K. Jituri Vs. Corpn . of The City of Bengauam  INSC 513 (5
Reddy, B.P. (J) Jeevan Reddy, B.P. (J) Venkatachalliah, M.N.(Cj) Ahmadi, A.M.
1995 AIR 288 1994 SCC (6) 572 JT 1994 (6) 496 1994 SCALE (4)447
Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.- In this appeal
preferred against the judgment of the Karnataka High Court, the question that
arises is whether the suit filed by the appellants in the civil court
questioning the revision of property tax in the year 1984 is not barred by
virtue of Rule 25 contained in Part 1 of Schedule III of the Karnataka
Municipal Corporations Act, 1976? The suit was initially instituted by three
persons. While Plaintiffs 1 and 3 are two of the house-owners within Belgaum
Municipal Corporation, the second plaintiff is an Association of house-owners
within the said corporation limits. Subsequently, fourteen other individuals
owning houses within the said corporation limits joined as plaintiffs. The
relief asked for in the plaint is for a declaration that the revision of
property tax effected by the defendant Corporation in the year 1984 is
arbitrary, unreasonable and illegal and should not be enforced against the
owners of the houses in Belgaum. The trial court dismissed the suit as not
maintainable in civil court by virtue of Rule 25 aforesaid. On appeal, however,
the first appellate court took a contrary view. It held that the suit is
maintainable and, accordingly, remitted the matter to the trial court for
disposal on merits. The order of the Appellate Judge was questioned by the
Municipal Corporation by way of miscellaneous civil appeal which has been
allowed by a learned Single Judge of the High Court.
Sub-section (2) of Section 108 of the Karnataka Municipal Corporations Act,
1976 provides for levy of property tax.
fixes a certain ceiling beyond which the tax cannot be levied. Sub-section (3)
provides that for the purposes of assessing the property tax, the rateable
value of any building or land shall be determined by the Commissioner.
109 prescribes the method of assessment of property tax. It also prescribes the
method in which the rateable value of a building or land shall be determined.
Section 117 empowers the Commissioner to ask for an information, and 575 also
to enter upon premises for the purpose of collecting information, to enable him
to make a proper assessment.
147 says that the rules and tables embodied in Schedule III shall be read as
part of Chapter X (Chapter X deals with the levy of property tax and its
assessment among other matters). Section 148 provides that the Corporation
shall revise any tax imposed by it once in every five years or whenever such
enhancement is found necessary.
Schedule III contains the taxation rules. The rules provide for the
Commissioner preparing and keeping assessment books containing necessary
particulars which shall be open for inspection by the taxpayers (Rule 1). It is
for the Commissioner to determine the tax to which each property or person is
liable (Rule 2). The assessment books shall have to be completely revised by
the Commissioner once in every five years and an assessment once made shall
continue until it is revised (Rules 5 and 6). Rule 7 prescribes the procedure
when assessment books are prepared for the first time or whenever a general
revision of the books is completed. It provides for giving a public notice
containing the prescribed particulars. Rule 8 says that the Commissioner may
after giving notice to the parties concerned and after hearing the objections,
if any, amend the books by making the necessary amendments and alterations. Any
person aggrieved by the assessment of property tax is entitled to file an
appeal before the Taxation Appeals Committee (Rule 18). A second appeal lies to
District Court as provided by Rule 20. There is, however, a condition attached
to this right of second appeal, viz., that the tax is to be paid within the
period prescribed. Rule 19 confers a suo motu power of revision on the
Divisional Commissioner of the Revenue Division to be exercised in cases where
any assessment or an order is prejudicial to the interests of revenues of the
22 empowers the District Court to state a question of law for the opinion of
the High Court in an appropriate case. Rule 25 then says that "subject to
any order of the District Court or the Divisional Commissioner or the decision
of the Taxation Appeals Committee or the orders passed by the Commissioner, the
assessment or demand of any tax shall be final."
the present case, the property tax was revised earlier in the year 1979. After
a lapse of five years, the impugned revision was made. The plaintiffs did not
file the appeal as provided by the rules but came forward with this
representative suit. We shall now notice the allegations in the plaint to
determine whether the said allegations bring the suit within the purview of the
civil court notwithstanding the bar contained in Rule 25. The main allegations
of the plaintiffs are that the valuation of the properties within the
Corporation limits has risen from Rs 2.5 crores in 1979 to Rs 9 crores in 1984
and that the tax has gone up from Rs 50 lakhs per annum to Rs 1.8 crores per
annum. This enhancement is termed as arbitrary, unreasonable and illegal. It is
stated that the enhancement in some cases is 10 to 20 times or more. It is
submitted that according to the decisions of this Court, property tax must be
determined on the basis of fair rent and, therefore, there cannot be any increase
of property tax from 1979 to 1984 since no additions or 576 alterations have
been effected to any house within the Corporation limits. Plaintiffs also
complain that the assessors inspected the houses and took measurements of the
plinth area of the buildings, without giving prior notice to the owners. The
measurements so taken stealthily, they said, cannot form the basis of revision
of property tax.
plaintiffs alleged that according to their information the assessors were pressurised
to increase the property tax to the maximum extent, i.e., at least by four to
five times over the existing tax.
allegation that between 1979 and 1984, no alterations or additions have been
effected and the further ambiguous assertion that the assessors were pressurised
to enhance the taxes by 4 to 5 times are too general and sweeping to merit any
consideration. It is not also alleged who pressurised the assessors.
