Abhyankar, J.
1. The petitioners, 18 in number, are either Managers or proprietors of cinema houses exhibiting cinema films in the City of Nagpur. There is a Corporation constituted for the City of Nagpur under the provisions of the City of Nagpur Corporation Act, 1948 (hereinafter referred to as the Corporation Act). Under Chapter XI in Part IV of this Act, provision is made for taxation. Under Section 114, the Legislature has provided for taxes which could be imposed under the Act by the Corporation. The procedure for imposing taxes enumerated in this section is prescribed under Section 115, Sub-section (1) of Section 114 makes provision for compulsory taxes which the Corporation must impose. Under Sub-section (2). the Corporation is empowered by the enabling provision, with the previous approval of the State Government and for the purposes of the Act, to impose some additional taxes. The additional taxes which could be so imposed are enumerated in Clauses (a) to (f), and there is a residuary Clause (g) under which the Corporation can also impose 'any other tax which the State Legislature has power to impose in the State under the Constitution.'
2. In exercise of this power, the Corporation of the City of Nagpur has imposed a tax called 'the theatre tax' after following the necessary procedure. Rules have been framed by the State Government under Sub-section (3) of Section 114 regulating the imposition, assessment and collection of the theatre tax. The petitioners have filed at annexure A to the petition a copy of the rules made by the State Government called the Nagpur Municipal Corporation Theatre Tax Rules. Under Rule 3 of these rules, different kinds of entertainments such as cinemas, dramas, circus, carnival or fete, tamashas, music concerts, wrestling performances and any other performances of amusement or entertainment are brought under the tax at the rate of Rs. 10/- or Rs. 7/- as the case may be. So far as the cinema houses are concerned, they are divided into two classes. Class I and Class II, and for cinema shows exhibited in Cinema Class I, a theatre tax at the rate of Rs. 10/- per show, and for cinema shows exhibited in Cinema Class II, a theatre tax at the rate of Rs. 7/- per show were required to be paid by virtue of the notification issued sometime in December 1958. These rates were enhanced in 1966 to Rs. 15/- and Rs. 10/- respectively by a notification dated, 11-2-1966.
3. Though the petition raised a number of contentions challenging the validity and imposition of this theatre tax, the learned counsel appearing for the petitioners has confined his challenge only to one ground and one ground alone. According to the learned counsel for the petitioners, the provision of Section 114 (2)(g) of the Corporation Act amounts to excessive delegation of legislative power by the State Legislature and any action taken in pursuance of the exercise of the powers under that section is void and invalid as the section itself suffers from the vice of excessive delegation of legislative power by the State Legislature. It is contended that the residuary Clause (g) permits the Corporation to impose any other tax which the State Legislature has power to impose in the State under the Constitution, namely, under any of the entries in the State List in the Seventh Schedule and the Legislature in investing the Corporation with this extensive power of imposing taxes has not taken care to indicate which of these taxes may be levied or what is the extent to which the impost may be levied, or the persons on whom it may be levied and what would be incidence of taxation in respect of any particular tax. It is contended that there is no guidance in any provision of the statute or in Section 114 itself as to what should be the maximum and minimum burden which can be imposed, the class of persons who will be liable to pay such tax, or the articles, events or properties in respect of which the tax may be levied, nor is there any guidance about the machinery of administration or exemptions, for which provision will have to be made in all tax legislations. On all these grounds therefore the provision of Section 114 (2) (g) is challenged as ultra vires of the powers of the Legislature and therefore invalid and void.
4. The learned counsel for the petitioners has relied heavily upon a recent decision of the Supreme Court in M/s Devi Das v. State of Punjab, : [1967]3SCR557 in which the provision of Section 5 of the Punjab General Sales Tax Act, 1948, as it stood in its original form, was struck down on the ground that the provision was in excess of the power of the Legislature to commit to the subordinate agency to legislate in respect of any law relating to taxes. That section as it stood was as follows:--
'Subject to the provisions of this Act, there shall be levied on the taxable turnover every year of a dealer a tax at such rates as the Provincial Government may by notification direct.'
