Patna High Court
Nripendra Nath Roy Choudhary vs Commissioner Of Chaibasa Municipality ... on 1 July, 1980
Equivalent citations: AIR1981PAT47, 1981(29)BLJR154, AIR 1981 PATNA 47, (1980) BLJ 637, 1981 BLJR 154, (1981) PAT LJR 10
Author: Nagendra Prasad Singh
Bench: Nagendra Prasad Singh
JUDGMENT Nagendra Prasad Singh, J.
1. One of the defendants in a suit filed on behalf of the respondent Municipality for realisation of the arrears of municipal tuxes is the appellant in this appeal. The money suit in question was filed for realisation of municipal taxes for the period 1-10-1967 to 30-9-1970 amounting to Rs. 1087.56. The suit was contested on behalf of the defendants primarily on the ground that as their names are not recorded in the assessment list of the Municipality, no liability to pay the tax has been created. According to the defendants, one Gyanendra Nath Roy Choudhary was the owner of the holding who died in the year 1936. The defendants who are the sons of aforesaid Gyanendra Nath Roy Choudhary had applied for mutation of their names in the municipal records, but the municipal authorities refused to mutate their names till they had paid the arrears of taxes accruing during the lifetime of the aforesaid Gyanendra Nath Roy Choudhary. Learned Munsif, however, upheld the claim of the Municipality and negatived the defence of the defendants that as their names have not been mutated in the records of the Municipality they are not liable to pay the municipal taxes. That finding has been affirmed even by the court of appeal below.
2. The case has been referred to a Full Bench for answering the question as to whether the liability to pay the municipal taxes is created only after the name of a person is recorded in the records of the Municipality as owner of such holding.
3. Chapter IV of the Bihar and Orissa Municipal Act, 1922 (hereinafter to be referred to as 'the Act') deals with municipal taxation. Section 82 vests power in the Commissioners to impose within the limits of the municipality taxes, detailed natures of which have been given in that section. Section 98 lays down the mode of fixing the annual value of the holdings. Section 100, which is relevant for the present ease, is as follows:
"(1) Any tax which is assessed on the annual value of holdings, other than the latrine tax, shall, subject to the provisions of Sections 133 and 134, be payable by the owners of holdings within the municipality.
(2) The latrine tax shall, subject to the provisions of Section 135, be payable by the persons in actual occupation of holdings within the municipality. On a plain reading, any tax which is assessed on the annual value of the holding other than the latrine tax, is payable by the owners of the holdings, "owner" has been defined under Section 3 (18) which is as follows:--
" 'Owner' includes-
(a) every person who is entitled for the time being to receive any rent in respect of the land with regard to which the word is used, whether from the occupier or otherwise;
(b) a manager on behalf of any such person;
(c) any agent for any such person; and
(d) a trustee for any such person;
....."
On face of it, it gives an inclusive definition apart from what is understood in the general law. Section 105 provides procedure for preparation of the assessment list which shall contain particulars like name of the road, as well as number of the holding on the register, its annual value; the name of the owner and occupier; the amount of tax payable for the year, etc. This assessment list can be altered or amended by the Commissioners from time to time for the purpose of and in the manner prescribed in that section. Section 107 (1) (a) and (b), which are relevant for the present case, are as follows:--
"(1) The Commissioners may from time to time alter or amend the assessment list in any of the following ways:--
(a) by entering therein the name of any person or any property which ought to have been entered, or any property which has become liable to taxation after the publication of the assessment list under Section 115;
(b) by substituting therein for the name of the owner or occupier of any holding the name of any other person who has succeeded by transfer or otherwise to the ownership or occupation of the holding;" This power to alter and amend the assessment list is necessary in order to keep the records up to date taking note ol transfer or devolution of the holding. Sub-section (2) of Section 107 is as follows:
"(2) The Commissioners shall give at least one month's notice to any person interested, of any alteration which they propose to make under Clauses (a), (b), (c), (d), or (dd), of Sub-section (1), and of the date on which the alteration will be made."
Sub-section (3) of Section 107 says that provisions of Sections 116 to 119 applicable to objections shall, so far as may be apply to any objection made in pursuance of a notice issued under Sub-section (2) of Section 107. Sub-section (4) of Section 107 states:
"(4) Every alteration made under Sub-section (1) shall be signed bv the Chair-man and, subject to the result of an application under Section 116, shall take effort from the date on which the next instalment falls due, but the Commissioners by such alteration shall not be deemed to have made a new or revised assessment list."
Sub-section (1) of Section 108 imposes a duty upon thn parties to a transfer of the holding, to give notice of the transfer to the Chairman. Sub-section (2) of Section 108 is as follows :--
"(2) In the event of the death of the person in whom such title vests, the person to whom, as heir or otherwise, the title of the deceased is transferred, b\ descent or demise, shall, within one year from the death of the deceased, give notice in writing of such transfer to the Chairman."
