Jharkhand High Court
Alok Sahoo vs Urban Development Department on 17 August, 2017
Author: D.N.Patel
Bench: Ratnaker Bhengra, D.N.Patel
1
IN THE HIGH COURT OF JHARKHAND, RANCHI
W.P. ( PIL) No. 764 of 2017
Alok Sahoo, son of Lt. R.P. Sahoo, resident of Ward No. 5, Kanshari
Tola, P.O., P.S. Sarikella & District Sarikella Kharsawan.
...Petitioner
Versus
1 State of Jharkhand, through Chief Secretary, Government of
Jharkhand, Project Bhawan, P.O. & P.S. Dhurwa, District
Ranchi
2 The Secretary, Urban Development Department, Government
of Jharkhand, Project Bhawan, P.O. & P.S. Dhurwa, District
Ranchi
3 Director, State Urban Development Authority, having its office
at Urban Development Department, Government of
Jharkhand, Project Bhawan, P.O. & P.S. Dhurwa, District
Ranchi
4 The Deputy Commissioner, Sarikella Kharsawan, P.O., P.S.
Sarikella & District Sarikella Kharsawan
5 The Nagar Panchayat, Sarikella through its Special Officer,
Sarikella, P.O., P.S. Sarikella, and District Sarikella
Kharsawan.
6 M/s Sparrow Softech Pvt. Ltd., a company Incorporated under
the Companies Act having its registered office at GS-4, GS-
10, Vinayaka Apartment, Kadru, P.O. & P.S. Kadru, District
Ranchi and its Branch Office at Ward No. 8, P.O., P.S.
Sarikella & District Sarikella Kharsawan, through its Managing
Director.
...Respondents
With
W.P. (PIL) No. 697 of 2017
AND
I.A. No. 2057 of 2017
Pradip Prasad, son of Sri Bhagirath Prasad Sahu, resident of
Anandpuri Colony, P.O., P.S. & District Hazaribagh.
....Petitioner
Versus
1. State of Jharkhand, through Chief Secretary, Government of
Jharkhand, Project Bhawan, P.O. & P.S. Dhurwa, District
Ranchi
2. The Secretary, Urban Development Department, Government
of Jharkhand, Project Bhawan, P.O. & P.S. Dhurwa, District
Ranchi.
3. Director, State Urban Development Authority, having its office
at Urban Development Department, Government of
Jharkhand, Project Bhawan, P.O. & P.S. Dhurwa, District
Ranchi.
4. The Deputy Commissioner, Hazaribagh, P.O., P.S. & District
2
Hazaribagh.
5. The Hazaribagh Municipal Corporation, through its Chief
Executive Officer, Hazaribagh, P.O., P.S. and District
Hazaribagh
6. Ritika Printech Pvt. Ltd., a company incorporated under the
Companies Act having its registered office at 4 th Floor A.H.
Complex, Opposite S.F.C. Godown, Kadru, P.O. Ashok Nagar,
P.S. Argora, District Ranchi and its Branch Office at Zullu
Park, P.O. P.S. & District Hazaribagh, through its Managing
Director.
....Respondents
With
W.P. (PIL) No. 872 of 2017
AND
I.A. No. 6179 of 2017
1. Abhay Kumar Singh, S/o Sri Nand Kishore Singh, Resident of
village Chandpur, Deoghar, P.O. Daburgram, P.S. Jasidih,
District- Deoghar.
2. Manoj Kumar Bhargab, S/o Sri Satya Narayan Bhargab,
Resident of Ganga Hari Lane, Near Kanya Patshala, Deoghar,
P.O. and P.S. Deoghar, District- Deoghar
3. Rupak Kumar, S/o Sri Ramesh Prasad Singh, Resident of
Bompass Town, Deoghar, P.O. and P.S. Deoghar, District-
Deoghar
4. Rajesh Kumar Choudhary, S/o Sri Nand Kishor Choudhary,
Resident of Mahabir Colony, Gali No. 3, Satsang Nagar,
Deoghar, P.O. and P.S. Deoghar, District- Deoghar
...Petitioners
Versus
1. The State of Jharkhand through the Chief Secretary,
Government of Jharkhand, Project Building, P.O. and P.S.
Dhurwa, District- Ranchi
2. The Secretary, Department of Urban Development,
Government of Jharkhand, Project Building, P.O. and P.S.
Dhurwa, District- Ranchi
3. The Deputy Commissioner, Deoghar, P.O. and P.S. Deoghar,
District- Deoghar
4. The Chief Executive Officer, Deoghar Municipal Corporation,
Deoghar, P.O. and P.S. Deoghar, District- Deoghar
5. Smt. Rita Raj, Mayor, Deoghar Municipal Corporation,
Deoghar, P.O. and P.S. Deoghar, District- Deoghar
6. Smt. Nitu Devi, Deputy Mayor, Deoghar Municipal
Corporation, Deoghar, P.O. and P.S. Deoghar, District-
Deoghar.
... Respondents
With
W.P. (C) No. 939 of 2017
Suraj Kumar Sharma s/o Late Shankar Sharma, R/o Mohalla
Baliharpur, P.O. Pakur, P.S. Pakur (Town), Dist. Pakur.
3
...Petitioner
Versus
1. State of Jharkhand through the Secretary, Department of
Urban Development having its office at Secretariat Building,
Nepal House, P.O. and P.S.- Doranda, District- Ranchi.
2. Deputy Commissioner, Pakur, P.O. P.S. & Dist. Pakur.
3. Executive Officer, Nagar Parishad Pakur, P.O., P.S. & Dist.
Pakur.
...Respondents
With
W.P. (PIL) No. 2519 of 2017
Jan Sangharsh Morcha through its convener Nand Kishore Thakur
son of Late Janki Thakur resident of Janki Nagar, Bind Mohalla,
P.O.& P.S.- Chatra, District- Chatra.
... Petitioner
Versus
1. The State of Jharkhand, through Chief Secretary, Government
of Jharkhand, Project Building P.O. and P.S.- Dhurwa,
District- Ranchi
2. The Secretary, Urban Development Department, Govt. of
Jharkhand, Project Building P.O. & P.S. Dhurwa, District-
Ranchi-4
3. Director, State Urban Development Authority, having its office
at Urban Development Department, Govt. of Jharkhand,
Project Building, P.O. and P.S.- Dhurwa, District- Ranchi.
4. The Deputy Commissioner, Chatra, P.O. & P.S.- Chatra,
District- Chatra
5. The Nagar Parishad, through its Executive officer, Chatra,
P.O.& P.S. - Chatra, District- Chatra.
