1. The suits, the subject of these civil revision petitions, were for a refund by the petitioner Panchayat Board of profession tax illegally collected from the respondents. The points for consideration are common to all the petitions and in the lower Court were dealt with in one judgment and I propose to do the same. The plaintiffs were all served with notices Under Section 97, Local Boards Act, calling upon them to file returns of their income or profits for the half-year ending 30th September 1934. They duly filed returns, but the President of the Panchayat Board deeming the returns to be incorrect, fixed an assessment himself and served notices on the plaintiffs directing each of them to pay profession tax in respect of their separate assessments. All the plaintiffs appealed to the Board and the appeals appear to have been dismissed as being out of time although from the judgment it is not clear whether all were dismissed on that ground or which, if any of them was dismissed, on the merits. The defendants raised various defences amongst which two have been argued in this Court, namely that the suits were not maintainable and that the payments of profession tax made by the plaintiffs were voluntary payments and therefore no claim for a refund of them could be allowed. The first point depends upon whether the provisions of the Local Boards Act have in substance and in effect been complied with and on this point the District Munsif finds that those provisions have not been complied with and that the levy was altogether illegal. With this conclusion I entirely agree. The power of the President of the Panchayat Board to make an assessment himself on a reputed income basis only arises in the event of the assessee's return being incorrect and not otherwise. The District Munsif seems to assume that the returns were not correct, but it appears to me that they were. At any rate it has not been shown satisfactorily before me that any of the returns were not correct. He therefore had no power at all to make an assessment Under Schedule 4, Rule 11(2)(3) and (4), Local Boards Act, but assuming, as the District Munsif did, that the President was entitled to make such assessment Under Clause (3) of the rule, he has, in the opinion of the District Munsif, had no regard whatsoever to the provisions of Rule 4 which reads :
The President may when classifying any company or person Under Sub-rule (3), do so on general considerations with reference to the nature and reputed value of the business transacted, the size and rental of residential and business premises, the quantity and number of articles dealt with, the number of persons employed and the income-tax paid to Government.
2. With this conclusion I entirely agree. The assessments in question appear to be entirely arbitrary. At any rate no attempt was made to show that they proceeded upon any basis and I am certainly of the opinion that the provisions of Sub-clause (4) were entirely neglected. Section 228, Local Boards Act, only protects assessments from impeachment; if the provisions of the Act have been in substance and effect complied with and having regard to the neglect of the very material provisions it is clear that the suit is maintainable in a Civil Court. On the defence that the payment was a voluntary one and its refund cannot be claimed, Chairman, Municipal Council, Rajahmundry v N. Subba Rao A.I.R. 1937 Mad 569 was cited by Mr. K. Bashyam Ayyangar is decisive of this question in his favour. The headnote of that case reads:
Where a person, on whom the Municipality had served a notice of demand of profession tax which stated that in default of payment his property would be distrained, paid up the tax and subsequently brought the present suit for refund of the tax paid on the ground of non-liability to pay that tax, held that the conventional threat of distraint contained in the ordinary notice of demand was not a real threat operating on the mind of the payer without which he would not have paid and hence the payment must be held to be voluntary and irrecoverable as such.
