- (1.) This appeal by special leave is from the common Judgment of the High Court of Andhra Pradesh dismissing two writ appeals and a writ petition. The Andhra Pradesh (Andhra Area) District Municipalities Act, 1920 (hereinafter referred to as the 'old Act) was applicable to Vijayaw%da Municipality of Andhra Pradesh and property tax was levied under that Act. The Andhra Pradesh Municipalities Act, 1965 (hereinafter referred to as the new Act) came into force on 2-4-1965. Section 2(11) of the new Act defined "council" to jnean "a municipal council constituted under this Act." Section 391(1) of the new Act repealed the old Act. Section 389 of the new Act provided:- "389. Act to be read subject tq Schedule IX in Regard to first reconstitution of councils etc.:- In regard to the first constitution of a council for any local area under S. 3, or to the first reconstitution in accordance with the provisions of this Act, of a council in existence at the commencement thereof, and otherwise in first giving effect to the provisions of this Act, this Act shall be read subject to the rules in schedule IX." The Schedule IX to the new Act contained the transitional provisions in the rules therein. R. 12 thereof dealt with levy of taxes etc. and said . " 12. Levy of taxes etc. any tax, cess or fee which was being lawfully levied by or on behalf of any council at the commencement of this Act and which may be lawfully levied under this Act, shall notwithstanding any change in the method or manner of assessment or levy of such tax, cess or fee be levied by or on behalf of the council at such rate as may be prevailing at such commencement or at such other rate as may be determined by the council from time to time, by a resolution for the year in which this Act is brought into force, and unless the Government by general or special order otherwise direct, for subsequent years also."
(2.) The result was that tax lawfully levied and continued to be levied under the old Act had to be continued unless the council by resolution determined such other rate from time to time, and unless the Government by general or special order otherwise directed under the transitional provisions. On 18-9-1969 the Government of Andhra Pradesh issued G.O. Ms. No. 749 M.A. in exercise of its powers under the' aforesaid R. 12 of Schedule IX directing that all Municipal Councils, shall with effect from 1-4-1970 levy the property tax as per the provisions of the new Act. But due to certain administrative difficulties the revision could not be completed before 1-4-1970 and the Government, therefore, issued G.O. Ms. No. 293 M.A. dated 18-4-1970 directing the Municipal Councils to levy the property tax as per ine provisions of the new Act from 1- 10- 1970. By another G.O. Ms. No. 81 M.A. dated 30-1-1971 the Government directed the Municipal Council of Vijayawada to continue to levy the property tax under the provisions of the old Act as certain rate payers had filed writ petition in the High Court and obtained stay. However, by G.O. Ms. No. 675 M.A. the G.O. Ms. No. 81 was rescinded and the Vijayawada Municipal Council was directed to collect revised taxes under the provisions of the new Act with effect from 1-10-1970. This latter G.O. Ms. No. 675 was in its turn rescinded by G.O. Ms. No. 255 M.A. dated 15-6-73 whereby the Government ordered that the Vijayawada Municipal Council shall continue to levy the property tax under the provisions of the old Act and that G.O. was to be deemed to have come into force from 1-10-1970. As a result the Vijayawada Municipality continued to levy and enhance the property tax under the provisions of the old Act. It may be mentioned that under S. 82 of the old Act property, tax was levied on the basis of gross annual rental value, whereas under S. 87 of the new Act the basis of assessment in owner occupied building was the capital value thereof to be determined in the prescribed manner.
(3.) The G.O. Ms. No. 255 dated 15-6-1973 was challenged by house property owners in the High Court in two writ petitions under Art. 226 of the Constitution of India seeking writ in the nature of mandamus or order or direction restraining the Vijayawada Municipal Council from enforcing it and declaring the same illegal and void. It was inter alia contended before the learned Single Judge that by earlier G.0s. the Government having directed that taxes should be levied under the new Act, the transitional power under Rule 12 had been already exercised and the power to levy any tax under the old Act therefore ceased and it was not open to the Government to rescind the previous orders and re-direct taxes to be levied under the old Act. That contention was accepted observing: "The language of the Rule is clear that once the Government by a general or special order, otherwise directs, the power to levy tax under the old Act is exhausted." Even so, it was held that in view of the provisions in S. 4(1) of the Andhra Pradesh Municipalities (Fourth Amendment) Act (23 of 1975) which validated the actions taken, those could not be challenged as invalid. The submissions that the Amendment Act was not retrospective and that the enhancement of the tax was not made following the procedure prescribed by law, were also negatived holding that the procedure prescribed under the old Act was followed inasmuch as under the old Act the property tax was levied on the basis of only rental value whereas under the new Act it was on the basis either of the rental value or of the capital value, and that under the old Act when tax was being levied on the basis of rental value there was no need to ascertain the capital value of the land and for enhancing the assessment all that the authority had to know was whether there had been an increase in the rent and Rule 6 of Schedule 11 which dealt with the value of the building for the purposes of property tax was inapplicable as the levy under the old Act on the basis of rental value and enhancement could be done according to the procedure contained in Schedule VII Rule 10 of the old Act. It was not denied that special notice as required under the old Act was given. The writ petitions were accordingly dismissed.;