D.N.Patel, J. - (1.) In all these writ petitions, constitutional validity of the Jharkhand Municipal Act, 2011 as well as the constitutional validity of the Jharkhand Property (Assessment, Collection and Levy) Rules, 2013, as amended from time to time, are under challenge, being violative of the provisions of the Constitution of India as well as the provisions of the Jharkhand Municipal Act, 2011, as per the counsel for the petitioners.
(2.) Arguments canvassed by the counsel for the petitioners: Mr. Indrajit Sinha, counsel appearing on behalf of the petitioners, in W.P.(PIL) No. 764 of 2017,W.P. (PIL) No.697 of 2017, W.P.(PIL) No. 872 of 2017, has submitted that there is no upper limit of tax prescribed for the holding tax, under the Jharkhand Municipal Act, 2011 [hereinafter referred to as 'the Act, 2011' for the sake of brevity] and hence, the Act, 2011 deserves to be quashed and set aside as it is unconstitutional and violative of the provisions of Article 265 of the Constitution of India. Counsel for the petitioners has relied upon the decision of the Hon'ble Supreme Court, reported in (1999) 8 SCC 667. Counsel for the petitioners has further submitted that as per Article 243-X (a) of the Constitution of India, the authority is a Municipality, who has power to levy, collect and appropriate such taxes, duties, tolls and fees, subject to such limits, as may be prescribed by law. Thus there is bound to be an upper limit of the rate of taxes. Such powers to levy and collect the taxes are with the Municipality and not with the Government and hence, Jharkhand Property (Assessment, Collection and Levy) Rules, 2013 [ hereinafter referred to as 'the Rules, 2013 for the sake of convenience] enacted by the State is beyond the powers as stated under Article 243-X of the Constitution of India. It is further submitted by the counsel for the petitioners that Section 152(5) of the Act, 2011, Municipality has to publish the Rules. The Rules enacted and amended by the State Government is in violation of Section 152(5) of the Act, 2011. It is further submitted by the counsel for the petitioners that as per Section 152(6) of the Act, 2011, itself prescribes criteria have been given for arriving at annual rental value, whereas, as per the Rules, enacted by the State, as amended from time to time, especially, as per Rule-3 thereof, additional criteria have been prescribed. Thus, the Rules, 2013 is violative of the Act, 2011. Counsel for the petitioners has pointed out, in detail, about the additional criteria, mentioned in the self-assessment form, which is at Annexure-3 to the memo of the writ petition bearing W.P. (PIL) No.697 of 2017, like usage of the property, definition of road etc. and it is submitted that these criteria have never been mentioned in the Act, 2011, whereas, the Rules, 2013 have added these criteria and hence, the Rules, 2013 is violative of the Act, 2011. Counsel for the petitioners has relied upon the following decisions of the Hon'ble Supreme Court, reported in: (a) (1972) 1 SCC 696; (b) (1999) 8 SCC 667, which was followed in (2016) 1 SCC 170; (c) (2005) 12 SCC 77; (d) (2015) 8 SCC 1; and (e) (2016) 7 SCC 703. On the basis of aforesaid decisions, it is submitted by the counsel for the petitioners that subordinate legislation can always be challenged, when the same is violative of the Constitution of India and/ or if it is violative of the principal Act. It is submitted by the counsel for the petitioners that the Rules, 2013, as amended from time to time, were published on 28.09.2016 and it is made effective from 01.04.2016. Said Rules have been applicable with retrospective effect. There are no such powers vested with the State to enact