1. The question which is involved in this petition is whether the limitation for an appeal filed under Section 406 of the Bombay Provincial Municipal Corporations Act, 1949 (hereinafter referred to as 'the Act') against a bill of demand, in which the owner of the property also challenges the determination of rateable value, commences from the time when the complaint of the owner against the rateable value is rejected by the Commissioner.
2. The petitioner is the owner of a bungalow within the limits of the Municipal Corporation of Poona. The Municipal Authorities determined the rateable value of the bungalow at Rs. 8640/- on 13th July 1968 after the Assessor rejected the complaint filed by the petitioner challenging the proposed rateable value.
Thereafter on 14th Aug. 1968, the petitioner received a bill of demand demanding general property tax and conservancy tax as well as education tax computed on the basis of the rateable value of Rupees 8640/-. On 28th August 1968 the petitioner filed an appeal under Section 406 of the Act before the Small Cause Court, Poona, The memo of appeal which is before us shows that the rateable value of Rupees 8640/- was expressly challenged and indeed, that is the main challenge in the appeal because, according to the petitioner, the rateable value should have been determined on the basis that the rent of the premises was only Rs. 750/-and that the rateable value was liable to be fixed at Rs. 3000/-. This appeal came to be dismissed by the Small Cause Court on the ground that it was barred by limitation. An application made by the petitioner for condonation of delay on the footing that the appeal should be treated as one against the order dated 13th July 1968 by which the objections to the determination of rateable value raised by the petitioner were rejected by the Assessor was also rejected by the Small Cause Court. It was the case of the petitioner before the Small Cause Court that the appeal was competent and that in the appeal he was entitled to challenge the rateable value also.
3. The petitioner then filed a second appeal against the order of the Small Cause Court as provided by Section 411 of the Act. The Assistant Judge, Poona, who dismissed the appeal took the view that the appeal filed by the petitioner was against the determination of rateable value and even though the Corporation has raised an objection on the ground of limitation immediately, the petitioner had taken about 3 1/2 years to file the application for condonation of delay. The Assistant Judge seems to have taken the view that a composite appeal challenging the bill of demand as well as the rateable value was not competent. The present petition is now filed by the petitioner challenging the orders made by the Assistant Judge and the Small Cause Court.
4. Shri Bhagat appearing on behalf of the petitioner has relied upon the provisions of Section 406(2)(e) of the Act and it is contended that in the appeal filed against the bill of demand, the petitioner could also challenge the determination of rateable value and having regard to the provisions of Section 406 (2) (e), such an appeal filed within a period of 15 days from the receipt of the bill of demand would beperfectly within limitation.
5. Shri Agarwal on behalf of the Corporation has, however, contended thatan appeal in which the rateable value is challenged must be filed only within 15days form the date on which the complaint of the owner against the determination of rateable value has been rejected by the Commissioner and, therefore according to the learned Counsel,the appeal, which was directed against the bill of demand, in so far as the challenge to the rateable value is concerned, could still be held to be barred by limitation.
6. In order to decide these contentions, it is necessary to refer to the provisions of Section 406 of the Act and some provisions in Chap. VIII in the Schedule to the Act. Under Rule 15 of the Taxation Rules in Chap. VIII of the Schedule to the Act, the Commissioner is required to give public notice of a day, not being less than 15 days from the publication of such notice, on or before which complaints of the amount of any rateable value entered in the ward assessment-book will be received in his office. Rule 1C deals with time and the manner of dealing with complaints of valuation. Rule 17 requires intimation by notice to the complainant of the day, time and place when and whereat his complaint will be investigated. Rule 18 then provides as follows:--
'18. (1) At the time and place so fixed the Commissioner shall investigate and dispose of the complaint in the presence of the complainant, if he shall appear and if not, in his absence
(3) When the complaint is disposed of, the result thereof shall be noted in the book of complaints kept under Rule 17 and any necessary amendment shall be made in accordance with such result in the assessment-book.'
It is not in dispute that the hearing granted to the petitioner by the Assessor of the Corporation on 13th July 1968, on which day the complaint of the petitioner was also disposed of, was in accordance with the provisions of Rule 18. That was, therefore the date on which the complaint against rateable value made by the petitioner was disposed of and it is not in dispute that if the petitioner, had to file an appeal barely against this order rejecting his complaint, that should necessarily have been filed within 15 days from 13th July 1968.
7. Section 406 as it was in force at the material time in 1968 read as follows:--
'406. (1) Subject to the provisions hereinafter contained, appeals against any rateable value or tax fixed or charged under this Act shall be heard and determined by the Judge.