... Respondents
With
W.P. (C) No. 1950 of 2017
Eastern Jharkhand Chamber of Commerce and Industries
Sahibganj through its Secretary Rajesh Agrawal, son of late
Keshrichand Bogi, resident of J.N. Roy Road Beside Surya Nursing
Home, P.O.- Sahibganj , P.S. Sahibganj(T), District- Sahibganj,
Jharkhand.
....Petitioner
Versus
1. The State of Jharkhand through the Secretary, Department of
Urban Development having its officer at Secretariat Building
Nepal House P.O.+P.S.- Doranda, District- Ranchi
2. Deputy Commissioner, Sahibganj, P.O.+P.S.-Sahibganj,
District- Sahibganj
3. Executive Officer, Nagar Parishad, Sahibganj, P.O. + P.S.-
Sahibganj, District- Sahibganj.
... Respondents
With
W.P. ( C) No. 1264 of 2017
1. Sarvajeet Jha, Son of Late Pandit Ranjeet Jha, Resident of
Netajee Nagar, Ward No.3, Godda, P.O. + P.S. and District-
4
Godda(T)
2. Ratan Kumar Dutta, Son of Late Harish Chandra Dutta,
resident of Ward No. 1, Rautara, P.O.- Godda, P.S.- Godda (T),
District- Godda. ...Petitioners
Versus
1 The State of Jharkhand, through its Chief Secretary, Project
Building, Dhurwa, P.O. Dhurwa , P.S. -Jagannathpur, District
-Ranchi.
2 The Secretary, Urban Development Department, State of
Jharkhand, at Project Building Dhurwa, P.O. Dhurwa, P.S.-
Jagannathpur District -Ranchi
3 The Executive Officer, Godda Municipality, (Nagar Panchayat),
P.O. + P.S.- Godda, District- Godda.
4 The Deputy Commissioner, Godda, P.O.+ P.S. Godda, District
-Godda.
... Respondents
With
W.P. (C) No. 1349 of 2017
1. Mahendra Routh, son of Late Baidyanath Routh, resident of
Patel Chowk, Bazar Road, Jamtara, P.O. Jamtara, P.S. Jamtara,
District- Jamtara
2. Mukta Mandal, daughter of Radha Raman Mandal, resident of
New Town, Jamtara, P.O. Jamtara, P.S. Jamtara, District- Jamtara
...Petitioners
Versus
1. State of Jharkhand, through the Secretary, Department of
Urban Development, having its office at Secretariat Building,
Nepal House, Doranda,P.O. Doranda, P.S. Doranda, District
Ranchi
2. Deputy Commissioner, Jamtara, P.O. Jamtara, P.S. Jamtara,
District Jamatara.
3. Executive Officer, Nagar Panchayat, Jamtara, P.O. Jamtara,
P.S. Jamtara, District- Jamtara
4. The Controller cum Sub- Divisional Magistrate, Jamtara, P.O.
Jamtara, P.S. Jamtara, District Jamtara.
....Respondents
---
CORAM :- HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE RATNAKER BHENGRA
---
For the Petitioners : M/s. Indrajit Sinha,
Rohitashya Roy, P.A.S. Pati,
Tarun Kr. Mahato &
Vineet Prakash, Advocates
[ in W.P.(PIL) No. 764 of 2017,W.P.
(PIL) No. 697 of 2017, W.P.(PIL) No.
872 of 2017]
Mr. Rajeeva Sharma, Sr. Advocate;
Mr. Sunil Kr. Mahto, Advocate
( in W.P.(C) No. 939 of 2017 &
W.P.(C) No. 1950 of 2017)
5
M/s. M.K. Habib &
J.K. Pandey, Advocates
(in W.P.(C) No. 1349 of 2017)
M/s. Amresh Kumar &
Namita Sahay, Advocates
(in W.P.(PIL) No.2519 of 2017)
Mr. Jay Prakash Jha, Sr. Advocate;
M/s. Shree Prakash Jha &
A. Prakash, Advocates
( in W.P.(C) No. 1264 of 2017)
For the Deoghar
Municipal Corporation : Mr. Anil Kumar Jha, Advocate
For the Municipality : Mr. Ranjit Kumar, Advocate
For the State /Resp. : Mr. Kumar Sundaram, JC to AG
Mr. Rajesh Kumar, G.P.-V
Mrs. Shweta Singh, JC to G.P.-V
Mrs. C. Prabha, S.C.IV
M/s. Santosh Kr. Jha &
Mahavir Pd. Sinha, Advocates
----
05/ Dated 17.8.2017:
(Oral Order)
Per D.N.Patel, A.C.J.
1. In all these writ petitions, constitutional validity of the
Jharkhand Municipal Act, 2011 as well as the constitutional validity
of the Jharkhand Property (Assessment, Collection and Levy)
Rules, 2013, as amended from time to time, are under challenge,
being violative of the provisions of the Constitution of India as well
as the provisions of the Jharkhand Municipal Act, 2011, as per the
counsel for the petitioners.
2. Arguments canvassed by the counsel for the petitioners:
• Mr. Indrajit Sinha, counsel appearing on behalf of the
petitioners, in W.P.(PIL) No. 764 of 2017,W.P. (PIL) No.697 of 2017,
W.P.(PIL) No. 872 of 2017, has submitted that there is no upper limit
of tax prescribed for the holding tax, under the Jharkhand Municipal
Act, 2011 [hereinafter referred to as 'the Act, 2011' for the sake of
brevity] and hence, the Act, 2011 deserves to be quashed and set
aside as it is unconstitutional and violative of the provisions of
Article 265 of the Constitution of India. Counsel for the petitioners
has relied upon the decision of the Hon'ble Supreme Court,
reported in (1999) 8 SCC 667.
• Counsel for the petitioners has further submitted that as per
6
Article 243-X (a) of the Constitution of India, the authority is a
Municipality, who has power to levy, collect and appropriate such
taxes, duties, tolls and fees, subject to such limits, as may be
prescribed by law. Thus there is bound to be an upper limit of the
rate of taxes. Such powers to levy and collect the taxes are with the
Municipality and not with the Government and hence, Jharkhand
Property (Assessment, Collection and Levy) Rules, 2013
[ hereinafter referred to as 'the Rules, 2013 for the sake of
convenience] enacted by the State is beyond the powers as stated
under Article 243-X of the Constitution of India.
• It is further submitted by the counsel for the petitioners that
Section 152(5) of the Act, 2011, Municipality has to publish the
Rules. The Rules enacted and amended by the State Government
is in violation of Section 152(5) of the Act, 2011.
• It is further submitted by the counsel for the petitioners that as
per Section 152(6) of the Act, 2011, itself prescribes criteria have
been given for arriving at annual rental value, whereas, as per the
Rules, enacted by the State, as amended from time to time,
especially, as per Rule-3 thereof, additional criteria have been
prescribed. Thus, the Rules, 2013 is violative of the Act, 2011.
