MADRAS AND SOUTHERN MAHRATTA RY CO LTD Vs. BEZWADA MUNICIPALITY
LAWS(PVC)-1944-3-66
PRIVY COUNCIL
Decided on March 30,1944

MADRAS AND SOUTHERN MAHRATTA RY CO LTD Appellant
VERSUS
BEZWADA MUNICIPALITY Respondents


Cited Judgements :-

DELHI DEVELOPMENT AUTHORITY VS. GANGA SINGH [LAWS(DLH)-1980-7-16] [REFERRED]
OMAN INTERNATIONAL BANK S A O G VS. APPELLATE AUTHORITY FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION [LAWS(DLH)-2008-3-175] [REFERRED TO]
DEBI SINGH VS. JAGDISH SARAN SINGH [LAWS(ALL)-1952-1-6] [REFERRED TO]
OUDH SUGAR MILLS LTD VS. STATE OF U P [LAWS(ALL)-1959-10-11] [REFERRED TO]
SHAHNAZ AYURVEDICS VS. COMMISSIONER OF CENTRAL EXCISE [LAWS(ALL)-2004-1-28] [REFERRED TO]
BORDER SECURITY FORCE B S F VS. STATE OF MEGHALAYA [LAWS(GAU)-1988-10-3] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. SAGAR MAL SHAMBHOO NATH [LAWS(ALL)-2005-12-96] [REFERRED TO]
CHERUKURI KUTUMBAYYA VS. MUNICIPAL COUNCIL VIJAYAWADA [LAWS(APH)-1958-7-13] [REFERRED TO]
ANANTHA NAGANNA CHETTY VS. COMMISSIONER OF INCOME TAX ANDHRA PRADESH HYERABAD [LAWS(APH)-1969-9-4] [REFERRED TO]
MOHAMMAD BASHA VS. SECRETARY REGIONAL TRANSPORT AUTHORITY [LAWS(APH)-1974-3-11] [REFERRED TO]
TARA DEVI VS. STATE OF U P [LAWS(ALL)-2011-9-109] [REFERRED TO]
K SRINIVAS VS. GOVERNMENT OF ANDHRA PRADESH [LAWS(APH)-2007-11-18] [REFERRED TO]
K SRINIVAS VS. GOVERNMENT OF AP [LAWS(APH)-2007-11-98] [REFERRED TO]
SUTLEJ COTTON MILLS LTD VS. COMMISSIONER OF INCOME TAX [LAWS(CAL)-1949-9-19] [REFERRED TO]
HARI CHAND RATTAN CHAND AND CO VS. SALES TAX OFFICER SECTOR III KANPUR [LAWS(ALL)-1971-2-3] [REFERRED TO]
JUGGILAL KAMLAPAT VS. SEW CHAND BAGREE [LAWS(CAL)-1959-7-11] [REFERRED TO]
SREE HANUMAN INVESTMENT CO LTD VS. COMMISSIONER OF INCOME TAX [LAWS(CAL)-1962-2-21] [REFERRED TO]
CALCUTTA PINJRAPOLE SOCIETY VS. HABU CHANDRA CHOSE ALIAS HABU CHARAN GHOSE [LAWS(CAL)-1970-7-22] [REFERRED TO]
GOVINDRAM LAXMAN PRASAD VS. STATE OF MADHYA PRADESH [LAWS(MPH)-1951-9-1] [REFERRED TO]
V S T THANUSTHASSEEM HAMMEPALLI MADARASA MELAPALAYAM VS. MELAPALAYAM MUNICIPALITY [LAWS(MAD)-1959-3-20] [REFERRED TO]
TELECOM EMPLOYEES CO-OPERATIVE HOUSING SOCIETY LTD VS. SCHEDULED CASTES SCHEDULED TRIBES MINORITY COMMUNITIES AND BACKWARD [LAWS(KAR)-1990-8-64] [REFERRED TO]
DISTRICT LOCAL BOARD VS. KRISHNA SAKHARAM PATIL [LAWS(BOM)-1948-12-2] [REFERRED TO]
SAYED MD ABDULLAH URAIZEE VS. P V RAO [LAWS(BOM)-1949-1-11] [REFERRED TO]
SHANKARLAL RAMRATAN SHET VS. PANDHARINATH VISHNU PHATAK [LAWS(BOM)-1951-1-8] [REFERRED TO]
MRITYUNJAY SEN VS. SIKHA SEN [LAWS(CAL)-2003-2-9] [REFERRED TO]
