Phani Bhusan Basu v. Province of Bengal — 1949 DIGILAW 588 (CAL)

JUDGMENT Das, J. - This appeal is on behalf of the Plaintiff. The Plaintiff's case is that he was assessed to Education Tax on an alleged income of Rs. 2,000 in respect of his profession as a lawyer under the provisions of Bengal Rural Primary Education Act (VII of 1930) which came into force in the district on July 15, 1939, that the assessment so imposed was illegal and ultra vires, on the ground that no notice of assessment was given to him, that the assessment list was not duly prepared and the amount of tax imposed was not so made by any legally constituted authority. The Plaintiff, therefore, prayed for a declaration that the assessment was ultra vires and prayed for an injunction restraining the Defendant from realising the said tax. 2. The suit was contested by the Province of Bengal, inter alia, on the ground that the Civil Court had no jurisdiction to determine the cause, that the assessment was made legally and in good faith after adopting the procedure laid down in the said Act. 3. The trial court decreed the Plaintiff's suit on the finding that the civil court had jurisdiction to try the suit, that the assessment list was not duly prepared as required by Section 34(1) of the said Act, that notice of assessment was not given, that the District Magistrate followed an arbitrary method in fixing the rate u/s 34(2) of the said Act, that the direction made by the District Magistrate to realise the tax retrospectively was illegal. 4. Against the decree of the trial court the Province of Bengal preferred an appeal. 4. Against the decree of the trial court the Province of Bengal preferred an appeal. The appeal was heard by the learned Additional District Judge, who was of the opinion that the main grievance of the Plaintiff was directed against the legality of the assessment list, which was prepared under the Bengal Village Self-Government Act, 1919, that the accuracy of the said list cannot be collaterally attacked, that the District Magistrate was justified in accepting the said list, that the extent of enquiry which the District Magistrate was required to make u/s 34 of the Act was entirely in his discretion and the civil court cannot sit in judgment over the exercise of such discretion, that the assessment list was prepared by the president of the Union Board and this was checked by the Circle Officer and verified by the Sub-divisional Officer and forwarded to the District Magistrate. The procedure adopted was in accordance with law. In the result, the appeal was allowed and the Plaintiff's suit dismissed. 5. The Plaintiff has appealed to this Court. Dr. Sen Gupta, appearing for the Appellant, has contended that the assessment is ultra vires on the ground that the assessment list was not prepared in conformity with the provisions of Section 34(1) of the Act, that the assessment list was, in fact, not prepared by the president, Union Board, but by the vice-president, who was not authorised to do so, that, accordingly, the assessment list was illegally prepared and could not form the basis of assessment, that the rate imposed by the District Magistrate u/s 34(5) of the Act was arbitrary, that the notice of assessment was necessary on general principle and that, in any event, the assessing authority had no right to direct payment of the assessment retrospectively. 6. The learned Assistant Government Pleader, appearing for the Province of Bengal, has contended that there was a presumption of regularity of official acts, that the onus to prove that the assessment was not in accordance with the statute rested on the Plaintiff, that the Plaintiff has entirely failed to discharge that onus and as such, the court has to presume that the assessment was made in accordance with the provisions of Section 34 of the Act. The rate that was imposed by the District Magistrate was entirely in his discretion and is not revisable in a civil court. 7. The rate that was imposed by the District Magistrate was entirely in his discretion and is not revisable in a civil court. 7. It may be pointed out, at the very outset, that in this appeal we are not concerned with the general question whether the assessment as a whole is ultra vires or not. We are concerned with a limited enquiry, viz., whether the assessment that was imposed upon the Plaintiff was contrary to the provisions of the Act and was ultra vires. 8. The validity of the assessment depends on the proper interpretation of Section 34(1) and (2) of the Act. The material part of the section runs as follows: 34(1) The District Magistrate or one of his subordinate officers shall from time to time, examine the assessment list prepared u/s 16 of the Village Chaukiddri Act, 1870 and shall consider the assessment made u/s 38 of the Bengal Village Self-Government Act, 1919, and after such inquiry as considers necessary, shall prepare a list of all persons assessed to pay the chaukiddri rate or the union rate, as the case may be, who, in his opinion, have been so assessed wholly or in part in respect of their trade, business or profession. (2) The District Magistrate shall assess a tax on each of such persons not exceeding one hundred rupees per annum. 