In view of this sub-section, in the event of death of the owner of the holding, his heirs are enjoined to Rive notice to the Chairman of the Municipality whenever the title of the deceased is transferred by devolution,
4. In view of the aforesaid provision? any tax which is assessed on the annual value of the holding, other than the latrine tax, is payable by the owners of the holdings. It is also apparent that whereas Section 108 casts a statutory duty on the transferor and transferee of a holding as well as on the heirs of a deceased owner in case of devolution to inform the municipality in respect of such transfer, See. 107 (1) (a) and (b) makes it incumbent on the part of the Commissioners to alter and amend the assessment list by substituting therein for the name of the owner or occupier the name of any other person who has succeeded by transfer or otherwise, The power under Sub-section (1) of Section 107 can be exercised suo motu, or on basis of information furnished in compliance with the requirement of Section 108. But, can it be said that till the formality of substituting the name of the person who has succeeded by transfer or otherwise to the ownership of the holding, Is completed he does not become the owner for the purpose of this Act so as to be liable to pay the municipal taxes? In my view, the answer to this question is in the negative. The liability for payment of taxes is created by Section 100 of the Act which says in un-: ambiguous terms that taxes other than the latrine tax shall be payable by the owner of the holding. A person becomes owner of a holding not only after his name is entered in the records of the municipality but because of the transfer or devolution of the holding in his favour. Provisions of Sections 105 and 107 regarding preparation and alteration of the assessment list are for purpose of maintaining the record of such owners as well as the amount of taxes payable, by the municipality. For this purpose the municipality is required to give notice to heirs of such persons whose names are to be entered in the municipal register.
5. A similar question had arisen in the case of Abrar AH Khan v. Patna City Municipality ((1962) ILR 41 Pat 338) in which Ramaswami, C. J. and Untwalia. J. observed:--
"The liability of the defendants to pay the taxes is determined not by the entry of their names in the assessment list but by virtue of Section 100 (1), read with Section 82 of the Bihar and Orissa Municipal Act The liability of the defendants to pay the taxes is dependent upon the provisions of these taxing sections and not upon the provisions of Sections 105, 106 and 107, which deal with the preparation of assessment list and the quantification of the tax liability."
In that case also a suit had been filed on behalf of the Municipality concerned against persons who during the relevant time had transferred the holding in favour of their wives through registered document. The transferees applied for mutation of their names, but mutation was kept pending on the ground that the transferees had not deposited the arrears of taxes of the transferors. Thereafter, the suit in question was instituted for recovery of municipal taxes for the period subsequent to the transfer. In the suit only the transferors were impleaded as parties and not the transferees. The suit of the municipality was dismissed, and it was observed.
"It is, therefore, not open to the plaintiff-respondent in the present case to take advantage of its own laches or negligence in not entering the mutation of title in its assessment list. As we have already pointed out, the defendants are not liable to pay municipal taxes for the period in question because they are not 'owners' within the meaning of Section 3 (18) of the Act, read with Section 100 (1) of the Act". It was also observed that the plaintiff might have obtained a decree for the amount of taxes against the transferees, but they were not parties to the suit.
6. Again in the case of Sarat Kumar Acharya v. Mahesh Prasad Sahu (AIR 1972 Pat 377) a learned Judge of this Court observed that the Act was "to make the owner liable to pay the municipal taxes." This question was again agitated in the case of Chairman and the Municipal Commissioners of the Chakradharpur Municipality v. Bishwanath Jagatrainka (AIR 1975 Pat 158) before a Bench of this Court and again the argument that till the name of the transferee or the person on whom the holding has devolved by death of the owner is entered in the records of the Municipality, the liability to pay the tax does not arise, was repelled.
7. Learned counsel appearing for the appellant placed reliance on some observations made in a Bench decision of this Court in the case of Patna Municipal Corporation v. Ladley Saran (1963 BLJR 214). In that case this Court had to deal with a case covered by Section 109 of the Act. Section 109 of the Act deals with a situation where house belongs to one owner and the land on which it stands and any adjacent land belongs to another. In that case in respect of the holding, A was the owner, B. however, had made certain temporary structures ou that holding and he was said to be the owner of those structures. In such a situation, in view of Section 109, the Commissioners could value the house and land together and may impose a consolidated tax which shall be payable by owner of the house who shall thereafter, be entitled to deduct the same from the rent which he pays for the land on proportionate basis In that connection it was observed:--
"In my opinion, the word 'owner' in this section means only the person who is recorded as such by the Municipality. It will be noticed that under Sub-section (1) of that section, it is in the discretion of the municipal authorities to value the house and land together and to impose a consolidated tax: but they are not bound to do so. If, however, a consolidated tax is imposed, Sub-section (2) comes into play; and the tax is to be realised from the owner of the house. It is obvious that before imposing the consolidated tax, the authorities must know who is the owner; and the municipal records are the only materials in their possession for the purpose at the time of assessing the tax, unless the law requires the authorities to make further inquiry, of their own motion, about the actual ownership of the house or the land at the time of the assessment. No such law has been brought to our notice."
