BAGMAL KISANDAYAL GINNING FACTORY Vs. MUNICIPAL COMMITTEE

JUDGEMENT

(1.) SUBHEDAR , A.J.C. 1. This is a second appeal by the plaintiffs who carry on the trade of ginning and pressing cotton within the limits of the defendant, Municipal Committee of Akot, and whose suit for a declaration and injunction against the defendant committee has been dismissed by the two lower Courts. The facts concerning this litigation are very elaborately stated in the judgments of the two lower Courts, but for the purposes of this second appeal they may shortly be stated as under. The defendant committee came into existence long before 1898 and was originally governed by the Berar Municipal Law of 1886 till 15fch February 1924, since when it is governed by the C.P. Municipalities Act (2 of 1922) as applied to Berar. Under the provisions of the said Municipal Law the defendant committee had imposed a tax under Section 41(1)(a)(b) on professions and trades by Hyderabad Residency Order Notification No. 98, dated 14th March 1899, according to which the tax was levied at the rate of one and a quarter percent on the taxable portion of the estimated income of a trader upto a maximum of Rs. 500. It is admitted that the imposition of this tax was legal and that the tax at this rate was willingly paid by the plaintiffs up to 1st August 1908.

(2.) IT is alleged that on 27th October 1907, the defendant committee passed a, resolution making an invidious distinction between assessees carrying on trade of ginning and pressing cotton and those carrying other trades within the limits of the municipality and without following the procedure laid down in the Municipal Law illegally altered the mode of assessing the tax on factory owners by introducing a novel method of assessing the tax on the outturn of bales and bojas from their factories irrespective of the assessees' profits or losses by fixing the rate at 8 pies per boja of 10 maunds and 10 pies per bale. This new method of assessment was published as Notification No. 1063 in the C.P. Gazette of 13th July 1908. It is alleged that this assessment was ultra vires of the defendant committee, but the plaintiffs continued to pay this new tax under a mistake of law up till the year 1928.

(3.) AFTER serving a notice upon the defendant committee on 13th January 1928, the plaintiffs brought a suit in the Court of the Second Class Subordinate Judge No. 1, Akola, for a declaration: (1) that the imposition, assessment and recovery in 1928 by the defendant from the plaintiffs of the tax on the professions and trades by Notification No. 1063, dated 13th July 1908, was illegal and ultra Tires of the defendant?; (2) that the variation effected by the defendant committee in the rates by the subsequent notification dated 17th September 1927 was also illegal, arbitrary and ultra Tires of the defendant, and (3) for a permanent injunction restraining the defendant committee from assessing and collecting any tax from the plaintiffs otherwise than at the rates and on the principles laid down in the Notification No. 98, dated 17th March 1899. In the alternative it was prayed that the tax be recovered as per rates fixed by the Notification No. 1063, dated 13th July 1908.