Divan, C.J.
1. So far as this Full Bench is concerned, we will only deal with the question arising under Section 77 of the Bombay Municipal Boroughs Act, 1925. This second appeal first came up for hearing before our learned Brother S. B. majmudar, J. on November 27, 1979. By his order dated on that day he referred the second appeal to a larger Bench forresolving the controversy which arises for decision in the present case. Our learned Brother found that there was an important question of law of general public importance arising in this present proceeding and the decision of the learned single Judge M. U. Shah, J. though directly on the point had not considered all the relevant aspects of the matter and that at present there were Division Bench judgments of this Court, some of which had made certain general observations though not strictly concerned with the main question whieh arose for decision in the present ease and he felt that it was a it case which deserved to be referred to a Larger Berch. Thereafter the second appeal came up before the Division Bench consisting one of us (Divan, C. J.) and S. P.Maimudar, J. on January 15, 1980 and in view of the conflict in the decision of Division Benches, the matter was referred to a Larger Bench and thereafter the matter has now come up for hearing before this Full Bench.
2. The facts leading to this litigation are as follows:
The respondent in this suit is the ori ginal plaintiff and the appellant, the Municipal Corporation of the City of Rajkot, is the original defendant. The plaintiff is a registered partnership firm and it filed a suit, being Regular Civil Suit No. 25 of 1972, in the Court of the learned Civil Judge, Senior Division, Rajkot praying for a declaration that the impugned rules, Exhibit 89 in the trial Court, of the defendant Municipal Corporation for levying rates and taxes on buildings and lands in Rajkot which were sought to be put into force from January 1, 1965, were illegal, unconstitutional, ineffective and without any authority. A further declaration was also sought that the assessment lists in the suit in so far as they pertain to the factory of the plaintiff firm were also illegal, uncon stitutional, ineffective and without authority and further that the suit-bill dated December 8, 1970 and the demand notice dated December 22, 1971 for Rs. 12,517/- for the period April 1, 1966 to March 31, 1972 and the year 1971-72 were also il legal, unconstitutional, ineffective and without any authority. The plaintiff also prayed for a permanent injunction restraining the defendant Corporation from recovering any rate or tax on the basis of the impugned -rules or the impugned assessment lists or the impugned bill or the demand notice. They also prayed for a permanent ' injunction restraining the defendant from sending any bill or demand notice pursuant to the impugned rules or the impugned assessment lists for the recovery of house tax from the plaintiff. The learned Joint Civil Judge, Junior Division, Rajkot who heard the suit held that the rules 'called Rules For Rates And Taxes On Lands And Buildings issued by the defendant Municipal Corporation and its predeces sor, the Rajkot Municipality, were illegal unconstitutional, unauthorised and void. He further held that the assessment list relating to the plaintiff's factory for the purposes of house tax was illegal, un constitutional and void. He further held that the demand notice dated December, 22, 1971 and the bill dated December 8, 1970 were illegal, unconstitutional and void. A contention was raised on behalf of the Municipality that the suit was barred by limitation and further that
With out notice to the Municipality the suit was not maintainable. The learned Judge held that the suit was not barred by limitation and further that the suit was maintainable. He also held that the suit was properly valued for the purposes of Court fee. Ultimately the learned Civil judge, Junior Division decreed the plaintiff's suit and also granted the injunctions as prayed for in the suit. The declarations and injunctions which were thus sought for were granted by the learned Judge in the trial Court.
3. Against this Judgment and decree of the trial Court an appeal was preferred by the Municipal Corporation of Rajkot to the District Court, Rajkot. The' appeal was disposed of by the learned Extra Assistant Judge, Rajkot. This appeal was Civil Appeal No. 107 of 1977; the learned Extra Assistant Judge dismissed the appeal and confirmed the decree of the trial Court and thereafter the present second appeal was filed by the Municipal Corporation of Rajkot. At the time when the second appeal came up for admission before one of us (B. K. Mehta, J.), the following questions of law were formulated as questions of law arising in this appeal :
(1) Whether, on the facts and in the circumstances of the case, the lower Appellate Court committed a substantial error of law in striking down the House and Land Tax Rules, 1965 of the appellant Municipal Corporation since the provisions contained in Section 77 of the Bombay Municipal Boroughs Act, 1925, being mandatory in character were not complied with inasmuch as there was no publication of the Rules as required by the section ?
(2) Whether, on the facts and in the circumstances of the case, the lower Appellate Court committed a substantial error of law in declaring the assessment list to be void and ineffective as they were not duly authenticated and consequently the bills and notices were also illegal and void as they were not in compliance with the provisions contained in Sections 78 to 82 of the said Municipal Boroughs Act. 1925 ?
(3) Whether, on the facts and in the circumstances of the case, the lower Appellate Court committed a substantial error of law in holding that no notice was required as prescribed under Section 253 of the Gujarat Municipalities Act, and that the suit was within limitation as the assessment list and the bills and notices of demand were nullity?
4. The order of our learned Brother S.B.Mujmudar, J dated November, 27, 1979 referring the second appeal to a Larger Bench clearly indicates that it was only in the context of the provisions of Section 77 of the' Bombay Municipal Boroughs Act, 1925 and in connection with the alleged non-observance of the conditions required by Section 77 that the matter was referred to a larger Bench. The other points of law which were formulated at the time when the second appeal was admitted have not been considered by the learned single Judge. In our opinion, the only question that is required to be considered by us is in the context of Question No. 1 of the three questions which were formulated at the time where the second appeal was admitted, and in the course of this judgment we propose only to deal with inquiry No. I arising out of the provisions contained in Section 77 of the Bombay Municipal Boroughs Act, 1925.
