Holding

The West Bengal Central Valuation Board (Amendment) Act, 1994 is unconstitutional as it violates Article 14 by denying an effective pre‑decisional hearing and by creating an arbitrary, non‑independent review mechanism.

Summary

The Bidhannagar Welfare Association, whose members occupied lands and buildings in Bidhannagar Municipality, challenged the West Bengal Central Valuation Board (Amendment) Act, 1994, which altered the procedure for municipal tax valuation by removing the pre‑decisional hearing and vesting review powers in a committee composed of municipal officials and board officers. The Association argued that the amendment violated Article 14 of the Constitution by denying a fair hearing, being arbitrary, and lacking independent expertise in valuation. The Supreme Court held that the amendment was unconstitutional because it stripped assessee’s right to a pre‑decisional hearing, made the review process illusory, and created an arbitrary, non‑independent Review Committee, thereby breaching the principles of natural justice. The Court emphasized that statutes must provide an effective hearing and that valuation must be conducted by qualified experts, not casual employees. Consequently, the Court set aside the High Court’s decision, declared the 1994 amendment void, and restored the earlier judgment that the amendment was invalid. No costs were awarded.

Issues considered

The amendment Act's compatibility with Article 14 of the Constitution.
Whether the removal of a pre‑decisional hearing violates the principles of natural justice.
Whether the Review Committee, as constituted, is independent and capable of providing an effective remedy.
Whether the valuation methodology employed is arbitrary and unscientific.
Whether the amendment amounts to substantive unreasonableness rendering it ultra vires.

Legislation cited

Constitution of Indias. Article 14

Subjects

Article 14Natural JusticePre‑decisional HearingMunicipal Tax ValuationReview CommitteeArbitrarinessProcedural FairnessConstitutional ValidityWest Bengal

Judgment

A BIDHANNAGAR (SALT LAKE) WELFARE ASSON
l!
CENTRAL VALUATION BOARD AND ORS.

MAY 18,2007

B (S.B. SINHA AND MARKANDEY KATJU, JJ.]

West Bengal Central Valuation Board Act, 1978-Amendment by West
Bengal Central Valuation Board (Amendment) Act, 1994:

c Constitutionality of-Held the Act of 1994 unconstitutional being
violative of Article 14 of Constitution of India, 1950-Amendments took
away right of assessee of a pre-decisional hearing and did not provide for
any effective hearing; review of valuation was provided but it was ineffective
remedy as Review Committee was not bound to follow principles of natural
D justice and assign reasons, inspite of it being a quasi judicial body; it was
more so as before taking recourse to review, a pre-deposit had to be made--
Review Committee consisted of authorities of Municipality and officers of
Board alone, whereas it should have been independent of both keeping in
view that its power was curtailed to 25% of valuation made by Board,
decision on valuation was that of Board itself and jurisdiction of civil court
E was barred, leaving open only remedy of judicial review which in view of
nature of disputed questions of fact, was very limited.

Valuation of land and buildings-Methodology-Constitutionality of-
Held-Valuation was a complex exercise requiring certain amount ofexpertise,
F and in determination thereof, it is not expected of a statutory authority to
take recourse to arbitrary, unscientific or haphazard course of action-On
facts, held that though proviso to Section 9 of 1978 Act, added by 1994 Act,
provided for valuation by a Valuer-Surveyor Grade I or II, Municipality
recruited casual employees to make door to door survey of properties and
on date collected there from valuation was determined by Board; those
G employee were neither experts nor trained, their qualifications were not
known, on what basis they could determine valuation of buildings and lands,
and who supervised their work was not disclosed-As a result of such
unscientific study valuation increasing ranging from 3954% to 137% resulting
in exorbitant increase in tax on public, which itself was indicative of

H 430
BIDHANNAGAll (SALT LAKE) WELFARE ASSON 1•. CENTRAL VALUATION BOAllD 431

arbitrariness, and hence, violative of Article I 4 of Constitution of India, A
1950.

Members of the appellant association are occupiers of lands and
buildings situated within the territorial limits of a Municipality. Their annual
valuation for the purpose of assessment of municipal tax is governed by the
West Bengal Municipal Act, 1993. In terms of Section 110 thereof, it was to B
be determined by the Central Valuation Board established under the West
Bengal Central Valuation Board Act, 1978. It provided under Section 10(3)
that upon publication of the draft valuation list, objections were to be invited
and, if filed, considered by the Board upon giving an opportunity of hearing
in that behalf. Section 11 provided for publication of the final valuation list C
together with the amount of consolidated rate payable. Section 12 provided
that the Board could amend the valuation list at any time before the date
specified for filling objections under Section 10(2). Section 15 provided that
for hearing review applications, the State Government was to constitute
committee consisting of two members, the President thereof had to possess
the prescribed qualifications and the other member had to be one of the D
Councilors concerned. Section 15(3) gave a plenary power to review committee
to confirm, reduce, enhance or annul the valuation of land or building.

West Bengal Central valuation Board (Amendment) Ad, 1994, inter
a/ia, made following changes to Act of 197S-{i) a proviso was added to Section
9 stating that the Board may, in accordance with a resolution in that behalf, E
and with the previous approval of the State Government, require a valuer-
surveyor grade I or II, to make, subject to such conditions as may be
prescribed, the general valuation of lands and buildings under its
superintendence, direction and control on payment of such remuneration as
it may determine, and every such valuation shall be deemed to have been made p
by the Board; {ii) Sections 10 and 12 were deleted; (iii) Section 15 was amended
to empower Municipality to constitute Review Committee; each of them to be
presided by the Chairman or the Vice-Chairman of the Municipality and
consisting of two Councillors of the Municipality and an officer of the Board
having knowledge in the assessment of municipal valuation; instead of
decisions by majority, they were required to be unanimous, and in case or G
difference of opinion, the matter was required to be referred back to the Board.
Also, in year 2002, the power of the Review Committee was curtailed to 25%
of the valuation made by the Board.

Aggrieved by the above Act of 1994, the appellant filed a writ petition H
432 SUPREME COURT REPORTS [2007] 7 S.C.R.

A contending it was vi~lative of Article 14 of the Constitution of India, 1950 as
it deprived the citizens opportunity of being heard which is the essence of the
principles of natural justice as also lead to procedural unfairness. High Court
dismissed the petition on the grounds that (i) the requirements of compliance
of principles of natural justice have not completely been taken away; (ii) no
B case of substanti.ve unreasonableness has been made out; (iii) the restriction
put on the power of the Review Committee as also the extent to which such
power can be exercised do not lead to procedural unfairness; and (iv) validity
of constitution of the Review Committee cannot be faulted with. Hence, the
present appe2L

c excludeAppellant contended (i) it may be true that the Act of 1994 did not
the rules of audi alteram partem completely and provided an
opportunity of hearing only at the stage of review, however, the provisions
thereof indicate that there is no procedural or substantive observance of the
principles of natural justice in the process of determinat_ion of annual
valuation; (ii) the opportunity of hearing at the stage of review of the
D assessment being a post-decisional one, the same does not compensate for
the requirements of a pre-decisional hearing; (iii) the valuation list prepared
by the Board showed that rio reason had been assigned in support thereof, '
and it did not bear any real nexus with the factors prescribed by statute to be
taken into account in the matter of determination of annual valuation.

E Respondent contended that the procedural fairness as also the principles
of natural justice were capable of being read in the provisions of the Act of
1994.

Allowing the appeals, the Court

F HELD 1.1. The judgment of the Division Bench of the High Court is set
aside. The impugned Act is declared unconstitutional being violative of Article
14 oft he Constitution. [Para 51) (461-F)

1.2. The 1978 Act or even the Amending Act have not provided any
G guidelines. Guidelines are provided in the Municipality Act. When a statute
does not provide for procedural fairness, it may be ultra vires.
(Para 34) [456-D-E]

Dr. Balbir Singh v. Mis. MC.D. (1985) l SCC 167 and R. K. Kaura v.
Municipal Commr., MCD, (2005) 11 SCC 524, referred to.
H
BIDHANNAGAR (SALT LAKE) WELFARE ASSON ,._ CENTRAL VALUATION BOARD 433
1.3. Although the Court may not go into the question of a hardship which A
may be occasioned to the taxpayers but where a fair procedure has not been
laid down, validity thereof cannot be upheld. [Para 50) [461-E-FJ

Smith v. Kvaerner Cementation Foundations Ltd. (Bar Council
intervening), [2006) 3 All ER 593, referred to.
B
1.4. When a substantive unreasonableness is to be found in a statute, it
may have to be declared unconstitutional. [Para 37) (457-G-HJ

C.B. Gautam v. Union of India, [199311 SCC 78, Krishna Mohan (P)
Ltd v. Municipal Corporation of Delhi & Ors., [200317 SCC 151, relied on
c
Dewan Dau/at Rai Kapoor v. New Delhi Municipal Committee, (1980)
1 sec 685, referred to.

