Commissioners of the Patna City Municipality vs Kshetro Das Bose

Wort, J.—This is an application arising out of an action by the Commissioners of The Patna City Municipality against one KshetroDas Bose for arrears of municipal taxes. I would have reserved judgment in this case had I thought any advantage would have resulted but the matter to my mind is so clear that that coarse is unnecessary. There were three taxes which I propose to call house tax, water tax and latrine tax and the arrears were for the financial years 1925-1926, 1926-1927 and 1927-1928. The plaintiffs also claimed interest, but so far as that latter question is concerned it is not pressed in this application and in my judgment in any event in the circumstances of the case the plaintiffs would not be entitled to recover it.

Now, when this suit was brought against the defendant he set up in his written statement various defences, the substance of which according to Mr. P.K. Sen, who appears on his behalf in this Court, is that the tax was ultra vires. The learned Small Cause Court Judge came to a conclusion in favour of the defendant and dismissed the whole of the plaintiffs'' suit in spite of the fact that during the pendency of the proceedings the defendant had admitted that he was liable in the amount of Rs. 89. It is unnecessary to say perhaps that at any rate the plaintiffs were entitled to judgment for that sum.

The facts of the case so far as it is necessary to state them for the purpose of my judgment are these: The house or the building which is the subject matter of this action was a shop over which there is a room or rooms in which the manager, a relative as I understand, of the defendant, sleeps. I do not propose to decide whether in fact the house was a dwelling house within the moaning of Section 98, Bihar and Orissa Municipal Act of 1922 but that is one of the matters which came in controversy in the action. There had been an assessment in the year 1912 and under the old Act toeing the Bengal Municipal Act 3 of 1884, there was a revised assessment which comes into question in this suit made in the year 1925 by the Commissioners of Patna City Municipality purporting to act under the Bihar and Orissa Municipal Act of 1922.

It will be necessary now to consider a number of sections in order to deal with the arguments which have been put forward by both parties in this case and first of those sections is Section 82, Act 7 of 1922. That section gives the commissioners of a municipality power to convene a meeting for the purpose of imposing "certain taxes which are enumerated in the section. Section 84 provides that the tax on holdings shall not be imposed at a rate exceeding 7i per cent on the annual value of the holdings except in the Patna City Municipality in which it shall not exceed 10 percent, on such annual value. Section 86 is one of the sections which comes into controversy in this application and is a section which gives the commissioners the right in certain circumstances to impose latrine tax.

Section 98 which is another of the important sections provides that the annual value of a holding should be deemed to be the gross annual rental at which the holding may reasonably be expected to let. Sub-section (2), Section 98, provides that where a holding is not a dwelling house there shall be a tax which shall not exceed 7i per centum of the estimated cost of the building plus a reasonable ground rent for the land comprised in the holding. Section 101 provides that after it has once been determined to impose a tax there should be a certain enquiry as to the valuation of the holding upon which the tax is to be imposed. Section 102 deals with the machinery for realization of taxes from the assessees from time to time and Section 105 provides for the publication of a list or what is called an assessment list. Section 106 provides for a quinquennial valuation or assessment. Section 107 gives power to alter the assessment from time to time. Section 115 provides for the publication of the assessment. Then we come to Section 116, which is another important section, which comes into question in this matter which provides a method of appeal by the assessee against an assessment. Section 119 is ''important inasmuch as it provides that no objection would be taken to any assessment or valuation in any other manner than as provided in this Act.

As I have already stated the defendant in this action was assessed under the old Bengal Act in 1912. The first point which Mr. P.K. Sen raises in his behalf is that u/s 101 of the old Act there was an assessment on the basis of 7� per cent plus a reasonable ground rent. I ought to state in this connexion that actually what has taken place in the assessment of 1925 is not clear. But in substance it can be said that ''the effect of the assessment of 1925 is to increase the liability of the defendant. The argument is obviously based on the fact that the assessment of 1912 was more favourable to the assessee than the present assessment and it is contended that by reason of Section 8, Bihar and Orissa General Clauses Act, Mr. Sen''s client has got a vested right which cannot now be interfered with by any subsequent legislation. He relies in this connexion on Clause (b), Section 8, General Clauses Act of 1917.