5. It is not in dispute that at the relevant time the provisions of the Bombay Municipal Boroughs Act, 1925 were applicable to the Rajkot Municipality which was subsequently converted into Rajkot Municipal Corporation, Section 77 is one of the sections in Chapter VII of the Bombay Municipal Boroughs Act, 1925. That Chapter deals with municipal taxation and it consists of Sections 73 to 103, both inclusive. In this Chapter there are six sub-groups of Sections, Sub-group (1) consists of Section 73 to Section 77-A and the heading of this group of sections is 'Imposition of Taxes'. Sub-group (2) consists of Sections 78 to 89 and is headed. 'Assessment of and liability to rates on buildings or lands.' Section 90 has a subhead of its own, namely, 'power to charge fees'. Sections 91 and 92 are headed 'Special provisions relating to certain taxes'. Sections 93 to 101 are in the fifth group of sections and the heading of this sub-group is 'Octroi and Tolls' and the sixth group is of Sections 102 and 103 with heading 'Powers of State Government in respect of municipal taxes'. It may be pointed out that the general pattern for the imposition of taxes was on the same lines as in the Bombay District Municipalities Act of 1901 and the same pattern is also to be found in the Gujarat Municipalities Act of 1963. Under the Gujarat Panchayats Act, the State Government has been empowered to formulate rules in this behalf and the procedure for imposition of taxes has been prescribed by the rules and the rules are also similar to the scheme of sections relating to Imposition of taxes under the
Bombay Municipal Boroughs Act.
6. Section 73 of the Bombay Municipal Boroughs Act provides for taxes which may be imposed by the Municipality and it has been specifically mentioned that a Municipality may impose for the purposes of the Act any of the taxes mentioned in Section 73 but such imposition is to be subject to any general or special orders with the State Government may make in that behalf and also subject to the provisions of Sections 75 and 76. Clause (i) of Section 73 mentions a rate on buildings or lands or both situate within the municipal borough. Section 74 is not material for the purposes of this judgment because it deals with payment to be made to the Municipality in lieu of a rate on buildings by the Government or local board concerned, Section 75 deals with the procedure preliminary to imposing tax. It provides--
'A municipality before imposing a tax shall observe the following preliminary procedure:--
(a) it shall, by resolution passed at a general meeting, select for the purpose one or other of the taxes specified in Section 73 and approve rules prepared for the purposes of clause (j) of Section 58 prescribing the tax selected, and in such resolution and in such rules specify:
(i) the classes of persons or of property or of both, which the municipality Proposes to make liable, and any exemptions which it proposes to make;
(ii) the amount or rate at which the municipality proposes to assess each such class;
(iii) in the case of rate on buildings or lands or both, for each class of the valuation on which such rate is to be imposed;
(iv) all other matters which the State Government may require to be specified therein.
(b) When such resolution has been passed, the municipality shall publish the rules so approved with a notice in the form of Schedule II prefixed thereto.' Under clause (c) of Section 75-
'Any inhabitant of the municipal borough objecting to the imposition of 'the said tax or to the amount or rate proposed or to the classes of Persons or property to be made liable thereto or to any exemptions proposed may, within one month from the publication of the said notice, send his objection in writing to the municipality; the municipality shall take all such objections, Into consideration, or shall authorise a committee to consider the same and report thereon and unless it decides to abandon the proposed tax, shall submit such objections with its opinion thereon and any modifications proposed in accordance there~ with, together with the notice and rules aforesaid to the State Government.'
According to the Explanation to See. 75, in the case of lands the basis of valuation may be either capital or annual letting value. Schedule II to the Act sets out the form of notice and the form is in these words:
'Notice is hereby given to the inhabitants of the municipal borough of .......... that the municipality desire to impose the tax, rate, toll, octroi or cess (as the case may be) defined in the rules appended in lieu of the tax known as the........which is published at page.......of the sanctioned rules. Any inhabitant of the municipal borough objecting to. the proposed tax may, within one month from the date of this notice, send his objection in writing to the municipality.
RULES.
(The rules approved by the Municipality under clause (e) of Section 75 are to be appended here.).'
Thus, at the end of the notice the rules have to be appended. Under S. 76 the State Government, after it receives the rules together with notice and the rules and the objections and the opinion of the municipality regarding such objection may either refuse to sanction the rules submitted under Section 75 or may return them to the municipality for further consideration-, or, if no objection or no objection which is in its opinion sufficient, was made to the proposed tax within the period prescribed under Section 75, may sanction the said rules without modification, or subject to such modifications not involving an increase in the amount to be imposed, or to such conditions as to the application within the municipal borough to any purpose or purposes of the Act specified in such conditions of the whole or any part of the proceeds of the tm as it deems fit. Section 77 which is the material section for our consideration provides:
'Rules sanctioned under Section 76 with the modifications and conditions, it any, subject to which sanction is given shall be published by the municipality in the municipal borough, together with a notice reciting the sanction and the. Date and serial number thereof; and the tax as prescribed by the rules so published shall, from a date which shall be specified in such notice and which shall not be less than one month from the date of publication of such notice, be imposed accordingly, and the proceeds thereof shall be applied by the municipality in accordance with all conditions, if any, subject to which sanction under Section 76 was given.'
Under clause (a) of the proviso to S. 77:-
A tax leviable by the year shall not come into force except on one of the following days namely, the first day of April, the first day of July, the first day of October or the first day of January in any year; and if it comes into force on any day other than the first day of April, it shall be leviable by the quarter till the first day of April then next ensuing.'
Under clause N of the proviso to Section 77:-
'On or before the day on which a notice is issued under this section, the municipality shall publish such further detailed rules as may be required, and as may have been approved by the State Government under clause (a) of the proviso to Section 58, prescribing the mode of levying, and recovering the tax therein specified and the dates on which it or the instalments, if any. thereof shall be payable.'
