Supreme Court of India
SHYAM KISHORE AND ORS.versusMUNICIPAL CORPORATION OF DELHI AND ANR.
- Citation
- 1992 INSC 232
- Decided
- 3 September 1992
- Disposal
- Disposed off
- Bench
- S RANGANATHAN
Holding
Section 170(b) is intra‑vires; it bars only the hearing and determination of an appeal unless the disputed tax is deposited, and the District Judge may not waive the deposit or stay collection but may adjourn the hearing and grant interim relief.
Summary
Shyam Kishore and others appealed to the Supreme Court against the Delhi High Court's dismissal of their appeal for non‑deposit of the disputed tax under Section 170(b) of the Delhi Municipal Corporation Act, 1957. The issue was whether the pre‑deposit requirement, which makes an appeal "heard or determined" only after tax is paid, violates Article 14 of the Constitution. The Court examined whether the provision barred only the hearing and disposal of the appeal or also its admission, and whether the District Judge could waive the condition or stay tax collection. Relying on the principle that the right of appeal is a statutory creation and may be conditioned so long as the condition is not oppressive, the Court held that Section 170(b) is intra‑vires and applies only to the hearing and determination stage. The District Judge cannot dispense with the deposit or stay recovery, but may adjourn the hearing and grant interim relief to enable payment before the appeal is heard. Consequently, the Supreme Court affirmed the High Court’s decision and disposed of the appeal without costs.
Issues considered
- The constitutionality of Section 170(b) of the Delhi Municipal Corporation Act, 1957 under Article 14 of the Constitution.
- Whether Section 170(b) is a condition precedent to the filing/entertainment of an appeal or only to its hearing and determination.
- Whether the District Judge has jurisdiction to waive the pre‑deposit condition or stay tax collection pending appeal.
- The proper construction of the words "heard or determined" in Section 170(b).
Legislation cited
- Constitution of Indias. Article 14, s. Article 226, s. Article 227
- Delhi Municipal Corporation Act, 1957s. 169, s. 170, s. 457
Subjects
appealpre‑deposit conditionArticle 14constitutional validitymunicipal corporationtax assessmentstatutory interpretationdistrict judge powers
Judgment
SHYAM KlSHORE AND ORS. A
v.
MUNICIPAL CORPORATION OF DELHI AND ANR.
SEPTEMB.ER 3, 1992
[S. RANGANATHAN, V. RAMASWAMI AND B
YOGESHWAR DAYAL, JJ.]
Delhi Municipal Corporation Ac4 1957:
Section 170(b )-Constitutio11al validity of-Appeal against enhance- C
ment of rateable value of property-Condition of pre-deposit of tax before
filing of the appeal-Whether unreasonable and violative of Article 14 of the
Constitution-Words 'no appeal should be heard.or determined under Section
169 unless'-lnterpretation of-Clause (b) only bars the hearing of appeal and
its disposal on merits, but not entertainment of the appeal itse/f-;4.mendment
of provision-Suggested. D
Constitution of India, 1950:
Article 14---Right of appeal granted by statute-Imposition of conditions
for exercise pf such right-Whether valid.
E
Articles 226 and 227-When alternative remedy available under
provisions of Statute-Recourse to Court by way of Writ Petition-Whether
proper.
Interpretation of Statutes-Words of a provision-Wider construction to
~~ F
The appellants filed an appeal under Section 169 of the Delhi
Municipal Corporation Act, 1957 before the Disirict Judge challenging the
enhancement of the rateable value of the property ia dispute. The District
Judge dismissed the appeal on the ground of non-deposit of the disputed G
tax. The appellants filed a writ petition before the High Court against the
District Judge's order.
The appeal was heard by a Full Bench of the High Court. All the
three Judges were agreed that the condition of deposit of tax amount
under Section 170 (b) of the Act was a condition precedent for hearing or H
349
350 SUPREME COURT REPORTS(1992] SUPP. 1 S.C.R.
A determination of the appeal and the District Judge had no discretion to
grant stay or the disputed amount or dispense with the requirement of
pre-deposit of the amount in appeal, with or without conditions, in the
office of the Corporation. They were also agreed as to the amount to be
deposited. However, while two of the Judges held that Section 170(b) was
not ultra vires of the Constitution and that the right of appeal was a
B creature of the statute and there was nothing wrong in the statute making
a provision for conditional appeal requiring that a person desirous of
filing an appeal was to comply with the condition and affirmed the District
Judge's Order, the third Judge held that the sub-section was violative of
Article 14 of the Constitution and struck it down, and directed the appel·
C late authority to entertain the appeal without deposit of the amount and
decide it on merits.
In the appeal before this Court, on behalf of the appellants-asses·
sees, it was contended that the answer to the issue of constitutional
D validity of Section 170(b) would considerably depend upon the interpreta·
lion that was placed on the scope of the powers of the appellate authority,
that If the provision was interpreted as mandating that an appeal could
not be entertained but would have to be dismissed in limine if the tax in
dispute was not paid along with the memorandum of appeal, that would
place a very onerous condition on the right of appeal, particularly in cases
E where there was a substantial amount involved in the appeal and the
points raised were really contentions and debatable; that once the assess·
ment list was amended after hearing the assessee, it might stand adopted
for several subsequent years and demands for all these years would have
to be met until the assessment for the first year was altered in appeal, that
F the right of appeal itself would become illusory, if subjected to such a rigid
and absolute condition, and the provision would, therefore, be invalid, as
Imposing an unreasonable restriction on the fundamental rights of the
appellant·assessee, that curbing of unlimited appeal given by Section
169(1) of the Act was arbitrary and unreasonable and hit by Article 14 of
the Constitution, that the opening part of Section 170 that 'no appeal shall
G be beard or determined under Section 169 unless' barred, merely the final
determination or hearing of the appeal and not any other stage of the
hearing of appeal including the prelimiary/admission stage of the appeal.
It was contended on behalf of the respondent-Corporation that the
H validity of similar provisions had been unheld earlier, that even though an
SHYAM KISHORE v. M.C.D. 351
appeal, In such cases, might have to be thrown out, the assessee was not A
without redress;. he would always have the alternative remedy of taking
recourse to proceedings under Article 226 of the Constitution before the
High Court and in appropriate cases, where a case of hardship was made
out, the High Court had the undisputed powers to grant relief, that though
the High Court would not ordinarily entertain the petition under Article B
226 of the Constitution, when the alternative remedy of appeal was avail·
able to the party but it had the jurisdiction to grant such a relief tr It
though proper to do so in the circumstances of any case, that the decision
of this Court in Municipal Council, Khurai and Anr. v. Kamal Kumar and
Anr., [1965) 2 S.C.R. 653 and the guidelines issued by the Assessment and
Collection Department of the Municipal Corporation of Delhi contained C
in a book-let entitled 'Property Taxes and Education Cess, 1985', para
18(B), provided adequate safeguards to prevent any real hardship or
harassment to the assessee and that Section 170 (b) was not ultra vires,
and that the words 'heard and determined' used in Section 170 (b) were
comprehensive enough to cover not merely the Onal hearing of an appeal D
on merits but also, its preliminary hearings to find out whether the appeal
was in time [Section 170 (a)], whether the disputed tax had been along
with the appeal, [Section 170 (b)J and whether the appeal was otherwise
defective or to dismiss the appeal straightway if it was found defective in
any of those respects.
E
Disposing of the appeal, this Court,
HELD: 1. The High Court was correct in holding that Section 170(b)
of the Delhi Municipal Corporation Act, 1957 was intra vires of the Con-
stitution. The District Judge has no jurisdiction to waive the condition of F
deposit or stay the Collection of tax pending disposal of the appeal before
him. However, he has the power to adjourn the hearing of the appeal or
pass interim orders enabling the assessee to pay up the taxes before the
appeal is actually heard and determined. But this is a power which he
shall have to exercise judicially on the basis of the requirements of each
case, the interest of revenue and the position of the cases on the hearing G
list before him. [382 E·F)
2. It is the settled law that the right of appeal is a creature of statute
and there is no reason why the legislature while granting the right cannot
impose conditions for the exercise of such right so long as the conditions H
352 SUPREME COURT REPORTS[1992] SUPP. 1 S.C.R.
A are not so onerous as to amount to unreasonable restrictions rendering
the right almost Illusory. [376 E·F)
Nandlalv. State of Haryana, [1980) 3 S.C.R. 1181 at 1207, relied on.
Ganga Bai v. Vijay Kumar and Ors., [1974) 3 S.C.R. 882; Anant Mills
B Co. Ltd. v. State of Gujarat and Ors., [1975) 3 S.C.R. 220; Vijay Prakash D.
