B. P. Jeevan Reddy, J. - (1.) 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-I 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.
(2.) Sub-section (2) of S. 108 of the Karnataka Municipal Corporations Act, 1976 provides for levy of property tax. It 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. Sec. 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 any information, and also to enter upon premises for the purpose of collecting information, to enable him to make a proper assessment. Section 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.
(3.) 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 tax-payers (Rule I).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 (R.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 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 Corporation. Rule 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.";