CHANDRACHUD - (1.) THESE appeals by special leave involve the question of the legality of the demand for property-tax made by respondent 1 on the appellant Companies. Civil Appeal No. 213 of 1979 filed by the Bharat Aluminium Company Ltd. arises out of Misc. Petition No. 555 of 1977 filed by it in the High Court of Madhya Pradesh under Art. 226 of the Constitution. Respondent 1 is the Special Area Development Authority, Korba, District Bilaspur, M. P. respondent 2 is its Chairman and respondent 3 is the State of Madhya Pradesh. Since the three appeals raise similar questions, we will refer to the facts of Civil Appeal No. 213 of 1979 only. Civil Appeals Nos. 1025 and 1026 of 1978 are by Western Coalfields Ltd.
(2.) THE appellant. Bharat Aluminium Company Ltd., is a Government, company incorporated under the Companies Act, 1956, the entire share capital being owned by the Government of India. Respondent 1, the Special Area Development Authority for the Korba Special Area, is constituted under S. 65 of the M. P. Nagar Tatha Gram Nivesh Adhiniyam. (23 of 1973), referred to hereinafter as 'the Act of 1973'. That Act was passed by the M. P. Legislature in order "to make provision for Planning and development and use of land to make better provision for the Preparation of development Plans and zoning plans with a view to ensuring that town planning schemes are made in a proper manner and their execution is made effective; to constitute Town and Country Planning Authority for Proper implementation of town and country development plan; to provide for the development and administration of special areas through Special Area Development Authority : to make provision for the compulsory acquisition of land required for the purpose of the development plans and for purposes connected with matters aforesaid". Chapter VIII of the Act, consisting of Ss. 64 to 71. is entitled "Special Areas". S. 64 empowers the State Government to declare any area as a special area by issuing a notification. S. 65 provides that for every Special Area there shall be a Special Area Development Authority consisting of a Chairman and such other members as the Government may determine from time to time. THE Chairman and the members of the Development Authority are appointed by the Government. S. 68, which prescribes the functions of the Development Authority, lays down by cls. (v) and (vi) that the Development Authority shall make Provision for the municipal services and municipal management of the Special Area. S. 69, by cls. (c) and (d), confers upon the Development Authority powers for the purpose of municipal administration and for the purpose of taxation. THEse two clauses of S. 69 and cls. (v) and (vi) of S. 68 were inserted in their present shape by Ordinance 26 of 1975 which came into force on Feb. 27, 1976. THE Ordinance was replaced by the M. P. Nagar Tatha Gram Nivesh (Sanshodhan) Adhiniyam, 1976 (6 of 1976). Section 69 (d) of the Act of 1973 reads thus : "69. Powers : The Special Area Development Authority shall - (d) for the purpose of taxation have the Powers which a municipal corporation or a municipal council has as the case may be, under the Madhya Pradesh Municipal Corporation Act, 1956 (No. 23 of 1956) or the Madhya Pradesh Municipalities Act, 1961 (No. 37 of 1961) - (a) where the municipal corporation or municipal council existed in such area prior to its designation as special area under Section 64, according to the municipal law by which such special area was governed, and (b) where no municipal corporation or municipal council existed in such area prior to its designation as special area under Section 64, according to such of the aforesaid Acts as the State Government may direct." Clauses (a) and (b) above are sub-clauses of cl. (d). (They should better have not been so numbered alphabetically since the main clauses themselves are similarly numbered). Since there was no Municipal Corporation or Municipal Council in the Korba Special Area prior to the constitution of the Development Authority, the Government was required under sub-cl. (b) above to direct whether the M. P. Municipal Corporation Act. 1956 or the M. P. Municipalities Act. 1961, shall apply to the Korba Special Area for the Purposes of cls. (v) and (vi) of S. 68 and cls. (c) and (d) of S. 69. Such a direction was first issued by Notification dated Jan. 28, 1976 published in the Government Gazette, dated Feb. 27, 1976 by which the Development Authority, Korba, was directed to exercise the powers and perform the functions of a class I Municipality constituted under the M. P. Municipalities Act, 1961. This Notification became effective from Feb. 27, 1976 from which date Ordinance No. 26 of 1975 was made effective. By another Notification, dated Mar. 15, 1977, published in Government Gazette dated 15/07/1977, the Development Authority, Korba, was directed under the aforesaid clauses of Ss. 68 and 69 to exercise the powers and perform the functions under the M. P. Municipal Corporation Act, 1956.
(3.) S. 127 (1) (i) of the M. P. Municipalities Act, 1961 empowers a municipal council to impose, in the whole or any part of the municipality "a tax payable by the owners of houses, buildings or lands situated within the limits of Municipality with reference to annual letting value of the house, building or land called property tax". The corresponding provision in the M. P. Municipal Corporation Act. 1956 is S. 132 (1) (a). It says that "the Corporation shall impose a tax payable by the owners of buildings or lands situated within the city with reference to the gross annual letting value of the building or land called the property tax". The procedure for imposition of taxes is contained in S. 129 of the Municipalities Act and S. 133 of the Municipal Corporation Act. In 1964, the M. P. State Legislature had enacted the M. P. Nagariya Sthawar Sampatti Kar Adhiniyam, which was made applicable to the whole State, including the urban areas. By S. 36, of the aforesaid Adhiniyam, local authorities were prohibited from recovering the property tax from Nov. 24, 1970.;