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1983 Supreme(Mad) 451
Madras High Court
SWAMIKKANNU
Koothanallur Town Panchayat Board - Appellant
Versus
Mariam Beevi Ammal - Respondent
Decided On : 09/09/1983
R. Muthukumaraswami and V. Ramajagadeesan, for Appellant; G. Subramaniam, for Respondent.
A suit challenging the assessment of tax by a Panchayat is maintainable if the provisions of the Madras Panchayats Act, 1958 have not been complied with in substance and effect.
Headnote:
PROPERTY TAX - ASSESSMENT - JURISDICTION OF CIVIL COURT - MAINTAINABILITY OF SUIT - COMPLIANCE WITH ACT PROVISIONS - ASSESSMENT METHOD - REMAND FOR FRESH DISPOSAL - MADRAS PANCHAYATS ACT, 1958 (XXXV OF 1958), SS. 2(1), 2(13), 119, 120, SCH. I, R.2, 174(2).
Fact of the Case:
Plaintiff filed a suit challenging the assessment of property tax levied by the defendant Panchayat on his building, claiming it was excessive and illegal. The defendant contended that the assessment was proper and the suit was not maintainable. The trial court and the lower appellate court held in favor of the plaintiff.
Finding of the Court:
The High Court held that the suit was maintainable as the assessment was not in accordance with the provisions of the Madras Panchayats Act, 1958 and the relevant rules. The court found that the method adopted by the defendant in arriving at the value of the suit building was not clearly explained and no documents were filed to show compliance with the prescribed procedures.
Issues: 1. Whether the Civil Court has jurisdiction to try the suit questioning the assessment of tax by the Executive Officer of a Panchayat? 2. Whether the suit as filed by the respondent without challenging the legality or validity of the basis of the assessment is maintainable? 3. Whether Rule 23 of the Rules relating to the assessment of tax contained in the Manual of Panchayat Administration Part I will not be a bar for the maintainability of the suit? 4. Even assuming that the Civil Court has got jurisdiction to try the suit, can the Civil Court interfere with the order of assessment on the basis of re-assessment of the capital value?
Ratio Decidendi: 1. The Civil Court has jurisdiction to entertain a suit challenging the assessment of tax by a Panchayat if the provisions of the Madras Panchayats Act, 1958 have not been complied with in substance and effect. 2. A suit challenging the assessment of tax is maintainable even if the legality or validity of the basis of the assessment is not challenged. 3. Rule 23 of the Rules relating to the assessment of tax contained in the Manual of Panchayat Administration Part I does not bar the maintainability of a suit challenging the assessment of tax. 4. The Civil Court can interfere with the order of assessment on the basis of re-assessment of the capital value if the assessment is not in accordance with the provisions of the Madras Panchayats Act, 1958 and the relevant rules.
Final Decision: The High Court allowed the second appeal, set aside the judgments and decrees of the lower courts, and remanded the suit to the trial court for fresh disposal after giving both parties an opportunity to adduce evidence.
JUDGMENT :- The defendant in O. S. No. 477 of 1972, on the file of the District Munsif's Court, Mannargudi, is the appellant herein. The respondent plaintiff filed the suit for a declaration that the assessment of Rs. 1418-31 levied by the defendant for the building bearing door No. 4 Hospital Road, Koothanallur, is illegal and as a consequential relief for directing the defendant to refund the excess amount of Rs. 818-31, collected by the defendant with costs of suit.
2. The case of the plaintiff is as follows. The plaintiff is the owner of the building called 'Jabbar Talkies' bearing door No. 4 Hospital Road, Koothanallur. The building is a recent construction and it was completed in the year 1971, after a very long time. The defendant Panchayat Board assessed the building to property tax of Rs. 2362-85 including the library cess of Rs. 68-85 and issued a special notice of house-tax, new assessment which was served on the plaintiff on 17-7-1971 for the year 1971-72. On receipt of the notice, the plaintiff preferred a revision petition on 8-8-1971, to the Executive Officer, alleging that the proposed assessment was excessive and far in excess of the rental value of the building and that it should be revised. The Executive Officer reduced the tax on the revision petition to only Rs. 1418-31. The revised tax is also illegal and is far in excess of the actual rental value of the property. The Panchayat Board, in its resolution, dt. 30-10-1971, arbitrarily and without assigning any reasons confirmed the tax of Rs. 1418-31 and rejected the appeal preferred by the plaintiff. The cost of construction of the building was only Rs. 70,000. So the tax has to be imposed only on the rental value. The tax on similar building at Kodavasal and Koradacheri was not more than Rs. 412 per year. The annual rental value of the building can never exceed Rs. 600. Therefore, the plaintiff instituted the suit for the reliefs mentioned above.
3. On the other hand, the case of the defendant Panchayat Board as contended in the written statement is as follows : The defendant Panchayat Board assessed the suit building to property tax of Rs. 2363-85 including library cess of Rs. 68-85 for the year 1971-72. It is true that the plaintiff filed a revision petition for reduction of property tax. The defendant took into account all the aspects of the problem and after due verification of the suit building and the site on which it is constructed, fixed the capital value of the suit properly as Rs. 1,50,000, and the property tax was assessed at Rs. 1377 and the library cess was fixed at Rs. 41-31. Thus the total property tax for the suit property was fixed in Revision Petition No. 1 of 1971-72 at Rs. 1418-31, per annum. The plaintiff preferred an appeal against the assessment by the Executive Officer to the President in council of the defendant Panchayat. The defendant-Panchayat Board, after thoroughly examining the appeal confirmed the assessment of the property tax for the suit property. It is not true to say that the annual rental value of the suit property cannot exceed Rs. 600) per year and that the cost of construction of the building was only Rs. 70,000. The defendant Panchayat Board and its Executive Officer have correctly valued the suit property at Rs. 1,50,000. The rental value at the rate of 6% has been arrived at Rs. 9000 per year. A depreciation amount of Rs. 900 arrived at the rate of 10% has been deducted from the rental value. Thus, the property tax has been calculated at the rate of 17% p.a., on Rs. 8100 and arrived at Rs. 1377. The library cess of three paise per rupee has been assessed and fixed at Rs. 41.31. Thus, the total property tax has been assessed for the suit building and fixed at Rs. 1418.31 p.a. The plaintiff has not chosen to avail himself of the opportunity of appeal before the proper forum. The Civil Court has no jurisdiction to entertain the suit.
4. On the above pleadings, the following issues were framed for trial :
1. Whe
