Holding

Section 4(1) of the Fourth Amendment Act validly validates the council’s levy of property tax under the impugned G.O., and there was no legislative interregnum, so the appeal fails.

Summary

The Vijayawada Municipal Council originally levied property tax under the Andhra Pradesh (Andhra Areas) District Municipalities Act, 1920. After the Andhra Pradesh Municipalities Act, 1965 repealed the old Act, the State Government issued several General Orders directing the council to levy tax under the new Act, later rescinding and re‑directing it back to the old Act, culminating in G.O. No. 255 dated 15‑June‑1973. House‑property owners challenged this last order, arguing that once the power to levy under the old Act was exhausted by the earlier orders, the Government could not revive it, and that the Fourth Amendment Act of 1975 could not retrospectively validate the levy. The High Court dismissed the petitions, relying on Section 4(1) of the Fourth Amendment Act which expressly validated all such actions, and the Division Bench affirmed that view. The Supreme Court held that the amendment statute validly conferred retrospective validation on the council’s levy, that no legislative gap existed, and therefore the impugned G.O. was lawful, dismissing the appeal.

Issues considered

The legality of the State Government's power to rescind earlier orders and direct the municipal council to levy property tax under the repealed 1920 Act.
Whether Section 4(1) of the Andhra Pradesh Municipalities (Fourth Amendment) Act, 1975 can retrospectively validate actions taken under the impugned G.O. despite the absence of a specific legislative provision.
Whether the property tax assessments made between 1969 and 1973 under the old Act were valid.
The effect of the amendment of Section 87 of the 1965 Act on the basis of assessment and its retrospective applicability.

Legislation cited

Andhra Pradesh (Andhra Areas) District Municipalities Act, 1920s. 82, s. 87
Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960s. 4
Andhra Pradesh Municipalities Act, 1965s. 2(11), s. 389, s. 391, s. 85, s. 86, s. 87
Andhra Pradesh Municipalities (Fourth Amendment) Act, 1975s. 4(1), s. 85, s. 87

Subjects

property taxmunicipal taxationretrospective validationlegislative amendmenttransitional provisionsgovernment orderrepealassessmentconstitutional lawAndhra Pradesh

Judgment

YADLAPATI VENKATESWARLU
A
v.
STATE OF ANDHRA PRADESH AND ANR.

SEPTEMBER 11, 1990

[SABYASACHI MUKHARJI, CJ. AND K.N. SAIKIA, J.] 8

Andhra Pradesh Municipalities Act, 1965: Andhra Pradesh
(Andhra Areas) District Municipalities Act, 1920-Sections 2( 11), /l6, fi7
and 391-Vijayawada Municipal Council-Assessment and levy of
property tax under the old and new Acts-Validity of.

Vijayawada Municipality of Andhra Pradesh earlier levied pro-
c
perty tax under the Andhra Pradesh (Andhra Areas) District Munici-
palities Act, 1920. That Acl'was repealed and the new Act known as the
Andhra Pradesh Municipalities Act, 1965 came into force on 2.4.1965.
Uoder the old act property tax was levied on the basis of gross annual
rental value, whereas under section 87 of the new Act the basis of D
assessment in owner occupied building was the capital value thereof to
be determined in the prescribed manner. Section 389 of the new Act
provided that. that Act was to be read subject to-Schedule IX which
contained transitional provisions in the rules. Rule 12 thereof dealt with
levy .of taxes etc. The Government under Rule 12 issued a G.O.
Ms. No. 749 M.A. directing that all Mnnicipal Councils shall with effect E
from 1.4. 70 levy the property tax as per the provisions of the new Act,
which date by a subsequent G.O ... was changed to 1..10.1970. By
.1
another G.O.Ms. No. 81 M.A. dated 30.1.71, the Government directed
the Vijayawada Municipal Council to continue to levy the -property tax
• under the provisions of the old Act as rate payers had filed writ peti-
tions in the High Court and obtained stay. However, by G.O.Ms. 675 F
M.A., the G.O.No. 81 was rescinded and the Vijayawada Municipal
i!!l!
Council '!as directed to collect revised taxes under ihe provisions of the
"" new Act with effect from 1.10.70. This G.O. was rescinded and by G.O. Ms.
No. 255 M.A. dated 15.6. 73 the Government directed the Vijayawada
Council to levy the property tax under the old Act. As a consequence,
the Vijayawada Municipal continued to levy and enhance the property G
tax under the old Act.