Mehta/Sh. Jawanar D. Mehta v. Collector of Customs (Preventive) Bombay,
J.T. 1988 (3) S.C. 435; Collector of Customs & Excise, Cochin & Ors. v. A.S.
Bava, [1968) 1 S.C.R. 82; M/s. Ellora Construction Company v. The
Municipal Corporation of Greater Bombay and Ors., A.l.R. 1980 Bombay
C 162; Chatter Singh Baid and Ors. v. Corporation of Calcutta and Ors., A.l.R.
1984 Calcutta 283 and Municipal Council, Khurai and Anr. v. Kamal Kumar
and Anr., [1965) 2 S.C.R. 653, referred to.
The Anant Mills Co. Ltd. & Ors. v. State of Gujarat and Ors., XIV 1973
G.L.R. 826; Wire Netting Stores v. Regional Provident Fund Commissioner,
D 1987 Lab. I.C. 1015, referred to.
3.1. Prima facie, to read a power In the District Judge to grant stay of
collection of the disputed tax pending disposal ofthe appeal will run counter
to Section 170(b). Though the normal rulels thatthe Incidental and ancillary
powers of an appellate authority will include a power to grant stay or the
E order under appeal, that power cannot be read Into Section 170(b), for such
an Interpretation would render Section 170 (b) totally unworkable. However,
the provision has to be examined carefully to see whether, short of dismissing
an appeal for default of payment of tax, whether the District Judge has any
latitude In the matter. (377 C·F.·H; 378·A)
F Income Tax Officer, Cannanore v. M.K. Mohammed Kunh~ A.l.R.
1969 s.c.c. 430, referred to.
Punj Sons (P.) Ltd. v. Municipal Corporation of Delh~ 1982 R.L.R.
247, overruled.
G 3.2. The words of Section 170(b) that 'no appeal shall be beard or
determined under Section 169 unless' are capable of a broader lnterpreta·
tion. The Section uses three dillereut expressions 'beard or determined",
'brought' aud 'admitted' In relation to an appeal and some significance Is
to be attached to the use of the expression 'heard and determined". When
H the Delhi Municipal Corporation Act has carefully avoided the use of that
SHYAM KISHORE v. M.C.D. 353
word, 'entertained', the Court must give full effect to the differential A
wording. Also, the absence of a language in clause (b) of the proviso
similar to that In clause (a) ·which Indicates that an appeal filed beyond
the period of limitation will not stand admitted unless the delay Is con-
doned ·also warrants an inference that the payment of disputed laA Is not
a condition precedent to the entertainment or admission of the appeal. In B
the present statutory context, it sounds plausible to say that such an
appeal can be admitted o.r entertained but only cannot be heard or dis-
posed of without pre-deposit of the disputed tax. Such an interpretation
will provide some much needed relief from the harshness of the provision.
[380 B·E)
c
Mis Lakshmiratan Engineering Works Ltd v. Assistant Commissioner
(Judicial) I, Sales Tax, Kanpur Range, KanpurandAnr., A.l.R.1968 S.C. 488
and Mis. Ellora Construction Company v. The Municipal Co1]Joration of
Greater Bombay and Ors., A.l.R. 1980 Bombay 162, refi;rred to.
D
3.3. These are not days in which the calculation of the property tax
is simple and uncomplicated; the determination of the annual value of the
property, except when based on the actual rent received from the property,
involves various subjective factors aud, not unoflen, there is wide gulf
between the tax admitted to be due and the tax demanded. Sometimes, to
compel the assessee to pay up the demanded tax for several years in E
succession might very well cripple him altogether. This apart, an assessee
may not be able to deposit the tax While filing the appeal but may be able
to pay It up within a short time, or at auy rate, before the appeal comes
on for hearing in the normal course. There is no reason to construe the
provision so rigidly as to disable him from doing this. Again, When an F
appeal comes on for hearing, the appellat~ judge, in appropriate cases,
Where he feels there is some great hardship or injustice invovles, may be
Inclined to adjourn the appeal for some time to enable the assessee to pay
up the tax. Though it will not be expedient or proper to encourage ad-
journment or an appeal, Where It is ripe for hearing otherwise, only on this
ground and as a ma.tier of course, an interpretation which leaves some G
room for the exercise or a judicial discretion in this regard, Where the
equities of the case deserve it, may not be inappropriate. The appellate
judge's incidental and ancillary powers should not be curtailed except to
the extent specifically precluded by the statute. There is nothing wrong in
interpreting the provision as permitting the appellate authority to adjourn H
354 SUPREME COURT REPORTS[l992] SUPP. 1 S.C.R. ;.
A the hearing of the appeal thus giving time to the assessee to pay the tax or
even specifically granting time or instalments to enable the assessee to
deposit the disputed tax where the case merits it, so long as it does not
unduly Interfere with the appellate court's calendar of bearings. His
powers, however, should stop short of staying the recovery or the tax till
the disposal or the appeal. It is one thing for the judge to adjourn the
B hearing leaving it to the assessee to pay up the tax before the adjourned
date or permitting the assessee to pay up the tax, if he can, in accordance
with his directions before the appeal is heard. In doing so, he d0es not and
cannot injunct the department from recovering the tax, if they wish to do
so. He is only giving a chance to the assessee to pay up the tax if he wants
C the appeal to be heard. It is, however, a totally different thing for the judge
to stay the recovery till the disposal or the appeal; that would result in
modifying the language of the proviso to read: 'no appeal shall be dis·
posed of until the tax is paid'. Short of this, hwever, there is no reason to
restrict the powers unduly; all be bas to do is to ensure that the entin< tax
D in dispute is paid up by the time the appeal is actually heard on its merits.
Therefore, clause (b) of Section 170 should be read only as a bar to the
hearing orthe appeal and its disposal on merits, and not as a bar to the
entertainment or the appeal itself. This interpretation of the provision
could steer clear of all problems or constitutional validity.
(380 E-H; 381 A·F]
E
Mis Lakshmiratan Engineering Works Ltd. v. Assistant Commissioner
(Judicial) I, Sales Tax, Kanpur Range, KanpurandAnr., A.I.R.1968 S.C. 488
and M/s. E//ora Constrnction Company v. The Municipal Corporation of
Greater Bombay and Ors., A.l.R. 1980 Bombay 162, referred to.
F
3.4. The above construction of the Section vests in the appellate
authority a power to deal with the appeal otherwise than by way of ftnal
disposal even if the disputed tax is not paid. It enables the authority to
exercise a judicial discretion to allow the payment or the disputed tax even
G after the appeal is filed but, no doubt, before the appeal Is taken up for
act,.al bearing. The interpretation will greatly ameliorate the genuine
grievances of, and hardships faced by, the assessee in the payment of the
tax as determined. Though an assessee may not be able to acquire an
absolute stay of the recovery or the tax until the dispute is resolved, be will
certainly be able to get breathing time to pay up the same where bis case
H deserved it. Reading the provision rigidly and seeking to soften the rigour
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL, J.) 355
by reference to the availability of a recourse to the High Courts by way of A
a petition under Articles 226 and 227 In certain situations and the
departmental Instructions contained In Para 18(8) of the book-let entitled
"Property Taxes and Education Cess, 1985 Is not a satisfactory solution.
The departmental Instructions may not always be followed and the resort
to Articles 226 and 227 should be discouraged when there is an alternative B
remedy. A more satisfactory solution Is available on the terms of the
statute itself. [381 F·G·H; 382 A-BJ
The statute itself should be amended soon to make the position
clear. After all, under the Delhi Municipal Corporation Act, the appellate
authority is a high judicial officer, being the District Judge, and there is C
no reason why the Legislature should not trust such a !tigh judicial officer
to exercise bis discretion In such a way as to safeguard the interests of
both the revenue and the assessees. Until this is done, the provision
requires a liberal interpretation so as to preserve such Interests and
should not be so rigidly construed as to warrant the throwing out of an
appeal in limine merely because the tax is not paid before the appeal is D
tiled. (382 C·D)
CIVIL APPELLATE JURISDICTION: Civil Appeal No 2190 of
1991.
From the Judgment and Order dated 1.2.1991 of the Delhi High E
Court in Civil Writ No. 148 of 1989.
Y.K. Jain, B.B. Jain, Pravir K. Jain, Sudbir Nandrajog and S. Paul
for the Appellants.
