D.S. Mathur, J.
1. This is a petition under Article 226 ofthe Constitution' of India by Messrs. Gai Chhap Biri Depot through Shiyam Sunder Agrawal, and also by Shiyam Sunder Agrawal in his personal capacity, for the issue of a writ of certiorari, or any other writ, order or direction, to quash the order of the Additional District Magistrate, Azamgarh, respondent No. 2, whereby the appeal against the assessment of circumstances and property tax on the petitioners was in substance dismissed. A request was also made that the taxes already paid by the petitioners be ordered to be refunded to them.
2. Shiyam Sunder Agrawal is one of the four proprietors of an unregistered firm by the name of Gai Chhap Biri Depot at Belasia, Azamgarh. The District Board of Azamgarh, respondent No. 1, had assessed circumstances and property tax amounting to Rs. 150/- on the firm Gai Chhap Biri Depot for the year 1953-54 and raised the assessment to Rs. 500/- per year for the years 1954-55 and 1955-56. The petitioners' case is that the firm had suffered a loss during the years 1954-55 and 1955-56 and for that reason no circumstances and property tax could be imposed. This is challenged by the District Board, Azamgarh, respondent No. 1, according to whom the account books of the petitioner-firm were not produced at the time of the assessment for the year 1954-55 and the account books produced at the time of the assessment for 1955-56 were not accepted by the Assessment Committee.
The Additional District Magistrate, Azamgarh, respondent No. 2, has not recorded a finding in dear words, though he assessed the estimated income of petitioner-firm at Rs. 1000/- for each of the two years. It was for this reason that the tax imposed by the District Board for the two years was reduced to Rs. 437/8/6 per year. In proceedings under Article 226 High Court does not usually enter into controversial questions of facts and forms an opinion on consideration of broad features of the case.
The petitioners have not pleaded enmity with any office bearer of the District Board and it therefore, appears difficult to accept that they would have acted arbitrarily to the prejudice of the petitioners. It also appears difficult to accept that the petitioners would have carried on the Biri business not for one year but for two years at a stretch, if the concern was suffering a loss. In the circumstances the finding of fact impliedly recorded by the Additional District Magistrate with regard to the income of the petitioners during the two years cannot be interfered with in the present proceeding.
3. Another point raised with regard to the assessment of circumstances and property tax isthat no notice was served on the proprietors of the firm to enable them to oppose the enhancement of the tax. It was conceded that the notice was served on the Munim of the firm, not in his individual capacity but as the agent or employee of the firm. The service of notice on the Munim can, in such circumstances, be deemed to be on behalf of the proprietors. Further, as mentioned in the counter affidavit, he was the Munim and not the proprietors who preferred an appeal before the District Magistrate. There was thus no violation of the principles of natural justice.
4. The next point raised on behalf of the petitioners was that the assessment of circumstances and property tax on the petitioner firm was against the provisions of the Act in view of the fact that the tax was not imposed by special resolution of the District Board as laid down in Section 115 of the U. P. District Boards Act, 1922, nor was the imposition of tax sanctioned by the State Government in accordance with Sections 117 and 118 of the Act.
5. The above contention is based upon the presumption, which I must say is not justified, that at the time of the framing of preliminary proposals under Section 115 of the Act the Board has not only to take a decision on the imposition of taxes described in Section 108 but also to assess tax on individuals. To record a finding on this point it will be necessary to consider the scheme of the Act, specially the provisions contained ill. Ch. VI under the heading 'Taxation.' Section 108 of the Act details the taxes which the District Board can impose. Such taxes consist of a local rate under Section 3 of the U. P. Local Rates Act, 1914, as modified by the U. P. District Boards Act; and a tax known as 'tax on circumstances and property,' Section 108 was substituted by Section 22 of U. P. Act 24 of 1948, with the result that any tax on circumstances and properly imposed prior to the commencement of U. P. Act 24 of 1948 could not be abolished or altered without the previous sanction of the State Government.
Sections 109 to 113 govern the imposition of local rates. Section 114 onwards lays down the manner in which and the extent to which tax on circumstances and property can be imposed. Clause (a) of Section 114 will indicate that tax can be imposed cm any person in the rural area provided that he has resided or carried on business in that area for a total period at least six months in the year under assessment. Clause (b) lays down the category of persons who cannot be assessed to such tax.