are all the allegations in the plaint. It is apparent that there is no
allegation that there has been a non-compliance with any of the provisions of
the statute let alone non-compliance with any of the fundamental provisions of
the statute. No reasons are given as to why they did not file appeals before
the Taxation Appeals Committee. It is also not stated why they could not have
urged the grounds now taken in the plaint in appeals. The only reason stated
for approaching the civil court is that if appeals have to be filed, their numberwould
be in thousands and that it is not a practicable proposition.
principles relating to jurisdiction of civil court in the case of acts and
orders taken under special enactments is well-known. After considering several
Indian and English cases, Hidayatullah, C.J., had stated the relevant
principles in Dhulabhai v. State of M.P I, in the following words: (SCR p. 682)
" (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.
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.
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 1 (1968) SCR 662:AIR 1969 SC
78:22 STC 416 577 normally associated with actions in Civil Courts are
prescribed by the said statute or not.
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.
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
the particular Act contains no machinery for refund of tax collected in excess
of constitutional limits or illegally collected a suit lies.
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.
exclusion of the jurisdiction of the Civil Court is not readily to be inferred unless the conditions above
set down apply." This Court further clarified that non-compliance with the
provisions of the statute meant non-compliance with such fundamental provisions
of the statute as would make the entire proceedings before the appropriate
authority illegal and without jurisdiction. The Court also stressed the
relevance and significance of the machinery provided by the relevant special
statute for rectifying any errors and irregularities.
principles enunciated in this decision have since been followed uniformly in
various decisions, the last of which is in Shiv Kumar Chadha v. Municipal Corpn.
of Delhi2, where again the entire case-law on the subject has been reviewed and
Applying the above principles, it must be held that the present suit, on the
allegations contained in the plaint itself - let alone the findings of the
court is not maintainable in a civil court. None of the grounds on which an
assessment made under the Karnataka Act can be challenged in a civil court, is
even alleged in the plaint, as pointed out hereinbefore. In other words, none
of the grounds indicated in Dhulabhai case1, upon which such an assessment can
be questioned is alleged in the plaint. All that is complained of is that the
enhancement is excessive. That by itself is not enough. Similarly, the
allegation that enhancement is arbitrary or unreasonable is per se not
sufficient to override the express statutory bar. 2 (1993) 3 SCC 161 578 The
High Court was, therefore, right in holding that the said suit is not
maintainable in civil court.
Tarkunde, the learned counsel for the appellants submitted that inasmuch as the
right of second appeal to the District Court is coupled with an onerous
condition, viz., deposit of the entire property tax - neither the appellate
authority nor any other authority, it is stated, is empowered to relax that
condition, either partly or wholly, whatever be the circumstances - the said
remedy of appeal cannot be called an adequate or efficacious remedy. For this
reason, the learned counsel submitted, the suit is maintainable. Learned
counsel contended that if a writ petition is maintainable without filing the
second appeal provided by Rule 20, a suit is equally maintainable. In our
opinion, the said contention is based upon a misconception.
an onerous provision may be a ground for entertaining a writ petition on the
ground that the alternative remedy provided by the statute is not an adequate
or efficacious remedy (see Himmatlal Harilal Mehta v. State of M.P3) but that can never be a ground for maintaining a
the jurisdictions are different and are governed by different principles.
Article 226 provides a constitutional remedy. It confers the power of judicial
review on High Courts. The finality clause in a statute is not a bar to the
exercise of this constitutional power whereas the jurisdiction of a civil court
arises from another statute, viz., Section 9 of the Code of Civil Procedure. In
such a case, the bar arising from an express provision like Rule 25 or arising
by necessary intendment can be overridden only in cases and situations pointed
out in Dhulabhai case1. The jurisdiction of the civil court in such matters is
governed by the principles aforestated and the ground now urged by Shri Tarkunde
is not one of the grounds recognised for invoking the jurisdiction of the civil
court. It is not correct to say that whatever is good for Article 226 is good
for suit as well.
parting with this appeal, we feel compelled to express our doubts as to the
soundness and continuing relevance of the view taken by this Court in several
earlier decisions that the property tax must be determined on the basis of fair
rent alone regardless of the actual rent received. Fair rent very often means
the rent prevailing prior to 1950 with some minor modifications and additions.
tax is the main source of revenue to the municipalities and municipal
corporations, To compel these local bodies to levy and collect the property tax
on the basis of fair rent alone, while asking them at the same time to perform
all their obligatory and discretionary functions prescribed by the statute may
be to ask for the impossible.
cost of maintaining and laying roads, drains and other amenities, the salaries
of staff and wages of employees - in short, all types of expenditure have gone
up steeply over the last more than forty years. In such a situation, insistence
upon levy of property tax on the basis of fair rent alone - disregarding the
actual rent received - is neither justified nor practicable. None of the
enactments says so expressly. The said principle has 3 AIR 1954 SC 403 : 1954
SCR 1122: (1954) 1 MLJ 690 579 been evolved by courts by a process of interpretation.
a time has come when the said principle may have to be reviewed. In this case,
however, this question does not arise at this stage and, therefore, it is not
necessary to express a final opinion on the said issue.
The appeal accordingly fails and is dismissed. No costs.