1. These two applications in revision arise out of an order, parsed by the Small Cause Court Judge, Ahmedabad, in. Small Cause SuitsNote. 1673 of 1942 and 4085 of 1941. The facts of the case are not in dispute. The plaintiffs, who were the owners of a certain piece of land, leased it to the defendant on October 21, 1937, for a period of ten years on a rental of Rs. 2,004 a year, that is, on a monthly rental of Rs. 167 for the purpose of constructing motor garages and showrooms. One of the terms of the lease was that the Municipal and other professional taxes should be paid by the defendant tenant. As the Urban Immoveable 'Property Tax Act was not in force in 1937, naturally nothing was said in the lease regarding the payment of that, tax. That tax was imposed-by the Bombay Finance (Amendment) Act IV of 1939 which came into operation on March 30, 1939. Thereupon certain dispute arose between the parties as regards the question of the liability for payment of the tax.
2. It was contended by the plaintiff that the liability to pay was upon the defendant-lessee. The rent for the period from June 1, 1940, to August 31, 1940, was Rs. 501. Instead of paying this amount, the defendant-tenant only paid Rs. 199-10-0 deducting from the amount payable the Urban Immoveable Property Tax which had been recovered from him. Thereupon the plaintiff filed Small Cause Suit No. 4035 of 1940 to recover the balance which, he contended, was wrongfully deducted.
3. In resisting that suit, it was contended by the defendant-lessee that under the Act, the liability to pay the tax was on the owner of the property. This contention was negatived by the learned Judge who decreed the plaintiffs' suit with costs. There was no revision application against that decree.
4. Subsequently, in the year 1941 the defendant again deducted the amount of tax' recovered from him under the Act and again the plaintiffs had to file two suits, No. 4085 of 1941 and No. 1673 of 1942, for recovering the amount which they alleged was wrongfully deducted.
5. In contesting these suits the question of law was again raised and the learned Judge again decided the issue in the same manner in which he had decided it in Suit No. 4035 of 1940. He further held that by reason of his decision in that suit, it was no longer open to the defendant to contend that under the terms of the lease, the plaintiffs were liable to pay the tax. He, therefore, rejected both the contentions of the defendant and decreed the plaintiffs' suit with costs. Against the order in suit No. 1673 of 1942 revision application No. 256 of 1943 has been filed and against the order in suit No. 4085 of 1941 revision application No. 121 of 19,43 has been riled.
6. As pointed out by the learned Judge, it was open to the defendant to contend in suit No. 4035 of 1940 that under the terms ofthe lease, liability for the payment of the Urban Immoveable Property Tax was on theplaintiffs. This contention might and ought to have been made a ground of defence by the defendant in suit No. 4035 of 1940. As that was not done, it is no longer open to the defendant to contend that under the terms of the lease, even though he had to pay the Urban Immoveable Property Tax, he was entitled to deduct that amount from the rent due to the plaintiffs. That position is conceded before me.
7. The only point that is argued by Mr. J. C. Shah is that under the Finance Act IV of 1939 which imposed the Urban Immoveable Property Tax, the owner of the lands and buildings was liable to pay the tax, and, therefore, it ought to have been recovered not from him but from the plaintiffs. In this connection he referred toss. 22 and 26 of the Act. His argument was that under Section 22 the tax is levied upon lands and buildings and that, therefore, the liability for the payment of the tax is on the owner of those lands and buildings. According to him, Section 26(1) merely made the tax recoverable from the occupier, and if the occupier had to pay the tax when he was not legally bound to pay it, he was entitled to reimburse himself from the rent which was payable to the owner who, according to the learned advocate, was the person on whom the incidence of taxation fell.
8. In my opinion, this contention cannot be accepted. All that Section 22 of the Bombay Finance Act IV of 1939! does is to prescribe, as Mr. J. C, Shah himself put it, a unit for the purpose of taxation. It merely describes what kind of tax was being levied under the Act. The real incidence of taxation is prescribed in Section 26(1) of that Act. So far as it is applicable to this case the section says that the tax is leviable primarily on the actual occupier of thebuildings or lands upon which the said tax is assessed if he holds them on a building lease from any person. There is no dispute that the defendant in this case is holding the land on a building lease from the plaintiffs and that he himself is the owner of the buildings which he has constructed on those lands. There is also no dispute that he is the actual occupier of the buildings and lands. It, therefore, follows that the Urban Immoveable Property Tax is leviable on him. Sub-sections (2), (3): and (4) refer to a case where the occupier is not the owner of the lands or buildings or is not holding them on a building or other lease from -Government, any person or local authority. In such cases the primary liability is thrown upon' the lessor or the person in whom the right to lease vests. Sub-section (3) makes a further provision that on failure to recover the tax from the person primarily liable, it may be recovered from the actual occupier in a certain proportion, and Sub-section (4) lays down that if such a recovery is made from the occupier who is not primarily liable under this section, the occupier shall be entitled to be reimbursed by the person primarily liable for the payment, and may deduct the amount so paid from the amount of any rent from time to time becoming due to him from tht person who is primarily liable. Sub-sections (2), (3) and (4), therefore, would apply to a case which does not fall under Sub-section (I) of Section 26. In the present case, the defendant is, in my opinion, clearly liable to pay the tax under the provisions of Sub-section (1) of Section 26.
9. Mr. J. C. Shah further referred to the provisions of subs. (2) of Section 24 under which a tax is to be recovered by a Municipality in the same manner in which the Property Tax is levied and collected in the said area. But it does not follow that the incidence of the Urban Immoveable Property Tax is in all cases identical with the incidence of the Property Tax levied under the Bombay Municipal Boroughs Act, although in most cases the incidence would be identical. But the incidence of the Urban Immoveable Property Tax having been clearly defined inSub-section (1) of Section 26, all that Sub-section (2) of Section 24 does is to prescribe the manner in which the tax is to be levied and collected, including such matters as issuing of notices, serving of distress warrants, etc.
10. In my opinion, therefore, the learned Judge of the Small Causes Court rightly held that the defendant was liable to pay the Urban Immoveable Property Tax and was, therefore, not justified in deducting the amount from the rent payable to the plaintiffs. It was primarily his liability under the Act, and he did nothing more than discharge it himself.
11. Under these circumstances, it seems to me that the order of the learned Judge of the Small Causes Court decreeing the plaintiffs' suit is correct. In both the applications, therefore, the rules are' discharged. In Civil Revision Application No. 256 M 1943 the rule is discharged with costs, and there will be no order as to costs in Civil Revision Application No. 121 of 1943.