposition of the tax, without a resolution by the Board. Again, the notification cannot authorise the imposition of a
tax not included in s. 128 of the Municipalities Act. Neither a Municipal Board nor a State Government can exercise such a power. A tax can only be said to be imposed in accordance with the provisions of the Municipalities Act, if it is contemplated by the Act. ·mere is a difference between the tax and the imposition of the tax. The fonner is the levy itself and the latter the m~thod bv which the levy is imposed and collected.
What the sub-section does is to put beyond question the procedure by which the tax is imposed, that is to say, the various steps taken to impose it. A talC not authorised can never be within the protection afforded to the procedure for imposing taxes.
Such a tax may be cballenged, not with reference to the manner of the imposition but as an illegal impost. It would thus appear that at the very start the selection of E the tax must be with reference to the delegated powers.
The Municipal Board of the State Government cannot select a tax which the legislature has not mentioned in s. 128 of the Munici- palities Act. As the State Government cannot itself impose the
tax it must have before it, the special resolution of the Board before notifying the imposition. Between the special resolution selecting a tax for imposition and the special resolution imf>O'ing it sundry procedure is gone through and section 135 (3) says that the notification by Government is conclusive proof that the pro- cedure was correctly followed.
It is argued that ss. 131 to 134 use mandatory language and it is the intention of the Legislature to secure obedience to its wishes and therefore it is for the couns to say whether those pro- visions were followed by the Municipal Board
and the State Government. There can be no doubt that some of the provision> are mandatory. But all provisions are not of the same character. In Raza B1111/a11d Sugar Co. Ltd. v. The Municipal Board. Ram- pur(') ss. 131 to 134 were considered in the light of the tests ·—
—- (!) [19651 I. S. C. R. 970. … , MUNI. BOARD v. RAGHUVENDRA (Hidayatullah, /.) 959, usually applied to determine whether a provision of law is manda- tory or directory. It was there pointed out that all the sections ino spite of the language used in them were not mandatory.
The majority opinion considered that the first part of s. 131 ( 3) requiring publication of proposals was mandatory and the second part which required that publication should be in the
manner required by s. 94(3) was only directory. In one of the minority opinions no such distinction was made but s. 94(3) was held to be directory. In the other minority opinion distinction was made between provisions for the protection of tax payers which were stated to be mandatory and provisions for promoting despatch, publicity and efficiency were stated to be directory requiring sub- stantial but not literal compliance. In that case the notice impos- ing water tax in Rampur was published in Hindi but in a news- paper published in Urdu.
The majority treating the latter part of s. 131 ( 3) as directory held that there was substantial com- pliance. The minority treating s. 131 ( 3) to be mandatory upheld the tax treating s. 94 ( 3) as directory. One of the minority views. relied upon s. 135 (3) as shutting out enquiry .
In Berar Swadeshi Vanaspati v. Municipal Committee Sheo- gaon & Anr. (1) the Municipality passed a resolution under s. 67 (1) of the C. P. & Berar Municipalities Act, 1922. Sub- sections (1) to (7) incorporated provisions similar toss. 131-135 of the U. P. Municipalities Act. An attempt to question the tax on the ground that the procedure prescribed by s. 67 was
not followed was repelled. It was observed : " …… This notification itherefore ;clearly is one which directs imposition of octroi and falls within sub- s. (7) of s. 67 and having been notified in the Gazette
it is conclusive evidence of the tax having been imposed in accordance with the provisions of the Act and it can- not be challenged on the ground that all the necessary steps had not been taken."
The defect in the imposition of the tax here being of the same character as in the two cases of this Court above cited, the imposi- tion would have the protection of s. 135(3) and the tax must be deemed to be imposed according to the procedure laid down in the Act.
As observed already, some of the provisions controlling the imposition of a tax must be fully complied with because they are ~.> ' vital and therefore mandatory, and the others may be complied (I) [1962] I S.C.R. 596.