It was specifically pointed out even in this case that under Section 100 any tax which is assessed on the annual value of the holding other than the latrine tax, is payable by the owners of the holding, but this is "to some extent modified by Section 109, which makes a distinction between the owner' of the house and the 'owner' of the land where they belong to two different persons, though comprised in the same holding". It is apparent that the aforesaid observations on which reliance has been placed on behalf of the defendant-appellant were made in context with Section 109 of the Act find not in respect of owners of all holdings. In the case of Sarat Kumar Acharya v. Mahesh Prasad Sahu (AIR 1972 Pat 377) as well as in the ease of Chairman and the Municipal Commissioners of the Chakradharpur Municipality v. Bishwa-nath Jugatramka, (AIR 1975 Pat 158) this distinction in the case of Patna Municipal Corporation v. Ladley Saran (1963 BLJR 214) has to be read for the purpose of ascertaining as to who is the owner within the meaning of Section 109 only and not for purpose of Section 100 of the Act.
8. Reliance was also placed on behalf of the defendant-appellant on a Bench decision of this Court in the case of Satyadeo Narain Lal v. Municipal Commissioners, Bhagalpur Municipality (AIR 1960 Pat 84). In that case in purported exercise of the powers conferred on the Commissioners of the Municipality, by Section 99 (b) of the Act, a resolution had been passed that in respect of agricultural and horticultural holdings tenants and not the landlords should be recorded as the 'owners' of the holding as provided in Section 100 of the Act, and that such tenants should be assessed accordingly. On the strength of this resolution, defendant No. 4 of the suit, who was the tenant, was sought to be made liable for the municipal taxes although his name was not mutated in the assessment list and no notice was served of the aforesaid resolution on him and names of the landlords had continued in the municipal records. In that context, it was held that a resolution by itself did not create liability for payment of taxes and before the tenant was called upon to pay the tax it was necessary to amend the assessment list and give notice thereof to the tenant as provided by Sub-sections (1) and (2) of Section 107 of the Act. This case, in my view, does not hold that unless the names of the persons who are owners of the holding are entered in the assessment list of the municipality, no liability to pay municipal taxes is created. No doubt, Sub-section (4) of Section 107 says that every alteration made under Sub-section (1) "shall take effect from the date on which next instalment falls due", but this does not mean that liability to pay the taxes by such transferee arises from the date on which the next instalment after alteration made falls due. What it means, according to me, is that the Commissioners after altering their assessment register shall demand the next instalment of taxes from such transferee. This deals only with the procedural part of the law and not the substantive one which is contained in Section 100 of the Act. If it is held that the liability for payment of tax arises only after an alteration under Sub-section (1) of Section 107 is made then as a necessary corollary it has to be held that liability of the transferor or the ex-owner continues up to that date, which will lead to an absurd result. A person having transferred the holding and having informed in accordance with Section 108 will have to pay the tax till an order under Section 107 (1) after enquiry is made.
9. Learned counsel appearing for the appellant then submitted that if it is held that the liability to pay taxes is not dependent on the name of such person being entered in the assessment list, then in many cases the Commissioners of Municipality concerned may instead of filing suits, exercise their power under Sections 124, 127 and 129-B which enable them to realise the said amount by issuing warrant of distress and sale of moveable properties as well as under the provisions of the Bihar and Orissa Public Demands Recovery Act. In other words, according to the appellant, the Commissioners will be at liberty to adopt summary procedure for realisation of the arrears from persons whose liability has not been enquired into in accordance with Sub-sections (2) and (3) of Section 107 of the Act. Whatever may be said in respect of the summary procedure for realisation of the arrears of taxes contained in the aforesaid provisions, which I am not called upon to decide in this case, but so far as the suit is concerned, it is certainly maintainable against a person who has become owner of the holding either by transfer or by devolution, although his name for one reason or other has not been entered in the records of the municipality.
10. My considered opinion is that Section 100 creates liability on the owner to pay municipal taxes other than latrine tax, which is not dependent till his name is entered in the records of the municipality. The Commissioners have to alter or amend the assessment list from time to time either suo motu or on receipt of the notice of transfer or devolution, after complying with the requirements of Sub-sections (2) and (3) of Section 107 of the Act. The Commissioners cannot withhold the passing of the order for alteration or amendment till the arrears of the taxes of the transferor or the original owner are' paid by the transferee or persons on whom the interest in such holding has devolved. A person who will be deemed to be owner within the meaning of Section 100 read with Section 3 (18) of the Act cannot repudiate his liability, in a suit for recovery of arrears since the date he becomes owner of the holding, on the ground that his name has not been mutated in the records of the municipality.
