CHAIRMAN OF THE MUNICIPAL COMMISSIONERS OF JALPAIGURI MUNICIPALITY Vs. JALPAIGURI TEA COMPANY LIMITED AND THE NORTHERN BENGAL TEA COMPANY LIMITED

JUDGEMENT

(1.) These two appeals are directed against the decrees of the lower Appellate Court, made in affirmance of the decrees of the Trial Court, in two suits instituted by the plaintiffs- respondents to contest the legality of the assessment of personal tax and latrine fee on them by the Commissioners of the Jalpaiguri Municipality. The plaintiffs are two Companies, the Jalpaiguri Tea Co. and the Chuniajhora Tea Co., which have their registered offices within the Municipal limits of the Town of Jalpaiguri. The defendant Municipality in exercise of statutory powers (under the Bengal Municipal Act, 1884) assessed on the plaintiffs at the last general assessment a personal tax of Rs. 84 each per annum under Section 85(a) and a latrine fee of Rs. 7 3 0 each per annum under Section 86(f). These are the assessments challenged in the two litigations. Section 85 provides that the Commissioners may impose within the limits of the Municipality one or other of the following taxes: (a) a tax upon persons occupying holdings within the Municipality according to their circumstances and property within the Municipality: Provided that the amount assessed upon any person in respect of the occupation of any holding shall not be more than eighty four rupees per annum; or (b) a rate on the annual value of holdings situated within the Municipality: Provided that such rate shall not exceed seven and a half per centum on the annual value of such holdings, except within the Municipalities of Howrah, [Patna], Dacca and Darjeeling, in which it shall not exceed ten per centum on such annual value : and provided also that no rate shall be imposed on any holding of which the annual value is less than six rupees : Provided that both the taxes shall not be in force at the same time in the same ward. Section 86 provides that the Commissioners may order that a fee for the cleansing of latrines be levied within the limits of the Municipality in addition to either of the taxes mentioned in Section 85.

(2.) The plaintiffs attack the tax imposed under Section 85(a) as ultra vires on three grounds, namely, first, that the amount was assessed on the basis of their circumstances and property outside the Municipality : secondly, that each of the joint occupants of a holding has been separately asssessed at the maximum amount: and thirdly, that the statutory procedure for assessment has not been followed. The plaintiffs challenge the latrine fee as ultra vires, on the ground that each of two Companies who are joint occupiers of one holding has been separately assessed with the entire latrine fee payable. No further reference will be made to the legality of the latrine fee, as the question, in so far as it has been decided in favour of the plaintiffs, has not been re-argued in this Court. We are consequently concerned now solely with the matter of the legality of the tax imposed under Section 85(a), which has been pronounced ultra tires by the concurrent judgments of the Courts below.

(3.) The facts relevant for the determination of this question are not challenged in this Court and may be briefly recited. The head office of each of the Companies is situated within the Municipality. Their income is derived from tea gardens in the Western Doars in the District of Jaipaiguri, beyond the Municipal jurisdiction of the Town of . Jaipaiguri. The tea is sent direct from the gardens to Calcutta and sold there. The sale-proceeds are sent to the Jaipaiguri Banking and Trading Corporation, which is the financing Bank of the two Companies and has its office in the Town of Jaipaiguri. The amounts received by the Bank are placed to the credit of the respective Companies. The sums due on account of advances made by it as loan to the Companies are first deducted from the receipts. From the balance, the expenditure is met, and then dividends are declared in a general meeting of the share-holders. It is not disputed that the amount thus received by the Bank to the credit of each Company from outside the Munisipal limits exceeds Rs. 30,000 a year, and at the sanctioned rate of one rupee for Rs. 160, would justify the levy of the maximum tax of Rs. 84. On these facts, the Municipality maintains that the income thus received by each Company at Jaipaiguri constitutes its circumstances and property within the Municipality for the purposes of Section 85(a), and that it is immaterial that the tea is grown in a garden outside the Municipal limits or is sold in a market in Calcutta. This contention has been overruled by both the Courts below. We have arrived at the conclusion that the view taken by the Subordinate Judge, whose judgment is under appeal, cannot be supported.