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Issues Involved:
1. Validity of the authentication of the assessment list after the expiration of the official year. 2. Applicability of the limitation period under Section 206A of the Bombay Municipal Boroughs Act, 1925. Issue-wise Detailed Analysis: 1. Validity of the Authentication of the Assessment List After the Expiration of the Official Year: The respondents, rate-payers liable to pay property tax, contended that the assessment list for the official year 1951-52, authenticated on 24th July 1952, was void and inoperative because it was authenticated after the expiration of the official year. The Municipal Borough argued that there was no requirement in the Act stipulating that the assessment list must be authenticated within the official year and that the authentication, even if done after the official year, was valid and effective. The Court examined the scheme of the Bombay Municipal Boroughs Act, 1925, specifically sections 78 to 89, which deal with the assessment and levy of property tax. The Court observed that the official year is the unit of time for the levy of the tax and that the process of assessment and levy of the tax is completed only when the assessment list is authenticated. The Court held that the authentication must be made within the official year to be valid and effective, as the tax for an official year must be levied during that year. Any other interpretation would lead to an anomalous situation where the tax for an official year could be levied at any time, even years after the expiration of the official year, which could not have been the intention of the legislature. The Court also noted that the legislative assumption underlying Section 84, which allows for the adoption of the valuation and assessment contained in the assessment list of any particular year for the year immediately following, is that there would be an authenticated assessment list for each official year before the close of that year. Additionally, Section 82, which provides for the amendment of the assessment list, supports the view that the authentication must be made within the official year. The Court found that the consistent interpretation of these provisions by the Bombay High Court and the Gujarat High Court, which required the authentication to be made within the official year, should be upheld. The Court also noted that the Bombay Legislature had accepted this interpretation by introducing Section 84A, which made the time limit for authentication more stringent. 2. Applicability of the Limitation Period Under Section 206A of the Act: The Municipal Borough argued that the suit was barred by limitation under Section 206A of the Act, which requires that no suit shall lie against a municipality unless it is commenced within six months next after the accrual of the cause of action. The Municipal Borough contended that the cause of action arose on 24th July 1952 when the assessment list was authenticated, and since the suit was filed on 6th June 1955, it was barred by limitation. The Court rejected this argument, holding that the cause of action for the respondents and other rate-payers arose only when the Municipal Borough sought to recover the amount of tax from them on the strength of the assessment list. The assessment list, being authenticated after the expiry of the official year, was void and inoperative, and the respondents were entitled to ignore it as a nullity. The cause of action accrued when the Municipal Borough issued notices of demand or took steps to recover the tax, not when the assessment list was authenticated. The Court noted that there was no material to show when the notices of demand were issued or when the rate-payers paid the amount of tax. In the absence of such material, it was not possible to determine when the cause of action arose and whether it arose within six months before the filing of the suit. Therefore, the Municipal Borough failed to establish that the suit was barred by limitation under Section 206A. Conclusion: The Court dismissed the appeal, holding that the authentication of the assessment list must be made within the official year to be valid and effective, and that the suit was not barred by limitation under Section 206A. The Court made no order as to costs.
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