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Judgment
N. Paul Vasantha Kumar, J.—The prayer in these writ petitions is to quash the orders dated 25.9.2000, 5.6.2000 and 25.7.2000
respectively intimating arrears of water tax of Rs. 7,385.90, Rs. 7,319.05 and Rs. 28,631.80 respectively for the period in first half of 1993-1994
to first half of 2000-2001, first half of 1993-1994 to first half of 2000-2001 and in second half of 1996-1997 to first half of 2000-2001 relating to
the building situated at No. 7, Royapettah High Road, Mylapore, Chennai, No. 6, Royapettah High Road, Mylapore, Chennai, and No. 84,
Royapettah High Road, Mylapore, Chennai respectively.
The case of the petitioner is that the Madras Sanskrit College is an educational and charitable institution affiliated to the University of Madras
since 1911 and recognised by the Government of Tamil Nadu under grant in aid scheme from the year 1907 and from 1977, aided by the
Government of India. The institution is owned by a Trust constituted under a Trust Deed dated 27.10.1907. The aim of the Trust is to run a
Sanskrit College for the development of oriental learning, including Sanskrit. The Sanskrit College is giving free instructions and no income is
received except the grant given by the Government. In the said premises, Oriental Higher Secondary School for Boys and Girls is also functioning
for promoting Sanskrit language and coaching students for appearing in the Higher Secondary examination conducted by the Government of Tamil
Nadu.
The Kuppuswamy Sastri Research Institute is yet another educational institution situated within the same campus run on private donations. The
petitioner also owns house properties at No. 6 and 7, Royapettah High Road, First Lane, Mylapore, Chennai-600 004, where the staff of the
petitioner institution are permitted to reside free of rent. The said properties have been settled in favour of the petitioner by settlement deed
executed on 27.1.1966 by Smt. K. Saraswathi Ammal and Smt. K. Savitri Ammal registered as Document Nos. 101 and 100 of 1966
respectively. The Chennai Metropolitan Water Supply and Sewerage Board is supplying water to the petitioner institution and the petitioner has
been paying water and sewerage tax regularly to the second respondent till 31.3.1994.
Section 101 of the City Municipal Corporation Act, 1919 was amended under which exemption is granted to all the educational institutions from
payment of property tax. The petitioner being an educational institution is also exempted from payment of Corporation Property Tax under the
amended provisions of the City Municipal Corporation Act. The demand for water and sewerage tax was made based upon the annual value as
determined by the Corporation of Chennai in respect of property tax. From 1.4.1994, no property tax is payable and the petitioner stopped
payment of metro water and sewerage tax for the period from 1.4.1994.
Water and sewerage tax is a specific tax assessed based on 7% of the annual value of the building as fixed by the Corporation. According to the
petitioner, Section 35 of the Chennai Metropolitan Water Supply and Sewerage Board Act 1978 governs assessment and annual value however
the Board uniformly adopted the annual value as fixed by the Chennai Corporation. The petitioner, who was assessed to property tax upto
31.3.1994 ceased to be taxable entity on and from 1.4.1994 under the City Municipal Corporation Act, 1919 and therefore, there has been no
demand from the Chennai Corporation.
Section 34(1) of the Chennai Metropolitan Water Supply and Sewerage Board Act, 1978 clearly states that the Board shall determine the
annual value for each year for assessing the water and sewerage tax. However, insofar as the petitioner is concerned, no such assessment is made
by the Metro Water Board. The impugned demand notices are issued on the basis of the property tax assessment made upto 31.3.1994 by the
Chennai Corporation. The said action of the Board is challenged in these writ petitions by contending that separate assessment of the water and
sewerage tax has to be made as per Section 34 of the Chennai Metropolitan Water Supply and Sewerage Board Act, 1978 and as a temporary
measure even though u/s 35 of the Act, the annual value as determined by the Chennai Corporation can be taken as a basis till date, no assessment
is made by the respondents u/s 34 of the Act.