2.1. The effect of the amendments is inter alia to take away the right of
an assessee of a pre-decisional hearing. The provisions of the Amendment
Act only provide for a review of the valuation made by the Board as pre-- D
decisional hearing is not required to be given. (Para 131 (448-G-H)

2.2. In a case of this nature, provision for review was in effect and
substance a provision for appeal. But, when a provision for appeal has been
laid down, the same should, for all intent and purport, must provide for an E
effective-remedy. [Para 40] [459-C-D)

2.3. Principles of natural justice are based on two basic pillars: (i) Nobody
shall be condemned unheard (audi alteram partem) {ii) Nobody shall be judge
of his own cause (memo debet esse judex in pripria sua causa).
(Para 43) (459-G-H; 460-A] p
Swadeshi Cotton Mills v. Union of India, (1981) l SCC 664, Calcutta
Gujarati Education Society v. Calcutta Municipal Corpn., (2003) 10 SCC
533, relied on.

2.4. Duty to assign reasons is, however, a judge made law. It is considered G
to be a third pillar. [Para 44) (460-A-B)

Union of India & Anr. etc. v. Tulsiram Patel etc. AIR (1985) SC 1416,
relied on.

Chief Security Officer & Ors. v. Singasan Rabi Das, [1991) 1SCC729, H
434 SUPREME COURT REPORTS [2007) 7 S.C.R.

A Tarsem Singh v. State of Punjab & Ors., (Civil Appeal No. 1489 of 2004),
decided on 25th 'January, 2006; Prithipal Singh v. State of Punjab & Ors.,
(2006) 11 SCALE 28, Indian Airlines Ltd. v. Prabha D. Kanan, (2006) 12
SCALE 58 and Reliance Industries Ltd. v. Designated Authority, (2006) AIR
sew 4911, referred to.
B 2.5. A Review Committee being a quasi judicial body was required to
fulfill the requirements of the three conditions. There is furthermore no
reason whatsoever as to why the power of Review Committee was curtailed
only to the extent of 25%. It is furthermore beyond any logic as to why rule
of simple majority in a multi-member committee could not be applied.
C (Para 45) (460-B-C)

AM (Serbia) & Ors. v. Secretary of State for the Home Department,
(2007) EWCA Civ. 16, referred to.

2.6. The proviso appended to Section 14 of the 1978 Act makes the
D situation worse inasmuch as before taking recourse to the review provision
a pre-deposit is to be made in terms thereof. A statute which provides for civil
or evil consequences must conform to the test ofreasonableness, fairness
and non-arbitrariness. [Para 28) [453-A-B)

2.7. Ordinarily an order entailing civil consequences should be
E preceded by an opportunity of being heard. The impugned Act, however, has
taken away such a provision which existed in the earlier one.
(Para 29) (453-B-C)

Rajesh Kumar and Ors. v. D.C.l T. and Ors., [2007) 2 SCC 181, referred
to.
F
1.8. The provisions for review conferred in terms of the statute for all
intent and purport are illusory ones and do not satisfy the test of Article 14
of the Constitution of India. No statute which takes away somebody.'s right
and/or imposes duties, can be upheld where for all intent and purport, there
does not exist any provision for effective hearing. [Para 47) (461-B-C)
G
3.1. In view of the mode and manner in which the general valuation had
been prepared without giving an opportunity of hearing and/or in any event
without even asking the residents of the area in general to have their say, the
provisions of the 1978 Act are required to be construed.
[Para 10) (451-A)
H
BIDHANNAGAR (SALT LAKE) WELFARE ASSON v. CENTRAL vALUA non BOARD 435

3.2. It may be that the legislature thought that while preparing the A
general valuation, it may not be possible to give an opportunity of hearing as
such and, an opportunity of hearing may be given at a later stage. It is true
that an order of assessment under the Act is conclusive subject to Sections
14 and 15 of the Act but keeping in view the limited power conferred upon
the Revenue Committee there under in terms whereof a part of demand is
beyond the pale thereof, it is possible that in a given case the entire exercise B
of review may end in futility. What, thus, was necessary was to provide for an
independent and impartial body constituted for the general redressal of the
grievance of the taxpayers. [Para 30) (453-C-D)

3.3. The Committee should not have consisted of the authorities of the C
Municipality and the officers of the Board alone. Section 15 does n-0t provide
for any expertise on the part of the Councillors to determine the objections.
As many committees as the Municipality likes may be constituted. Rationality
in the decision is, thus, not guaranteed. [Para 31) (453-E]

3.4. The provisions are per se unreasonable and arbitrary. The Review D
. Committee is not independent of the Municipality or the Board. Whereas
under the 1978 Act, a person having the requisite knowledge was to be
appointed by the State Government as Chairman of the Review Committee,
the affairs of the Review Committee are controlled only by the Municipality
concerned and the Board under the Amendment Act. The Municipality
essentially is interested in increase in valuation of lands and buildings as it E
would fetch more income to its coffers. It is unthinkable that although the
power to make annual valuation is not to be preceded by an opportunity of
being heard to the person who would be affected thereby, the power of the
Review Committee has been curtailed to 25% of the valuation made by the
Board. The members are not independent person and each one of them is, in F
one way or the other, interested in the matter. Even the officer nominated by
the Board who is said to be an expert might have something to do with the
annual valuation of the area in question. In any event, the effect of the
amendment is that annual valuation is to be made by the Board, then the
objections are to be heard by a Committee which again consists of members
of the Municipality and the Board, and in the event, the decision is not G
unanimous, the matter again goes back to the Board.
[Para 26] [452-C-F]

3.5. This provision is akin to the well-known doctrine of Caesar to
Caesar, It per se contravenes the values attached to the principles of natural H
436 SUPREME COURT REPORTS [2007) 7 S.C.R.

A justice. Even the jurisdiction of civil court is barred and, thus, the only remedy
which would be available to the taxpayer would be to take recourse to judicial
review. Its application in the matter of this nature where disputed questions
of fact may arise for its determination, would be very limited. It is unfortunate
that the Division Bench opined, although there was no provision therefor, that
in case of any final decision of the Board, the taxpayer can go back to the
B Review Committee. (Para 27) (452-F-H)

Mithu v. State of Punjab, (1983) 2 SCC 277, referred to.

3.6. It is one of those statutes where a decision is rendered by a body
C which may have an institutional bias although same is not ordinarily
contemplated in the case of an individual member being a part of a body.
(Para 48) (461-C-D)

Dr. Bonham's case 8 Co Rep, 113 at 118 referred to.