The section reads:

Where any Bihar and Oriasa Act repeals any enactment hitherto made, or hereafter to be made, then unless a difisrent intention appears the repeal shall not affect any right, privilege, obligation, or liability acquired, accrued or incurred under any enactment so repealed.

At first sight I should have thought that if this section had any application at all that part of the section which had application would be those words "or liability acquired." I should have thought at first sight that this assessment of 1912 was a liability incurred, but Mr. Sen states, as I have already indicated, that this is a "right" which has accrued and the fact which is the fact, that the Bengal Act has been repealed by the present Municipal Act of Bihar and Orissa, does not prevent his claiming this right or ''privilege which has become vested in him by reason of the assessment of 1912. In this connexion he relies upon a case, the Colonial Sugar Refining Go. Ltd. v. Irving [1905] A.C. 369. The facts of that case shortly stated were that prior to coming into force of the Act of Imperial Legislature which altered the situation of Australia, the Company had brought an action which ultimately went up to the Supreme ''Court of Australia. Before an appeal could be preferred to the Board of the Privy Council the Imperial Act came into force and abolished the right which the appellants contended they had to prefer an appeal to the Board. It was held by the Board by the judgment of Lord Macnaghten that the appellant has acquired a vested right and therefore they were not precluded by the legislation to which I have referred from preferring and prosecuting their appeal. In my judgment that case has no bearing upon the point which I have to determine. The matter it seems to me can be tested in this way. Mr. Sen contends that this is a right which is vested in his client. Now, it is perfectly clear in the first place that he claims it as a right because of the fact that the assessment of 1912 was more beneficial to him than the assessment under the present Act. In my judgment the mere statement of that fact would show that this was not a right but rather a liability.; Assuming for the moment that his contention is right, the result would be that any person who had been assessed under the old Bengal Act with all its provisions could not in any circumstances whatever come under the jurisdiction of the Municipalities of Bihar and Orissa under ''the Act of 1922 and it would have the effect of repealing Section 1, Act of 1922. Section 1 of that Act provides that this Act shall be called the Bihar and Orissa Municipal Act of 1922 to extend to the whole province of Bihar and Orissa and the necessary result from that provision is that the Act gives jurisdiction to the municipalities over all persons residing within their jurisdiction within the province of Bihar and Orissa. Mr. Sen''s contention would have the effect of his client being assessed under an Act which has in fact been repealed by the Act of 1922. It is difficult to give reasons against the contention which Mr. Sen puts forward, but that difficulty only arises by reason, of the fact that there is no mention of the old Act being repealed by the Bihar and Orissa Municipal Act of 1922. But in my judgment that argument is untenable.

The other matters which came to be decided were the question of the household tax and the latrine tax. The learned Small Cause Court Judge has set out to decide the question whether this was a dwelling house within the meaning of Sub-section (2), Section 98, or whether it was a holding within the meaning of Sub-section (1) of that section. Now, it is necessary to state quite clearly what the position of the plaintiffs was in order to come to a conclusion on the two points which have been raised and which I have just stated. The plain'' tiffs were a Municipal Authority. It claimed arrears of taxes which it must be presumed for the purpose of this action had been validly levied upon the defendant. The presumption in matters of this kind is expressed in the maxim omnia praesumuntur rite esse acta all things are presumed to have been rightly and duly performed until contrary is proved and it is for the defendant to show the contrary. That brings me to the question of jurisdiction of the learned Small Cause Court Judge in this matter.