MUNICIPAL COUNCIL MORSHI VS. TULSIRAM [LAWS(BOM)-1977-3-34] [REFERRED TO]
PADUBIDRI DAMODAR SHENOY VS. INDIAN AIRLINES LIMITED [LAWS(SC)-2009-9-18] [REFERRED TO]
LOKMANYA MILLS BARSI LIMITED VS. BARSI BOROUGH MUNICIPALIT BARSI [LAWS(SC)-1961-3-15] [REFERRED TO]
HOLANI AUTO LINKS PVT LTD VS. STATE OF MADHYA PRADESH [LAWS(SC)-2008-4-198] [REFERRED TO]
MAHESH PRASAD VS. MUNDAR [LAWS(ALL)-1950-5-12] [REFERRED TO]
NIRMAL DASS KHATURIA VS. STATE TRANSPORT APPELLATETRIBUNAL U P LUCKNOW [LAWS(ALL)-1971-12-3] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. BALIRAM SANTHOBA [LAWS(APH)-1953-7-3] [REFERRED TO]
AYYAPPAN VS. SREEDHARAN NAMBOODIRI [LAWS(KER)-1967-8-10] [REFERRED TO]
MOHANLAL HIRALAL VS. COMMISSIONER OF INCOME TAX [LAWS(BOM)-1952-4-14] [REFERRED TO]
SAKHARAM NARAYAN KHERDEKAR VS. CITY OF NAGPUR CORPORATION [LAWS(BOM)-1962-9-12] [REFERRED TO]
MADHAVAN VS. EXCISE INSPECTOR [LAWS(KER)-1999-11-63] [REFERRED TO]
ZAHIDA NIZAMUDDIN JALAL VS. ABIDALI JAFFERALI SYYED [LAWS(BOM)-2002-9-66] [REFERRED TO]
COMMR OF INCOME-TAX PUNJAB PEPSU HIMACHAL PRADESH AND BILASPUR SIMLA VS. HIRA MALL NARAIN DASS [LAWS(P&H)-1953-6-6] [REFERRED TO]
SUBASH CHAND VS. STATE OF U.P. [LAWS(ALL)-2005-9-334] [REFERRED TO]
ADITYA EDUCATIONAL SOCIETY VS. UNION OF INDIA [LAWS(APH)-2014-1-2] [REFERRED TO]
RAJEEV SHARDA VS. EXECUTIVE ENGINEER, HP PWD, THEOG [LAWS(HPH)-1999-12-29] [REFERRED TO]
KULDEEP SINGH VS. STATE OF U.P. [LAWS(ALL)-2014-4-141] [REFERRED TO]
GUJARAT SHIP BREAKERS ASSOCIATION VS. STATE OF GUJARAT [LAWS(GJH)-2014-3-100] [REFERRED TO]
BALAJI NAGAR RESIDENTIAL ASSOCIATION VS. STATE OF TAMIL NADU [LAWS(SC)-2014-9-33] [REFERRED TO]
SURENDER SINGH VS. UNION OF INDIA [LAWS(DLH)-2014-9-169] [REFERRED TO]
MAWANA SUGARS LIMITED, NEW DELHI VS. UTTAR PRADESH STATE LOAD DESPATCH CENTRE, LUCKNOW AND NATIONAL LOAD DESPATCH CENTRE, NEW DELHI [LAWS(APTE)-2012-10-29] [REFERRED TO]
VIDYA RATTAN SHARMA VS. STATE OF J&K [LAWS(J&K)-2001-11-44] [REFERRED TO]
NAVAYUGA ENGINEERING CO LTD VS. ASSISTANT COMMISSIONER (CT), LTU, VISAKHAPATNAM, VISAKHAPATNAM DISTRICT [LAWS(APH)-2014-12-7] [REFERRED TO]
GIRISH CHHABRA VS. LT. GOVERNOR OF DELHI [LAWS(DLH)-2014-9-318] [REFERRED TO]
C RAMU VS. STATE OF KARNATAKA [LAWS(KAR)-2014-12-171] [REFERRED TO]
KURAPATI BANGARAIAH VS. GOVERNMENT OF ANDHRA PRADESH [LAWS(APH)-2014-6-192] [REFERRED TO]
MAHARANA PARTAP CHARITABLE TRUST VS. STATE OF HARYANA [LAWS(P&H)-2014-12-48] [REFERRED TO]
N.V.L. NARASIMHA RAO VS. RAO BAHADUR TELLAKULA JAIAYYA AND ORS. [LAWS(APH)-1956-1-36] [REFERRED TO]
TARUN PAL SINGH AND ORS. VS. LT. GOVERNOR, GOVT. OF NCT OF DELHI AND ORS. [LAWS(DLH)-2015-5-287] [REFERRED TO]