H.N. Salve and Vi.;hnu Mathur for the Respondents. F
The Judgment of the Court was delivered by
YOGESHWAR DAYAL, J. This appeal has been preferred against the
Full Bench decision of the Delhi High Court dated 1st February, 1991. Leila
Seth and V.B. Bansal, JJ. agreed with Nag, J. that the condition of deposit of G
tax amount under Section 170(b) of the Delhi Municipal Corporation Act,
1957 (hereinafter referred to as 'the Act') is a condition precedent for
hearing or determination of the appeal and the District Judge had no discre-
tion to grant stay of the disputed amount or dispense with the requirement of
pre-deposit of the amount in appeal, with or without conditions, in the office H
356 SUPREME COURT REPORTS[1992] SUPP. 1 S.C.R.
A of the Corporation. They also agreed as to the amount which was to be so
deposited. The difference of opinion was only restricted to the vires of
Section 170(b) of the Act. The majority of learned Judges took the view that
Section 170(b) of the Act is not ultra vires the Constitution but Nag. J. took the
view that sub-section (b) of Section 170 is violative of Article 14 of the
Constitution of India and he accordingly struck it down and directed the
B appellate authority to entertain the appeal of the appellant without deposit of
the amount and decide it on merits. The majority of the learned Judges, on
the other hand, dismissed the writ petition affirming the order of the District
Judge who had dismissed the appeal filed by the appellant under Section 169
of the Act challenging the enhancement of the rateable value of the property
C in dispute for non-deposit of the disputed tax.
The majority of the learned Judges took the view that the right of
appeal is a creature of statute and there is nothing wrong in the statute
making a provision for conditional appeal requiring that a person desirous
D of filing an appeal is to comply with the conditions.
Before examining the constitutional validity and meaning of Section
170 (b) of the Act it will be useful to examine .he provisions of the A.ct in
relation to the levy of property taxes, particularly the general taxes, and the
provisions for "payment and recovery" thereof as well as the provisions of
E the Delhi Municipal Corporation (Assessment List) Bye Laws 1959
(hereinafter referred to as the Assessment Bye-Laws). The relevant
provisons are:~
'121. (1) Save as otherwise provided in this Act, the
F corporation shall cause an assessment list of all lands and
buildings in Delhi to be prepared in such form and manner
and containing such particulars with respect to each land
and building as may be prescribed by the bye-laws.
(2) When the assessment list has been prepared the Com-
G missioner shall give public notice thereof and of the place
where the list or a copy thereof may be inspected, and every
person claiming to be the owner, lessee or occupier of any
land or building included in the list and any authorised
agent of such person, shall be at liberty to inspect the list
H and to tako extracts therefrom free of charge.
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL,J.) 357
(3) The Commissioner shall, al the same time, give public A
notice of a date, not less than one month !hereafter, when
he will proceed to consfder the rateable values of lands and
buildings entered in the assessment list, and in all cases in
which any land or building is for the first time assessed, or
the rateable value of any land or building is increased, he
shall also give written notice thereof to the owner or to any
B
lessee or occupier of the land or building.
(4) Any objection to a reteable value or any other matter
as entered in the assessment list shall be made in writing
to the Commissioner before the date fixed in the notice c
and.shall state in what respect the rateable value, or other
matter is in dispute, and all objections so made shall be
recorded in the register to be kept for the purpose.
(5) The objections shall be inquired into and investigated,
and the persons making them shall be allowed an oppor- D
tunity of being heard either in person or by authorised
agent, by the Commissioner or by any officer of the Cor-
poration authorised in this behalf by the Commissioner.
(6) When all objections have been disposed of, and the
E
revision of the rateable value has been completed, the
assessment list shall be authenticated by the signature of
the Commissioner or, as the case may be, the officer
authorised by him in this behalf, who shall certify that
except in the cases, if any, in which amendments have been
made as shown therein no valid objection has been made F
to the rateable values or any other matters entered in the
said list.
(7) The assessment list so authenticated shall be deposited
in the office of the Corporation and shall be open, free of
charge during office hours to all owners, lessees and oc-
G
cupiers of lands and buildings comprised therein or the
authorised agents of such persons, and a public notice that
it is so open shall forthwith be published.
125. Subject to such alterations as may thereafter be made H
358 SUPREME COURT REPORTS[1992] SUPP. l S.C.R.
A in the assessment list under S. 126 and to the result of any
appeal made under the provisions of this Act, the entries
in the assessment list authenticated and deposited as
provided in S.124 shall be accepted as conclusive evidence:·
(a) for the purpose of assessing any tax levied under this
B Act, of the rateable value of all lands and buildings to
which such entries respectively relate.
126. (1) The Commissioner may, at any time, amend the
assessment list :·
c (a) (b) (c) ..........................
(d) by increasing or reducing for adequate reasons the
amount of any rateable value and of the assessment there·
upon; or
D
(e) (f) (g) ........................ ..
Provided that no person shall by reason of any such amend·
ment become liable to pay any !!Ill or increase of tax in
respect of any period prior to the commencement of the
E year in which the notice under sub-section (2) is given.
(2) Before making any amendment under sub-section (1)
the Commissioner 'shall give to any person affected by the
amendment, notice of not less than one month that he
F proposes to make the amendment and consider any objec·
lions which may be made by such persons.
127. It shall be in the discretion of the Commissioner to
prepare for the whole or any part of Delhi a new assessment
list every year or to adop• the rateable value contained in
G the list for any year, \\ith ·such alterations as may in par-
ticular cases be deemed necessary, as the rateable values
for the year following, giving the same public notice as well
as individual notices, to persons affected by such altera·
lions, of the rateable values as if a new assessment list had
H been prepared."
SHYAM KISHORE v. M.C.D. (YOOESHWAR DAYAL. J.] 359
Bye-Laws. A
"(8) (1) The Commissioner shall keep a register in which
all objections received under the provisions of sub-section
(4) of Section 124 as well as sub-section (2) of Section 126
shall be entered. This register will show:
B
(a) the name or number of the land or building in respect
of which objection is received;
(b) name of the person primarily liable for the payment
of property tll'.'es; '
c
(c) name of the objector;
( d) the rateable value finally fixed after enquiry and in-
vestigation of the objection;
(e) the date from which the rateable value finally fixed is D
to come into force; and;
(f) such other details as th~ Commissioner may from time
to time think fit.
(2) ........................ E
9. (1) When any amendment is proposed to be made under
the provisions of Section 126, such amendment will
provisionally be made in the assessment list when the. notice
as required under the provisions of sub-section (2) of Section
F
126 is given to the person affected by the amendment.
(2) Objections shall be inquired into and investigated by
the Commissioner or any other officer authorised by him.
(3) The assessment list shall be finally amended in accord- G
ance with the decisions given by the Commissioner or by
an officer referred to in clause (2) on the investigation and
disposal of the objections, if any.
(4) Uno objection is received or if objection is not received
within the time limit, specified in this behalf in the nottce, H
360 SUPREME COURT REPORTS(1992) SUPP. 1 S.C.R.
A the assessment list shall be finally amended by confirming
the provisional amendment made in the assessment list.
(5) Property taires on the basis of the amended Assessment
List shall be due on the day on which the Amendment is
formally made in the Assessment List. •
B
Provided that payment of taxes on the basis of the Assess-
ment List, existing before such amendment cannot be with-
held on the ground that some amendment is to be made in
the List under this bye-Law.''
c It will be noticed that proviso to Section 126 (1) before its amend-
ment read as under:
"Provided that no person shall by reason of any such
amendment become liable to pay any tax or increase of
D tax in respect of any period prior to the commencement
of the year in which the amendment is made."
The proviso before its amendment suggested as if the person could
become liable by reason of amendment of the assessment list only in the
E year during which the amendment was made. The amendment of the
proviso to Section 126 (1) shows that the liability to pay any tax or increase
of tax can go beyond the currency of the year in which a notice is given
under sub-section (2) of Section 126 of he Act. Therefore, even if the notice
is given during the currency of a financial year but the amenJment in fact
after investigation is completed later on after. the expiry of the financial
F year, the amended list would still have the effect retrospectively for the
financial years during which the notice of increase was given. This can be
the only reasonable view of the proviso to Section 126 (1) if one takes into
account the legislative history of the amendment and it is the duty of the
court to take notice of the legislative changes and give effect to the
G intention exhibited by the changes.
It will be noticed from the .:ipening words of Sec~ion 125 of the Act
that the assessment list prepared under Section 124 of the Act is subject
to any alteration that may be made under Section 126 of the Act and is
also subject to the result of any appeal made under the provisions of the
H Act. It ·cannot be the scheme of the Act that though the assessment list
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL, J.) 361
prepared under Section 124 is subject to any appeal, the appeal must itself A
be decided within the year for which the amendment relates to.