D 4.1. Valuation of lands and buildings is a complex exercise. It requires
certain amount of expertise. Valuation is ma(je upon obtaining data prepared
from a scientific study. Valuation of.a land or building would depend upon
\
several factors. Several methods of valuation may be applied for determination
thereof. It is for the expert ordinarily to arrive at a decision as to which mode
of valuation having regard to a particular set of factors would entail a correct
E evaluation. However, in determining the valuation of a land or building, it is
not expected of a statutory authority to take recourse to the course of action
which may be arbitrary, unscientific or haphazard in nature.
(Para 14) (449-B-C)

4.2. The proviso appended to Section 9 of the 1978 Act is an enabling
F provision in terms whereof general valuation of lands and buildings in the
area as aforesaid or in any part thereof made by a Valuer-Surveyor Grade I
or Valuer-Surveyor of Grade II, however, shall be under the superintendence,
direction and control of the Board. Admittedly, no such exercise had been
undertaken. (Para 13) [449-A-B]

G 4.3. Although the proviso appended to Section 9 of the 1978 Act provided
for certain safeguards and as thereby a legal fiction has been created, the
same is optional. The Board is not bound to take recourse thereto. Who would
be the surveyors eligible for carrying out the survey requires prior approval
of the State. Instead and place of appointing experts in the field, only casual
H employees were recruited by the Municipality, who made door to door survey
BIDHANNAGAR (SALT LAKE) WELFARE AS SON v. CENTRAL VALUATION BOARD 437
of the properties situated within the area of Bidhannagar Municipality and A
collected the purported datas of the concerned premises in a field book
wherefrom an inspection book was prepared and only on the basis thereof
valuation was determined by the Board. Such a course of action was not
contemplated by law. [Para 14) [449-C-D)

4.4. No person was appointed who had an expertise in the field. The B
casual employees appointed were not trained personnel. Their qualifications
.,,i are
., not known. On what basis they could determine the valuation of the
buildings and lands has also not been disclosed. They, being not government
servants, ordinarily would not have the power to enter into the premi!.es .of
persons so as to infringe the right of privacy which is otherwise granted to
an authority under the 1978 Act. (Para 19) [450-G-H]
c
4.5. The Board delegated its power to the Municipality which was
impermissible in law. It had no control over the recruitments made by the
Municipality. Probably it even did not have any control over their work. Who
had been supervising the job of the said casual employees has not been D
disclosed. (Para 17) (450-C-D)

4.6. The result of such an unscientific study may produce a disastrous
result and in fact from the pattern of increase in demands by the Bidhanagar
Municipality it appears that the increase in the valuation ranges from 3954%,
i.e. 39.5 times to 137%, i.e., 1.4. times. Such exorbitant increase in tte tax E
on the public is itself indicative of arbitrariness, and hence, violative of Article
14 of the Constitution. In a democracy, the people are supreme, and all
authorities must function for the public welfare. Excessive increase in the
tax burden on the public is surely not for the public welfare. Also, in the
aforementioned context, the very method applied by the Municipality and the
1 Central Valuation Board must be held to be arbitrary in nature and hence
F
violative of the Constitution. (Para 18) [450-D-F]

Maneka Gandhi v. Union of India, AIR (1978) SC 597, relied on.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5519-5520 of2004.
G
From the Final Judgment and Order dated 24.12.2003 of the Division
Bench of the High Court at Calcutta, in MAT No. 3359 of2000 and 3674 of
,. 2000.

Bhaskar P. Gupta, Sr. Adv., Rana Mukharjee, Siddarth Gautam, Goowill
H
438 SUPREME COURT REPORTS (2007] 7 S.C.R.

A Indeevar for the Appellants.
R. Mohan, ASG., Altaf Ahmad Sr. Adv H.K. Puri, Ujjwal Banerjee, S.K.
Puri, Priya Puri, V.M. Chauhan for the Respondent.

The Judgment of the Court was delivered by
B
S.B. SINHA, J. I. Validity or otherwise of certain provisions of the West
Bengal Central Valuation Board (Amendment) Act, I994 (for short "the
Amendment Act") is in question in these appeals which arise out of a
judgment and order dated 24.12.2(,J3 passed by a Division Bench of the High
Court of Calcutta dismissing the writ petition filed by the appellant herein and,
C thus, upholding the impugned provisions thereof.

2. Members· of the appellant association are occupiers of lands and
buildings situated within the territorial limits of the Bidhannagar Municipality.
Annual valuation of lands and buildings for the purpose of assessment of
municipal tax indisputably is governed by the provisions of the West Bengal
D Municipal Act, I 993 (for short "the Municipal Act"). In terms of Section I I 0
thereof, the annual valuation of lands and buildings is required to be detennined
by the Central Valuation Board (for short "the Board"). The Board was
established under the provisions of the West Bengal Central Valuation Board
Act, I978 (for short "the I978 Act").
E
3. Valuation of the holdings used to be governed by Sections 10, I I and
12 of the I978 Act. Before we embark upon a detailed analysis of the provisions
thereof, we may notice that they provided for publication of the draft valuation
list, publication of the final valuation list and amendment of valuation of the
list by the Board respectively.
F
4. Principles of natural justice were to be complied with in tenns of Sub-
section (3) of Section IO insofar as upon publication of the draft valuation
list, objections were invited and objections, if filed, were required to be
considered by the Board for detennination thereofupon giving an opportunity
of being heard in that behalf. Section I I provided for publication of the final
G valuation list together with the amount of consolidated rate payable after
determination of the objections filed under Section I 0. The final valuation list,
so arrived, could be subject to further review in tenns of Sections I4 and 15
of the Act.

5. By reason of the impugned amendment, alterations on three principal
H
BIDHANNAGAR (SALTLAKE) WELFARE ASSON v. CENTRAL VALUATION BOARD [S.B. SINHA.!.) 439

fields were made, i.e., the provisions relating to publication of the draft A
valuation list of lands and buildings and finalization thereof, upon hearing
objections thereto were deleted. The West Bengal Central Valuation Board
(Valuation of Lands and Building) Rules, 1984 (for short "the 1984 Rules")
framed under the 1978 Act were also amended by a notification dated 30.03.1984
wherein provisions pertaining to filing objection petitions against the draft B
annual valuation and determination thereof were deleted. The effect of the
said amendment was that the valuation made by the Board was made final,
subject to review as provided for under Sections 14 and 15 of the 1978 Act.

6. Contending that the said Amendment Act is violative of Article 14
of the Constitution of India as it deprived the citizens of being heard which C
is the essence of the principles of natural justice as also lead to procedural
unfairness, a writ petition was filed by the appellant. The said writ petition
was allowed by a learned Single Judge of the High Court. In arriving at its
conclusion, the learned Judge took notice of the contentions raised by the
respondents in their counter-affidavits as also other factors relevant for
determination thereof at some details. An intra-court appeal was preferred D
thereagainst in terms of Clause 15 of the Letters Patent Appeal of the Calcutta
High Court and by reason of the impugned judgment dated 24.12.2003, th~
said appeal has been allowed.

7. The High Court opined:
E
(i) The requirements of compliance of principles of natura1 justice
have not completely been taken away.
(ii) No case of substantive unreasonableness has been made out.
(fu) In the matter of collection of debt for the purpose of arriving at
a general valuation as also for the purpose of determining the F
objections by the owners and occupiers of the lands and the
buildings, the restrictions put on the power of the Review
Committee as also the extent to which such power can be exercised
do not lead to procedural unfairness; and

(iv) Validity of constitution of the Review Committee cannot also be G
faulted with.

8. Mr. Bhaskar P. Gupta, learned senior counsel appearing on behalf of
the appellant would submit that the Division Bench of the High Court committed
a serious error in construing the provisions of the impugned Amending Act
H
440 SUPREME COURT REPORTS [2007] 7 S.C.R.
...
A insofar as it failed to take into consideration the following: ,....
(i) The valuation list prepared by the Board and produced in course
of the hearing before the learned Single Judge clearly showed
that no reason had been assigned in support thereof, and in any
event, the same did not bear any real nexus with the factors to
B be taken into account in the matter of determination of annual
valuation as provided under Section I 06 of the Municipal Act.
(ii) It may be true that the Amending Act did not exclude the rules
of audi alteram partem completely and sought to provide an
opportunity of hearing only at the stage ofreview. However, the
c provisions thereof would clearly indicate that there is no procedural
or substantive observance of the principles of natural justice in
the proce.;,s of determination of annual valuation.
(tii) Opportunity of hearing at the stage of review of the assessment
being a post-decisional one, the same does not compensate for
D the requirements of a pre-decisional hearing.

9. Mr. R. Mohan, learned Additional Solicitor General appearing on
behalf of the State of We-;t Bengal and Mr. Altaf Ahmad, learned senior
counsel appearing on behalf of the Central Valuation Board, on the other
hand, would submit that the procedural fairness as also the principles of
E natural justice being capable of being read in the provisions of the Amendment
Act, the High Court cannot be said to have committed any error in passing
the impugned judgment.

