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PETITIONER: CORPORATION OF THE CITY OF BANGALORE

       Vs.

RESPONDENT: KESORAM INDUSTRIES AND COTTON MILLS LTD.DUNLOP INDIA LTD. AN

DATE OF JUDGMENT08/12/1989

BENCH: FATHIMA BEEVI, M. (J) BENCH: FATHIMA BEEVI, M. (J) OZA, G.L. (J)

CITATION:  1990 AIR  322            1989 SCR  (2) 443  1989 SCC  Supl.  (2) 753 JT 1989 (4)   491  1989 SCALE  (2)1265

ACT:     City  of  Bangalore Corporation Act. 1949:  Section  98, Octroi-Levy of--Consideration of objections by the  Corpora- tion against the levy--Court--Whether can examine the manner of consideration.     Taxation--Essentials of valid taxation--What are--Proce- dure  for imposition of tax--Court--Whether to presume  com- pliance  with--Noncompliance  with  condition--Precedent  of levy of tax--Burden of proof On whom. Words and phrases: ’Consideration’--Meaning of.

HEADNOTE:     The  City  Corporation of Bangalore  invited  objections from  the public to the proposed levy of octroi  on  certain items.  In  a meeting of the Corporation after  placing  the objections  on  the Table and circulating the Notes  of  the Commissioner  analysing the objections, a unanimous  resolu- tion was passed levying the octroi.     The  respondents challenged the validity of the  Resolu- tion  contending that it was passed in violation of  Section 98(1) of the City of Bangalore Corporation Act, 1949.     The  High Court declared the Resolution invalid  holding that  because of shortage of time, the  condition  precedent for  passing the resolution i.e. real consideration  of  the objections  was  not satisfied. Hence these appeals  by  the Corporation.     Setting aside the judgment of the High Court and  allow- ing the appeals, this Court,     HELD: 1. Taxation in order to be valid must not only  be authorised by a statute, but also be levied or collected  in strict  conformity  with the statute  which  authorises  it. Where a condition precedent is laid down for statutory power being  exercised it must be fulfilled before a  sub-ordinate authority can exercise delegated power. When the 444 statute  requires that delegated power may be  exercised  on fulfilment of certain conditions precedent, the Court  would presume the regularity of the order including the fulfilment of  the condition precedent. It is 1or the party  who  chal- lenged the legality to show that the condition precedent was not in fact complied with by the authority. [446H; 447B]

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   2. The Municipal Administration is coordinated to secure the vital interest of the general public. It is the function of  the representative body to ascertain the  local  opinion and  decide  thereon before imposition of the tax.  It  has, therefore, to be assumed that local representatives who  had taken  note of the objections received in pursuance  of  the notice published have consciously reached the decision. Once it is clear that there had been consideration of the  objec- tion, it is not for the Court to examine the manner in which the legislative will had been indicated. [447C-D]     3. The Court has no jurisdiction to examine the validity of  the  reasons that goes into the decision or  the  motive that induced the delegated authority to exercise its powers. No  judicial duty is laid on the authority in  discharge  of the statutory obligations, and, therefore, the only question to be examined is whether the statutory provisions have been complied with. [447H; 448A]     4. The High Court was not justified in assuming from the time factor alone that there could not have been a consider- ation of the objections. It is not the function of the Court to probe into the details of the discussions and the  delib- erations before legislative will is seen expressed by  pass- ing the resolution. The connotation of the word  ’considera- tion’ occuring in sub-section (1) of Section 98  comprehends ’taking  note  of’ or ’paying heed to’  depending  upon  the nature of the subject. It may be open to the councillors  to express their views even within the limited time  available. No  standard can be prescribed in such matters. When  it  is shown  that the council had the opportunity to consider  the objections  received,  it has to be deemed,  that  they  had taken  note of the same before reaching a  decision.  [448H; 449A-B]     Municipal Board, Hapur v. Raghuvendra Kripal and Others, [1966] 1 S.C.R. 956; Sundarjas Kanyalal Bhatija & Ors.  etc. v. The Collector, Thane, Maharashtra & Ors., [1989] 3  Judg- ment  Today  57; Swadeshi Cotton Mills Co.  Limited  v.  The State of U.P. and Others, [1962]  1 S.C.R. 422; Gopal Narain v.  State of Uttar Pradesh & Another, A.I.R. 1964 S.C.  370, followed. 445

