PRAKASH CHAND MAHESHWARI & ANR. versus ZILA PARISHAD, MUZAFFARNAGAR & ORS.

PRAKASH CHAND MAHESHWARI & ANR.

ZILA PARISHAD, MUZAFFARNAGAR & ORS. May 7, 19n: [S. M. SIKRI, C. J., G. K. MITTER, C. A. VAIDIALINGAM, A. N. RAY AND P. JAGANMOHAN REDDY, JJ.J

Professions Tax Limitation (Amendment and Validation) Act 1949-Retrospective validation of levy under U. P. District Boards Act, 1922 con-tnJYening limit of R•. 50 laid down in Profession Tax Limitation Act XX of 1941-Validity-Procedure under r. 3 of Rules made under U.P. Dis-tril:I Boards Act, 1922 whether unworkable under U.P. Kshetra Samithis <llld 'Lila Parishads Adhiniyam 33 of 1961-Time limit for assessment pro--Wre under rr. 4 and S of Rules under 1922 Act whether mandatory-Rulu whether not properly framed-Kar Adhikari appointed without cen· llllling Public Service Commission as required by s. 43 of U.P. Kshetra Samithi and Zila Parishads Adhiniyam Act 1961-Mere sending of papers to Commission after making of appointment not sufficient compliance with s. 43-Appointment is temporary and good only for two years-Assessment made after two years invalid.

Tax on circumstances and property we levied in 1928 on persons resid-ing in or carrying on business in the rural areas of District Muzaffarnagar under the provisions of !he U.P. District Boards Ac~ 1922. In 1942, the Central Legislature passed the Professions Tax Limitation Act which laid down that no tax on circumstances and property levied by local authority should exceed Rs. 50 except in cases where it was already being levied. The Act -was passed in accordance with the provisions of s. 142-A of the Government of India Act, l935. Jn 1948 s. 108 of the U.P. District Boards Act was amended to provide that board may continue tax al-ready imposed on persons assessed according to their circumstances and pioperty, and that the tax so imposed shall not be abolished or altered without the previous sanctjon of the State Government. In order to get over the d<Cision of the High Court of Allahabad in District Board of Farrukhabad v. Prag Dutt, (I.L.R. 1949 All. 26) the Central Legislature passed the Professions Tax Limitation (Amendment and Validation) Act 61 of 1949. This Act retrospectively exempted the circumstances and property tu levieci by local bodies in U.P. from the upper limit of Rs. 50 laid down by the 1941 Act On August 22, 1958 the U.P. Antarim Zila Parishad Act 22 of 1958 was passed by the U.P. Legislature. The said Act was extended to December 31, 1962 by successive legislation. The U.P. Kshetra Samithis and Zila Parishads Adhiniyam 33 of 1961 repealed the United Provinces District Board Act 1922 in relation to district as from the date on which tho establishment of Kshetra Samithis under the new Act was completed and as from the date on which the U.P. Antarim Zila Parisbild Act was to stand repealed in relation to that district. Kshetra Samithis and Zila Parishad were constituted in the District of Muzaffarnagar -under the Act. The circumstances and property tax levied under the repealed Acts was continued under the new Acl The taxing officer called Kar Adhikari was to be appointed according to the procedure laid down in s. 43 of the new Act. The appellants who carried on 'khandsari' and 'gur' bnsiness in the rural area of Muz.atfarnagar District were, for the year 1967-68, assessed to ~y sum of Rs. 2,000 as circumstances and property tax. They filed writ petition under Art. 32 of the Constitution challenging the levy on

1he following grounds; (i) Central Act LXI of 1949 w&s beyond the legis-lative competence of the Federal Legislature because the power o{ tile Federal Legislature having been once exercised to reduce the imposts over Rs. SO per annum to tbat sum it was exhausted and could not be exerci9ed second time; (ii) Even assuming the said Act was within the competence-of the legislature, as result of tbe amendment of s. 108 of the U.P. Districts Boards Act in 1948 tbe board could only continue to levy tb• tax which was lawfully being imposed in 1948 on persons assessed accord-ina to their circumstances and properties in accordance with s. 114 and inasmuch as the tax bad been reduced to Rs. 50 by the Central Act of 1941 tbe validation under tbe Professions Tax Limitation (Amendment and Validation) Act, 1949 would not serve to raise the limit of the tax to be-yond Rs. 50 per annum, (iii) under r. ·3 framed by the local self govern-ment of the U.P. under s. 172 of tbe Act of 1922 the tax was to be assess-ed by an assessing officer appointed by tbe District Board with the help of the members\ of the circle but since under the Zila Parishad Act there was no circle or members, the old rule bad become unworkable; (iv) the prescribed time schedule mentioned in rr. 4 and 5 in the relevant notifica~ tion not having been adhered to the assessment was illegal. (v) the rules of 1928 were not properly framed inasmuch as the procedure laid down in tbe relevant Chapter of the Act of 1922 was not followed strictly; (vi) the appointment of the Kar Adhikari was not made in accordance with tbe provisions of s. 43 of the U.P. Act XXXlll of 1961 and therefore t~e assessment made by him was illegal.

