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PETITIONER: SHIBJI KHESTSHI THACKER

       Vs.

RESPONDENT: COMMISSIONERS OF DHANBAD MUNICIPALITY AND ORS.

DATE OF JUDGMENT28/02/1978

BENCH: SARKARIA, RANJIT SINGH BENCH: SARKARIA, RANJIT SINGH UNTWALIA, N.L. SINGH, JASWANT

CITATION:  1978 AIR  836            1978 SCR  (3) 404  1978 SCC  (2) 167

ACT: Bihar   and   Orissa  Municipality  Act,   1922,   S.   106, construction  of,  whether  mandatory  or  directory-Holding excluded  from quinquennial revision at assessment,  whether previous valuation and assessment lapses.

HEADNOTE: The Commissioner of Dhanbad Municipality, instituted a  suit against  the  appellant  and respondents 2  to  5,  for  the recovery  of  holding  tax and latrine tax,  as  arrears  of Municipal  Taxes for the first quarter of 1950-1951  to  the third quarter of 1953-54, in respect of a ’holding’ owned by them.  The Trial Court dismissed, the suit inter alia on the ground that during a general revision of assessments u/s 106 of  the Bihar and Orissa Municipality Act, in  1950-51,  the Dhanbad  Municipality  had  failed to  revise  the  original assessment  of  the  defendants  holding  and  had   thereby committed  a breach of the mandatory provisions of  S.  106. The old assessment on the basis of which the demand had been raised, had lapsed and there being no revised assessment  of the  holding, the Municipality was not entitled  to  realise any tax from the defendants with effect from April 1,  1950. The  High  Court allowed an appeal by the  Commissioners  of Dhanbad  Municipality,  but  granted  a  certificate  u/Art. 133(1)(b)(c) of the Constitution. Dismissing the appeal the Court, HELD  :  1.  The language of S. 106 is  flexible  enough  to enable the Commissioners to leave out for some good  reason, any   holding  from  the  revision  of  the  valuation   and assessment  lists.   The word "ordinarily", tones  down  the force   of  "shall"  which  immediately  precedes  it,   and indicates  that the requirements with regard to revision  of the  assessment in every five years and to include  all  the holdings,  are not absolute but only directory, and  can  be departed from in extraordinary circumstances, or in the case of particular holdings for good reasons. [409 C-D] 2.  In  the  case of a holding which is  excluded  from  the quinquennial revision of assessments, the old valuation  and assessment  list  do not lapse, but continue  to  remain  in force  till they are altered or amended in  accordance  with the  procedure laid down in the Act, and when a new list  is

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completed,  then  till the 1st day of April  following  such completion is reached. [409 F-G]

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  1230  of 1968. (From the Judgment and Decree dt. 19-2-65 of the Patna  High Court in First Appeal No. 514 of 1958). Niren De and Sukumar Ghose for the Appellant. Bishan Narain & S. K. Sinha for the Respondent. The Judgment of the Court was delivered by SARKARIA,  J.  This  appeal,  on  certificate,  is  directed against  a judgment and decree, dated February 19, 1965,  of the High Court of Patna.  It arises out of these facts. 405 At  all material times, holding No. 594, Ward No. 3  in  the area  of the urban Municipality, Dhanbad, was owned  by  the appellant  and respondents /2, 3, 4 & 5. On this holding,  a Cinema House known as "Ray Talkie" was constructed in March, 1948. On March 31, 1948, the Commissioners of Dhanbad Municipality served a notice on the appellant and the respondents 2 to 5, under Section 1. 15(2) of the Bihar and Orissa  Municipality Act,  1922 (hereinafter referred to as the Act) demanding  a sum of Rs. 900/- as quarterly Municipal Tax. The appellant and respondents 2 to 5, applied for review  of the  assessment.   Thereupon, the Review  Committee  reduced the, Municipal Tax to Rs. 8 10/- per quarter, i.e. Rs. 488/- as holding tax and Rs. 465/as latrine tax. Aggrieved, the assessees instituted a Title Suit No.  17/144 of 1949 in the Court of Munsif, Dhanbad, inter alia, praying for  a declaration that the assessment was ultra  vires  and illegal  inasmuch as it was not made under Section 9 8  (2), but  under  Section  9 8 (1 ) of the  said  Act  The  Munsif dismissed  the Suit and the) dismissal was upheld in  appeal by the District Judge, Purulia, under a judgment, dated June 17,  1952.   A  further  appeal to the  High  Court  by  the assessees was dismissed on December 4, 1957. Default having been committed by the assessees in paying the tax,  a demand notice, dated March 6, 1951, was served  upon them  requiring them to pay all arrear taxes then  due,  but they  put  off  payment  on  one  objection  or  the  other. Subsequently,  by  their letter dated March 3,  195  1,  the assessees   raised,an  objection  on  the  ground  that   no assessment  was made in respect of the holding in  question. This  letter-  was  considered by  the  Commissioners  at  a meeting  held  on November 19, 195 1.  Through  the  Finance Committee,  the assessment of holding tax was  confirmed  in the  said  meeting.  Intimation  of  this  confirmation  was given  to  the  assessees by a letter,  dated  December  18, 1.951. Thereafter,  demand  notices were issued to  the  assessees, calling upon them to pay the tax in arrears, but they failed to do so. On  the  preceding  facts,  the  Commissioners  of   Dhanbad Municipality,  instituted Suit No. 203 of 1953 in the  Court of  Subordinate  Judge Dhanbad, against  the  appellant  and respondents  2  to 5, for recovery of Rs. 12,655/-  for  the first quarter 1950-51 to third quarter 1953-54 in respect of the  holding  tax and latrine tax, as arrears  of  Municipal Taxes,  in respect of holding No. 616, Ward No.  3,  Dhanbad Municipality. The defendants-assessees in their written statements,  inter

