1. The suit out of which this appeal arises was the outcome of an assessment made by the Municipal Commissioners of the Bhabua Municipality in the district of Shahabad, under Clause (a) of Section 85 of the Bengal Municipal Act III of 1884 as amended by Act IV (B.C.) of 1894. The object of the suit was to have it declared that the assessment was illegal, because the Municipal Commissioners, in making the assessment, and imposing the highest tax as allowed by Section 85, proceeded upon the basis of his “circumstances and property” outside the limit of the Municipality. It appears that the plaintiff had recently purchased a small house within the Bhabua Municipality which had previously been taxed at Rs. 2-8-0 per annum. He seems to be a person of considerable means in Benares, where he resides, and he owns a certain share of the Municipal town Bhabua, which yields him, as it was found by the Munsif, Rs. 200 a year.
2. But it was alleged by the Municipality in their defence to this action that the plaintiff was in the habit of doing considerable business through his servants at the house which he had purchased; that he lent large sums of money to persons residing within the limits of the Municipality of Bhabua, and that his men were in the habit of receiving the collections of his zemindari at the said place. And it was pleaded on their behalf that the Municipal officers in making the assessment proceeded in accordance with law, and that no suit would lie for the purpose of having the assessment set aside.
3. The Munsif laid down, amongst others, the following issues: “2nd.–Can the suit be maintained in a Civil Court? 4th:Was there any irregularity in assessing the tax upon the plaintiff? 5th.–Whether the tax should he assessed upon the property and circumstances within the Municipality only 6th.–What would be the proper amount to tax upon the plaintiff? 7th.–What relief, if any, is the plaintiff entitled to? ”
4. It will be observed that the fifth issue proceeded upon the assumption that the tax imposed upon the plaintiff had been assessed upon his circumstances and property, not only within the limits of the Bhabua Municipality, but also outside thereof; and one may well gather, referring to the judgments of both the Munsif and the Judge of the Appellate Court, that one of the main contentions raised on behalf of the Municipality was that they were justified in imposing the tax upon the plaintiff with reference not only to his circumstances and property within the Municipality, but also his circumstances and property outside the limits thereof. The Munsif found that the action of the Municipality in making the assessment in question was ultra vires and therefore the suit, would lie. He held, to use his own words that “from the written statement, and evidence it is, quite clear that the defendant Municipality has exceeded its proper limits in assessing a tax upon the plaintiff.” And later on, he observed: “I am of opinion that the defendant Municipality exceeded their power, and therefore the assessment was irregular.” He was of opinion, upon the fifth issue, to which we have already adverted, that the tax. should be assessed upon his circumstances and property within the Municipality only. He, however, held with reference to, the issue as to the proper amount of tax to be levied upon the plaintiff, and what relief the plaintiff was entitled to, that he was not at liberty to determine what should be the proper amount of tax, and that the only relief that the plaintiff was entitled to, was a declaration that the assessment made by the Municipality was illegal and not binding upon the plaintiff.
5. Against this judgment, the Municipality appealed to the District Judge of Shahabad; and we might here observe that, if the case of the Municipality really was, as it has now been represented to us, that the basis of the assessment was the plaintiff’s circumstances and property within the Municipality only, we should have expected that they would raise this particular ground in their petition of appeal presented to the District Judge, and that they would complain of the issues as framed by the Munsif. And looking at the judgment of the District Judge one cannot help saying that the bone of contention of the Municipality was, as regards the construction to be put upon the words “circumstances and property within the Municipality” occurring in Clause (1) of Section 85. The learned Judge has held, and we think rightly held, that the assessment should be made with reference to the circumstances and property within the Municipality and not outside the limits thereof. But he evidently thinks that what the plaintiff seeks to do in the present case is to have the amount of the tax imposed reduced, and that therefore, having regard to the case of Manessur Das v. The Collector and Municipal Commissioners of Chupra (1876) I.L.R.,1 Cal., 409, a suit like the present could not be maintained.