SUPREME COURT REPORTS [1966) l S.C.R. with substantially but not literally, because they arc directory. Jn either case the agency for seeing to this compliance is the State Government. It is hardly to be expected that the State Govern- ment would not do its duty or that it
would allow breaches -0f the provision to go unrectificd. One can hardly imagine that an omission to comply with the fundamental provisions would ever be condoned. The law reports show that even before the
addition of the provision making the notification conclusive evidence of the proper imposition of the tax, complaints brougbt before the courts concerned provisions dealing with publicity or requiring ministerial fulfilment.
Even in the two earlier case' which reached this Court and also the present case, the complain1 is of a breach of one of the provisions which can only he regarded as directory. In cases of minor departures from the letter of the law especially in matters not fundamental, it is for the Govern- ment to see whether there has been substantial or reasonable com- pliance.
Once Government condones the departure, the decision c of Government is rightly made final by making the notification conclusive evidence of the compliance with the requirements of the Act. It is not necessary to investigate whether a complete lack of observance of the provisions would be afforded the same pr<.>- tcction.
It is most unlikely that this would ever happen and before we pronounce our opinion we should like to see such a case. It was, however. contended that there has been excessive delegation, inasmuch as the State Government has been given th~ power to condone breaches of the Act and thus to set at naught the Act itself. This is not a right reading of the relevant provisions. We have already pointed out that the power to tax i' conferred on the State Legislature but is exercised by the focal authoritv under the control of the State Government. The taxes with which we are concerned are local taxes for local needs and for which local inquiries have to be made.
They are rightly left to the representatives of the local population which would bear the tax. Such taxes must vary from town to town, from one Board to G another. and from one commodity to another.
It is im,.,ossible for the Legislature to pass statutes for the imposition of such ta'te-; in local areas. The power must be delegated. Regard bcin!! had to the democratic set-up of the municipalities which need the proceeds of these taxes for their own administration. it 1s proner to leave to these municipalities the power to imnose and collect these taxes.
The taxes are, however, predetermined and a pro- cedure for consulting the wishes of the people is devised. 13ut the c MUNI. BOAl\D v. llAGHUVENDllA (Hidayatullah, I.) matter is not left entirely in the hands of the MuriiCipal Boards. As the State Legislature cannot superv~ the due observance of its laws by the Municipal Boards, power is given to the State Government to Clieck their actions. The imposition of the tax is left to the Municipal Boards but the duty to see tliat the provi- sions for publicity, and obtaining the view~ of the persons to be taxed are fully complied with, ii laid upon the State Government. The proceedings for the imposition of the tax, however, must come to a conclusion at some stage after which it caiJ. be said that the tax has been imposed. That stage is reached, not when the special resolution of the Municipiil. Board is passed, but when the notification by Government is issued.
Now it is impossible to leave the matter open so that complaints about the imposition of the tax or the breach of this rule or that may continue to be raised. The door to objections must at some stage be shut and the Legislature considers that, if the State Government approves of the special resolution, all enquiry must cease. This is not a case D ohncessive delegation unless one starts with the notion that the State Government may collude with tho Municipal Board to dis- regard deliberately the provisions for the imposition of the tax. There is no warrant for suck a supposition. The provision making tho notification conclusive evidence of tho proper imposition of tax is conceived in the best interest of compliance of the provi- sions by the Boards and not to facilitate their breach. It cannot, therefore, be said that there is excessive delegation.
The matter may be looked at from another point of view. Excessive delegation is most often found when the Legislature docs not perform all the essential legislative functions and leaves them l'<'
to some other agency. The Legislature here performs all essential functions in the imposition of the tax. The selection of tax for imposition in a Municipal area is by the legislative will expressed in s. 128. Neither the Municipal Board, nor the Govenunent can go outside the List of taxes therein included. The procedure for the imposition of the tax is also laid down by the Legislature for the Municipal Board to follow and the State Government is there to ensure due observance of that procedure.