Counsel for the petitioners has pointed out, in detail, about the
additional criteria, mentioned in the self-assessment form, which is
at Annexure-3 to the memo of the writ petition bearing W.P. (PIL)
No.697 of 2017, like usage of the property, definition of road etc.
and it is submitted that these criteria have never been mentioned in
the Act, 2011, whereas, the Rules, 2013 have added these criteria
and hence, the Rules, 2013 is violative of the Act, 2011.
• Counsel for the petitioners has relied upon the following
decisions of the Hon'ble Supreme Court, reported in:
(a) (1972) 1 SCC 696;
(b) (1999) 8 SCC 667, which was followed in (2016) 1 SCC
170;
(c) (2005) 12 SCC 77;
(d) (2015) 8 SCC 1; and
(e) (2016) 7 SCC 703.
7
On the basis of aforesaid decisions, it is submitted by the
counsel for the petitioners that subordinate legislation can always
be challenged, when the same is violative of the Constitution of
India and/ or if it is violative of the principal Act.
• It is submitted by the counsel for the petitioners that the Rules,
2013, as amended from time to time, were published on 28.09.2016
and it is made effective from 01.04.2016. Said Rules have been
applicable with retrospective effect. There are no such powers
vested with the State to enact such type of Rules and make them
effective with retrospective effect. It is further submitted by the
counsel for the petitioners that Section 152(7) and 152(8) of the Act,
2011 are also unconstitutional, which authorize the Government to
prescribe the rate of tax without any upper limit and thus, the same
is violative of Article 243-X of the Constitution of India, because the
said Article authorizes only the Municipality to prescribe the rate of
tax.
• Counsel for the petitioners has also pointed out Articles 243-P,
243-R, 243-Q and 243-X of the Constitution of India to be read with
various provisions of the Act, 2011 from Section 151 onwards,
including 262, 263, 268 and 269 as well as Section 590 of the Act,
2011.
• Counsel for the petitioners has also pointed out the extra
classification of tenant. Annual rental value can be made depending
upon the nature of the holding of the property and hence also, the
Rules are violative of the Act, 2011.
• Mr. Indrajit Sinha, counsel for the petitioners, has submitted
that the previous publication of the Rules is a must and in the facts
of the present case, there is no previous publication of the Rules as
required under Section 590 of the Act, 2011 and Section 26 of the
Bihar and Orissa General Clauses Act, 1917, for which, he has
relied upon the decision, reported in (1972) 1 SCC 696.
• Mr. Rajeeva Sharma, Senior Advocate, while arguing W.P.(C)
No. 939 of 2017, has submitted that political democracy is
converted into social democracy i.e. people's participation. Senior
Counsel has also pointed out Articles 243-P, 243-E, 243-Q, 243-R,
8
and 243-W of the Constitution of India and it is further submitted by
the Senior Counsel that powers of Municipality have been usurped
by the State Government. Senior Counsel has also relied upon
Article 243-X of the Constitution of India. It is further submitted by
the Senior Advocate that there is no power vested with the State
Government to levy, assess and collect the tax. Senior Advocate
has also developed some concepts like anti-social democracy, de-
centralization of power etc.
• Senior Advocate, Mr. Jay Prakash Jha, while arguing W.P.(C)
No. 1264 of 2017, has pointed out 74th amendment of the
Constitution of India, especially Part-IX-A thereof and the Articles
243-P, 243-R, 243-Q and 243-X of the Constitution of India to be
read with several provisions of the Jharkhand Municipal Act, 2011
and has submitted that there is no State Commission, constituted
under Section 268 of the Act, 2011. State Municipal Regulatory
Commission Rules, enacted by the State, cannot be made
functional. Senior Advocate, Mr. Jay Prakash Jha, has also pointed
out this Court to Section 268(1) (a) as well as Section 268(1)(h) of
the Act, 2011. It is submitted by Mr. Jay Prakash Jha, Senior
Advocate, that as per Section 268(2) of the Act, 2011, powers are
given to the State Commission; similarly, as per Section 269 of the
Act, 2011, powers are given to the State Municipal Advisory
Committee, which are not constituted at all. Senior Counsel has
also pointed out that as per Section 153 of the Act, 2011, Jharkhand
Property Tax Board has not been constituted. Thus, Mr. Jay
Prakash Jha, Senior Counsel, has referred to Sections 151 & 153
to be read with Sections 262, 268, 269 of the Act, 2011 and has
submitted that Rules, which are amended, from time to time, by the
State, cannot be made operative.
• Mr. M.K. Habib, counsel for the petitioner in W.P.(C) No. 1349
of 2017, has adopted the arguments canvassed by earlier counsels
and has submitted that the Act, 2011 is violative of Article 243-X of
the Constitution of India and the Rules, 2013 is violative of
Constitution of India as well as violative of the Act, 2011.
3. Arguments canvassed by the State of Jharkhand:
9
• Counsel for the State of Jharkhand has submitted that neither
the Jharkhand Municipal Act, 2011 nor the Jharkhand Property
(Assessment, Collection and Levy) Rules, 2013, as amended from
time to time, is violative of the provisions of the Constitution of
India, in view of Article 265 of the Constitution of India to be read
with Entry-49, List-II (State List) of 7th Schedule of the Constitution
of India and other provisions of the Constitution of India, much less
Article 243-X thereof.
• It is submitted by the counsel for the State of Jharkhand that
as per Section 590 of the Jharkhand Municipal Act, 2011, State has
all power, jurisdiction and authority to enact the Rules and the
Municipalities have also power and jurisdiction to make Rules
under Section 592 of the Act, 2011, which are not inconsistent with
the provisions of the Act, 2011 and which are in fact consistent with
the Rules, enacted by the State Government.
• It is submitted by the counsel for the respondent-State that as
per Section 152 (7) and 152(8) of the Act, 2011, State has all
power, jurisdiction and authority to enact the Rules, 2013 and to
amend the Rules from time to time, especially, for the purpose of
holding tax, as defined under Section 2(54) of the Act, 2011.
• It is submitted by the counsel for the respondents-State that
holding tax is nothing, but, certain percentage of the annual rental
value or annual letting value. Annual letting value is nothing but a
notional rent. This rent will be a standard rent and will now be fixed
in the State of Jharkhand by the Rent Controller under the
Jharkhand Building (Lease, Rent and Eviction) Control Act, 2011.
• It is submitted by the counsel for the respondents that what is
prescribed under the Rules by the State is 2% of the annual letting
value or the annual rental value of the property as a holding tax.