No such tax can be imposed on persons whose total taxable income, as defined in the explanation of this section, is less than two hundred rupees per annum. Clause (d) lays down the maximum amount of tax which can be imposed on any person. The rate of tax is laid down in Clause (c) and such rate is not to exceed four pies in the rupee. The other provisions contained in Section 114 are not material for the purposes of the present case. In other words. Section 114 simply enumerates the powers of the Board with regard to the imposition of tax on circumstances and property.
6. The procedure for imposition of such tax or the framing of rules, either by the Board itself or by the State Government, is specified in Sections 115 to 120. Under Section 115 the Board has to frame proposals by special resolution for the imposition of the tax. The Board has also to prepare a draft of the rules which it desires the State Government to make in respect of the matters to be referred to in Section 123. The preliminary proposals an thedraft rules are then published under Sub-section (3) of Section 115 for general information along with a noticecalling upon persons interested to make objections.
Any person ordinarily residing or carrying onbusiness in the district within which the Board desires to impose the tax can, under Section 116, submit to the Board an objection in writing to all orany of the proposals framed under Section 115. Suchobjections have to be made within 30 days from the publication of the notice under Section 115(3) After consideration of the objections the Board finalises the proposals and the draft rules.
Modified proposals have to be published in the same manner as original proposals. After the proposals have been finalised they are submitted to the State Government through the prescribed authority along with the objections; and the State Government can sanction them under Sub-section (2) of Section 117. Thereafter rules are made by the StateGovernment under Section 118. Upon receipt of a copy of the rules so made the Board has to direct by special resolution the imposition of the tax with effect from a date to be specified in the resolution (vide Section 119).
A copy of the resolution so passed by the Board is submitted to the State Government under Section 120 and when the resolution has been notified in theOfficial Gazette the imposition of the tax becomes complete. Taxes already imposed can be abolished, suspended or altered under Section 121 and the procedure prescribed for the imposition of taxes by Sections 115 to 120 has to be followed.
7. It will be found that Sections 115 to 121 nowhere speak of assessment of tax on individualpersons. They contemplate imposition of the tax, that is, tax on circumstances and property can be levied and at what rate. The Legislature has not laid down the procedure to be followed for assessing such tax on individuals; but has delegated the power to make rules on this matter to the State Government. Under Section 123 the assessment and collection of taxes are to be governed by rules sanctioned by the State Government under Section 118(1). The delegation of the power to make rules on the above matter cannot be said to be beyond the permissible limits.
Once the rate of tax along with the maximum have been prescribed, the tax can be levied onindividuals, after ascertaining their income, even if there was no direct provision in the Act and no rules had been framed by the State Government. In the circumstances, the power to make rules pertains to executive functions only, and to thisextent the Legislature could delegate its functions to the State Government. Section 123 will thus indicate beyond doubt that the assessment of tax on persons residing or carrying on business within the limits of the District Board is distinct from the imposition of such tax.
This inference finds corroboration from two other sections of the Act, namely, Sections 126 and 128. Section 126 gives power to the Board to call upon persons to furnish information to enable it to assess tax. Such a power can be exercised after the tax has been imposed; suggesting thereby that steps for assessment of tax are taken after imposition of the tax. Section 128 makes provision for an appeal before the District Magistrate against an assessment or alteration of an assessment of a tax on circumstances and property.
The appeal would he maintainable if compliance of Section 129 has been made. In case imposition of tax under Sections 115 to 121 was the same as assessment of the tax, there was no necessity formaking a provision for appeal against the assessment, all the more to the District Magistrate, considering that the taxes can be imposed only with the prior sanction of the State Government, In other words, Sections 115 to 118 do not apply to assessment of tax on circumstances and property of individuals; and in the circumstances the tax shall be deemed to have been properly assessed on the petitioners.
8. However, a part of Section 115 of the U. P. District Boards Act is unconstitutional for the reason that it permits discrimination among persons placed in the same group or class. On similar grounds a part of Section 124 of the Act would also be unconstitutional.