Clause (c) of the proviso is not material for the purposes of this judgment. It may be mentioned that under Section 80 which occurs in the group of sections dealing with assessment and levy of rates on buildings or lands, it has been provided:
'When the assessment list has been completed, the Chief Officer shall give public notice thereof and of the place where the list or a copy thereof may be inspected, and every person claiming to be either the owner or occupier of property included in the list, and any agent of such person, shall be at liberty to inspect the list and to make extracts there from without charge.'
Under Section 81 (5) of the Act, the authenticated assessment list shall be deposited in the municipal office, and shall there be open for inspection during office hours to an owners and occupiers of property entered therein or to the agents of such persons, and a notice that it is so open shall be forthwith published. It has been urged before us that regarding the rules mentioned in Section -77, namely, the rules, as finally sanctioned by the State
Government, there is no provision similar to Section 80 (in connection with assessment list) or Section 81 (5) (in connection with authenticated list). It must also be pointed out that under See. 102 the State Government has been empowered to suspend levy of objectionable taxes and under Section 103 the State Government has been empowered to require the municipality to impose taxes. Section 102 provides:
'If it shall at any time appear to the State Government on complaint made or otherwise that any tax leviable by a municipality is unfair in its incidence or that the levy thereof or of any part thereof is obnoxious to the interest of the general public, it may require the municipality, within such period as the State Government shall fix in this behalf, to take measures for removing any objection which appears it to exist to the said tax, and if, within the period so fixed, such requirement shall not be carried into effect to the satisfaction of the State Government, it may, by notification in the Official Gazette, suspend the levy of such tax, or of such part ~thereof, until such time as the objection thereto shall be removed.'
It was urged before us that even after a tax has been imposed after following the procedure laid down in Sections 75, 76 and 77 of the Act, it is open to the State Government to take action under Section 102 or Section 103 of the Act even though the imposition of the tax was after following the procedure and after obtaining the sanction of the State Government.
7. It may be mentioned at the present stage that in the Bombay District Municipalities Act of 1901, Section 90 corresponds to Section 75 of the Municipal Boroughs Act. Section 62 corresponds to Section 77 of the Municipal Boroughs Act. Section 94 corresponds to Section 80 of the Municipal Boroughs Act avid Section 85 corresponds to Section 81 (5) of the Municipal Boroughs Act. As regards the Gujarat Panchayats 'Act, Rule 3 (b) of the relevant rules corresponds to Section 75 of the Municipal Boroughs Act, and Rule 4 corresponds to Section 77 of the Municipal Boroughs Act. As, regards Gujarat Municipalities Act, 1963, being Gujarat Act 34 of 1964, Section 101 corresponds to Section 75 of the Municipal Boroughs Act, Section 103 corresponds to Section 77 of the Municipal Boroughs Act, Section 107 corresponds to Section 80 of the Municipal Boroughs Act, and Section 108 (5) corresponds to Section 81 (5) of the Municipal Boroughs Act. Thus it is obvious that for different local self Government bodies governed by different Acts, namely, the Bombay District Municipalities Act of 1901, Bombay Municipal Boroughs Act. 1925 the Gujarat Municipalities Act. 1963 and the Panchayats, either Nagar Panchayats or Village Panchayats, under the Gujarat Panchayats Act, the pattern for imposition of taxes and the procedure before imposition of tax, is the same in all cases,
8. We may point out at this stage that Mr. A. H. Mehta for the appellant Municipal Corporation has cited a number of authorities of the Supreme Court as regards the approach which the Courts should adopt in cases of this kind. Since Section 77 of the Municipal Boroughs Act with which we are concerned uses 'the word 'shall' regarding the publication of the sanctioned rules together with the notice mentioned in that section, a great deal of argument was advanced before us as to whether this requirement is mandatory or directory and a number of authorities have been cited before us as to under what circumstances a particular provision should be interpreted by the Courts as mandatory or directory even though the word tt shall' has been used by the Legislature. In Hiralal Agrawal v. Rampadarath Singh, AIR 1969 SC 244, Shelat J. speaking for the Supreme Court has pointed out at page 252:
the question whether a particular provision of a statute which on the fare of it appears mandatory inasmuch as it used the word 'shall' is merely directory cannot be resolved by laying down any general rule and depends up on the facts of each case and for that purpose the object of the statute in making the provision is the determining factor.'
Again, in Govind Lal Chagan Lal Patel v. The Agricultural Produce Market Committee, AIR 1976 SC 263, Chandra chud J., as he then was, has pointed out in paragraph 13 at page 267 after citing from Crawford on 'Statutory Construction :
the governing factor is the meaning and intent of the legislature, which should be gathered not merely from the words used by the legislature but from a variety of other circumstances and considerations, in other words the use of the word 'shall' or 'may' is not conclusive on the question whether the particular requirement of law is mandatory or directory. But the circumstance that the legislature has used a language of compulsive force is always of great relevance and in the absence of anything contrary in the context indicating that a permissive interpretation is permissible, the statute ought to be construed as peremptory. One of the fundamental rules of interpretation is that if the words of a statute are themselves precise and unambiguous, no more is necessary than to expound those words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the legislature.'