The validity of G.O.Ms. No. 255 dated 15.6.73 was challenged by
house property owners in the High Court in two writ petitions seeking
an order restraining the Vijayawada Municipal ConncU from enlorcing it,
and declaring the same illegal and void. The petitioners' contention H

381
382 SUPREME COURT REPORTS [1990] Supp. 1 S.C.R.

''
d:. amongst others was that the Government having directed that the taxes
A be levied nnder the new Act, the transitional power under rule 12 stood
•" exercised, and the power to levy tax under the old Act had ceased and it
was no longer open to the government to rescind the previous orders.
The High Court accepted the said contention, but held that in view of
the provisions of section 4(1) of the Andhra Pradesh Municipalities
B (Fourth Amendment) Act (23 of 1975), which validated the actions
taken, those could not be challenged as invalid. The writ petitions were
therefore dismissed. Appeals to the Division Bench, having failed, this
appeal has been filed after obtaining special leave.

Dismissing the appeal, this Court,

c HELD: The State's power to tax is derived from the Constitution,
and the municipality's power to tax is derived from the State Legisla-
ture, which could delegate that power in the manner the Constitution
permits to the municipal council, an agent of the State Government and
the municipality cannot refuse to raise taxes as directed. The proper
authority to determine what should and what should not constitute a
public burden is the Legislature of the State. This is not only true for the
State itself, but it is also true in respect of each municipality of the
State; these inferior corporate bodies having only such authority in this
regard as the legislature shall confer upon them. [202E-F) ,.
E A statute will not be declared unconstitutional unless it is specifi-
cally challenged and the principle is equally applicable to an enact-
ment authorising levy of a tax for a public purpose. The power to
tax is a sovereign power and is legislative in character and it has to
be exercised within the constitutional limitations. The statutes relat-
ing to municipal taxes may be changed according to the existing legis-
F lative rules of State policy unless forbidden by the Constitution from
doing so. [202G-H]

Irregular assessment may also be regularised with retrospective
effect within the Constitutional limitations. Where the Court has not
already declared invalid a taxing measure which was of doubtful vali-
G dity, it is permissible for appropriate legislature to validate it by re-
trospective legislation. No legal fiction is involved in such a case. [203A-C)

The G.0. itself covered the period· after the repeal of the old Act
and till the date of commencement of the fourth amendment so that no i"'
interregnum was really there. The assessment made according to the
H provisions of the old Act were validated as actions taken by the Council
YADLAPATI v. STATE OF A.P. [SAlKIA, J.I 383

pursuant to the impugned G,Q, and not under the provisions of the old A
Act which was already repealed. While referring to the old Act, the
G.O. did not revive the Act but only prescribed the same procedure as
was found in the repealed Act as a transitory measure. [203B-C]

· Janapada Sabha Chhindwara v. The Central Provinces Syndicate i3
Ltd. and Anr., [1970] 3 SCR,745, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2494
of 1978.

From the Judgment and Order dated 9.12.1977 of the Andhra
P"radesh High Court in Writ Appeal No. 465 of 1976. C

A. Subba Rao for the Appellant.

A.S. Nambiar, B. Parthasarthy, G. Prabhakar and K. Ram
Kumar for the Respondents.
D
The Judgment of the Court was delivered by

K.N. SAIKIA, J. This appeal by special leave is from the
common Judgment of the High Court of Andhra Pradesh dismissing
two writ appeals and a writ petition. The Andhra Pradesh (Andhra
E
Area) District Municipalities Act, 1920 (hereinafter referred to as the
'old Act') was applicable to Vijayawada Municipality of Andhra
Pradesh and property tax was levied under that Act. The Andhra
Pradesh Municipalities Act 1965 (hereinafter referred to as the 'new
Act') came into force on 2.4.1965. Section 2(11) of the new Act·
defined "council" to mean "a municipal council constituted under this
Act." Section 391(1) of the new Act repealed the old Act. Section 389 F
of the new Act provided:

"389. Act to be read subject to Schedule IX in regard to first
reconstitut;on ofa council etc.:

In regard to the first constitution of a council for any local G
area under Section 3, or to the first reconstitution in
acCordance with the provisions of this Act, of a council in
existence at the commencement thereof, and otherwise in
first giving effect to the provisions of this Act, this Act shall
be read subject to the rules in schedule IX."
H
384 SUPREME COURT REPORTS [1990] Supp. 1 S.C.R.

