1. Multanchand Fulchand Sancheti, whom I will hereafter refer to as 'the respondent', constructed a building within the limits of the Borough Municipality of Chalisgaon. The completion certificate in respect of the building was issued by the Municipality on 18-10-1951. The building bears Municipal Census No. 331. The Borough Municipality of Chalisgaon is governed by the provisions of the Bombay Municipal Boroughs Act 18 of 1935.
On 31-3-1952, the Chief Officer of the Municipality inspected the site and amended the assessment list and incorporated therein an entty relating to the house showing that the respondent was liable to pay general house tax in respect of that house. The Chief Officer also issued a notice to the respondent inviting objections against the valuation of house No. 331.
The notice way received by the respondent on 2-4-1952, and he submitted his objection to the valuation. On 30-6-1952, the Standing Committee resolved that the assessment made by the Chief Officer was proper and on 9-7-1952, the Standing Committee rejected the objections raised by the respondent. On 10-7-1952, a bill was sent to the respondent calling upon him to pay house tax due for the year 1951-52.
The respondent paid the tax demanded under protest, and appealed against the bill to the Resident Magistrate, First Class, Chalisgaon, under Section 110(1), Bombay Municipal Boroughs Act. The respondent contended in appeal that the Municipality had no right by assessing the building in the official year 1952/53 to levy house tax for the year 1951-52 which ended on 31-3-1952. He also contended that the Standing Committee had not lawfully decided the objections raised by him. The learned Magistrate rejected the contentions raised by the respondent and, dismissed his appeal.
2. Against the order passed by the Besident Magistrate, a revision application was filed in the Court of Session at East Khandesh. The learned Additional Sessions Judge who heard the revision application set aside the order passed by the Resident Magistrate. The learned Judge held that the levy of the house tax upon the respondent's house No. 331 for the year 1951-52 was not valid.
In the view of the learned Sessions Judge the Standing Committee could under Section 82(3), Bombay Municipal Boroughs Act amend the assessment list current at the date of amendment, and the amendment made by the Standing Committee 'can take effect from a date in the current official year only' and that the Municipality could not amend the assessment list of the previous year.
In coming to that conclusion the learned Sessions Judge relied upon a judgment of this Court. 'Municipal Borough, Sholapur v. Governor-General of India in Council', 1948 Bom 145 (AIR V 35) (A). Against the order allowing the appeal and annulling the assessment of the respondent's property for the year 1951-52 the Chalisgaon Municipality has invoked the revisional jurisdiction of this Court on its civil side.
3. It has been held by this Court in 'Lokmanya Mills Ltd., Barsi v. Municipal Borough, Barsi, 1939 Bom 477 (AIR V 26) (B), that even though appeals lie under Section 110 of the Act against) entries in assessment lists and against claims made by a Borough Municipality to a Magistrate, the disputes raised thereby relate to civil liability, and, therefore, from the order of the Court of Session exercising revisional jurisdiction under Section 111 of the Act against the order of the Magistrate a revision application lies to this Court under Section 115 Civil, P. C.
Counsel for the Municipality contends that the Chief Officer was entitled to alter ex parte the assessment list, current on 31-3-1952, and thereafter to issue a notice requiring the rate payer to submit his objections thereto.
He further contends that under the Municipal Boroughs Act the Municipality has the right to amend an assessment list even, after the year for which the list is current has expired, and the liability to pay the rate arising on amendment of the assessment list relates back to the date on which the notice was issued, and may be enforced even if the official year for which the list was current has come to an end, and there is on the day on which the amendment is made a fresh assessment list in operation.
In other words, it is contended that even after the official year is over and a fresh assessment list has come into force, the assessment list of the previous year may be amended, and tax may be levied accordingly provided the notice inviting objections has been issued during the currency of the list to be amended.
4. Before we consider the contentions raised on behalf of the Municipality, we may refer to the relevant, provisions of the Bombay Municipal Boroughs Act, 1925. By Section 78 of the Act the Chief Officer is required to cause an assessment list of all buildings or lands or lands and buildings In the Municipal Borough to be prepared where the Municipality has imposed a rate on buildings or lands or on both. After the assessment list is completed the Chief Officer has to give public notice thereof and of the place where the list or a copy thereof may be inspected.
The Chief Officer, at the time of the publication of the assessment list, has also to give public notice of a date, not less than one month after the publication, before which abjections to the valuation or assessment in such list shall be made and where property is for the first time assessed or the assessment is increased the Chief Officer has to give individual notice thereof to the owner or occupier of the property (see Sections 80 and 81(1)).