The reasons for this conclusion of the Court are to be found in paragraph 16 of the judgment where it is stated:
'Under Section 5 of the Punjab General Sales Tax Act, 1943, as it originally stood, an uncontrolled power was conferred on the Provincial Government to levy every year on the taxable turnover of a dealer a tax at such rates as the said Government might direct. Under that section the Legislature practically effaced itself in the matter of fixation of rates and it did not give any guidance either under that section or under any other provisions of the Act.... no other provision was brought to our notice. The argument of the learned counsel that such a policy could be gathered from the constitutional provisions cannot be accepted, for, if accepted, it would destroy the doctrine of excessive delegation. It would also sanction conferment of power by Legislature on the executive Government without laying down any guidelines in the Act. The minimum we expect of the Legislature is to lay down in the Act conferring such a power of fixation of rates clear legislative policy or guidelines in that regard. As the Act did not prescribe any such policy it must be held that Section 5 of the said Act, as it stood before the amendment, was void.'
5. The contention of the learned count sel for the petitioner in support of this petition is that similarly in the case of the Corporation Act, there are no guidelines either in Section 114 or in any other provisions, which could be reasonably said to lay down guidance for the subordinate authority, namely, the Corporation or the State Government, in making rules as to what should be the incidence of this taxation or the maxi-mum or minimum rates of tax, or the persons who may be exempted and the, manner in which the tax may be collected. It is not disputed that if no guidelines can be found in any provision of the Act under which the Legislature entrusts a subordinate or a delegate with the further function of carrying out the provisions of the Act by subordinate legislation such as making rules or bye-laws, then such a provision in the statute itself is liable to be struck down as amounting to delegation in excess of legitimate bounds. The question is whether the provisions of the Corporation Act, in the light of other pronouncements of the highest Court in this country, will justify such a construction and conclusion sion.
6. The learned counsel for the petitioners has brought to our attention some decisions of the other High Courts which have taken a similar view in respect of provisions relating to taxation under different heads. Liberty Cinema v. Commissioner, Calcutta Corporation, : AIR1959Cal45 , is a case directly in point, because it concerned the power of the Municipal Corporation to fix what was called a licence fee for running a cinema house under Section 548(2) of the Calcutta Municipal Act, 1951. That section was worded as follows:--
'Except when it is in this Act or in any rule or bye-law made thereunder otherwise expressly provided, for every such licence or written permission a fee may be charged at such rate as may from time to time be fixed by the Corporation and such fee shall be payable by the person to whom the licence or written permission is granted.'
In exercise of this power, the Corporation of Calcutta had fixed a fee at the rate of Rs. 400/- per show for small cinemas and Rs. 800/- per show for bigger cinemas. By a subsequent resolution, the Corporation increased this fee to Rs. 6000/-for smaller cinemas, to Rs. 12000/-for medium cinemas, and to Rs. 18,000/-for largest ones. One of such cinema houses called the Liberty Cinema, through its proprietor, challenged this enhancement and even the original imposition on several grounds. It was contended on behalf of the cinema exhibitor that if the impost was in the nature oi a fee, it was disproportionate to the services rendered and was excessive; and if on the other hand, the impost was in the nature of a tax, the power to impose a tax was exercised under a provision of the Act, namely, Section 548(2) of the Calcutta Municipal Act, which was void and invalid as it amounted to excessive delegation of legislative power. This contention was accepted by the learned single Judge before whom the matter was taken in his writ jurisdiction. There was an appeal against this order, but the appellate Bench affirmed the decision of the learned single Judge. The Corporation thereafter preferred an appeal to the Supreme Court and the decision of the Supreme Court is reported in Corporation of Calcutta v. Liberty Cinema, : [1965]2SCR477 . The Supreme Court reversed the decision of the Calcutta High Court and affirmed the validity of the section and the action taken thereunder We will have occasion to refer to the observations made in this decision on which the learned counsel for the respondent naturally relies.
7. The petitioners also invited our attention to another decision of the Calcutta High Court (again a single Bench decision) reported in Sarat Chandra v Calcutta Corporation, : AIR1959Cal36 . The challenge in that case was to thp imposition of what is called an advertisement tax under Section 229 of the Calcutta Municipal Act, 1951. In paragraph 26 of the judgment, the learned Judge observed that the section left it to the Corporation to levy the licence fee. thai is to say, to levy a tax in such manner and at such rate as it liked, or to exempt any person or body of persons that it thinks fit As a necessary corollary, it follows that it could levy a tax on any person or body of persons that it thinks fit and leave out others similarly situated, As there was no guidance in the section itself in respect of all these matters, it was held that the impost was unsupportable in view of the statutory provision itself being invalid as amounting to excessive delegation.