This is a minimum rate of tax, which can be altered by the
Municipalities with the prior approval of the State Government. By
this mechanism, no provision of the Constitution of India is violated
by the State of Jharkhand, much less, Article 243-X of the
Constitution of India.
• Counsel for the respondents-State has further submitted that
10
the Rules, 2013 can still be made operativ, even in absence of the
constitution of the State Commission, which is prescribed under
Section 262(d) to be read with Section 268 of the Act, 2011.
Similarly, the provisions of the Rules, 2013 can always be made
operative, even in absence of State Municipal Advisory Committee,
as envisaged under Section 269 of the Act, 2011 because the
Rules, 2013, as amended from time to time, prescribe only 2% of
the annual letting value as holding tax. This rate can be altered by
the Municipality after prior permission of the State Government.
The word "holding tax" is not within the power of the State
Commission under Section 268 of the Act, 2011.
• It is further submitted by the counsel for the respondents-State
that by virtue of the Rules, 2013, as amended from time to time,
criteria to arrive at a correct assessment of annual letting value or
annual rental value have never been altered nor have been added.
It ought to be kept in mind that criteria have been given under sub-
section (6) of Section 152 of the Act, 2011. Rules have given the
guidance how to arrive at annual letting value of any property,
which is situated on road side or if it has already fetched higher
rental value or has already been given on rent and is not self-
occupied property. Thus, if any rent is already paid by any tenant, it
will be easier for the Rent Controller to arrive at annual letting value
of the property. Thus, mentioning of the criteria in the Rules about
the rented property or about mentioning of the definition of the
road, makes neither the Rules, 2013 violative of the Act, 2011 nor
the Constitution of India.
• Counsel for the respondents has submitted that the Rules,
2013 have already been published in the Official Gazette. Much
has been argued on the previous publication. This contention has
been replied by the counsel for the respondents-State to the effect
that the Rules, 2013, as amended from time to time, prescribe only
minimum rate of tax at the rate of 2% of annual letting value.
Municipality is a self-sufficient and self-dependant body. Imposition
of the Property Act is must for the Municipality. There cannot be any
Municipality, which can impose the Property Tax, for which,
11
minimum 2% has been prescribed of the annual letting value of the
property as a holding tax. This bare minimum rate of tax can be
enhanced by the Municipalities with the prior permission of the
State Government under sub-section (8) of Section 152 of the Act,
2011. Imposition of 2% holding tax of annual letting value of the
property cannot be said to be unreasonably excessive nor it can
be said to be confiscatory in nature. If there is any further
enhancement, question of publication can be decided by this Court.
Even otherwise, Rules, 2013 have already been published in the
Official Gazette and if there is any grievance of an individual
regarding the holding tax, remedy is available under the law and
the same can be decided by the competent trial court, looking to
the individual nature of the property and the quantum of
assessment of the annual letting value.
• It is further submitted by the counsel for the respondents-State
that on a probable misuse of the provisions of the Act or Rules
neither the Act nor the Rules can be held as unconstitutional. Such
type of violation of the Act and the Rules can be challenged by the
individuals in their separate cases in the trial court. Future
probability of the misuse of the Act or the Rules cannot be the
ground for declaring them as unconstitutional.
REASONS
4. Having heard counsel for both the sides, looking to the facts
and circumstances of the case, judicial pronouncements, provisions
of the Constitution of India, provisions of the Jharkhand Municipal
Act, 2011 and the provisions of the Jharkhand Property
(Assessment, Collection and Levy) Rules, 2013, it appears that
both, the Jharkhand Municipal Act, 2011 as well as the Jharkhand
Property (Assessment, Collection and Levy) Rules, 2013 are
constitutionally valid and lawful mainly for the following facts,
reasons and judicial pronouncements:
(i) As per Article 265 to be read with Article 243 and 243-X to be
read with Entry 5 and 49 of List-II (State List) of 7th Schedule of the
Constitution of India, State has all power, jurisdiction and authority
to enact the law for the Municipal Corporations, Municipalities and
12
the local Government bodies, especially, for tax on lands and
buildings. Entry 5 and Entry 49 of 7th Schedule of the Constitution
of India read as under:
"5. Local government, that is to say, the constitution
and powers of municipal corporations, improvement
trusts, district boards, mining settlement authorities and
other local authorities for the purpose of local self-
government or village administration.
49. Taxes on lands and buildings."
Article 243 and Article 243-X of the Constitution of India read
as under:
"243. Definitions.- In this part, unless the context
otherwise requires-
(a) "district" means a district in a State;
(b) "Gram Sabha" means a body consisting of
persons registered in the electoral rolls relating to a
village comprised within the area of Panchayat at the
village level;
(c) "intermediate level" means a level between the
village and district levels specified by the Governor of a
State by Public notification to be intermediate level for
the purposes of this part;
(d)"Panchayat" means an institution (by whatever
name called) of self-government constituted under
Article 243-B, for the rural areas;
(e) "Panchayat area" means the territorial area of
a Panchayat;
(f) "population" means the population as
ascertained at the last proceeding census of which the
relevant figures have been published;
(g) "village" means a village specified by the
Governor by public notification to be a village for the
purpose of this Part and includes a group of villages so
specified.
243X. Power to impose taxes by, and Funds of,
the Municipalities.- The Legislature of a State may, by
law,-
(a) authorise a Municipality to levy, collect and
appropriate such taxes, duties, tolls and fees in
accordance with such procedure and subject to such
limits;
(b) assign to a Municipality such taxes, duties, tolls
and fees levied and collected by the State Government
for such purposes and subject to such conditions and
limits;
(c) provide for making such grants-in-aid to the
Municipalities from the Consolidated Fund of the State;
13
and
(d) provide for constitution of such Funds for
crediting all moneys received, respectively, by or on
behalf of the Municipalities and also for the withdrawal of
such moneys therefrom,
as may be specified in the law."
(ii) In view of the aforesaid provisions of the Constitution of India,
Jharkhand Municipal Act, 2011 has been enacted. The objects and
reasons for enactment of Jharkhand Municipal Act, 2011 read as
under:
"Jharkhand Municipal Act, 2011
An Act to consolidate and amend the laws relating
to the Municipal Governments in the State of Jharkhand
in conformity with the provisions of the Constitution of
India as amended by the Constitution (Seventy fourth
Amendment) Act, 1992, based on the principles of
participation in, and decentralization, autonomy and
accountability of, urban self-government at various
levels, to introduce reforms in financial management and
accounting systems, internal resource generation
capacity and organizational design of municipalities, to
ensure professionalisation of the municipal personnel,
and to provide for matters connected therewith or
incidental thereto.
BE it enacted by the Legislature of the State of
Jharkhand in the Sixty-one year of the Republic of
India....."