We have already shown above that it would be impossible for the Legisla- ture to legislate for the numerous Municipal Boards and local authorities with a view to raising taxes for them. The provisions, such as they are, are the best means of achieving consultation of II
the local population and close scrutiny of the actions of their representatives in imposing the tax. The notification which issues is given finality by the voiee of the Legislature. It would, there- LBSup.CI/65-18
SUPREME COURT il!POiTS fore, appear that in the selection of the tax and its imposition the A Legislature plays a decisive part and also lays down the method by which the tax is to be imposed. The Legislature does not make local enquiries, hear objections and decide them-functions which :ire most inappropriate for the Legislature to perform. 111is task: is delegated to the appellant Board which is the representative body of the local population on whom the tax is levied. In other B words, all the essential functions of Legislation are perfom1ed by the State Legislature and only the minor functions necessary for the imposition of the taX and the enquiries which must be made to ascertain local opinion are left to the Municipal Boards. An
additional check is available as Government can veto the actions of a Board if it docs not carry out the mandate of the Legislature. In our judgment, there was no excessive delegation or a conferral of Legislative functions on the appellant Board or
th~ State Government. It remains to consider two other arguments in the case. The first is the question of discrimination which is said to arise from the proviso which makes the notification conclusive in respect of the procedure by which the tax is imposed. There are numerous 'T
statutes, including the Evidence Act, in which a fact is taken to be conclusively proved from the existence of some other fact. TI1e law is full of fictions and irrcbuttable presumptions which al.so involve proof of facts.
It has never been suggested before E that when the Legislature says that enquiry into the truth or other- wise of a fact shall stop at a given stage and the fact taken to be conclusively proved, a question of discrimination arises. The tax payers in the Municipality are allowed under the Municipalities Act to object to the proposal for the tax and the rules and to have f
their objections considered. They cannot. of course, be allowed to keep on agitating and a stage must come when it may be said that the provisions of the 'Act have been duly observed.
Th.it ~tage is reached after Government has scrutinized the proposal, the rules, the objections and the orders and ha.s approved of the proposal, a special resolution is passed by the Municipal Board and a notification is issued. It cannot be said that sub·s. ( 3) of s. 135 which leads to the conclusion that the imposi!ion of the tax is according to the Municipalities
Act is discriminatory because it only concludes objections agaimt the rrocedure followed in the imposition of the tax. The next objection that the impugned sub·scction involves the exercise of judicial functions not open to the Legislature, is wholly 4.'
erroneous. The sub-section only shuts out further enquiry and MUNI. BOARD v. RAGHUVEND!lA (Wanchoo, I.) A makes the notification final. There is no exercise of a judicial function.
In our country there is no rigid separation of powers and the legislature often frames a rule such as is incorporated in !he third sub-section of s. 135. The Evidence Act is full of such provisions. In the United States of America where the separation of pewers is extremely rigid in some of the constitutions of the B States it may be open to objection that the Legislature in shutting out enquiry into the truth of a fact encroaches up0n the judicial power of the State. Such disability has never been found to exist in our country although legislation of this type is only too frequent The objection is, therefore without substance.
c In the result we are 'of opinion that the judgment of the High Court under appeal must be set aside. We accordingly set it aside and order the dismissal of the petition under Arts. 226 and 227 of the Constitution from which the present appeal has arisen, In the circumstances of the case there shall be no order as to costs.
Wanchoo J. I regret I am unable to agree. This appeal by special leave from the judgment of the Allahabad High Court raises thc:,"1'Uestion of vires of s. 135(3) of the U.P. Municipalities Act, NO'. 2 of 1916,
(hereinafter referred to as the Act). The facts in the case are not in dispute and may be briefly stated. The appellant, namely, the Munici- pal Board Hapur, decided to impose water tax from April 1, 1957. In consequence, steps were taken under ss. 131 to 135 of the Act to effebt!Jate that purpose.
However, proposals and draft rules were never published as required by s. 131 ( 3) of the Act. All that was done was that a notice in the form set F forth in Sch. III was pasted on the notice-board and there was some beat of drum with respect to the notice.
Even so, the draft rules were not appended to the notice which was put up on the notice-board and in effect there was more or less no compliance with the provisions relating ito ,the publication of proposals and draft rules.
Eventually a notification was issued G under s. 135 (2) of the Act by the relevant authority about the imposition of the tax from April 1, 1957. Thereafter collection of tax began.