Again, in Murarilal Mahabir Prasad v, B. R. Vad, AIR 1976 SC 313, Chandrachud J., as he then was, speaking for the majority of the learned Judges who decided the matter. observed in paragraph 29 at page 322 of the report:
'The true implication of the principal that a taxing statute must be construed strictly is often misunderstood and the principle is unjustifiable extended beyond the legitimate field of its operation Indeed, the more well expressed the principle as in Cape Brandy case ( (1921) 12 Tax Cas 358) greater the reluctance to see its limitations. In that famous passage marked by a happy turn of phrase, Rowlatt J. said 'there is no presumption as to a tax' There is no equity about a tax in the sense that a provision by which a tax is imposed has to be construed strictly, regardless of the hardship that such a construction may cause either to the treasury or to the taxpayer. If the subject falls squarely within the letter of law he must be taxed, howsoever inequitable the consequences may appear to the judicial mind. If the Revenue seeking to tax cannot bring the subject within the letter of law, the subject is free no matter that such a construction may cause serious prejudice to the Revenue. In other words, though what is called equitable construction may be admissible in relation to other statutes or other provisions of a taxing statute, such a construction is not admissible in the interpretation of a charging or taxing provision of a taxing statute'.
Really speaking this decision of the Supreme Court where the earlier decision of the Supreme Court in Gursahal Saigal v. Commr. of I.-T., AIR 1963 SC 1062 was followed is not of much assistance to us in the present case because we are not concerned with the construction of a taxing statute as such but we are concerned with the approach to the construction of a section like Section 77.
9. Mr. A. H. Mehta for the Appellant Municipal Corporation has very strongly relied upon the observations of the Supreme Court particularly from the judgment of Krishna Iyer J. in D. R. Venkatachalam v. Dy. Transport Commissioner AIR 1977 SC 842. The observations on which tie has relied are to be found *in paragraphs and 8 and 9 of the judgment. In paragraph 8 Krishna Iyer. J. has observed:
'Public law, in our piebald economy and pulralist society responds to societal challenges and Constitutional changes. To miss the ideological thrust of our Constitution and the economic orientation of our nation while construing legislation relating to public law and scanning them for their validity is to fail in understanding the social philosophy that puts life and meaning into the provisions of the Act. The law, being realistic, reckons with the socialist sector covering State and co-operative enterprises.'
Paragraph 9 deals with the special facts of that case and hence though considerable reliance was placed by Mr. Mehta on Paragraph 9, we will not deal with the contents of that paragraph which deal with controversies regarding the advisability of Government owned transport service as against private operators.
10. In Sunil Batra v. Delhi Administration, AIR 1978 SC 1675. Krishna Iyer J. speaking for the Supreme Court has observed in paragraph 38 at page 1686:
'Constitutional deference to the Legislature and the democratic assumption that people's representatives express the wisdom of the community lead courts into interpretation of statutes which preserves and sustains the validity of the provision. That is to say courts must, with intelligent imagination, inform themselves of the values of the Constitution and, with fundamental flexibility, explore the meaning of meanings to adopt hat, construction which humanely constitutionalizes the statute in question. Plainly stated, we must endeavour to interpret the words in Sections 30 and 56 of the Prinsons Act and the paragraphs of the Prinsons . v. The Municipal Board, Rampur, AIR 1965 SC 895 the Supreme Court was concerned with a case where the provision was of a taxing statute similar to Section 75 of the Bombay Municipal Boroughs Act, that is, with what has been described as a stage preliminary to the imposition of the tax. This decision of the Supreme Court in Raza Buland Sugar Co.'s case and other decisions of the Supreme Court available till that time were considered by a Division Bench of this High Court consisting one of us (Divan C. J.) and P. D. Desai J. in Gokaldas Amarshi v. Porbandar City Municipality, (1971) 12 Gui LR 603: (19''1 1 Tax LR 684). In that case the Court was concerned with the provisions of Section 60 of the Bombay District Municipal Act, 1901 equivalent to Section 75 of the Bombay Municipal Boroughs Act. After considering the decision of the Supreme Court in Raza Buland Sugar Co's case (supra) and the decision in the Municipal Board Hapur v. Rtighavendra Kripal, AIR 1966 SC 693 and also the decision of the Supreme Court in Pioneer Motors v. Nager coil Municipal Council, AIR 1967 SC 684, the following principles were culled out as emerging from the three decisions of the Supreme Court, namely: (1) The notification of the proposal to levy a particular tax is mandatory and (2) the manner of publication of such notice is directory and if the actual notice as published substantially complies with the requirements of law they can be said to be complied with and the publication will be considered proper publication. It may be pointed out that in Special Civil Application No. 1213 of 1967 decided by one of us (Divan C. J.) and P. D. Desai J. on April 22, 1970* in the case of Lalitaben v. Keshod Nagar Panchayat, the same two principles were culled out and the decision in Sitapur Municipality v. Prayag Narain, AIR 1970 SC 58 was also taken into consideration. It is obvious that what has been referred to in the text books on jurisprudence and in the text books on interpretation of statutes as purposeful interpretation requires that so far as Section 75 of the Bombay Municipal Boroughs Act is concerned, when the requirement of that 'section is to publish the rules with a view to inviting objection. that provision must be read as mandatory, though provisions regarding the manner of publication of the proposed rules may be considered to be directory. In the case of Section 77 of the Bombay Municipal Boroughs Act, the stage which is dealt with is after the proposed rules together with objection raised by citizens or tax-payers who are going to be affected if no such objections have been filed, have been considered by the State Government and the State Government has sanctioned the rules subject to such modifications, if any, as it has thought proper. Therefore, the observations of the Supreme Court in the different cases mentioned above regarding mandatory or directory provisions are not strictly relevant for the purposes of the case before us. It may be pointed out that in Special Civil Application No. 1127 of 1970 decided on July 13, 1976, J. B. Mehta J. sitting singly has dealt with a situation arising under the Gujarat Panchayats Act, Rule 3 (b) and Rule 4. In that case it was found that Rule 4 itself prescribed the mode of publication and on the affidavit-in-reply filed-in that case .the learned Judge found that there was proper publication and substantial compliance with the terms of Rule 4 of the relevant Panchayat Rules. Under that Rule- 'Where a Panchayat so decides to levy a tax or fee, the rules in that part of these rules which relate to such tax or fee, together with the notice stating the tax or fee to be levied and the rate thereof shall be published by it by affixing copy thereof in the office of the Panchayat. The fact of such Publication shall, as soon as may be, be announced either by beat of drum in the gram or nagar or by affixing it at some conspicuous places in the gram or nagar or by publishing it in at least one local Gujarati newspaper circulating in the area of the Panchayat.'
