1966 (2) TMI 75 - SC - Indian Laws

Whether the Municipality had not established the precondition for the re-assessment? Held that - The burden is certainly upon the Commissioners before they could amend the valuation and the assessment already made to establish that the previous assessment was in-correctly made by reason of fraud, misrepresentation or mistake. The High Court said that not a word had been said in the evidence adduced by the parties that the rental taken into consideration by the Special Officer while making the re-assessment in 1952 did not exist at the time of the periodical revisional assessment. This observation was made on the assumption that the burden was upon the assessee. Indeed, when the appellant filed a petition in the suit under Order XI of the Code of Civil Procedure for the discovery of the relevant records of the three assessments and though the learned Munsif made an order directing the Municipality to do so, it failed to produce them. In the circumstances we must hold that the Municipality had not established the precondition for the re-assessment, namely, that the original periodical revisional assessment was vitiated by fraud, misrepresentation or mistake. Appeal allowed.

Issues Involved:

1. Jurisdiction of the Assistant Special Officer under Section 117 of the Bihar and Orissa Municipal Act, 1922.
2. Validity of the re-assessment of municipal taxes.
3. Burden of proof regarding fraud, misrepresentation, or mistake in the original assessment.

Detailed Analysis:

1. Jurisdiction of the Assistant Special Officer under Section 117 of the Bihar and Orissa Municipal Act, 1922:

The primary issue in this appeal was the true construction of sub-section (1) of Section 117 of the Bihar and Orissa Municipal Act, 1922. The appellant contended that the Assistant Special Officer, S. N. Sarkar, did not have the jurisdiction to dispose of the review petition under Section 117(1) of the Act. The relevant provisions of the Act and notifications issued by the Government were examined. Section 386(1)(b) of the Act states that all the powers and duties of the Commissioners shall be exercised and performed by such person or persons as the State Government may direct during the period of supersession. The Government issued notifications appointing S. N. Sarkar to exercise and perform the powers under Section 107 of the Act and other sections, and to exercise the powers and perform the functions of the Committee under Section 117.

The Court held that the Assistant Special Officer did not have the jurisdiction to hear the review petition under Section 117(1) of the Act. The Committee under Section 117 should have been constituted with one or more of the three persons nominated by the Government under Section 386(1)(b) of the Act, two taxpayers nominated by them, and a Deputy Magistrate nominated by the Government. The construction suggested by the respondents and accepted by the High Court would make Section 117 unworkable, as the same officer who revised the assessment would sit in judgment over it. Therefore, the order made by S. N. Sarkar rejecting the objections filed by the appellant and enhancing the valuation of the suit holding was without jurisdiction.

2. Validity of the Re-assessment of Municipal Taxes:

The appellant challenged the validity of the re-assessment of municipal taxes on the ground that the Assistant Special Officer lacked jurisdiction. The original periodical revisional assessment of the premises was made in 1950, and it was altered in 1951 under Section 107(1)(d) of the Act due to additions made by the owner. The impugned revaluation and assessment were made in 1952 under Section 107(1)(c) of the Act, which allows the Commissioner to alter or amend the assessment list by enhancing the valuation or assessment on any holding incorrectly valued or assessed by reason of fraud, misrepresentation, or mistake.

3. Burden of Proof Regarding Fraud, Misrepresentation, or Mistake in the Original Assessment:

The Court addressed the issue of the burden of proof regarding fraud, misrepresentation, or mistake in the original assessment. Under Section 107(1)(c) of the Act, the burden is on the Commissioners to establish that the previous assessment was incorrectly made due to fraud, misrepresentation, or mistake before they could amend the valuation and assessment. The High Court wrongly placed the burden of proof on the appellant. The appellant had filed a petition for the discovery of relevant records, but the Municipality failed to produce them despite an order from the learned Munsif. Consequently, the Court held that the Municipality had not established the precondition for the re-assessment.

Conclusion:

In conclusion, the appeal was allowed, the decree of the High Court was set aside, and the suit was decreed with costs throughout. The Assistant Special Officer's order rejecting the objections and enhancing the valuation and municipal taxes was declared without jurisdiction. Additionally, the Municipality failed to establish that the original periodical revisional assessment was vitiated by fraud, misrepresentation, or mistake.

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