Kerala High Court
Corporation Of Cochin vs New India Maritime Agencies (P) Ltd. on 4 July, 2003
Equivalent citations: 2003(3)KLT209
Author: K.K. Denesan
Bench: K.K. Denesan
JUDGMENT S. Sankarasubban, J.
1. This appeal is filed against the judgment and decree in Order S. No. 83 of 1990 of the Sub Court, Cochin. The suit was filed for a declaration that the recovery of property tax is illegal, since it is barred by limitation. The Court below held that Section 417 of the Kerala Municipal Corporations Act (hereinafter referred to as 'the Act') applies and so, according to the Court below, the tax for the period from 1.10.1978 to 1.10.1986 is barred. It is challenging the above that the present appeal is filed.
2. The only contention that is urged is that the tax for the property in question is not barred by limitation. While the appellant would argue that there is a charge created under Section 105 of the Act and the period of limitation is under Article 62 of the Limitation Act and hence, the Corporation has got 12 years to recover the amount. On the other hand, learned counsel for the respondent submitted that it is Section 417 of the Act that applies and on the basis of that only 3 years period is available for recovering the tax.
3. We heard learned counsel for the appellant and learned counsel for the respondent.
4. The description of the property tax is given under Section 101 of the Act. Section 105 of the Act says that the property tax is charged on the property subject to the arrears of land revenue. Section 106 of the Act mentions when the tax is payable. According to Section 106 of the Act, the property tax shall be levied every half-year and shall, save as otherwise expressly provided in Schedule II, be paid by the owner of the assessed premises within thirty days after the commencement of the half-year. Section 138 of the Act says that the rules and tables embodied in Schedule II shall be read as part of the Chapter. Schedule n deals with taxation in the Finance Rules. Part I of Schedule II deals with provisions common to taxes in general. Part II deals with assessment of the property tax. Part III deals with assessment for profession tax. Part IV deals with tax on animals, vessels and vehicles. Part V deals with revision of assessment. Part VI deals with collection of taxes. Rules 29(1) and (2) of the Taxation Rules states that where any tax, not being a tax in respect of which a notice has to be served under Section 115 or Section 123 is due from any person the Commissioner shall cause to be served upon or sent to such person a bill for the sum due before proceeding to enforce the provision of Rule 30. The notice shall be signed by the Commissioner and shall contain a statement of the period and a description of the occupation, property or thing for which the tax is charged and other particulars of the demand. Rule 30(1) says that if the amount due on account of any tax is not paid within thirty days from the service of the notice or bill referred to in Section 115 or Section 123 or Rule 29 and if the person from whom the tax is due has not shown cause to the satisfaction of the Commissioner why it should not be paid, the Commissioner may recover by distraint under his warrant and sale of the movable property of the defaulter or if the defaulter is the occupier of any building or land. Rule 30(2) says that if for any reason the distraint, or a sufficient, distraint of the defaulters property is impracticable the Commissioner may prosecute the defaulter before a Magistrate. Rule 30(3) says that nothing herein contained shall preclude the Corporation from suing in a civil court for the recovery of any tax duty or other amount due to it under this Act. Thus, a reading of Rule 30 shows that the right to recover tax arises only if the tax is not paid within 30 days from the service of bill.
5. The question now arises is what is the period of limitation for recovery of the amount that will come under Rule 30 of the Rules. No limitation is prescribed under that Rules. The limitation is prescribed under Section 417 of the Act. Section 417 of the Act states as follows: "No distraint shall be made, no suit shall be instituted and no prosecution shall be commenced in respect of any sum due to the Corporation under this Act after the expiration of a period of three years from the date on which distraint might first have been made, a suit might first have been instituted or prosecution might first have been commenced, as the case may be, in respect of such sum". Learned counsel for the appellant brought to our notice a decision reported in Jose Antony v. Corporation of Cochin (1995 (1) KLT 304). There, a learned single Judge of this Court held as follows:
"Property tax having been made a charge on the property and since there is specific provision with regard to the demand and payment of the same, it cannot be equated with any other claim of money. The method of assessment and recovery of property tax is dealt with separately from the subject matter dealing with recovery of any other sum mentioned under the heading "Payment of Compensation etc. by and to the Corporation" in Chap.XVI of Part VI of the Act containing Section 417. Section 105 of the Act would therefore lose its significance if demand of property tax is treated on par with any other claim of money simpliciter. On a harmonious construction of both the sections the conclusion is irresistible that Section 105 is intended to be taken out of the purview of Section 417 of the Act. Section 417 of the Act therefore contemplates recovery of money which is other than property tax. Article 62 of the Limitation Act, 1963 lays down that the period of limitation is twelve years to enforce payment of money secured by a mortgage or otherwise charged upon immovable property and the time from which period begins to run is when the money sued for becomes due. Since property tax is charged on the property to which it relates, the period of limitation for recovery of the same is 12 years.....".
In Lakshmi Chand v. Municipal Corporation of Delhi (AIR 1988 Delhi 220), it was held that so far as the Delhi Municipal Corporations Act is concerned, Article 62 applies for the recovery of house tax and hence, 12 years period is available. But it is not known whether the provisions similar to Section 417 of the Act is there in the Delhi Municipal Corporation Act.
6. After going through the various provisions of Act, we are not able to agree with the above decision. Section 105 of the Act merely says that the property tax is a charge on a property. It does not prescribe the period of limitation. If there was no other provision prescribing the limitation, we would have followed the limitation under the Limitation Act. But Section 29(2) of the Limitation Act says that if there is separate law prescribing limitation, then that law should be followed. Question for consideration is whether Section 417 of the Act applies to recover the property tax. In this context, we wish to state that Part III, wherein Section 105 appears, does not deal with recovery of tax. Enumeration of tax contains property tax, profession tax, tax on animals, vessels and vehicles, show tax, tax on timber brought into the city, tax on advertisement and duty on certain transfers of property in the shape of an additional stamp duty. Section 138 says that the rules and tables embodied in Schedule II shall be read as part of that chapter. Part VI deals with collection of tax. The Rules regarding collection of tax are common to all kinds of taxes.
7. Now let us turn to Section 417 of the Act. It says that no distraint shall be made, no suit shall be instituted and no prosecution shall be commenced in respect of any sum due to the Corporation under this Act after the expiration of a period of three years from the date on which distraint might first have been made, a suit might first have been instituted or prosecution might first have been commenced, as the case may be, in respect of such sum. There is no quarrel that with regard to profession tax and other taxes it will definitely come under Section 417 of the Act. Can we say that Section 105 of the Act is out of the purview of Section 417? We are of the view that that it is not out of the purview of Section 417. While Section 105 of the Act only says that a charge is created, Section 417 of the Act prescribes the period of limitation for recovery of tax. Thus, according to us, the time for recovery of property tax is only three years. In this context, we also refer to a decision of a learned single Judge of this Court in Thankamma v. The Corporation of Trivandrum (1990 (2) ILR Kerala 315) wherein Radhakrishna Menon, J. held that time for recovery of property tax is three years.
In the above view of the matter, we agree with the lower court and dismiss the appeal.