MUNICIPAL COUNCIL VIJAYAWADA Vs. BANDI BUTCHAYYA

JUDGEMENT

(1.) The Municipal Council, Vijayawada, represented by its Commissioner is the appellant. The suit out of which this appeal arises was instituted by it for recovery of property tax alleged to be due from the defendant for the years 1948-1949 to 1951-1952. The suit was decreed by the trial Court but oa appeal the learned Subordinate Judge set the decree aside. Originally the tax. assessed on the land was Re. 1-7-0 per half year and it was enhanced to Rs. 36-2-0 The Municipality claimed that it was wrongly assessed originally as " agricultural land " and that it should be assessed only as " building site ". The petitioner filed a revision petition to the Municipality. But it appears that it was disposed of by the Municipal Council without notice to the defendant.

(2.) The original amount of tax was revised, it appears, pursuant to a directive issued by the Council to its Commissioner asking him to revalue the property on the basis that it was a building site instead of agricultural land. Now under rule 4 in Schedule IV to the Madras District Municipalities Act (V of 1920), it is provided as follows :- "4. (1) If at any time it appears to the council that any person or property has been inadequately assessed or inadvertently or improperly omitted from the assessment books relating to any tax, or that there is any clerical or arithmetical error in the said books it may direct the executive authority to amend the said books in such manner as it deems just or necessary : There is a proviso to the rule to the effect that where such a direction involves an increase in the assessment, notice should be given to the person concerned to show cause why the assessment books should not be amended as proposed. Having regard to the context it appears to me that this rule does not confer on the Municipality the right to direct the executive authority to enhance the tax or to revise the valuation of a particular property in order to enhance it. The primary object of the rule is in my judgment to direct an amendment of the books so as to show the correct assessments and not to deal with the merits of any assessment. An amendment may occasionally involve an enhancement of tax but it does so only indirectly. That is why there is no provision for an appeal or revision against such assessment, whereas in the case of a revised imposition the assessee is given a right to question it. (Vide rules 9, 10 and II of the same schedule). Under rule 6, the power to determine the value of any land or building for purposes of the property tax is vested in the Executive Authority and under rule 7 the Executive Authority is to enter the annual or capital value of all lands and buildings determined by him and the tax payable thereon in the assessment books to be kept for the purpose at the municipal office, and certain particulars must be specified therein. There is a provision also for revision of the assessment books once in every five years. Under rule 8, it is open to the executive authority to amend the assessment books at any time between one general revision and another by inserting therein or removing therefrom any property or by altering the valuation of any property or the amount of tax. Reading all these rules together it seems to me that when the value of the property is to be altered, it is to be done only by the Executive Authority and not by the council.

(3.) In the present case, it is not pretended that the Executive Authority exercised Its power under rule 8 (2). The contention of the appellant however is that the Executive Authority acted under the directions of the Municipal Council under rule 4, that no revision lies to any authority and that therefore the defendant was" not prejudiced by not having had notice of the hearing of the revision petition filed by him, when such a petition was not sustainable at all. I cannot agree with this contention. The words " inadequately assessed " may of course, strictly speaking, cover cases of under assessment due to wrong valuation of the land to be taxed as well as cases of such assessment due to a wrong amount of tax being fixed on the basis of a correct valuation. If it is the latter, the Municipal Council can direct the amendment of the books under rule 4. If it is the former, it is only the Executive Authority that has the right to do so. It is true that rule 4 as well as rule 8 aims in one sense to correct wrong assessments. But where the assessment is incorrect on the ground that the property was wrongly valued either because it was valued as agricultural land when it should have been valued as a building site or because the figure at which it was valued was lower than it should have been, then it is the Executive Authority who can alter the value of the land and impose an assessment corresponding to the altered valuation. Interpreting the words " inadequately assessed " in accordance with the maxim noscitur a sociis I entertain no doubt whatsoever that the power vested in the Municipality is merely to direct amendment of the assessment books but not to revise taxation as such. Reference may be made in this context to the decision of a Full Bench of the Madras High Court in State of Madras v. Louis Dreyfus and Co., Ltd., I.L.R. (1956) Mad. 1285: (1956) 2 M.L.J. 327 (F.B.). where their Lordships discussed the scope of rule 14(2) and rule 17(1) of the Madras General Sales Tax Rules, 1939 and contrasted escaped turnover with escaped assessment.