JUDGMENT:     CIVIL   APPELLATE   JURISDICTION:  Civil   Appeal    No. 1216(N)of 1975. WITH Civil Appeal Nos. 509 641(N) of 1977.     From  the  Judgment  and Order dated  26.2.1975  of  the Karnataka High Court in W.P. No. 371 of 1975. A.S. Nambiar and M. Veerappa for the Appellant.     K.N.  Bhat,  Vineet Kumar and K.M.K. Khan, for  the  Re- spondents. The Judgment of the Court was delivered by     M.  FATHIMA  BEEVI,  J. 1. These  connected  appeals  by special  leave  arise from the common judgment of  the  High Court of Karnataka. The Writ Petitions filed by the respond- ents  against the appellant, the Corporation of the City  of Bangalore were allowed and the resolution dated the December 30, 1974 passed by the Corporation levying octroi on certain additional  items under Section 98 of the City of  Bangalore Corporation  Act,  1949 (shortly stated as  ’the  act’)  was declared as invalid.     2. Section 98 of the Act requires the Corporation before passing any resolution imposing a tax or duty for the  first

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time to publish a notice in the Official Gazette and in  the local  newspapers of its intention and inviting  objections. The  Corporation may, after considering the  objections,  if any,  received  within  the period  specified  determine  by resolution to levy the tax or duty.     3.  On the recommendation of the Standing  Committee  to levy  octroi  on certain new items of  goods  the  appellant published  a notice as contemplated under Section  98(1)  of the  Act  inviting objections from the public and  the  said notice was published in the Gazette dated 17-9-1974. Several objections were received in pursuance of the said  notifica- tion.  The subject was included in the supplementary  agenda at  the meeting held on 30-12-1974. It was taken up as  Item No.  146  and  the resolution was  passed  unanimously.  The Commissioner thereafter issued notification. 446     4. The respondents challenged the validity of the  reso- lution  on  the ground inter alia that there  had  not  been consideration  of the objections before passing the  resolu- tion  and, therefore, the mandatory provision under  Section 98(1)  was  violated. The High Court in  allowing  the  Writ Petitions  has  taken  the view that  what  is  contemplated trader the statute is a real consideration of the objections and  not  a mere pretence and since the time was  too  short there  was  no  opportunity for such  consideration  and  on account  of non-consideration of the objections to the  pur- posed  levy the condition precedent for the passing  of  the resolution  was not satisfied and therefore, the  resolution is invalid.     5. The learned counsel for the appellant submitted  that the  objections  have  been placed on the  table  after  the Commissioner  had prepared a note of the several  objections analysing the nature of the objection, setting out the legal conditions regarding the levy and containing the answers  to the  objection, distributed cyclostyled copies of  the  note before the meeting, and the subject was taken up and  passed unanimously.  The  text of the resolution  it  is  submitted indicated  that there was proper application of-mind by  the council. Relying on the decision of this Court in  Municipal Board,  Hapur  v. Raghuvendra Kripal and  Others,  [1966]  1 S.C.R.  956  the learned counsel maintained  that  the  High Court  should  not have ventured into the  question  of  the manner  in which consideration was given to the item in  the agenda and the presumption that the statutory authority  has followed  the  prescribed procedure should prevail.  It  was also  pointed out that the Mayor of the Corporation and  one of the councillors have filed affidavits affirming that  the objections along with the note were placed on the table  and the objections were taken note of before reaching the  deci- sion.  The respondents’ learned counsel submitted that  con- sideration  of  the objections is a  condition  precent  for imposition of the levy and the High Court having been satis- fied of the non-compliance with this mandatory  requirement, has rightly invalidated the tax.      6. The admitted facts are that the resolution had  been passed on 30-12-74 after placing the objections on the table and,  distributing notes of the Commissioner, analysing  the objections  and containing answers to the same. The  subject was  in  the  urgent agenda and the  record  of  proceedings revealed that the resolution had been passed unanimously-      7.  Taxation  in  order to be valid must  not  only  be authorised by a statute, but also be levied or collected  in strict conformity with the 447 statute which authorises it. Where a condition precedent  is