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alia,  pleaded  that the Municipality was  not  entitled  to recover  the  tax demanded, because the  original  assesment made  on  the annual value of the holding in  question,  was illegal inasmuch as the assessment should have been made  on persons and not the annual value of the holding.  The  other objection raised was that although a general provision under Section   106  of  the  Act  had  been  undertaken  by   the Municipality in 406 1950-51, the assessment of the holding of the defendants had not been revised with a mala fide and improper motive.   The defendants  did not get the advantage of a fresh  assessment and  as the old assessment and valuation lapsed on April  1, 1950,  no  tax could be realised from them on the  basis  of this  lapsed  assessment.   They further  pleaded  that  the alleged  confirmation  of the assessment of the  holding  on November  19,  1951 by the Commissioners,  was  illegal  and without  jurisdiction because no prior intimation about  the alleged  confirmation  was  given to them  before  issue  of letter No. 1624/VII-2, dated December 18, 1951. The  Trial  Court  by  its  judgment  dated  May  24,  1958, dismissed  the Suit, inter alia, holding, that the  failure, of the Municipality to revise the original assessment on the defendants   holding   during  the   general   revision   of assessments  in  1950-51,  was a  breach  of  the  mandatory provisions of Section 106 of the Act.  As a result, the  old assessment on the basis of which the demand had been  raised bad  lapsed  and there being no revised  assessment  of  the holding  in question, the Municipality was not  entitled  to realise  any tax from the defendants with effect from  April 1, 1950. Against   that  judgment,  the  Commissioners   of   Dbanbad Municipality preferred an appeal to the High Court at Patna, which allowed the appeal, holding-               (i)  that  the  defendants  had  been  rightly               assessed  on the annual value of  the  holding               and  therefore the defendants liability  under               Section  100  in  that respect  could  not  be               disputed;               (ii) that the defendants had not been left out               from  the genera., assessment of 1950-51  with               any mala fide or incorrect motive;               (iii)  that from a proper construction of  the               relevant  provisions of the Act,  particularly               the)  word  "list" used in  singular  in  sub-               section (2) of Section 105, and the expression               ’completion  of a new list" in subsection  (2)               of Section 1.06, the intention was clear  that               if   the   valuation  and  assessment   of   a               particular holding is not revised for any good               reason,  then  the assessment entered  in  the               previous  valuation  and  assessment  list  in               respect of that holding will remain in  force.               It  is only when a now list of  valuation  and               assessment in respect of a particular holding,               is complete, the assessment of that list  will               substitute  the previous assessment  based  on               the previous list.  Since the defendants hold-               ing was left out from the general revision  of               1950-51  for a valid reason, the  suit  demand               based  on the previous lists of valuation  and               assessment  in respect of suit holding,  could               not lapse on April 1, 1950. On  the  application  of  the,  assessees,  the  High  Court ;,ranted a certificate under Article 133 (1) (b) and (c) of