Before the Amending Act 42 of 1961, in so far as it amended the
proviso to Section 126 (1) of the Act, became law, the notes on clause 12 of
the Delhi Municipal Corporation (Amendment) Bill, 1961(No.49of1961) as
introduced in the Lok Sabha on 23rd Aug. 1961 provided as under:- B
"NOTES OF CLAUSE;
Clause 12
At present, if an amendment of the assessment list is not c
completed in the year. in which the notice of the proposal
to make the amendment has been issued by the Commis-
sioner, the liability for the property l>ll<eS according to the
amended list accrues only after the commencement of the
year in which the amendment is made. There does not D
appear any reasonable justification as to why the liability
to pay the property tax in such a case should not accrue in
the year in which the notice of the proposal is issued by the
Commissioner. This is sought to be done by the amendment
porposed in the proviso to Section 126(1). The amendment
proposed will not take the assessee by surprise or in
E
genuine cases cause any hardship to him as he has already
been served with the notice of the proposal."
We are, therefore, of the considered view that it is not necessary that
the proceedings in pursuance of a notice for increasing the rateable value F
and of the assessment thereupon must be completed within the year in
which the notice is given to become effective from the year in which notice
is given.
Section 124 (1) casts a duty on the Corporation to preapare an
assessment list of all lands and buildings in Delhi. Such assessment list has G
to be in such from and manner as prescribed by the Bye-laws. When the
assessment list has been prepared under sub-section {1) of Section 124,
sub-section (2) thereof requires that a public notice about its preparation
and of the place where the list may be inspected shall be given and the
owner, occupier or lessee shall be at liberty to inspect the list and to take H
362 SUPREME COURT REPORTS[1992] SUPP. 1 s.c.R.
A extracts thereof.
Under Sub-section {3) of Section 124, the Commissioner has, also at
the same time, to give a public notice of the date when he will proceed to
consider reteable values entered in the assessment list, and in all cases in
which tLe rateable value for any land or building is being assessed for the
B first time of rateable value is sought to be _increased, the Commissioner is
required to give a written notice thereof to the owner or to the lessee or
the occupier of such laod of building. After such public notice or individual
notice, as the case may be, has been given, under sub-section (4) the
objection to rateable values can be filed in writing to the Commissioner
C before the date fixed in the notice and the objections have to state in what
respects the rateable value is disputed.
Under sub-section (5), the objections so filed are required to be
investigated and the person ma~. the objections is allowed an oppor-
tunity of being heard either in person or by atutborised agent, by the
D Commissioner or by aoy officer of the Corporation authorised by the
Commissioner in this behalf.
When all the objections have been disposed of and the revision of
the rateable value is completed, the assessment list is required to be
E authenticated by the Commissioner or by an Officer authorised by him. By
this Authentication the Commissioner or the officer authorised by him in
this behalf has to certify that "except in the cases, if any, in which amend-
ments has been made as show therein no valid objection has been made to
the rateable values or any other matter entered in the said list."
F Before adverting to Section 125, the relevant provisions of Section
126 along with its proviso and the Bye-laws may be noticed.
It is clear from the provisions of Section 126 ( 1) read with its proviso
and sub-section {2) thereof that its proviso and sub-section {2) thereof that
G a notice of not less than one month is required to be given before the
Commissioner may propose to make amendment. It is also clear from
bye-law No. 9 (1) that when an amendment is proposed to be made in the
assessment list under the provisions of Section 126, such amendment will
be provisionally made in the assessment list when the notice as required
•mder sub-section {2) of Section 126 is given to the person affected by the
H amendment. Therefore, as soon as a notice is given proposing enhance-
SHYAM KISHORE v. M.C.D. [YOOESHWAR DAYAL, J.) 363
me11t, the assessment list, if one may say so, stands "provisonally amended" A
and rateable value is as stated therein with effect from the date proposed
in the notice.
It is also clear from clause (5) of bye· law No.9 that the property taices
on the basis of amended list become due only when the amendment is
. formally made in the assessment list as a result of investigation of the notice B
issued under Section 126 (2) of the Act and so long as the assessment list
is not formally amended, the person liable to pay property taxes bas to
continue to pay the said taxes on the basis of the unamended assessment
list.
c
Now the provisions of Section 125 of the Act may be examined for
their effect.
The effect of Section 125 is that the assessment list finalised and
authenticated and deposited under sub-sections (6) and (7) of Section 124 D
of the Act is subject to such alterations as may be made under the
provisions of Section 126 and/or the the result of any appeal under the
provisions of this Act.
Once the list so authenticated under Section 124 (6) is, by virtue of
Section 125, made subject to the provisions of Section 126, the assessment E
list for any year where it is subject to a notice under Section 126 is really
finalised only after the investigation to the proposed enhancement has been
completed and finalised; authentication and deposit of the list under
Section 124(6) and (7) is subject to such finalisation.
F
The scheme of Sections 124, 125 and 126 read with the bye-laws is
that the assessment bas to be duly authenticated by the Commissioner or
an officer on his behalf bl·: this list is subject to the other provisions of the
Act including Section 126 and the bye-laws and once a notice has been
issued under Section 126(2) of the Act, the assessment list though authen- G
ticated under Section 124 (6) is subject to the result of the notice and the
assessment list as a result to the investigation under Section 126 automat-
ically gets amended from the date of the order of assessment passed as a
result of notice under Section 126 (2) with effect from the date as found
in the order of assessment and for the amount the rateable value is finally
arrived at. H
364 SUPREME COURT REPORTS[1992] SUPP. l S.C.R.
A Coming to Section 127 of the Act, it gives a discretion to the
Commissioner to prepare for the whole or any part of Delhi a new
assc;ssment list. If a new assessment list is to be prepared, the procedure
for it is in relation to laods aod buildings which are being assessed for the
first time or where the rateable value of any land or building is sought to
B be increased; apart from public notice, ao individual written notice thereof
to the owner, lessee or the occupier is required to be given. This is so if
the provisions of Section 127 are read with Section 124 (3) of the Act.
Similarly, if instead of preparing a new assessent list, the Commissioner
seeks to adopt the rateable values stated in the assessment list of aoy year
for the following year by increasing the rateable value given thereof, the
C Commissioner is required to give a public notice aod ao individual notice
but if the old rateable value of the previous year is being adopted for aoy
following year, no indi>'idual notice need be given for the simple reason
that there has to be no chaoge but at the same time only public notice must
be given as the owner, lessee or the occupier may show that old rateable
D value need not be adopted due to change of circumstances for the year.
What do we understaod when it is said that the Commissioner may
adopt the rateable values contained in the list for aoy year for the year
following? This really refers to adopting the rateable values given in the
previous year in respect of laod or building. Once a notice under Section
E 126 proposing ao increase has already b.een given in respect of the land or
building by virtue of bye-law No. 9, the assessment list in the year in which
notice is given automatically gets amended aod under Section 127 it is that
rateable value which is adopted for the following year. When the proceed-
ings under Section 126 (2) get finally determined, the assessment list gets
F amended with effect from the date as found in the assessment order and
since the adoption of rateable value for aoy year was of the previous year
in which the notice was given, as soon as, the assessment order for the
previous year gets finalised, the demand is raised for the year in which the
rateable value of the previous year was adopted for any year, on the basis
of the finalisaiton of the assessment of the previous year.
G
While adopting the assessment list of aoy previous year for any year,
it was not necessary that the assessment list for the previous year must have
become final in the sense that the proceedings for increasing the rateable
value in the previous year must also come to ao end and failing which the
H rateable value for the previous year cannot be adopted for the following
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL, J.] 365
year. All that Section 127 contemplates is that for any year the rateable A.
value contained in the list for the previous year may be adopted.
To summarise -
(a) An assessment list has to be prepared in respect of each land and
building which is liable to tax which list contains ill the particulars includ- B
ing the rateable value of the property. The procedure for preparing such
an assessment list is contained in sub-sections (3) to (7) of Section 124;
(b) Section 127 provides that every year the Commissioner should
either prepare for the whole or any part of Delhi a new assessment list
or" ..... adopt rateable values contained in the list for and year with such C
alterations as may in particular cases be deemed necessary.......'