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laid  down  for statutory power being exercised it  must  be fulfilled  before  a  sub-ordinate  authority  can  exercise delegated  power. When the statute requires  that  delegated power  may be exercised on fulfilment of certain  conditions precedent,  the  Court would presume the regularity  of  the order  including the fulfilment of the condition  precedent. It is for the party who challenged the legality to show that the condition precedent was not in fact complied with by the authority.     8. The Municipal Administration is coordinated to secure the vital interest of the general public. It is the function of  the representative body to ascertain the  local  opinion and  decide  thereon before imposition of the tax.  It  has, therefore, to be assumed that local representatives who  had taken  note of the objections received in pursuance  of  the notice published have consciously reached the decision. Once it is clear that there had been consideration of the  objec- tion, it is not for the Court to examine the manner in which the legislative will had been indicated. We shall only refer to  the recent decision of this Court in Sundarjas  Kanyalal Bhatija  & Ors. etc. v. The Collector, Thane, Maharashtra  & Ors., Judgments Today [1989] 3 S.C. 57:               "It  must be noted that the functions  of  the               Government in establishing a Corporation under               the  Act is neither executive nor  administra-               tive. Counsel for the appellants was right  in               his submission that it is legislative  process               indeed.  No judicial duty is laid on the  Gov-               ernment in discharge of the statutory  duties.               The  only question to be examined  is  whether               the  statutory provisions have  been  complied               within they are complied with, then, the Court               could  say  no more. In the present  case  the               Government did publish the proposal by a draft               notification and also considered the represen-               tations  received. It was only  thereafter,  a               decision  was taken to exclude Ulhasnagar  for               the  time  being. That decision  became  final               when  it was notified under Section 3(2).  The               Court  cannot sit in judgment over such  deci-               sion.  It cannot lay down norms for the  exer-               cise of that power. It cannot substitute  even               "its juster will for theirs."     The Court has no jurisdiction to examine the validity of the  reasons that goes into the decision or the motive  that induced  the delegated authority to exercise its powers.  No judicial  duty is laid on the authority in discharge of  the statutory obligations and, therefore, 448 the  only question to be examined is whether  the  statutory provisions have been complied with.     9. In The Swadeshi Cotton Mills Co. Limited v. The State of  U.P.  and Others, [1962] 1 S.C.R. 422  this  Court  held that:               "Where a condition precedent has to be  satis-               fied  before a subordinate authority can  pass               an  order,  (executive  or in  the  nature  of               subordinate legislation), it is not  necessary               that the satisfaction of the condition  should               be  recited  in the order itself,  unless  the               statute requires it, But it is desirable  that               it  should be so mentioned for then  the  pre-               sumption  that  the  condition  was  satisfied               would  immediately arise and the burden  would               be  on  the persons challenging the  order  to

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             show  that  the recital is not  correct.  Even               when the recital is not made in the order,  it               will  not  become void ab initio  and  only  a               further burden is cast on the authority  pass-               ing  the order to satisfy the court  by  other               means,  e.g. by filing an affidavit, that  the               condition precedent was satisfied."     10. In Gopal Narain v. State of Uttar Pradesh & Another, A.I.R. 1964 S.C. 370, this Court held that:               "There  is  a presumption,  when  a  statutory               authority  makes  an order for  imposition  of               tax,  that  it  has  followed  the  prescribed               procedure. The said presumption is not in  any               way  weakened by the long acquiescence in  the               imposition  by the residents of the  locality.               Nonetheless no tax shall be levied or collect-               ed except in accordance with law. If it is not               imposed  in  accordance  with  law,  it  would               infringe  the  fundamental  right   guaranteed               under Art. 19(1)(f) of the Constitution. While               the  long period of time that  lapses  between               the imposition of the tax and the attack on it               may  permit  raising of  certain  presumptions               where the evidence is lost by efflux of  time,               it cannot exonerate the statutory authority if               it imposes a tax in derogation of the statuto-               ry provision."     11.  The High Court was not justified in  assuming  from the  time  factor  alone that there could not  have  been  a consideration  of the objections. It is not the function  of the  Court to probe into the details of the discussions  and the deliberations before legislative will is seen 449 expressed by passing the resolution. The connotation of  the word ’consideration’ occuring in sub-section (1) of  Section 98 comprehends ’taking note of’ or ’paying heed to’  depend- ing  upon the nature of the subject. It may be open  to  the councillors  to express their views even within the  limited time  available. No standard can be prescribed in such  mat- ters. When it is shown that the council had the  opportunity to  consider the objections received, it has to  be  deemed, that  they  had  taken note of the same  before  reaching  a decision.     We  are, therefore, of the view that the High Court  has committed an error in assuming on account of the shortage of time  alone and that there had been non-compliance with  the requirements under the statute. We set aside the judgment of the  High Court and allow the appeals. In the  circumstances of the case we make no order as to costs. T.N.A.                                               Appeals allowed. 450