HELD: (i) The proviso to s. 142-A(2) of the Government of India Act, 1935 could not be read to give the legislature power to alter tbe quantum of ass .. sment once for all. Clearly it gave power to the fede!'!'l Ieaislature to fix rate of such tax in substitution for the one which was already prevailing on the 31st March, 1939 and it could do so not only once but from time to time. The use of the words 'unless for the tinJC being' indicates tbat the legislature could at any point of time substitute fresh rate of tax for the one prevailing. It follows that it was open lo tbe federal legislature to make such substitution more tban once. [771F· 772B]

(ii) The amendment of s. 108 of the U.P. District Boards Act of 192~ in 1948 only allowed tbe continuance of tbe tax already imposed on persons assessed according to their circumstances and property. The argument that validation of tbe imposition of tax .by tbe Professions Tax Limitation (Validation and Amendment) Act, 1949 with retrospective. effect was .not possible could not be accepted. In tbe case of M. P. Sundararamier & Co. this Court clearly laid down that law authorising imposition of tax could be both retrospective and prospective. It necessarily followed tbat if the Act of 1949 was valid tbe imposition was saved even after 1950 under tile proviso to cl. (2) of Art, 276 of tbe Constitution. [772H-773F]

B. M. Lakhani v. Malkapur Municipality, A.I.R. 1970 S.C. 1002 dis-tinguished.

M.P. V. Sundararamier & Co. v. State of A11dhra Pradesh, [1958) S.C.R. 1422, relied on.

(iii) The argument that tbe rules framed under the Distric! Boar~s Act became inconsistent with and unworkable under the U. P. Zila Par!Shads Act could not be accepted. The ass~ssment was to be done by the asse&S· ing officer appointed by the District Board. Even if there was circle but the members of the circle refused to co.operate with him, the asse.!S· meot would not be invalid. The help which Ibey could render would only

be limited to giving information about the assesses. It was quite competent for the assessing officer to proceed with the assessment even if the members refused to help him. The situation was not altered by reason of the fact that the circle and the members had disappeared. [773G-774A]

(iv) Rules 4 and 5 which laid down certain dates by which the work was directed to be taken in hand and completed were merely directory and not mandatory. There was nothing in these rules to suggest that if the dates were not strictly observed any prejudice would be caused to the asses-see. [77411-q

Judgment of Allahabad High Court dated January 8 1963 in Civil Misc. Writ Petition No. 3160 of 1962, disapproved.

(v) Even if there was any irregularity in the framing of the rules under the 1922 Act the same was cured by the publication of the notification under s. 120(3) of thQ Act of 1922. [7740]

(Vl} The appointment of Kar Adhikari (respondent no. 2 in this case) took place on 8th August 1965, the impugned assessment was made on 6th March 1968 i.e. more than two years after the date of appointment. Under s. 43 the appointment of this officer to the post which carried an initial salary of more than Rs. 200 p.m. could be made by the Parishad in con-sultation with the Public Service Commission or other Commission or selection Body as might be constituted by the State Government and if there was difference of opinion between the Commissi()n and the Parishad the matter was to be referred to the State Government whose decision was to be final. In the present case the State Public Service Commission had been notified of the appointment and they had not expressed any disappro-val of the same. Appointing respondent no. 2 as Kar Adhikari and mere-ly &eJlding the papers relating to such appointment to the Public Service Commission would not be con1pliance with s. 43 of the Act. Even if it be regarded as temporary appointment, it could only be effective for two yean, and as the assessments in the present case was made beyond that date it must be held that the assessment was made by person not com· petcnt to make it. [774H-775H] ·

Cloandramouleshwar Prasad v. Patna High Court, [1970] 2 S.C.R. 666, applied

The position was not improved by the inclusion of the name of res-pondent no. 2 in List 'C' under paragraph 9(4) of the U.P. Zila Parishad Central Transferable Cadre Rules, 1966 which came into force with effect from December 20, 1966. Jn terms of s. 47 of U.P. Act of 1961 the ap-pointment ceased to be valid after two years, the period having expired long before the hearing of this matter. The ordex: of assessment of Rs. 2,000 on the petitioners dated 25th March 1968 must therefore be quashed. [776E-H]

ORIGINAL JURISDICTION : Writ Petition No. 435 of 1968.

Petition under Art. 32 of the Constitution of India for the enforcement of fundamental rights.