I have already stated what the presumption was in an action of this kind and the question therefore is to what extent was the learned Small Cause Court Judge entitled to enquire into the matters which he in fact enquired into. Now, Section 116 provides a method by which a dissatisfied assessee can attack the assessment or appeal from the assessment which has been made upon him and Section 119 which I have already quoted provides that apart from the method provided by the Act no assessment or valuation shall be objected to. Now, I do not think that there is any manner of doubt that the principle is now well settled in India as well as in England that in any matters of this kind the civil Courts have no jurisdiction in matters unless it can be shown to be ultra vires of the authority such as the municipal authority in this case. Having regard to the provisions of Sections 116 and 119 I have no doubt that no civil Court has jurisdiction to enquire into a question of fact which the legislature has placed within the jurisdiction of the Municipal Authorities, the subject matter of the Act. Now, in this connexion the case of the Chairman of Gindhi Municipality v. Srish Chandra Mozumdar [1908] 35 Cal. 859 has been quoted. That was a case in which the municipal authorities sued the assessee for arrears of tax. The defendant in that action set up the defence that he had been assessed on his income which was not according to his argument a proper basis of assessment according to the Act.

One of the questions which came So be determined in that case was the question whether the civil Court could enquire into a matter of this kind. Mookerjee, J., in deciding that case stated in his judgment referring to Section 116, Bengal Municipal Act:

In these cases it was pointed out that Section 116 does not take away the jurisdiction of he civil Courts ii a HUSO, in which it is alleged and established that the assessment, She propriety of which is in controversy, is open to objection on the ground that it is ultra vires.

In a later passage ho makes this observation:

A corporation, which is invested with authority to assess '';axes, is really invested with a quasi judicial power, and although its action when taken in conformity with the provisions of the law, which created the authority, may not ho liable to challenge in the civil Courts it does not enioy a similar immunity, when that action Can be challenged of the ground that it has been taken either in excess of or in contravention of the powers conferred upon it by the statute.

In my judgment, as I have already stated the principle is well settled that the only matter which the civil Court and'' therefore this Court or the Small Cause Court Judge can enquire into is whether in imposing this tax the authorities hav�1 acted ultra vires. No question, it may be noted, was raised by the defendant as to the validity of the proceedings'' under which or by which the municipal authority came to assess this holding as a dwelling house. The learned Small Cause Court Judge during the course of the hearing framed certain issues which, by the way, were nevermatters of argument nor had either party had any notice of them and one of those issues dealt with this question--whether the municipal authorities were competent to assess tax on the defendant''s holding on the basis of a presumed letting value or rental or was any assessment made by it on such altered basis illegal, void and and without jurisdiction. So far as the alteration of the assessment is concerned, I have dealt with that matter in dealing with the argument of Mr. Sen that his client had a vested interest by reason of the assessment of 1912. Now, when it is once shown that the defendant did not raise any contention as to the validity of the proceedings by which the municipal authorities came to the conclusion that this was a dwelling house, it seems to me to dispose of the whole of the defendant''s case on this point. This was a matter which the legislature gave the municipal authorities jurisdiction to decide. They had under the provisions of the Act either to decide whether this holding was a dwelling house under Sub-section (1), Section 98 or they had to come to the conclusion that it was not a dwelling, house and assess it accordingly under Sub-section (2), Section 98. I have already stated and I reiterate that if the defendant objected, as I understand he did, to that assessment, then he had a right of appeal u/s 116 and Section 117 and having exhausted that remedy in my judgment this Court has no jurisdiction whatever to question the decision at which the municipal authorities came to excepting on the ground that their assessment is ultra tires. Can it be said by reason of the fact that either this Court or the lower might coma to a different conclusion in the facts that the municipal authorities acted ultra vires? The proposition only needs to be stated to carry with it its own answer. The answer is obviously in the negative. It was a matter which was wholly within the jurisdiction of the municipal authorities. The assessee had certain remedies by way of appeal and when once that has been exhausted no Court has, in my judgment, jurisdiction to interfere. That disposes in my opinion the two main contentions which were advanced on behalf of the opposite party in this case.