And it was found that there was proper publication and it must be noted that in Rule 4 what was required was that the factum of publication was to be announced in the particular manner laid down in the rule. Therefore, the problem which has arisen before us was not before Mehta, J. in Special Civil Application No. 1127 of 1970. It may be mentioned that a Letters Patent Appeal against that decision had been filed, being Letters Patent Appeal No. 218 of 1976, and the Division Bench consisting of A. D. Desai and A. M. Ahmadi. JJ. dismissed that Letters Patent Appeal on September 7, 1976. In Special Civil Application No. 1869 of 1972 decided by A. D. Desai J. on February 28, 1977, the question arose under Section 103 of the Gujarat Panchayats Act. That section, as we have pointed out earlier, is equivalent to Section 77 of the Bombay Municipal Boroughs Act. In that case it was found that the Municipality itself had not fixed the date from which the increased octroi duty prescribed by the rules should come into force but the said date was fixed by the Chief Officer of the Municipality and as the Dower to fix the date from which the new octroi duty was to come into force vested only in the Municipality and in no other officer, the imposition of octroi duty was not in compliance with Section 103 of the Gujarat Municipalities Act. Against this decision of the learned single Judge, Letters Patent Appeal No. 49 of 1977 was filed by the Municipality. The appeal was decided on July 30, 1979* by the Division Bench consisting of S. H. Sheth J. and one of us (G. T. Nanavati, i.). The Division Bench dismissed the Letters Patent Appeal. It may be pointed out that the Division Bench in that case disagreed with the view of the learned single Judge of this Court N. H, Bhatt, J. in Palitana Nagarpalika v. Arisa Bhuvan Jain Dharamshala, 20 Guj LR 24 : (AIR 1979 Guj 140). The learned single Judge in Palitana Nagarpalika's case was concerned with the interpretation of Section 103 of the Gujarat Municipalities Act. We may point out that the point which arose in that case was regarding the period of one month which must elapse between the date of publication of the notice and the rules coming into force. N. H. Bhatt, J. had taken the view that even if the rules had to be brought into force they came into force on the date of the publication of the notice of those rules. It was therefore evident that no date was required to be mentioned as the date on which the rules would come into force. The Division Bench disagreed with the view of N. H. Bhatt, J. in that case. It may be pointed out that so far as the problem in Bhavnagar Municipality's case (AIR 1970 Guj 53) regarding increase of octroi duty was concerned the same was totally different from the question that arises for our determination in the present case.
*Reported in (1980) 21 Guj. L, R. 815.
11. In the group of six special civil applications, namely, Special Civil Applications, Nos. 221, 278, 279, 280, 281 and 282, all of 1966, decided by a common judgment by 'the Division Bench consisting of Bakshi and B. G. Thakore, JJ. on October 23, 1967, the question of imposition of octroi duty was gone into. It was the imposition of octroi duty by Grampanchayat and it was in the context of Rule 3 (b) that the question was considered by the Division Bench. As pointed out earlier, Rule 3 (b) is equivalent to Section 75 and hence the observations in that judgment are not really helpful for: the purposes of this judgment.
12. In Second Appeal No. 135 of 1964 decided by M. U. Shah, J. sitting single on July 13, 1970, one of the questions before M. U. Shah, J. was in connection with Section 62 of the Bombay District Municipalities Act equivalent to Section 77 of the Bombay Municipal Boroughs Act. In that case the only material observation was:
'The learned District Judge has considered the question of compliance of the provisions of Sections 60 and 62 of the Act in detail in his judgment and for the reasons stated with which I am in agreement, the mandatory provisions must be held to have not been complied with. It cannot be disputed that the compliance with the provisions is mandatory. Unless there has been full compliance with the provisions of law authorising the tax, the liability of the subject as regards the payment of tax cannot arise.'
In. our opinion, the observations of M. U. Shah J. in that case were purely on the facts as found in that case, In so far as he purports to say that the provisions of Sections 60 and 62 of the Bombay District Municipalities Act are mandatory, they must be read as departing from the principle laid down by the Supreme Court in Raza Buland Sugar Co.'s case (AIR 1965 SC 895) (supra) and other cases referred to above. Even as regards Section 60 it is only publication of the rules which is mandatory and not the mode of publication, even if there is a prescribed mode, So far as the provisions of Section 62 are concerned, we, have got passing observations in some cases that those provisions are mandatory. It may be pointed out that in the Dhrangadhra Chemical Works Ltd. v. State of Gujarat, AIR 1973 SC 1041, the Supreme Court was directly concerned with the provisions of Section 60 of the Bombay District Municipalities Act. In that case it was found that the Municipality had passed a resolution enhancing the rate of octroi without framing 'any rules for that purpose. In the context of those facts, in paragraph 14 at page 1044, Mathew J. has observed:
We do not think that the mandatory provisions of Sections 60 to 62 for imposing a tax have been complied with in the case'.
Therefore it is obvious that even though it is an obiter dictum of the Supreme Court and the Supreme Court has observed that the provisions of Section 62 of the Bombay District Municipalities Act equivalent to Section 77 of the Bombay Municipal Boroughs Act are mandatory, but we do not propose to place sole reliance on this judgment of the Supreme Court.