IO. Assessment of property tax used to be governed by the Bengal
Municipal Act, 1932. However, the State of West Bengal enacted the 1978 Act
F Inter alia for constitution ofa Central Valuation Board and Valuation Authorities \
I\
for the purpose of valuation of lands and buildings in West Bengal. By reason
of the said provision, the exclusive jurisdiction of the Municipal Committees
to make valuation of the lands and buildings which were exigible to levy of
property tax was taken away.
G I I. A Comparative table showing relevant provisions of the I 978 Act
and the impugned Amendment Act is as under:

-*. ~
BIDHA.,'NAGAR (SALT LAKE) WELFARE AS SON v. CENTRAL VALUATION BOARD [S.B. Slr..ll.\. J J 441

'
-;
The 1978 Act The Amendment Act A

5. Members of the Board: (l) The 5. Members of the Board (1) The
Board shall consist of a Chairman Board shall consist of a Chairman
and two other members to be and four other members to be
appointed by the State Govt. appointed by the State Govt.
B
(2) The Chairman shall be a person (2) The Chairman shall be a person
who is or has been an officer of the who is or has been an officer of the
State Govt. not below the rank of a State Govt. (not below the rank of
Secretary. Secretary including ex-officio
Secretary).
(3) Of the two other members
c
(3) The four other members shall
(a) one shall be a person who is or
include the Director of Local Bodies,
has been a member of the judicial
Government of West Bengal, who
service for not less than 7 years and
shall be the ex-officio member of the
has experience in municipal affairs;
Board, and such other officers of the D
and
State Government or non-official
experts having knowledge and
(b) the other shall be a person
experience in the field of judiciary,
holding a degree in Civil Engineering
Engineering, Valuation and
and having knowledge and
Assessment of properties, economics
experience in the work of valuation
or social science as the State E
and assessment for not less than
Government may determine.
seven years.
(4) The Chairman and the other (4) The Chairman and the other
members of the Board shall hold members of the Board shall hold
office for such period not exceeding office for such period not exceeding
six years as the State Government four years as the State Government F
may detenuine and the terms and may determine and the terms and
conditions or their service including conditions of their service, including
salaries and allowances shall be salaries and allowances shall be such
such as may be prescribed. as may be prescribed.

(5) The Board shall have a Member- G
Secretary who shall be appointed by
the State Government from amongst
the members referred to in sub-
section (3) and shall be the Chief
Executive Officer of the Board.
H
442 SUPREME COURT REPORTS (2007) 7 S.C.R.

A SA. Validation Notwithstanding SA. Validation Notwithstanding
anything contained elsewhere in this anything contained elsewhere in this
Act, no action of the· Board shall be Act, no action of the Board shall be
invalid or otherwise called in question invalid or otherwise called in question
merely on the ground of the merely on the ground of the existence
existence of any vacancy (initial or of any vacancy (initial or
B subsequent) in the office of the subsequent) in the office of the
members of t\le Board. members of the Board. .

8. Expenditure incurred on account 8. Expenditure incurred on account
of salaries and allowances The of salaries and allowances The
C expenditure incurred by the Board expenditure incurred by the Board
for meeting the salaries and for meeting the salaries and
allowances of the Chairman, the other allowances of the Chairman, the other
members, the Secretary and Officers members, the Secretary and Officers
and employees serving under the and employees serving under the
Board shall be defrayed out of the Board shall be defrayed out of the
D Fund. Fund.

8A. The Board shall maintain the
prescribed manner a register of
registered valuer surveyors (Gr. I) and
registered valuer Surveyors (Gr. ~).
E
8B. Every person who possess such ,
qualifications as may be prescribed
shall, subject to such terms and
conditions and on payment of such
F fee, as may be prescribed, be entitled
to have his name entpred in the
register of registered valuer
surveyors (Gr. I) and registered valuer
surveyors (Gr. II);
l G IO. Preparation of the draft valuation 10.***
list (I) When the valuation under
Sec. 9 of the lands and buildings in
any area has been completed, the
Board shall cause such valuation to
be entered in a list.
H

/
BIDHANNAGAR (SALT LAKE) WELFARE ASSON v. CENTRAL VALUATION BOARD [S.B. SINHA. J] 443

(2) The Board shall publish the A
valuation list in such manner as may
be prescribed and shall specify a
date within which objections to the .
list may be filed.

(3) After the expiry of the date
B
specified in sub-sec (2) and within
the objection shall be determined,
after giving the objector an
opportunity of being heard by such
officer or officers of the Board as it c
may specify in this behalf.

(4) The objection shall be filed and
determined in such manner as may
be prescribed.
D

11. Publication of final valuation list 11. Publication of final valuation list
When objections have been When the general valuation of lands
determined, the Board shall prepare and buildings has been made by the
a final valuation list and shall give Board under Sec. 9, the Board shall E
public notice of the place or places prepare a valuation list and shall give
where such list may be inspected public notice of the place or places
and the valuation (together with the where the valuation list may be
amount of consolidated rate thereon) inspected, and the valuation as
as recorded in the final valuation list aforesaid together with the amount
shall, subject to the provisions of of consolidated rate or property tax, F
Sections 14 and 15, be conclusive. as the case may be, payable thereon,
as recorded in the valuation list shall,
subject to the provisions of Sections
14 & 15 be conclusive. The Board
shall give a notice in writing to the G
owner or to the lessee, sub-lessee or
occupier of any land or building, as
the case may be, in all case in which
-- /'· the valuation of such land or buikiing
is made for the first time or the annual
H
444 SUPREME COURT REPORTS [2007] 7 S.C.R.

A
valuation of such land or building as
increased: Provided that the valuation
. list as aforesaid may be prepared and
published in respect of all the
holdings of any municipal area or any
B area within the jurisdiction of a
Corporation specified in the
notification under sub-sec (1) of Sec
9 or the holdings Of any municipal
area within such group of wards or
c any area within such group of wards
within the jurisdiction of a
Corporation as the State Government
may determine.
12. Amendment of Valuation list by 12. *"'**
D Board-The Board may, for reasons
to be recorded in writing, amend the
valuation list at any time before the
date specified for filing objections
under sub-sec (2) of Section 10.

E 12A. Alteration or amendment of
valuation list (1) Notwithstanding
anything contained in Sec 11, the
Board may at any time before the
date of hearing of an application for
F review under Section 14 and for
reasons to be recorded in writing,
direct any alteration or amendment of
the valuation list : -

(a) by inserting therein the name of
G any person whose name ought to be
inserted; or

(b) by inserting therein any land or
building previously omitted together ,-_ -
with the valuation thereof; or
H
- BIDHANNAGAR.(SALT I.AKE) WELFARE ASSON v. CENTRAL VALUATION BOARD [S.B. SINHA, l.)

(c) by striking out the name of any
person or any land or building not
445

A

liable for payment of consolidated rate
or property tax, as the case may be;
or

(d) by increasing or decreasing the B
annual valuation of any holding
which, in the opinion, of the Board,
has been substantially under-valued
or over-valued by reasons of fraud,
mis-representation, mistake or error. c
14. Application for review - 14. Application for review

(1) The owner or occupier or any (I) The owner or occupier or any
other· person primarily liable to pay other person primarily liable to pay
consolidated rate may, if dissatisfied consolidated rate for property tax, as D
with the valuation of any land or. the case may be, may if dissatisfied
building as entered in the final with the valuation of any land or
valuation list, apply to the Board to building as entered in the valuation
review the valuation. list, apply to the Corporation or the
Board of Councillors concerned 'to
review the valuation. E

(2) The application shall be filed (2) The application shall be filed
within such time and in such manner within such time and in such manner
as may be prescribed. as may be prescribed.

(3) Every application presented (3) Every application presented under F
under sub-sec ( l) shall be heard and sub-sec ( l) shall be heard and
determined by a Review Committee determined by a Review Committee
constituted under Sec 1S in constituted under Sec l S in
accordance with such procedure as accordance with such procedure as
may be prescribed. may be prescribed. G
(4) No application shall be (4) No application u/sub-sec (l) shall
entertained unless the amount of be entertained unless the amount of
consolidated rate as recorded in the consolidated rate or property tax, as
final valuation list referred to in Sec the case may be, on the previous
11 has been paid or deposited in the valuation of land or building as H
446 SUPREME COURT REPORTS (2007] 7 S.C.R.

A office of the Corporation or the aforesaid has been paid or deposited
Municipality, as the case may be, in the office of the Corporation or
before the application is filed and Municipality, as the case may be,
the application shall fail unless before the application is filed, and
amount is continued to be paid or every such application shall fail unless
deposited till the application is the amount of consolidated rate or
B finally disposed of. property tax as the case may be on
the previous valuation as aforesaid is
continued to be ,e_d or deposited in
the Office of the Corporation or
Municipality, as the case may be, till
c such application is disposed of.