E. C. Agarwala, for the petitioners.

C. B. Agarwala, Uma Mehta, S. K. Bagga and S. Bagga, for respondents Nos. 1 and 2.

0. P. Rana, for respondent No. 3.

The Judgment of the Court was delivered by

Mitter, J.-By this petition the petitioners challenge the validity of (!) the Professions Tax Limitation (Amendment and Validation) Act, 1949, (2) s. 131 of the U. P. Zi\a Parishad Act. (3) an order of assessment of Rs. 2,000/- dated 25th March, 1968 made by the Kar Adhikari, Zila Parishad Muzaffarnagar and pray for incidental reliefs.

The petitioners carry on the business of manufacture and sale of "khandsari" amd "gur" in the District of Muzaffarnagar, U. P. They own crusher in village Morna in the sa.id district where the manufacture of khandsari as sugar is =ied on. They challenge the imposition of "Circumstances and Property" tax of Rs. 2,000 /- imposed on their business under. the order of assessment passed by respondent No. 2, Kar Adhikari, Zita Parishad Muzaffarnagar for the year 1967-68. As they did not produce their accounts for their business in khandsari the Kar Adhikari, an officer appointed by the Zila Parishad of Muzalfar-D nagar assessed them to Rs. 2,000 / - as "Circumstances and Pro-perty" tax on the estimated income of Rs. 96,000 /- from their property and business for the year.

To appreciate how the Zila Parishad (a district authority) came to have the power to levy the tax, it is necessary to take an ac-count of some past le_gislation. The Local body to administer the dis-trict of Muza.Jiarnagar in U. P. until the year 1958 was the District Board of Muzaffamagar constituted under the U. P. District Boards Act, 1922 (U. P. Act X of 1922). Chapter VI of the Act containing sections 108 to 132 gave the Board certain powers of taxation. local rates etc. and prescribed the procedure ~r imposition and recovery of the levy. Under s. 114 the Boord had the power to impose tax on "circumstances and property" subject to certain conditions, inter a/ia, that the tax could be imposed only on persons residing or carrying on business in the rural a.rea with an income above certain minimum limit. The rate of tax was not to exceed Rs. 0-0-4 In the rupee on the total income and the total amount of tax was not to exceed the maximum which might be prescribed by rule. By s. 115 Board deciding to impose ai tax had to frame proposals by special resolu-tion, specifying the particular tax out of those prescribed in s. I 08 which it desired to impose, the persons or classes of persons to be made liable and the description of the property or other taxab1e thing or circumstance in respect of which they were to be made liable, the amount of ra.te leviable from such persons or classes of persons and a,ny other matter which the State Govern-ment required by rule to be specified. S. 116 enabled any personordinarily residing or carrying on business in the district to raise objections to the proposal which had to. be considered by the Board. Under s. 117 the Board had to submit the finally settled proposaJs to the State Government which could either sanction the same or return them to the Board for further consideration. When the State Gov~ment had sanctioned the jproposal8 of the Board, it had to frame rules under s. 172 in respect of the tax as for the time being it considered necessary after taking into consideration the draft rules submitted by the Board. Follow-ing . on the above, the Board was required to direct the imposi-tion of the tax with effect from date to be specified by specia.I resolution. Under s. 120(1) copy of the resolution passed by the Board was to be submitted by it to the State Government. Government was required to notify in the official gazette the imposition of the tax from the a,ppointed day upon receipt of the copy of the board's resolution and the imposition of tax was in all cases. to be subject to the condition that it had been so notified. Under sub-s. (3) of s. 120 notification of the impo-sition of tax under sub-s. (2) was to be conclusive proof that the tax had been imposed in accordance with the provisions of the Act. Matters mentioned in clauses (a) to (f) including inter alia the assessment anu collection of taxes was under s. 123 to be governed by rules except in so far as the provision therefor was made by the Act. S. !.72 empowered the State Governme.nt to make rules consistant with the Act in respect inter alia of matters mentioned in s. 123.

On the !st of March 1928, the U. P. Local Self Government · rssued notification prescribing rules for the assessment and collection of tax on circumstances a.nd property in the rural area of the Muzaffarnagar District under s. 172 of the Act after the previous publication thereof as required by s. 176. Rule 3 provided tha.t "the tax shall be assessed by an assessing officer appointed by the District Board with the help of the members of the circle concerned". Rules 4 and 5 laid down time sche-dule for the work of the assessing officer and the submission of the list of persons within the district who appeared to be liable to pay the tax to the boa.rd. He was first required to prepare list on or before 15th December of each year of all persons who appeared to him to be so liable. He was then to consider the circumstances and property of every person entered in the list and to determine the amount of the tax to which such person should be assessed. The name of every person assessed and the amount of tax to which he was assessed was to be entered in an assessment list in the form attached to the rules and was to be completed on or before the 20th of January next. After the preparation of the list and the submission thereof to the Boartl 'the fatter could take action to revise the list by resolution and

the Board was to return the list to the assessing officer by the 15th February.