HARNAM SINGH VS. STATE OF M.P [LAWS(MPH)-2014-12-164] [REFERRED TO]
P. MARUDHACHALAM AND ORS. VS. K. SRIDHAR AND ORS. [LAWS(MAD)-2015-6-516] [REFERRED TO]
DR. ROMA SUR VS. STATE OF WEST BENGAL [LAWS(CAL)-1989-9-60] [REFERRED TO]
KERALA AIDED L.P. & U.P. SCHOOL MANAGERS ASSOCIATION VS. STATE OF KERALA [LAWS(KER)-2015-12-164] [REFERRED TO]
M/S GVPR ENGINEERS LIMITED VS. THE STATE OF TELANGANA AND OTHERS [LAWS(APH)-2016-4-16] [REFERRED TO]
D. MAHESH KUMAR VS. STATE OF TELANGANA [LAWS(APH)-2016-11-7] [REFERRED TO]
M/S. PAHARPUR COOLING TOWERS LIMITED VS. STATE OF KERALA [LAWS(KER)-2017-1-30] [REFERRED TO]
R MOORTHY VS. STATE OF TAMIL NADU [LAWS(MAD)-2014-9-467] [REFERRED]
LAVJIBHAI AMARSIBHAI BHALODIYA VS. MEHMOODABEN SIC RAJABSHA @ RAJUBHAI ABDULSHA RATHOD [LAWS(GJH)-2018-1-255] [REFERRED TO]
ANKUR GOPALBHAI PATEL VS. CHISTI VASIMUDIN KHURSHIDBHAI [LAWS(GJH)-2017-12-264] [REFERRED TO]
RAJASTHAN RAJYA VIDYUT PRASARAN NIGAM LTD. (RRVPNL), VS. THE STATE OF RAJASTHAN, THROUGH SECRETARY, ENERGY, SECRETARIAT, JAIPUR [LAWS(RAJ)-2016-10-119] [REFERRED TO]
THE STATE OF TAMIL NADU VS. HOTEL MOUNT HEERA [LAWS(MAD)-2017-11-173] [REFERRED TO]
CHRISTOPHER SAM MILLER VS. INSPECTOR OF POLICE, DISTRICT CRIME BRANCH, NAGARCOIL [LAWS(MAD)-2017-11-225] [REFERRED TO]
VOLTAS LIMITED VS. STATE OF GUJARAT [LAWS(GJH)-2019-8-173] [REFERRED TO]
UNION OF INDIA VS. RAJENDRA N.SHAH [LAWS(SC)-2021-7-24] [REFERRED TO]


JUDGEMENT

Lord Macmillan - (1.)The appellants, the Madras and Southern Mahratta Railway Company, Limited, own certain vacant lands within the municipality of Bezwada. These lands are admittedly subject to the property tax which the respondents, the Bezwada Municipality, are empowered to levy. The question for decision in these consolidated appeals is whether the respondents acted within their statutory powers in ascertaining the annual value of the lands for the purpose of imposing the tax. The method which the respondents adopted in order to arrive at the annual value of the lands was first to ascertain their capital value, which they did by reckoning them at so much per square yard, and they then took 6 per cent. of the capital value as representing the annual value. On the annual value so calculated they imposed property tax at the rate of 16? per cent. per annum. The appellants under protest paid the assessments made upon them in each of the four financial years ending on 3l March, in 1932,1933,1934 and 1935. They now seek to have these payments refunded as having been illegally exacted. In this they have been unsuccessful in both the Courts in India.