The respondents who are residents of Hapur received notices for payment of tax. Thereupon they filed a writ petition in the High Court, and their main grievance wa~ H that the provisions of s. 131 relating to publication of proposals and draft rules were not complied with and thus they were de· prived of an opportunity to file objections as provided under s. 132 of the Act. They contended that the publication as pro- SUPREME
COURT REPORTS [1966) I S.C.R. vided in s. 131 of the Act was mandatory and as a mandatory provision of the Act was not complied with, the imposition of the tax was invalid. The petition was heard by a learned Single Judge who found, as already indicated that the provisions of s. 131 (3) relating to publication had not been complied with, consequently, the resi- JI.
dents of Hapur had no "'opportunity of making objections to the proposals and draft rules. Reliance however was placed on behalf of the appellant ()n s. 135(3) of the Act, which is in these terms:-
"A notification of the imposition of a tax under sub- section (2) shall be conclusive proof that the tax ha., been imposed in accordance with the provi,ions of thi' Act." In reply to this, the respondents contended that s. 135 ( 3) was ultra vires, and this contention was accepted by the learned Single Judge. He therefore allowed the petihon and directed the appel- !ant not to collect water tax from the respondents until ~uch time as the tax was imposed 1n strict compliance with the provi- sions of the Act
Then there was an appeal by the appellant to a Division Bench. There also reliance was placed on s. 135 ( 3) of the Act. The Division Bench upheld the order of the learned Single Judge, though its approach
to s. 135(3) was different. It held that s. 135 (3) was not a provision for validating anything done with· out complying with the provisions of the Act and it could not protect the invalidity of a tax if it was invalid on account of its being imposed without following the legal procedure.
Then there was an application by the appellant for a certificate to appeal to this Court, which was refused by the High Court. The appel- lant thereupon got special leave and that is how the matter has come up before this Court.
The main contention on behalf of the appellant before this court is that s. 135(3) which Jays down that the notification under s. 135(2) would be conclusive procf that the tax had been imposed in accordance with the provisions of the Act bars any enquiry into the various procedural steps taken for the imposition of the tax, and the court where such a question is raised must hold that the tax has been imposed in accordance
with the provisions of the Act. Once the court comes to that conclusion it would mean that it must assume that the necessary procedural steps for imposing tax had all been properly complied with and MUNI. BOARD v. RAGHUVENDRA (Wanchoo, !.)
A therefore there could not be any invalidity of the tax on the ground that all steps necessary for the valid imposition of the tax had not been taken. It is further submitted that s. 135 ( 3)
bars enquiry as to the procedural steps necessary for imposing the tax which are contained in ss. 131 to 133 of the Act, and it is urged that what a court can enquire is whether the special B resolution as required by s. 134 ha8 been passed by the munici- pality or not.
On the other hand, learned counsel for the respondents con- tends that ifs. 135(3) is to be given the meaning for which the appellant contends it will be ultra vires because then there will be an abdication of its essential legislative functions by the legislatures with respect to imposition of tax and therefore s. 135(3) would be bad on the ground of excessive delegation. It is further urged on behalf of the respondents that s. 135 ( 3) read literally not only bars enquiry into procedural steps necessary for the imposition of the tax, which, according to learned coun- D sel, are contained in ss. 131 to 135(1) but also bars enquiry as to whether the tax is in accordance with ss. 128 to 130, which arc substantive provisions with respect
to taxes which can be imposed by municipal boards. Learned counsel for the respon- dents thus urges that s. 135 (3) would give blanket power fo1 the imposition of any tax whether it is contained in s. 128 01 E not and wonld also permit violating the restrictions contained in ss. 129 and 130; and if that be so, it would be a case of complete abdication of its essential functions by the legislature with respect to imposition of tax and a gross case of excessive delegation.
The question that falls for consideration therefore is about the scope of s. 135 (3) and whether on a true inter- F pretation of that provision it can be said to amount to a case of excessive delegation and therefore liable to be struck down on that count.
Before I come to s. 135(3) I may indicate the scheme of municipal taxation contained in ss. 128 to 135 of the Act. Section 128 mentions the taxes which a board may impose sub- G ject to any general rules or special orders of the State Govern. ment in this behalf. Section 129 lays down certain restrictions on the imposition of water-tax and s. 130 lays down certain restrictions on the imposition of certain other taxes.