In terms of the U. P. District Boards Act, 1922 rules were framed on the lst March 1928 and the Smte Government issued notification on the 20th April, 1928 under s. 120(2) of the Act to the effect that the District Board Muzaffarnagar had in exercise of powers conferred by s. 108(2) imposed with effect from May 15, 1928 ta'x. on all persons ordinarily residing or carrying on business in the rural area of Muzaffarnagar District according to their circumstances and property at the rate of Rs. 0-0-3 in the rupee on incomes of Rs. 300 /- but not ex<;ceding Rs.1200 per annum a'1ld Rs. ()..()..4 in the rupee on incomes of over Rs. 1200 /- per year provided that in the case of persons residing in notified and town areas and paying tax on circumstances and property to their respective committees, the rate of tax Wll6 to be Rs. 0-0-2 on the income of Rs. 300 but not exceeding Rs. 1200 and Rs. 0-0-3 on the income of over Rs. 1200/- per annum.

In 1935 the Government of India Act of that year was enacted whereby the Legislative Lists were defined in the Seventli Schedule to the Act in terms of ss. 99 to 107 in Chapter I of Part V. Certain restrictions on legislative powers were also defi-ned in Chapter II of the said Part containing ss. 108 to no. Item 46 of the Provincial Legislative List was amended in 1940 to read : .

"Taxes on professions, trades, camngs and employ-ments, subject, however, :to the provisions of section 142-A of this Act."

The said section which also came into force under the same Amending Act ran a~ follows :-

"142-A. ()) Notwithstanding anything in section one hundred of this Act, no Provincial law relating to taxes for the benefit of ai Province or of municipality, district board. local board or other local authority therein in respect of professions, trades, callings or employments shall be invalid on the ground that it rela-tes to tax on income.

(2) The total amount payable in respect of any per-son to that Province or to any one municipality, district board, local board, or other local authority in the Pro-vince by way of .. ta.xes on professions, trades, callings and employments shall not, after the thirtyfirst day .of

March nineteen hundred and 'thirty-nine, exceed fifty rupees per annum :

Provided that, if in the financial year ending with that date there was in force in the case of any Province or any such municipality, board or authority tax on pro-fessions, trades, callings or employments the rate, or the maximum rate, of which exceeded fifty rupees per annum, the preceding provisions of this sub-section shall, unless for the time being provision to the contra,ry is made by Jaw of the Federal Legislature, have effect in relation to that Province, municipality, board or authority as if for the reference to fifty rupees per annum there were substituted reference to that ra,te or maxi· mum rate, or such lower rate, if any (being rate greater than fifty rupees per annum), as may for the time being fixed by Jaw of the Federal Legislaiture; and any law of the Federal Legislature made .for any of the pur-poses of this proviso may be made either generally or in relation to any specified Provinces, municipalities, boards or a.uthorities.

(3) The fact that the Provincial Legisla.ture has power to make Jaws as aforesaid with respect to taxes on professions, trades, calllings 1tnd emftoyrnents, the generality of the entry in the Federal LeJ!Slative List relating to taxes on income."

In exercise of the powers conferred by the above section the Cen-tral Legislature passed the Professions Ta-x Limitation Act, 1941 (Act XX of 1941) on 26th November 1941. The preamble to the Act shows that its object was to limit the total amount pay-able in respect of any person in respect of his profession, trade or calling etc. by way of tax to fifty rupees per a.nnum notwith-standing the provision to the contrary in s. 142-A of the Govern-ment of India Act, 1935. The Act which contained only three sections and Schedule provided by section 2 that the amount of tax payable in respect of any one person to ru Province, muni-cipality, district board etc. was to cease to be levied to the extent to which such taxes exceeded Rs. 50 per annum. The section ran as follows :

"2. Notwithstanding the provisions of any law for the time being in force, a·ny taxes payable in respect of any one person to Province, or to any one munici-pality, district board, local board or other local autho-rity in any Province, by way of tax on professions, trades, callings or employments, sh&ll from and after the com-mencement of this Act cease to be levied to the extent to which such taxes exceed fifty rupees per annum."

S.3 was saving provision whereby the provisions of s. 2 were not to apply to the taxes specified in the Schedule. All the five it.ems in the Schedule related to taxes on professions, trades or callings by certain municipalities.

S. 108 of the U. P. District Boards Act, 1922 was amended in 1948 to read : ·

"A board-

(a) shall, by notification in the official Gazette, impose local rate under section 3 of the United Provin· ces LocaJ Rates Act, 1914, as modified by this Act; and

(b) may continue tax already imposed on per-sons assessed according to their circumstances and pro· perty ............ in accordance with section 114 :

Provided that the tax on circumstances and pro-perty so imposed shaJI not be abolished or altered with-out the previous sanction of the State Government."