A The Schedule IX to the new Act contained the transitional provisions
in the rules therein. Rule 12 thereof dealt with levy of taxes etc. and
said:

"12. Levy of taxes etc. Any tax, cess or fee which was being
lawfully levied by or on behalf of any council at the com-
B mencement of this Act and which may be lawfully levied
under this Act, shall notwithstanding any change in the
method or manner of assessment or levy of such tax, cess or
fee be levied by or on behalf of the council at such rate as
may be prevailing at such commencement or at such other
rate as may be determined by the council from time .to
time, by a resolution for the year in which this Act is
c brought into force, and unless the Government by general
or special order otherwise direct, for subsequent years
also." ,

The result was that tax lawfully levied and continued to be levied
D under the old Act had to be continued unless the council by resolution
determined such other rate from time to time, and unless the Govern-
ment by general or special order otherwise directed under the transi-
tional provisions, On 18.9.1969 the Government of Andhra Pradesh
issued G.O. Ms. No. 749 M.A. in exercise of its powers under the
aforesaid Rule 12 of Schedule IX directing that all Municipal Councils,
E shall with effect from 1.4. 70 levy the Property tax as per the provisions
of the new Act. But due to certain administrative difficulties the revi-
sion could not be completed before 1.4.1970 and the Government,
therefore, issued G .0 .Ms. No. 293 M.A. dated 18.4. 1970 directing the
Municipal Council to levy the property tax as per the provisions of the
new Act from J.10. 1970. By another G.O. Ms. No. 81 M.A. dated
F 30. 1.1971 the Government directed the Municipal Council of Vijaya-
wada to continue to levy the property tax under the provisions of the
old Act as certain rate payers had filed writ petition in the High Court
and obtained stay. However, by G.O. Ms. No. 675 M.A. the G.0. Ms.
No. 8 I was rescinded and the Vijayawada Municipal Council was
directed to collect revised taxes under the provisions of the new Act ..
G with effect from I. 10.1970. This latter G .0. Ms. No. 675 was in its turn
rescinded by G.O. Ms. No. 255 M.A. dated 15.6.73 whereby the
Government ordered that the Vijayawada Municipal Council shall
continue to levy the property tax under the provisions of the old Act
and that G .0. was to be deemed to have come into force from
1.10.1970. As a result the Vijayawada Municipality continued to levy
H and enhance the property tax under the provisions of the old Act. It
•'
YADLAPATI v. STATE OF A.P. [SAIKIA, J.} 385

may .be mentioned that under s. 82 of the old Act property, tax was A
levied on the basis of gross annual rental value, whereas under s. 87 of
the new Act the basis of assessment in owner occupied building was
the capital value thereof to be determined in the prescribed manner.

The G .0. Ms. No. 255 dated 15.6.73 was challenged by house
B
property owners in the High Court in two writ petitions under Article
226 of the Constitution of India seeking writ in the nature of
mandamus or order or direction restraining the Vijayawada Municipal
Council from enforcing it and declaring the same illegal and void. It
was in.ter a/ia contended before the learned Single Judge that by earlier
G.Os. the Government having directed that taxes should be levied
under the new Act, the transitional power under rule 12 had been c
already exercised and the power to levy any tax under the old Act
therefore ceased and it was not open to the Government to rescind the
previous orders and re-direct taxes to be levied under the old Act.
That contention was accepted observing:
D
"The language of the Rule is clear that once the Govern-
ment by a general or special order, otherwise directs, the
power to levy tax under the old Act is exhausted."

Even so, it was held that in view of the provisions in s. 4(1) of the
Andhra Pradesh Municipalities (Fourth Amendment) Act (23 of 1975)
which validated the actions taken, those could not be challenged as E
invalid. The submissions that the Amendment Act was not retrospec-
tive and that the enhancement of the tax was not made following the
procedure prescribed by law, were also negatived holding that the
procedure prescribed under the old Act was followed inasmuch as
under the old Act the property tax was levied on the basis of only
rental value whereas under the new Act it was on the basis either of the F
rental value or of the capital value, and that under the old Act when
tax was being levied on the basis ofrental value there was no need to
ascertain the capital value of .the land and for enhancing the assess-
ment all that the authority had to know was whether there had been an
increase in the rent and Rule 6 of Schedule II which dealt with the
value of the building for the purposes of property tax. was inapplicable G
as the levy under the old Act on the basis of rental value and enhance-
ment could be done according to the procedure contained in Schedule
VII Rule 10 of the old Act. It was not denied that special notice as
required under the old Act was given. The writ petitions were accord-
~ ingly dismissed.
H

I
386 SUPREME COriRT REPORTS [ 1990] Supp. 1 S.C.R.