9. Article 13(1) of the Constitution of India clearly provides that all laws in force in the territory of India immediately before the commencement of the Constitution, in so far as they are inconsistent with the provisions of Part III, namely, fundamental rights, snail, to the extent of such inconsistency, be void. Therefore, if any part of Section 115 or any other section of the Act is inconsistent with the fundamental rights, specially Article 14 of the Constitution of India, such provision shall be void. If it is possible to sever the unconstitutional part without effecting the working of the enactment, the enactment as a whole snail not be unconstitutional and only unconstitutional portions shall be selected out and declared void. But if it is not possible to sever the valid part of the enactment or the valid part would not be workable, the whole Act shall have to be declared void.
10. Sub-section (1) of Section 115 of the U. P. District Boards Act, a part of which is unconstitutional, runs as below:
'115. (1) When a board desires to impose a tax it shall by special resolution frame proposals specifying-
(a) the tax, being one of the taxes described in Section 108, which it desires to impose;
(b) the persons or class of persons to be made liable and the description of the property or other taxable thing or circumstance in respect of which they are to be made liable, except where arid in so far as any such class or description is already sufficiently defined under Clause (a) or by this Act;
(c) the amount of rate leviable from each such person or class of persons;
(d) any other matter referred to in Section 123 which the State Government requires by rule to be specified.'
11. It will be found that the Legislature has used two sets of words 'persons' and 'class of persons' in both Clauses (b) and (c). Under Clause (c) it has been made permissible to impose a specified amount of tax on a person. It was urged by the learned Standing Counsel that the words 'person' or 'persons' used in both the clauses should be deemed to mean a group of persons and not an individual person, and for this reason Section 115 should not be deemed to empower the Board to frame proposals to discriminate between persons placed in the same class or group. In case the Legislature had not used the words 'class of persons' in both the Clauses (b) and (c), I would have had no hesitation in accepting this contention; but when the Legislature used two sets of words in the same clause, it shall have to be presumed that it had the intention to give different meaning to the different sets of words.
Consequently, the word 'person' or 'persons' shall be deemed to be distinct from 'class of persons.' Further, 'group of persons' has the same meaning as a 'class of persons.' When one classifies people, he does it by grouping them in different classes or by dividing them in various groups. Consequently, the group or class of persons shall have the same meaning as far as Article 14 of the Constitution is concerned. In other words, when the Legislature used the words 'person' or 'persons' in addition to the words 'class of persons,' the former words have reference to individual person or persons, and not to a group or class of persons.
This inference finds support from another provision contained in Clause (c) of Section 115(1). Section 114 lays down the maximum rate of tax which can be imposed; rate of tax is different to a lump sum tax. On the other hand, under Clause (c) of Section 115(1) the Board can frame proposals to specify the amount of tax leviable from each person or class of persons. When a lump sum tax dependent upon the circumstances and property is levied, it is necessary to consider individual cases, and not a group or class of persons.
Consequently, the provision for specifying the amount of tax leviable from a person under Clause (c) permits the Board to discriminate among persons placed in the same class or group by applying one rule to one person and a different one to another though placed in the same group or class. Such a discrimination clearly infringes the clause of equality before the law guaranteed by Article 14 of the Constitution. In other words, the following portions of Section 115(1) must be declared to be unconstitutional.
Clause (b) The words 'persons or' existing between the words 'the' and 'class of persons.'
Clause (c) The words 'amount or' existing between the words 'the' and 'rate leviable' and also the words 'person or' existing between the words 'each such' and 'class of persons.'
12. The unconstitutional words have been underlined (here into ' ') in the sub-sectionwhich was reproduced in the beginning of thisjudgment.
13. If the invalid portion of Sub-section (1) of Section 115is removed, the sub-section in its remaining form is enforceable. Consequently, the constitutionality of the enactment, as a whole, remains unaffected.
14. When the above-mentioned portions of Section 115(1), which are void and unconstitutional, are removed, the contention raised by the petitioners with regard to Sections 115, 117 and 118 becomes still more without substance.
15. For similar reasons certain words of Sub-sections (2) and (3) of Section 124 would be unconstitutional, but on this point I need not express a final opinion as the point is not directly in issue in the present proceeding.
16. For reasons given above, the petition has no force and it is hereby dismissed with costs. It is further ordered that portions of Clauses (b) and (c) of Section 115(1) of the U. P. District Boards Act, 1922, as reproduced above, are void and unconstitutional, and they are hereby declared void.