Arthur J.H. Collins, C.J.
1. This is an appeal from a decree passed by the District Judge of Coimbatore reversing a decree of the Acting Subordinate Judge (Mr. Elliot) of Ootacamund.
2. The suit was brought by the chairman of the Municipal Council of Ootacamund against Mr. Edward Clarke, the owner of certain lands within the municipal limits, called Bishopsdown and Belmont, for certain taxes levied under the authoriuy of the Madras Act IV of 1884.
3. The municipal council on the third of March 1892 resolved that a tax on all lands unappropriated to buildings be imposed according to area under Section 63, Clause (2) of the above Act, and that it be fixed for 1892-93 at Rs. 1-8-0 per acre or 476 pies per 80 square yards. The council allege that about 248’83 acres of the defendant’s holding comes within the definition of land unappropriated to any building and therefore becomes subject to the tax of Rs. 1-8-0 per acre.
4. Two questions arise–(1) Has the municipal council power to levy a tax on any land exceeding 7½ per cent, on the annual value of such land? (2) Is the defendant’s 248 83 acres unappropriated land within the meaning of Section 63, Clause (2)?
5. The first question depends upon the construction of Act IV of 1884, Sections 47 and 63, Clause (2).
6. Chapter III is headed “taxes and tolls, and mode of realizing them,” and Section 47 enacts that the taxes and tolls to be levied, for the purposes of this Act, shall be as follows”: Clause (ii)–“A yearly tax on lands and buildings, not exceeding 7½ per centum on the annual value of such lands and buildings.” Section 48 authorises the council to raise funds with the approval of the Governor in Council from any of the sources mentioned in Section 47 at a rate or rates not exceeding those specified in Section 47.
7. Section 50 enacts that, when the municipal council shall have determined, with the approval of the Governor in Council, to levy any tax or tolls, it shall be notified in a particular manner and such tax or tolls shall be levied in the manner hereinafter provided. Section 63 is the section declaring how such tax or tolls shall be levied; it enacts that if the municipal council notify, under Section 50, that an annual tax shall be levied on buildings and lands, the chairman shall impose such tax at the rate specified in such notification on all building’s and lands, with certain exceptions immaterial to this case.
8. Clause (2) states that “in the case of any lands unappropriated to any building, or occupied by native huts, the chairn. an may, subject to the approval of the municipal council, impose such tax at an annual rate, not exceeding annas four for every eighty square yards of such lands, in lieu of the rate specified in the said notification.”
9. It is contended by the plaintiff that Clause (2) authorizes the chairman to impose a tax of annas four for every 80 square yards amounting, it is said, to over Rs. 15 per acre on all lands unappropriated to any building, or occupied by native huts, even though the sum levied be far in excess of the sum to be levied under the authority of Section 47, Clause (ii).
10. I think this contention cannot be supported. Section 47 limits the yearly tax on lands and buildings to 7½ per centum on the annual value of such lands and buildings. No land, therefore, can be taxed beyond 71/2 per cent, on the annual value of such land.
11. In Section 63, Clause (i), the tax is to be levied on buildings and lands (the words used in Section 47 are lands and buildings) and such tax shall be imposed at the rate specified in the notification under Section 50.
12. Sub-section (2) deals with lands unappropriated to any building or occupied by native huts, but the words in Section 47 are large enough to include all land in the municipality. It may be that sub-Section (2) was drafted for the purpose of enabling the municipality to deal with the waste land in the municipality in the occupation of persons not being owners thereof, and the words “or occupied by native huts” lend some colour to the suggestion; it is to be observed that Section 64 enacts that the tax imposed under Section 63 shall be payable by the owners of such “buildings and lands,” using the words in Section 63, Clause (1), and omitting the description in Clause (2).
13. It would be unreasonable to hold that it was the intention of the Legislature, after enacting that a tax should be levied on lands and buildings not exceeding 71 per cent, on their annual value, to allow the chairman of the municipality to tax lands at a rate greatly exceeding the amount provided for in Section 47. If the chairman taxes what is termed “lands unappropriated to any building, or occupied by native huts,” he is controlled by Section 47 and in whatever sum he assesses the amount of the tax, such tax must not exceed the amount specified in Section 47.
14. It was stated at the bar that Clause (2) of Section 63 remained a dead letter as far as the Ootacamund Municipality was concerned for many years and it would seem that former chairmen exercised a wise discretion in forbearing to put in force a section which undoubtedly is very difficult to construe consistently with the plain intention of the Legislature as evidenced by Section 47.
15. I am of opinion that the action of the municipality in taxing the lands of the defendant in the manner described in the plaint was ultra vires.
16. This finding is sufficient to dispose of the appeal and renders it unnecessary to consider the second ground; but I must not be taken to agree with the District Judge in his construction of the words “lands unappropriated to any building.”
