1. This appeal is by the Corporation of Madras against a decree of the Additional Judge, City Civil Court, granting a declaration that the amount to which the plaintiff, the Scindia Steam Navigation Company, Limited, hereinafter called the Company, was assessed is not legally payable by it and an injunction restraining the Corporation from taking any coercive steps to realise the amount to which the Company was assessed.
2. Under section no of the City Municipal Act, companies are liable to pay half-yearly tax in accordance with the rules laid down in Schedule IV of the Act. According to Rule 7, Schedule IV, companies are ordinarily liable for a tax on the basis of their paid-up capital; but in cases where the head or principal office is not in the City of Madras, but elsewhere, the tax is assessed on the gross income derived from or received in the City. Since the company has its headquarters at Bombay, the Corporation sought to assess the company at the rates specified in Rule 7, Schedule IV, on its gross income; and so it asked the Company what its gross income was. The company made a return which showed its gross income at a figure not far below four lakhs; but the Corporation made an allowance for the fact that two of the vessels of the Company had been commandeered by the Government. That reduced the gross income to two lakhs odd, on which, according to the rules laid down in part II of the schedule, the tax was Rs. 1,000 a half year. The Commissioner accordingly assessed the Company at their own figure and demanded payment. On 31st January, 1945, by Ex. P 6, the Company replied that it had by mistake given as gross income the gross receipts and asked the Commissioner to revise his previous assessment. The Assistant Revenue Officer pointed out that as a sum equal to the tax due during the previous years had not been deposited as required under Rule 12 of Schedule IV before a revision application can be entertained, the Company must pay the amount to which it had been assessed. In the ensuing correspondence the Company made some attempt to estimate its net income, but said that it was found impracticable to do so as the necessary details and figures were not available locally. Finally, on 16th July, 1945, the company filed the present suit for a declaration and injunction as stated.
3. Schedule IV prescribes the procedure to be adopted in connection with the assessment of taxes and the reliefs open to the assessee if he feels aggrieved by the assessment. Rule 12 makes provision for a revision of the assessment if an application is made within 15 days and the tax based on the assessment prevailing in the previous year has been paid. If the assessee is still aggrieved, he has a remedy under Rule 14 by way of appeal to the Taxation Appeals Committee. Finally, he can appeal against an adverse decision of the Taxation Appeals Committee to the Court of Small Causes, after giving notice to the Commissioner and paying the tax to which he has been assessed.
4. Section 401 says:
No assessment .... imposed under the authority of this Act shall be impeached ... by reason of any mistake ...
(c) in respect of the amount, assessed...:
Provided that the provisions of this Act have, in substance and effect, been complied with.
This section substantially lays down the recognised law as to the circumstances under which a Civil Court can intervene when remedies are afforded in the statute itself to a person aggrieved by any act done or an order passed against him under that statute. It is conceded that the question that the Court has here to decide is whether the Corporation made this assessment substantially in accordance with the rules laid down in Schedule IV.
5. It is argued for the Company that the rules were not complied with, because the assessment was not levied on the gross income but on the gross receipts. The Corporation does not admit that there was any mistake. They contend that what the Company gave as its gross income was in fact its gross income and not its gross receipts; but it is immaterial for the purpose of this appeal to consider whether in fact the assessment was made on the correct figure or not; for no figures were placed before the Corporation which would have enabled it to make any calculations. The Corporation, as already stated, asked the Company to state what its gross income was; and it gave a figure which, after certain deductions in favour of the Company had been made, was adopted as the correct gross income. It was on the basis of that figure that the Corporation made its calculations and assessed the Company to tax. It is conceded that in doing so the Corporation at that stage acted in accordance with the rules; and it has not been shown that at any stage subsequent to this the Corporation did not continue to act in accordance with the rules. The only circumstance which the learned advocate for the Company has been able to point to is that subsequently the Company drew the attention of the Commissioner to the fact that the figure 'on which the calculations had been made was not the correct one. That however does not render the assessment already made bona fide by the Corporation an illegal one. The Company had an opportunity, if it had chosen to deposit within the 15 days allowed the amount to which it had been taxed the previous year, to ask the Commissioner to set the assessment aside. Since the deposit was not made, the Commissioner was justified in rejecting the revision application. No further steps were adopted by the Company by way of appeal to the Taxation Appeals Committee and thereafter to the Court of Small Causes. No suit therefore lay to the City Civil Court.
6. The appeal is allowed, the decree of the lower Court set aside, and the suit dismissed with costs in both Courts.