13. We may also observe that there are other decisions of the Gujarat High Court where observations regarding the mandatory character of the provisions similar to the provisions in Section 77 of the Bombay Municipal Boroughs Act have been made. In Saurashtra Iron Foundry & Steel Works Pvt. Ltd. v. Bhavnagar Nagarpalika, (1970) 11 Guj LR 351: (AIR 1970 Guj 53), the Division Bench consisting of Bakshi and D. A. Desai JJ. was concerned with the Provisions of Sections 99, 101, 102 and 103 of the Gujarat Municipalities Act, 1963. At page 356 in paragraph 7 it has been mentioned that the machinery provided by Sections 101, 102 and 103 which provided for obligatory steps which b-me to be taken from the beginning, that ';, from the selection of the tax which is to be imposed to the publication of the date from which the tax could effectively be levied, all these different steps are said to be obligatory steps.
14. In the Municipal Corporation of the City of Ahmedabad v. Jhavari Keshavlal Lallubhai, (1965) 6 Guj LR 228, a Division Beach consisting of Bhagwati J., as he then was, and Vakil J. was dealing with the provisions of Sections 15, T6 and 77 of the Bombay Municipal Boroughs Act and there Bhagwati J. speaking for the Division Bench has observed in paragraph 4 at page 238 :
'After the sanction is received from the Government Section 77 requires that the sanctioned rules must be published by the Municipality together with a notice reciting the sanction and the date and serial number thereof and while publishing the rules the Municipality has also to specify the date from which the rules shall come into force.'
And it has been observed in paragraph 22:........ before a Municipality can impose a tax, it must comply with the procedure set out in Sections 75,76 and 77 and it is only after that procedure is complied with by the passing of the resolution selecting the tax and the approval of the Rules prescribing the tax and the sanction of the Government to the Rules so approved, that the Municipality can impose the tax. Such imposition can be made only by following the procedure set out in Sections 78 to 81 read with Sections 82 and 84. There can be no taxation unless the procedure set
out in these sections is complied with...it must be pointed out that these observation are general and are merely setting out the effect of the provisions of the sections in general terms rather than laying down exact interpretations of Section 77. In Dalpatbhai Hemchand v. The Municipality of Chansma. (1967) 8 Gul LR'225 : (AIR 1968 Guj 38) a Division Bench consisting of Miabhoy, C. J. and J. B. Mehta, J. was dealing with provisions inter alia of Sections 60, 61 and 62 of the Bombay District Municipal Act. Miabhoy, C. J. has in paragraph 12 at page 247 set out, the scheme of the different sections and at page 259 it has been observed:-
'The Municipality is required to publish the rules with a notice on and from which the tax will be leviable. Clause (b) also requires the, municipality on frame rules in regard to matters mentioned in the fourth topic, i e. clause W af Section 46.'
Again in this case the observation is only a passing observation in this' connection.
15. We may point out that a problem similar to the problem before us arose before the learned Judges of the Rajasthan High Court in,Chuni Ld v.The Municipal Board, Shri Madhopur. ILR (1956) 6 Raj 568 where the two learned Judges, namely, Bapna and Ranawat, JJ. differed regarding the publication after the rules were sanctioned by the State Government and the main question was whether the publication in that case was sufficient to comply with the Publication required by the Rajasthan Town Municipalities Act, Section 62 equivalent to Section 77 of the Bombay Municipal Boroughs Act. There Bapna, J. was of the view that it was not sufficient compliance regarding publication where as Ranawat, J. held that there was sufficient publication. In view of the difference between the two learned Judges the matter was placed before the third learned Judge Sharma, J. and he agreed with Bapna, J. and it was held by the two learned Judges that the sanctioned rules did not receive publication in accordance with the provisions of Section 62 of the Rajasthan Town Municipalities Act, 1951
16. In Our opinion, the correct approach in all these interpretations is to ascertain firstly the stage at which the particular rules require to be published. The stage of Section 75 is altogether different from the stage of Section 77 and an analysis of Section 77 of the Bombay Municipal Boroughs Act reveals that the rules sanctioned by the State Government have to be published by the Municipality fn the municipal borough and they have td be published together with a notice reciting the date of sanction and the serial number thereof and the tax as prescribed by the rules so published shall, from a date which shall be specified is such notice and which shall not be less than one month from the date of Publication of such notice, be imposed accordingly. It is only if the requirements of Section 77 are satisfied, namely, that the rules are published and the notice reciting the factum. of the sanction and the date and serial number of the sanction by Government and also setting out the date from which the rules are to come into force, such date not being lea than one m6nth from the date of publication of such notice, and only if the two things are published and -the rules and notice are published in this manner, that the tax as prescribed by the rules sanctioned by Government can be imposed, because the words are 'tax shall be imposed accordingly.' It must not be lost sight of that Section 77 occurs in the group of sections dealing with imposition of tax. It has been pointed out by Supreme Court in Bhinka v. Charan Singh, AIR 1959 SC 960 at p. 966:
' 'The headings prefixed to sections or sets of sections in some modem statutes are regarded as preambles to those sections. They cannot control the plain words of the statute but they may explain ambiguous words.'
If there is any doubt in the interpretation of the words in the section, the heading certainly helps us to resolve that doubt.'