Sub-section (2) of Section 81 deals with the procedure for submitting objections to the valuation and assessment of property. By Sub-section (3) of Section 81 provision is made for hearing and disposal of objections by the Standing Committee. Sub-section (4) of Section 81 provides that when all objections made under Section 81-have been disposed of and all amendments required by Sub-section (3) have been made in the assessment list, the list shall be authenticated.
Sub-section (6) of Section 81 makes the entries in the assessment list so authenticated subject to any alterations that may be made therein under Section 82 and to the result of any appeal or revision made under Section 110 conclusive evidence for the purpose of all Municipal taxes, of the valuation, or annual letting value on the basis prescribed in the rules regulating the rate, of buildings and for the purposes of the rate for which such assessment list has been prepared and of the amount of the rate leviable on such buildings or lands or both buildings and lands in any official year in which such list is in force.
By Section 82(1) the Standing Committee is given the power to alter the assessment list by Inserting or altering an entry in respect of any property, when such entry has been omitted from or erroneously made in the assessment list through fraud, accident or mistake or in respect of any building constructed, altered, added to or reconstructed in whole or in part, where such construction, alteration, addition or reconstruction has been completed after the preparation of the assessment list.
But before such alteration or insertion of any entry can be made the Standing Committee must give notice to any person interested in the alteration of the list of a date not less than one month from the date of service of such notice inviting objections to the alteration sought to be made. The objection raised pursuant to a notice served under Section 82(1) must be heard and disposed of in the manner prescribed by Sub-section (2) of Section 81. Then follows Sub-section (3) on the true effect of which the ultimate decision of this application depends. It provides:
"An entry or alteration made under this section shall, subject to the provisions of Section 110, have the same effect as if it had been made in the case of a building constructed, altered, added to or reconstructed on the day on which such construction, alteration, addition or reconstruction was completed or on the day on which the new construction, alteration, addition or reconstruction was first occupied, whichever first occurs, or in other cases, on the earliest day in the current official year on which the circumstances Justifying the entry or alteration existed; and the tax or the enhanced tax as the case may be shall be levied in such year in the proportion which the remainder of the year after such day bears to the whole year."
Section 84 by Sub-section (1) provides that it shall not be necessary to prepare a new assessment list every year and the Chief Officer may adopt the valuation and assessment contained in the list for any year, with such alterations as may be deemed necessary for the year immediately following.
It is then provided by Sub-section (2) that the provisions of Sections 80, 81 and 83 shall be applicable every year as if a new assessment list had been completed at the commencement of the official year. The expression 'official year' is defined by Section 3(13), Bombay Municipal Boroughs Act as meaning 'the year commencing on the first day of April'.
The scheme of the Act, therefore, appears to be that when the Municipality levies a rate on buildings or on lands or on buildings and lands the Municipality must prepare an assessment list, give notice of the preparation of the assessment list, invite objections to the entries contained therein and consider the objections. After the objections are heard and adjudicated upon, the assessment list should be finalised and authenticated in manner provided by the Act.
The liability to pay the rate arises from the assessment list and the entries made in the assessment list are conclusive as to the valuation or the annual letting value of the lands or buildings, to which the entries relate, and as to the amount of rate leviable on such building in any official year in which the list is in force.
Machinery is provided for amendment of the assessment list where error has crept in and where liability has been incurred for the first time in respect of buildings constructed, altered, added to or reconstructed during the course of the year. Every assessment list is operative for one year only the year being one commencing on the 1st April and ending on the 31st of March of the next year.
On the 1st of April of each year notionally a fresh assessment list comes into existence, even if the objections which have been raised are not disposed of before the commencement but are disposed of during the course of the official year. When the list is authenticated it is deemed to come into existence as on the 1st of April of the official year.
This scheme of the Act necessarily postulates that if any alteration is to be made in the assessment list, it must be carried out during the course of the official year. If the list is altered during the course of the year the liability arising by reason of alterations made rectifying omissions or erroneous entries becomes enforceable as from the date on which the assessment list comes into operation and in other cases where a fresh entry is made on account of new constructions from the first day on which building becomes liable to pay the rate or tax.
5. It is evident in this case that on 31-3-1952 notice was issued by the Chief Officer inviting objections to the proposed alterations in the assessment list for the official year 1951-52. The Chief Officer purported to amend the assessment list on 31-3-1952, by incorporating therein an entry relating to house No. 331 and showing the tax payable in respect thereof.
We may observe that under the rules framed by the Chalisgaon Municipality under Section 58, Bombay Municipal Boroughs Act the powers of the Standing Committee under Section 82 have been delegated to the Chief Officer and the Chief Officer was, therefore, competent to issue the notice. But in our view the Chief Officer had no authority to make an ex parte amendment or alteration of the assessment list. That appears to be clear from the provisions of Sub-section (1) of Section 82 which makes it obligatory on the standing Committee to give notice to persons interested in the alteration of the list of a date not less than one month from the date of service of the notice.