Provided that wherever the previous
valuation refers to a valuation made
under the Bengal Municipal Act, 1932
(Bengal Act XV of 1932), and in force
D on the date immediately before the
commencement of the West Bengal
Municipal Act, 1993 (West Bengal Act
XXII of 1993), no application under
sub-section (1) shall be entertained
unless the amount of consolidated rate
E
on such previous valuation has been
paid or deposited or is continued to
be paid or deposited in the office of
the concerned Municipality.

15. Review Committee-(!) The State 15. Review Committee - Every
F Government shall constitute such Corporation or Municipality shall, by
number of Review Committee as may a resolution constitute Review
be considered necessary to hear the Committee (s) to hear applications
applications filed under sub-section presented under sub-sec (I) of Sec
(I) of Section 14. 14.
G
(2) Each such Review Committee (2) Every Review Committee shall be
shall consist of two members of presided over by the Chairman or the
whom one shall be its President. The Vice-Chairman of the Municipality and
President of each Review Committee shall consist of two other members,
shall be appointed by the State Govt. being Councillors of the Municipality,
H
I '

447
.. BIDHANNAGAR (SALT LAKE) WELFARE ASSON v. CENTRAL VALUATION BOARD (S.B. SINHA, J.]

on such terms and conditions and as may be nommated by the Board ot A
_., shall possess such qualifications as Councillors, and another member, who
may be prescribed. The other shall be an officer of the Board having
members of the Review Committee knowledge in the assessment of
· shall be, where the matter relates to municipal valuation, deputed by the
Board:
(i) any land or building in any Ward B
in Calcutta or Howrah or
Chandranagore, the Councillor of the
Ward; or Provided that in the case of a
Corporation, the Presiding Officer and
(ii) any land or building in any Ward two other members of the Review
in a municipality, the Commissioner Committee shall be such persons as
c
of that Ward; or may be nominated by the
Corporation from amongst the
(iii) any land or building in any area Councillors by a resolution:
other than the areas mentioned in
clauses (i) and (ii), such person as Provided further that no decision of D
the State Government may appoint: a Review Committee shall be invalid
Provided that when a Corporation or called in question merely by reason
is, or the Commissioners of a of any vacancy in the composition of
Municipality are, superseded, the the Committee or absence of any
State Government shall appoint a member from a meeting thereof other
person residing in the Ward to which than the Presiding Officer: E
the matter relates as the other
member referred in clause (i) or Provided also that the decision of a
clause (ii). Review Committee snail be
unanimous.

Provided further that no meeting of Provided also that when a F
a Review Committee shall be held if Corporation or a Municipality is
the President is absent: dissolved, the State Govt shall
constitute by notification the Review
Committee consisting of a President
Provided also that no decision of a
and such number of other members G
Review Committee shall be invalid
as may be specified in the notification
or otherwise called in question
for the purpose of hearing
merely by reason of any vacancy in
applications for review.
the office of the other member or
due to absence of such member from
any sitting.
H
448 SUPREME COURT REPORTS [2007) 7 S.C.R.

A (3) The Review Committee may (3) The Review Committee may
confirm, reduce, enhance or annul confirm, reduce, enhance or annul th~
the valuation of land or building or valuation of land or building as may
may direct fresh valuation to be direct fresh valuation to be made after
made after such further enquiry as such further enquiry as the Review
the Review Committee may direct. Committee may direct.
B
(4) If there is any difference of (4) If there is any difference of
opinion between the members of the opinion amongst the members of the
Review Committee, the matter shall Review Committee, the matter shall
be referred to the Board for decision. be referred to the Board for decision.
c (5) The decision of the Review (5) The decision of the Review
Committee or of the Board, as the Committee or of the Board, as the
case may be, shall be final and no case may be, shall be final and no
suit or proceeding shall lie in any suit or proceeding shall lie in any
Civil Court in respect of any matter Civil Court in respect of any matter
D which has been or may be referred which has been or may be referred to
to the Review Committee or has been the Review Committee or has been
decided by the Review Committee or decided by the Review Committee or
the Board. the Board.

12. The 1978 Act, as noticed hereinbefore, was amended in the year
E 1994. By reason of the said Amendment Act, a proviso was added to Section
9 which is in the following terms:

"Provided that the Board may, in accordance with a resolution in this
behalf adopted at a meeting of the Board and with the· previous
approval of the State Government, require (a valuer - Surveyor Grade
F I or valuer surveyor of Grade II) to make, subject to such conditions
as may be prescribed, the general valuation of I.ands and buildings in
the area as aforesaid or in any part thereof under the superintendence,
direction and control of the Board on payment of such remuneration
as the Board may determine, and every such valuation shall be deemed
G to have been made by the Board."

13. The effect of the said amendments is inter a/ia to take away the
right of an assessee of a pre-decisional hearing. The provisions of the
Amendment Act only provide for a review of the valuation made by the Board
as pre-decisional hearing is not required to be given. A review contemplated
H under the 1978 Act is for all intent and purport in the nature of an appeal.
BIDHANNAGAR (SALT LAKE) WELFARE ASSON v. CENTRAL VALUATION BOARD [S.B .. SINHA. J.] 449

The proviso appended to Section 9 of the 1978 Act is an enabling provision A
in tenns whereof general valuation of lands and buildings in the area as
aforesaid or in any part thereof made by a yaluer Surveyor Grade I or Valuer-
Surveyor of Grade II, however, shall be under the superintendence, direction
and control of the Board. Admittedly, no such exercise ~ad been undertaken.

14. Valuation of lands and buildings is a complex exercise. It requires B·
" ·rtain amount of expertise. Valuation is made upon obtaining data prepared
from a scientific study. Valuation of a land or building would depend upon
several factors. Several methods of valuation may be applied for detennination
thereof. It is for the expert ordinarily to arrive at a decision as to which mode
of valuation having regard to a particular set of factors would entail a correct
evaluation. However, in detennining the valuation of a land or building, it is
c
not expected of a statutory authority to take recourse to the course of action
which may be arbitrary, unscientific or haphazard in nature. Although the
proviso ap{>ended to Section 9 of the 1978 Act, provided for certain safeguards
,'
and as thereby a legal fiction has been created, the same, as noticed
hereinbefore, is optional. The Board is not bound to take recourse thereto. D
-,I Who would be the surveyors eligible for carrying out the survey requires
prior approval of the State. The learned Single Judge in his judgment noticed
that in stead and place of appointing experts in the field, only casual employees
were recruited by the Municipality, who made door to door survey of the
properties situated within the area of Bidhannagar Municipality and collected
E
the purported datas of the concerned premises in a field book wherefrom an
inspection book was prepared and only on the basis thereof valuation was
detennined by the Board. Such a course of action was not contemplated by
Jaw.

15. Section 9(1) of the 1978 Act provides for survey in specific areas. F
--! We may notice that the appellants in their writ petition and in particular
Paragraphs 16 to 24 thereof categorically stated in regard to the mode and
manner in which the valuation is required to be done and had in fact been
conducted. Paragraph 23 thereof is as under:

"23. The Central Valuation Board had no infrastructure of its own in G
survey the building to ascertain the reasonable valuation and they
depended entirely upon what the Municipality had conveyed to them
,_ which in turn was based on sunnise and conjecture is the Municipality
did not and/ or could not carry out any house to house survey of all
the 17070 holdings in Salt Lake."
H
450 SUPREME COURT REPORTS [2007] 7 S.C.R.

A 16. In their counter-affidavits, the respondents inter alia stated:

"18. The allegations made in paragraph 23 of the said application are
categorically denied and disputed and it is stated that it is on the
advice of the Central Valuation Board that the Municipal authority
engaged casual staff who, undertook door to door survey of the
B holdings on being exhaustively trained by the competent office are of
Central Valuation Board. The basic data thus collected have been
transferred to the Inspection Book. Central Valuation Board prepared
the valuation list on such data and the Municipality thereafter
despatched notices signed by the Member Secretary of Central
c Valuation Board to owner/ occupier etc."

17. The Board, therefore, delegated its power to the Municipality which
was impermissible in law. It had no control over the recruitments made by the
Municipality. Probably it even did not have any control over their work. Who
had been supervising the job of the said casual employees· has not been ',

D disclosed.

