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2006 DIGILAW 534 (ORI)

Damodar Hota v. Jeypore Municipality

2006-07-18

A.K.PARICHHA

body2006
JUDGMENT A. K. PARICHHA, J. — Both the appeals are taken up together for admission and final disposal as they arise out of a composite judgment passed by the learned Ad hoc Addl. District Judge, Jeypore in Money Appeal Nos.1 of 2001 and 2 of 2001 (previously numbered as Money Appeal Nos.5 of 1994 & 6 of 1994 respectively). 2. The respondent as plaintiff filed Money Suit No.33 of 1993 and 155 of 1993 for realization of the holding tax of Hold¬ing Nos. 555 and 555-A of Jeypore town respectively on the plea that the appellant-defendant who is in occupation of those hold¬ings has defaulted in payment of holding tax. The appellant resisted the claim of the respondent pleading, inter alia, that remodeling of his house can never amount to bifurcation of the holding and tax for two holding cannot be realized from him. Appellant also took a plea that the Money Suits are not maintain¬able as his representations under Exts. A to C challenging the levy of tax are pending before the Executive Officer, Jeypore Municipality and no claim could be made before adjudication of such representations. Learned Civil Judge on consideration of the plea and evidence of the parties decreed Money Suit No.33 of 1993, but dismissed the claim of the respondent in M.S. No. 155 of 1993 relating to holding No.555-A. The present appellant preferred Money Appeal No.5 of 1994 against the judgment and decree passed in Money Suit No. 33 of 1993 and the present re¬spondent filed Money Appeal No.6 of 1994 against the judgment and decree passed in Money Suit No.155 of 1993 before the learned District Judge, Koraput. Subsequently, the appeals came to the Court of learned Ad hoc Addl. District Judge, Jeypore before whom they were renumbered as Money Appeal Nos. 1 and 2 of 2001. Both the appeals were heard analogously. Learned first appellate Court confirmed the decree passed in Money Suit No. 33 of 1993, but reversed the judgment passed in M.S. No. 155 of 1993. Aggrieved by those orders of the first appellate Court, the appellant has preferred the present appeals. 3. On consent of learned counsel for the parties, the matter was taken up for final disposal at the stage of admission and the following substantial question of law was formulated for consideration. Aggrieved by those orders of the first appellate Court, the appellant has preferred the present appeals. 3. On consent of learned counsel for the parties, the matter was taken up for final disposal at the stage of admission and the following substantial question of law was formulated for consideration. “Whether filing of the Money Suits by the respondent for realization of the holding tax was legally permissible before disposal of the representations under Exts. A to C and whether the suits were hit under the provision of Sec. 147 (2) of the Orissa Municipal Act, 1950.” 4. Mr. A. K. Hota, learned counsel appearing for the appellant in both the appeals submits that a holding cannot be bifurcated and holding tax of a particular holding cannot be enhanced without giving notice to the house-holder and without giving him an opportunity of raising objection and without decid¬ing such objection. He argues that no proper notice having been served on the appellant about the bifurcation of the holding and enhancement of holding tax and the representations Ext. 1 to 3 still pending for consideration, filing of the money suit for realization of the holding tax at the enhanced rate was violative of Section 147(2) of the Orissa Municipal Act and also principle of natural justice. 5. Mr. P. C. Chhinchani, learned counsel appearing for the respondent-Municipality contends that there is no legal bar for filing money suit for realization of the holding tax during pendency of representations made by the householder. According to him, notice was not necessary to be served on the appellant as he was aware of the bifurcation of the holding and enhancement of tax, when he preferred appeal before learned A.D.M. 6. Relevant portion of Section 147 of the Municipal Act reads as follows : “147. According to him, notice was not necessary to be served on the appellant as he was aware of the bifurcation of the holding and enhancement of tax, when he preferred appeal before learned A.D.M. 6. Relevant portion of Section 147 of the Municipal Act reads as follows : “147. Amendment and alteration of list - (1) The Executive Officer may, at any time alter or amend the assessment list in any of the following ways : (a) by entering therein the name of any person or any property which ought to have been entered or any property which has become liable to taxation after the publication of the assessment list under Section 152; (b) by substituting therein for the name of the owner of any holding the name of any other person who has succeeded by trans¬fer or otherwise to the ownership of the holding; (c) altering the valuation of or assessment on, any holding which has been incorrectly valued or assessed by reason of fraud, misrepresentation or mistake; (d) By revaluing or reassessing any holding the value of which has been increased by additions or alterations to buildings; xxx xxx xxx xxx (2) The Executive Officer shall give at