17. This appeal must be allowed and the decree of the District Judge set aside and that of the Subordinate Judge restored and the respondent must pay the appellant his costs in this and the Lower Appellate Court.
18. The question for decision in this appeal is whether the District Judge of Goimbatore is right in holding the lands in question to be unappropriated to any building” and consequently liable to be taxed under Clause (2) of Section 63 of the District Municipalities Act No IV of 1884 (Madras).
19. Section 47 of the Act states what “the taxes and tolls to be levied, for the purposes of this Act, shall be” and among them is Clause (ii) “a yearly tax on lands and buildings not exceeding 71/2 per centum on the annual value of such lands and buildings.” Section 48 authorizes the municipal council “with the approval of the Governor in Council,” to raise funds for the purposes of the Act from all or any one or more of the sources before mentioned, at a rate or rates not exceeding those specified in the last preceding section. Section 50 provides for notification of the rates at which such taxes or tolls are to be levied, and also directs that they “shall be levied in the manner hereinafter provided,” i.e., in Section 63, Clause (1), which is as follows: “If the municipal council notify, under Section 50, that an annual tax shall be levied on buildings and lands in the municipality, the chairman shall impose such tax at the rate specified in such notification, on all buildings and lands, excepting lighthouses, public piers, wharfs, jetties,” and certain other buildings and places set apart for charitable or religious purposes with which the present appeal is in no way concerned.
20. Clause (2) of the same section is as follows: “In the case of any lands unappropriated to any building, or occupied by native huts, the chairman may, subject to the approval of the municipal council, impose such tax at an annual rate, not exceeding annas four for every eighty square yards of such lands, in lieu of the rate specified in such notification.”
21. No doubt, as observed by the Judge, the tax to be imposed under this last clause is directed to be in lieu of the rate to be specified in the notification issued under Section 50, but that circumstance does not warrant the conclusion that it may be in excess of the 74 per centum on the annual value which is the maximum fixed by Clause (ii) of Section 47.
22. Clause (2) of Section 63 appears to have been intended for mitigation of the tax on small holdings. It gives power to the chairman, with the approval of the municipal council, to impose on lands “unappropriated to any building, or occupied by native huts,” a tax at a rate different from that sanctioned by Government as the ordinary rate to be charged on lands and buildings within the municipal limits. In this connection it is to be remarked that the remaining Clause (3) of the same section directs that “the chairman shall exempt from tax under this section any building or land, the annual value whereof is less than rupees six if it be the owner’s sole property liable to tax under this Act.”
23. It is unreasonable to suppose that it was intended to confer on the chairman and councillors, without the sanction of Government such sanction not being provided for in Clause (2) of Section 63, the power of assessing lands at a higher rate than that sanctioned by the Governor in Council under Section 48 which happens in the case of the Ootacamund Municipality, the respondent in the present case, to be the maximum rate chargeable under the Act, namely, 7½ per cent.
24. If the above view of Clause (2) of Section 63 is correct, as I think it is, it is not very material for the purposes of taxation under the Act whether the plaint lands are held to be, or not to be,: “appropriated” to the houses to which they respectively belong; for, under Clause (1) of the same section, both buildings and lands are chargeable with the tax at the rate notified under Section 50, which, as already observed, is in this particular municipality the highest possible under the Act. But, in my opinion, the land which forms the compound of a house and is let with the house when the house is let, is appropriated to that house, and the mere fact of the owner obtaining profit therefrom by selling laterite and granite quarried from such land, or the milk of cattle grazed thereon, or firewood obtained from trees grown on the land, does not render the land unappropriated to the buildings; nor will the fact of a portion of the land being planted with tea necessarily make it land unappropriated to the house. In the present case, however, it is admitted that 15 acres of the Belmont property, which is cultivated with tea, are reserved when the house is let; and of the Bishopsdown property, some 5 acres are admittedly leased to tenants separately. These portions may be held to be no longer appropriated to the buildings called, respectively, ‘Belmont’ and ‘Bishopsdown,’ but the other lands cannot be so considered merely because, instead of using them as pleasure grounds, the owner utilizes them for the purpose of grazing cattle, etc., with a view to pecuniary profit. If, in consequence of the profit thus derived, the annual value of the lands is enhanced, it is open to the municipality to assess the land at such enhanced value, but that is no reason for taxing it under Clause (2) of Section 63 at a rate higher than is permissible under the Act.
25. I would therefore allow this appeal, and, setting aside the decree of the Lower Appellate Court, restore that of the Court of First Instance, and direct the plaintiff to pay defendant’s costs throughout.
26. Barclay, Morgan & Orr, Attorneys for Eespondent.