1. The petitioner seeks to revise the decree of the Court of the District, Munsif of Vizianagram in S.C.S. No. 966 of 1922. The petitioner is the Krishna Jute Cotton Mills Co., Ltd. On 31st March, 1922, it was served with a demand notice by the counter-petitioner, the Municipal Council of Vizianagram, for profession tax from 1st October, 1921 to 31st March, 1922 assessed at Rs. 125. The petitioner paid and preferred the appeal Ex. A to the Council pointing out that the company had been decreed exempt from profession tax in O.S. No. 521 of 1919.
2. The petitioner, receiving no reply to this appeal, gave the Council notice of suit, Ex. B. dated 28th August, 1922. No reply was received, and on 7th October, 1922 the petitioner filed the suit under revision. On the next day a Memorandum Ex. D was drafted in the Municipal Office, which was signed on 17th October, 1922, by the Chairman. The petitioner was informed that his appeal against the companies tax had been read, and that the proper assessment should have been Rs. 75 and Rs. 50 would be refunded.
3. On 6th November, 1922, the Council filed its written statement in the suit. It claims that the suit is barred under Section 354 of Madras Act V of 1920 ; that the plaintiff had not been charged profession tax, but had been assessed under Clause 16 of Schedule IV of Companies Tax and when plaintiff paid he had been given a receipt on the form intended for profession tax. Nevertheless plaintiff was bound to pay profession tax.
4. At the trial the defendant Council did not, it seems, attempt to prove that the tax had been originally levied as companies tax, and only receipted as profession tax on the wrong form. It was conceded that the tax was levied as profession tax, and the only question raised was whether the Council's retention of Rs. 75 out of the sum illegally levied could be justified on the ground that it had been allotted to companies tax and. was therefore imposed under the authority of the Act within the mischief of Section 354, and so irrecoverable by suit.
5. It is very doubtful if this defence is open to the Council. A Municipal Council cannot impose charges not under the authority of the Act, and then, when a suit is filed for their recovery, allot the money thus unlawfully obtained to some demand alleged to be under the authority of the Act and plead that no suit lies. But in the present suit the plea has no validity for the demand to which the collection has now been allotted is as illegal as that under which it was originally made.
6. ACouncil may levy a tax on companies [Section 78(1)b] if it publishes a notice of its intention[Section 78(3)] and then a notification in the District Gazette [Section 80] and if the Chairman publishes that notification, companies shall be liable to pay the tax [Section 92]. Only on such terms can a Council impose such a charge under the authority of the Act. Admittedly the Council published no notification under Section 80 but the learned District Munsif finds that a Council may dispense with that notification. This finding is a misinterpretation of Section 80 which is mandatory and a perusal of Section 92 ought to have made the matter perfectly clear. It is no use finding that the Council has ' substantially complied ' with the statute. Large powers are conferred upon these local bodies, upon the strict understanding that they observe the conditions of the statute to which they owe their origin, and to allow them to levy taxes upon private persons without such strict compliance would be a grave scandal. At any rate the Courts have no power to relieve local bodies from the statutory obligations imposed upon them.
7. I find that the levy of profession tax and the levy of companies tax were not made under the authority of the Act. Plaintiff is entitled to sue, and to have a decree for a refund of the money sued for, with costs.
8. The decree of the Lower Court is reversed and the petition allowed with costs.