Saturday 27 August 2022

Whether the civil court has jurisdiction to entertain a challenge to property tax imposed on charitable trust?

This contention of the respondent/Public Trust can be certainly raised in an appeal under Section 406 of the said Act. The exemption claimed by it, is under Section 132(1)(b) of the said Act, which is a ground that can be agitated in the appeal. It is not as if the respondent/Public Trust is prohibited from raising such a ground in the appeal or that the "Judge" does not have the authority to deal with such a ground of challenge while exercising appellate power under Section 406 of the said Act. The said contention of the respondent/Public Trust is covered under the expression "appeals against rateable value or the capital value as the case may be or tax fixed or charged under this Act" used in Section 406 of the said Act. {Para 15}


16. A perusal of the other relevant provisions of the said Act show that under Section 410 thereof, if on hearing of an appeal a question of law or construction of a document arises, the Judge may draw a statement of the facts of the case and refer such questions with his own opinion on the point for a decision of the District Court. Under Section 411 of the said Act, an appeal shall lie to the District Court from any decision of the Judge in an appeal under Section 406 thereof, by which a rateable value or capital value as the case may be is fixed or upon a question of law or usage or the construction of a document. The question whether tax is to be fixed at the rate at which the Municipal Corporation claims or it has to be nil as claimed by the respondent based on Section 132(1)(b) of the Act, can also be a subject matter of such appeal under Section 411 of the Act. Further Section 413 of the said Act provides that the decision of the District Court in an appeal under Section 411 of the Act shall be final.


17. Thus, the provisions of the aforesaid Act provide a scheme wherein the grievance of the respondent/Public Trust can be fully taken care of and, therefore, the jurisdiction of the Civil Court is impliedly ousted. Applying the propositions culled out by the Constitution Bench judgment of the Hon'ble Supreme Court in the case of Dhulabhai (supra), it becomes evident that the aforesaid Act, with which we are concerned in the present case, is covered under proposition Nos. 2 and 6. In the present case, there is no question of a challenge to the vires of any provision of the aforesaid Act and the claim of the respondent/Public Trust that the notice and bills issued by the appellant/Municipal Corporation are illegal because the respondent is entitled for exemption from payment of property tax, is a question that can very well be decided in the mechanism provided as per the aforesaid provisions of the said Act.


18. In this context, the contents of the plaint of the respondent/Public Trust need to be appreciated. The entire grievance of the respondent is that it is undertaking educational activities in the building in question and that, therefore, under Section 132(1)(b) of the said Act, it is exempt from levy of tax. It is also claimed that tax is being claimed retrospectively by the appellant/Municipal Corporation, which cannot be done. In my opinion, all these are facets of "tax fixed or charged" or the rateable value applied by the appellant/Municipal Corporation, while raising bills against the respondent/Public Trust. If the contents of the plaint are appreciated in the proper perspective, it becomes evident that there is force in the contention raised on behalf of the appellant/Municipal Corporation that the respondent/Public Trust has filed the civil suit, instead of appeal under Section 406 of the said Act, only to avoid the mandatory deposit of disputed tax claimed by the appellant/Municipal Corporation, under Section 406(2)(e) of the Act, before the appeal can be heard or decided by the Judge. Although, this aspect may not be relevant to decide as to whether the jurisdiction of the Civil Court is ousted, it does demonstrate that in such cases, by clever drafting assessees may claim that civil suit is maintainable by contending that the very levy of the tax by the Municipal Corporation is "illegal" and that there is no remedy other than filing of suit before the Civil Court. It is for the assessees like the respondent/Public Trust to demonstrate as to why the grievance sought to be raised by them cannot be addressed under the scheme manifested by the above quoted provisions of the said Act.


19. In the present case, the learned Counsel for the respondent/Public Trust has heavily relied upon the judgment of this Court in the case of Balkrishna Vora v. Poona Municipal Corporation (cited supra). In the aforesaid case, the Court was concerned with the question that the tax levied or sought to be recovered was ultra vires the powers of the Corporation. In such a situation, it was held by this Court that the machinery provided under the aforesaid Act would not be sufficient for the assessee to air his grievance and thereupon, the Court held that the jurisdiction of the Civil Court could not be said to have been ousted and that the suit was maintainable. But, in the instant case, the nature of the grievance of the respondent/Public Trust is not such that it cannot be redressed under the machinery of the aforesaid Act. Therefore, the reliance placed on the said judgment of this Court is misplaced.

 IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Appeal Against Order (AO) No. 34 of 2017

Decided On: 14.02.2018

Akola Municipal Corporation Vs. Shri Akola Gujrati Samaj

Hon'ble Judges/Coram:

Manish Pitale, J.

Citation:  MANU/MH/0239/2018

1. Heard. Admit. Heard finally with the consent of the learned Counsel appearing on behalf of the respective parties.


2. The question that arises for consideration in this appeal is, whether the suit filed by the respondent seeking declaration and permanent injunction against the appellant/Municipal Corporation, in respect of dues towards Municipal tax, was maintainable. The appellant/Municipal Corporation has relied upon provisions of the Maharashtra Municipal Corporations Act, 1949 (hereinafter referred as the said Act), particularly Section 406 thereof, to claim that the jurisdiction of the Civil Court is impliedly ousted and that, therefore, the Civil Court in the present case did not have jurisdiction to entertain the suit filed by the respondent.


3. The relevant facts, in brief, giving rise to the present appeal, are that on 01.09.2014, the respondent, a Public Trust, filed suit for declaration and permanent injunction against the appellant/Municipal Corporation praying for a declaration that bills and notices issued by the appellant/Municipal Corporation in respect of Municipal tax dues were without jurisdiction as the respondent/Public Trust was using the building in question for charitable and educational purposes. The respondent/Public Trust further prayed for a permanent injunction to restrain the appellant/Municipal Corporation from threatening or actually putting seal on the building in question. A further prayer was made for refund of amounts that were earlier deposited by the respondent/Public Trust with the appellant/Municipal Corporation. It is relevant to mention here that the respondent/Public Trust had paid the said tax without demur for the year 2010-11.


4. On 01.04.2015, the appellant/Municipal Corporation filed an application under Section 9 read with Section 151 of the Code of Civil Procedure (CPC) for returning the plaint to the plaintiff/respondent/Public Trust for filing appeal under Section 406 of the said Act. It was contended that when remedy of appeal was available under the said provision, the suit filed by the respondent/Public Trust was not maintainable. On the basis of the said application, on 16.06.2015, the trial Court passed an order framing preliminary issue as to whether the said Court had jurisdiction to try and entertain the suit.


5. On 03.08.2015, the trial Court passed its order holding that the Court did not have jurisdiction to try and entertain the suit, as remedy of filing appeal under Section 406 of the said Act was available to the respondent/Public Trust. Accordingly, the plaint was directed to be returned to the respondent to be presented before the proper forum.


6. The said order was challenged by the respondent/Public Trust before this Court by filing an appeal, wherein it was held by this Court that the second direction given by the trial Court in the order dated 03.08.2015 for returning the plaint was not maintainable and it was set aside. This Court further held that the aforesaid order of the trial Court was appealable under Section 96 of CPC. Therefore, the respondent/Public Trust filed Regular Civil Appeal No. 112 of 2015 before the District Court at Akola under Section 96 of CPC.


7. By the impugned judgment and order, the District Court has allowed the appeal of the respondent/Public Trust and remanded the matter to the trial Court with a direction to determine the suit afresh on all issues. The District Court has held in the impugned judgment and order that the grounds raised in the suit by the respondent/Public Trust cannot be adjudicated by the authority empowered under Section 406 of the said Act and that, therefore, the suit filed by the respondent/Public Trust was maintainable. The District Court held that when the respondent/Public Trust had challenged the very legality of the tax to be recovered by the Municipal Corporation, such question could be decided by the Civil Court and that it could not be the subject matter of appeal under Section 406 of the said Act. Aggrieved by the said judgment and order of the District Court, the appellant/Municipal Corporation has filed the present appeal.


