TMI Blog1971 (11) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... to levy tax with effect from the commencement of that year only? 2. This controversy has really arisen because of a conflict of views between the decision of a Division Bench of this Court in Jalgaon Municipality v. Khandesh Mills (1961) 64 Bom. L.R. 229, and the decision of another Division Bench of this Court in Chalisgaon Bor. Municipality v. Multanchand (1955) 58 Bom. L.R. 375 and some earlier single Bench decisions of this Court. 3. The facts upon which the controversy arises are simple. The respondents own a house No. 146 in Ganesh Peth, Sholapur which was assessed to house tax at ₹ 550 per year from the official years 1959-60 to 1963-64. In the year 1962 the owners were called upon to construct two latrines in order to provide necessary sanitary amenities to their tenants in that house. Those latrines wore constructed and a certificate of completion was granted to them from September 14, 1962. In consequence of this new construction the applicant Municipality issued a notice to the owners on January 22, 1963 under Section 82(1) of the Act proposing to enhance the annual letting value. The owners took objection, on February 15, 1963, as they were entitled to do to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he year 1063-64. As regards the assessment for the year 1964-65 the Civil Judge held that there was no fresh notice issued and that the assessment for the year 1964-65 was also illegal. 5. The Civil Revision Application preferred by the Sholapur Municipal Corporation came before our learned brother K.K. Desai and he by his order dated December 9, 1968 felt that in view of the conflict between the decision of the Division Bench in the Ghalisgoan Borough Municipality's case and the decision of another Division Bench in the Jalgaon Borough Municipality's case the revision application ought to be disposed of by a Division Bench. The Civil Revision Application thereafter came to be put up before a Division Bench consisting of the same learned Judge and Mr. Justice Nathwani. They noticed that there was clear conflict as regards the true construction and effect of the provisions in Section 82(3) of the Bombay Municipal Boroughs Act, 1925 in the above two decisions and the conflict required to be resolved. Therefore, they referred the matter to a Full Bench. Before we proceed to state the respective contentions of the parties, it is necessary first to refer to some of the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery person claiming to be either the owner or occupier of property included in the list, and any agent of such person, liberty to inspect the list and to make extracts therefrom without charge. After the publication of the notice of the preparation of the assessment list, a further public notice has to issue under Section 81 inviting objections to the. valuation or assessment in such list . In all cases in which any property is for the first time assessed or the assessment is increased, a special notice has also to be given to the owner or occupier of the property, if known, and if the owner or occupier of the property is not known, the notice has to be affixed in a conspicuous position on the property. Sub-section (2) of Section 81 prescribes how the objections are to be made by the owner or occupier. Sub-section (3) provides for the hearing of objections, and disposal thereof. Sub-section (4) of Section 81 then provides that when all objections made under Section 81 have been disposed of and all amendments required to be made by Sub-section (3) have been made in the assessment list the said list shall be authenticated by the signatures of the chairman and at least one other mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of which alone the levy of the tax depends. 9. Secondly, it is for this reason that Section 82 had to make provision for the yearly amendment of the assessment list arid Sub-section (6) of Section 81 is expressly made subject to the provisions of Section 82. 10. Thirdly, Sub-section (6) of Section 81 imparts conclusive evidentiary value to the entries in the assessment list and Sub-clause (i) makes the entries conclusive evidence for the purposes of all municipal taxes in regard to two things namely (a) the valuation or (b) the annual letting value, on the basis prescribed in the rules regulating the rate of buildings or lands or both the buildings and lands. Sub-clause (ii) of Sub-section (6) makes the entries also conclusive evidence for the purposes of the rate for which such assessment list has been prepared, but in this respect it is expressly provided that it shall be conclusive evidence of the amount of the rate leviable (in all the Government publications the word used is 'liable' but we think that is clearly a printing error) on such buildings or lands or both buildings and lands in any official year in which such list is in force . The words which we have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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. Sub-section (1) gives power to the standing committee to alter at any time the assessment list by inserting or altering an entry in respect of any property but upon three grounds as follows: 1. that an entry has been omitted; or 2. erroneously made in the assessment list through fraud, accident or mistake, or 3. in respect of any building constructed, altered, added to or reconstructed in whole or in part, and where such construction, alteration, addition or reconstruction has been completed after the preparation of the assessment list. If these conditions are fulfilled the standing committee has the right to alter at any time the assessment list by inserting or altering an entry in it, provided of course there is notice given to the aggrieved party and their objections considered. If an entry is thus amended, then the question arises, what is the effect of that amendment? and that is provided by Sub-section (3) of Section 82 and in this respect Sub-section (3) contemplates three different categories in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst heard and disposed of under Sections 81(2) and 81(3) and the assessment list authenticated under Section 81(4), because it is the assessment list so authenticated that is endowed with conclusive evidentiary value by Sub-section (6) of Section 81 and it is only when this conclusive evidentiary value is imparted to the assessment list that the liability to tax arises. Therefore it is urged that in the present case no liability could possibly arise until March 28, 1964 when the plaintiffs' objections were disposed of. We have already said that in this case the actual date of the amendment to the assessment list is not clear but counsel for both the parties agreed that that date may be taken as being the date on which the objections were disposed of. Therefore according to counsel for the plaintiffs the liability to tax in the present case cannot arise prior to March 28, 1964. 