It will be noticed that after the Professions Tax Limitation Act of 1941 the District boards in U. P. were not allowed to collect tax on circumstances and property of any person in excess of Rs. 50. The situation was however altered in .1949 when the Professions Tax Limitation (Amendment and Valida· tion) Act, 1949 was passed with the assent of the Govemor· General on 26th December 1949 (Act LXI of 1949). This was really to get over the decision of the Allaha.bad High Court in Distri~t Board of Farrukhabad v. Prag Dutt ('). The Act was passed to amen1 the Professions Tax Limitation Act, 1941 and to valida.te the imposition in the United Provinces of certain taxes on circumstances and property. Section 2 of the Act purported, to add items 3-A and 3-B in the Schedule to the Professions Tax Limitation Act, 1941 with retrospective effect. Items 3-A and

3-B read as follow. :-

"3-A. The tax on inhabitants assessed according to their circumstances and property, imposed under cli;use (ix) of sub-section (I) of section 128 of the United Provinces Municipalities Act, 1916 (U. P. Act II of 1916).

3-B. The tax on persons Msessed according to their circumstances and property, imposed under clause (b) of section 108 of the United Provinces District Boards Act, 1922 (U. P. Act X of 1922)."

(1) I. L. R.. [1949] Allahabad 26.

The usual clauses for ·validation with retrospective effect wete contained in s. 3 of the Act.

Taxes on professions, trades, callings and employments again came to be dealt with by Art. 276 of the Constitution in 1950. Clause (!) of the article laid down that

"Notwithstanding anything in article 246, no law of the Legislature of State rela.ting to taxes for the benefit of the state or of municipality, district board, lo~al board or other local authority therein in respect of professions, trades, callings or employments shall be in· valid on the ground tha.t it relates to tax on income."

Cl. (2) was aimed at limiting the maximum amount in respect of sµch taxes subject to certain qualifications. It ran as follows :-

"The total amount paya.ble in respect of any one person to the State or to any one municipality, district board, local board or other local authority in the State by way of 'taxes on professions, trades, ca.flings and em· ployments shall not exceed two hundred and fifty rupees per annum :

Provided that if in the financial year immediately preceding the commencement of this Constitution there was in force in the case of any State or a.ny such muni· cipa!ity, board or authority tax on professions, trades, callings or employments the rate, or the maximum rate, of which exceeded two hundred and fifty rupees per a.nnum, such tax may continue to be levied until provi· sion to the contrary is made by Parliament by law, and any law so made by Parliament may be made either gene-rally or in relation to a.ny specified States, municipalities, boards or authorities."

On August 22. 1968 the U. P. Antarim Zila Parishad Act (XXII of 1958) was passed by the U. P. Legislature. Under section 1(3) of the Act it was to come into force on 29tlt day of April 1959 and to expire on 3 lst December 1959. The said Act was purported to be extended to 31st December 1962 by successive legislation. Under s. 3 (!) of the Act of 1958 al.I district boards in U. P .......... and all committees of such boards constituted under• the District Board3 Act of 1922 were to cease to function and all members and the President of each board and all members of each committee were to vacate and be deemed to have vacated their respective offices.

The U. P. Kshettra Samithis and Zila Parishads Adhiniyam. 1961 repealed the United Provinces District Boards Act 19::.2 49-1 S.C. lndia/il

in relation to a. district as from the date on which the establish· ment of Kshettra Samithis under the new Act (XXXIII of 1961) was completed and as from the date on which the U. P. Antarim Zila Parishad Act was to stand repealed in relation to that district. The Kshettra Samitis and Zila Parishad were constituted in the District of Muzffarnaga.r under the Act. This Act was comp· rehensive Act which prescribed inter alia for dividing all the rural areas of each district into khands, the establishment of Kshettra Samithis for each khand, their composition aind establishment and incorporation of Zila Parishads. Each Zila Parishad woo to be body corporate ha.ving perpetual succession and a.common seal with power to acquire, hold and dispose of property and to discharge its functions under tlie Act. The powers and functions of Kshettra Samitis and Zila Parishads were specified in Chapter III of the Act. Chapter IV of the Act containing ss. 39 to 55 laid down provisions for the appointment of officers and servants of the Zila Parishads. Under s. 43()) aippointments to the posts of Karya Adhikari, Abhiyanta and Kar Adhikari and the posts created under sub-section (2) of s. 39 carrying an initia.l salary of Rs. 200 dr more per month were to be made by the Parishad in consultation with the State Public Service Commission or such other Commission or Selection Board as might be constituted by the State Government in this behalf in the manner prescribed provided that if there was a, difference of opinion between the Commission and the Parishad the matter was to be referred to the State Government whose decision was to be final. Under s. 47

"Notwithstanding anything contained in s. 43 ...... officiating and temporary appointments to posts men· tioned in sub-section ()) of section 43, may be made by ·the appointing authority specified in section 43 or in the rules made under section 44, without consulting the Commission, but no such appointment shall, except as provided in sub-section (2), continue beyond period of one year sav\, after consultation with the Commis· sion."