The learned Counsel for the petitioner cited the judgments of this Court reported in Kutty Flush Doors and Furniture Company Private Limited
Vs. Madras Metropolitan Water Supply and Sewerage Board and Others, , 2002 (2) CTC 219 (Kasi Theatre v. Chairman, M.M.W.S.S.B.,
Chennai and Two Ors.) and in 2007(3) CTC 270 M.O.P. Iyengar v. Charities, The Special Tahsildar in support of his contention and contended
that unless and until there is an assessment of tax as required u/s 34 of the Chennai Metropolitan Water Supply and Sewerage Board Act, 1978,
no demand could be made against the petitioner.
The learned Counsel for the respondents on the other hand submitted that the property tax assessment made by the Chennai Corporation upto
31.3.1994 was relied upon by the respondents for calculating the water and sewerage tax and the same is permissible u/s 35 of the Chennai
Metropolitan Water Supply and Sewerage Board Act, 1978.
I have considered the rival submissions made by the learned Counsel for the petitioner as well as the respondents.
Admittedly, from 1.4.1994, when Corporation is not demanding any property tax and no assessment of property tax is also made against the
petitioner''s property. The demand of water and sewerage tax is made by the respondents u/s 35 of the Chennai Metropolitan Water Supply and
Sewerage Board Act, 1978, even though the said Section permits determination of annual value as determined by Chennai Corporation till the
assessment is made u/s 34 of the Chennai Metropolitan Water Supply and Sewerage Board Act, 1978.
Section 34 of the Chennai Metropolitan Water Supply and Sewerage Board Act, 1978 reads as follows:
Taxes leviable by the Board: (1) For the purpose of this Act, the Board shall levy on premises situated within its area-
a) a water tax: and
b) a sewerage tax
2) The taxes mentioned in Sub-section (1) shall be levied at such rates as may be prescribed which the case of water tax shall not be more than
twenty per cent and in case of sewerage tax shall not be more than ten per cent of the assessed an value of the premises.
3) The Board may, with the sanction of Government, exempt any local area from the whole portion of the water tax and sewerage tax on the
ground that such area is not deriving any or the full benefit from the water apply or sewerage system, or the Board may remit a portion of such
taxes not exceeding one half on the ground that the premises concerned has remained vacant.
Explanation: For the purposes of this chapter the expression ''premises'' shall mean any land or building.
4) Where water tax or drainage tax is comprised in the property tax or house-tax levied and collected by the existing authority such existing
authority shall reduce the property tax or house tax by an amount equal to the amount attributable to water tax and drainage tax.
As rightly pointed out by the learned Counsel for the petitioners that the very same issue was considered by this Court in the decision reported
in Kutty Flush Doors and Furniture Company Private Limited Vs. Madras Metropolitan Water Supply and Sewerage Board and Others, , wherein
the scope of Sections 34 and 35 of the Act has been considered and in the said judgment, it is held as follows:
Section 35 provides for the manner of the assessment the annual value and says that till such time as the annual valuation is determined under the
Act, the annual value of a building for the purpose of assessment shall be the annual value as assessed by Municipal Corporation or Municipality or
Panchayat. The tax is taken as a percentage of the annual value of a building or land. Similarly, the sewerage tax also is taken as a percentage of
the annual value. Therefore, the Board has to determine the annual value and then adopt percentage of tax. But it is not disputed that the Board has
not started making assessment of annual value as provided u/s 35 of the Act and they are adopting only the annual value as made by the Municipal
Corporation, Municipality or Panchayat. Therefore, the question of assessment does not arise because the annual value as provided by the
Municipality or Corporation is adopted by the Board. But the Board has a duty u/s 34 of the Act to levy tax by adopting the annual value. Unless
there is a levy by the Board, there cannot be a demand for payment of the water tax or sewerage tax. In fact, in respect of every half year, the City
Municipal Corporation Act says that the tax should be demanded before the end of the half year and the liability of the tax-payer arises only when
a demand is issued on the basis of a levy. In this particular case, there is absolutely no record to show whether there was any levy at all at any
point of time, leave alone a demand notice. Consequently, I have to hold that the impugned notice, dated 17.1.1990 is totally without jurisdiction
and illegal. Accordingly, that writ petition is allowed as prayed for. No costs. Liberty is given to the respondents to proceed in accordance with
law and demand the tax, if they are so authorised under the Act. If any amount has been recovered from the petitioner under orders of this Court,
the same shall be returned to the petitioner subject of course to say future demands that may be made by the respondents in which event the Board
can make some adjustment of the amount already recovered.