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the Constitution.  Hence, this appeal. Mr Niren De, learned counsel for the appellant has canvassed before  us  two posts First, under the scheme of the  Act  a general revision of 407 assessment  must take place quinquennially and such  general revision   must   cover   all  the   holdings   within   the Municipality.  If a particular holding is left out from  the revised  general assessment, then, on the coming into  force of  the  revised general assessment, the old  assessment  in respect of that holding also lapses.  Since the  appellants’ holding  was  excluded  from  the  five-yearly  revision  of assessment,  the Municipality cannot legally recover tax  in respect  of it on the basis of the old assessment which  had lapsed on April 1, 1950.  Second in any case, enhancement of the  rate of tax by the Municipality on the holding  of  the appellant,  can-not be supported because in doing  so,  they have not followed the procedure prescribed by the Act;  that they  have  not  issued  any  proper  notice  or  given  any opportunity  of being heard with regard to the  enhancement, to  the  appellant,  nor was any  new  assessment  list,  as required by Section 106, prepared. Before dealing with these contentions, it will be proper  to have a short look at the relevant provisions of the Act. Section  101 provides that "when it has been  determined  to impose  any  tax  to, be assessed on  the  annual  value  of holdings, the Commissioners, after making such inquiries  as may  be necessary, shall determine the annual value  of  all holdings within the municipality as hereinafter provided and shall enter such value in a valuation list". Section  102  speaks  of the  procedure  for  preparing  the valuation   list.   It,  inter  alia,  provides   that   the Commissioners may by notice, require the owners or occupiers of all holdings to furnish them with returns  of the rent or annual value thereof. Section  103 provides for penalty for default in  furnishing return. Section  104 deals with the determination of rate of tax  on holdings.  The material part of the Section reads as follows               "Subject to the provisions of clause (iii)  of               the  proviso. to sub-section ( 1 ) of  section               82 and to the provisions of sections 84 to  88               inclusive, the Commissioners, at a meeting  to               be  held  before the close of  the  year  next               preceding  the year to which any tax which  is               assessed on the annual value of holdings  will               apply,  shall determine the percentage on  the               valuation  of holdings at which the tax  shall               be  levied, and the percentage so fixed  shall               remain in force until the order of the Commis-               sioners  determining such percentage shall  be               rescinded,  and until the Commissioners  at  a               meeting shall determine some other percentage,               on the valuation of holdings at which the  tax               will be levied from the beginning of the  next               year :               Provided.........     further     that     the               Commissioners  shall not without the  previous               sanction of the State Govt., decrease the rate               of any tax levied by them." Section 105 provides for preparation of assessment list.  It lays down that "as soon as possible after the percentage  to which the tax is 408 to be levied for the next year has been determined under the

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last  preceding section the Commissioners shall cause to  be prepared   an  assessment  list",   containing   particulars enumerated in clauses (a) to (h) of that Section. It is Section 106, the construction of which is in  question in the instant case.  It runs as under               "Revision   and  duration  of  list.-(1)   New               valuation    and   assessment   lists    shall               ordinarily be prepared, in the same manner  as               the original lists, once in every five years.               (2)Subject to any alteration or amendment made               under  section 107 and to the result of  ,’any               application under Section 116, every valuation               and  assessment  entered  in  a  valuation  or               assessment  list shall be valid from the  date               on   which  the  list  takes  effect  in   the               municipality  and until the first day  of  the               April  next following the completion of a  new               list." Section  107 gives powers to the Commissioners to  alter  or amend  ’the assessment list from time to time in any of  the ways  enumerated in clauses (a) to (g) of  sub-section  (1). Two of such ways, as provided in clauses (c) and (e), are as under :-               "(c)   By  enhancing  the  valuation  of,   or               assessment  on,  any holding, which  has  been               incorrectly  valued or assessed by  reason  of               fraud, misrepresentation or mistake."               "(e) Where the percentage on the annual  value               at  which  any tax is to be  levied  has  been               altered   by  the  Commissioners under   the               provision   of  section  104,  by   making               a  corresponding alteration in the  amount  of               tax payable in each case."’ Then, sub-section (2) of this Section makes it obligatory on the Commissioners to give at least one month’s notice to any person  interested, of any alteration which they propose  to make  under  clause.  (a), (b), (c), (d) or  (dd),  of  sub- section (1), and of the date on which the alteration will be made.   It is to be noted that clause (e), extracted  above, has. not been referred to in sub-section (2). Section  115 speaks of publication of notice of  assessment. It says that when the assessment list mentioned ’in’ section 89 or section 105 has been prepared or revised, the Chairman shall  sign the same, and shall give public notice, by  beat of  drum  and by placards. posted up in  conspicuous  places through  the municipality, of the place where the said  list may be inspected.  Sub-section (2) further requires that  in all  cases  in  which any property is  for  the  first  time assessed  or  the assessment is increased, notice  shall  be given  thereof to the owner or occupier of the property,  if known. Having  perused the various relevant provisions referred  to by Mr. Niren De, we are of opinion that under the scheme  of the  Act,  the  old assessment does not come to  an  end  in respect of a holding 409 the moment new valuation and assessment lists are ordered to be prepared by the Commissioners of the Municipality; nor is there  anything to show that if a holding is left  out  from the general revisional assessment for any good reason, then, in respect thereof, the old assessment comes to an end after five  years  ending  on  the first day  of  the  April  next following the completion of a new revised list. Mr. Niren De placed emphasis on the word "all",  immediately preceding the word "holdings" in the latter part of  Section