Under sub·s.(2) the &ppointments made under su!J..s.(I) might in special circumstances imd where the appointing authority was the Parishad., with the approval of the State Government be continued without consulting the Commission for period not exceeding two years. Chapter VII of the Act of 1961 contains provisions for taxation and levy of fees and tolls in ss. 119 to 146. S. 120 sanctioned the continuance of imposition of circum· stances and property tax which was imposed or continued under the U. P. District Boards Act 1922 until abolished or altered and all rules, regulations ·and bye-laws, orders, notific&tions were con· tinue in force as if enacted under the Act of 1961. S. 131 (!)

enabled the Zila Parishad to exempt for period not exceeding one yea.r, from the payment of tax or any portion of tax imposed under the Act, any person who was in its opinion, by reason of poverty unable to pay the same and renew the exemp-tion as often as it deemed necessary. Sub-ss. (2) and (3) allow other such exemptions either by the Zila Parishad or the State Government.

The main plank of the argument on behalf of the petitioners was that the Central Act LXI of 1949 W&S beyond the legisla-tive competence of the Federal Legislature, but even assuming the said Act was within the competence of the legislature as result of the amendment of s. 108 of the U. P. District Boards Act in 1948 the board could only continue to levy the tax which W&S lawfully being imposed in 1948 on persons assessed accord-ing to their circumstances and properties in accordance with s. 114 and inasmuch as the tax had been reduced to Rs. 50 by 1he Central Act of 1941 the validation under the Professions Tax Limitation (Amendment and Validation) Act, 1949 would not serve to raise the limit of tax to beyond Rs. 50 per annum. In our view, none of these contentions have any force.

On the first branch of his submission, counsel relied on passage in Craies on Statute Law (sixth edition, page 283) reading :

"If power is given to the Crown by sta.tute for the purpose of enabling something to be done which is beyond the scope of the royal prerogative, it is said to be an important constitutional principle that such power, having been once exercised, is exhausted a·nd cannot be exercised again."

It was said that the effect of sub-s. (2) read with the proviso to s. 142-A of the Government of India Act was that although tax in respect of professions, trades and callings might have been levi-able after the 31st March 1939 if it was being levied before, the power of the Federal Legislature having been once exercised to reduce the imposts over Rs. 50 /- per annum to that sum, it wa,s exhausted and could not be exercised second· time. The argu-ment is patently fallacious. Here there is no qi:Jstion of any prerogative and the proviso cannot be read to give the legislature JlOWer to alter the quantum· of assessment once for all. Clearly it . gave power to the Federal Legislature to fix rate of such tax in substitution for the one which was already prevailing on the 31st March 1939 and it could do so not only once but from time to :time as is apparent from the use of the expression :

"unless for the time being provision to the contrary is made by law of the Federal Legislature."

The words "unless for the time being" indicate that the Legisla-ture could at any point of time substitute fresh rate of tax for the one prevailing. It follows that it was open to the Federal Legislature to make such substitution more than once. Having reduced the r31te of Rs. 50 by the Professional Tax Limitation Act the Legislature took power again to substitute the old rate to tax for the sum of Rs. 50. · This substitution became effective as from the date of the Professions Tax Limitation Act, 1941 by the insertion of items 3-A and 3-B to the Schedule to the said Act. S. 3 of the Act of 1949 validated imposts for the period intervening between 1941 and 1949•Counsel sought to rely on decision of this Court in B. M. Lakhani v. Mdlkapur Municipality (') in aid of his contention that fresh Act had to be re-enacted after 1949. In that case the appellants had filed suit to restrain the municipality from recovery of "Bale and Bhoja" tax for the season 1953-54 and for the subsequent seasons and for decree for refund of the amount paid contending that the tax was ultra vires the municipali!y. One of the points there canva<5sed was, whether the levy of the tax by the municipality was valid in law. The municipality was constituted in 1905 under s. 41(1) cls.(a) and (b) of The Berar Municipal Act, 1886. It purported to lev!)', with effect from October l, 1912, 31 tax known as the Bale and Boja tax on cotton ginned and pressed in Ginning and Pressing factories at certain rates. On the 2nd October 1939 the municipality resolved to revise the rates and by notification dated January 2, 1940 under s. 67(5) of the C. P. and Berar Municip311ities Act, 1922 tax was permitted to be levied at the rate of four annas per bale with effect from October 1, 1939. The \Court observed that the notification of 1940 was not saved by the proviso to s. J42-A but the municipality collected tax 31t the rates set out in the said notification. Accordingly the Court held that if the notification of 1940 was ineffective under the Government of India Act, 1935 it could not be revived under the Constitution by virtue of Art. 276(2) proviso.

