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1937 Supreme(Mad) 70
IN THE HIGH COURT OF MADRAS
Beasley, C.J.
Chidambaram Municipality
Versus
P. Venugopal Pillai
Decided On : 08.02.1937
The Municipality was entitled to sue for tax recovery in the absence of a specific notice as a condition precedent.
Headnote:
Municipality - Tax Recovery - District Municipalities Act, Schedule 4, Rule 29, Rule 30 - The court discussed the requirement of a notice of demand for tax recovery under the District Municipalities Act. It concluded that the Municipality was entitled to sue for tax recovery in the absence of a specific notice as a condition precedent.
Fact of the Case:
The Chidambaram Municipality filed a suit to recover house tax and water tax from the defendant for the year ending 31st March 1934. The defendant contested the suit on the grounds of the absence of a proper and legal notice of demand served by the Municipality.
Finding of the Court:
The lower court held that the Municipality did not sufficiently prove the service of the required notice, and therefore, was not entitled to file the suit. However, the Chief Justice found that the Municipality was entitled to sue for tax recovery even in the absence of a specific notice as a condition precedent.
Issues: The main issue was whether the suit was maintainable by the Municipality in the absence of a proper and legal notice of demand previously served upon the defendant.
Ratio Decidendi: The court concluded that the requirements as to notice are only confined to the enforcement of payment by distraint or prosecution in the criminal Court, and no specific notice was required as a condition precedent to the filing of a suit in the civil Court to recover the tax.
Final Decision: The Civil Revision Petition was allowed with costs, the order of the lower Court was set aside, and a decree was passed in favor of the plaintiff Municipality for the amount claimed with costs.
Beasley, C.J.
1. The question here is not free from difficulty. The suit was by the Chidambaram Municipality to recover house tax and water tax for the year ending 31st March 1934 in respect of houses belonging to defendant. The point to be decided here is whether the suit was maintainable by the Municipality in the absence of a proper and legal notice of demand previously served upon the defendant by the Municipality. There were other points raised but it is this question which has given rise to this petition. The learned District Munsif has held that the plaintiff-Municipality did not sufficiently prove that it had served what it was alleged was the required notice upon the defendant and that in the absence of such proof, the Municipality was not entitled to file the suit. The question of whether the notice was really served is one of fact and therefore if it had been the only question, the lower Courts judgment could not be interfered with, although I am bound to say that there appears to me to have been certainly prima facie proof that the defendant was served with a. notice of his liability to pay the tax and the defendant did not go into the witness-box and deny the receipt of the notice merely contenting himself with a denial in his written statement. But the question here is whether, even if such a notice of demand has not been given, the Municipality is entitled to sue. The statute imposes a clear liability to pay tax in respect of property and therefore there is that statutory liability. The question is whether there are any rules which provide that as a condition precedent for the enforcement of that liability upon the owner of property there must first have been a demand in compliance with the rules. The only rules relating to the collection of taxes are rules 29 onwards ins Schedule 4, District Municipalities Act. Rule 29 provides for a notice or a bill to be served upon a person containing
(a) a statement of the period and a description of the occupation, property or thing for which the tax is charged; and (b) a notice of the liability incurred in default of payment.
2. When is a notice in that form required? Rule 29 says that this notice or bill is to be served before the provisions of Rule 30 are to be enforced. Rule 29(1) reads:
The (executive authority) shall serve upon such person a bill for the sum due before he proceeds to enforce the provisions of Rule 30.
3. What is provided for in Rule 30? First" of all, there is the very summary and salutary provision that, if the amount due on account of any tax is not paid within 15 days from the service of the notice, the tax may be recovered by distraint under warrant and sale of moveable property of the defaulter. That is Rule 30(1). Sub-rule (2) of the same rule provides that:
If for any reason the distraint, or a sufficient distraint, of the defaulters property is impracticable the executive authority may prosecute the defaulter before a Magistrate.
Sub-rule (3) says:
Nothing herein contained shall preclude the council from suing in a civil Court for any tax due to it under this Act.
4. There is another sub-rule to which reference must be made, viz., Sub-rule (3), Rule 29; and it is as follows:
Where a notice, bill or direction referred to in Sub-rule (1) has not been served or given either in the half year in which the tax became due or in the succeeding half year the tax for the half year first mentioned in this Sub-rule shall not be demanded.
5. Having set out the material rules, two points of view present themselves, namely (1) does this provision with regard to the serving of a notice or sending of a bill form a condition precedent to the enforcing of the very salutary provisions of Rule 30, or (2) is it a condition precedent also to any claims made in a civil suit? Rule 30 provides a very special procedure for the collection of the tax, i. e., by distraint of moveable property and prosecution in the Magistrates Court; and it is to be enforced where there has be