8. Apparently along with this case, several other petitions raising a similar challenge were disposed of and the decision was a subject-matter of appeal before a Division Bench consisting of the learned Chief Justice and Mr, Justice Bachawat (as he then was). That decision is reported in Calcutta Corporation v. Sarat Chandra. : AIR1959Cal704 . So far as the validity of Section 229 is concerned, in so far as that section empowered the Corporation to prescribe the rates of tax not having laid down any standard by which the power can be guided or controlled, there was a difference of opinion between the two members of the Bench, in paragraph 49 of the report, Bachawat J. observed that the Legislature may formulate its policy with regard to fixation of the rate of tax in very broad and general terms and leave the implementation of the policy to subordinate agencies. Then reference is made to the decision of the American Supreme Court in (1928) 276 US 394 : 72 Law Ed 624, J. W. Hampton Jr. and Co. v. United States where a legislation of this type was held as constitutional. It is then observed:
'Instances of legislation in this country providing for flexible rates of tax are furnished bv the Indian Tariff Act of 1934 (Act XXXII of 1934) Ss. 4, 8 and 9 empowering the government to alter protective duties, to impose additional import duty on bounty-fed articles, and to levy special import duty on sugar; The Sugar Industry (Protection) Act (Act XIII of 1932), Section 4 empowering the government to increase the duty on imported sugar; The Salt (Additional Import Duty) Act (Act XIV of 1939) Section 4 empowering the government to impose additional duty on Imported salt' it is then observed that the legislation will certainly be upheld if it lays down an intelligible principle for fixation of the rate which can be implemented by the administrative agency. In paragraph 52 the learned Judge has pointed out:'The legislative practice has gone even further and has often left to the executive an unfettered power to fix the rate of tax. The Bengal Excise Act, 1909 (Bengal Act V of 1909). Section 27 empowers the Government to impose an excise duty or a countervailing duty, as the case may be, at such rate or rates as the Government may direct on certain excisable articles. Similar unlettered power seems to have been given to the executive by the Aimer Excise Regulation (I of 1915) noticed in Cooverji B. Bharucha v. Excise Commissioner, : [1954]1SCR873 . Unfettered power to fix the rate of tax was also conferred upon the Government by ' the Matches (Excise Duty) Act, 1934 (Act XVI of 1934) Section 4 (b) by which duly was levied 'on all other matters at such rate as the Central Government may prescribe' and the Sugar (Excise Duty) Act, 1934 (Act XXIV), Section 3 (2) (iii) by which duty was made payable on palmyra sugar at such rate, if; any, as may be fixed in this behalf by the Central Government after such enquiry as it may think fit'. While a legislature cannot by prescription acquire the power which it does not otherwise possess, consistent practice of making laws of a certain type is a sufficiently important matter to be taken into consideration in deciding whether legislation of that type is unconstitutional.'
After noticing the judicial decisions on the subject, the learned Judge observed that the delegation made under Section 229 of the Calcutta Municipal Act to the Corporation of Calcutta of the power to fix the rates of tax is valid.
9. The next case relied upon is Shanmugha Oil Mill v. Market Committee, : AIR1960Mad160 . In this case, the constitutional validity of Section 11 (1) of the Madras Commercial Crops Markets Act, 1933, was under examination. In its re-enacted form Section 11(1) provided that the Market Committee shall, subject to such rules as may be made in this behalf, levy a cess by way of sales-tax on any commercial crop bought and sold in the notified area at such rates as the State Government may, by notification, determine. It was held by the learned single Judge:
'But the rate of tax which is an essential part of the declaration and assessment has been completely delegated to the executive Government with no principles or basis laid down. Uncontrolled power is vested in the Executive to fix such rate as it pleases. In the absence of a legislative provision regarding any policy or limits of assessment for the guidance of the assessing authority, it must be held that the provisions of the section amount to excessive delegation of legislative power, and, therefore, invalid.'