Oearly, that case is distinguishable from the facts of the case before us. In this case the impost rem31ined the same between the passing of the Government of India Act, 1935 and the com-mence ent of the Constitution. The amendment of s. 108 of the . P. District Boards Act of 1922 in 1948 only allowed the co muance of the tax already imposed on persons assessed ac-e. ding to their circumstances 31nd property. We cannot accept the argument that validation of the imposition of tax by the Professions Tax Limitation (Validation and Amendment) Act

(•) A. I. R. 1970 S. C. 1002.

1949 with retrospective effect was not possible. An argument -similar to tha.t raised by the counsel for the petitioners was raised .and negatived in M. P. V. Sundararamier & Co. v. The State of Andhra Pradesh ([1]). There it was contended oil. behalf of the asses-sees that s. 2 of the Sales Tax Laws Va.Jidation Act, 1956 which provided that no law of State imposing or authorising the , imposition of tax on inter.State sales during the period between April 1, 1951 and September 6, 1955 shall be deemea to be invalid or ever to haive been invalid merely by reason of the fact that sales took place in the course of inter-State trade, did not authorise the initiation of fresh proceedings for the imposition but only validated levies already made. Rejecting this conten-:tion it was obseryed (see p. 1460) :

"What is maiterial to observe is that the power con-ferred on Parliament under Art. 286(2) is legislative power, and such : power conferred on Sovereign Legislature carries with it authority to enact law either prospectively or restrospectively, unless there can be found in the Constitution itself ai limitation on that power."

;and at p. 1461 :

"While law prohibiting transfers (the subject mat-ter of the appeal before the Privy Council in Punjab Province v. "Dau/at Singh-13 I. A. 59) must be pros-pective, law autliorising imposition of tax need not be. It c&n be both prospective and retrospective."·

Jt necessarily follows that if the Act of 1949 was valid the im-poiition was saved even after 1950 under the proviso to cl. (2) of Art. 276 of the Constitution.

It was next argued that the rules framed under the District Boards Act became inconsistent with and unworkable under the U.P. Zita Parishads Act. It was said that under rule 3 framed by the Local Self Government of the U. P. under s. 172 of the Act of 1922 the tax was to be assessed by an assessing officer appointed by the District Board with the help of the members of the cirde. As under the Zila Parishad Act there were no circle or members, the old rule was said to have becoine unworkable. In our view this argument has no force. The assessment was to be done by the assessing officer appointed by the District Board. Even if there was circle but the members of the circle refused to cooperate with him, the assessment would not be invalid. After all the help which they could render would only be limited to

(1) [19S8] S. C.R. 1422.

giving information about the assessees. It was quite competent for the assessing officer to proceed with the assessment even if the members refused to help him. The situation was not altered by reason of the fact that the circle and the members had disappeared.

The next argument of counsel that the time schedule men-tioned in rules 4 and 5 in the notification of January 28 not having been a<lhered to, the assessment was illegal, must be rejected on the face of it. These rules laying down certain dates by which the work was directed to be taken in hand and comp-leted were merely directory and· not mandatory. There was .nothing in these rules to suggest tha,t if the dates were not strictly observed any prejudice would be caused to the assessee. We find ourselves unable to accept the observations to the cont-rary in judgment of the Allahabad High Court dated 8th January 1963 rendered in Civil Miscellaneous Writ Petition No. 3160 of 1962 to which reference wa,s made in this connection.

In paragraph 21 of the petition, complaint is made that the Zila Parishad had changed the rate of tax to 3 paise per rupee which is equivalent to 6 pies (old) per rupee being the rate which was in force under the District Boards Act and the minimum amount on income for levy of ta,x had also been raised under the Zila Parishad Act to Rs. 600 from Rs. 300 under the District Boards Act. It is pointed out in the counter affidavit of respon-dent No. 2 that the above statementis not correct and that the rate of 3 paise per rupee provided under s. 121 of the Zila Parishad Act wa6 not applicable by virtue of s. 120 of the Act. The respondent further pointed out that the maximum amount on which the tax was leviable had been raised from Rs. 300 to Rs. 600 before the commencement of the Zila Parishad Act the change working in favour of the assessee. We are therefore not satisfied a,bout the genuineness of the petitioners' complaint.

faint attempt was made to argue that the rules of 1928 were not properly framed inasmuch as the procedure laid down in the relevant chapter of the Act of 1922 was not followed strictly a·nd the rules were not sent to Government for approval. In our view, even if there was any such irregularity in the framing of the rules, the same were cured by the publication of the noti· fication under s. 120(3) of the Act of 1922.