A Two writ appeals were filed by the writ petitioners. Another writ
petition having raised identical questions was heard with the two appe-
als by the Division Bench. The Division Bench held that the finding of
the Single Bench that having already given directions by the General
Orders under the transitory provision of Schedule IX Rule 12 the
Government's power under that provision ceased and it had no power
El to rescind that order and direct that the taxes which were under the old
Act musi be continued to be collected was nut challenged before it.
The Division Bench held that the Fourth Amendment Act had
entrusted to the Municipal Councils the power to tax under the old
Act, though that Act had been repealed. It held that though the
actions of the Vijayawada Municipal Council pursuant to the General
Order might have been invalid those were validated bys. 4(1) of the
c Fourth Amendment Act. It was also held that the appellant could
pursue their remedies by way of revision under the new Act. Thus, the
Division Bench having dismissed the two writ appeals as well as the
writ petition by the impugned judgment and also having refused the
certificate, the appellant has obtained special leave.
D
Mr. A. Subba Rao, the learned counsel for the appellant, sub-
mits that under the old Act the basis for assessment of property tax was
the annual rental value while under the new Act it was capital value.
By the G.O. No. 749 the Government having directed that property
tax would be ·levied under the new AC!. the subsequent G.Os. passed
E after rescinding the said G.O. No. 749 and redirecting assessment to
be made under the old Act were invalid as was held by the Single
Bench and that finding was not challenged before the Division Bench.
Consequently, it is submitted, during the period from 1969 to 1973
there was no valid law to enable the Municipal" Couneil to levy taxes
under·the old Act and the actions under the G.Os. are sought to be
F validated by the Fourth Amendment Act of 1975, but unless the sub-
stantive law relating to the method of assessment was also amended
retrospectively, the invalid actions could not be validated, as that law
could not be deemed to have been in existence by a legal fiction.
Council submits that s. 87 of the new Act relating to levy of Property
Tax was amended so as to bring it in conformity with the correspond-
(} ing provision of s. 20 of the old Act which prescribed rental value as
the basis for assessment. It is pointed out that s. 3 of the Fourth
Amendment Act did not contain any indication that the said amend-
ment was retrospective so as to bring it on the statute book by a fiction
prior to 1973 when the invalid assessment was made. The Fourth
Amendment Act came into force only from !0th June, 1975 which was ..
H the date of the Ordinance. The amendment of s. 87 of the new Act
YADLAPATI v. STATE OF A.P. [SAIKIA, J.J 387

being not retrospective in its operation prior to 1973, it is submitted
A
that the invalid assessments could not have been validated.

Mr. A.S. Nambiar, the learned counsel for the respondents. sub'
mits that the old Act entitled the Municipality to collect the taxes
which had been collected in accordance with law and after coming into
force of the new Act according to the intermediate G.Os.; and that the B
impugned G.O. Ms. No. 255 dated 15.6.73 having directed t.he taxes to
be levied and collected in accordance with the old Act, there was, no
infirmity in the Judgments of the High Court.

It appears that after the writ petitions were filed challenging
G.O. Ms. No. 255 dated 15.6.73 the Government issued the Andhra
Pradesh Municipalities (Amendment) Ordinance 1975 (Ordinance 1 of C
1975) which became the Andhra Pradesh Municipalities (Fourth
Amendment) Act, 1975 which was deemed to have come into force on
the 10th June, 1975. By the said Amendment act not only ss. 85 and 87
of the new Act were amended but also certain intervening actions of
the Municipal Council were sought to be validated. Section 85 'dealt D
with levy of tax and sub-section (I) thereof said:

"Where the council by resolution determines that a pro-
perty tax shall be levied. such tax shall be levied on all
bliildings and lands within the municipal limits save those
exempted by or under this Act or any other law." E

Sub-section (2) provided:

"Save as otherwise provided in this Act and subject to the
provisions of Ss. 81 & 87 and in accordance with the rules
made by the Government in this behalf, these taxes shall be F
levied .... .''