11. It is not in dispute that the defendants, after the death of Gyanendra Nath Roy Choudhary, became the owners of the house in question by inheritance, and, as such, they are liable to pay the municipal taxes in respect of the house in question. The suit was filed on 3-12-1970 for realisation of the arrears for the period 1-10-1967 to 30-9-1970, as already mentioned above. In the courts below an objection had been taken on behalf of the defendants that in any view of the matter, so far as the claim for quarter beginning from 1-10-1967 is concerned, it was barred by limitation. This objection has been negatived by both the courts below on the ground that the tax which is payable in quarterly instalments becomes due on the first day as well as on the last day of the quarter, in view of the statement made in the plaint to that effect. In my view, in face of Sub-section (2) of Section 121 of the Act, the aforesaid assertion in the plaint cannot be accepted. Sub-section (2) of Section 121 is as follows :
"Such tax shall be payable to quarterly Instalments and every such instalment shall be deemed to be due on the first day of the quarter in respect of which it is payable."
In view of the deeming provision it has to be held that the owner becomes liable to pay quarterly instalment on the first day of the quarter in respect of which it is payable. The effect of a deeming provision need not be impressed which is almost settled that rights and liabilities are created in the manner commanded by such statutory fiction. It has also been pointed out that one should not allow one's imagination to boggle when working out the consequence of such statutory fiction. The result will be that liability of the defendants to pay the quarterly tax for the quarter beginning from 1-10-1967 will be deemed to have been created on 1st of October, 1967 itself. The suit having been filed beyond three years from that, that claim has to be held to be barred by limitation. Accordingly, I hold that there cannot be any decree in favour of the Municipality for the quarter beginning from 1-10-1967. To that extent the decree of the courts below are modified.
12. In the result, the appeal is allowed in part to the extent indicated above. In the circumstances of the case, there will be no order as to costs.
S.K. Jha, J.
13. I have had the advantage of going through the judgment of my learned Brother, N. P. Singh. J., and I agree that the appeal be allowed in part, as indicated in paragraph 12 of his judgment, without costs. In deference, however, to the learned Judges of the Division Bench, at whose instance this case was referred to a Full Bench, I feel obliged to write out a separate--although a concurring--judgment. It would not be out of place to mention here that at places some of the provisions of the Bihar and Orissa Municipal Act, 1922 would bear repetition in my judgment although they have been taken notice of by my learned Brother N. P. Singh, J., in his lucid judgment. I may, however, make it clear that I shall not dwell upon the question of limitation which has been thoroughly dealt with in the judgment of my learned Brother.
14. This second appeal initially came up for hearing before a learned single Judge (Lalit Mohan Sharma, J.) who, ay his order dated 2-3-79, held that there seemed to be some conflict in the Bench decisions of this Court, namely Patna Municipal Corporation v. Ladley Saran (1963 BLJR 214) and Satyadeo Narain Lal v. Municipal Commissioners, Bhagalpur Municipality (AIR 1960 Pat 84) on the one hand and a single Judge decision in the case of Saraju Bala Devi v. Chairman and Commissioner of Chaibassa Municipality (AIR 1976 Pat 243). The learned single Judge, therefore, by the aforesaid order referred this case for being heard by a Division Bench. When the case came up before a Division Bench of this Court, the two learned Judges hearing the appeal (namely, Hari Lal Agrawal and Lalit Mohan Sharma, JJ.,) by their order dated 26-7-1979 expressed the view, tentative as it may seem now that there seemed to be some conflict between the decisions of this Court, namely, a Bench decision of Ramaswami, C. J., and Untwalia, J., (as he then was) in the case of Abrar AH Khan v. Patna City Municipality (1962 ILR 41 Pat 338) on the one hand and of another Bench in the case of Patna Municipal Corporation (supra) and another Bench decision in AIR 1960 Pat 84 (supra) on the other. The records of the appeal were, therefore, placed before the Hon'ble the Chief Justice for considering the desirability of referring the matter to a Full Bench. Hence, we sat together to decide this apparently vexed question of law (I have used the word 'apparently' deliberately which I shall endeavour to justify at a proper place hereinafter) with regard to the true scope and purport of the charging section of the Bihar and Orissa Municipal Act, 1922 (Bihar and Orissa Act 7 of 1922), hereinafter to be referred to as the Act, read with the other relevant sections of the Act. Thus far, the justifiability of the constitution of this Full Bench. But before I proceed to go into the various ramifications of the legal issue involved in the fitness of things I must set out the facts first.