Section 130-A specifies the powers of the State Government to require a board to impose taxes. Then comes section 131 to 135 which are obviously procedural provisions with respect to imposition of any tax mentioned in s. 128. That these are procedural provi- sions is clear from s. 13 6 of the Act which lays down that the SUPJlEMB COURT
JlEPORTS [1966] l S.CR. procedure for abolishing a tax or for altering a tax in respect of A certain matters shall, so far as may be, be the procedure pres- cribed by ss. 131 to 135 for the imposition
of a tax. The essentials of the procedure contained in ss. 131 to 135 may be briefly summarised thus. When a board desires to impose a tax it has to pass a special resolution framing proposal~ specifying the tax, the persons or class of persons on whom the tax will be imposed, the amount or rate Ieviab!e and any other matter referred to in s. 153 which the State Government requires by rules to be specified.
The board has also to prepare a draft of the rules which it desires the State Government to make in that behalf. After the proposals and draft rules have been prepared. the board is required to publish them along with a notice in the form set forth in Sch. III : (sec s. 131).
On the publication of the notice along with the proposal~ and draft rules any inhabi- tant of the municipality has the right to submit objections in writing and the board has to take such objections into considera- tion and pass orders thereon by special resolution. If the board decides to modify its proposals, it shall publish the modified pro- posals and (if necessary) revised draft rules in the same manner as the original proposals and draft rules were published.
If any objections are received to the modified proposals they arc again dealt with by the board which has to pass orders thereon by special resolution. When the board has finally settled its pro-
posals, it has to submit them along with the objections (if any) to the proper authority, s. (132). The proper authority may either refuse to sanction the proposals or return them to the board for further consideration or sanction them without modifications or with such modification not involving an increase of rhe amount to be imposed, as it deems fit; (section 133).
Whell' the pro- posals have been sanctioned by the proper authority, the State Government after taking into consideration the draft rules sub- mitted by the board has to make such rules in respect of the tax as for the time being it considers necessary.
When the rules have been made, the order of sanction and a copy of the rules c has to be sent to the board and thereupon the board has by special resolution to direct the imposition of the tax with effect from a date to be specified in the resolution : (s. 134). There- after a copy of the resolution pas.sed under s. 134 is submitted to the proper authority.
Upon receipt of the copy of the resolu- tion the proper authority has to notify in the official gazette the imposition of the tax from the appointed day and the imposition of a tax shall in all cases be subject to the condition that it has been so notified.
c MUNI. BOARD v. RAGHUVENDRA (Wanchoo, !.) It will be seen from the above procedural provisions that the legislature has taken great care to see that the tax is imposed after the inhabitants of a municipality have had a chance to make representations in that behalf and after the tax has been approved at all stages including the disposal of objections by means . of special resolutions, which require a special quorum for the meeting in which they are passed. Further the legislature has taken care to provide that the disposal of objections by , a board even by special resolution is not sufficient and it has required that the objections shall be sent to the proper authority, presumably for its consideration before it sanctions the tax.
These provisions to my mind indicate the safeguards the legislature intended in a case of this kind where the legislature itself has not indicated the rate of tax but has merely indicated the heads of taxation and the fixation of rate of tax and all incidental matters have been delegated to the board subject to the supervision of the State Government.
It is after all this elaborate procedure has been gone through that a tax can be validly imposed by the delegate, namely the board. This brings us to s. 135 ( 3) which has already been set out. The first question that arises is the interpretatioR of this provision. As I have already indicated two different submissions have been made in this connection on behalf of the parties.
The appellant submits that this section only bars enquiry by the court into the procedural provisions contained in s. 131 to s. 133. On the other hand, the respondents contend that this
provision bars enquiry into all matters contained in s. 128 to s. 135(1). If the words of this provision were to be literally interpreted they lay down that the notification under s. 135(3) shall be conclusive proof that the tax has been imposed in accordance
with the provisions of the Act. The last words are very wide and it is contended on behalf of the respondents that they would include all the provisions of the Act and once a notification is issued under s. 135(2) the court is barred from inquiring whether the tax is against any of the provisions of the Act.