The procedure for exercise of either of these two options is by 'giving
the same public notice as well as individual notices to persons affected by
such alterations to the rateable values as if a new list had bee11 D
prepared........';
(c) Section 126 confers power to "........amend the assessment list. .•..."
in respect of any property or person after the issuance of a prior notice
therefor. After the amendment of the laws by Act 42 of 1961, the only
limitation on the retroactivity of such an amendment is that it cannot relate E
to a period prior to the commencement of the year in which the notice to
amend is given;
( d) The legal consequences of an assessment list, as per Section 125,
is that it is conclusive evidence of the rateable value of lands and buildings
for the purpose of assessing any tax. However, this is subject to ' ..•...any F
alteration that may be made thereafter in the assessment list under Section
126 and to the result of any appeal made under the provisions of this
Act.....";
(e) That once the Commissioner exercises the option to 'adopt" the
assessment list of a pat dcular year for subsequent years then any amend- G
ment of the original assessment list (either by virtue of powers exercised
by the Commissioner under Section 126 or as a consequence of any appeal)
constitutes ipso jure an amendment of the assessment list for the sub-
sequent years also for which the original assessment list had been adopted
and it is not necessary to once again follow the procedure of Section 126 H
366 SUPREME COURT REPORTS[1992] SUPP. 1 S.C.R.
A for a consequential modification of the assessment lists for the subsequent
years to bring them in accord with the amended/modified initial assessment
list.
The recovery of tax is the subject matter of the sam~ Chapter, namely
Chapter VIII of the Act relating to 'Levy of Taxes', the scheme of which
B is as hereinafter:
(a) Section 152 provides that any tax levied under the Act shall be
on such dates, in such number of instalments and in such manner as may
be determined by the Bye-laws in this behalf.
c (b) There are two sets of Bye-laws which relate to levy and collection
of property taxes, namely the Property Tax Bye-Law, 1953 (hereinafter
referred to as the Property Tax Bye-Laws) and the Assessment List Bye-
Laws, referred to above. The latter set of Bye-laws deal with the procednre
to be followed in amendment of the assessment lists. The former set of
D Bye-laws provides for the procednre and recovery of taxes.
( c) Sections 154 to 158 deal with coercive process of recovery of tax.
Section 155 deals with leavy of penalty against a person in default. The
scheme of these provisions has to be understood in the backdrop of the
scheme of the Act in regard to the assessment of tax. The scheme of these
E provisions proceeds on the footing that the amendment or modification of
the assessment list for one particular year may have ramifications for
subsequent years.
Section 156 (1) of the Act provides as under :-
F "Recovery of tax.
(1) If the person liable for the payment of the tax does not,
within thirty days from the service of the notice of demand,
pay the amount due, such such together with all costs and
the penalty provided for in section 155, may be recovered
G
under a warrant, issued in the from set forth in the Eighth
Schedule, by distress and sale of the movable property or
the attachment and sale of the immovable property, of the
defaulter;
H Provided that the Commissioner shall not recover any
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL, J.] 367
sum the liability for which has been remitted on appeal A
under the provisions of this Act.
(2) ..........................."
The proviso to Section 155 (1) contemplates that even at the stage of B
recovery by distress/attachment any remission of the liability in appeal
should be given effect to automatically. Thus, if the assessment list is
adopted in subsequent years, and there is modification in appeal of such
an assessment list, the relief automatically has to be given even in proceed-
ings for recovery by distress/attachment in respect of tax liability of the
later years as well. As we have noticed earlier, after the assessment list is ~
amended finally in view of notice under Section 126 the rateable value is
automatically determined for the year in which the notice was given and
since the provisional amendment in the assessment list has been adopted
for the later years till the assessment is finalised, on the finalisation of the
list of the assessment lists which were adopted for the subsequent years D
would also get amended. Thus where the provisional assessment is finalised
it will be legitimate for the authorities to make the demand on the basis of
the list so finalised. It would also be legitimate for the authorities to raise
demand for a subsequent year where the provisional list had been adopted
for the later years. The purpose of the proviso to Section 156 ( 1) is that
where liability in respect of an assessment order has been finalised and it E
' is disputed in appeal only for the year in which it was finalised the benefit
'
as a result of appeal, if any, is given not merely for the year in question but
also for the years in which the assessment list was adopte.d. The proviso
contemplates that without any appeal for the later years the Commissioner
will be bound to give the remission granted in appeal for the year for which F
the assessment list was amended and adopted for the later years.
Mr. Yogesh K. Jain, learned counsel for the appellant, tried to submit
that this proviso to sub-section (1) of Section 156 indicates that the appel-
late court has the power to grant stay during the hearing of the appeal and
that when the relief is finally granted, this proviso comes to the rescue. We G
do not agree ·:·lith this view. The proviso deal with a case where assessments
for one or more future years are made adopting the assessment or revision
made for one year (which may be called the base year) which is under
appeal. It ensures that demands for successive years cannot he enforced or
recovered to the extent the appeal for the base year succeeds, even without H
368 SUPREME COURT REPORTS[1992] SUPP. 1 S.C.R.
A the necessity for an appeal by the assessee for each of the successive years.
Having surveyed the provisions of the Act relating to the assessment
of the property tax, we shall turn the crucial provision of the statute the
validity of which has been canvassed before us. An appeal against levy of
assessment of tax is provided for under Section 169. Section 170 qualifies
B this right of appeal. The relevant provisions of Sections 169 and 170
themselves may be noticed:-
'169. Appeal against assessment, etc.
(1) An appeal against the levy of assessment of any tax
c ,under this Act shall lie to the court of the district judge of
Delhi.
(2) ····························
(3) ........................... .
D
(4) .......................... ..
(5) ........................... .
(6) ........................... .
E
'170 Conditions of right to appeal.
No appeal shall be heard or determined under Section
169 unless -
F (a) the appeal is, in the case of a property tax, brought
whithin thirty days next after the date of authentication of
the assessment list under section 124 (exclusive of the time
requisite for obtaining a copy of the relevant entries there-
in) or, as the case may be, within thirty days of the date on
which an amendment is fmally made under section 126,
G and, in the case of any other tax, within thirty days next
after the date of the receipt of the notice of assessment or
of alteration of assessment or, if no notice has been given,
within thirty days after the date of the presentation of the
first bill or, as the case may be the first notice of demand
H in respect thereof:
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL, J.] 369
Provided that an appeal may be admitted after the A
expiration of the period prescribed therefor by this section
if the appellant satisfies the court that he had sufficient
cause for not preferring the appeal within that period:
(b) the amount, if any, in dispute in the appeal has been
deposited by the appellant in the office of the Corporation.' B
The provisions of the Section 457 may also be noticed at this stage:
Proceedings before the court of the district judge.
"457 General powers and procedure of the court of the c
district judge.
The ·procedure provided in the Code of Civil Proce-
dure, 1908, in regard to suits shall be follow~d, as as far
as it can be made applicable, in the disposal of applica-
D
tions, appeals or references that may be made to the court
of the district judge of Delhi under this Act or any bye-law
made thereunder. 11
As noticed by us earlier, the majority of Judges took the view that
the conditions to the hearing or determination of the appeal under Sections E
169 are tow-fold as prescribed by clauses (a) and (b) of Section 170. The
third learned Judge (a) and (b) of Section 170. The third learned Judge
also agreed with this view but took the view that clause (b), namely the
second condition to the hearing and determination of the appeal, is ultra
vires article 14 of the Constitution of India.
F
The same argument has been advanced before us by Mr. Yogesh K.
Jain on behalf of the appellant. He further submitted that curbing of the
right of unlimited appeal given by Section 169 (1) of the Act is arbitrary
and unreasonable and is hit by article 14 of the Constitution.
G
Before dealing with this contention, it may be useM to refer to
certain judicial decisions relevant to this issue.
In Ganga Bai v. Vijay Kumar and other, [1974] 3 SCR 882
Chandrachud, J. (as His Lordship then was) held that "there is a basic
distinction between the right of suit and the right of appeal. There is an H
370 SUPREME COURT REPORTS(l992] SUPP. 1 S.C.R.
A inherent right in every person to bring a suit of a civil nature, but the right
of appeal inheres in no one and therefore an appeal for its maintainability
must have the clear authority of law."
In Anant Mills Co. Ltd. v. State of Gujarate and others, (1975] 3 SCR
220 which is an appeal from the decision of the Gujarat High Court in
B
The Anant Mills Co. Ltd. & Others v. State of Gujarat and others, XIV:
1973 GLR 826 the Supreme Court had occasion to consider vires of
Section 406 (2)(e) of the Bombay Provincial Muncipal Corporations Act
(Bombay Act 59 of 1949) as amended by Gujarat Acts No. 8 of 1968 and
No.5 of 1970 to the entertainment of the appeal by a person who had not
C deposited the amount of tax due from him and who had not been able to
show to the appellate judge that the deposit of the amount would cause
him undue hardship arising out of his own omission and deafult. A
disability or disadvantage arising out of a party's own default or omission
cannot be taken to be tantamount to the· creation of two classes offensive
D to Article 14 of the Constituiion, especially when that disability or
disadvantage operates upon all persons who make the default or omission.