8. Shri A.R. Deshpande, learned Counsel appearing on behalf of the appellant/Municipal Corporation has submitted that the impugned judgment and order is erroneous because the scheme of the aforesaid Act has not been appreciated in the correct perspective and that the disputes sought to be raised by the respondent/Public Trust can very well be agitated in an appeal under Section 406 of the aforesaid Act. It is contended that the main thrust of the contentions raised on behalf of the respondent/Public Trust is that it is exempted from payment of said tax under the aforesaid Act, as it is carrying out charitable and educational activities from the building in question and that this aspect can certainly be decided by the Judge empowered under Section 406 of the said Act in an appeal under the said provision, which concerns questions pertaining to rateable value or capital value or tax fixed or charged under the said Act. It is further contended that the respondent/Public Trust has filed the civil suit only to avoid depositing of the tax claimed by the appellant/Municipal Corporation, which is mandatorily required to be deposited under sub-section (3) of Section 406 of the said Act, before the appeal under the said provisions can be heard. On behalf of the appellant/Municipal Corporation, reliance has been placed on the judgment of this Court in the case of Greave Cotton Limited v. Pimpri Chinchwad Municipal Corporation and others (reported in MANU/MH/1576/2013 : 2014 (1) Mh.L.J., 655).


9. On the other hand, Shri M.G. Sarda, learned Counsel appearing on behalf of the respondent/Public Trust has submitted that the impugned judgment and order does not deserve any interference because the suit filed by the respondent/Public Trust was maintainable and that the disputes and questions raised therein cannot be agitated in an appeal under Section 406 of the said Act. It was submitted that when the very legality of imposition of the tax was being questioned by the respondent/Public Trust, such questions could be decided only by the Civil Court. It is further contended that ouster of the jurisdiction of the Civil Court is not to be inferred readily and that, under scheme of the aforesaid Act, it could not be said that the jurisdiction of the Civil Court stood ousted impliedly. On behalf of the respondent/Public Trust, reliance was placed on the judgment of this Court in the case of Balkrishna Vora v. Poona Municipal Corporation (reported in MANU/MH/0203/1962 : 1963 Mh.L.J., 325).


10. Having heard the learned Counsel appearing on behalf of the respective parties and upon perusal of the record of the present case, it is necessary to determine as to whether the disputes and questions sought to be raised by the respondent/Public Trust in its suit can be determined only by the Civil Court or the same can be examined and determined by the authorities contemplated under the scheme of the aforesaid Act, particularly Section 406 thereof. In order to determine the said questions, it is necessary to refer to relevant provisions of the said Act. Under Section 132(1)(b) of the said Act, it is provided that tax shall not be levied on buildings and lands or portions thereof that are solely occupied and used for public charitable purpose. Section 406 provides for appeals against valuations and imposition of taxes while Sections 407 to 411 provide for a mechanism of further appeals, reference and arbitration. The term "Judge" mentioned in Section 406 pertains to Civil Judge (Senior Division) under Section 2(29) of the said Act. The said provisions read as follows:-


"2(29). "the Judge" means in the [City of [Pune] the Judge of the Court of Small Causes, and in any other City, the Civil Judge (Senior Division) having jurisdiction in the City].


132. (1) The general tax shall be levied in respect of all buildings and lands in the city except-


(a) buildings and lands solely used for purposes connected with the disposal of the dead;


(b) buildings and lands or portions thereof solely occupied and used for public worship or for a public charitable purpose;


(c) buildings and lands vesting in the [Government] used solely for public purposes and not used or intended to be used for purposes of trade or profit or vesting in the Corporation, in respect of which the said tax, if levied, would under the provisions hereinafter contained be primarily leviable from the [Government] or the Corporation, respectively.


(2) The following buildings and lands or portions thereof shall not be deemed to be solely occupied and used for public worship or for a public charitable purpose within the meaning of clause (b) of sub-section (1), namely-


(a) buildings or lands or portions thereof in which any trade or business is carried on; and


(b) buildings or lands or portions thereof in respect of which rent is derived whether such rent is or is not applied solely to religious or charitable purposes.


(3) Where any portion of any building or land is exempt from the general tax by reason of its being solely occupied and used for public worship or for a public charitable purpose such portion shall be deemed to be a separate property for the purpose of municipal taxation.


406. (1) Subject to the provisions hereinafter contained, appeals against any rateable value [or the capital value, as the case may be,] or tax fixed or charged under this Act shall be heard and determined by the Judge.