I feel however that even though the words may be capable of such a wide inter- pretation, as is being put upon them on behalf of the respondents, it would not be right to read them as if they provide that a notification under s. 135(2) bars enquiry even. into the question whether the tax is one which could be imposed by the board at all under s. 128.
It would to my mind be proper to read the section in a restricted sense and to hold that when it speaks of tax being imposed "in accordance with the provisions of this Act" it refers only to the procedural provisions relating to the SUPREME COURT
REPORTS [1966] I S.C.R. imposition of tax_ by the board. The legislature by these words co~d not have mtended that the board could impose any t;u which was even not within the legislative competence of the State legislature and enquiry into that aspect would also be barred.
Therefore I must reject the extreme argument on behalf of the respondents that these words mean that the court is barred from enquiring even whether the tax imposed is such as can be properly imposed by a board under s. 128 of the Act.
I must read down ~ese w?rds only to mean that they bar an enquiry as to comphance with the procedural provisions of the Act with respect to the imposition of a tax. This brings me to the next question namely whether the bar c created by this provision is only with respect to s. 131 to s. 133 as urged on behalf of the appellant or goes further.
I have already indicated that the procedural provisions for the imposi- tion of a tax by the board are contained in ss. 131 to 135 (1). It is after these procedural provisions are complied with that a notification under s.
135(2) is issued. I can understand s. 135 (3) being restricted in its application to procedural provi- sions only with respect to the imposition of a tax; but I cannot understand how that provision can be read down further so that it bars enquiry only into some procedural provisions i.e. from s. 131 to s. 13 3, and not into the other procedural provisions i.e. s. 134 and
s. 135 (I). I can see no way of reading s. 135(3) in the manner suggested on behalf of the appellant. I must therefore hold that s. 135 ( 3) bars enquiry by courts into all procedural provisions relating
to imposition of taxes and therefore it bars enquiry into any matter covered by s. 131 to s. 135 (1) of the Act. This brings me to another question namely, what is the nature of the provision contained ins. 135(3) of the Act. Is it merely a rule of evidence as urged on behalf of the appellant or i~ ir more than that and is a substantive provision in itself ?
This Court had occasion to consider the question whether a rule of irrebuttable presumption was a rule of evidence or a substantive provision in lshar Ahmad Khan v. Union of India(') and ob- served that "the proper approach to adopt would be to consider whether fact A from the proof of which a presumption is required to be drawn about the existence of fact B is inherently relevant in the matter of proving fact B and has inherently any probative or persuasive value in that behalf or not. If fact A is inherently relevant in proving the existence of fact B and to any r:itional (I) (1962) Supp. 3 S.C.R. l3S.
1·- _, j. MUNI. BOARD v. RAGHUVENDRA (Wanchoo, I.) A mind it would bear a probative or persuasive value in the matter of proving the existence of fact B, then a rule prescribing either a rebuttable presumption or an irrebuttable presumption in that behalf would be a rule of evidence. On the other hand, if fact A is inherently not relevant in proving the existence of fact B or has no probative value in that behalf and yet a rule _is made B prescribing for a rebuttable or an irrebuttable presumption in that connection, that rule would be a rule of substantive law and not a rule of evidence." It is on this principle that I must con- sider whether s. 135 ( 3) is merely a rule of evidence or a subs- tantive provision.
To my mind it cannot be said from the mere fact that a notification has been published under s. 135(2) that C that fact is inherently relevant in showing that all the procedural provisions have been complied with; nor can it be said that that fact has inherent probative or persuasive value. There is in my opinion no inherent connection between the publication of a notification under s. 135(2) and the compliance with
all the procedural provisions (namely, s. 131 to s. 135(1) ) of the Act. D It will all depend on whether the proper authority has been vigilant or not in seeing that all the provisions contained from s. 131 to s. 135 ( 1) have been complied with.
I would therefore hold that s. 135 ( 3) is not a rule of evidence; it is a substantive provision which lays down in effect that once a notification under E s. 135 (2) is issued it will be conclusively presumed that the tax is in accordance with all the procedural provisions with respect to the imposition thereof. In other words, the effect of the subs- tantive provision contained in s. 135(3) really comes to this. namely, that all the provisions from s. 131 to s. 135(1) are wiped out and the notification issued under s. 135 (2) becomes the sole F basis of the imposition of tax.