The High Court had taken the view that there was a discrimination
between an appellant who deposited the tax and an appellant who did
not, which is the necessary consequence of the condition requiring deposit
E of the amount of tax, which was unreasonable and hit by article 14 of the
Constitution. Setting aside the view of the Gujarat High Court Khanna, J.
speaking for the Supreme Court at pages 246 to 248 observed as under:-
"After hearing the learned counsel for the parties, we are
F unable to subscribe to the view taken by the High Court.
Section 406 (2)(e) as amended states that no appeal against
a rateable value or tax fixed or charged under the Act shall
be entertained by the Judge in the case of an appeal against
a tax or in the case of an appeal made against a rateable
value after a bill for any property tax assessed upon such
G value has been presented to the appellant unless the
amount claimed from the appellant has been deposited by
him with the Commissioner. According to the proviso to
the above clause, where in any particular case the Judge is
of <lpinion that the deposit of the amount by the appellant
H will cause undue hardship to him, the Judge may in his
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL, J.) 371
discretion dispense with such deposit or part thereof, either A
unconditionally or subject to such conditions as he may
deem fit. The object of the above provision apparently is
to ensure the deposit of the amount claimed from an
appellant in case he seeks .to file an appeal against a tax or
against a rateable value after a bill for any property tax
assessed upon such value has been presented to him. Power
B
at the same time is giveri to the appellate judge to relieve
the appellant from the rigour of the above provision in case
the judge is of the opinion that it would cause undue
hardship to the appellant. The requirement about the
deposit of the amount claimed as a condition precedent to c
the entertainment of an appeal which seeks to challenge
the imposition or the quantum of that tax, in our opinion,
has not the effect of nullifying the right of appeal, especially
when we keep in view the fact that discretion is vested in
the appellate judge to dispense with the compliance of the
above requirement. All that the statutory provision seeks
D
to do is to regulate the exercise of the right of appeal. The
object of the above provision is to keep in balance the right
of appea~ which is conferred upon a person who is ag-
grieved with the demand of tax made from him, and the
right of the Coporation to speedy recovery of the tax. The E
impugned provision accordingly confers a right of appeal
and at the same time prevents the deiay in the payment of
the tax. We find ourselves unable to accede to the argument
that the impugned provision has the effect of creating a
discrimination as is offensive to the principle of equality
enshrined in article 14 of the Constitution. It is significant
F
that the right of appeal is conferred upon all persons who
are aggrieved against the determination of tax or rateable
value. The bar created by section 406(2)(e) to the enter-
tainment of the appeal by a person who has not deposited
the amount of tax due from him and who is not able to show G
to the appellate judge that the deposit of the amount would
cause him undue hardship arises out of his own omission
and default. The above provision, in our opinion, has not
the effect of making invidious distinction or creating two
classes with the object of meting out differential treatment
H
372 SUPREME COURT REPORTS[l992] SUPP. 1 S.C.R.
A to them; it only spells out the consequences flowing from
the omission and default of a person who despite the fact
that the deposit of the amount found due from him would
cause him no hardship, declines of his own volition to
deposit that amount. The right of appeal is the creature of
a statute. Without a statutory provision creating such a right
B the person aggrieved is not entitled to file an appeal. We
fail to understand as to why the legislature while granting
the right of appeal cannot impose conditions for the exer-
cise of such right. In the absence of any special reasons
there appears to be no legal or constitutional impediment
c to the imposition of such conditions. It is permissible, for
example, to prescribe a condition in criminal cases that
unless a convicted person is released on bail, he must
surrender to custody before his appeal against the sentence
of imprisonment would be entertained. Likewise, it is per-
missible to enact a law that no appeal shall lie against an
D order relating to an assessment of tax unless the tax had
been paid. Such a provision was on the statute book in
section 30 of the Indian Income-tax Act, 1922. The proviso
to that section provided that" ..... no appeal shall lie against
an order under sub-section (1) of section 46 unless the tax
E had been paid". Such conditions merely regulate the exer-
cise of the right of appeal so that the same is not abused
by a recalcitrant party and there is no difficulty in the
enforcement of the order appealed against in case the
appeal is ultimately dismissed. It is open to the legislature
. to impose an accompanying liability upon a party upon
F whom a legal right is conferred or to prescribe conditions
for the exercise of the right. Any requirement for the
discharge of that liability or the fulfilment of that condition
in case the party concerned seeks to avail of the said right
is a valid piece of legislation, and we can discern no
'G contravention of article 14 in it. A disubility or disadvantage
arising out of a party's own default or omission cannot be
taken to be tantamount to the creation of two classes
offensive to article 14 of the Constitution, especially when
that disability or disadvantage operates upon all persons
who make the default or omission.'
H
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL, J.] 373
Similarly in Vijay Prakash D. Mehta/Sh. Jawahar 0. Mehta v. Collector A
of Customs (Preventive) Bombay, J.T. (1988) 3 S.C. 435 the Supreme Court
had occasion to deal with the right of appeal created under Sections 129A
and 129B of the Customs Act, 1962. The appeal provided was against the
duty demanded or penalty levied under the Cllstoms Act. The provision
for appeal contemplated a condition for deposit. of the duty or the penalty B
pending the appeal. Sarne plea was taken that the provision for deposit of
duty or penalty pending appeal whittled down the appellant's right of
appeal and is ultra vires. The Supreme Court speaking through Sabyasachi
Mukharj~ J. held as up.der:-
"(ii) Right to apppal is neither an absolute nor an ingredient C
of natural justice the principles of which must be followed
in all judicial and quasi-judicial adjudications. The right to
appeal is a statutory right and it can be circumscribed by
the conditions in the grant."
D
Reference !'lay also be made to the decision of this Court in Collector
of Customs & Excise, Cochin & others v. A.S. Bava, (1968) 1 S.C.R. 82. In
this case section 35 pf 1he Central Excise & Salt Act, 1944 conferred a right
of appeal which was sought to be whittled down by applying the provisions
of Section 129 of the Sea Customs Act, 1878, containing a requirement of
pre-deposit but with Jl power in the appellate authority to dispense with it
0 E
in appropriate cases. Tius Court held that the attempt of the Central Excise
Act went beyond the powers conferred on the Central Government in this
behalf.
Similar view was taken by Bharucha, J. (as His Lordship then was) F
in Mis. Ellora Construction Company v. The Municipal C01poration of
Greater Bombay and others, AIR 1980 Bombay 162 while dealing with the
validity of Section 217 (as amended) of the Bombay Municipal Corporation
Act (3 of 1988) wherein the right to appeal was similarly restricted, that
too retrospectively. The restriction so imposed was challenged on the
ground that it violated article 19(1) (f) of the Constitution which argument G
was repelled by the learned Judge. The same view was taken by the
Calcutta High Court in Chatter Singh Baid and others v. ColpOration of
Calcutta and others, AIR 1984 Calcutta 283 where the Calcutta High Court
was concerned with the validity of Section 183 (3-A) of the Calcutta
Municipal Act (33 of 1951) and Chittatosh Mookerjee, J. observed as H
374 SUPREME COURT REPORTS[l992] SUPP. 1 S.C.R.
A under:
"Merely because Section 183 (3-A) impairs the right of
appeal by imposing the right of appeal by imposing an
onerous condition of deposit of consolidated rate payable
up to the date of presentation of appeal on the valuation
B determined. it cannot be said that Section 183 (3-A) is
unfair, fanciful, oppressive and arbitrary. The said
provision is also not repugnant to or inconsistent with other
provisions for payment and recovery of consolidated rates
contained in the Calcutta Municipal Act. The sub-section
c (3-A) of Section 183 does not make right of appeal under
Section 183(1) of the Act nugatory or illusory."
The contention before us on behalf of the assessee, however, is that
the answer to the issue of constitutional validity of Section 170 (b) will
D considerably depend upon the interpretation that is placed on the scope
of the powers of the appellate authority. It is argued that if Section 170(b)
is interpreted as mandating that an appeal cannot be entertained but will
have to be dismissed in limine if the tax in dispute is not paid along with
the memorandum of appeal, that would place a very onerous condition on
the right of appeal particularly in cases where there is a substantial amount
E involved in the appeal and the points raised in the appeal are really
contentious and debatable. It should not also be forgotten that, once the
assessment list is amended after hearing the assessee, it may stand adopted
for several subsequent years and· demands for all these years will have to
be met until the assessment for the first year is altered in appeal. It is
p argued that the right of appeal itself becomes illusory, if subjected to such
a rigid and absolute condition. The provision will, therefore, be invalid, it
is said, as imposing an unreasonable restriction on the fundamental rights
of the appellant assessee.