By Sub-section (2) of Section 82 procedure for hearing of objections to notices issued under Section 82(1) is the same as is provided under Sub-sections (2) and (3) of Section 81. It follows, therefore, that the amendment to an assessment list can only be made after due notice is served upon the persons interested and after giving them an opportunity of raising objections, and if objections are raised after disposing of the objections in the manner provided by law. It is only after the objections are heard and disposed of that the entry which creates liability to pay the tax mentioned therein can be posted in the assessment list.
As we observed earlier the liability to pay a rate arises under the assessment list and so long as the entry is not finalised no liability to pay a rate or a tax leviable as a rate arises. It is true that once the entry is made in the assessment list either under Section 81 or by alteration under Section 82 the entry shall have the same effect as if it had been made, in the case of a building constructed, altered, added to or reconstructed, on the day on which such alteration, addition or reconstruction is completed and in other cases on the earliest day in the current official year on which the circumstances justifying the entry or alteration existed.
In the present case, the Standing Committee of the Municipality having rejected the objections on 9-7-1952, the earliest day on which the entry must be deemed to have been made in the assessment list is 1-4-1952 and the liability of the respondent to pay the rate which is leviable as house tax arose from the date. The official year 1951-52 having expired on 1-4-1952, and before that date no alteration having been effected in the assessment list in the manner prescribed by Sub-section (2) of Section 82, it was not open to the Municipality to reopen the assessment list for the expired year and to seek to levy house tax for that year.
6. Mr. Divekar, who appears on behalf of the Municipality, contends, that the view we are taking would enable rate payers to escape liability to pay tax where the completion, alteration or reconstruction of the building has taken place late in the official year. He contends that where a building is completed, in the month of January or February, the Municipality would not be able to levy a rate in respect of that building for the period between the date of the completion, alteration or reconstruction and the date of expiry of the official year, because the Municipality by Sub-section (1) of Section 82 is required to give one month's notice to the rate payer and to invite objections.
Mr. Divekar points out that in the hearing and disposal of the objections some appreciable time must elapse and if by that time the official year expires, the Municipality would be disentitled to levy the tax to which it is legitimately entitled. We are conscious of this difficulty arising in the levy of taxes by Municipalities but we do not think that it is possible for us, on the language used by the Legislature, to take the view that it is open to a Municipality after the official year has expired to alter and amend the assessment list of that year. The view we are taking is supported by the view expressed in several decisions of this Court to which we will make a brief reference,
7. In '1943 Bom 145 (AIR V 35) (A)', the question arose whether it was open to a Municipality to levy a tax in respect of a previous year when the Municipality through mistake had omitted to levy the tax. It was held that the Municipality had no such right. In that case the Municipality of Sholapur prepared an assessment list under Section 78, Bombay Municipal Boroughs Act for the year commencing 1-4-1937, and through mistake it omitted to levy a tax on certain buildings of the G.I.P. Railway which were within the limits of the Sholapur Municipality. The mistake was discovered in May 1039.
Thereafter the Municipality gave notice to the Railway Company and corrected the assessment list under Section 82 of the Act and sent a bill to the plaintiff demanding payment of the arrears of tax for the two previous years 1937-1933 and 1938-1939. The Railway Company resisted the claim and ultimately filed a suit to recover the tax which it had to pay under protest.
It was held by Lokur J. that under Section 82(3), Bombay Municipal Boroughs Act the corrected list must be deemed to have come into force from 1-4-1939, and, therefore the Municipality was not competent to recover the arrears for the years 1937-38 and 1933-39 according to the corrected list.
8. In 'Borough Municipality of Amalner v. Pratap Spinning, Weaving and Manufacturing Co., Ltd',1952 Bom 401 (AIR V 39) (C), it was held that an assessment list which was prepared ex parte and after omitting the procedure contemplated by Sections 80 and 81, Bombay Municipal Boroughs Act, viz. the issue of public notice and authentication of the list, was regarded as illegal and the Municipality was not entitled to levy the tax mentioned in the assessment list.
It was held that the Municipality having failed to carry out the mandatory provisions relating to the framing of the assessment list, the list must be regarded as invalid and no liability could be deemed to have arisen there under and the Municipality was not entitled to recover the tax relying upon the assessment list.