3. This matter was also considered by Pandalai J. in Municipal Council, Tuticorin v. Ralli Brothers : AIR1934Mad420 Chairman, Municipal Council, Rajahmundry v N. Subba Rao A.I.R. 1937 Mad 569 however does not govern this case. The payments in respect of which the claim for a refund was made were payments made after an appeal preferred against the assessment had been dismissed by the Municipal Board to whom the appeal lay and it will be seen from the judgment of Mookett J. that although dissatisfied with the decision the assessee continued to pay the tax from 1928 until 1930 and without any protest accompanying the payments. In all the cases the subject of these petitions, the payment of profession tax, was made before or at the time the appeals against the assessment were lodged and it is here that Rule 28 of Schedule 4 of the Act applies. That rule provides that no appeal to a panchayat shall be heard (1) unless it reaches the office of the panchayat within 30 days after the tax complained of has been demanded, and (2) unless (except when the President otherwise directs on the ground of poverty) the tax in respect of which the appeal is presented has been paid or deposited at the office of the panchayat within the period specified in Clause (1). It is clear therefore that if Rule 28 (2) had not been followed the appeals could not have been heard. It is a condition for hearing the appeal that the tax must first of all be paid and it is by force of that statutory provision that the tax was paid and the respondents had no alternative but to pay it if they wished their appeals to be heard. It seems to me to follow clearly that if the appeals had resulted in a reduction of the assessment, the local authority would have been bound to refund the excess payment. How therefore can the payment be described as in any sense a gift? Some authorities were cited on this question in addition to those already referred to, but I do not think that on the facts of this case any authority is needed to reach the conclusion that the payments here were involuntary. However, I would refer first of all to Rajah of Ramnad v. Secretary of State A.I.R. 1929 Mad 179. There a claim was made to recover an amount wrongly paid in respect of income which was not assessable under the Act and it was held that the payment was made under a mistake of the general law of British India applicable to all persons in the position of the assessee holding permanently settled estates, and not under duress or coercion and consequently the amount could not be recovered. After dealing with a cumber of authorities where payments wrongly made were held to be irrecoverable as not made under duress and therefore voluntary, Devadoss and Maokay JJ. on page 776 say:
The case would be different if for the purpose of getting an official act done a person pays something more than what is proper, for in order to get the act done he must pay the amount demanded, otherwise the act would not be done. In such cases it can be said that the payment is not a voluntary payment nor is it a payment made under a mistake of law. The cases in Hooper v. Mayor and Corporation of Exeter (1887) 56 L.J.Q.B. (N.S.) 457 and Steele v. Williams (1853) 8 Ex 625 are cases where in order to get a certain thing done, the plaintiff had to pay the amount demanded; In Hooper v. Mayor and Corporation of Exeter (1887) 56 L.J.Q.B. (N.S.) 457 the Corporation of Exeter exacted harbour dues from the plaintiff in respect of exempted articles. The plaintiff paid in ignorance of the exemption. It was held that the plaintiff was entitled to recover back the money so paid.
4. After quoting from the judgment of Lord Coleridge C.J. they add:
The plaintiff in this case could not have landed his limestone, the article exempted, without paying harbour dues. In Steele v. Williams (1853) 8 Ex 625 the facts were that the plaintiff's clerk applied to the defendant, a parish clerk, for liberty to search the register book of burials and baptisms. He told the defendant that he did not want certificates but only to make extracts. The defendant said the charge would be the same whether he made extracts or had certificates. The clerk searched through four years and made 25 extracts, for which the defendant charged him 3 Section 6 d. each and he accordingly paid the defendant 4-7-6. It was held first that the charge for extracts was illegal since 6 & 7 Will. IV, Ch. 86, Section 35 only authorizes a charge for a search and for a certified copy and secondly that the payment was not voluntary so as to preclude the plaintiff from recovering back the excess. Parke B, observed: 'In the first place I think that there is evidence that this payment was not voluntary but necessary for the exercise of a legal right'.
5. In Municipal Council, Tuticorin v. Ralli Brothers : AIR1934Mad420 the case already referred to, Pandalai J. distinguishes between voluntary and involuntary payments; but that case is distinguishable from this on the ground that the payments there were not made in order to get the appeal heard and the facts were similar to Chairman, Municipal Council, Rajahmundry v N. Subba Rao A.I.R. 1937 Mad 569. In my view, the payments here were involuntary payments and on this ground the plaintiffs were entitled to make a claim for a refund and, as the suits were maintainable and the assessments made by the President were arbitrarily made without regard to the provisions of the Act, it follows that the plaintiffs were entitled to succeed. The District Munsif has awarded them the sums found to be due calculating the assessment on the basis of income tax returns and no point was taken before me that the basis adopted by him was incorrect.
6. All the C.R. Ps. will therefore be dismissed with costs in each of them. I observe that in the lower Court the District Munsif disallowed the plaintiff's costs because he thought that they had made false returns which provoked the defendant to act in this manner. On that assumption with which I by no means agree, he was entitled to make that order as to costs. Here different considerations apply, because the petitioners did not remain satisfied with the lower Court's order but have further pursued the matter to the High Court and without success and must therefore suffer the natural consequences. Although I am not influenced at all by it in making my order as to costs, I feel bound to observe that the procedure adopted by the President of the panchayat Board as it appears from the facts was grossly irregular and his conduct is certainly not such as to inspire confidence in the minds of others.