It has been said that there is no reason to suppose that the proper authority will not see that the provisions of s. 131 to s. 135(1) are complied with and that there is no reason to presume that the provision of s. 135(3) will be abused.
So far as the first aspect is concerned it is obvious in this very case that the proper authority has not seen G that the provisions of s. 131 to s. 133 have been complied with. As to the second I do not say that the proper authority will abuse the provisions of s. 135(3); but that does not in my opinion make any difference to the devastating effect of that pro- vision on compliance with the procedural provisions contained in s. 131 to s. 135 ( 1) of the Act in the matter of imposition of tax. H The effect of s. 135 (3) which in my opinion is a substantive provision is that the procedural provisions are given a complete go-by in the matter of imposition of tax and as soon as a notifi- SUPRE:vlf.
COURT REPORTS [1966] l S.C.R. cation under s. 135 (2) is shown to the court, the court is helples., in the matter, even though none of the provisions of s. 131 to s. 135 (1) may have been complied with.
This in my opinion is the effect of s. 135 ( 3), as it stands and there is no question of presuming that the proper authority would abuse that provi- sion. Irrespective of the abuse or otherwise of that provision.
the effect thereof in my opinion is to wipe out all the procedural safeguards provided in s. 131 to s. 135 (1) of the Act relating to imposition of tax and to make the tax a completely valid
imposition so long as there is a notification under s. 135(2). On this interpretation of s. 135(3) a serious question arises whether it is a provision which can be said to be intra vires. As c I have already indicated, this is a case of delegation of power to impose tax in so far as its rate and incidence is concerned. Generally speaking. I am of opinion that it is the duty of a legis- lature when imposing a tax· to specify the rate at which the tax is imposed, for the rate of tax, again speaking generally, is one of the essentials of the taxing power given to the legislature. But I cannot fail to recognise that there may be situations where the legislature may delegate to a subordinate authority the power to fix the rate under proper safeguards. It is not necessary to specify all the situations where this can be done.
But there can be no doubt that in the matter of local taxation like taxation by municipal boards, district boards and bodies of that character there is pre-eminently a case for delegating the fixation of the rate of tax to the local body, be it a municipal board or a district board or some other board of that kind.
The reason for this is that problems of different municipalities or districts may be different and one municipality may require one kind of tax at a particular rate at a particular time while another municipality may need another kind of tax at another rate at some other time. Therefore, the legislature can in the
case of taxation by local bodies delegate even the authority to fix the rate to the local body provided it has taken care to specify the safeguards in the fom1 of procedural provisions or such other forms
as it considers necessary in the matter of fixing the rate. So far as I know practically all Municipal Acts provide safeguards of the nature contained in ss. 131 to 135 ( l) of the Act or some other prov;- sions which are equally effective in the matter of controlling the fixation of rate of tax by a delegate of the legislature. In such a case where delep.ation of fixing the rate has been made by the legislature to a subordinate body with proper safeguards, it can- not be said that the legislature bas abdicated its essential func- tions In the matter of taxing legislation by delegating the rate "J
MUNI. BOARD v. RAGHUVENDRA (Wanchoo, !.) A of taxation to be determined under proper safeguards by the delegate. Nor can such delegation be struck down as a case of excessive delegation which means that the legislature has abdi- cated its essential legislative functions in the matter of the legis- lation concerned.
But there is ample authority for the view that where the legislature has abdicated its essential legislative func- B tions and has made a delegation which may be called excessive such excessive delegation may be struck down.
I may in this. connection refer to two decisions of this. Court, namely, In re The Delhi Laws Act, 1912(1) and Rajnarain Singh v. The Chairman, Patna Administration (j:ommillee ( 2). It has been held in these cases that an essential legislative function cannot be delegated C by the legislature.
Exactly what constitutes essential function cannot be enunciated in general terms. But the essential legis- lative function consists in the determination of the legislative policy and its formulation as a binding rule of conduct. It can- not be said that an unlimited right of delegation is inherent in the legislative power itself. This is not warranted by the provisions D of the Constitution and the legitimacy
of delegation depends entirely upon its being used as an ancillary measure which the legislature considers to be necessary for the purpose of exercising its legislative powers effectively and completely.