10. The next case relied upon is Standard Motor Union (P.) Ltd. v. State of Kerala. : AIR1962Ker298 . Section 12 of the T. C. Motor Vehicles Act provided that where Government are satisfied that special circumstances exist for the levy of toll on any road or bridge they may subject to such conditions as they may deem fit to impose direct by notification in the gazette the levy of tolls on vehicle using such road or bridge and thereupon the provisions of the law relating to tolls for the time being in force shall apply thereto. The contention was that there was absolutely no indication anywhere in the Act as to what circumstances can be considered to be 'special circumstances' under Section 12 justifying the levy of a toll. This contention was upheld and the section was struck down.
11. Reference was also made in the course of arguments to a decision of the Madhya Pradesh High Court in State v. Haidarali, : AIR1957MP179 (FB). In the case, the provisions of Clause 11-B of the Iron and Steel (Control of Production and Distribution) Order 1941, were under examination. But the decision of the Full Bench could no longer be relied upon in view of the decision of the Supreme Court in Union of India v. Bhanamal Gulzarimal Ltd., : [1960]2SCR627 , upholding the validity of that clause. Precisely the same provision of the Iron and Steel (Control of Production and Distribution) Order, 1941, was under examination in that case and has been upheld by the Supreme Court as not being unconstitutional on the ground of excessive delegation of power.
12. In our opinion, the petitioner's case would have been on a much stronger ground but for the decision of the Supreme Court in : [1965]2SCR477 . It is useful to note a little more closely what the contention in that case was and how that contention was met. We have already referred to the facts giving rise to that case, By a resolution dated 14-3-1958 the Corporation of Calcutta changed the basis of assessment of the licence fee with effect from 1-4-1958. Under the new method the fee was to be assessed at rates prescribed per show according to the sanctioned seating capacity of the Cinema houses. The respondent's cinema house had 551 seats and under the changed method it became liable to a fee of Rs. 5/- per show. In the result, it became liable to pay a fee of Rs. 6000/- per year, whereas previously it was liable to pay only Rs. 400/-per year. The impost was challenged op different grounds in the Supreme Court, The contention that the levy amounted to expropriation and was an invasion on the right of the petitioner under Article 19 (l)(f) and (g) of the Constitution was rejected. The second contention was that the levy was in the nature of a fee in return for services to be rendered, and if it was a fee, the impost was not commensurate with the cost incurred by the Corporation in providing the services. It was not accepted that it was a fee and it was treated more properly as a tax. It is the last contention which is germane to the issue before us, and that was that Section 548 of the Calcutta Municipal Act which authorised the levy as a tax as distinct from a fee was invalid as it amounted to an illegal delegation of legislative function to the Corporation, because it left it entirely to the latter to fix the amount of the tax and provided no guidance for that purpose. On the basis that Section 548 is a piece of delegated legislation, it was contended that the delegation was excessive. On the other hand, the Corporation's defence was that assuming that Section 548 is a piece of delegated legislation, the rate of tax is not an essential feature of the legislation and power was properly delegated to the Corporation and sufficient guidance for the purpose was given in the Act. It cannot be disputed that the power of the Legislature to delegate some of the subordinate functions is not disputed provided the guidelines within which the power is to be exercised are indicated. The first question that was considered and decided was regarding the contention of the Corporation that fixation of rates is not an essential part of legislation and is therefore not an essential legislative function.
13. The decision refers to the case of Pandit Banarsi Das's case, : [1959]1SCR427 , and observes as follows:
'The Act was a statute imposing taxes for revenue purposes. This case would appear to express authority for the proposition that fixation of rates of taxes may be legitimately left by a statute to a non-legislative authority, for we see no distinction in principle between delegation of power to fix rates of taxes to be charged on different classes of goods and power to fix rates simpliclter, if power to fix rates in some cases can be delegated then equally the power to fix rates generally can be delegated. No doubt Pandit Banarsi Das's case, : [1959]1SCR427 , was not concerned with fixation of rates of taxes; it was a case where the question was on what subject matter, and therefore on what persons, the tax could be imposed. Between the two we are unable to distinguish in principle, as to which is of the essence of legislation; if the power to decide who is to pay the tax is not an essential part of legislation, neither would the power to decide the rate of tax be so. Therefore, we think that apart from the express observation made, this case on principle supports the contention that fixing of the rate of a tax is not of the essence of legislative power'.