In the judgment reported in 2002 (2) CTC 219 (Kasi Theatre v. Chairman, M.M.W.S.S.B., Chennai and Two Ors.) also, the scope and
ambit of Section 34 of the Act was considered and the view expressed by this Court in the decision above cited was affirmed. In paragraphs 9 and
10, it is held as follows:
Section 34 of the Act provides for the levy of water tax and sewerage tax, Section 35 provides for the method of assessment of annual value.
The annual value of the premises for the purposes of levy of taxes mentioned in Section 34 shall be assessed by such authority as may be
prescribed. Till such time as the annual valuation of land and buildings is determined under this Act, the annual value of the land and buildings for
the purposes of this Act, shall be the annual value as assessed by the local bodies. It is evident that u/s 35, the respondents have to determine the
annual value and assess the tax. Though the Board is making the assessment adopting the annual value made by the local bodies, the board has a
duty u/s 34 of the Act to levy tax. The respondents have not produced any evidence to show that they have levied tax.
I concur with the view taken by the learned Judge in the decision relied on by the petitioner viz., Kutty Flush Doors and Furniture Company
Private Limited Vs. Madras Metropolitan Water Supply and Sewerage Board and Others, and I dissent the view taken by the learned Judge in the
decision relied on by the respondents viz., W.P. No. 14392/2000, dated 11.10.2001. Hence, I come to the conclusion that the impugned notice is
unsustainable in law and liable to be quashed.
The petitioner has not produced any iota of evidence to show that they have not availed the facility provided by the respondents. On the other
hand, the petitioner had been paying taxes and charges yeteryears which prove that they have been enjoying the facilities rendered by the board.
As rightly pointed out by the learned Counsel for the respondent, water and sewerage taxes are not related or referable to any particular service
rendered to a particular individual but it is a general levy collected from the public for providing and implementing the welfare measures. As such
the petitioners are liable to pay taxes. Hence, it is open to the respondents to proceed in accordance with law and demand the tax.
The same is reiterated in the subsequent decision by the very same learned Judge in the decision reported in 2007 (3) CTC 270 (M.O.P. Iyengar
v. Charities, The Special Tahsildar). The learned Counsel for the respondents fairly submitted that no appeal against the said orders were preferred
and the said orders have become final.
The learned Counsel for the respondents relied upon an unreported judgment of this Court made in W.P. No. 15243 of 1997, dated
20.10.1998 and contended that the metro water and sewerage tax can be assessed on the basis of the property tax assessed by the Corporation.
In fact in the said judgment, the scope and ambit of Section 34 and 35 of the Chennai Metropolitan Water Supply and Sewerage Act, 1978 was
not considered. Therefore, I am of the view that the said judgment will not give any help to the respondents in contending their case.
In view of the said statutory provision as stated above viz. Sections 34 and 35 of the Chennai Metropolitan Water Supply and Sewerage Act,
1978, the impugned demand notices are set aside as no assessment as required u/s 34 of the Chennai Metropolitan Water Supply and Sewerage
Act, 1978 has been made by the respondent-Board for all these years while making the impugned demand. When the statute namely Section 34 of
the Act mandates the Board to assess the water and sewerage tax in a particular manner it is not open to the respondents to assess the tax on the
basis of property tax asessed earlier by Chennai Corporation. Section 35 permits to rely on property tax assessment which is a stop gap
arrangements and the same cannot be continued for years together.