Section 2 of the Fourth Amendment Act amended s. 85 of the new Act
by substituting clauses (a) and (b) of sub-section (2) excluding the
i· proviso thereto. by the following words:.
G
"At such percentages of the annual rental value of lands or
buildings or both as may be fixed by the council."

Section 86 of the new Act provided as follows:

"86. Levy of property tax on a direction by Government: H

•
388 SUPREME COURT REPORTS [1990] Supp. I S.C.R.

A ( 1) The Government may, after consultation with the
council by order published in the Andhra Pradesh Gazette,
direct any council to levy the property tax referred to in
sub-section (1) of Section 81 or any· class of such tax. at
such rate and with effect from such date, not being earlier
than the first day of the half year immediately following
that in which the order is published, as may be specified in
the order.

(2) When an order under sub-·section ( 1) has been pub-
lished, the provisions of this Act relating to property tax
shall apply as if the council had, on the date of publication
c of such order, by resolution, determined to levy the tax at
the rate and with effect from the date specified in the order
and as if no other resolution of the council under Section 81
determining the rate at which and the date from which
property tax shall be levied, had taken effect.

D (3) A council shall not alter the rate at which the property
tax of any class or such tax is levied in pursuance of an
order under sub-section (1) or abolish such tax except with
the previous sanction of the Government."

Section 87(1) of the new Act provided:
£
···s7{1) Every building shall be assessed together with its
site and other adjacent premises occupied as an appur-
tenance thereto unless the owner of the building is a diffe-
rent person from the owner of such site or premises."

F Bys. 3 of the Fourth Amendment Act in sub-section (2) of s. 87 of the
new Act the following words were substituted, namely:

"(2) The annual rental value of lands and buildings Shall
be deemed to be the gross annual rent at which they may
reasonably be expected to let frum month to month or from
G year to year less a deduction, in the case of buildings, of ten
per cent of that portion of such annual rent which is
attributable to the buildings alone, apart from their sites
and the adjacent lands occupied as an appurtenance

H
thereto; and the said deduction shall be in lieu of all allo-
wance for repairs or on any other account whatever.
-
YADLAPATI v. STATE OF A.P. {SAIKIA, J.} 389

Provided that in respect of any building and the land
appurtenant thereto, the fair rent of which has been fixed A
under section 4 of the Andhra Pradesh Buildings (Lease,
Rent and Eviction) Control Act, 1960, the gross annual
rent shall be the annual amount of the fair rent so fixed."

Section 4 of the Fourth Amendment Act sought to validate the actions B
taken earlier by providing as under:

"4(1) Notwithstanding anything in the provisions of the
principal Act or any order of the Government made under
the rule 12 in Schedule IX to the Principal Act, any action
taken till the commencement of this Act by any municipal
council to continue to levy and collect the property tax in c
accordance with the method or manner or assessment or
levy as provided in the Andhra Pradesh (Andhra Area)
District Municipalities Act, 1920 or the Andhra Pradesh
(Telangana Area) District Municipalities Act, 1956, as the
case may be, shall not be deemed to be invalid or ever to D
have been invalid by reason only of the fact that such action
was taken .by the said municipal council during the period
when the power in this behalf had not been validly entrus-
ted to it in accordance with the provisions of the principal
Act or the rules made thereunder and accordingly:
E
(a) The levy and collection of property tax made in
pursuance of such action shall for all purposes be deemed
. to be, and to have always been, made in accordance with
law; and

(b) no suit or other proceeding shall be instituted or con- F
tinued in any court against the municipal council concerned
or any person or authority whatsoever on its behalf on the
ground only that any such action or levy and collection was
not taken or made in accordance with law.

·· (2) Notwithstanding anything in sections 85 and 87 of the G
Principal Act as amended by this Act, the property tax
levied in accordance with the provisions of the Principal
Act as it stood before the commencement of this Act by
such ofthe municipalities as have come into existence after
the commencement of the principal Act shall continue to
be levied and collected by or on behalf of the Municipal H
390 SUPREME COURT REPORTS [ 1990] Supp. 1 S.C.R.

Council of any such municipality for the year commencing
A
on the !st April, 1975."