(2) No such appeal [shall be entertained] unless-


(a) It is brought within fifteen days after the accrual of the cause of complaint;


(b) in the case of an appeal against a rateable value [or the capital value, as the case may be,] a complaint has previously been made to the Commissioner as provided under this Act and such complaint has been disposed of;


(c) in the case of an appeal against any tax [including interest and penalty imposed] in respect of which provision exists under this Act for a complaint to be made to the commissioner against the demand, such complaint has previously been made and disposed of;


(d) in the case of an appeal against any amendment made in the assessment book for property taxes during the official year, a complaint has been made by the person aggrieved within [twenty-one days] after he first received notice of such amendment and his complaint has been disposed of;


(e) in the case of an appeal against a tax, or in the case of an appeal made against a rateable value [or the capital value, as the case may be][the amount of the disputed tax claimed from the appellant, or the amount of the tax chargeable on the basis of the dispute rateable value up to the date of filing the appeal, has been deposited by the appellant with the Commissioner].


[(2A) Where the appeal is not filed in accordance with the provisions of clauses (a) to (e) of sub-section (2), it shall be liable to be summarily dismissed.]


[(3) In the case of any appeal entertained by the Judge, but not heard by him, before the date of commencement of the Maharashtra Municipal Corporations (Amendment) Act, 1975, the Judge shall not hear and decide such appeal unless the amount of the disputed tax claimed from the appellant, or the amount of the tax chargeable on the basis of the disputed rateable value, as the case may be, up to the date of filing the appeal has been deposited by the appellant with Commissioner, within thirty days from the date of publication of a general notice by the Commissioner in this behalf in the local news-papers. The Commissioner shall simultaneously serve on each such appellant a notice under sections 473 and 474 and other relevant provisions of this Act, for intimating the amount to be deposited by the appellant with him.


(4) As far as possible, within fifteen days from the expiry of the period of thirty days prescribed under sub-section (3), the Commissioner shall intimate to the Judge the names and other particulars of the appellants who have deposited with him the required amount within the prescribed period and the names and other particulars of the appellants who have not deposited with him such amount within such period. On receipt of such intimation, the judge shall summarily dismiss the appeal of any appellant who has not deposited the required amount with the Commissioner within the prescribed period.


(5) In the case of any appeal, which may have been entertained by the Judge before the date of commencement of the Act aforesaid or which may be entertained by him on and after the said date, the Judge shall not hear and decide such appeal, unless the amount of the tax claimed by each of the bills, which may have been issued since the entertainment of the appeal, is also deposited, from time to time, with the Commissioner in the first month of the half year to which the respective bill relates. In case of default by the appellant at any time before the appeal is decided, on getting an intimation to that effect from the Commissioner, the Judge shall summarily dismiss the appeal.]


[(6) An appeal against [the demand notice in respect of levy of cess under chapter XIA or the Local body Tax under Chapter XIB] shall lie,-


(i) to the Deputy Commissioner, when the demand notice is raised by the Deputy Commissioner.


(ii) to the Commissioner, when the demand notice is raised by the Deputy Commissioner.


(7) The appeal under sub-section (6) shall be filed within fifteen days from the date of the demand notice.]


[(8) No appeal under sub-section (6) shall be entertained by the Deputy Commissioner or, as the case may be, the Commissioner unless the amount of the disputed tax claimed from the appellant has been deposited by the appellant with the Commissioner.]


407. For the purposes of section 406, cause of complaint shall be deemed to have accrued as follows, namely:-


(a) in the case of an appeal against a rateable value [or a capital value, as the case may be,] on the day when the complaint made to the Commissioner against such value is disposed of;


(b) in the case of an appeal against any tax referred to in clause (c) of sub-section (2) of the said section on the day when the complaint against the tax is disposed of by the Commissioner;


(c) in the case of an appeal against any amendment made in the assessment book for property taxes during the official year, on the day when the complaint made to the Commissioner by the person aggrieved against such amendment is disposed of;


(d) in the case of an appeal against a tax not covered by clause (b) above on the day when payment thereof is demanded or when a bill therefor is served.


408. Where any appeal against the rateable value [or the capital value, as the case may be,] or tax fixed or charged under this Act is pending and all the parties interested agree that any matter in difference between them shall be referred to arbitration, they may, at any time before a decision is given in such appeal, apply in writing to the Judge for an order of reference on such matter and on such application being made the provisions of [the Arbitration and Conciliation Act, 1996], relating to arbitration in suits, so far as they can be made applicable, apply to such application and the proceedings to follow thereon, as if the said Judge were a Court within the meaning of that Act and the application were an application made in a suit.


409. [Appointment of expert valuer. Deleted by Mah. 10 of 2010, s. 14.]