15. The key words in Sub-section (3) of Section 82 are the earliest day in the current official year . The word current has no doubt several shades of meaning and is used in different contexts but its basic meaning is thus given in the Shorter Oxford English Dictionary. Its literal meaning would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-64, because according to the Corporation the house had been completed by September 14, 1962, but for those years there would be no question of computing the enhanced tax in the proportion which the remainder of the year after such day boars to the whole year because the owners (the plaintiffs) would be liable to pay for the whole year. This shows, therefore, that in view of the last clause of Sub-section (3) of Section 82 the words the current official year earlier used, could never mean the past years, but must necessarily refer only to the current official year in which the amendment of the assessment list was made. Only in that context would the last clause become comprehensible and have a meaning. 17. The other indication is to be found in the provisions of Sub-section (6) of Section 81-a point to which we have referred in passing when dealing with those provisions. Sub-clause (i) of Sub-section (6) of Section 81 imparts conclusive evidentiary value to the entries in the properly authenticated assessment list for the purposes of all municipal taxes...annual letting value on the basis prescribed in the rules regulating the rate. Sub-clause (ii) imparts conclusive evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to a particular year with reference to the context in which it is used and in the context of Section 82(3) it can only mean the official year which was running when the amendment to the assessment list was made. 19. Lastly, it cannot be forgotten that all this controversy has arisen in the context of a tax the whole basis of which is an annual basis namely the annual letting value. This is clear from the provisions of Section 78(1)(d) which speaks of the valuation based on capital or annual letting value, as the case may be, on which the property is assessed and the annual letting value, we have already shown, is defined with reference to the annual rent for which any building or land might reasonably be expected to be let from year to year subject to certain exclusions and inclusions. 20. Reference was made to Section 84(1) of the Act. Section 84(1) prescribes that it shall not be necessary to prepare a now assessment list every year. It also provides that subject to the condition that every part of the assessment list shall be completely revised not less than once in every four years, the Chief Officer may adopt the valuation and assessment contained in the list for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uncipalities Act (Act 1 of 1954), which repealed the Indore City Municipal Act 4 of 1909. See Municipal Corporation v. Hiralal . The provisions of Section 76(6) of that Act are for the purpose of the point before us in pari materia with the provisions of Section 81(6) of our Act and the provisions of Section 79 of that Act are in pari materia with the provisions of Section 84 of our Act. Dealing with the provisions of Section 76(6) of that Act the Supreme Court held in that case (p. 130): ...The Municipal tax is an annual tax leviable for a particular official year and the assessment list on the basis of which the tax is assessed is for each such official year. This is supported by the words 'such assessment list' and 'of the amount of tax leviable...in any official year in which such list is in force' in Section 76(6). Dealing with the section analogous to our Section 84 the Supreme Court held (p. 130): Ordinarily therefore the Municipal Corporation has to prepare a fresh assessment list every year. The legislature however has empowered by Section 79, as other State legislatures have similarly done in several Municipal Acts, to adopt the valuation and asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to levy a tax on certain buildings of the plaintiff situated within its limits when it was preparing the assessment list for the year commencing from April 1, 1937. They discovered the error in May 1939 and after giving the requisite notice to the plaintiff in that case corrected the assessment list under Section 82. They then sent a bill to the plaintiff for the recovery of the arrears of the tax for the two previous years namely 1937-38 and 1938-39. That liability to pay for those two years was disputed. It will be noticed that the facts were almost identical with the facts in the present case. It was held that under Section 82(3) the corrected list must be deemed to have come into force only from April 1, 1939, that is to say the current official year in which the assessment list was amended and therefore the Municipality could not recover the arrears for the years 1937-38 and 1938-39 according to the corrected list. Dealing with the very problem which has been presented to us in this reference, Mr. Justice Lokur held after quoting the provisions of Sub-section (3) of Section 82 (p. 753): ...In the case of a mistaken omission in the assessment list the correction obviou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable to the assessee. Therefore on March 24, 1947 the Municipality issued a notice under the then Section 32 of the Bombay Municipal Boroughs Act to the asaessee for amendment of the assessment list. The