18. The result of such an unscientific study may produce a disastrous '·
result and in fact from the pattern of increase in demands by the Bidhanagar
Municipality it appears that the increase in the valuation ranges from 3954%,
i.e., 39.5 times to 137%, i.e., 1.4 times. Such exorbitant increase in the tax on
E the public is, in our opinion, itself indicative of arbitrariness, and hence,
violative of Article 14 of the Constitution. In a democracy, the people are
supreme, and all authorities must function for the public welfare. Excessive
increase in the tax burden on the public is surely not for the public welfare.
Also, in the aforementioned context, in our opinion, the very method applied
by the Municipality and the Central Valuation Board must be held to be
F arbitrary in nature and hence violative of the Constitution. In Maneka-Gandhi .,,..
v. Union of India, [AIR (1978) SC 597], it was held that arbitrariness may be
violative of Article 14 of the Constitution.

19. No person was appointed who had an expertise in the field. The
casual employees appointed were not trained personnel. Their qualifications
G
are not known. On what basis they could determine the valuation of the
buildings and lands has also not been disclosed. They, being not government
' servants, ordinarily would not have the power to enter into the premises of
persons so as ~o infringe the right of privacy which is otherwise granted to "·
an authority under the 1978 Act.
H
BIDHANNAGAR(SALTLAKE) WELFARE ASSON v. CENTRAL VALUATIONBOARO[S.B. SINHA,J.) 451

20. In view of the mode and manner in which the general valuation had A
been prepared without giving an opportunity of hearing and/ or in any ev~nt
without even asking the residents of the area in general to have their say, the
provisions of the 1978 Act are required to be construed.

21. Se~ .ion I I of the 1978 makes such general valuation final. Section
IO has been deleted but the finality clause attached to Section I I has been B
retained. By reason of the Amendment Act, the finality clause has been
converted to a conclusive one, subject of course to the provisions of Sections
14 and 15 of the 1978 Act. The provision has been made for giving notice
only to the lessees and sub-lessees who were occupiers of the buildings
where valuation is intended to be made for the first time or the valuation is C
sought to be increased.

22. Section I2 of the 1978 Act which provided for certain safeguards
insofar as it empowered the Board to make amendment of the valuation list
has been omitted. Section 13 had been omitted in the year 1984. It is in the
aforementioned backdrop, that the provision for review contained in Section D
14 is required to be taken into consideration. Before, however, we resort
thereto, it may be noticed that in terms of an unamended provision of Secti~n
14, a Review Committee was constituted in terms of Section 15 of the 1978
Act.

23. Under the unamended provision of Section 15, the State Government E
was to constitute a number of review committees which were required to hear
applications presented under Sub-section (1) of Section 14. Such review
committees consisted of two members, out of whom the President was required
to be appointed by the State Government on such terms and conditions and
who was to possess such qualifications which were prescribed and the other F
member was to be one of the Councillors concerned. The said provision has
no application in the instant case. Sub-section (3) of Section 15 of the
Unamended Act had a plenary power to confirm, reduce, enhance or annul
the valuation of land or building. The Review Committee had the jurisdiction
to make further enquiry as it thought fit and proper. It was only the decision
of the Review Committee which was made final. G
24. Under the Amended provisions, however, the power of the State
• I
which was an independent authority, has been taken away. Power to constitute
Review Committee has been conferred upon every Corporation or Municipality,
as the case may be. Every Review Committee was to be presided by the

- H
452 SUPREME COURT REPORTS [2007) 7 S.C.R. .
A Chainnan or the Vice-Chairman of the Municipality and would consist of two
Councillors of the Municipality and an officer of the Board having knowledge
in the assessment of municipal valuation.

25. From the plenary and unlimited power of such Review Committee,
its power has been curtained only to 25% in the year 2002. The rule of ~
B majority has been taken away. The decision under the amended provision is
required to be unanimous. In case of difference of opinion, th1;, matter is
required to be referred back to the Board.

26. The provisions, in our opinion, are per se unreasonable and arbitrary.
The Review Committee is not independent of the Municipality or the Board.
c Whereas under the 1978 Act, a person having the requisite knowledge was
to be appointed by the State Government as Chainnan of the Review Committee,
the affairs of the Review Committee are controlled only by the Municipality
concerned and the Board under the Amendment Act. The Municipality
essentially is interested in increase in valuation of lands and buildings as it
·n would fetch more income to its coffers. It is unthinkable that although the
power to make annual valuation is not to be preceded by an opportunity of
being heard to the person who would be affected thereby, the power of the
Review Committee has been curtailed to 25% of the valuation made by. the
Board. The members are not independent person and each one of them is, in ·
one way or the other, interested in the matter. Even the officer nominated by
E the Board who is said to be an expert might have something to do with the
annual valuation of the area in question. In any event, the effect of the
amendment is that annual valuation is to be made by the Board, then the
objections are to be heard by a Committee which again consists of members
of the Municipality and the Board, and in the event, the decision is not
F unanimous, the matter again goes back to the Board.

27. This provision is akin to the well-known doctrine of Caesar to
Caesar. It per se contravenes the values attached to the principles of natural
justice. We must also take notice of the fact that even the jurisdiction of civil
court is barred and, thus, the only remedy which would be available to the
G taxpayer would be to take recourse to judicial review. Its application in the
matter of this nature where disputed questions of fact may arise for its
determination, would be very limited. It is unfortunate that the Division Bench
opined, although there was no provision therefor, _that in case of any fmal -\ ~
decision of the Board, the taxpayer can go back to the Review Committee.

H
BIDHANNAGAR (SALTLAKE) WELFARE ASSON v. CENTRAL VALUATION BOARD [S.B. SINHA.I.) 453

28. The proviso appended to Section 14 of the 1978 Act makes the A
situation worse inasmuch as before taking recourse to the review provision
a pre-deposit is to be made in terms thereof. A statute which provides for civil
or evil consequences must conform to the test of reasonableness, fairness
and non-arbitrariness.

29. Ordinarily an order entailing civil consequences should be preceded B
by an opportunity of being heard. (See Rajesh Kumar and Ors. v. D:C.J. T. and
Ors., [2007) 2 SCC 181) The impugned Act, however, has taken away such a
provision which existed in the earlier one.

30. It may be that the legislature thought that while preparing the C
genera! valuation, it may not be possible to give an opportunity of hearing
as such and, an opportunity of hearing may be given at a later stage. It is
true that an order of assessment under the Act is conclusive subject to
Sections 14 and 15 of the Act but keeping in view the limited power conferred
upon the Revenue Committee thereunder in terms whereof a part of demand
is beyond the pale thereof, it is possible that in a given case the entire D
exercise of review may end in futility. What, thus, was necessary was to
.1 provide for an independent and impartial body constituted for the general
redressal_ of the grievance of the taxpayers.

31. The Committee should not have consisted of the authorities of the
Municipality and the officers of the Board alone. Section 15 does not provide E
for any expertise on the part of the Councillors to determine the objections.
As many committees as the Municipality likes may be constituted. Rationality
in the decision is, thus, not guaranteed.

32. In Swadeshi Cotton Mills v. Union of India, [1981] 1 SCC 664, this
Court held: F
"44. In short, the general principle as distinguished from an absolute
rule of uniform application seems to be that where a statute do~ not,
in terms, exclude this rule of prior hearing but contemplates a post-
decisional hearing amounting to a full review of the original order on G
merits, then such a statute would be construed as excluding the audi
alteram partem rule at the pre-decisional stage. Conversely, if the
statute conferring the power is silent with regard to the giving of a
pre-decisional hear ing to the person affected and the administrative
decision taken by the authority involves -civil consequences of a
grave nature, and no full review or appeal on merits against that H
454 SUPREME COURT REPORTS [2007) 7 S.C.R.

A decision is provided, courts will be extremely reluctant to construe
such a statute as excluding the duty of affording even a minimal
hearing shorn of all its formal trappings and dilatory features at the
pre-decisional stage, unless, viewed pragmatically, it would paralyse
the administrative progress or frustrate the need for utmost
promptitude. In short, this rule of fair play "must not be jettisoned
B save in very exceptional circumstances where compulsive necessity
so demands". The court must make every effort to salvage this cardinal
rule to the maximum extent possible, with situational modifications. ....
But, to recall the words of Bhagwati, J., the core of it must, however,
remain, namely, that the person affected must have reasonable
c opprtunity of being heard and the hearing must be a genuine hearing
and not an empty pub lie relations exercise."