410. If, before or on the hearing of an appeal relating to the rateable value [or the capital value, as the case may be,] or tax, any question of law or usage having the force of law, or the construction of a document arises, the Judge may, and on the application of any party to the appeal shall, draw up a statement of the facts of the case and the question so arising, and refer the statement with his own opinion on the point for the decision of the District Court.


411. An appeal shall lie to the District Court-


(a) from any decision of the Judge in an appeal under section 406 by which a rateable value [or a capital value, as the case may be,] is fixed, and


(b) from any other decision of the said Judge in an appeal under the said section, upon question of law or usage having the force of law or the construction of a document:


Provided that no such appeal shall be heard by the District Court unless it is filed within one month from the date of the decision of the Judge.


413. (1) Every rateable value [or the capital value, as the may be,] fixed under this Act against which no complaint is made as hereinbefore provided, and the amount of every sum claimed from any person under this Act on account of any tax, if no appeal therefrom is made as hereinbefore provided, and the decision of the Judge aforesaid upon any appeal against any such value or tax if no appeal is made therefrom under section 411 and if such appeal is made the decision of the District Court in such appeal shall be final.


[(2) Where the decision of the said Judge is not final it shall be lawful for the Commissioner to assess the property tax on the basis of the rateable value or the capital value, as the case may be determined under rule 7 or 7A of the TAXATION RULES in Chapter VIII of Schedule D from year to year, Subject, however, to the provision of Section 406.]"


11. The aforesaid provisions show that there is a mechanism provided under the said Act whereby a person aggrieved by imposition of property tax or valuation thereof can approach the authorities specified under the said provisions. The question is whether such mechanism covers the disputes and questions sought to be raised by the respondent/Public Trust in the present case. If it is found that the said mechanism is inadequate, the ouster of the jurisdiction of the Civil Court cannot be inferred. In this context, it would be relevant to refer to the position of law regarding ouster of jurisdiction of Civil Courts, enunciated by the Hon'ble Supreme Court in various judgments. In a Constitution Bench judgment in the case of Dhulabhai and others v. The State of Madhya Pradesh and another (reported in MANU/SC/0157/1968 : 1968 (3) SCR, 662), upon analysis of earlier judgments on the said issue, it has been recorded as follows:-


"Neither of the two cases of Firm of Illuri Subayya of Kamla Mills can be said to run counter to the series of cases earlier noticed. The result of this inquiry into the diverse views expressed in this Court may be stated as follows:-


(1) Where the statute gives a finality to the orders of the special tribunals the Civil Courts' jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.


(2) Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court.


Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not.


(3) Challenge to the provisions of the particular Act as ultra vires cannot be brought before Tribunals constituted under that Act. Even the High Court cannot go into that question on a revision or reference from the decision of the Tribunals.


(4) When a provision is already declared unconstitutional or the constitutionality of any provision is to be challenged, a suit is open. A writ of certiorari may include a direction for refund if the claim is clearly within the time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit.


(5) Where the particular Act contains no machinery for refund of tax collected in excess of constitutional limits or illegally collected a suit lies.


(6) Questions of the correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case the scheme of the particular Act must be examined because it is a relevant enquiry.


(7) An exclusion of the jurisdiction of the Civil Court is not readily to be inferred unless the conditions above set down apply."


12. The aforesaid position of law has been quoted by a subsequent Constitution Bench judgment of the Hon'ble Supreme Court in the case of Mafatlal Industries Ltd. and others v. Union of India and others (reported in MANU/SC/1203/1997 : 1997 (5) SCC, 536). It has been recorded therein that judgment in the case of Dulhabhai (cited supra) has been consistently followed by the Hon'ble Supreme Court. In a subsequent judgment of the Hon'ble Supreme Court in the case of Devinder Singh and others v. State of Haryana and another (reported in MANU/SC/2897/2006 : 2006 (5) SCC, 720), reference has been made to the aforesaid propositions culled out in the case of Dulhabhai (cited supra) and a reference is also made to the judgment of the Privy Council in the case of Secretary of State v. Mask and Co. (reported in MANU/PR/0022/1940 : AIR 1940 Privy Council, 105). In the said judgment, the Privy Council in the context of ouster of jurisdiction of Civil Courts, has held as follows:-


"It is settled law that the exclusion of the jurisdiction of the Civil Courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. It is also well settled that even if jurisdiction is so excluded, the Civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.