Now, we come to another matter and that is the latrine tax. Section 86 provides the imposition of this tax on holdings containing dwelling houses, latrines, urinals or cesspools, and on holdings containing shops or places of business in which, in the opinion of the commissioners at a meeting, a latrine, urinal or cesspool is required. At any rate the municipal authority has come to the conclusion in this case that a latrine was necessary. No latrine was in fact in existence nor was there any other matter within the moaning of Sub-clause (a), Section 86, which would entitle the commissioners to impose this tax than the conclusion at which they arrived, namely, that the latrine was necessary. Now, the defendant in his written statement states in para. 6 that the holding is a shop building housing a medical firm owned by the defendant himself, having no urinal or lavatory; nor is any urinal or lavatory necessary or was not considered necessary as an adjunct to the same. Mr. Sen contends that this sufficiently raises the question whether there was a meeting of the commissioners and whether the latrine tax was validly imposed u/s 86 of the Act. Now, when we come to the judgment of the learned Small Cause Court Judge and refer to the issues which he settled, the only issue we find on this point is: Is the holding in suit a dwelling house and as such was it liable to be assessed with latrine tax? Now, the learned Small Cause Court Judge in a very elaborate judgment on this point comes to the conclusion that no latrine is necessary, bat then he goes on to decide that in fact the tax was not imposed in accordance with Section 86. It is difficult to see how that question arose having regard to the issue which he settled. It is quite clear from a plain reading of that issue that what he set out to determine was whether this was a holding or a dwelling house or whether a latrine was necessary. It is nowhere indicated in the issue which I have set out nor does it appear that the question was present in his mind that it was necessary to decide the point whether the commissioner had in fact come to the conclusion that a latrine was necessary. In my Judgment if I had to decide this point�which I think I have not whether para. 6 was sufficient to raise this question, I should undoubtedly decide that it was not. Clearly there was no urinal nor was it considered necessary by the defendant and if the defendant had thought fit to raise the question he could have raised it in another issue the point which he stated in para. 6 of his-written statement. The learned Small Cause Court Judge set out the question to be decided was whether there was a. latrine actually in existence there or whether it was necessary. The Small Cause Court Judge has come to the conclusion that it was not and then goes on to decide that no meeting was held or or to use his own language:

In all the above circumstances therefore I am of opinion that if again a assessment has been made of the latrine tax with respect to this building it is ultra vires and without jurisdiction because it is opposed to the statutory provisions laid dawn in Section 86.

He appears to come to the conclusion, reading the whole of that part of his judgment, that no meeting of the commissioners had been held in order to-come to the conclusion to impose this tax. I have actually looked into the evidence of this case myself. The learned-Small Cause Court Judge refers to the-witness who was called to prove that there was a meeting. But apparently he does not believe that witness by reason of the fact that the municipality did not produce any book or register of the proceedings of the meeting in order to support the theory that although no latrine or urinal was in existence it was the opinion of the commissioners at a meeting that such things-were required for the imposition of the latrine tax. Now, it seems to me that the judgment on those lines is wholly untenable. The learned Small Cause-Court Judge could not decide the question only by inference; it was open to him to say that he was not prepared to believe the witness who came to prove that in fact the commissioner held the opinion on the matter of the latrine after a convened meeting for that purpose. In my judgment it was not open to him to come to the conclusion on this point on the ground that the municipal authorities had to produce books of the proceedings or meetings. In my judgment the matters upon which the learned Judge has come to the conclusion against the plaintiffs are matters which were entirely beyond his jurisdiction, matters, which as I have already said in an earlier part of my judgment, were matters which the legislature has entrusted to the municipal authorities with certain safeguards and unless it can be shown that the authorities in this case acted ultra vires, the plaintiffs were obviously entitled to succeed. In my judgment the defendant has entirely failed to show that the matter was ultra vires and the net result of the application is that it should be allowed and the plaintiffs'' claim should succeed in full with the exception of the claim which the plaintiffs made to interest. There will be a decree in favour of the plaintiffs with costs throughout.