33. This Court in Calcutta Gujarati Education Society and Anr v.
Calcutta Municipal Corpn. and Ors., (2003] IO SCC 533], held:

D "30. The aforesaid ground also does not seem to be acceptable. It is
true that burden of tax based on valuation in the assessment is to be
borne by the tenant or occupier but as we have examined the \
provisions, even though the landlord remains inactive by not
contesting the assessment proposed, the tenant or occupier has to be
vigilant and has the right to object to the same pursuant to the public
E and written notices. The tenants or occupants who have to shoulder
major portion of the tax burden, therefore, have to be vigilant and
raise objections pursuant to public and written notices and contest
the assessments on valid grounds in their own interest.

50. We have examined the scheme of the Act and we find that in
F apportioning the burden of tax on landlord and tenant a uniform
scheme or tax structure has been evolved under the Act on the basis ,_ )
of actual and notional rental value of the premises. The liability of the
landlord towards tax is limited to the valuation based on actual rent
received and the assessment made of the tax based on letting value
of the premises is the liability of the tenant/sub-tenant or occupier.
G
Merely because the Tenancy Act is attracted to accommodations with
rent less than Rs 3000 per month and not to other accommodations
having higher rent, does not create any dissimilar situation in
application of the Act to various categories of tenants paying rent
more or less than Rs 3000. The portion of tax liable to be paid by the
ii.1 occupant or tenant is 1ot directly recovered by the Corporation from
BIDHANNAGAR (SALT LAKE) WELFARE ASSON '" CENTRAL VALUATION BOARD [S.B. SINHA. J.] 455
them but is recoverable through the landlord and the landlord has A
' been given right of reimbursement by demanding it from the tenant,
sub-tenant or the occupant. For recovering such portion the tax payable
by the tenant, sub-tenant or occupant, which has been paid by the
landlord, is deemed to be "rent" only for the limited purpose of its
recovery. The modes of recovery are by a demand notice under the
Tenancy Act and if necessary, by filing an eviction suit. Resort to B
remedy before the regular court is also not prohibited. On this aspect
of apportionment of tax· and mode of recovery of tax, the Act does not
-4
make any discrirr.ination between tenants of premises covered by the
Tenancy Act and others not covered by the said Act.

51. As a result of the discussion aforesaid, we find no vice in any of
c
the provisions of the Act although we have considered it necessary
to interpret the provisions harmoniously for better application of the
provisions of the Act and the Tenancy Act. The various legal
provisions assailed before us have been interpreted by us and our
conclusions are as under: D
"(I) In view of specific provisions of the Act and as the provisions
of the Act impose burden of tax to an appreciable extent on the
tenants, sub-tenants and occupiers and the tax is liab::: to be recovered
from them through the landlord or directly by attachment of rent or
other coercive modes, the tenants, sub-tenants and occupants are E
entitled to an opportunity to participate in the process of valuation
and assessment. They are entitled, therefore to written notices apart
from public notice for assessment, revision of assessment or amendment
of assessment of the 'consolidated rate' or tax. It is also made clear
that pursuant to the public notice or written notice, the returns
submitted by the tenant, sub-tenant or occupier, with regard to
F
1 determination of annual value shall be considered by the Corporation.
The same procedure would be followed in revision of the annual
valuation.

(2) It is further made clear that non-issuance of public notice or
notices and/or non-service of written notices to the 'persons primarily
G
, liable' would not necessarily invalidate the proceedings of assessment

... ,...
or reassessment or amendment of the valuation for consolidated rate
unless it is established by the party aggrieved that a serious prejudice
was caused to it for want of notice.
H
........
456 SUPREME COURT REPORTS [2007) 7 S.C.R.

~
A ( 3 ) Under the provisions of the Act since the tenant, sub-tenant or
occupier have to share the burden of an appreciable portion of •
'consolidated rate' exclusive or inclusive of 'surcharge' in relation to
properties used for non-residential and commercial purposes and as
to
the Act provides for opportunity of participation them pursuant to t
a public notice and written notice in assessment and reassessment of
B tax, they have a right of appeal provided under the Act. It is made
clear that tenants, sub-tenants and occupiers held liable for payment
of a portion of tax have a right of appeal on predeposit of a portion
...
of tax levied anu made recoverable from thc:;m.

(4) It is also made clear that to enable the tenant, sub-tenant or
c occupier as 'person liable' to pay 'consolidated rate', they would ~
have a right to obtain necessary information on payment of requisite
fee in accordance with Section 178 of the Act and corporation
authorities are legally bound to furnish such requisite information."
)::
[See also Paras 32 to 34 and 40]
D
34. The 1978 Act or even the Amending Act have not provided any
guidelines. Guidelines are provided in the Municipality Act. When a statute
does not provide for procedural fairness, it may be ultra vires.

35. In Dr. Balbir Singh and Ors v. Mis. MC.D. and Ors., [1985] 1 SCC
E 167], this Court held:

"It is indeed strange that the assessing authorities should have declined
to assess the rateable value of 494 properties in South Delhi on the
basis of standard rent determinable on the principles laid down in
sub-section (l)(A) (2)( b) or (l)(B)(2)( b) of Section 6, merely on the
F ground that in the opinion of the assessing authorities "the assessees
failed to produce the documentary evidence as regards the aggregate ~

amount of reasonable cost of construction and the market price of
land comprised in the premises on the date of commencement of the
construction". If the assessees failed to produce the documentary
evidence to establish the reasonable cost of construction of the
G premises or the market price of the land comprised in the premises, the
asse ssing authorities could arrive at their own estimate of these two
~
constituent items in the application of the principles set out in sub-
section (l)(A) (2)( b) or {l)(B)(2)(b) of Section 6. But on this account, -4-
'\
the assessing authorities could not justify resort to sub-section (4) of
).-
H Section 9. It is only where for any reason it is not possible to determine ..-
}=:
,..~

'
BIDHANNAGAR (SALT LAKE) WELFARE ASSON v. CENTRAL VALUATION BOARD [S.B. SINHA, J.] 457

the standard rent of any premises on the principles set forth in A
Section 6 that the standard rent may be .fixed under sub-section (4)
of Section 9 and merely because the owner does not produce
satisfactory evidence showing what was the reasonable cost of
. construction of the premises or the market price of the land at the date
of com~encement of the construction, it cannot be said that it is not B
possible to determine the standard rent on the principles set out in
sub-section (l)(A) (2)( b ) or (l)( b )(2)( b ) of Section 6. Take for
example a case where the owner produces evidence which is found
to be incorrect or which does not appear to be satisfactory; can the
assessing authorities in such a case resort to sub-section (4) of
Section 9 stating that it is not possible to determine the standard rent C
on the principles set out in sub-section (l)(A)(2)( b) or (l)(B)(2)(b)
of Section 6. The assessing authorities would obviously have to
estimate for themselves, on the basis of such material as may be
gathered by them, the reasonable cost of construction and the market
price of the land and arrive at their own determination of the standard
rent. This is an exercise with which the assessing authorities are quite D
familiar and it is not something unusual for them or beyond their
I
competence and capability. It may be noted that even while fixing
standard rent under sub-section (4) of Section 9, the assessing
authorities have to rely on such material as may be available with
them and determine the standard rent on the basis of such material E
by a process estimation."

36. In R.K. Kaura v. Municipal Commr., MCD and Ors (2005] 11 SCC
524, this Court held:

"6. It is true that the order of the respondent authorities dated 14-11- F
1996 records that the appellant had appeared and requested for
rectification of ex parte assessment dated 9-11-1993 ~d had also
produced documents. However, it appears that the basis for arriving
at the market price of the land had not in fact been discl9sed to the
appellant nor was the appellant given any opportunity of meeting the
same. Accordingly, we set aside the impugned order dated 14-11-1996 G
and direct the authorities concerned to redetermine the rateable value
for the period from March 1989 to 31-3-1994."

. 37. When a substantive unreasonableness is to be found in a statute,
it may have to be declared unconstitutional.
H
458 SUPREME COURT REPORTS [2007) 7 S.C.R.