It is a settled proposition of law that when a statute prescribes to do a particular thing in a particular manner, the same shall not be done in any
other manner than prescribed under the law. The said proposition is well recognised as held by the Honourable Supreme Court in the decision
reported in State of Uttar Pradesh Vs. Singhara Singh and Others, . In paragraphs 7 and 8 of the Judgment, it is held thus,
In AIR 1936 253 (Privy Council) the Judicial Committee observed that the principle applied in Taylor v. Taylor (1876) 1 Ch.D 426 to a Court,
namely, that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and that other methods of
performance are necessarily forbidden, applied to judicial officers making a record u/s 164 and, therefore, held that the magistrate could not give
oral evidence of the confession made to him which he had purported to record u/s 164 of the Code. It was said that otherwise all the precautions
and safeguards laid down in Sections 164 and 364, both of which had to be read together, would become of such trifling value as to be almost idle
and that ""it would be an unnatural construction to hold that any other procedure was permitted than that which is laid down with such minute
particularity in the Sections themselves.
The rule adopted in Taylor v. Taylor (1876) 1 Ch D 426 is well recognised and is founded on sound principle. Its result is that if a statute has
conferred a power to do an act and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act
in any other manner than that which has been prescribed. The principle behind the rule is that if this were not so, the statutory provision might as
well not have been enacted. A magistrate, therefore, cannot in the course of investigation record a confession except in the manner laid down in
Section 164. The power to record the confession had obviously been given so that the confession might be proved by the record of it made in the
manner laid down. If proof of the confession by other means was permissible, the whole provision of Section 164 including the safeguards
contained in it for the protection of accused persons would be rendered nugatory. The section, therefore, by conferring on magistrates the power
to record statements or confessions, by necessary implication, prohibited a magistrate from giving oral evidence of the statements or confessions
made to him.
The said proposition is also reiterated in the decision reported in Babu Verghese and Others Vs. Bar Council of Kerala and Others, . In
paragraphs 31 and 32 of the Judgment, the Honourable Supreme Court held thus,
It is the basic principle of law long settled that if the manner of doing a particular act is prescribed under any statute, the act must be done in
that manner or not at all. The origin of this rule is traceable to the decision in Taylor v. Taylor (1875)1 Ch D 426 which was followed by Lord
Roche in AIR 1936 253 (Privy Council) who stated as under:
(W)here a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all.
This rule has since been approved by this Court in Rao Shiv Bahadur Singh and Another Vs. The State of Vindhya Pradesh, and again in Deep
Chand Vs. The State of Rajasthan, . These cases were considered by a three-Judge Bench of this Court in State of Uttar Pradesh Vs. Singhara
Singh and Others, and the rule laid down in AIR 1936 253 (Privy Council) was again upheld. This rule has since been applied to the exercise of
jurisdiction by courts and has also been recognised as a salutary principle of administrative law.
The said principle is followed in the decision reported in Ramchandra Murarilal Bhattad and Others Vs. State of Maharashtra and Others, .
Admittedly, there is no limitation to demand metro water and sewerage tax and water charges as per Section 74 of the Chennai Metropolitan
Water Supply and Sewerage Act, 1978. In view of the same, it is open to the respondents to properly assess the tax payable by the petitioner.
The amount already paid by the petitioner is directed to be adjusted after making proper assessment. The respondents are directed to assess the
value of the tax as required u/s 34 of the Chennai Metropolitan Water Supply and Sewerage Act, 1978 and demand the same from the petitioner.
On such assessment as already stated, the amount already paid can be given credit to and the arrears if any can be demanded from the petitioner.
The writ petitions are disposed of accordingly. No costs.