And therefore we must take note of the fact that Section 77 is one of the group of sections which deals with imposition of tam It in terms provides that rules so published will prescribe the tax and the tax as prescribed by the rules so published shall be imposed accordingly, 'accordingly' in this context means from the date mentioned in the notice which must accompany the publication of the rules. Therefore what is required to be published principally under Section 77 are the rules mind the rules have to be published together with the notice containing recitals mentioned in Section M In our opinion, before the tax can be said to be validly imposed, publication of the rules together with, the notice mentioned in Section 77 is a condition precedent. It is not a question of a mandatory provision or a non-mandatory provision so far as Section 77 is concerned. It is a condition precedent to the imposition of tax that the rules sanctioned by the State Government must be published. They must be so published together with the notice containing the recitals mentioned in Section 77 and it is only on the publication of the rules together with the notice that the tax prescribed by the rules so published shall be imposed. Therefore, in our opinion, the only question that has to be asked where the question under Section 77 of the Bombay minicipal Boroughs Act arises or under similar other enactment arises, is whether the condition precedent to the imposition of the tax is satisfied or not.
17. It is a trite saying that a tax can only be levied if it is in accordance with law and no tax can be collected if it is riot imposed in accordance with law.
18. In Khub Chand v. State of Rajasthan, AIR 1967 SC 1074, the Supreme Court was concerned with the Provisions of the Rajasthan Land Acquisition. Act and it has been pointed out that in that particular case :
'Indeed, the wording of Section 4 (2) of the Act leads to the same conclusion. It says, 'thereupon it shall be lawful for any officer, generally or specially authorised by the Government in this behalf, and for his servants and workmen to enter upon and survey and take levels of any land in such locality....', The expressions 'thereupon' and 'shall be lawful' indicate that unless such a public notice is given, the officer or his servants cannot enter the land. It is a necessary condition for the exercise of the power of entry. The non-compliance with the said condition makes the entry of the officer or his servants unlawful. On the express terms of sub-section (2), the officer or his servants can enter the land to be acquired only if that condition is complied with.'
In the instant case before us the word 'accordingly' is used in Section 77 while speaking of imposition of the tax, namely, that the tax so prescribed by rules shall be imposed accordingly, that is from the date mentioned in the notice and in accordance with the notice but it is only if both the rules as well as the notice specified in Section 77 are publish-, ed that the tax can be imposed and the word 'accordingly' in this connection has a very important role to play.
19. At this stage it would be useful to refer to the observations of Scott L. J. in the well known case of Blackpool Corporation v. Lockar, (1948) 1 KB 349. It has been pointed out by Scott, L. J. that:
'The maxim that ignorance of the law does not excuse any subject represents the working hypothesis on which' the rule of law rests in British democracy. That maxim applies in legal theory just as much to written as to unwritten law, i. e. to statute law as much as to common law or equity. But the very justification for that basic maxim is that the whole of our law, written or unwritten, is accessible to the public in the sense, of course, that, at any rate, its legal advisers, have access to it. at any moment, as of right. When a Government Bill is brought before Parliament in a form which, even in regard to merely executive or administrative matters, gives a. wide and unlimited discretion to a minister, and objection is made, the answer is sometimes given that the minister may be trusted by the House to use his powers with a wise and reasonable discretion.'
It is to inform the general public of the law by which they are bound that the publication of the delegated legislation is as essential as publication of the statute made law. Evershed, L. J. has also pointed out that publication is necessary so that public servants may not be exposed to the charge of inadequate and unfair
representation from which they are entitled to be protected. it was pointed out that those who, pursuant to the policy of secrecy if such policy there be lay on the officers the injunction against disclosure, and enquire then, instead, to make brief summaries in their correspondence of the complexities of the material documents, expose them inevitably to the charge of inadequate and unfair representation from which they are entitled to be protected.
20. As far back as 1952 the Supreme Court has pointed out in Harla v. The State of Rajasthan, (1952) 3 SCR 110 : (AIR 1951 SC 467) that natural justice requires that before a law can become operative it must be promulgated or published. It must be broadcast in some recognisable way so that all men may know what it is, or at least there must be some special rule or regulation or customary channel by or through which such knowledge can be acquired with the exercise of due and reasonable diligence. And the test mentioned by the Supreme Court is whether any citizen can acquire with the exercise of reasonable diligence knowledge of the law 'in question. Bose, J. speaking for the Supreme Court observed at page 112:
'In the absence of any special law or custom, we are of opinion that it would be against the principles of natural justice to permit the subjects of a State to be punished or penalised by laws of which they had no knowledge and of which they could not even with the exercise of reasonable diligence have acquired any knowledge. Natural justice requires that before a law can become operative it must be promulgated or/published. It must be broadcast in some rec6gnisable wav so that all men may know what it is; or, at the very least, there must be some special rule or regulation or customary channel by or through which such knowledge can be acquired with the exercise of due and reasonable diligence. The thought that a decision reached in the secret recesses of a chamber to which the public have no access and to which even their accredited representatives have no access and of which they can normally know nothing, can nevertheless affect their lives, liberty and property by the mere passing of a Resolution without anything more is abhorrent to civilised man. It shocks his conscience. In the absence therefore of any law, rule, regulation or custom, we hold that a law cannot come into being in this way. Promulgation or publication of some reasonable sort is essential.'