The last point raised by the petitioners relates to the appoint-ment of the Kar Adhikari on the ground that it wa,s not done in consultation with either the Public Service Commission of the State or any other Commission or body appointed in that behalf by the State Government Under s. 43 of the U. P. Kshettra Samithis and Zila Parishads Adhiniyam, 1961 i.e. U. P. Act XXXIII of 1961. The appointment of respondent No. 2 in this case took place on 8'th August 1965; the impugned assessment

was made on 6th March 1968 i.e. more than two years aifter the daite of appointment. Under s. 43 the appointment of this officer to the post which carried an initial salary of more ihan Rs. 200 p.m. could be made by the Parisbad in consultation with the Public Service Commission or other Commission or Selection Body as might be constituted by the State Government and if there was difference of opinion between the Commission a,nd the Parishad the matter was to be referred to the State Govern-ment whose decision was to be final. Counsel for the respondents on the materials before this Court was only in position to in-form us that the State Public Service Commission had been notified of the appointment and they had not eXpressed any dis-approval of the same. We do not think that this was sufficient compliance with s. 43. In Chandramouleshwar Prasad v. Patna High Court (') this Court had to consider the question of "appoint-ment of persons to be and the posting and promotion of District Judges" in the State of Bihar which under Art. 233(1) of the Constitution were to be made by the Governor of the State in consultation with the High Court. It appeared thM there was some difference of opinion between the High Court and the Government of Bihar with regard to certain appointments and promotions of District Judges in the State of Bihar and the Government issued notification on 17th October 1968. appoint-ing the petitioner a~ temporary District and Sessions Judge Singh-bbum until the appointment of permanent officer in the vacancy caused by the retirement of an incumbent to that office. This Court found that before issuing the said notification the Govern-ment never attempted to ascertain the views of the High Court with regard to the petitioner's claim or gave the High Court any indication of its views with regard thereto. It was observed that (p. 674) :

"The Governor cannot discharge his functions under Art. 233 if be makes an appointment of person without ascertaining the High Court's views in regard thereto ............ Consultation or deliberation is not comp-lete or effective before the parties thereto make their respective points of view known to the other or others and discuss and examine the re!Mive merits of their views."

Appointing respondent No. 2 as Kar Adhikari and merely sending the papers relating to such appointment to the Public Service Commbsion would not therefore be in compliance with s. 43 of the Act. Even if it be regarded as temporary appointment, it could only be effective for two years and as the assessment in this c~se was made beyond tha;t date it must be held that the assessment was by person not competent to make it.

11) [1970] 2 S. C.R. 666:

After the conclusion of the arguments of both parties, the respondents had an affidavit affirmed by one K. D. Banerjee, an Assistant· in Panchayat Raj II Department, Government of U. P. to the effect that the State Government had created Central transferable cadre of the class of officers, acting under s. 44 of Act XXXIII of 1961 and that the Government had also frnmed rules known as U. P. Zila Parishad Central Transferable Cadre Rules, 1966 which came into force with effect from Dece· mber 20, 1966. According to paragraph 8 of the rules, appoint-ments for the first time to the cadre were to be made from amongst the officers who on the 26th April 1966 were holding the posts, inter alia, Kar Adhikari. Further, according to paragraph 9(4) of the rules, list known as List 'C' was to be prepared containing the names ot officers who as on 26th April 1966 are holding the posts of Secretary or Kar Adhjkari etc. in temporary or officiating capacity and the list was to be arranged in order of seniority. According to the affidavit the respondent No. 2 having been appointed in temporary officiating capacity conti-nued to be on that post under sub-r. (4) of rule 9 and his name was included in list 'C' and was being considered by the Govern-ment for permanent appointment in consultation with the State Public Service Commission.

In our view the matters relied on in the affidavit do not alter the situation or improve the position of respondent No. 2 in any way. The non-obstante clause in s. 44 of Act XXXIII of 1961 only relates to sections 41, 42 and 43 and not to s, 47 which deals with officiating and temporary appointments to cer-tain posts. It would therefore appear that by the inclusion of the name of respondent No. 2 in list 'C' he still continued to be in his officiating and temporary capacity. In terms of s. 47 there-F fore the appointment ceased to be valid after two years, the period having expired long before the hearing of this matter.

No argument was advanced to us on the question of the validity ot s. 131 of the U. P. Zila Parishad Act and we do not express any opinion thereon.

Although the major points raised by the petitioners are of no substan~e, we find ourselves unable to uphold the validity of the levy as it has not been shown to us that Kar Adhikari's appoint-ment was valid in law. The order of assessment of Rs. 2,000 /- on the petitioners date~ 25th Marc~. 1968 wµi the_r:fore be quashed. In view of the divided success m the wnt petition, we make no order as to costs.

Assessment order quashed.