14. Reference is then made to the decision of the English case of Powell v. Apollo Candle Co. Ltd. (1885) 10 AC 282; Syed Mohamed & Co. v. State of Madras. : AIR1953Mad105 ; and (1928) 276 US 394 : 72 Law Ed 624. And then the Court observed:
'No doubt when the power to fix rates of taxes is left to another body, the legislature must provide guidance for such fixation. The question then is, was such guidance provided in the Act? We first wish to observe that the validity of the guidance cannot be tested by a rigid uniform rule; that must depend on the object of the Act giving power to fix the rate. It is said that the delegation of power to fi rates of taxes authorised for meeting the needs of the delegate to be valid, must provide the maximum rate that can be fixed or lay down rules indicating that maximum. We are unable to see how the specification of the maximum rate supplies any guidance as to how the amount of the tax which no doubt has to be below the maximum is to be fixed. Provision for such maximum only sets out a limit of the rate to be imposed and a limit is only a limit and not a guidance.
It seems to us that there are various decisions of this Court which support the proposition that for a statutory provision for raising revenue for the purposes of the delegates as the section now under consideration is, the needs of the taxing body for carrying out its functions under the statute for which alone the taxing power was conferred on it, may afford sufficient guidance to make the power to fix the rate of tax valid.'
15. Reference is then made to the previous decision of the Supreme Court in the Western India Theatres Ltd. v. Municipal Corporation of the City of Poona, : AIR1959SC586 . With reference to this case, it is pointed out that it was concerned with a statute under which the respondent Corporation had been set up and which gave that Corporation power to levy 'any other tax'. It was contended that such a power amounted to abdication of the legislative function as there was no guidance provided, and this contention was rejected by the Supreme Court, and one of the grounds on which the contention was rejected was that the State authorised the municipality to impose taxes therein mentioned 'for the purposes of the Act' and that this furnished sufficient guidance for the imposition of the tax (the underlining (here in ' ') is ours).
16. Reference is also made to other decisions of the Supreme Court. The first case was Vasanlal Maganbhai v. State of Bombay, : 1978CriLJ1281 where the provisions of the Bombay Tenancy and Agricultural Lands Act giving power to the Government to fix a lower rate of maximum rent payable by the tenants were under challenge. The other case was : [1960]2SCR627 to which we have already made a reference and in which the power given to the Steel Controller to fix rates was challenged. In our opinion, the following observations in this decision should hardly leave any scope for taking a different view about the validity of the impost challenged in this case. They are to be found in paragraph 31 and we make no apology for producing them in extenso:
'It is not difficult to appreciate how and why the Legislature must have thought that it would be inexpedient either to define or describe in detail all the relevant factors which have to be considered in fixing the fair price of an essential commodity from time to time. In .prescribing a, schedule of maximum prices the Controller has to take into account the position in respect of production of the commodities in question, the demand for the said commodities, the availability of the said commodities from foreign sources and the anticipated increase or decrease, in the said supply or demand. Foreign prices for the said commodities may also be not irrelevant. Having regard to the. fact that the decision about the maximum prices in respect of iron and steel would depend on a rational evaluation from time to time of all these varied factors, the Legislature may well have thought that this problem should be left to be tackled by the delegate with enough freedom, the policy of the Legislature having been clearly indicated by Section 3 in that behalf.
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In deciding the nature and extent of the guidance which should be given to the delegate Legislature must inevitably take into account the special features of the object which it intends to achieve by a particular statute ..... Having regard to the nature of the problem which the Legislature wanted to attack it may have come to the conclusion that it would be inexpedient to limit the discretion of the delegate in fixing the maximum prices by reference to any basic price.'