A 38. In C.B. Gautam v. Union of India and Ors., [1993) 1 SCC 78),
emphasising the need to comply with principle of natural justice, it was held:

" ..... Although Chapter XX-C does not contain any express provision
for the affected parties being given an opportunity to be heard before
an order for purchase is made under Section 269-UD, not to read the
B requirement of such an opportunity would be to give too literal and
strict an interpretation to the provisions of Chapter XX-C and in~ the
words of Judge Learned Hand of the United States of America "to
make a fortress out of the dictionary". Again, there is no express
provision in Chapter XX-C barring the giving of a show-cause notice
or reasonable opportunity to show cause nor is there anything in the
c language of Chapter XX:C which could lead to such an implication.
The observance of principles of natural justice is the pragmatic
requirement of fair play in action. In our view, therefore, the requirement
of an opportunity to show cause being given before an order· for
purchase by the Central Government is made by an appropriate
D authority under Section 269-UD must be read into the provisions of
Chapter XX- C. There is nothing in the language of Section 269-UD
or any other provision in the said Chapter which would negate such
an opportunity being given. Moreover, if such a requirement were not
read into the provisions of the said Chapter, they would be s~riously
open to challenge on the ground of violations of the provisions of
E Article 14 on the ground of non-compliance with principles of natural
justice. The provision that when an order for purchase is made under
Section 269-UD reasons must be recorded in writing is no substitute
for a provision requiring a reasonable opportunity of being heard
be.fore _such an order is made. 31. The recording of reasons which lead
F to the 'passing of the order is basically intended to serve a two-fold
purpose:

(I) that the "party aggrieved" in the proceeding before (sic the
appropriate authority) acquires knowledge of the reasons and, in a
proceeding before the High Court or the Supreme Court (since there
G is no right of appeal or revision), it has an opportunity to demonstrate
that the reasons which persuaded the authority to pass an order
adverse to his interest were erroneous, irrational or irrelevant, and

(2) that the obligation to record reasons and convey the same to the
party concerned operates as a deterrent against possible arbitrary
H action by the quasi-judicial or the executive authority invested with
BIDHA.'-'NAGAR(SALTLAKE)WELFAREASSON•. CENTRAL VALUATIONBOARD[S.B. SINHA,J.) 459

judicial powers. A
39. In Krishna Mohan (P) Ltd. v. Municipal Corporation of Delhi &
Ors., (2003] 7 SCC 151], this Court held:

"51. In the result, we allow the appeals and hold as under:

(l) Section 116(3) is declared invalid as it delegates unguided and B
uncanalised legislative powers to the Commissioner to declare any
plant or machinery as part of land or building for the purpose of
determination of the rateable value thereof'

[See also Dewan Dau/at Rai Kapoor and Ors. v. New Delhi Municipal C
-I Committee and Ors., [ l 990] 1 SCC 685]

40. In a case of this nature, provision for review was in effect and
substance a provision for appeal. But, when a provision for appeal has been
. laid down, the same should, for all intent and purport, must provide for an
effective remedy. D
1 41. This Court in Union ofIndia & Anr. etc. v. Tulsiram Patel etc. [AIR
(1985) SC 1416], held:

"The second condition necessary for the valid application of clause
(b) of the second proviso is that the disciplinary authority should E
record in writing its reason for its satisfaction that it was not reasonably
practicable to hold the inquiry contemplated by Article 31 l (2). This is
a constitutional obligation and if such reason is not recorded in
writing, the order dispensing with the inquiry and the order of penalty
following thereupon would both be void and unconstitutional."
F
; 42. The said dicta was affirmed by a Three Judge Bench of this Court
in Chief Security Officer & Ors. v. Singasan Rabi Das [1991] 1 SCC 729],
stating that principle of natural justice cannot be dispensed with on mere ipso
dixit. [See also Tarsem Singh v. State ofPunjab & Ors., (Civil Appeal No.1489
of 2004), decided on 25th January, 2006, Prithipal Singh v. State of Punjab
& Ors., 2006 (11) SCALE 28 and Indian Airlines Ltd. v. Prabha D. Kanan, G
[2006] 12 SCALE 58

43. Principles of natural justice are based on two basic pillars:

CO Nobody shall be condemned unheard (audi a/teram partem)
H
460 SUPREME COURT REPORTS [2007) .7 S.C.R.

A (iI) Nobody shall be judge of his own cause (nemo debet esse judex
in propria sua causa)

44. Duty to assign reasons is, however, a judge made law. It is cons~dered
to be a third pillar. [See Reliance Industries Ltd. v. Designated Authority and
Ors.,( 2006) AIR sew 4911]
B
45. A Review Committee being a quasi judicial body was required to
fulfill the requirements of the three conditions. There is furthennore no reason
whatsoever as to why the power of Review Committee was curtailed only to
the extent of 25%. It is furthennore beyond any logic as to why rule of simple
majority in a multi-member committee could not be applied.
c
46.In the case of AM (Serbia) & Ors v. Secretary of State for the Home
Department, (2007) EWCA Civ 16, before the impugned amendment came into
force, the Immigration and Asylum Adjudication System had taken the fonn
of a right to appeal against a decision of the Secretary of State to· an
D adjudicator, with a further right of appeal with leave to the Immigration Appeal
Tribunal. The jurisdiction of the IA T was not limited to points of law. By the
Nationality, Immigration and Asylum Act 2002, appeals from an adjudicator
to the IAT were restricted to appeals on points of law (section 101(1)) and
conventional judicial review of a refusal of leave to appeal to the IA T was
replaced by statutory review of the leave.decision (section 101(2)). The words·
E "fairly, quickly and efficiently" fonned the crux of the debate which were
derived from under section 106(1A) of the 2002 Act. The court, while finding
fault with the impugned amendment, observed:

"I have come to the conclusion that Rule 62(7) is fundamentally
flawed. The significance of Robinson is in its _demonstration of the
F role of the courts and the Tribunal in ensuring that the United Kingdom
does not fall foul of the Refugee Convention, even where an obvious
point of Convention law has been missed by the practitioners. It
surely applies on the same basis to the ECHR, where the argument is
even stronger because, by section 6 of the Human Rights Act 1998,
it is unlawful for a public authority to act in a way which is incompatible
G
with an ECHR right and courts and the Tribunal are "public authorities"
for this purpose: section 6(3)(a). There is then a further logical stage
in the argument. If it is incumbent upon the AIT to consider and
decide Robinson obvious points which have not been advanced by
the appellant notwithstanding Rule 62(7), given the rationale of
H Robinson there is no rational basis for excluding and deciding points
BIDHANNAGAll(SALT LAKE) WELFARE ASSON v. CENTllAL VALUATION BOARD (S.B. SINHA, J.) 46}

of equal force which the appellant draws to the attention of the A
Tribunal, even though they were not embraced in the grounds of
appeal sanctioned by the IA T. For these reasons, I consider that,
when he promulgated Rule 62(7), the Lord Chancellor fell into legal
error and the Rule cannot survive the Wednesbury challenge."

47. We, therefore, for the aforementioned reasonshave no other optfon B
but to hold that the provisions for review conferred in terms of the statute
for all intent and purport are illusory ones and do not satisfy the test of
Article 14 of the Constitution of India. No statute which takes away sombody' s
right and/ or imposes duties, can be upheld where for all intent and purport,
'-
there does not exist any provision for effective hearing. C
48. It is one of those statutes where a decision is rendered by a body
which may have an institutional bias although same is not ordinarily
contemplated in the case of an individual member being a part of a body.

49. In Dr. Bonham's case (8 Co Rep 113 at 118], Coke, CJ declared a D
statute ultra vires where a body empowered to impose a levy was itself to
be benefited thereby. The said decision was rendered despite the doctrine of
parliamentary sovereignty existing in the United Kingdom.

50. We may notice that even this Court in Mithu v. State of Punjab
(198312 sec 211 has applied the test of non-arbitrariness while striking down E
Section 303 of the Indian Penal Code. Although the Court may not go into
the question of a hardship which may be occasioned to the taxpayers but
where a fair procedure has not been laid down, in our opinion, the validity
thereof cannot be upheld. [See Smith v. Kvaerner Cementation Foundations
Ltd (Bar Council intervening), (2006) 3 All ER 593]
F
51. For the reasons aforementioned, the judgment of the Division Bench
of the High Court is set aside and that of the learned Single Judge is restored.
The impugned Act is declared unconstitutional being violative of Article 14
of the Constitution. These appeals are allowed. No costs.

vs Appeal allowed.