21. We may mention that Exhibit 182 on the record of this case is a copy of the bys-laws of Rajkot Municipality regarding the mode in which publication of notices of Rajkot Municipality has to be made. Now, publication of a notice is one thing whereas publication of rules of the Municipality is another and 'barring, Exhibit 182, the bye-laws regarding the manner of publication of public notices, there is nothing before us to show the prescribed manner of publication Of Rules. It may be pointed out that only the public notice which has been brought on record is the notice published in the issue of 'Jai Hind' Gujarati Newspaper published from Rajkot. In the issue of November 28, 1964 a notice was published stating that the rules of Rajkot Borough Municipality for levy of rates and tax on buildings and lands had been sanctioned by the State Government. The date and number of sanction of Gujarat Government have been mentioned in the notice and it was also mentioned in the notice that it was resolved by the Municipality to bring the rules into force with effect from January 1. 1965. Then it was mentioned in the notice: 'These rules can be inspected at the office of the Municipality on all days other than holidays during office hours. Moreover copies of the rules can be purchased at the Municipal Office.' It is thus clear that before this notice appeared in 'Jai Hind' on November 28, 1964, the rules were published in the sense that they were placed before the public and the public was informed by the notice that the rules had not 9nly been published but anybody wishing to check up the rules can go to the office of the Municipality and even buy a copy of the rules if he so wanted. If the rules had not been published by that time, copies of the notice could not have been made available for sale or for inspection. Since no mode has been prescribed for publication of the rules and since any person with reasonable diligence could have acquainted himself with the contents of the rules by going to Municipal Office and perusing the rules there or by buying a copy of the rules, it is clear that the requirement of publication of the rules set out in Section 77 of the Bombay Municipal Boroughs Act was satisfied in the instant case. We must reiterate that under Section 77 publication of the rules is a condition precedent. The condition precedent of the notice reciting the factum of sanction and the date and serial number thereof has been shown to have been satisfied in the instant case. In our opinion, whenever a question arises whether a tax or a fee prescribed by a municipal statute like the Bombay Municipal Boroughs Act is properly imposed or not and the challenge is on the ground of various steps leading to the imposition of the tax, the Court has to ask itself as to the stage relating to which the dispute was raised.. If the stage in question is at the stage of proposal for a tax, the entire rules must be published together with notice and appended to the notice mentioned in Schedule H to the Act or similar notice mentioned in other provisions of law. That is the mandatory provision because if the proposal to levy tax or rate or fee in question is not properly broadcast, objections cannot be put forward to the proposed levy by the citizens concerned and their rights would be prejudicially affected without getting an opportunity to put forward their objections. Even at that state, however, it is the publication which is mandatory and not the manner of publication. The manner of publication would be directory as discussed in Raza Buland Sugar Co.'s case (AIR 1965 SC 895) (supra) and other decisions of the Supreme Court mentioned above. The cases have been summarised by the Division Bench in Porbandar Municipality's case, (1971) 12 Guj LR 603: (1971 Tax LR 684) (supra). However, if the question is of the subsequent stage, namely, after the rules have been sanctioned by the Government, the Court has to ask itself the question whether the condition precedent to the imposition of tax has been satisfied or not. If the mode of publication is mentioned, the mode of publication again in the context of publication of the sanctioned rules would be directory and ,the Court will have to examine whether the mode of publication has been prescribed and has been substantially complied with or not, But if there is no prescribed mode of publication of the rules sanctioned by the State Government, then the only question that the Court has to ask itself is whether the rules were placed before the public in such a manner that any citizen could with reasonable diligence have acquired knowledge of the contents of the rules. Barring these tests of reasonable diligence and putting before the public for its knowledge, no other requirement need be satisfied if there is no prescribed mode of publication of Rules.
22. Before parting with this case we may point out that a Full Bench of the Allahabad High Court in Hira Lal v. District Magistrate, Etah, ILR (1975) 2 All 70 : (1975 All LJ 419) has pointed out that in the context 'of the U. P. Municipalities Act the date of the notification in the context of elections for councillors would not be the date when the notification was drawn up but it would be the date when the Gazette containing it was Published and on the facts of that particular case, since the Gazette was published on 24th September 1976, the date fixed for filing nomination papers was not after four days of the date of the notification. The Allahabad High Court has pointed out on the examination of all materials in that particular case that publication means bringing to the notice of all concerned through. prescribed manner the contents of the notification or the matter which was required to be published.
23. Our conclusions are as follows:
(1) As regards Section 75 of the Act the decision in (1971) 12 Guj LR 603 : (1971 Tax LR 684) (supra) has correctly culled out the principle from the decision of the Supreme Court and the test to be applied is that the publication of the proposal to levy a particular tax is mandatory but the manner of publication of such notice is directory and if the mandatory notice as published on the facts of a particular case substantially complies with the provisions prescribing the mode of publication, it will be proper publication.
(2) As regards the provisions of Section 77, instead of saying that the provisions are mandatory it would be more correct to say that Section 77 lays down the conditions precedent to the imposition of tax and if those conditions precedent regarding publication of the sanctioned rules and regarding publication of the notice setting out the recitals mentioned in Section 77 are not complied with, there cannot be said to be a legal imposition of tax. However, even in the context of Section 77, if there is a prescribed mode of publication of the rules the question of substantial compliance of these rules will have to be examined on the facts of the particular case. If there is no prescribed mode of publication of the rules then the test to be applied is whether the rules were made known to the public and the publication was such that any citizen with reasonable diligence could have obtained knowledge of the contents of the sanctioned rules.
24. In our opinion, in the instant case, the conditions precedent have been satisfied since the publication was such that any citizen of Rajkot at the relevant time could with reasonable diligence have obtained knowledge of the contents of the rules. The point referred to us, and therefore point No. I formulated at the time when Second Appeal No. 110 of 1978 was admitted, must be decided in favour of the appellant Municipal Corporation and against the respondents in the sense that the answer must be that the provisions of Section 77 of the Bombay Municipal Boroughs Act were complied with in the instant case. The matter will now go back to the learned single Judge for being disposed of in accordance with law and in the light of what has been stated in the above answer.
25. The learned Advocate General sit this stage applies orally for leave to appeal to the Supreme Court under Article 133(1)(a) of the Constitution. In our opinion, this application cannot be granted at this stage since there is no final judgment in this case so far as this second appeal is concerned as the other two points of law which were formulated at the time when the second appeal was admitted have yet to be decided.
26. Order accordingly