(iii) As per Section 590 of the Jharkhand Municipal Act, 2011,
Rule making power is vested with the State Government. For ready
reference, Section 590 of the Jharkhand Municipal Act, 2011 reads
as under:
"590. Power to make rules.-
(1) The State Government may, by notification, and
subject to the condition of previous publication, make
rules for carrying out the purposes of this Act.
(2) Any rule made under this Act may provide that any
contravention thereof shall be punishable with fine which
may extend to five thousand rupees.
(3) Every rule made under this Act shall, as soon as may
be after it is made, be laid before the State Legislature
while it is in session for a total period of ten days which
may be comprised in one session or in two or more
successive sessions, and if before the expiry of the
session in which it is so laid or the successive sessions
aforesaid, the State Legislature agrees in making any
modification in the rules or the State Legislature agrees
14
that the rules should not be made, the rule shall
thereafter have effect only in such modified form or be of
no effect, as the case may be, so however that such
modification or annulment shall be without prejudice to
the validity of anything previously done or omitted to be
done under that rule."
(iv) In exercise of powers under Section 590 of the Act, 2011 to
be read with other provisions of the Act, 2011, especially, Section
152(3) thereof, the State of Jharkhand has enacted Jharkhand
Property (Assessment, Collection and Levy) Rules, 2013. By
virtue of these Rules, the State of Jharkhand has enacted, in detail,
the provisions for imposition, assessment and levy of the taxes for
municipal corporations or municipalities or the local Government
bodies. Here, we are concerned with the holding tax as defined
under Section 2(54) of the Act, 2011. For ready reference, Section
2(54) of the Act, 2011 reads as under:
"2. Definitions- In this Act, unless the context otherwise
requires-
(1) "Ad hoc Committee"..............................................
(2) ..................................................................................
.........................................................................................
........................................................................................
(54) "Holding" means land held under one title or
agreement and surrounded by one set of boundaries:
Provided that, where two or more adjoining holdings
held by the same owner form part and parcel of the site
or premises of an apartment and a dwelling house,
manufactory, warehouse or place of trade or business,
such holdings shall be deemed to be one holding for the
purposes of this Act:
Explanation-Holdings separated by a road or other
means of communication shall be deemed adjoining
within the meaning of this clause:
Provided further that where any building is capable of
being enjoyed separately in parts, or where portions of
such building are owned separately by different
persons, or where the building comprises self contained
and independent units, each of such parts, portions or
units shall, on application by the owners, be deemed, to
be a separate holding;"
(Emphasis supplied)
(v) By virtue of the aforesaid constitutional provisions, especially,
Article 243-X to be read with Entries of the 7th Schedule, State
Government has all power, jurisdiction and authority to enact the
15
Jharkhand Municipal Act, 2011 and the Jharkhand Property
(Assessment, Collection and Levy) Rules, 2013. It further appears
from the constitutional provisions that for the local bodies like
municipal corporations, municipalities, panchayats, State
Government can enact law, especially, for imposing tax upon the
property. Here, in the State of Jharkhand, the said enactment is
Jharkhand Municipal Act, 2011 and Jharkhand Property
(Assessment, Collection and Levy) Rules, 2013.
(vi) Much has been argued on Section 152(7) and 152(8) of the
Act, 2011 to be violative of Article 243-X of the Constitution of India.
We are not in agreement with the contention raised by the
counsel for the petitioners. It ought to be kept in mind that law as a
whole should be interpreted. Constitutional validity of the law as a
whole is to be checked and thereafter any sub-section, as a whole.
The State Government has all power, jurisdiction and authority, as
stated hereinabove, to enact the law for the local governments i.e.
municipal corporations, municipalities and the panchayats for
imposition, assessment and levy of the property tax.
(vii) Looking to the over all provisions of the Act, 2011, it appears
that the same is not violative of any of the provisions of the
Constitution of India. Looking to Article 243-X of the Constitution of
India, it appears that this Article empowers the State Legislature to
authorize a municipality to levy, collect and appropriate such taxes,
duties, tolls and fees in accordance with such procedure and
subject to such limits. By virtue of this Article, State Legislature is
also empowered to assign to a Municipality such taxes, duties, tolls
and fees, levied and collected by the State Government for such
purposes and subject to such conditions and limits.
(viii) Much has been argued out by the counsels for all the
petitioners that imposition, assessment and levy of the property tax
or holding tax is a monopoly of the municipal corporations and
municipalities and State has no power, jurisdiction and authority to
give any guidance to the municipal corporations or municipalities.
This contention is devoid of any merit. Article 243 of the
Constitution of India never creates any monopoly in favour of the
16
municipal corporation nor in favour of the municipalities. Article 243-
X of the Constitution of India mere empowers the State Legislature
that they can authorize the municipalities to levy, collect and
appropriate taxes or duties or tolls or fees in accordance with such
procedure and subject to such limits, as may be prescribed by the
State Government. Thus, State Legislature has all power,
jurisdiction and authority to give proper guidance to the municipal
corporations and municipalities by enacting an Act or the Rules.
Article 243-X of the Constitution of India defines "Powers of the
State". Whenever the Constitution defines "Power", there is no
corresponding duty vested in anybody. When there is no
corresponding duty, there cannot be any right vested with anybody.
When there is no right vested in any one, there is no violation of
the public duty whatsoever arises and when there is no violation of
the public duty of the State, no writ of mandamus can ever be
issued, while exercising power of judicial review under Article 226 of
the Constitution of India. Thus, power has no corresponding duty,
meaning thereby to, the Constitution empowers the State
Legislature that State can authorize the municipalities to levy,
collect and appropriate such taxes, duties, tolls and fees, in
accordance with such procedure and subject to such limits. The
words used in Article 243 of the Constitution of India are "in
accordance with such procedure and subject to such limits".
Meaning of the aforesaid words further empowers the State
Government to enact the Act and the Rules also, especially, looking
to the Entry 5 and Entry 49 of the 7th Schedule of the Constitution
of India for enactment of law for imposition, levy and collection of
the property tax and/ or holding tax. Thus, as per Article 243-X of
the Constitution of India, there in no independent power vested with
the municipal corporations nor with the municipalities nor there is
any monopoly in their favour that only they can impose and assess
the property tax or holding tax. By virtue of the words-"in
accordance with such procedure and subject to such limits", used in
Article 243 of the Constitution of India, the State Legislature has all
power, jurisdiction and authority to prescribe the procedures and the
17
limits of the imposition of the holding tax.
(ix) Much has also been argued out by counsel Mr. Indrajit Sinha
that "subject to such limits",the words used in Article 243-X(a)
thereof prescribe that there is bound to be upper limit given by the
Act or the Rules of the percentage of the holding tax. This
contention is devoid of any merit. Much has been argued that there
is bound to be maximum limit of the property tax, which has been
prescribed under the Act, 2011 or under the Rules, 2013.