As against this, it is contended for the Corporation that the validity
G of similar provisions have been upheld in the cases discussed earlier. It is
submitted that even though an appeal, in such cases, may have to be thrown
out, the assessee is not without redress. He will always have the alternative
remedy of taking recourse to proceedings under Article 226 of the Con-
stitution of India before the High Court and in .appropriate cases, where a
H case of hanish1p is made out, the High Court has the undisputed powers
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL, J.] 375
to grant relid. It is true that the High Court would not ordinarily entertain A
the petition under Article 226 of the Constitution when the alternative
remedy of appeal is available to the party but it must be said that the High
Court has the jurisdiction to grant such. a relief it thinks proper to do so
in the circumstances of any case. Reference in this behalf is invited to the
decision of this Court in Municipal Council, Khurai and another v. Kamal B
Kumar and another, (1%5) 2 S.C.R. 653 the relevant portion of which reads
~under:-
"Before us it is contended by Mr. Setalvad on behalf of the
Council that an appeal had already been preferred by the
respondents against the assessment list and, therefore, they c
were not entitled to any relief under Article 226 of the
Constitution. It is true that the High Court would not
ordinarily entertain a petition under Article 226 of the
Constitution where an alternative remedy is open to the
aggrieved party. Though that is so the High Court has
jurisdiction to grant relief to such a party if it thinks proper
D
to do so in the circumstances of the case. In the present
case the High Court has chosen to exercise discretion in
favour of the respondents and it would not be right for us
to interfere with the exercise of that discretion unless we
are satisfied that the action of the High Cowt was arbitrary E
or unreasonable. Nothing has been brought to our notice
from _whi~h it could be inferred that the High Court acted
arbitrarily in granting the writ prayed for to the respon-
dents."
F
The learned counsel for the Corporation has also brought to our notice the
guidelines issued by the Assessment and Collection Department of the
Municipal Corporation of Delhi contained in a book-let entitled "Property
Taxes and Education Ceses, 1985'', para 18(8) whereof reads as follows:-
"18. (B) Revisions : G
On an application made by the tax payer and on
payment of admitted taxes, the assessment can be
reviewed or re-opened by the Assessor and Collector/
High Power Committee in the following cases: H
376 SUPREME COURT REPORTS(1992] SUPP. 1 S.C.R.
A (i) If an objection had been filed in time, but the same
was not considered by the department:
I-
(ii) If no notice or revision came to the notice of the
tax-payer and the assessment was completed unob-
jected:
B
(iii) If the notice was received by the tax-payer but he
could not file objection on account of reasons beyond
his control."
c It is said that the above decision and guidelines provide adequate
safeguards to prevent any real hardship or harassment to the assessee and
that Section 170(b) is not ultra vires for the reasons adduced on behalf of
the assessee.
D The decisions of the Bombay and Calcutta High Courts earlier
referred to (Ellora & Chatter Singh) have upheld the validity of a rigid
provision banuing the entertainment of an appeal altogheter where the
taxes are not paid. However, the Supreme Court decisions in Anant Mills,
Vijay Prakash Mehta and Batra had occasion to consider only the vires of
E a milder provision which permitted the appellate authority to waive or
relax the condition of deposit. As explained in Nandla/ v. State of
Haryana, (1980] 3 S.C.R. 1181 at 1207 these decisions settle the principle
"that the right of appeal is a creature of statute and there is no reason
why the legislature while granting the right cannot impose conditions for
F the exercise of such right so long as the conditions are not sc onerous as
to amount to unreasonable restrictions rendering the right almost illusory"
(emphasis added). The Court in those cases had no occasion to consider
what the position would be if the conditions placed on the right of appeal
were unduly onerous or such as to render the right of appeal totally
illusory.
G
The question whether the imposition of a condition which makes a
right of appeal is illusory can be valid may need careful consideration in
an appropriate case. In Wire Netting Stores v. Regional Provident Fund
Commissioner, 1987 Lab. I.C 1015 a decision of the Delhi High Court (to
H which one of us was a party), the lack of a provision conferring an
SHYAM KISHORE v. M.C.D. (YOGESHWAR DAYAL, J.] 377
effective right of appeal against determination of damages under the A
Employees' Provident Fund Act was held violative of the provisions of the
Constitution. That decision is the subject matter of an appeal which is still
pending in this Court. It is fortunately not necessary, for the purposes of
the present case, to enter into that area in view of the construction which
we propose to place on Section 170 (b). We shall now turn to that B
question.
We have set out the terms of Section 170(b) earlier. This has been
interpreted by the Corporation to mean that an appeal preferred by an
assessee has to be dismissed in limine unless the tax in dispute has been C
paid and that there is no scope for the appellate authority exercising any
powers of stay pending disposal of the appeal. Priinafacie, the contention
of the Corporation that to read a power in the. District Judge to grant
stay of collection of the disputed tax pending disposal_ of the appeal will
run counter to Section 170(b) appears to be well founded. Though the D
normal rule is that the incidental and ancillary powers of an. appellate
authority will include a power to grant stay of the order under appeal -
vide, Income Tax Officer, Cannanore v. M.K. Mohammed Kunhi, AIR
1969 S.C. 430 that power cannot be read into Section 170(b) for such an
interpretation would render Section 170(b) totally unworkable. An argu- E
ment was addressed before us that such a power can be ascribed to the
District Judge in view of the provisions of Section 457 of the Act
reproduced earlier. Reliance was placed on the Single Bench's decision
of the Delhi High Court in Punj Sons (P) Ltd. v. Municipal Corporation
of Delhi, 1982 R.L.R. 247 where a learned Single Judge of the Delhi High
Court took ii.e view that the District Judge, in view of Section 457 of the F
Act, has powers to take recourse to Order 41 Rule 5 of the: Code of Civil
Procedure in the appeal under Section 169 of the Act. With all due
respect we do not agree with the reasoning of the learned Single Judge
in the said case. In fact in the judgment under appeal all the three Judges
have also dissented from this view of the learned Single Judge in the G
matter of Punj Sons. 1'he reason is simple as Section 457 itself states that
the procedure provided in the Code of Civil Procedure in regard to suits
are to be followed "as far as it can be made applicable". The other
provisions of the statute totally bars the gran: of such relief. The other
provisions have to be harmoniously read with it and not in derogation H
378 SUPREME COURT REPORTS(1992] SUPP. 1 S.C.R.
A thereto. Section 457 itself, therefore, does not help the assessee whose
case depends entirely on the construction to be placed on Section 170(b).
But still one has to examine Section 170(b) carefully to see whether, short
of dismissing an appeal for default of payment of tax, the District Judge
has any latitute in the matter.
B
On behalf of the Corporation, it is contended that. the words "heard
and determined" used in Section 170(b) are comprehensive enough to
cover not merely the final hearing of an appeal on merits but also its
preliminary hearings to find out whether the appeal is in time [Section
170(a)], whether the disputed tax has been paid along with the appeal
c [Section 170(b)], whether the appeal is otherwise defective or to dismiss
the appeal straightaway if it is found defective in any of those respects. It
is, however, contended by the learned counsel for the appellant that the
opening part of Section 170 that 'no appeal shall be heard or determined
under Section l69 unless' bars merely the final determination or hearing
D of the appeal and not any other stage of the hearing of appeal including
the preliminary/admission stage of the appeal. It will be noticed that so far
as ~ection 169(1) is concerned, it provides only for the forum i.e. the co1!ft
where the appeal to be filed and the procedure is provided in Section 457
of the Act, namely the procedure of suit as far as it can be made applicable.
Once there is a provision like Section 170(b) of the Act, a question arises,
E
could any interim reliefs be granted at the admission stage or at any point
of time before the final determination of or decision on the appeal.
In Mis Lakshmiratan Engineering Wori<s Ltd. v. Assistant Commis-
F sioner (Judicial) I, Sales T.u; Kanpur Range, Kanpur and another, A.LR.