notice was served on April 2, 1947. The assessee's objections were all rejected and the Municipality then called upon the assessee to pay the special water tax for the period from July 1, 1946 to March 31, 1947. The learned Judge held that the assessee was not liable to pay this special water tax for the period from July 1, 1946 to March 31, 1947, because if the assessment was made before March 31, 1947 the end of the official year it would have taken effect from July 1, 1946 which was the earliest day in the current official year 1946-47 within the meaning of Section 32 of that Act. A reference was made to the provisions of Section 82(3) to support the contention of the Municipal Corporation that they could recover for a period prior to the year in which the rule was amended. It was urged on the basis of the provisions of Sub-section (3) of Section 82 that the circumstances justifying the alteration came into existence on July 1, 1946 when the rule was amended and it was urg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nicipality the fact of the acceptance or rejection of the objections itself is one of the circumstances justifying the entry or alteration within the meaning of Sub-section (3) of Section 82. Thus, until the objections under Section 81 are finally disposed of, Sub-section (3) of Section 82 would not come into play. As regards the effect of Sub-section (3) of Section 82 also the Division Bench in that case held (p. 379): ...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 the building becomes liable to pay the rate or tax. Having regard to the facts of that case the Division Bench held that the official year 1951-52 having expired on April 1, 1952, and before that date no alteration having been made in the assessment list ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh Municipality's case observed at p. 381 that ...Subbappa's case, appears to be an authority for the proposition that alterations made in an assessment list under Section 81(3) have a 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 on 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, 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. 25. This was the clear position as it emerged from these authorities and there was no doubt or dispute as to the construction of Section 82(3) for all the years from 1947 when the Sholapur Municipality's case was first decided until 1955 when the Chalisgaon Municipality's case was decided, but in Jalgaon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have any jurisdiction to entertain a suit of this kind instituted by the Municipality, a point with which we are not concerned, but as regards the provisions of Section 82(3) the Division Bench held as follows (p. 238): It is clear that Section 82(3) is a counterpart of Section 81(6). It provides that an entry or alteration made under the section shall subject to the provisions of Section 110 have the same effect as if it had been made on the earliest day in the current official year in which the circumstances justifying the entry or alteration existed. In the judgment cited and referred to above, emphasis seems to have been laid on the words 'current official year'. It seems to us that decisive words in the sub-section are 'circumstances justifying the entry or alteration'. The first question, therefore, in each case to be determined is, when did the circumstances exist which justified the alteration? Once that is determined it would not be difficult to go to the earliest day of the current official year during which such circumstances existed. The circumstances which can justify the alteration of the entry, in our opinion, could only be the initial mistake, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those words. It is not enough to say that the decisive words in the sub-section are 'circumstances justifying the entry or alteration' . In other words, the earlier cases emphasised one part of Sub-section (3) of Section 82 and the Division Bench in Jalgaon Municipality's case without reference to the earlier cases emphasised another part of Sub-section (3) of Section 82. In our opinion, the expression used in Sub-section (3) of Section 82 is a composite expression on the earliest day in the current official year on which the circumstances justifying the entry or alteration existed and that provision of the law must be read as a whole. The error in the Jalgaon Municipality's case was to emphasise only one part namely the words circumstances justifying the entry or alteration , but even assuming that we were to consider only the words circumstances justifying the entry or alteration , we are at a loss to know why the fact that objections were taken and the objections were disposed of on a certain date, is not one of the circumstances justifying the entry or alteration within the meaning of Sub-section (3) of Section 82. We also cannot see how holding that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is to be followed in regard to an assessment-list. Section 81 lays down the stages before an assessment is authenticated. Section 82 deals with a special subject and Section 84 deals generally with an annual assessment-list and a revised assessment list once in every four years. The omission, therefore, to make in Section 81 a provision similar to the one contained in Section 82 is not at all of any significance. The subject of an annual assessment-list or a revised assessment-list is dealt with in Section 84 and retrospective effect to an annual assessment-list or to a revised assessment-list is given by virtue of Sub-section (2) of Section 84. For these reasons we are not in agreement with the decision in Jalgaon Borough Municipality's case. We think that it was not correctly decided and that, on the other hand, the correct view has been taken in the Chalisgaon Borough Municipality's case. The decision in Chalisgaon Borough Municipality's case and the earlier decisions of single Judges of this Court were all followed by a Division Bench of the Gujarat High Court in The Municipal Corporation, Ahmedabad v. Zaveri Keshavlal [1965] 6 Guj. 701. 29. In the resu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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