This argument has no legs to stand, mainly for the reason
that the words - "subject to such limits" can also fix the minimum
rate of tax. In the facts of the present case, it is 2% of the annual
letting value, so far as holding tax is concerned. By no stretch of
imagination , this 2% tax of the total value of annual letting value of
any property can be said to be confiscatory in nature nor it can be
labelled as unreasonably excessive. It ought to be kept in mind
that sometimes while assessing or while levying some taxes by
the municipalities, there may be some error committed by them.
Such type of erroneous fixing of annual letting value may be
challenged and can be quashed by competent trial court,but, it
does not mean that tax liability will be zero. To avoid such type of
situations, which can bring imposition of taxes at level zero,the
State of Jharkhand has all power, jurisdiction and authority to
prescribe minimum holding tax, so that the municipality can work
and can perform its statutory duties, with the help of collection of
taxes at this minimum rate of holding tax. Municipalities are not
error proof authorities. Even assessment of the municipalities is
quashed, but, still the minimum liability will remain in existence for
holders of properties, so that the municipalities can work and can
perform their statutory duties and therefore, Jharkhand Municipal
Act, 2011 to be read with Jharkhand Property (Assessment,
Collection and Levy) Rules, 2013 are in consonance with the
provisions of the Constitution of India and more particularly, in
consonance with Article 243-X of the Constitution of India .
(x) Much has been argued out by the counsels for the petitioners
that the Rules, 2013, as amended from time to time, violates the
18
provisions of the Act, 2011.
We are also not accepting this contention. The enactments
of the Rules, 2013 and the amendments, from time to time therein,
are absolutely in consonance with provisions of the Constitution of
India as well as in consonance with the provisions of the Act, 2011.
(xi) Section 590 of the Act, 2011 empowers the State to enact the
Rules, which has been quoted hereinabove. In exercise of the
power confered vide Section 590 of the Act 2011 to be read with
Section 152(3) thereof, the Rules 2013 have been enacted by the
State Government. In these petitions, we are concerned with
holding tax only, as argued out by the counsels for the petitioners.
Here, the petitioners are not concerned with any other type of
taxes. Looking to the constitutional provisions, as stated
hereinabove, to be read with entires made in the State List, to be
read with Section 590 of the Act,2011, to be read with Section
152(3) thereof, the State Legislature has all power, jurisdiction and
authority to enact the Rules, 2013, which prescribe, in detail, the
procedure for imposition, assessment,levy etc. of the holding tax.
Holding tax has been defined under Section 2(54) of the Act, 2011,
which has been quoted hereinabove. For determination of the
holding tax, there should be determination of the annual letting
value, which is known as ''annual rental value" in the State of
Jharkhand, as defined under Section 2(5) of the Jharkhand
Municipal Act, 2011. For ready reference, Section 2(5) of the
Jharkhand Municipal Act, 2011, reads as under :-
"Annual Rental Value" of a holding means the
gross annual rental at which a holding may reasonably
be expected to be let out."
(xii) Thus, before finalization of holding tax, one has to arrive at
the annual rental value or the annual letting value, of the property in
question. If the property is self occupied property, there will be
notional rent of the property. There are various methods and
mechanism to arrive at the notional letting value of the property
under the various Act prevailing in India, enacted by the State or by
the Central Government and by virtue of several judgments,
varieties of methods are available to arrive at annual letting value
19
of the property. Sometimes, it can be few percentage of the value
thereof;sometimes, value of the property depends upon the value
prescribed in " register of minimum value" and sometimes, it also
depends on "circle rate". Different terminology is being used in our
country. This guidance, to arrive at annual letting value, has been
given under the Rules 2013 by the State Legislature. After arriving
at annual letting value, certain percentage of this value will be a
holding tax. This percentage has been fixed as minimum
percentage i.e 2% by the Rules 2013. Much has been argued out
by the counsels for the petitioners that this rate can be prescribed,
only by some Commission or Committee under the Act, 2011. We
are not in agreement with this contention. The State Government
has all power, jurisdiction and authority to prescribe minimum rate of
tax. In the facts of the present case, 2% of the annual letting value
of the property, is holding tax. This prescription of minimum tax is
must, because it happens sometimes that municipalities commit
error in imposing and levying holding tax. In such type of
eventuality, even by nicest arguments, assessment of the holding
tax cannot be zero, if the minimum rate of tax is prescribed under
the Rule 2013, Consequent thereto, the municipality can work i.e. it
can pay the salaries, it can carry out, the works for the public
welfare, as there are public duties imposed by the Act, 2011 etc.
Had there been no minimum rate of tax prescribed under the
Rules,2013, eventuality may arise that for a particular year or
years, by smallest error of the municipality, the imposition of the
levy of the tax may be zero. To avoid such situation, wisely and in
due compliance of the constitutional mandates, the State has
enacted the Rules 2013, which prescribe minimum rate of holding
tax. Rule-7 of the Jharkhand Property (Assessment, Collection and
Levy) Rules, 2013,amended from time to time, reads as under:
"Rule 7. Rate of Holding Tax- In the light of
section 152(8) of the Jharkhand Municipal Act, 2011, the
holding tax shall be assessed on the basis of 2% of the
Annual Rental Value."
(Emphasis supplied)
The aforesaid provision is to be read with Section 152(7) and
20
152(8) of Jharkhand Municipal Act, 2011. For ready reference,
Section 152(7) and 152(8) read as under :
"152. Power to Levy Taxes.
(1) .....................................................................................
(2) ....................................................................................
.........................................................................................
.........................................................................................
(7) The following taxes shall be assessed on the basis
of Annual Rental Value at such rates as prescribed by
the Government from time to time:-
(i) Holding Tax
(ii) Water Tax
(iii) Latrine Tax
(iv)Tax on any other item included in Twelfth Schedule
of the Constitution of India on such rate as
prescribed.
(8) The municipality shall revise the rate of tax on Annual
Rental Value once in five years or earlier with the prior
approval of the State Government."
(Emphasis supplied)
Thus the municipality has also the power, jurisdiction
and authority, to revise the rate of tax; meaning thereby to, from the
very beginning some rates can be prescribed, so that the
municipality can revise the same. Rule-7 of the Rules-2013
prescribes minimum rate of holding tax and if the municipality is
revising the same, in exercise of power under Section 152(8) of
Act,2011, it is always permissible, subject to the limitations
mentioned in sub-section(8) of Section 152. Looking to the Section
152(8) of the Act, 2011 also, the State Government has all control
upon the rate of tax. In any absurd situation or arbitrariness, on
the part of the municipality, the State has a power of denial or the
State has a power not to grant approval or the State has a power
not to ratify the revision in the rate of Tax. Thus, ultimately powers
are vested with the State Government, which is absolutely in
consonance with 243-X of the Constitution of India because by this
Article, the State Legislature is empowered to authorize the
municipality for collection of the holding tax or property tax.Thus
neither Sections 152(7) and 152(8) of the Act, 2011 nor the
Rules,2013 are violative of Article 243-X of the Constitution of India.