such type of Rules and make them effective with retrospective effect. It is further submitted by the counsel for the petitioners that Section 152(7) and 152(8) of the Act, 2011 are also unconstitutional, which authorize the Government to prescribe the rate of tax without any upper limit and thus, the same is violative of Article 243-X of the Constitution of India, because the said Article authorizes only the Municipality to prescribe the rate of tax. Counsel for the petitioners has also pointed out Articles 243-P, 243-R, 243-Q and 243-X of the Constitution of India to be read with various provisions of the Act, 2011 from Section 151 onwards, including 262, 263, 268 and 269 as well as Section 590 of the Act, 2011. Counsel for the petitioners has also pointed out the extra classification of tenant. Annual rental value can be made depending upon the nature of the holding of the property and hence also, the Rules are violative of the Act, 2011. Mr. Indrajit Sinha, counsel for the petitioners, has submitted that the previous publication of the Rules is a must and in the facts of the present case, there is no previous publication of the Rules as required under Section 590 of the Act, 2011 and Section 26 of the Bihar and Orissa General Clauses Act, 1917, for which, he has relied upon the decision, reported in (1972) 1 SCC 696. Mr. Rajeeva Sharma, Senior Advocate, while arguing W.P.(C) No. 939 of 2017, has submitted that political democracy is converted into social democracy i.e. people's participation. Senior Counsel has also pointed out Articles 243-P, 243-E, 243-Q, 243-R, and 243-W of the Constitution of India and it is further submitted by the Senior Counsel that powers of Municipality have been usurped by the State Government. Senior Counsel has also relied upon Article 243-X of the Constitution of India. It is further submitted by the Senior Advocate that there is no power vested with the State Government to levy, assess and collect the tax. Senior Advocate has also developed some concepts like anti-social democracy, decentralization of power etc. Senior Advocate, Mr. Jay Prakash Jha, while arguing W.P.(C) No. 1264 of 2017, has pointed out 74th amendment of the Constitution of India, especially Part-IX-A thereof and the Articles 243-P, 243-R, 243-Q and 243-X of the Constitution of India to be read with several provisions of the Jharkhand Municipal Act, 2011 and has submitted that there is no State Commission, constituted under Section 268 of the Act, 2011. State Municipal Regulatory Commission Rules, enacted by the State, cannot be made functional. Senior Advocate, Mr. Jay Prakash Jha, has also pointed out this Court to Section 268(1) (a) as well as Section 268(1)(h) of the Act, 2011. It is submitted by Mr. Jay Prakash Jha, Senior Advocate, that as per Section 268(2) of the Act, 2011, powers are given to the State Commission; similarly, as per Section 269 of the Act, 2011, powers are given to the State Municipal Advisory Committee, which are not constituted at all. Senior Counsel has also pointed out that as per Section 153 of the Act, 2011, Jharkhand Property Tax Board has not been constituted. Thus, Mr. Jay Prakash Jha, Senior Counsel, has referred to Sections 151 & 153 to be read with Sections 262, 268, 269 of the Act, 2011 and has submitted that Rules, which are amended, from time to time, by the State, cannot be made operative. Mr. M.K. Habib, counsel for the petitioner in W.P.(C) No. 1349 of 2017, has adopted the arguments canvassed by earlier counsels and has submitted that the Act, 2011 is violative of Article 243-X of the Constitution of India and the Rules, 2013 is violative of Constitution of India as well as violative of the Act, 2011.
