CANTONMENT BOARD Vs. LKANHAIYA LAL

JUDGEMENT

(1.) This appeal may be described as the last round in a protracted fight that has been taking place between Kanhaiya Lal and the Agra Cantonment Board over the amount of taxes to be assessed on the premises occupied by the said Kanhaiya Lal in the Agra Cantonment. The Cantonment Board is the appellant in this case and the appeal arises out of proceedings in execution of a decree obtained by Kanhaiya Lal against the Board. On 1 August 1919, a lease of certain land within the Cantonment area in Agra was granted to Kanhaiya Lal by the Officer Commanding, Agra Division, on behalf of the Secretary of State for a period of 25 years. Condition 7(2) of the lease was in the following terms: That the lessee will keep separate and proper accounts of the income arising from the premises hereby demised and the buildings erected thereon and that the same shall be accessible at all reasonable times to the Cantonment Authority or any person duly authorized in that behalf for the purpose of inspection, examination, checking and copying. Taxation must be based upon the not profit of the lessee while in occupation of the sarai.

(2.) The taxts to which the premises are liable under the Cantonments Act, 1924 and notifications issued thereunder are house tax, water tax and conservancy tax. The basis of the tax assessment is the "annual value" of the building. "Annual value," as applicable to the building in question, is defined in Section 64 of the Act to be the gross annual rent for which such building...is actually let, or, where the building...is not let...might reasonably be expected to let from year to year.

(3.) The assessment to the various taxes payable by Kanhaiya Lal in respect of his premises was made accordingly. Kanahaiya Lal claimed that the Cantonment Board was bound by the clause in the lease that taxation must be based on the net profits of the lessee while in occupation of the sarai. He accordingly instituted Suit No. 34 of 1927 in the Court of the Subordinate Judge, Agra, against the Cantonment Board in which he prayed for a declaration inter alia that the condition in the lease for payment of house and water taxes on the net income is binding on the defendant Board and that the Board is not entitled to realize from him more than Rs. 2 per mensem as conservancy tax. He also prayed for an injunction restraining the Board from demanding and realizing more than it is entitled to recover under the terms of his agreement. The learned Subordinate Judge decreed the claim for declaration that the clause of the lease with regard to the basing of the assessment to house and water taxes on net income was binding on the Board and for an injunction to this extent. He dismissed the rest of the plaintiff's suit. The Board did not appeal, but Kanhaiya Lal appealed to this Court in respect of the refusal of the trial Court to grant him a declaration and injunction that the Board was not entitled to realize more than Rs. 2 per mensem in respect of conservancy tax. This appeal was heard by a Division Bench of this Court consisting of Banerji and King, JJ., and was dismissed on the ground that the civil Court had no jurisdiction to question the liability of a person to be assessed or taxed and that the only method by which the plaintiff could challenge the order of the Cantonment Board was as provided in the rules made under the provisions of the Act for the assessment and collection of conservancy tax. These rules provide for an objection to the Cantonment Committee. Rule 11 provides for an appeal against the order of the Cantonment authority, while Rule 15 lays down that no objection shall be taken as to an assessment nor shall the liability of a person to be assessed or taxed be questioned in any other manner or by any other authority than is prescribed under this ule.