Admittedly the validity of the Fourth Amendment Act had not been
challenged in the High Court. In fact it was passed during the
pendency of the writ petitions in the High Court. Mr Subl>_a Rao's
B submission is thats. 3 of the Fourth Amendment Act having not been
made retrospective, s. 4 of the Act could not have said that the levy
and collection of property tax made in pursuance of such action for all
purposes be deemed to be and to have always been made in accor·
dance with law.

It is true that only sub-section (2) of Section 87 of the new Act
c was substituted as stated above by the Fourth Amendmen.t Act. How-
ever, once the amendment substituted sub-section (2) of s. 87 it
formed a part of that section. This amendment only provided the basis
of assessment and it itself did not provide for the commencement of
such calculation which however might be taken from the other provi·
D sions of the new Act or from the General Orders issued by the Govern-
ment. Section 4{ 1) of the Fourth Amendment Act expressly validated
any action taken till the commencement of that Act notwithstanding
anything in the provisions of the new Act or in any Government Order
made under-rule 12 of Schedule IX of the new Act and the Municipal
Council should continue to levy and collect the property tax in accor-
E dance with the method or manner of assessment or levy as provided in
the old Act and those acts shall not be deemed to be invalid or ever to
have been invalid by reason only of the fact that such action was taken
by the said municipal council during the period when the power in this
behalf had not been validly entrusted to it in accordance with the
pro.visions of the new Act or the rules made thereunder and that the
F levy and collection of property tax may in pursuance of such action
shall for all purposes be deemed to be, and to have always beer., made
in accordance with law. From the above provisions of s. 4(1) of the
Fourth Amendment Act there is no doubt that the legislature intended
to validate the actions taken under the general orders and under the
old a~ well as the new Act. It may be interpreted that the impugned
G G .0. having been validated, the tenure covered by it must also be held
to have been covered by it, so that there was really no interregnum in
the process or proce1ure of assessment of property tax.

Mr. Subba Rao relies on Janapada Sabha, Chhindwara v. The
Central Provinces Syndicate Ltd. and Anr., [1970] 3 SCR 745. In that
H case in 1935, the Independent Mining Local Board, Chhindwara con-
YADLAPATI v. STATE OF A.P. [SAIKIA, J.J 391

stituted under C.P. Local Self Government Act, 1920 resolved to levy
A
a ces.s on coal extracted within the area at 3 pies per ton. The sanction
of the Local Government, as required by s. 51(2) of the Act, was
obtained for the levy. In 1943, the levy was enhanced to 4 pies, in 1946
to 7 pies and in 1947 to 9 pies. The validity of the enhanced levy was
challenged and this Court, in appeal, held that the increased levy
would also require the previous sanction of the Local Government and B
such sanction not having been obtained, the levy at a rate higher than 3
pies was illegal. The State legislature thereafter enacted the Madhya
Pradesh Koyala Upkar (Manyatakaran) Adhiniyam, 1964. Section
2(a) of that act defined "Board" to mean the independent Mining
Local Board, Chhindwara and its successor body the Janapada Sabha,
Chhindwara, the appellant, constituted under the C.P. and Berar
Local Government Act, 1948. Section 2(b) defined "cess" to mean "a C
cess imposed by the independent Mining Local Board Chhindwara or
its successor" Section 3(1) of that Act provided that 'notwithstanding a
judgment of any court, cesses imposed, assessed or collected by the
Board in pursuance of the notifications specified in the Schedule shall,
for all purposes, be deemed to be, and to have been validly imposed. D
assessed or collected as if the enactment under which they were issued
stood amended at material times so as to empower the Board to issue
the said notifications. In the Schedule were specified three notifica-
tions enhancing the rate of cess .. Ori the question whether the
enhanced levy was validated by the 1964 Act, this Court held that the
Act did not give legal effect to the imposition of cess· at the enhanced E
rates. It was pointed out that the text or even the nature of the amend-
ments was not disclosed though Section 51(2) of the 1920 Act could not
be deemed to have been repealed by the 1964 Act, because the latter
Act, in terms was limited in its application to the Independent Mining
Local Board, Chhindwara, and its successor body and only in respect·
of the three notifications specified in the Schedule. An Act so limited ·F
in its application to one Local Board and to specified notification could
not repeal the sub-section which applied to all Boards. Nor was there
anything to indicate that notifications issued by the appellant-Board
without the sanction of the State Government must be deemed to have
been issued validly. lt was held that such an intendment could "not be
implied without express language, in a taxing statute. It was further G
observed that it was open to the legislature within certain limits to
amend the provisions of an Act retrospectively and to declare what the
law shall be deemed to have been. But the Legislature, in that case
attempted to overrule or set aside a decision of the Court. It was not
open to the Legislature to say that a judgment of a Court properly
constituted and rendered in exercise of its powers in a matter brought H
392 SUPREME COURT REPORTS [1990] Supp. 1 S.C.R.

