Bombay High Court
Gandhi Agencies And Etc. vs Municipal Council, Barshi And Another on 10 February, 1995
Equivalent citations: AIR1995BOM169, 1995(2)MHLJ76, AIR 1995 BOMBAY 169, 1995 (2) BOM CJ 432, 1995 BOMCJ 2 432, (1995) 2 MAH LJ 76
JUDGMENT
1. After hearing both the Counsel, both the second appeals are admitted. The question of law to be decided in these two appeals is formulated as follows:--
"Whether the Civil Court has jurisdiction to try these two suits?"
By consent of both the Counsel, both the appeals were taken up for final hearing. I have heard both the counsel appearing for both the parties.
2. The appellant in Second Appeal No. 525 of 1994 filed a suit against the respondents in Regular Civil Suit No. 661 of 1988 on the file of the learned Civil Judge, Junior Division, Barshi for a permanent injunction to restrain the defendants from recovering the tax from the plaintiff.
A similar suit was filed by the appellant in Second Appeal No. 527 of 1994 against the same respondents in the same Court in Regular Civil Suit No. 228 of 1990.
After trial, the trial court dismissed the suits as not maintainable.
The appellants-plaintiffs filed two appeals in Civil Appeals Nos. 142 and 143 of 1992 in the Court of the District Judge, Solapur. The learned District Judge has dismissed both the appeals on the ground that the suits arc not maintainable in the Civil Court.
Being aggrieved by that judgment, the plaintiffs in the two suits have come up with these two appeals.
3. The learned counsel for the appellants contended that having regard to the frame of the suits, the Civil Court has jurisdiction and the suits were perfectly maintainable. On the other hand, the learned counsel for the respondents has supported the impugned judgment. The point of law to be decided has already been formulated as mentioned above.
4. Few facts which are relevant for the disposal of these two appeals are thus:--
In one suit, the plaintiff is running a medical shop and in other suit, the plaintiff is running a shop in selling electrical goods. In both these cases it is alleged that the plaintiffs get discount on the purchases made by them from the wholesale dealers and the cash discount is mentioned in the invoices. The plaintiffs are liable to pay octroi tax on the actual amount paid by them to the wholesale dealer, which means the value of the goods less the discount mentioned in the invoice. Since the defendant Municipal Council is claiming octroi by disregarding the discount shown in the invoice, the two suits came to be filed praying for a permanent injunction to restrain the defendants from claiming octroi on the discounted amount.
The Municipal Council, which is the first defendant in both the suits, filed a defence asserting that the claim made by it for octroi on the value of the goods mentioned in the invoice ignoring the discount is perfectly justified. It was further pleaded that the Civil Court has no jurisdiction to decide this question. It is stated that the plaintiffs' remedy is to file an appeal under the provisions of the Municipalities Act.
5. It is not disputed that the Municipality can claim any tax by presenting a bill under Section 150 of the Maharashtra Municipalities Act, 1965 (hereinafter referred to as "the Act").
A person who is aggrieved by presentation of such a bill by a municipality is given a remedy of filing an appeal before a Judicial Magistrate under Section 169 of the Act.
Then Section 171 of the Act provides that order passed on such an appeal by a Magistrate is subject to revisional jurisdiction of the Sessions Court.
Then what is more, Section 172 of the Act provides as under:--
"172. No objection shall be taken to any valuation, assessment or levy nor shall Bar of the liability of any person to be assessed or taxed be questioned, in any other manner or by any other authority than is provided in this Act."
The controversy between the parties is centered upon Section 172 of the Act.
6. A bare reading of Section 172 shows that no objection can be taken to any tax in any form except in the manner provided under the Act.
We find that a Municipality has to present a bill and the tax-payer is given a right to challenge the bill before a Magistrate and then there is a further remedy to challenge the order of the Magistrate before the revisional Court. In other words, the statute has made provision for questioning the validity of the assessment by providing an appeal and also a revision. Though under Section 9 of the Code of Civil Procedure, a Civil Court has jurisdiction on all civil disputes, the jurisdiction of the Civil Court can be barred by express words or by necessary implication. It is well settled that a Civil Court's jurisdiction must be deemed to have been barred if a taxing statute provides a separate machinery or a separate forum to challenge the liability of tax.
7. In this connection, we may make useful reference to two decisions which were relied on by the learned counsel for the Municipality.
In 1989 Mah I.J. 26, Chief Officer, Sangamner Municipal Council v. Narayandas Jagannath Karva, a similar and identical question arose about a person challenging the levy of tax on the property by filing a civil suit and then asking for the relief of injunction. A learned single Judge of this Court held that such a suit is not maintainable in view of the specific bar in Section 172 of the Act.