On the contrary, they are absolutely in consonance with the
21
provisions of the Constitution of India.
(xiii) Much has been argued out by the counsels for the petitioners
that under Section 590 of Act ,2011, the State may, by notification
and subject to conditions of previous publication, make the rules.
"Previous publication" has been argued out at length. The
judgment delivered by the Hon'ble Supreme Court, reported in
(1972) 1 SCC 696 has been argued out at length. This contention
is also not helpful to the petitioners, mainly for the reasons that,
Rules enactment power, vested with the State, is by virtue of the
Act, 2011.There are various provisions under the Act, 2011 which
empower the State to enact the Rules. There are provisions like
Section153(4) of the Act, 2011 also, which empower the State,
which may, by notification, make the Rules for carrying out the
purposes of that Section. Moreover, looking to Section 152(3) and
152(8) of the Act, 2011,over all control is with the State Government
for levy, assessment and collection of the tax under the Act, 2011.
Basically, power of the State is conferred by the Constitution of
India, especially under Article 243-X to be read with Entry-5 and
Entry-49 of List-II(State List) of 7th Schedule of the Constitution of
India. These matters are only for the holding tax. As stated
hereinabove, only 2% of the annual letting value has been
prescribed by the Rules, 2013 as a holding tax. This is a minimum
rate of tax as per Rule-7 thereof. This rate can be revised by
Municipality under sub-section (8) of Section 152 of the Act,
2011,but, the approval of the State is must. Such revision can be
suggested by the municipality, normally once in five years and
exceptionally, even earlier also. Such type of powers are vested with
the municipality. For any so-called error in assessment of the
holding tax, it cannot lead to zero assessment; otherwise,
municipality can not work in certain eventualities; it cannot render
statutory or constitutional obligations. Every holder of the property is
bound to make payment of holding tax, which is prescribed by the
State Government. There is no need of any previous publication
of the Rules, when the minimum rate of tax is prescribed. It is a
bounden duty of the holder of the property, to pay, the minimum
22
holding tax to their local government. If the rates are to be
enhanced, as per sub-section(8) of Section 152 of the Act, 2011,
from that of the minimum prescription of holding tax, in such
eventualities, the previous publication is required, otherwise not.
This interpretation is purposeful interpretation so as to avoid zero
tax liability of the holder of the property. For bare minimum payment
of tax, previous publication is not required.
(xiv) Much has been argued by the counsel for the petitioners that
various criteria have been mentioned under sub-section(6) of
Section 152 of the Act, 2011 for arriving at correct annual rental
value and by virtue of the Rule, 2013, one or two criteria have been
added which is not permissible. This contention is also not accepted
by this Court, mainly for the reason that to arrive at annual rental
value or annual letting value, what is prescribed under sub-
section(6) of Section 152 of the Act, 2011, is nothing, but, a
guidance provided to the assessing authority. To arrive at annual
letting value of any property, especially, when it is self-occupied, it is
a very complex phenomena. Annual letting value will be guided by
several factors. List of such factors, given under sub-section(6) of
Section 152 of the Act, 2011, is not exhaustive. List of the factors to
be kept in mind by the assessing authorities. It is a inclusive list of
the factors or the circumstances, whereby, annual letting value can
be assessed by the assessing officer. Criteria, are mentioned in the
Rules, 2013, as amended from time to time, which also prescribe
that assessing authority shall keep in mind the road or the width of
the road or whether the premises is actually rented premises or not.
Such type of criteria can always be prescribed, which are important
criteria, for arriving at annual letting value of the property, in
question. While mentioning all these criteria in the Rules, 2013. It
cannot be said that extraneous considerations will be considered by
the assessing authorities. On the contrary, these are major factors
to arrive at correct annual letting value. Annul letting value also
depends upon the road in front of which the property is situated. In
thin and narrow lane, if any property is situated and another
property of the same area or measurement is situated, on a
23
considerably wider road, on a considerably busy road of the town,
absolutely, another rent, can be fetched. Such type of
considerations, to be kept in mind, while arriving at annual letting
value, cannot be said to be arbitrary considerations.
(xv) Looking to the aforesaid aspects of the matter, reasons and
the constitutional provisions, State of Jharkhand has all power,
jurisdiction and authority to enact Jharkhand Municipal Act, 2011.
Section 152(7) and 152(8) are also constitutionally valid. Moreover,
looking to Article 243-X to be read with Entry-5 and Entry-49, List-II
(State List) of 7th Schedule of the Constitution of India,the State
Government has all power and authority to prescribe minimum rate
of holding tax and the same can be varied or revised by the
municipalities under sub-section(8) of Section 152 of the Act, 2011.
By no stretch of imagination, it can be said that only municipality
can prescribe the rates much time has been consumed during
course of argument that State has no power to prescribe the rate of
tax. We are not in agreement with this contention. Municipalities
have power to revise the rate of tax; meaning thereby, State can
always prescribe the minimum rate of holding tax so as to avoid
"zero tax" situation, as stated hereinabove in detail. Hence,
judgments relied upon by the counsel for the petitioners are of no
help to them. There is a need of prescribing maximum rate of tax
which is a major argument canvassed by the counsel, Mr. Indrajit
Sinha. We are not accepting this argument. Maximum rate of tax
depends upon the situations, prevailing within local self
Government, which also depends upon need of municipality. It also
depends upon evasion of the tax. More the evasion of the tax, more
will be the rate of tax and hence, there is no need for any statute to
prescribe maximum rate of tax. Neither under the Jharkhand
Municipal Act, 2011 nor under the Jharkhand Property
(Assessment, Collection and Levy) Rules, 2013, there is any legal
obligation on the part of the State to prescribe the maximum rate of
tax.
(xvi) Assesses have all right to challenge the assessment of the tax
before the competent trial court, but, in any eventualities, they will
24
have no option, but to pay, the holding tax at the rate of 2% as
prescribed under the Rule, 2013, as amended from time to time. It is
now high time in this country to prescribe minimum rate of tax
instead of maximum rate of tax, because by any nicest argument,
rate of holding tax should never be zero as per the Rule, 2013,
which is also a constitutional one and nothing of this methodology,
of prescribing, minimum rate of tax, is violative of any of the
provisions of the Constitution of India because municipalities have
to render several services to the public at large and there are
several constitutional duties and statutory duties to be performed by
them Salaries are to be paid; services are to be purchased by the
municipalities. This cannot be done without imposing minimum rate
of tax.