15. This appeal arises out of, and is directed against, the judgment dated the 21st day of August. 1974 passed by the learned Subordinate Judge at Chaibassa in Money Appeal No. 3 of 1972, by which he affirmed the judgment and decree passed by the learned Munsif at Chaibassa on 29-6-72 in Money Suit No. 136 of 1970. Defendant No. 2 in the action, Nripendra Nath Roy Choudhary is the appellant in this second appeal, the plaintiff being the Chairman and the Commissioners of the Chaibassa Municipality, who are respondent No. 1 in this appeal. The other defendants, namely, Jatindra Nath Chou-dbary, defendant No. 1. Sachindra Nath Roy Choudhary, defendant No. 3 Manindra Nath Roy Choudhary, defendant No. 4 and the appellant were all sons of late Gyanendra Nath Roy Choudhary. It seems during the pendency of the appeal in the lower appellate court Jatindra Nath Roy Choudhary, who was appellant No. 1 in that court, died and his heirs Namita Roy Choudhary (widow) and Kalpana Hoy Choudhary (daughter) -- were substituted in his place by order dated 18-7-1974 passed by the lower appellate court. Defendant No. 3 Sachindra Nath Roy Choudhary and defendant No. 4 Manindra Nath Roy Choudhary have been arrayed as respondents 4 and 5 respectively. In other words, respondents 2 to 5 have all common interest in the property in question with appellant Nripendra Nath Roy Choudhary, defendant No. 2, claiming devolution of interest in the property in question, which I shall describe hereinafter, by succession from the common ancestor Gyanendra Nath Roy Choudhary.
16. Respondent No. 1, whom for the sake of brevity I shall refer to as the municipality, brought the suit for recovery of Rs. 1,087.56 paise on account of arrears of municipal taxes in respect of holding No. 7 situate in ward No. II of Chaibassa municipality. The aforesaid arrear of municipal taxes for the said holding was said to be due for the period commencing from 1-10-1967 up to 30-9-1971, i. e., technically speaking the suit was for recovery of arrears of municipal taxes from the 3rd quarter of the financial year 1967-68 to the 2nd quarter of 1970-71. The plaintiff respondent No. 1 further prayed for such ancillary reliefs as costs and interest at the rate of 6% per annum.
Both the courts below have decreed the municipality's suit against the appellant and respondents 2 to 5 with costs and interest pendente lite as prayed for.
17. The facts are not in controversy at all. Short and simple as they are, I may set out the relevant facts here. The name of late Gyanendra Nath Roy Choudhary stood mutated in the assessment list with respect to the property in question in the municipal records. The defendants applied for mutation of their names and also deposited the requisite mutation fee as enjoined by Section 108 (2) of the Act read with Sub-section (3) of that section. They claimed mutation of their names by amending the assessment list and substituting their names in place of the deceased owner as the ownership had devolved upon them by virtue of succession.
Accordingly, the amendment was prayed for in terms of Section 107 (1J (b) of the Act. The municipality rejected their claim for mutation as it insisted that the arrears of taxes must be cleared off by defendants (who for all practical purposes are respondents 2 to 5), which had accrued due before the death of the recorded owner who was admittedly also the occupier of the premises in question, during his lifetime. This condition pre-cedent imposed by the municipality to the defendants" names being mutated was, as I shall presently show against the provisions of the Act and such a demand was manifestly illegal. All that was required of the defendants to do under Section 108 (3) of the Act had been done by them. Sub-section (2) of Section 108 lays down that -
"In the event of the death of the person in whom such title vests, the person to whom, as heir or otherwise, the title of the deceased is transferred, by descent or demise, shall, within one year from the death of the deceased, give notice in writing of such transfer to the Chairman."
Sub-section (3) of that section is to this effect --
"Every notice under Sub-section (1) or (2) shall be accompanied by a fee calculated at the rate of one per centum on the annual value of the holding subject to the maximum of five rupees in any one case."
The defendants had acted in accordance with the aforesaid provisions of the Act. The demand by the plaintiff municipality from the defendants to pay off all the arrears of taxes before their names could be mutated in place of their father under Section 107 (1) (b) of the Act was, therefore, clearly unwarranted by any of the provisions of the Act. This has been settled by this Court by a Bench decision of Ramaswami, C. J., and Untwalia, J. (as he then was) in (1962) ILR 41 Pat 338 at p 345 (supra) wherein it has been stated in clear terms that refusal to mutate on the ground of arrears of taxes due on the holding is a refusal on no legal ground since there is not a condition precedent for the names of the successors-in-interest of the last owner being mutated, and in this respect, if the provisions of Section 108 of the Act have been duly complied with, it is the duty of the municipality to mutate their names. There are numerous decisions in support of this proposition. Rut since learned counsel for the municipality respondent has fairly conceded that this demand on the part of the municipality was not warranted by any provision of the Act and was not legal, I do not think it useful to detain myself on this question any longer. The point then is well established that the defendants of the instant suit having duly applied for mutation in accordance with the law, the plaintiff municipality illegally refused to mutate their names or, to say the least, has kept the matter pending. For, it is admitted at all hands that, if the defendants had complied with this demand of the municipality, the municipality could not have raised any objection to their mutation after complying with the legal formalities as envisaged by Section 107 of the Act with regard to notice, etc. any person having any interest in the matter of alteration under Sub-section (2) of Section 107 of the Act.