6. In that case, certain houses had been assessed at Rs. 144 a year, and had so continued until the year 1873, when tax was raised to Rs. 216, though the value of the houses had not in the meantime increased, nor had any change of form bean made. The person so taxed brought a suit complaining against the enhancement, and asked that this enhancement might be set aside; and it was held by this Court that the Municipal Commissioners having determined what was the annual tax to be levied on account of the houses in question, though they might have erred in doing so, a suit would not lie to set aside the order of the Commissioners, the object of the suit being to reduce the amount of the tax. But that is not the case here. The plaintiff questions the principle upon which the assessment was made, not so much as to the amount of the tax imposed. He says that in making the assessment the Municipal Commissioners had proceeded upon a certain basis, which could not under the law form the right basis of such assessment, namely, the circumstances and property of the plaintiff outside the local limits of the Bhabua Municipality. As to the question whether a civil suit lies in a matter like this, we need only refer to one of the recent cases upon the point, namely, the case of Nabadip Chandra Pal, Chairman of the Kamarkhali Municipality v. Puma Nando, Saha (1898) 3 C.W.N., 73, where it was held that “if the assessment made by the Municipal Commissioners be ultra vires there is nothing in the Act to prevent a rate-payer from seeking in a Civil Court a decision that the action on the part of the Municipality was ultra vires, and that the assessment is not binding upon him.” We may, therefore, take it, if the ground of the action be correct, that the plaintiff was entitled to institute the suit that he did in order to have it declared that the assessment in question was ultra vires. The learned Judge of the Court below, however, about the end of his judgment, upon the question whether the Municipal Commissioners in the case had acted without jurisdiction or in the excess of jurisdiction, observes as follows: I am of opinion that, the plaintiff-respondent occupying the house in question as a kind of head-quarters for servants who conduct zemindari and money-lending business on his behalf, is a circumstance which might not improperly be taken into consideration by the Commissioners. I do not think that the Commissioners can be said to be wrong, if they make a distinction between a person in receipt of a limited income, in the shape, for instance, of a pension or an annuity, and a person who is carrying on business of various kinds for his own profit, although they may occupy holdings of the same class.” This portion of the judgment would indicate as if the assessment made by the Municipality was upon the basis of the circumstances and property of the plaintiff within the municipality only; but there is no evidence upon the record to support this position. If that were so, we should have had no hesitation in saying that the suit could not be maintained. But that was not what was found by the Munsif, who tried the case in the first instance. The judgment of that officer proceeded rather upon this, that the assessment was made partly, at any rate, with reference to the circumstances and property of the plaintiff outside the Municipality, and against this conclusion there was apparently no ground taken by the Municipality in the memorandum of appeal to the District Judge. But assuming for the purposes of argument that the learned Judge was right in holding that the Municipality in making the assessment in question did proceed upon the circumstances mentioned in his judgment, it is quite evident, having regard to the judgment of the first Court, and also having regard to the line of defence and the contention raised by the Municipality, both before the Munsif and the District Judge, that the assessment was made, at any rate, partly with reference to the circumstances and property of the plaintiff outside the local limits of the Bhabua Municipality. In this view of the matter we should think that the assessment was ultra vires and illegal. Section 85 of Act III of 1884 says: “The Commissioners may from time to time at a meeting convened expressly for the purpose, of which due notice shall have been given, and with the sanction of the Local Government, impose within the limits of the Municipality one or other or both of the following taxes: (a) A tax upon persons occupying holdings within the Municipality according to their circumstances and property within the Municipality: Provided that the amount assessed upon any person, in respect of the occupation of any holding, shall not be more than eighty-four rupees per annum “and so on. Now the first condition, which the law imposes, is that the person to be taxed occupies a holding or holdings within the Municipality; and the second condition is that the taxation must be according to that person’s” circumstances and property within the Municipality.” And the whole question which had to be considered in this case was whether the Municipality had not in making the assessment in question proceeded upon the basis of the plaintiff’s circumstances and property outside the Municipality of Bhabua. If they did so altogether or even partly, as it seems to have been the case, it is obvious that the assessment was ultra vires, and that the plaintiff was entitled to bring the suit that he instituted.
7. We may as well add that the contention that was raised by the plaintiff before the Municipal Commissioners, on appeal against the order of assessment, was that he was not at all liable to be taxed because he had not been residing in the house within the Municipality of Bhabua, which he had purchased. That ground no doubt could not be sustained, and the learned vakil on behalf of the municipality has contended before us that the line of action taken by the plaintiff before the Commissioners would, rather indicate as if, barring the particular question raised by the plaintiff before the Commissioners, the assessment had rightly been made. We are, however, unable to accept this contention as correct. No doubt his endeavour then was to show that he was not liable to be taxed at all, but it does not follow from this that he thereby accepted the principle of the assessment that was made, much less does it follow that he is not entitled to maintain the suit which he has brought.
8. The result is that the decree of the District Judge is set aside, and that of the Munsif restored, with costs.