1. This appeal arises from a decision of our learned brother Gentle, J., on a matter relating to proviso C to Section 3 (ii) of Madras Act IV of 1938 and the connected Rule 7 of the rules framed under that Act by the Government of Madras.
2. The appellant here is the decree-holder. She obtained a decree in 1934 on a promissory note. The respondent filed an application under Section 19 of Act IV and it was resisted on the allegation that the respondent was not an agriculturist by reason of his being assessed to property tax in respect of a house situate within the Municipality of Devakottah. The respondent proved that the house in question had been sold by him on 10th February, 1935. This was met by an allegation that the sale was a benami transaction, which allegation the appellant failed to substantiate by the necessary evidence. The learned Judge consequently held, applying Rule 7, that the person in whose name the assessment to property tax stood was not the owner of the property during the relevant period and that therefore he was not disqualified by reason of the mere inclusion of his name in the municipal registers from being an agriculturist under the Act. We should add that there was evidence before the learned Judge that the tax for the relevant period was actually recovered from the purchaser.
3. In appeal before us, an attempt has been made to dispute the finding on the question of benami by the argument that the facts could only be established in the cross-examination of the respondent and that the respondent had not gone into the box. It seems to us that when no evidence at all was tendered on behalf of the appellant and apparently no request was made for - the cross-examination of the respondent on his affidavit, it cannot be held that the benami theory, in respect of which the onus clearly lay upon the appellant, was established merely by the failure of the respondent to offer himself for cross-examination.
4. A more substantial contention is that Rule 7 of the rules framed by the Provincial Government is inconsistent with proviso C to Section 3 (ii) and therefore beyond the powers of the Government under Section 28. Section 28 of the Act gives to the Provincial Government power to frame rules for removing any difficulty in giving effect to the provisions of the Act, provided that the rules shall be consistent with the provisions of the Act. Proviso C excludes from the category of agriculturists:
Any person who has within the two years immediately preceding 1st October, 1937, been assessed to property or house tax in respect of buildings or lands other than agricultural lands under the Madras District Municipalities Act...provided that the aggregate annual rental value of such buildings and lands, whether let out or in the occupation of the owner, is not less than Rs. 600.
5. It is to be noted that this proviso, though it does not expressly make ownership an integral part of assessment, contemplates that the person assessed shall be the owner. A Bench consisting of Burn and Stodart, JJ., had to deal with a case, Swaminatha Odayar v. Srinivasa Aiyar : AIR1939Mad942 in which it was contended that mere ownership of property liable to tax disqualified the owner thereof from being an agriculturist, regardless of whether there was or was not an assessment and the learned Judges held that the proviso to Section 3 excludes from the benefit of the Act only persons who have been assessed to property tax and it does not exclude those who, though liable to property tax, have for some reason or other escaped assessment. In the particular case before the learned Judges, the nominal assessee was dead and it might well be argued in such a case that if it is established that there has actually been a demand made for the tax on the building from the owner, this demand might amount to an assessment even though a dead man's name is shown in the municipal registers. More especially if the person upon whom the demand is made actually pays the tax. That is a matter which is not before us and on which we do not wish to express any considered opinion. For the present it is sufficient to say that mere ownership apart from assessment will not disqualify a person under proviso C. It does not, however, follow that a mere registry in the assessment registers and a repetition in the demand notice of the name so shown in the register would constitute an assessment apart from ownership, so as to import the disqualification under proviso C. We had to make a reference to this possibility in the case of Sarveswara Rao v. Umamaheswara Rao : AIR1941Mad152 where we observe:
It may well be argued that proviso C contemplates not only the assessment of an individual, but also the ownership by that individual of the property in respect of which he has been assessed.
6. It is necessary now to go further into this contention. Strictly speaking, under the Madras District Municipalities Act, the assessment is imposed, not on the individual, but on the property. The property tax under Section 86 has to be paid by the owner and the only contingency in which liability might be imposed on a person who is not the owner seems to be under Section 88 (4) whereby in case of a transfer, if the transferor omits to give notice of the transfer to the municipality, both the transferor and the transferee may be held liable for the tax. But in such circumstances, if in fact, though there has been no formal notice, the municipal officials are well aware of the transfer and, without making any change in their registers, if the tax is in fact demanded from the transferee and paid by him, can it be said that the transferor who ceased to be the owner and who has neither been asked for the tax nor has paid it, has been assessed to property tax so as to disqualify him under proviso C? The word 'assess' is one which is susceptible of several different meanings. According to the dictionary it may mean:
to fix the amount of the tax 'or' to determine the amount and impose the tax upon an individual 'or merely' to impose a tax upon an individual 'or' to estimate officially the value for purpose of taxation.
7. In view of these different meanings of which the word 'assess' is susceptible and of the fact that the liability to property tax under the District Municipalities Act depends primarily upon ownership, can it be contended that the use of the word 'assessed' in proviso C necessarily implies the mere registry of an individual as the person liable and does not imply the full process of demanding the tax from the person as the owner of the property. It seems to us that the matter is by no means free from ambiguity and that the use of the word 'owner' in the last sentence of this proviso gives considerable support to the view that the Legislature intended to disqualify from a claim to be an agriculturist only a person from whom tax had been demanded by virtue of ownership. This is a view which is consistent with the terms of the District Municipalities Act which was expressly in the contemplation of the Legislature when this proviso was enacted and it is a view, for which there is, much to be said from the practical point of view. The Provincial Government have enacted Rule 7 making it clear that the term 'assessed to property tax' will not cover the case of a person in whose name an assessment has been made, when he was not in fact the owner of the property during the relevant period. We do not find anything repugnant to the apparent intention of proviso C in this rule, nor do we think that it can be said that this rule gives to the proviso a meaning which is not its probable meaning. It is within the powers of the Local Government to make a rule which merely removes an ambiguity in a clause of the statute. That is., in our opinion, the effect of this rule and we see no reason to hold that the rule is beyond the powers of the Provincial Government.
8. In the result therefore the appeal is dismissed with costs.