1960 S.C. 488 the Supreme Court had occasion to construe the meaning of
the word 'entertained' in proviso to Section 9 of the U.P. Sales Tax Act
1948 and the Court took the view that the word 'entertain' means 'admit
to consideration'. The Supreme Court while interpreting the word
'entertained' contained in Section 9 of the U .P. Sales Tax Act, 1948 and
G the proviso thereto made a distinction between the expressions 'appeal' and
'memorandum of appeal'. Section 9 contemplated that the appeal could
not be entertained without the proof being given along with memorandum
of appeal that the tax had been paid. While dealing with the meaning of
the word 'entertained' Hidayatullah, J. in paragraphs 7 and 10 of the
H judgmert at pages 491 and 493 observed as under:
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL, J.] 379
"(7} To begin with it must be noticed that the proviso merely A
requires that the appeal shall not be entertained unless it
is accompanied by satisfactory proof of the payment of the
amount of tax admitted by the appellant to be due. A
question thus arises what is the meaning of the word
'entertained' in this context? Does it mean that no appeal
shall be received or filed or does it mean that no appeal
B
shall be admitted or heard and disposed of unless satis-
fatory proof is available? The dictionary meaning of the
word 'entertain' Was brought to our notice by the parties,
and both sides agreed that it means either 'to deal with or
admit to consideration'. We are also of the same opinion. c
The question, therefore, is at what stage can the appeal be
said to be entertained for the purpose of the application
of the proviso? Is it 'entertained' when it is filed or is it
'entertained' when it is admitted and the date is fixed for
hearing or is it finally 'entertained' when it is heard and
D
disposed of? Numerous cases exist in the law reports in
which the word 'entertained' or similar cognate expressions
have been interpreted by the courts. Some of them from
the Allahabad High Court itself have been brought to our
notice and we shall deal with them in due course. For the
present, we must say that if the legislature intended that E
the word 'file or receive' was to be used, there was no
difficulty in using those words. In some of the statutes which
were brought to our notice such expressions have in fact
been used....... 11
F
"(10} ............. When the proviso speaks of the entertainment
of the appeal, it means that the appeal such as was filed
will not be admitted to consideration unless there is satis-
factory proof available of the making of the deposit of
admitted tax."
G
This was the meaning which the Supreme Court has given to the
word 'entertained' in the aforesaid decision. This was also the word used
in the Ellora Constrnction Co. case and Chatter Singh Baid case referred to
earlier. However, the expression used in the opening part of Section 170
of the statute before us is that 'no appeal shall be heard or determined H
380 SUPREME COURT REPORTS[1992] SUPP. 1 S.C.R.
A under Section 169 unless. The question is : what the interpretation to be
placed on these words?
It seems to us the words of Section 170(b) are capable of a broader
interpretation. A perusal of Section 170 shows that the section uses three
B different expressions 'heard or determined", "brought' and "admitted' in
relation to an appeal and some significance is to be attached to the use of
the expression 'heard and determined". Io like situations, other statutes
such as the one eonsidcred by this Court in Lakshmi Rattan Engi.neering
Worla' Ltd. v. Asslstlllll Comrrnssianer of Sales Tax and those contained in
certain other enactments like the Bombay and Calcuta Municipal Acts
C specifically prohibit the very entertainment of the appeal if the tax is not
paid. When the DMC Act has carefully avoided the use of that word, we
must give full effect to the ·differential wording. Also, the absence of a
language in clause (b) of the proviso similar to that in clause (a) • which
indicates that an appeal filed beyond the period of limitation will not stand
D admitted unless the delay is c:Ondoned • also warrants an inference that the
payment of disputed tax is not a eonditioo precedent to the entertainment
or admission of the appeal. In the present statutory context, it sounds
plausible to say that such an appeal can be admitted or entertained but
only cannot be heard or disposed of without pre-deposit of the disputed
tax. Such an interpretation will provide some much- needed relief from the
E harshness of the provision. These are not days in which the calculation of
the property tax is simple and uncomplicated; the determination of the
annual value of the property, except when based on the actual rent received
from the property, involves various subjective factors and, not unoften,
there is a wide guH between the tax admitted to be due and the tax
F demanded. Sometimes, to compel the assessee to pay up the demanded tax
for several years in succession might very well cripple him altogether. This
apart, an assessee may not be able to deposit the tax while filing the appeal
but may be able to pay it up within a short time, or at any rate, before the
appeal comes on for hearing in the normal course. There is no reason to
construe the provision so rigidly as to disable him from doing this. Again,
G when an appeal comes on for hearing, the appellate judge, in appropriate
cases, where he feels there is some great hardship or injustice involved,
may be inclined to adjourn the appeal for some time to enable the assessee
to pay up the tax. Though it will not be expedient or proper to encourage
adjournment of an appeal, where it is ripe for hearing otherwise, only on
H !his ground and as a matter of course, an interpretation which leaves some
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL, J.] 381
room for the exercise of a judicial discretion .in this regard, where the A
equities of the case deserve it, may not be inappropriate. The appellate
judge's incidental and ancillary powers should not be curtailed except to
the extent specifically precluded by the statute. We see nothing wrong in
interpreting the provision as permitting the appellate authority to adjourn
the hearing of the appeal thus giving time to the. assessee to pay the tax or B
even specifically granting time or instalments to enable the assessee to
deposit the disputed tax where the case merits it, so long as it does not
unduly interfere with the appellate court's calendar of hearings. His
powers, however, should stop short of staying the recovery of the tax till
the disposal of the appeal. We say this because it is one thing for the judge
to adjourn the hearing leaving it to the assessee to pay up the tax before C
the adjourned date or permitting the assessee to pay up the tax, if he can,
in accordance with his directions before the appeal is heard. In doing so,
he does not and cannot injunct the department from recovering the tax, if
they wish to do so. He is only giving a chance to the assessee to pay up the
tax if he wants the appeal to be heard. It '5, however, a totally different D
thing for the judge to stay the recovery till the disposal of the appeal; that
would result in modifying the language of tlie proviso to read: 'no appeal
shall be disposed of until the tax is paid". Short of this, however, there is
no reason to restrict the powers unduly; all he has to do is to ensure that
the entire tax in dispute is paid up by the time the appeal is actually heard
on its merits. We Woluld, therefore, read clause (b) of Section 170 only as E
a bar to the hearing of the appeal and its disposal on merits and not as a
bar to the entertainment of the appeal itself.
'· If the provision is interpreted in the manner above suggested, one
can steer clear of all probems of constitutional validity. The contention on F
behalf of the Corporation to read lhe provision rigidly and seek to soften
the rigour by reference to the availability of a recourse to the High Courts
by way of a petition under Articles 226 and 227 in certain situations and
the departmental instructions referred to earlier does not appear to be a
satisfactory solution. The departmental instructions may not always be
followed and the resort to Articles 226 and 227 should be discouraged G
when there is an alternative remedy. A more satisfactory solution is avail-
able on the terms of the statute itself. The construction of the section
approved by us above vests in the appellate authority a power .to deal with
the appeal otherwise than by way of final disposal even if the disputed tax
is not paid. It enables the authority to exercise a judicial discretion to allow H
382 SUPREME COURT REPORTS(1992] SUPP. 1 S.C.R.
A the payment of the disputed tax even after the appeal is flied but, no doubt,
before the appeal is taken up for actual hearing. The interpretation will
greatly ameliorate the genuine grievances of, and hardships faced by, the
assessee in the payment of the tax as determined. Though an assessee may
not be able to acquire an absolute stay of the recovery of the tax until the
dispute is resolved, he will certainly be able to get breathing time to pay
B up the same where his case deserves it. If this interpretation is placed on
the provision, no question of unconstitutionality can at all arise.
We only wish that the statute itself is soon amended to make this
position clear. After all, under the DMC Act, the appellate authority is a
C high judicial officer, being the District Judge, and there is no reason why
the Legislature should not trust such a high judicial officer to exercise his
discretion in such a way as to safeguard the interests of both the revenue
and the assessees. We think that, until this is done, the provision requires
a liberal interpretation so as to preserve such interests and should not be
so rigidly construed as to warrant the throwing out of an appeal in limine
D merely because the tax is not paid before the appeal is filed.
We, therefore, agree with the majority of the Division Bench of the
High Court that Section 170(b) of the DMC Act is intra vires. The District
Judge has no jurisdiction to waive the condition of deposit or stay the
E collection of the tax pending disposal of the appeal before him. We,
however, hold that he has the power to adjourn the hearing of the appeal
or pass interim orders enabling the assessee to pay up the taxes before the
appeal is actually heard and determined. But this is a power which he shall
have to exercise judicially on the basis of the requirements of each case,
the interests of revenue and the position of the cases on the hearing List
F before him.
The appeal is disposed of accordingly. There will be no order as to
costs. I•
'
N.P.V. Appeal disposed of.
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