JAHANABAD NAGAR PALIKA Vs. STATE OF BIHAR

JUDGEMENT

(1.) A significant question of law is involved in this case. The question is whether the State Government can issue any direction fo the municipality in the matter of assessment of municipal taxes under the provisions of the Bihar Municipal Act, 1922 . Before adverting to the question and considering the contentions of the counsel, it would be appropriate to briefly notice the facts of the 5/1/2013 Page 8 Kausalaya Devi Versus State Of Bihar case.

(2.) THERE are 12 petitioners in this case. While petitioner no.1 is an association of tax -payers of Jehanabad municipality, petitioner nos. 2 to 12 are the individual tax -payers. They seek, in effect and substance, quashing of the decision of the Appeal Committee of the municipality dated 4.1.96 fixing the rates of municipal tax on the basis of carpet area of holdings, and the certificate proceedings initiated for recovery of the municipal taxes on that basis. Copies of the said decision dated 4.1.96 and the notices issued in connection with the certificate proceedings have been enclosed, respectively, as Annexures 6 and 1 series to the writ petition.

(3.) AT this stage it would be useful to notice the relevant provisions of the Act. The provisions in regard to municipal taxation are contained in Chapter IV of the Act. Chapter IV consists of six parts. For the purpose of this case we are concerned with parts I and II alone dealing with the imposition and assessment of taxes. Section 82 empowers the Commissioners of a municipality to impose different kinds of taxes, such as, holding tax, water tax, latrine tax and so on, upon persons in sole or joint occupation of the holdings within the municipality assessed on their annual value. Section 89. provides that where it has been determined that a tax shall be imposed, the Commissioners after making such inquiry as may be necessary shall cause to be prepared an assessment list containing necessary particulars mentioned in the section. Every such assessment shall remain valid for three years or until such time it is revised. Section 98 lays down that annual value of a holding shall be deemed to be gross annual rental at which the holding may reasonably be expected to let. If there be on the holding building or buildings the actual cost of erection of which can be ascertained or estimated and which is not intended for letting or for the residence of the "owner himself, the annual value of such building shall be deemed to an amount equal to but not exceeding 7 1/2% of such cost, in addition to a reasonable ground rent for the land comprised in the holding. Section 101 provides that when it has been determined to impose any tax on the annual value of holdings, the Commissioner shall after making such inquiries, as may be necessary, determine the annual value of all holdings within municipality and for this purpose, under section 102, call upon the owners or occupiers of the holdings to furnish returns of the rent or the annual value thereof together with the description of the holding containing such particulars as the Commissioner may direct. If the person concerned refuses or fails to furnish any such return or description of the building within stipulated period or knowingly furnishes a false return, he would be liable to fine. Section 104 provides for determination of the taxes. Section 105 provides