... The determination of this question must rest on the terms of the particular statute which is under consideration, and decisions on other statutory provisions are not of material assistance, except in so far as general principles of construction are laid down. The main principles to be observed in the present case are to be found in the well-known judgment of Willes, J. in (1859) 6 CB (NS) 336 at p. 356, which was approved of in the House of Lords in (1919) AC 368. the question is whether the present case falls under the third class stated by Willes J., viz.:


Where the statute creates a liability not existing at common law, and gives also a particular remedy for enforcing it.... With respect to that class it has always been held, that the party must adopt the form of remedy given by the statute."


13. The aforesaid position of law as laid down by the Hon'ble Supreme Court shows that the propositions culled out in the case of Dhulhabhai (cited supra) render guidance on the question as to whether jurisdiction of Civil Court in a given case has been ousted. Such ouster of jurisdiction can take place by an express provision in the statute or impliedly. The most crucial aspect under the said position of law is the scheme of the statute in question and it is important that examination and analysis of the same should be done before the question of ouster of jurisdiction of the Civil Court can be decided.


14. In the present case, it is the contention of the appellant/Municipal Corporation that Section 406 of the said Act is a sufficient remedy for the respondent/Public Trust to air its grievance as sought to be raised in the suit filed by it before the Civil Court. A perusal of the aforesaid provision shows that an appeal shall be heard and determined by the Judge on questions pertaining to rateable value or capital value or tax fixed or charged under the said Act. In this case, it is the contention of the respondent/Public Trust that the notice and bills issued by the appellant/Municipal Corporation charging a certain amount of tax on its building is not sustainable because under Section 132(1)(b) of the said Act, because such building is exempt from payment of tax for the reason that it is being used for public charitable purposes. In other words, the contention of the respondent/Public Trust is that being exempt from payment of tax the rate of such tax would be nil or that the fixing and charging of such tax by the appellant/Municipal Corporation ought to be nil.


15. This contention of the respondent/Public Trust can be certainly raised in an appeal under Section 406 of the said Act. The exemption claimed by it, is under Section 132(1)(b) of the said Act, which is a ground that can be agitated in the appeal. It is not as if the respondent/Public Trust is prohibited from raising such a ground in the appeal or that the "Judge" does not have the authority to deal with such a ground of challenge while exercising appellate power under Section 406 of the said Act. The said contention of the respondent/Public Trust is covered under the expression "appeals against rateable value or the capital value as the case may be or tax fixed or charged under this Act" used in Section 406 of the said Act.


16. A perusal of the other relevant provisions of the said Act show that under Section 410 thereof, if on hearing of an appeal a question of law or construction of a document arises, the Judge may draw a statement of the facts of the case and refer such questions with his own opinion on the point for a decision of the District Court. Under Section 411 of the said Act, an appeal shall lie to the District Court from any decision of the Judge in an appeal under Section 406 thereof, by which a rateable value or capital value as the case may be is fixed or upon a question of law or usage or the construction of a document. The question whether tax is to be fixed at the rate at which the Municipal Corporation claims or it has to be nil as claimed by the respondent based on Section 132(1)(b) of the Act, can also be a subject matter of such appeal under Section 411 of the Act. Further Section 413 of the said Act provides that the decision of the District Court in an appeal under Section 411 of the Act shall be final.


17. Thus, the provisions of the aforesaid Act provide a scheme wherein the grievance of the respondent/Public Trust can be fully taken care of and, therefore, the jurisdiction of the Civil Court is impliedly ousted. Applying the propositions culled out by the Constitution Bench judgment of the Hon'ble Supreme Court in the case of Dhulabhai (supra), it becomes evident that the aforesaid Act, with which we are concerned in the present case, is covered under proposition Nos. 2 and 6. In the present case, there is no question of a challenge to the vires of any provision of the aforesaid Act and the claim of the respondent/Public Trust that the notice and bills issued by the appellant/Municipal Corporation are illegal because the respondent is entitled for exemption from payment of property tax, is a question that can very well be decided in the mechanism provided as per the aforesaid provisions of the said Act.