9. Before I discuss the effect of the said section, it is necessary to state that the said Act in Chapter IV provides for the levy of a Primary Education Cess, as also of an Education Tax. The Primary Education Cess is levied u/s 29 of the said Act on all immoveable property on which Road and Public Works Cess has been assessed. On the other hand, the Education Tax is a personal tax, which is imposed on persons carrying on trade, business or profession. Section 34(2) of the Act requires the District Magistrate or one of his subordinate officers to examine the assessment list made under the Village Chaukiddri Act and to consider the assessment made u/s 34 of the Bengal Village Local Self-Government Act, 1919. The reason why the two Acts are referred to in the section is apparent. The Bengal Village Self-Government Act, 1919, extends to the whole of Bengal, except Calcutta and other municipal areas. The reason why the two Acts are referred to in the section is apparent. The Bengal Village Self-Government Act, 1919, extends to the whole of Bengal, except Calcutta and other municipal areas. Section 2 of this Act repeals the whole of the Bengal Village Chaukiadri Act, 1870, except the preamble, Sections 1, 48-61 (Part 11), 66, 67 and 69 and Schedules C and D and the whole of the Village Chaukidari Act, 1871, in any area declared to be an Union u/s 5 of the Act. Section 14 of the Bengal Village Chaukidari Act, 1870, makes all owners and occupiers of houses and persons who have a kachari for collecting rents within the village liable to assessment to the chaukidari rate. Section 15 then states that the Chaukidari rate is to be assessed according to circumstances and the property that would be protected. Section 38 of the Bengal Village Local Self-Government Act, 1919, authorizes the imposition of a rate by a Union Board according to the circumstances and property within the Union and the person liable to pay the same. The effect of the Village Chaukidari Act, 1870 and the Bengal Village Local Self-Government Act, 1919, is that a rate may be assessed according to the circumstances and the property of the Assessee in a non-municipal area. The assessment list prepared under either Act will depend on the extent of the property and the circumstances either within the village or in the Union. On the other hand, Section 34 of the Bengal (Rural) Primary Education Act, 1930, enables the tax to be imposed on a person who carries on trade, business or profession. The income which a person derives from the property is not subject to Education Tax. It is liable, however, to Education Cess u/s 29 of the said Act. In order to entitle the assessing authority to impose Education Tax, the assessing authority has to prepare an assessment list. The preparation of an assessment list involves an entry of the names of persons liable to pay the tax as also the extent of the assessment to be imposed. As such, an enquiry is necessary to find out the income which an Assessee derives from trade, business or profession. The preparation of an assessment list involves an entry of the names of persons liable to pay the tax as also the extent of the assessment to be imposed. As such, an enquiry is necessary to find out the income which an Assessee derives from trade, business or profession. The assessment list which has to be prepared u/s 34 is not, therefore, identical with the assessment list which has to be framed in order to find out the persons liable to pay either the chaukidari rate or the union rate. It is true that Section 34 leaves it to the discretion of the assessing authority as to the extent of the enquiry such authority has got to make. 10. It has to be seen how far the provisions of Section 34 of the said Act have been complied with, in the facts of the present case. The learned Additional District Judge has not come to specific findings on this point. The learned Assistant Government Pleader, as I have already stated, relied on the presumption of the regularity of official acts and stated that the burden of proof which rested on the Plaintiff had not been discharged. 11. It may be conceded that it is for the person who alleges illegality to prove that the regular procedure for assessing the tax has not been followed. In the absence of such proof, the court will presume that the assessing authority has followed the regular procedure. In this case, however, the parties led evidence and the Plaintiff is entitled to rely on the evidence which was led on behalf of the Defendant. Witness No. 1 for the Defendant stated in his examination-in-chief that he was in charge of the preparation of the assessment list. He stated further-- The president of the Union Board of Diamond Harbour prepared list of persons liable for the payment of Education Tax. He simply entered the names of the persons and their income from trade, business and profession. 12. The learned Additional District Judge has believed the evidence of this witness and has stated that the assessment list was prepared by the president of the Union Board and the assessment list so prepared was checked by the Circle Officer and verified by the Sub-divisional Officer. 