17. It will now be useful at this stage to compare the provisions of Section 548 of the Calcutta Municipal Act with the provisions of Section 114 of the Corporation Act, with which we are concerned in this case. if sufficient guide-lines are found indicating the policy of the Legislature and the limits within which the tax should be imposed under Section 548 of the Calcutta Municipal Act, we do not see why sufficient guide-lines cannot be said to exist in the provisions of Section 114 of the Corporation Act as well. It is necessary to point out that the power to impose taxes, whether compulsory or optional, has been granted to the Corporation for the purposes of the Act which itself is a sufficient guideline according to the decision of the Supreme Court. The Corporation is charged with multifarious duties. It has to find funds, finances and revenues for discharging its functions effectively and efficiently. It knows as a representative body what are the needs )f its people, residents and citizens and low they should be met. The proposals for imposing the tax in the first instance are subject to objections which are required to be considered. They are further subject to scrutiny by the State Government at a responsible level. The rules to be made are again the responsibility of the State Government. All these safeguards in our opinion, therefore, are sufficiently defensive to protect the provision from challenge as a piece of excessive delegation of legislative power. There is a provision for budget. The budget is to be scrutinised by the Government. There is overriding power in the State Government under Section 144 of the Corporation Act to order exemption from payment of any tax in whole or in part in proper cases and in case of particular class of persons, and Government is also empowered to require the Corporation to reconsider its proposal of impost if it results in an unfair incidence or is injurious to the interests of the general public as provided under Sub-section (2) of Section 144. The guide-lines that are to be sought in the legislation are to be found in such and similar provisions of the Corporation Act and we are satisfied that on the test laid down in the case of Liberty Cinema : [1965]2SCR477 , by the Supreme Court it cannot be said that Section 114 suffers from the vice of excessive delegation legislative power,
18. The learned counsel for the State has also relied upon some decisions taking a similar line. There are two decisions of this Court by which we are bound on similar provisions of the Act. The case of Kisan v. Bhusawal B. Municipality, : AIR1966Bom15 was concerned with a challenge to the power of the municipal authorities to impose a tax on professions, trades, callings and employments. Section 73 of the Bombay Municipal Boroughs Act, 1925. which empowered the municipal borough to levy a profession tax was challenged on the ground of excessive delegation. The learned Chief Justice, delivering the judgment on behalf of the Court, observed:
'Since, however, the power to levy taxes is conferred on a Municipality for carrying on the local government it seems to us doubtful whether merely because the Legislature has left to each municipality to determine the rate at which if should levy the tax, it can be said that the Legislature has made excessive delegation of powers vested in it. Moreover, the power given to the Municipality to levy this tax on professions, trades, callings and employments is not absolute or uncontrolled, as has been argued. The maximum rate at which the tax can be levied is determined by Article 276 of the Constitution and it cannot exceed Rs. 250/-per annum. The tax can be levied only for purposes of the Act. that is, in order to enable the Municipality to discharge the obligations imposed upon it by the Act. It must therefore have some relation to the needs and requirements of the Municipalities. The circumstances and conditions of Municipalities vary. In fixing the rate of tax the capacity of those on whom the liability will fall to bear the burden has to be taken into consideration. A rate of tax which residents of a large and prosperous city may be able to bear may be too heavy for people residing in a small town. Every town and city is also growing and as the duties and responsibilities of a municipality increase the need for additional taxation will arise. It is probably on account of these and other similar considerations that it has been left to each municipality to decide the rate at which it should levy the tax. Since, however, the rate of tax is to be determined having regard to the resources required by a municipality for performing its statutory duties, it cannot be said that the power given to a Municipality to fix the rate is entirely unfettered or uncontrolled.'
19. The other case is Hirabhai Ashabhai v. State of Bombay, : AIR1955Bom185 . In that case, Section 169 of the Bombay Municipal Corporation Act, 1888, which empowers the Commissioner to charge for water supplied by measurement was under challenge. With regard to this challenge, the Court observed:
'A delegation of certain functions is bad only if it amounts to an abdication by the Legislature. In other words, if the Legislature, instead of legislating itself, which is its own function, permits legislation by some other authority or again, to put it in different language, if the Legislature, without laying down the policy, permits the carrying out of a particular activity or a particular function by some authority, then it might be said that the Legislature has abdicated its own functions.
The contention that Section 169 constitutes a delegation of legislative function by the Legislature is therefore untenable.'