(3.) Arguments canvassed by the State of Jharkhand: Counsel for the State of Jharkhand has submitted that neither the Jharkhand Municipal Act, 2011 nor the Jharkhand Property (Assessment, Collection and Levy) Rules, 2013, as amended from time to time, is violative of the provisions of the Constitution of India, in view of Article 265 of the Constitution of India to be read with Entry-49, List-II (State List) of 7th Schedule of the Constitution of India and other provisions of the Constitution of India, much less Article 243-X thereof. It is submitted by the counsel for the State of Jharkhand that as per Section 590 of the Jharkhand Municipal Act, 2011, State has all power, jurisdiction and authority to enact the Rules and the Municipalities have also power and jurisdiction to make Rules under Section 592 of the Act, 2011, which are not inconsistent with the provisions of the Act, 2011 and which are in fact consistent with the Rules, enacted by the State Government. It is submitted by the counsel for the respondent-State that as per Section 152 (7) and 152(8) of the Act, 2011, State has all power, jurisdiction and authority to enact the Rules, 2013 and to amend the Rules from time to time, especially, for the purpose of holding tax, as defined under Section 2(54) of the Act, 2011. It is submitted by the counsel for the respondents-State that holding tax is nothing, but, certain percentage of the annual rental value or annual letting value. Annual letting value is nothing but a notional rent. This rent will be a standard rent and will now be fixed in the State of Jharkhand by the Rent Controller under the Jharkhand Building (Lease, Rent and Eviction) Control Act, 2011. It is submitted by the counsel for the respondents that what is prescribed under the Rules by the State is 2% of the annual letting value or the annual rental value of the property as a holding tax. This is a minimum rate of tax, which can be altered by the Municipalities with the prior approval of the State Government. By this mechanism, no provision of the Constitution of India is violated by the State of Jharkhand, much less, Article 243-X of the Constitution of India. Counsel for the respondents-State has further submitted that the Rules, 2013 can still be made operativ, even in absence of the constitution of the State Commission, which is prescribed under Section 262(d) to be read with Section 268 of the Act, 2011. Similarly, the provisions of the Rules, 2013 can always be made operative, even in absence of State Municipal Advisory Committee, as envisaged under Section 269 of the Act, 2011 because the Rules, 2013, as amended from time to time, prescribe only 2% of the annual letting value as holding tax. This rate can be altered by the Municipality after prior permission of the State Government. The word "holding tax" is not within the power of the State Commission under Section 268 of the Act, 2011. It is further submitted by the counsel for the respondents-State that by virtue of the Rules, 2013, as amended from time to time, criteria to arrive at a correct assessment of annual letting value or annual rental value have never been altered nor have been added. It ought to be kept in mind that criteria have been given under subsection (6) of Section 152 of the Act, 2011. Rules have given the guidance how to arrive at annual letting value of any property, which is situated on road side or if it has already fetched higher rental value or has already been given on rent and is not selfoccupied property. Thus, if any rent is already paid by any tenant, it will be easier for the Rent Controller to arrive at annual letting value of the property. Thus, mentioning of the criteria in the Rules about the rented property or about mentioning of the definition of the road, makes neither the Rules, 2013 violative of the Act, 2011 nor the Constitution of India. Counsel for the respondents has submitted that the Rules, 2013 have already been published in the Official Gazette. Much has been argued on the previous publication. This contention has been replied by the counsel for the respondents-State to the effect that the Rules, 2013, as amended from time to time, prescribe only minimum rate of tax at the rate of 2% of annual letting value. Municipality is a self-sufficient and self-dependant body. Imposition of the Property Act is must for the Municipality. There cannot be any Municipality, which can impose the Property Tax, for which, minimum 2% has been prescribed of the annual letting value of the property as a holding tax. This bare minimum rate of tax can be enhanced by the Municipalities with the prior permission of the State Government under sub-section (8) of Section 152 of the Act, 2011. Imposition of 2% holding tax of annual letting value of the property cannot be said to be unreasonably excessive nor it can be said to be confiscatory in nature. If there is any further enhancement, question of publication can be decided by this Court. Even otherwise, Rules, 2013 have already been published in the Official Gazette and if there is any grievance of an individual regarding the holding tax, remedy is available under the law and the same can be decided by the competent trial court, looking to the individual nature of the property and the quantum of assessment of the annual letting value. It is further submitted by the counsel for the respondents-State that on a probable misuse of the provisions of the Act or Rules neither the Act nor the Rules can be held as unconstitutional. Such type of violation of the Act and the Rules can be challenged by the individuals in their separate cases in the trial court. Future probability of the misuse of the Act or the Rules cannot be the ground for declaring them as unconstitutional. R E A S O N S;