Supreme Court Dismisses Municipal Council's Appeal Against Quashing of Tax Assessment List for Non-Compliance with Madhya Pradesh Municipalities Act, 1961. Assessment List Confirmed Under Section 141 Was Invalid as Initial Assessment Not Prepared According to Law, Violating Article 265 and Section 137 Procedure.

Writ petition before Madhya Pradesh High Court challenging the validity of a municipal tax assessment list confirmed by Municipal Council, Khurai under the Madhya Pradesh Municipalities Act, 1961; appealed to Supreme Court by special leave after High Court quashed the list.

Respondent assessees sought quashing of the assessment list confirmed on February 24, 1964 and authenticated on March 4, 1964, as not made in accordance with the Act; appellant Municipal Council sought reversal of High Court's decision and upholding of the assessment list.

The appellant Municipal Council argued the assessment list was valid and that the High Court should not have entertained writ due to alternative remedy; the respondents contended the list was prepared without proper notice, improper delegation, and in violation of statutory procedure.

The Madhya Pradesh High Court in Misc. Petition No. 113 of 1964 allowed the writ petition and quashed the assessment list on the ground that the Council had given notice only to 300 assessees instead of all objectors and that Section 141 could not be used after the Collector suspended the earlier list; the Collector had earlier suspended the revised list dated August 30, 1963 under Section 323, and the Government confirmed the suspension.

Whether the assessment list confirmed by the Municipal Council on February 24, 1964 was effective and prepared in accordance with the Madhya Pradesh Municipalities Act, 1961. Whether the Municipal Council was competent to delegate to a sub-committee the power to hear objections under Section 138(2) of the Act. Whether the procedure for inviting objections complied with Sections 137 and 138, given the change from slab system to old rate. Whether Section 141 of the Act could be invoked to amend the assessment list when the earlier list was not prepared according to law. Whether the High Court should have entertained the writ petition under Article 226 despite the availability of an alternative statutory remedy.

Appellant argued that as the assessment list had been authenticated under Section 140, it became final and Section 141 permitted amendment of the assessment list. Appellant argued that the High Court should not entertain the writ petition because the respondents had already preferred an appeal against the assessment list. Respondent contended that Section 141(1) could be used only for correcting arithmetical or similar errors, not for revising taxes, and only with respect to a current list that had become final under Section 142. Respondent argued that the appropriate provision was Section 146, not Section 141. Respondent contended that since the Collector had suspended the assessment list under Section 323, the Council had no power to amend it under Section 141. Respondent argued that the power of hearing objections or revising the list could not be delegated to the Sub-Committee and therefore the revised list was bad in law.

Strict compliance with tax imposition procedure is required under Article 265 of the Constitution; an assessment list prepared without giving assessees a proper opportunity to object to their actual tax liability is not prepared according to law; the power to hear objections under Section 138(2) cannot be delegated to a sub-committee; Section 141 of the Madhya Pradesh Municipalities Act, 1961 cannot be used to amend an assessment list that was not validly prepared; the High Court has discretion under Article 226 to grant relief despite an alternative remedy.

The assessment list authenticated by the Chief Municipal Officer was not prepared according to law and therefore, the provisions of s.141 were not available to the appellant. Article 265 of the Constitution, implies that the procedure for imposing the liability to pay a tax has to be strictly complied with. Assuming that under s. 78, the appellant council could delegate the power to hear objections against a proposed list under s. 138(2) to its vice-president or certain other officers, this power could not be delegated to a sub-committee. Though an alternate remedy is open to an aggrieved party the High Court has jurisdiction under Art. 226 to give relief to such a party in appropriate cases.

On December 28, 1962, Municipal Council appointed a Sub-Committee for hearing objections under Section 138(2). On December 30, 1962, Chief Municipal Officer directed to prepare assessment lists for all 11 wards. On March 3, 1963, Council resolved to introduce slab system, modified by Smt. Poonabai. On March 6, 1963, assessment list prepared and authenticated, published under Section 136, objections invited; about 2,200 objections filed and considered by Sub-Committee between April 7-14, 1963. Some assessees filed suit; Council in written statement indicated reconsideration. On April 28, 1963, Council revoked March 3 resolution and reverted to old rate. Complaints of partiality; President found substance. On August 21, 1963, Sub-Committee decided revised list; Chief Municipal Officer authenticated under Section 140 and published August 30, 1963; demand notices issued. On October 9, 1963, Collector suspended the revised list under Section 323. Government confirmed suspension on December 2, 1963. On December 29, 1963, Council resolved to revise under Section 141. Notices issued to 300 persons on January 7, 1964; objections heard February 16-20, 1964. On February 24, 1964, Council confirmed revised assessment effective April 1, 1963; authenticated March 4, 1964. Respondents filed writ petition in High Court; High Court allowed on September 10, 1964, quashing list. Appeal by special leave to Supreme Court.

• Madhya Pradesh Municipalities Act, 1961: 78, 137, 141, 138, 140, 142, 146, 323, 327, 71, 134, 135, 136
• Constitution of India: Article 265, Article 226