least one month notice to any person interested, of any alteration which he pro¬poses to make under Clauses (a), (b), (c) or (d) of Sub-section (11) and of the date on which the alteration will be made.” 7. Sub-section (2) thus clearly contemplates that whenever an Executive Officer takes steps to alter or amend the assessment list by revaluing or reassessing any holding, he shall give at least one month’s notice to the person affected in such revalua¬tion of the assessment specifically indicating the nature of the amendment, alteration to be effected in the assessment list and the date on which such alteration is proposed to be made. 8. It is the admitted case of the parties that after some alteration in the structure of the house by the appellant, the Executive Officer of Jeypore Municipality bifurcated the Holding No.555 into two holdings and demanded more tax and directed that the appellant may file appeal if he was aggrieved with such demand of holding tax. 8. It is the admitted case of the parties that after some alteration in the structure of the house by the appellant, the Executive Officer of Jeypore Municipality bifurcated the Holding No.555 into two holdings and demanded more tax and directed that the appellant may file appeal if he was aggrieved with such demand of holding tax. Appellant filed appeal before the A.D.M., Koraput, who directed the appellant to file his objection before the Executive Officer, Jeypore Municipality on the subject and accordingly appellant filed Exts A to C. The Money Suits were filed before those representations were disposed of. Now the questions whether at such juncture, filing of money suit for recovery of holding tax at the enhanced rate was legally permis¬sible. 9. It appears, from the judgment of the trial Court as well as the first Appellate Court the appellant had raised objec¬tion about the collection of holding tax at the enhanced rate in the appeal before the A.D.M., Koraput, who disposed of the appeal giving liberty to the appellant to file his objection before the Executive Officer and that such objection can be disposed of by the Executive Officer. So, disposal of those representations had direct bearing on the legality of collection of holding tax from the appellant for two holdings. Section 147(2) of the Municipal Act clearly contemplates that notice inviting objection has to be given and the house-holder has to be given an opportunity of hearing, thereby meaning that the objection of the house-holder has to be adjudicated upon before collection of the holding-tax at the enhanced or changed rate. This was also said in the case of G. Narayana Murty v. Berhampur Municipality and others, re¬ported in 1986 (II) OLR 483 where a Division Bench of this Court candidly observed that notice in case of increase or enhancement of taxes is compulsory and should be strictly followed and that not following such procedure rigidly amounts to violation of rules of natural justice. In the present case, if the representa¬tions under Exts. A, B and C are allowed, then there will be some change in the rate of holding tax. So before disposing of those representations, filing of Money Suit for collection of tax at the enhanced rate was clear violation of principle of natural justice and also offends the mandates of Section 147(2) of the Municipal Act. A, B and C are allowed, then there will be some change in the rate of holding tax. So before disposing of those representations, filing of Money Suit for collection of tax at the enhanced rate was clear violation of principle of natural justice and also offends the mandates of Section 147(2) of the Municipal Act. The filing of Money Suit under such circumstances was, therefore, illegal and not sustainable under law. 10. Mr. Chhichani submits that the appellant paid holding tax for three years at the enhanced rate and thereby under the principle of acquiescence he lost his right of challenging the enhanced rate of tax. In this regard he places reliance on the case of Krishna Dev v. Smt. Ram Piari, AIR 1964 Himachal Pradesh 34, where a learned Single Judge has made the following observa¬tion : “The word ‘acquiescence’ is used in two senses; sometimes it is used to denote conduct which is evidence of an intention by a party, conducting himself, to abandon an equitable right; some¬times to denote conduct from which another party would be justi¬fied in inferring such an intention.” First of all this issue was not raised either in the trial Court or before the appellate Court. That apart, the principle cited is not applicable to the present case, as the appellant had already lodged his protest by filing representations under Exts. A to C. So the submission that the appellant is estopped from challenging the enhanced rate under the principle of acquiescence is not tenable. 11. For all the aforesaid reasons, the impugned orders of the first appellate Court are unsustainable and are set aside. However, the respondent-Municipality is not estopped from realiz¬ing the holding-tax for the period from 1.4.1990 to 31.3.1993 from the appellant at the appropriate rate as per the provisions of law after disposing of the representations in Exts. A to C. 12. In view of the peculiar circumstances of the case, parties are directed to bear their own costs in this appeal. Appeal disposed of.