18. That being so, the name of the father of the defendants continued in the assessment list of the municipality even alter his death as far back an in the par 1936. It is, however, nobody's case that the interest of the owner and occupier of the holding in question did not devolve upon the defendants who were all sons of the deceased by inheritance. It is not even the defendants case nor is that the case of the municipality that there is any other person who is interested in the matter of mutation of the defendants' names and alteration being accordingly made in the assessment list in terms of Section 107 (1) (b) of the Act. The only defence that was raised in the action by the original defendants (respondents 2 to 5) was that since their names did not stand mutated in the assessment list of municipality, they were not liable to pay the arrears of municipal taxes. The only other substantial defence was that the claim for arrears of taxes with regard to the third quarter of the year 1967-68, i. e., from 1-10-67 to 31-12-67 was barred by the provisions of Section 121 (2) of the Act read with Article 113 of the Indian Limitation Act 1963.
The claim of the defendants having been negatived, both the courts below have decreed the suit on the ground that the defendants were admittedly the owners and occupiers of the holding in question and as such they could not escape the liability of payment of taxes which was fastened upon them by the charging section, namely, Section 100 of the Act. The courts below have further negatived the plea of limitation, with regard to the aforementioned period raised by the defendants.
19. These being the foundational facts admitted at all hands, I proceed to examine the provisions of the Act to find out as a matter of first impression as to whether, in principle, if a person is admittedly the owner and occupier of a holding, he can escape the liability of payment of tax only because his name is not duly mutated in the municipal records by the municipal authorities which had been duly noticed about such devolution of interest--in other words, whether the term "the owners of holdings" in a portion of the charging section namely, Sub-section (1) of Section 100 can mean the owners of holding mutated in the assessment list of the municipality. I shall only then proceed to examine the various case law on the subject to find out as to whether there is any divergence of views between the sets of Bench decisions as well as a couple of single Judge decisions with regard to the specific question which has led this case to be placed before this Full Bench, If there is a conflict, it shall then be my duty, sitting in a larger Bench, to endeavour to lay down the correct legal interpretation so that further controversy may not arise. If, however, there is no conflict to resolve, I shall proceed to show that there is no divergence of opinion but merely in the factual context of certain cases some observations had been made which may create some doubt in regard to the correct principle of law to be universally followed in relation to the true meaning and purport of Section 100 of the Act read with Section 3 (18) and other relevant sections thereof.
20. Before I proceed to traverse the legal bone of contention between the teamed counsel for the parties, I must state in all fairness to learned counsel for the appellant that although in the written statement of the defendants a defence had been taken with regard to estoppel or waiver by conduct on the part of the plaintiff municipality, the question of estoppel and/or waiver was not seriously contested in the courts below. On the contrary, Mr. Arun Chandra Mitra, learned counsel for the appellant rightly accepted the legal position before starting to argue this case that there could be no estoppel against statute. If the defendants, namely, the appellant and respondents 2 to 5 were covered by the charging Section of the relevant taxing statutory provision then in the absence of any legal provision in the Act to bar the suit, there can be no question of estoppel or waiver by conduct to be raised against the plaintiff respondent No. 1,
21. This then brings me at once to the relevant provision of the Act for the purpose of determining the correct interpretation of Section 100 of the Act in the context of some other statutory provisions to which I shall presently make a reference hereinbelow.
Admittedly Section 100 of the Act is the charging section which reads thus -
(1) Taxes by whom payable. Any tax which is assessed on the annual value of holdings, other than the latrine tax, shall, subject to the provisions of Sections 133 and 134, be payable by the owners of holdings within the municipality.
(2) The latrine tax shall, subject to the provisions of Section 135 be payable by the person in actual occupation of holdings within the municipality."
Section 100 (1) clearly and unequivocally states that any tax assessed on the annual value of the holdings within the municipality other than latrine tax shall be paid by the owners of the holdings within the municipality subject only to the provisions or Sections 133 and 134 of the Act Sub-section (2) of Section 100, on the other hand, fastens the liability for the payment of the latrine tax on the person in actual occupation of the holdings within the municipality subject only to the provisions of Section 135 of the Act. Shortly speaking all sorts of taxes assessed on annual value of holdings except the latrine tax have to be paid by the 'owners' of the holding whereas the latrine tax is liable to be paid by the occupiers of the holdings in question. Since Sections 133, 134 and 135 have been made subject to the provision of Section 100, I may at once make a reference to those three sections. Section 133 provides that if the sum due from an owner of any holding remains unpaid after the notice of demand has been duly served and such owner is not resident within the municipality or the place of abode of such owner is unknown, the same may be recovered from the occupier for the time being of such holding, who may deduct from the next and following payments of his rent the amount which may be so paid by or recovered from him, subject to certain provisos with which we are not concerned. Similarly, Section 134 of the Act enables the municipalities to recover and makes a provision for recovery by owner from tenant of three-fourth* of the water-tax which is one of the taxes included in the tax assessed on the annual value of holdings. Section 135 provides for levy of latrine tax from owners in certain cases and lays down that if any holding is occupied in severalty by more than one person, the commissioners may levy the latrine tax from the owner of such holding who may recover from each occupier such sum as shall bear to the entire amount of the tax so levied in the same proportion as the value of the part of the holding in the occupation of such person bears to the entire value of such holding. In this case, as I have already noticed earlier, the defendants are also the occupiers of the holding in question. Therefore, if they be held as owners and occupiers within the meaning of the Act, they cannot escape the liability of paying the entire tax assessed on the annual value of the holding including the latrine tax.
