Commissioners of Arrah Municipality vs Jatendra Chandra Jain and Others

Fazl Ali, C.J.—This is a second appeal by the Commissioners of Arrah Municipality, who were defendants in a suit which was partially decreed in favour of the plaintiff by the first Court and was wholly decreed by the lower appellate Court. It appears that in Circle No. 7 of Arrah Municipality there was a holding numbered 616. This holding belonged to the plaintiff and his two brothers, Sukhendra and Nagendra (defendants 2 and 3). The holding consisted of a house and some land. It is said that there was a partition among the three owners of the holding by which part of the house was given to the plaintiff, another part to defendant 2, and the land was given to the third brother.

Subsequently, Sukhendra, who was defendant 2 in the suit, applied for apportionment of taxes on the house which had been allotted to him by partition. An inquiry was thereupon made by a Municipal Commissioner under orders of the Vice-Chairman, and on the basis of that inquiry out of the total annual letting value of Rs. 600 assessed on holding No. 60, Rs. 872 was apportioned for the share allotted to the plaintiff, Rupees 228 was apportioned for the share of defendant 2, and no tax was assessed on the land allotted to defendant 8 on the ground that the land was parti. It appears that the apportionment was made without any notice being issued to the plaintiff, although it is said that no objection was filed to the apportionment by defendant 2, and that was decided in the presence of the plaintiff. The plaintiff in the present suit has challenged the apportionment as illegal and ultra vires, and he has claimed a refund of Rs. 144-10-6 which, according to him, has been realised from him by the Municipality as tax for his portion of the holding at the new rate.

Both the Courts below have held that the apportionment was illegal. The first Court held that the plaintiff was not entitled to a refund, but the lower appellate Court has granted the prayer for refund. The Commissioners of the Arrah Municipality have now preferred this second appeal. It appears that in both the Courts below the appellants'' contention was that the present case is governed by Clause (f) of Section 107, Bihar and Orissa Municipal Act, which provides that:

The Commissioners may from time to time alter or amend the assessment list by reducing, upon the application of the owner or occupier, the valuation of any holding which has been wholly or partly demolished or destroyed or the value of which has been diminished from any cause.

It is contended that in such a case no notice is necessary under Sub-section (2) of Section 107, and, therefore, the absence of notice will not invalidate the assessment, provided that the case falls under Clause (f). Both the Courts below are of the opinion that the case does not fall under Clause (f), and I agree with that view. Clause (f) deals with reduction of the valuation of a particular holding, and it applies only when the holding has been wholly or partly demolished or destroyed, or the value thereof has diminished for some reason or other. In the present case the value of the holding remains the same. Before the apportionment the assessment was fixed at a letting value of Rs. 600, and this value is still maintained, and it is neither party''s case that the old holding has been either demolished or destroyed.

Therefore, I hold, in agreement with the Courts below, that the present case does not fall u/s 107. Mr. Sarju Prasad, who appears for the appellants, has, however, put forward a new and a very ingenious argument. He contends that this is not a case of reduction of the value of the holding, but it is a case of fresh assessment of three new holdings. Such a holding may be assessed u/s 82, Municipal Act, and such a case may also fall u/s 107, Sub-section (1), Sub-clause (a). It may be stated at once that the appellants have not proceeded in this case as if it was a case of new assessment of three holdings. They have merely proceeded to apportion the original tax of the holding among three persons. There is nothing on the record before us to show that new numbers have been given to the houses and land now in possession of the plaintiff and his two brothers. The old holding remains; only the taxes are apportioned. Mr. Sarju Prasad contends that we must look to the substance, and not to the form. But even from that point of view it would appear that the present assessment was ultra vires. Section 116, Clause (2) provides that:

The Chairman shall also, in all oases in which any property is for the first time assessed or the assessment is increased, give notice thereof to the owner or occupier of the property if known.

In the present case no notice was given to the plaintiff of the alleged new assessment. As he had no notice of the assessment he could not prefer any objection. He was, however, present at the objection which was preferred by defendant 2 to the amount apportioned as against him. The fact, however, remains that he was never called upon to object to the assessment on the basis that it was a new assessment, and, as I have already stated, the procedure which is set out in the Act for making a new assessment was not followed. In these circumstances I agree with the Courts below that the apportionment was ultra vires.

It is argued on behalf of the appellants that Section 119 is a bar to the present suit. Section 119 provides that "No objection shall be taken to any assessment or valuation in any other manner than in this Act is provided." But where the whole assessment is ultra vires, the assessee can always bring a suit for a declaration that the assessment is not binding upon him. The only question which now remains to be decided is whether the plaintiff is entitled to the refund of a sum of Rs. 144-10-6, or any portion of it.

In my opinion, he is not entitled to any refund, because upon the view that the old holding continues he was jointly liable for the whole as well as part of the taxes payable in respect thereof. It is not contended that the amount which has been recovered from him was not due upon the holding. Therefore, the plaintiff is not entitled to a refund. His only remedy seems to lie in a suit for contribution if such a suit can be maintained in law.

This second appeal is allowed in part, and it is directed that the parties will bear their own costs in this Court. The decree of the Court below as to costs will stand.

Ray, J.

I agree.