12. The learned Additional District Judge has believed the evidence of this witness and has stated that the assessment list was prepared by the president of the Union Board and the assessment list so prepared was checked by the Circle Officer and verified by the Sub-divisional Officer. The evidence is not specific as to whether the president of the Union Board ascertained the income which was derived by an assessment solely from his trade, business or profession. On reference to the pleading it appears that in the plaint the Plaintiff definitely stated that he was assessed on an income of Rs. 3,000 derived from all sources. There was no specific denial of the statement in the written statement filed on behalf of the Province of Bengal. Exhibit 7 is the assessment list which was prepared under the Bengal Village Self-Government Act, 1919, in the year 1939. The name of the Plaintiff appears under serial No. 438 of Madhabpur. Under the head dealing with income from circumstances and property within the Union, a sum of Rs. 2,000 appears against the Plaintiff's name. The sum of Rs. 2,000 is, therefore, the entire income of the Plaintiff from all sources including property and profession. The original assessment list which was prepared u/s 34 of the Bengal (Rural) Primary Education Act, 1930, has not been produced by the Province of Bengal though called for. A copy of the same is on the record and was marked Ex. B(1). This paper shows that the Plaintiff was assessed on an income of Rs. 2,000. The assessment of the Plaintiff, therefore, proceeded on the footing of his total income, viz., the income derived from property and profession and not merely on his income derived from profession. Such a mode of assessment is not justified by the provisions of Section 34(7). 13. The principles bearing on the question are well settled and may be stated as follows: The power to levy rates, taxes, tolls, customs, etc., from the subject is not one of the ordinary incidents of a corporate body. Such power cannot be exercised unless authorised by statute. If the statute authorises such an imposition, the imposition cannot exceed that which the statute so authorises. Such power cannot be exercised unless authorised by statute. If the statute authorises such an imposition, the imposition cannot exceed that which the statute so authorises. In the case Mersey Docks and Harbour Board v. Birkenhead Assessment Committee (1901) A.C. 175, it was held that where the taxing authority is called upon to assess tax levied upon the letting value, he does very wrong if he rates as if he was dealing with the question for the income tax. Similarly in the case of Secretary of State for India in Counsel v. Major Hughes (1913) ILR 38 Bom. 293, 307, it was laid down that where a Cantonment Magistrate, u/s 22 of the Cantonment Act III of 1880, assumes power that the law has not given him and collects the tax not on the annual letting value, but on somewhat strange and novel method of his own, the assessment is ultra vires. The question was considered by this Court in the case of Chairman of Giridih Municipality v. Srish Chandra Mozumder (1908) ILR 35 Cal. 859. In the course of his judgment, Mookerjee J. observed that a corporation, which is invested with authority to assess taxes is really invested with a quasi-judicial power and a civil court would have jurisdiction to interfere and quash the order of the quasi-judicial authority upon the ground-- either of a manifest defect of jurisdiction in the tribunal that made the order or of manifest fraud in the party procuring it. 14. Such defect of jurisdiction may be founded on the character and constitution of the tribunal or on the nature of the subject-matter of enquiry or on the absence of some preliminary proceeding which was necessary to give the jurisdiction to that tribunal. The ultimate test is whether the assessment is or is not in conformity with the statutory provisions. If we apply these principles to the facts found above it cannot be doubted that the, assessment which was based, not on the income derived from trade, business or profession, but on the total income of the Assessee is one which is not justified by the statute and such an assessment must be deemed to be ultra vires. 15. There is another ground on which the assessment cannot be sustained. 15. There is another ground on which the assessment cannot be sustained. It has already been stated and this was found by the learned Additional District Judge that the assessment list was prepared by the president, Union Board. The president, Union Board, is not one of the subordinate officers of the District Magistrate. Section 9 of the Bengal Village Local Self-Government Act, 1919, states that the president, Union Board, has to be elected by the board. The president can be removed either u/s 16 of the Act by the District Board or u/s 56 of the Act by the Commissioner of Division. He is not under the control, administrative or otherwise, of the District Magistrate. As the assessment list, viz., the name of the Assessee and the income derived by the Assessee from his trade, business or profession was prepared by the president of the Union Board the assessment was made by a person who, under the statute, had no jurisdiction to do so. 16. In this view it is not necessary to consider the other contentions raised by Dr. Sen Gupta, viz., that the imposition of rate by the District Magistrate was arbitrary and how far the civil court can sit in judgment over the exercise of his discretion by the District Magistrate. The assessment, as we have already said, is ultra vires, because it contravenes the provisions of Section 34 of the Act. 17. The result then is that this appeal is allowed, the judgment and decree of the lower appellate court are set aside and those of the trial court are restored with costs in this Court and in the court of appeal below. Das Gupta J. 18. I agree.