18. In this context, the contents of the plaint of the respondent/Public Trust need to be appreciated. The entire grievance of the respondent is that it is undertaking educational activities in the building in question and that, therefore, under Section 132(1)(b) of the said Act, it is exempt from levy of tax. It is also claimed that tax is being claimed retrospectively by the appellant/Municipal Corporation, which cannot be done. In my opinion, all these are facets of "tax fixed or charged" or the rateable value applied by the appellant/Municipal Corporation, while raising bills against the respondent/Public Trust. If the contents of the plaint are appreciated in the proper perspective, it becomes evident that there is force in the contention raised on behalf of the appellant/Municipal Corporation that the respondent/Public Trust has filed the civil suit, instead of appeal under Section 406 of the said Act, only to avoid the mandatory deposit of disputed tax claimed by the appellant/Municipal Corporation, under Section 406(2)(e) of the Act, before the appeal can be heard or decided by the Judge. Although, this aspect may not be relevant to decide as to whether the jurisdiction of the Civil Court is ousted, it does demonstrate that in such cases, by clever drafting assessees may claim that civil suit is maintainable by contending that the very levy of the tax by the Municipal Corporation is "illegal" and that there is no remedy other than filing of suit before the Civil Court. It is for the assessees like the respondent/Public Trust to demonstrate as to why the grievance sought to be raised by them cannot be addressed under the scheme manifested by the above quoted provisions of the said Act.


19. In the present case, the learned Counsel for the respondent/Public Trust has heavily relied upon the judgment of this Court in the case of Balkrishna Vora v. Poona Municipal Corporation (cited supra). In the aforesaid case, the Court was concerned with the question that the tax levied or sought to be recovered was ultra vires the powers of the Corporation. In such a situation, it was held by this Court that the machinery provided under the aforesaid Act would not be sufficient for the assessee to air his grievance and thereupon, the Court held that the jurisdiction of the Civil Court could not be said to have been ousted and that the suit was maintainable. But, in the instant case, the nature of the grievance of the respondent/Public Trust is not such that it cannot be redressed under the machinery of the aforesaid Act. Therefore, the reliance placed on the said judgment of this Court is misplaced.


20. A perusal of the order passed by the trial Court in the present case, would show that much emphasis has been placed by it on the alleged suppression of material by the respondent/Public Trust as regards its claim of carrying on charitable educational activities in the building in question. An adverse inference seems to have been drawn by the trial Court against the respondent/Public Trust in that context. The said approach of the trial Court may have been harsh, but, it has correctly reached the conclusion that the grievance of the respondent/Public Trust can certainly be raised in an appeal under Section 406 of the said Act and further appeal as provided under the Act. On the other hand, the appellate Court in the impugned judgment and order has erred in holding that none of the grounds contended by the respondent/Public Trust could be agitated under Section 406 of the said Act. While arriving at the said conclusion, the appellate Court has failed to analyse the true nature of the grievance of the respondent/Public Trust. It has also erred in holding that the trial Court order was unsustainable because while deciding the issue of jurisdiction, it had held a mini trial. The appellate Court failed to appreciate that the true nature of grievance raised by the respondent/Public Trust was necessarily required to be analysed for deciding the question as to whether the trial Court had jurisdiction to entertain the civil suit or not. Once it is found that the true nature of the grievance is such that it can certainly be raised in an appeal under Section 406 of the said Act, it becomes clear that the jurisdiction of the civil Court is impliedly ousted and that the respondent/Public Trust is required to exhaust the remedy provided under the above quoted provisions of the said Act.


21. If litigants like the respondent/Public Trust are permitted to raise grievance, that can certainly be addressed in the remedies provided under the aforesaid Act, by filing civil suits, on the basis of clever drafting, all such litigants would avoid mandatory requirements of the said Act and approach the civil Court, although a proper mechanism of grievance redressal is provided under the said Act. This aspect was not appreciated in the correct perspective by the appellate Court while passing the impugned judgment and order.


22. Thus, on an analysis of the provisions of the aforesaid Act, in the context of law laid down by the Hon'ble Supreme Court and this Court, particularly Constitution Bench judgment in the case of Dhulabhai (supra), followed in various judgments, it becomes evidence that this appeal deserves to be allowed and the respondent/Public Trust is relegated to the remedies available under the provisions of the said Act.


23. Accordingly, the appeal is allowed. The impugned judgment and order is quashed and set aside. The respondent/Public Trust would be at liberty to initiate appropriate proceedings under the provisions of the said Act. There shall be no order as to costs.



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