The legislature must retain in its own hands the essential legislative functions E which consist in declaring the legislative policy and laying down the standard which is to be enacted into a rule of law and what can be delegated is the task of subordinate legislation which by its very nature is ancillary to the statute which delegates the power to make it.
Provided the legislative policy is enunciated with sufficient clearness or a standard is laid down, the courts F should not interfere with the discretion that undoubtedly rests. with the legislature itself in determining the extent of delegation necessary in a particular case.
In these two cases the question arose whether certain laws could be applied to certain areas with such modification as the executive authority deemed fit to make. It was held that where the G executive authority was permitted, at its discretion, to apply with- out modification (save incidental changes such as
name and place), the whole of any law already in existence in any part of India, that would be good. Further the executive authority could even be authorised to select future laws in a similar way and to apply them to certain areas. But where the authorisation was to repeal laws already in force
in the area and either substitute other laws with or without modification, this was held (I) (1951] S.C.R. 747. (l) (1955] I S.C.R. 290. SUPREME COURT REPORTS [1966] l S.C.R. to be excessive delegation and ultra vires.
Further where the modifica.tion in a law to be applied did not affect any essential change m the law and alter its policy it could be modified to that e~tent and applied by the. executive authority under delegated authonty.
But where a modification affects a radical change in the policy of the law to be applied such an authority could not be delegated and would be ultra vires. It is on the basis of these principles that I have to see whether s. 135 ( 3) can be upheld. There is no doubt that the legislature delegated its power of imposing taxes, including the power to fix the rate, to the municipal board by s. 128 with respect to taxes specified therein.
I have already said that generally speak· ing the fixation of rate of tax is one of the essential legislative functions but there may be situations where it may not be con- sidered to be an essential legislative function and may be dele· gated by the legislature to subordinate authorities with proper safeguards.
I have also said that in the field of local taxation relating to municipal boards and district boards and similar other bodies there are reasons for delegating fixation of the rate to such bodies subject to proper safeguards.
This is exactly what has been done under the Act subject to the safeguards contained in ss. 131 to 135 ( 1 ) . If those safeguards are followed, the de!· gation in my opinion would be a proper delegation and could not be challenged as ultra vires on the ground of excessive delc- gation.
But if the legislature after laying down with great care safeguards as to the imposition of tax including its rate makes a blanket provision like s. 135 ( 3), which at one stroke does away with all those safeguards–and this is
what in my opinion s. 135 ( 3) has done in the present case-the position that results after such provision is that there is delegation of even the essen· tial function of fixing the rate to the subordinate authority with out any safeguard.
Such a delegation would in my opinion be excessive delegation and would be ultra vires. The question then is whether in the present case I should save the delegation contained in s. 128 read with the safeguards provided in s. 131 to s. 135 (I) for the imposition of variou.• taxes mentioned therein or upholds. 135(3) which in one sweep does away with all the safeguards.
Tn my opinion s. 135(3) is severable and the legislature would have provided for various safeguards contained in s. 131 to s. 135 (I) when it delegated the power to impose a tax including the fixation of rate to municipal boards.
It would therefore in my opinion be right to hold that sections 128 to 135(2) indicate proper delegation of the authority . I MUNI. BOARD v. RAGHUVENDllA (Wanchoo, /.) 97~ A of the legislature to impose taxes specified in s. 128 and that it is sub-s. ( 3) of s. 135 which should be struck down because it is the only provision which makes the delegation excessive. would therefore hold that s. 135 ( 3) inasmuch as it makes the delegation contained in ss. 128 to 135(2) excessive must be severed from the rest of the sections which are otherwise a proper B exercise of delegation of legislative authority and should be struck down on the ground of excessive delegation.
I would therefore dismiss the appeal with costs and uphold the order of the High Court holding that the tax imposed by the appellant had not been validly imposed, though on a different c ground.
ORDER BY COURT In accordance with the opinion of the majority the appeal is allowed. No order as to costs.