20. The learned counsel for the respondent has made available to us a copy of the recent judgment of the Supreme Court in Civil Appeals Nos. 1857 and 1858 of 1967 in the case of Municipal Corporation of Delhi v. Birla Cotton, Spinning and Weaving Mills, Delhi. A short note also appears with regard to this decision in : [1968]3SCR251 . In that case the provisions of the Delhi Municipal Corporation Act, 1957, passed by Parliament and in particular the provisions in Section 113(2)(d) and (3) and Section 150 were under challenge as suffering from the vice of excessive delegation. Section 150 is more or less analogous to Section 114 of the Nagpur Corporation Act. Under Section 150 of the Delhi Municipal Corporation Act, the Corporation has been empowered to levy any of the taxes specified in sub-section (2) of Section 113 by passing a resolution for the same and defining the maximum rate of the tax to be levied, the class or classes of persons or the description or descriptions of articles and properties to be taxed, the system of assessment to be adopted and the exemptions, if any, to be granted. Almost similar powers are given to the Nagpur Corporation under Sections 114 and 115 of the Corporation Act. Under the Delhi Act, as in the case of the Nagpur Act, a proposal to levy a tax is subject to sanction of the Central Government (under the Nagpur Act, it is subject to sanction of the State Government) and the actual rates can be determined under the Delhi Act by passing a second resolution. The learned Chief Justice pointed out the various provisions in the Delhi Act regarding the Corporation's functions and duties and the necessity of raising funds for the same and found that there was guidance and policy as to the ambit and incidence of taxes and the provision was within the bounds of permissible delegation. In a concurring opinion, Hidayatullah J. (as he then was) pointed out that the proper test to apply was whether the legislative will to impose the tax is adequately expressed so as to bind those who have to pay the tax. It was observed that the principle now advocated that the legislature must itself impose the tax by laying down the rate, the persons to be affected and the manner of levy and collection when it concedes power to Municipal Corporation appears to be a novel doctrine which has not been accepted even in the land where the doctrine about delegated legislation took its birth. It was further pointed out:
'Local bodies are subordinate branches of governmental activity. They are democratic institutions managed by the representatives of the people. They function for public purposes and take away a part of the government affairs in local areas. They are political sub-divisions and agencies which exercise a part of State functions. As they are intended to carry on local self-government the power of taxation is a necessary adjunct to their other powers. They function under the supervision of the Government. This supervision is considered necessary, because Municipal Councillors as a rule are unwilling to tax in a manner likely to affect themselves. House-holders seek to transfer burdens to tradesmen and vice versa. To insist that the legislature should provide for every matter connected with municipal taxation would make municipalities mere tax collecting departments of Government and not self-governing bodies which they are intended to be. Government might as well collect the faxes and make them available to tne municipalities. That is not a correct reading of the history of Municipal Corporations and other self-governing institutions in our country.'
It was also observed;
'The learned Chief Justice has upheld Section 150 by pointing out certain inbuilt safeguards in the Act which, in his view, save it from being characterised as a piece of excessive delegation. With all due respects we think this is not the only approach to the problem. We do not wish to be understood as saying that the conferral of a power of taxation on Municipalities must always be accompanied by B detailed enumeration in the constituent Act of the rate of the tax, the persons to be taxed, the manner of the levy and collection, before it can be said that there are sufficient safeguards. Nor do we think that these matters cannot be left to the determination of the Municipal Corporation subject, of course, to such controls as the legislature may think necessary to effectuate its own will. While the provisions which have been characterised as safeguards (where found necessary) are desirable the proper test to apply is not the existence of safeguards but whether the legislative will to impose the tax is adequately expressed so as to bind those who have to pay the tax.'
21. We have thus no doubt that the decision in Liberty Cinema's case. : [1965]2SCR477 and the latest decision in the case of the Municipal Corporation of Delhi, : [1968]3SCR251 are ample authority in support of the contention of the respondent that the provisions in the Nagpur Corporation Act are adequate to indicate the legislative policy and the reasonable limits within which the power to tax can be exercised, and therefore the sections under which the power is exercised cannot be considered as void or invalid on account of excessive delegation.
22. The only ground on which the levy was challenged having failed, it is apparent that the petition must fail and is accordingly dismissed with costs,
23. Leave to appeal to the Supreme asked for orally is rejected.
24. Petition dismissed:
25. Leave to appeal refused.