As a logical sequence I think it worthwhile to explain the concept of ownership of property since the definition clause, namely, Section 3 (18) of the Act does not give the full connotation of the term 'owner' but merely has laid down an inclusive definition and reads thus -
"3 (18) 'Owner' includes -
(a) every person who is entitled for the time being to receive any rent in respect of the land with regard to which the word is used, whether from the occupier or otherwise;
(b) a manager on behalf of any such person;
(c) any agent for any such person; and
(d) a trustee for any such person;
provided that no such manager, agent or trustee shall be liable to do anything required by this Act, to be done by the owner, nor shall he be subject to any fine for omitting to do such thing, unless he had sufficient funds in his hands as such manager, agent or trustee to do such thing."
We are not concerned with Clauses (b), (c), (d) and the proviso to Sub-section (18) of Section 3. The only relevant portion of the inclusive definition, and not exhaustive, which may be relevant is Clause (a) of Section 3 (18). It may be seen from Clause (a) of Section 3 (18) extracted above that every person who is entitled to receive any rent in respect of any land (namely, a holding within the municipality) (brackets are mine), whether from occupier or otherwise is included in the definition of the term 'owner'. The legal connotation of the term 'ownership' with regard to the interests in property as envisaged by the Transfer of Property Act, 1882, which in English laws is termed as 'rent rights', is a bundle of rights. The bundle is that of various rights and interests which may be vested in different persons, for example, a mortgagor mortgagee, a lessor and a lessee or a tenant for the life and a remainderman. Absolute ownership is an aggregate of component rights such as the right of possession, the right of enjoying the usufruct of land and so on. These subordinate rights, the aggregate of which make up absolute ownership, are called interests in property under the Transfer of Property Act and in English law, real rights [reference in this connection may be made to a Beach decision of the Allahabad High Court in the case of Indar Sea v. Naubat Siugh (1885) ILR 7 All 553 at p. 556) (FB) and Mulla on the Transfer of Property Act, 5th Edition, at page 501. This is the concept of ownership which, under the English common law relating to real property, is generally or ordinarily known as an estate in fee simple.
The tax-payers, therefore, were inevitably the owners in respect of the holding in question since they combined in themselves both the requisites of being the owners and occupiers of the said holding.
22. Much of the difficulty and complications which arise on account of taxing provision in certain Statutes may be obviated if we keep in mind two distinct aspects of any taxing statute. It is well settled by various decisions of the highest Court of our country as also those of England that the liability to tax arises by virtue of the charging section alone. The charging section is not necessarily concerned with the quantification or the procedural aspect for such quantification of the amount payable for which a distinct machinery may be provided and in such cases although the liability to tax arises by virtue of the charging section alone, the quantification of the amount payable, after following the procedure as laid down in the Statute, may be postponed. The liability to tax does not depend upon assessment; that ex hypothesi has already been fixed by the charging section. The assessment order only quantifies the liability which is already distinctly and finally created by the charging sections. Reference in this connection may be made to the decision of House of Lords in Whitney v. Inland Revenue Commrs. (1926 AC 37) and the decision of the Privy Council in Wallace Bros. and Co. Ltd. v. Commr. of Income-tax, (AIR 1948 PC 118). These are decisions of the highest English Courts. To the same effect are the decisions of our own highest Court, to wit, in the cases of Chatturam Horilram Ltd. v. Commr. of Income-tax. [(1955) 2 SCR 290 : AIR 1955 SC 619], Neptune Assurance Co. Ltd. v. Life Insurance Corporation of India (AIR 1963 SC 900), Kesoram Industries and Cotton Mills Ltd. v. Commr. of Wealth Tax. [(1966) 2 SCR 688 : AIR 1966 SC 1370], Setu Parvati Bayi v. Commr. of Wealth Tax [(1968) 69 ITR 864 (SC)] and Ishwar Lal Parekh v. State of Maharashtra, (AIR 1969 SC 40), Units of taxing objects or subjects (namely, the creation of charge and the quantification of the tax liability) are two distinct but supplementary aspects of every taxing Statute. The procedural parts of any taxing Statute have ordinarily and generally no overriding effect on the charging provision. There may, however, be instances where the liability for payment of taxes being still there by virtue of the charging section, the remedy for realisation or recovery thereof is barred. For instance, if there is a period of limitation prescribed for such assessment then, in spite of the charging section, beyond the period of limitation there can be no assessment and no liability can be fastened on the person who would otherwise have been subjected to such tax. Nonetheless, matters like limitation are of no consequence in so far as the question at hand is concerned inasmuch as a period of limitation prescribed under Statute has at times, been recognised as a part of the substantive law itself and not procedural, barring the remedy, not necessarily obliterating the right. Section 100 of the Act, I may repeat, is alone the charging section casting the incidence of taxation on the owner and/or occupier in different proportions. This charging section can, by no stretch of imagination, be made subservient to the provisions of Section 107 of the Act.