Then we have a decision of the Apex Court Bata Shoe Co. v. Jabalpur Municipality, which arose from Madhya Pradesh. In that case also question was of interpretation of S. 84(3) of C.P. and Berar Municipalities Act which is almost on pari materia with S. 172 of the Act. In that case also plaintiff viz. Bata Shoe Co. had challenged the levy of octroi duly by opening the earlier assessment. The Supreme Court reviewed the case law on the point and held that Civil Court has no jurisdiction to entertain such a suit in view of Section 84(3) of C.P. and Berar Municipalities Act. For our purpose, the following observations of the Supreme Court as summarised in the head note are relevant and they read as follows:--
"Both the Act and the Rules contain provisions enabling the aggrieved party effectively to challenge an illegal assessment or levy of double duty. By reason of the existence and availability of those special remedies, the ordinary remedy by way of a suit would be excluded on a true interpretation of Sec-tion 84(3) of the Act, more so, when the plaintiffs in fact availed themselves of those remedies.
The argument that double duty was levied on the plaintiffs though not justified by the terms of Rule 14(b) goes to the correctness of the levy, not to the jurisdiction of the assessing authority. The error could be corrected only in the manner provided in the Act and by the authority prescribed therein. The remedy by way of a suit is thus barred."
It is, therefore, seen that the Apex Court has ruled that if a special statute provides for a special remedy and also provides an alternative forum to challenge the correctness of levy of tax, the jurisdiction of the Civil Court is impliedly barred.
8. Now in the present case the dispute is whether the value of the goods as mentioned in the invoice should be taken into account or only discounted value of the goods should be taken, into consideration for the purpose of levy of octroi duty. It is a question of interpreting the invoice. It may be that a retail dealer gets the discount on many considerations. But the Municipality is concerned only with the value of the goods, in other words, the market value of the goods. Therefore, it wants to levy the octroi duty only on the value of the goods as shown in the invoice by ignoring the discount value. If the action of the Municipality in demanding higher octroi duty is incorrect or erroneous, the plaintiffs can challenge the same by filing an appeal before the Magistrate under Section 169 of the Act and then they can go in revision before a Sessions Judge under Section 171 of the Act. We are also aware of such orders passed by the Sessions Judge being subsequently challenged by filing a writ petition under Article 226 or under Article 227 of the Constitution. In my view, the appellate Court rightly held that the suits are not maintainable.
9. The learned counsel for the appellants tried to make a distinction and contended that the suits are filed for injunction and the learned Magistrate has no powers to grant injunction, and therefore, the suits for injunction filed in the Civil Court are maintainable. The argument is no doubt attractive, but on a deeper scrutiny I am unable to "accept the same. A plaintiff can cleverly frame the suit in such a way so as to defeat the object of a special statute. The very object of special machinery or special forum in a taxing statute is to have summary and quick disposal of the matters so that the Government or local body can collect taxes according to law without being forced to file suits against lax-payers. Though the prayer in the two suits is one for injunction, it is based on the allegation that the defendant Municipality is not entitled to collect tax on the discounted value. Therefore, before granting the relief of injunction the Court will have to decide whether the entire value of the goods should be taken into consideration or only the discounted value should be taken into consideration. This matter cannot be agitated before a Civil Court since a special remedy is provided under the Act. A perusal of the plaint shows that the grievance of the appellants is one of liability to pay octroi on a particular value. By merely asking for injunction, plaintiffs cannot get over the bar under Section 172 of the Act.
10. As rightly argued by the learned counsel for the respondents if once the plaintiffs get such an order by competent forum under the Act that only discounted value is liable for octroi and again in future if the Municipality demands octroi on the entire value of the goods ignoring the discounted value, the plaintiffs may file a suit in a Civil Court asking for injunction that in view of the earlier decision of the competent authority the Municipality should be restrained from demanding tax by ignoring the discounted value. But there is no such earlier finding in favour of the appellants by the competent authority under the Act. In order to grant the present prayer for injunction, the Court will have to undoubtedly decide the question whether the discount given in the invoice is liable for octroi duty or not and this cannot be done by a Civil Court and this power can be exercised only by the forum set out in the Act. Hence in my view, the findings of the appellate Court in both these cases that the Civil Court has no jurisdiction and the suits are not maintainable, is perfectly justified and does not call for interference by this Court.
11. Alternatively, the learned counsel for the appellants submitted that if the Court comes to the conclusion that a Civil Court has no jurisdiction, then the appellants may be given liberty to file appeals before the competent authority under the Act. The learned counsel for the respondents seriously opposed this on the ground that plaintiffs have been litigating these two suits since seven years and in spite of the specific defence iaken by the defendants, they have not chosen to file appeals under the Act and their right of appeal is now barred by limitation, and therefore, their request for reserving liberty to approach the competent authority under the Act should not be granted. In my view, the learned counsel for the respondents is right in contending that this Court cannot extend any time in favour of the appellants to now file appeals under the Act. The appellants are not taken by surprise. In the first instance, in the written statement, the defendant Municipality has taken a stand that the suits are not maintainable and the plaintiffs' remedy is to file an appeal under the Act. In spite of this, the plaintiffs have been carrying on this litigation for last seven years. Therefore, this Court cannot grant any liberty to the appellants now to file appeals under the Act. Of course, the appellants themselves may approach the competent authority under the Act with appeals and it is for the competent authority to decide whether appeals are barred by limitation or not and then dispose of the same according to law. No liberty need be given by this Court. If the appellants have any such right to approach the competent authority under the Act, they can do sd according to law.
12. In the result, both the appeals are hereby dismissed, with costs.
13. Appeals dismissed.