9. In 'Ahmedabad Municipal Corporation v. Kulinsinh Manibhai', 57 Bom L.R. 259 (D), a question arose whether it was open to a Municipality to levy tax in respect of a building which became liable to pay the tax after the commencement of the year the assessment list not having been altered in the course of that official year. The 'head-note in that case sets out the decision of the Court as follows :
"A Borough Municipality prepared an assessment list for the imposition of a special water rate for the year 1946-47. After the commencement of the assessment year on 1-4-1946, it amended one of its rules which came into force on 1-7-1946, under which the assessee's property became liable to levy of special water rate. On 24-3-1947, the Municipality issued a notice, under Section 32, Bombay Municipal Boroughs Act, 1925, to the assessee for amendment of the assessment list. The notice was served on the assessee on 2-4-1947. The assessee made objections, which were rejected by Municipality on 12-1-1948. The Municipality then called upon the assessee to pay the special water rate from 1-7-1946 to 31-3-1947 :
Held that the assessee was not liable to pay the special water rate for the period from 1-7-1946 to 31-3-1947, because if the assessment was made before 31-3-1947 it would have taken effect from 1-7-1046, which was the earliest day in the current official year 1946-47 under Section 82, Bombay Municipal Boroughs Act, 1925".
10. It was argued before the Court in that case that the circumstances justifying amendment of the assessment list came into existence on 1-7-1946, when the Rules of the Ahmedabad Municipality were amended and it was within the power of the Municipality after the list was amended to levy the tax from 1-7-1948. The argument was rejected on the ground that it overlooked the importance of the word 'current' in Sub-section (3) of Section 82. Rajadhyaksha J. who decided that case observed :
"The liability to the payment of the tax is contingent upon the authentication of the list or amendment thereof, for under Sub-section (6) of Section 81, the entries in the assessment list are to be accepted as conclusive evidence of the valuation and the basis prescribed in the Rules. The alteration could be made at any time during the current official year, and under Sub-section (3) of Section 82 the amendment takes effect from the earliest day in that official year. If in the present case the amendment had been made before 31-3-1947, then it would have taken effect from 1-7-1946, which is the earliest clay in the current year 1946-47 when the liability for the imposition of special water rate arose by the amendment of Rule 336.
11. The only difference between the facts of the case reported in '57 Bom. L. R. 259 (D)' and the facts in the present case is that in the former case the liability had arisen by reason of amendment of a rule in a previous year, whereas in the present case the liability arose by reason of construction of a new house. But we see no reason for holding that the distinction makes any difference in principle even though provision was made for raising liability under a statutory rule if the liability could not be enforced because the amendment of the assessment list was not carried out during the course of the official year in which the amendment was made.
On the same principle it must be held that where by the rules in force a liability would have arisen if the assessment list was altered but the assessment list was not altered in the official year then current, the liability could not be regarded or deemed to be imposed. The authorities which we have referred to amply support the view that we have expressed on a consideration of the statutory provisions.
12. Mr. Divekar sought to rely upon 'Subbappa Mallappa v. P.L. Bonni', 1949 Bom 119 (AIR V 36) (E), in support of the contention that it was open under the Bombay Municipal Boroughs Act to a Municipality to take retrospective alteration in an assessment list. In 'Subbappa's case (E)', a Borough Municipality published a new revised assessment list under Sections 80 and 81(1), Bombay Municipal Boroughs Act, 1925, On 31-3-1939.
Objections were thereafter raised- to the increased assessment and those objections were not considered until August 1939. In October 1939 the tax payer was informed of the result of the hearing of the objections and he was called upon topay the tax on the Increased assessment. The tax payer declined to pay the increased tax. It was held by this Court that the liability of the tax payer arose on 1-4-1939, and not on the date on which objections were finally considered and disposed of and an entry was made in the assessment list.
'Subbappa's case, (E)', appears to be an authority for the proposition that alterations made in an assessment list under Section 81(3) have limited retrospective operation i.e. the liability for a rate under an assessment list which is finalised and authenticated during the course of an official year arises in case of inadvertent omissions as from the date 011 which the assessment list is brought into operation and in cases where there has been new construction or alteration of a building during the course of the year from the date on which the building became liable to tax.
But 'Subbappa's case', (E), in our judgment, is no authority for the proposition that a more extensive retrospective operation to an assessment list is intended to be given so as to enable a Municipality to alter the assessment list of previous years. In other words, the assessment list for each year comes to an end on the expiry of the official year and a fresh assessment list comes into existence as from the 1st date of the official year, and the assessment list of the previous year cannot be amended so as to impose fresh liability after the close of the official year.
13. We, therefore, hold that the learned Sessions Judge was right in the view expressed by him. The rule is, therefore, discharged with costs.
14. Rule discharged.