23. There is yet another aspect of the matter which may have some important bearing upon the question of law involved. As I have already noticed earlier, Section 100 enjoins that a tax assessed on the annual value of holdings shall be payable "by the owners of holdings". Similarly, if we look to the provisions of Section 121A of the Act, we find that it states that "the tax on holdings due from an owner in respect of any land or building" will be the first charge on the said land or building subject only to the payment of the land revenue due to the Government in relation to such holdings. It would be noticed that the Legislature has used the term "the owners of holdings" in Section 100 and "an owner in respect of any land or building" in Section 121A of the Act. As I have already hinted at at the outset, the question is as to whether the term 'owner' of a holding or any land or building as used in the two aforementioned sections means to suggest, as is contended for by learned counsel for the appellant, an owner whose name stands mutated by amendment or alteration of the assessment list of the municipality under the provisions of Section 107 of the Act? On well settled principles of construction of Statutes the answer must be in the negative. It is a well-known canon of construction of Statutes that unless the literal meaning of a Statute produced an unintelligible result, there is no ground for reading in words or changing words according to what may be supposed to be the intention of the Legislature. On the contrary, where the literal reading of a Statute produces an intelligible result, "no case can be found to authorise any court to alter a word so as to produce a casus omissus" [refer to Lord Halsburys observation in Mersey Docks v. Henderson, (1888) 13 AC 595 at p. 602]. As the Judicial Committee of the Privy Council held in Crawford v. Spencer [(1846) 6 Moo PCC 1 at pp. 8 and 9], "we cannot aid the legislature's defective phrasing of an Act, we cannot add and mend and, by construction, make up deficiencies which are left there". The language of Section 100 supplemented by that of Section 121A of the Act does not lead to any unintelligible result or any absurd inconvenience. The municipal tax is assessed on the holding within the municipality and is payable by the owner thereof. Where is the difficulty in carrying into effect the intention of the Legislature as expressed in dear and unambiguous language? I therefore, cannot persuade myself to hold that the term 'owner' as used in the charging section can be read on any canon of construction of Statutes as meaning 'owner' as entered in the municipal assessment list under Section 107 of the Act.
24. So far I have dealt with the question at hand as a matter of first impression and as if the question were res integra. I now propose to examine as to whether on the basis of the case law it can at all be said that there is any conflict to be resolved in the Bench decision of this court in the case of Patna Municipal Corporation v. Ladley Saran (1963 BLJR 214) (supra) and that in Abrar AH Khan's case (supra). This question was raised before a Bench of this court in the case of Chairman and the Municipal Commissioners of Chakradharpur Municipality, (AIR 1975 Pat 158). In that case before a learned single Judge of this Court it was contended that since the defendant's name stood in the municipal register as the owner, the trial court had erred in dismissing the suit, and reliance was placed on the Bench decision in 1963 BLJR 214 (supra). The learned single judge in that case thought that there was some conflict between the decision in the case of Abrar Ali Khan (1962) ILR 41 Pat 338 and that of Ladley Saran (1963 BLJR 214). When the case was placed before a Division Bench, of which I also happened to be a member, such a contention was negatived and it was held (on a thorough consideration of all aspects of the matter) in Paragraph 4 at AIR 1975 Pat 158 (159) that--
"In my opinion, there is no conflict in the aforesaid two Bench decisions."
It seems that through inadvertence or oversight learned counsel for either party in the instant case could not invite the attention of the learned Judges sitting in the Division Bench, who referred this case to the Full Bench, to the decision in AIR 1975 Pat 158 and probably, if this had been cited before the learned Judges, the matter could not have necessitated a reference to the Full Bench at all.
Testing, therefore, the question posed either as a matter of first impression or on the basis of case law, I hold that irrespective of a person's name being mutated in the municipal records under the provisions of Section 107 of the Act, if he is the owner and/or occupier he cannot escape the liability fastened upon him by the charging section, namely, Section 100 in due proportions.
Vishwanath Mishra, J.
25. Having gone through the judgments of my learned brothers S. K. Jha, J and N. P. Singh, J. I find myself in agreement with the findings and reasonings recorded by both of them.