(2) No such appeal shall be heard unless-
(a) it is brought within fifteen days after the accrual of the cause of complaint;
(b) in the case of an appeal against a rateable value a complaint has previously been made to the Commissioner as provided under this Act and such complaint has been disposed of;
(c) in the case of an appeal against any tax in respect of which provision exists under this Act for a complaint to he made to the Commissioner against the demand, such complaint has previously been made and disposed of;
(d) in the case of an appeal against any amendment made in the assessment-book for property taxes during the official year, a complaint has been made by the person aggrieved within fifteen days after he first received notice of such amendment, and his complaint has been disposed of;
(e) in the case of an appeal against a tax, or in the case of an appeal made against a rateable value after a Bill for any property tax asseessed upon such value has been presented to the appellant, the amount claimed from the appellant has been deposited by him with the Commissioner.'
8. Under Sub-section (1) of Section 406 of the Act, the appeal against the rateable value or the tax fixed or charged under the Act is to be heard by the Judge of the Small Cause Court. Clause (a) of Sub-section (2) indicates that the appeal has to be filed within a period of 15 days from the accrual of the cause of complaint. Clause (b) deals with a specific case where an appeal has been filed against rejection of a complaint regarding determination of rateable value and rateable value determined by the Corporation cannot be challenged in appeal unless a complaint has been previously made to the Commissioner as provided by the Act and such complaint has been disposed of, One of the conditions which is prescribed by Clause (e) of Section 406 (2) is that where the appeal is against a tax or where an appeal is made against a rateable value after the bill for any property tax assessed on such value has been presented to the owner, the appeal will not be heardunless the amount claimed from the appellant has been deposited by him with the Commissioner. The petitioner is heavily relying on Clause (e) and it is contended that a composite appeal challenging a bill of demand demanding a tax as well as the rateable value on the basis of which the tax has been assessed is maintainable subject to the condition that the amount of the tax is deposited by the owner or the appellant with the Commissioner.
9. On a proper reading of Clause (e) of Sub-section (2) of Section 406 it also appears to us that an appeal challenging the determination of rateable value can be filed after a bill of demand demanding property tax is received by the appellant. Property tax is assessed on the basis of rateable value determined by the Corporation. In such a case, it will be futile to challenge a bill of demand in respect of property tax if the rateable value is not challenged. That is why provision seems to have been made that it will be open to the appellant to challenge the determination of the rateable value even after the bill of demand is served on him, the only condition then being that the amount demanded by way of tax will have to be deposited with the Commissioner. The very fact that such an appeal can be filed after the bill of demand is presented will mean that the cause of complaint is the receipt of the bill of demand. If that is the cause of complaint, then the limitation for such an appeal will, in view of the specific provisions in Clause (a) of Section 406 (2), commence from the receipt of the bill of demand.
10. It is difficult to accept the argument advanced on behalf of the Municipal Corporation that even when in an appeal filed after the bill of demand is received rateable value is permitted to be challenged, the limitation would still commence from the time when the complaint against the rateable value is rejected by the Commissioner. The scheme of Section 406 (2) appears to us be very clear. While there is nothing to prevent a person from challenging the determination of rateable value immediately after his complaint against rateable value has been rejected, he can also challenge the determination of rateable value after the bill of demand is served on him. In the first case, the cause of complaint will be the rejection of the complaint against the rateable value by the Corporation; in the second case, the cause of complaint will be the receipt of the bill of demand. Theadditional condition of the amount of the demand being required to be deposited before the appeal is heard will apply only in the second case because where an appeal is filed only against an order determining rateable value before the tax is assessed and the bill of demand is issued, there is no question of depositing any tax. As already pointed out, we are concerned with the provisions of Section 406 (2) as they were in force in 1968 and the amendments in 1975 do not become material. The learned Assistant Judge and the learned Judge of the Small Cause Court were, therefore, clearly in error in holding that the appeal filed by the petitioner was barred by limitation. This view was based on a misconstruction of the provisions of Section 406 of the Act. Their orders are, therefore, liable to be quashed. Consequently, the impugned orders of the Small Cause Court, Poona, dismissing the appeal of the petitioner as barred by limitation and the order of the Assistant Judge confirming that order are quashed.
11. The appeal will now stand remitted to the Small Cause Court for a proper decision according to law. The Small Cause Court will now decide afresh the application filed by the petitioner before it seeking permission to lead evidence in support of his contention that the rateable value has not been properly determined. Rule absolute with costs.
12. Ordered accordingly.