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102, and submitted that it indicates that no holding can  be left out from the preparation of valuation list. It  is nobody’s case that the appellants’ holding  was  left out  from  the  old  assessment.   So  far  as  the  revised assessment is concerned.  Section 102 has to be read not  in isolation but in conjunction with Section 106.  The language of   Section   106  is  flexible  enough   to   enable   the Commissioners to leave out for some good reason, any holding from  the  revision of the valuation and  assessment  lists. The Word "ordinarily", tones down the force of "shall’ which immediately precedes it, and indicates that the requirements with  regard  to revision of the assessment  in  every  five years and to include all the holdings, are not absolute  but only  directory  and can be departed from  in  extraordinary circumstances,  or  in the case of particular  holdings  for good  reasons.   This being the correct import of  the  word "ordinarily",  it  follows therefrom that in the case  of  a holding which is excluded from the quinquennial revision  of assessment.  the old valuation and assessment lists  do  not lapse but continue to remain in force till they are  altered or amended in accordance with the procedure laid down in the Act.   This position of the law is clear from a  reading  of the  last  clause of sub-section (2) of Section  106,  which provides  that every valuation and assessment entered  in  a valuation or assessment list shall be valid from the date on which  the list takes effect in the municipality  and  until the first day of the April following the completion of a new list.  The key word repeatedly occurring in the  sub-section is  "list"  which  appears to have been  advisedly  used  in singular,  in  contradistinction  to  "lists’  employed   in plural, in sub-section (2) such distinctive use of the  word "list"  in these sub-sections, puts it beyond doubt that  in respect of a holding which, for some reason, is not included in the five-yearly revision, the old valuation or assessment list  continues till a new Est is completed and the 1st  day of April following such completion is reached. In  this  view of the matter, the High Court  was  right  in holding  that  the  demand based on  the  previous  list  of valuation and assessment of the suit holding, did not  lapse on  the  first  of April 1950 for the  mere  reason  that  a general  revision of valuation and assessment lists  in  the Municipality was undertaken and the appellant’s holding  was not subjected to that revision. 410 The first contention of Mr. De is accordingly rejected.- In  regard to the second contention of Mr. De, we find  that this  plea  was  not taken at any stage  before  the  Courts below.   It was not even faintly adumbrated in  the  written statement filed by the defendant-appellant in the Suit.   No issue  was framed on this point, nor was any  such  argument advanced  before the High Court.  It is a mixed question  of law  and  fact.  It cannot be allowed to be raised  at  this stage, for the first time, in special appeal, as the  plain- tiff-respondent had no opportunity to lead evidence to  show that  the  requirements of the law had  been  complied  with before increasing the assessment.  We are told that  similar suits  have  been  filed by  the  Municipality  against  the appellant  for  recovery  of tax  pertaining  to  subsequent periods.   If  that be so, the appellant is  at  liberty  to raise  this  objection in these Suits in  a  proper  manner. But, in this case, for reasons already stated, we refuse  to entertain this plea raised for the first time in this Court. No other point has been pressed into arguments on behalf of the  appellant.  The appeal fails and is dismissed  with  no order as to costs.

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M. R.                        Appeal dismissed. 411