THE COIMBATORE COTTON MILLS LTD., BY MANAGING AGENTS R. BEEMA NAIDU AND CO. BY PARTNER R. ETHIRAJULU Vs. THE UPPILIPALAYAM PANCHAYAT BY ITS PRESIDENT

JUDGEMENT

(1.) THE plaintiff, the Coimbatore Cotton Mills Limited, who failed in the Courts below is the appellant. The plaintiff filed the suit questioning the legality and validity of the collection of a sum of Rs. 5,999 by the defendant, the Upplipalayam Panchayat, towards property tax and water -tax for the half year ending 30th January, 1960. The plaintiff is a limited company owning a cotton' mill within the limits of the defendant -panchayat. The tax of the building was fixed' in 1954 and for the half year ending 31st March, 1960, the plaintiff was assessed to a total tax of Rs. 4,110.14 nP. and the same has been collected by the Panchayat. In 1959, the panchayat with a view to improve the facilities for drainage, water supply, medical aid, education etc., passed a resolution, Exhibit B -2, dated nth August, 1959, increasing the property tax, the increase in the property tax to come into effect from 1st April, 1960. The resolution has fixed an enhancement of 10 per cent. over the then existing tax in respect of buildings where the assessment exceeded Rs. 1,000 per half year in the previous years. The panchayat also levied water tax of Rs. 1,974.46 nP. on a basis of 25 per cent. of the property tax levied under Section 25 of the Madras Public Health Act. The Plaintiff paid in all a sum of Rs. 10,109.70 nP. and filed the suit for refund of Rs. 5,999.56 nP. questioning the enhancement of property tax and the levy of water tax. The trial Court while holding that this is a case in which the civil Court's jurisdiction is not ousted, awarded no relief to the plaintiff in the view that the levy of the additional tax was justified. The appellate Court made a short -work of the matter by holding that the civil Court's jurisdiction is ousted though in a superficial manner it has upheld the view of the trial Court and dismissed the appeal.

(2.) AT the outset, it is necessary to mention that it is not a general quinquennial enhancement or general revision but it is an enhancement of tax in the mid term based upon the resolution of the panchayat. The Panchayat passed a resolution on nth August, 1959, that to provide facilities for drainage, housing scheme, medical, electricity, education etc., the Panchayat was increasing the property tax and to this resolution a list containing 20 items grading for enhancement. The list of 12,0 terns states:

(3.) IT will be noticed that the panchayat has merely fixed a progressive rate in the enhancement and admittedly thereof has been no re -valuation either with reference to the rental value or the capital value. Prior to Exhibit B -2, the appellant was paying 5 per cent. of the rental value and now it has been increased to 10 per cent. The evidence adduced on behalf of the Panchayat does not show how the value was fixed and in cross -examination D.W. 2, the Executive Officer of the Panchayat Board says that the basis adopted for the enhancement of the tax was the annual market value. The Mill contains portions which are used for business purposes and some portions for residence and portions which are not let out at all. The complaint «of the appellant is that even assuming that the Panchayat is entitled to adopt the progressive rate and increase 10 per cent in cases where the annual rental value is over Rs. 1,000 the Panchayat can do so only after determining the value of the property as on the date of enhancement whether on the basis of rental value or on the basis of capital value. It simply took the value as was in 1954 when it levied the tax to Rs. 4,110 -14 nP. and doubted it.