(xvii) It has also been canvassed by the counsels for the petitioners
that the Rules were published on 28.09.2016, whereas, it is made
effective from 01.04.2016. Such type of imposition of tax with the
aforesaid retrospectivity is always permissible in the eyes of law.
Tax imposing authority has all power, jurisdiction and authority to
impose tax with the retrospective effect, especially, looking to the
facts of the present case, amended Rules were published on
28.09.2016and the same were made effective from 01.04.2016. If we look closely like zoom lens camera, it will appear that arguments canvassed by the counsels for the petitioners is of no help to the petitioners because previously minimum rate of tax was 2.5% of the total annual letting value of the property for the holding tax and now, by virtue of amendment, it has been prescribed as 2%. Thus rate of tax has been reduced. If the petitioners are over enthusiastic, they can pay holding tax at the rate of 2.5% of the annual letting value, but, it does not mean that amendment carried out by the State is unconstitutional. More charitable persons are always preferred for payment of the taxes.
5. It has been held by the Hon'ble Supreme Court in the case of Rai Ramkrishna v. State of Bihar, reported in (1964) 1 SCR 897 :
AIR 1963 SC 1667 : (1963) 50 ITR 171 , reads as under:
"15. In M/s J.K. Jute Mills Co. Ltd. v. State of Uttar 25 Pradesh AIR 1961 SC 1534 the argument that the character of the sales tax as enacted by the U.P. Sales Tax Act, 1948, was radically altered in its retrospective operation, was likewise rejected. The same argument in respect of an excise tax raised before this Court in the case of Chhotabhai Jethabhai Patel & Co. v. Union of India was for similar reasons rejected. The position, therefore, appears to be well settled that if in its essential features a taxing statute is within the legislative competence of the legislature which passed it by reference to the relevant entry in the List, its character is not necessarily changed merely by its retrospective operation so as to make the said retrospective operation outside the legislative competence of the said legislature, and so, we must hold that the challenge to the validity of the retrospective operation of the Act on the ground that the provision in that behalf is beyond the legislative competence of the Bihar Legislature, must be rejected."
(Emphasis Supplied) It has further been held by the Hon'ble Supreme Court in the case of Entertainment Tax Officer v. Ambae Picture Palace, reported in (1994) 1 SCC 209 , reads as under:
"13. If the Parliament or the State Legislatures have competence to legislate, they can do so prospectively as well as retrospectively and taxation laws are no exception to this power. (Reference in this connection may be made to the decision of this Court in Union of India v. Madan Gopal Kabra). Again in Krishnamurthi & Co. v. State of Madras this Court held that the legislative power conferred on the appropriate legislatures to enact laws in respect of topics covered by the several entries in the three lists can be exercised both prospectively and retrospectively."
(Emphasis Supplied) It has further been held by the Hon'ble Supreme Court in the case of Star India (P) Ltd. v. CCE, reported in (2005) 7 SCC 203, reads as under:
"7. In any event, it is clear from the language of the validation clause, as quoted by us earlier, that the liability was extended not by way of clarification but by way of amendment to the Finance Act with retrospective effect. It is well established that while it is permissible for the legislature to retrospectively legislate, such retrospectivity is normally not permissible to create an offence retrospectively. There were clearly judgments, decrees or orders of courts and tribunals or other 26 authorities, which were required to be neutralised by the validation clause. We can only assume that the judgments, decrees or orders, etc. had, in fact, held that persons situate like the appellants were not liable as service providers. This is also clear from the Explanation to the validation section which says that no act or acts on the part of any person shall be punishable as an offence which would have been so punishable if the section had not come into force."
(Emphasis Supplied) It has further been held by the Hon'ble Supreme Court in the case of Municipal Committee, Patiala v. Model Town Residents Assn., reported in (2007) 8 SCC 669 , reads as under:
"20. Before concluding, we have serious objections to the manner in which direction has been given by the Division Bench of the High Court to the legislature. In this connection, we quote the last paragraph of the impugned judgment, which is as follows:
"... Sections 3(1)(b) and 3(8-aa) of the Act are declared unconstitutional and struck down.... The State shall be free to suitably amend Section 3(1) to provide for levy of house tax by adopting a uniform criteria for determination of annual value of similarly situated properties. The State shall also be free to amend Section 3(1) and lay down a uniform criteria for determination of annual value of properties occupied by the tenants as well as the owners in the light of the judgment of the Supreme Court in Sachchidanand Kishore Prasad Sinha case and observations made in this order. It is, however, made clear that any such enactment shall not affect the assessments made prior to the amendment of Section 3 by Punjab Act 11 of 1994 and the old cases, if any pending shall be decided in accordance with the unamended provision...."
(Emphasis Supplied) In the above judgment, the High Court directs the State Legislature to amend the law relating to determination of annual value by clarifying that any such amendment shall not be retrospective. We have serious reservations regarding such a direction. It is not open to the High Court under Article 226 of the Constitution, particularly in the matter of taxation directing it not to amend the law retrospectively. Such a direction is unsustainable, particularly in a taxing statute. It is always open to the State Legislature, particularly in tax matters, to enact validation laws which apply retrospectively. The High Court cannot take away the 27 power of the State Legislature to amend the tax law retrospectively. The basis of the law can always be altered retrospectively."
6. In view of the aforesaid decisions, State Legislature has all power, jurisdiction and authority to enact Jharkhand Municipal Act, 2011 and no provision thereof, especially, Section152(7) and 152(8) are violative of any of the provisions of the Constitution of India. On the contrary, the Act, 2011 is absolutely in consonance with the provisions of the Constitution of India. State Legislature has also power to enact the Rules, prescribing the imposition, levy and collection of the holding tax. Here, we are concerned with holding tax only, because in these matters arguments have been advanced only for holding tax and for nothing else. Rules are not travelling beyond the provisions of the Constitution of India nor the provisions of Rules are travelling beyond the provisions of the Act, 2011. On the contrary, the Rules, 2013, as amended from time to time, are absolutely in consonance with the provisions of the Constitution of India and in consonance with the provisions of the Jharkhand Municipal Act, 2011.
7. All the writ petitions being devoid of merit, are, hereby, dismissed.
8. In individual assessment of the property tax or the holding tax, they have remedies available under the Act to challenge the assessment.
9. In view of the final order passed in these writ petitions, both the interlocutory applications (I.A. No. 2057 of 2017 and I.A. No. 6179 of 2017) also stand dismissed.
(D.N. Patel, A.C.J.) (Ratnaker Bhengra,J.) AFR SD/SB