before it shall be deemed to be ineffective either as a precedent or
A
between the parties. That case is, therefore, clearly distinguishable
from the instant case on facts. Firstly, in the instant case there is no
question of any judgment of any Court having been overruled or set
aside. The Single Bench Judgment was passed on 23.3.76, that is, after
the Amendment Act which came into force on 10.6.75. Secondly the
B language of Section 4(1) is very clear as to the intention of the legisla-
ture as to the contents of the amendment. What the amendment in the
instant case did was to amend the new Act and also validate actions
taken under the G .0. impugned in the case. What was prescnbed by
the impugned G.O. was the same as was prescribed by the old Act
which itself stood repealed by the new Act. The procedure thus
prescribed was one under the G .0. and not under the old Act, and
c Section 4(1) validated those actions without reviving the repealed old
Act itself but by amending the new Act and validating the tni.nsitory
measure taken by virtue of the Government's orders issued under the
transiiional provision Schedule IX, of the new Act particularly Rule 12
thereunder, The validity of Section 4(1) itself having not been chal-
D lenged, it was not open for the Courts to give. an interpretation con-
trary to the clear and unequivocal language of the Section. The.rnle is
that an amendment Act must be read as if the words of amendment
had been written into the Act except where that would lead to an
inconsistency. (Shamarao V. Parulekar v. The District Magistrate,
Thana Bombay, [1952] 3 SCR 683 at 689) Power of the legislature to
E pass a law includes the power to validate actions retrospectively, of
course, within Constitutional limitations. It is apt to remember that
the State's power to tax is derived from the Constitution and the
municipality's power to tax is derived from the State Legislature which
could delegate that power in the manner the Constitution pennits to
the municipal council, an agent of the State Government, and the
F 'municipality cannot refuse to raise taxes as directed. The proper .au-
thority to determine what should and what should not constitute a
public burden is the Legislature of the State. This is not only true for
the State itself but it is also true in respect of each municipality of the
State; these inferior corporate bodies having only such authority in this
regard as the legislature shall confer upon them. A statute will not be
G declared unconstitutional unless it is specifically challenged and the
principle is equally applicable to an enactment authorising levy of a tax
'" for a public purpose. The power to· tax is a sovereign power. and is
legislative in ·Character and it has to be exercised within the Constitu·
tional limitations. The statutes relating to municipal taxes may be
changed according to the existing legislative rules of State policy unless
forbidden by the Constitution from doing so. Irregular assessment may
YADLAPATI v. STATE OF A.P. [SAIKIA, J.] 393

also be regularised with retrospective effect within the same Constitu· A
tional limitations. Where the Court has not already declared invalid a
taxing measure which was of doubtful validity, it is permissible for
appropriate legislature tO validate it by retrospective legislation. No
legal·fiction is 1nvolved in such a case. Mr. Subba Rao's submission
has, therefore, to be.rejected.
B
We find force in the submission of Mr. Nambiar in _this regard.
The G. 0. impugned before the High Court has been covered and
validated by the above provisions, the G.O. itself covered the period
aft~r the repeal of the old Act and till the date of commencement of
the Fourth Amendment so that no interregnum was really there. The
assessment made according to the provision·s of the old Act were c
validated as actions taken by the council pursuant to the impugned
G. 0. and not under the provisions of the old Act which was already
repealed. While referring to the old Act, the G.O. did not revive the
Act but only prescribed the same procedure as was found in the
repealed Act as ~transitory measure.
D
. The validity of s. 4(1) of the Fourth Amendment Act having Mt
been challenged before the High Court, we do not find.any infirmity in
the impugned judgments of the High Court.

.ln the result, this appeal fails and is dismissed but under the facts
and circumstances of the case without any order as to costs. .E

Y. Lal Appeal dismissed.