(2.)Many points were raised and many topics were discussed in the course of the proceedings in India, but before their Lordships the appellants both in their printed case and in their arguments at the bar concentrated upon one main ground of attack, namely, that on a sound construction of the respondents' statutory powers the method adopted by the respondents of fixing the annual value of the lands in question was not permissible. If they failed to make good this point the appellants did not contend that they could otherwise succeed. The taxing powers of the respondents are conferred upon them by the Madras District Municipalities Act, 1920, as amended by subsequent legislation. Their Lordships take the Act as it stood at the relevant period. By S. 78 every Municipal Council is empowered to levy inter alia a property tax and any resolution of a Municipal Council determining to levy a tax is required to specify the rate at which and the date from which it shall be levied. Secs.81 and 82 deal with the levying and assessment of property tax and the argument turned upon the interpretation of these sections. So far as material to the present question they read as follows : Section 81.-(1) If the Council by a resolution determines that a property tax shall be levied, such tax shall be levied on all buildings and lands within municipal limits save those exempted by or under this Act or any other law. The property tax may comprise - (a) a tax for general purposes; (b) a water and drainage tax. (2) Save as otherwise provided in this Act, these taxes shall be levied at such percentages of the annual value of lands or buildings or both as may be fixed by the Municipal Council, subject to the provisions of section 78. (3) The Municipal Council may, in the case of lands which are not used exclusively for agricultural purposes and are not occupied by, or adjacent and appurtenant to, buildings, levy these taxes at such percentages of the capital value of such lands or at such rates with reference to the extent of such lands, as it may fix : Provided that such percentages or rates shall not exceed the maxima, if any, fixed by the Local Government and that the capital value of such lands shall be determined in such manner as may be prescribed. (4) (a) The Municipal Council may, in the case of lands used exclusively for agricultural purposes, levy these taxes at such proportions as it may fix of the annual value of such lands as calculated in accordance with the provisions of S. 79, Madras Local Boards Act, 1920. Section 82.-(1) Every building shall be assessed together with its site and other adjacent premises occupied as an appurtenance thereto unless the owner of the building is a different person from the owner of such site or premises. (2) The annual value of lands and buildings shall be deemed to be the gross annual rent at which they may reasonably be expected to let from month to month or from year to year less a deduction, in the case of buildings only, of ten per centum of such annual rent and the said deduction shall be in lieu of all allowance for repairs or on any other account whatever : Provided that - (a) in the case of - (i) any Government or railway building or (ii) any building of a class not ordinarily let the gross annual rent of which cannot, in the opinion of the executive authority, be estimated, the annual value of the premises shall be deemed to be six per cent. of the total of the estimated value of the land and the estimated present cost of erecting the building after deducting for depreciation a reasonable amount which shall in no case be less than ten per centum of such cost :"
(3.)By a resolution dated 29 January 1932 the respondents resolved to levy property tax within their municipality at certain specified rates. The terms of this resolution give rise to some questions but the assessment on the appellants was not challenged by them before their Lordships on the ground that there had been no effective resolution to levy property tax. It will be observed that under S. 81 (2) the property tax, save as otherwise provided in the Act, is to be levied at a percentage of "the annual value of lands or buildings or both." Sub-section (3) otherwise provides inasmuch as it permits, but does not enjoin, the levying of the tax "in the case of lands which are not used exclusively for agricultural purposes and are not occupied by or adjacent and appurtenant to buildings" either at a percentage of the capital value of such lands or at such rates with reference to the extent of such lands as the Municipal Council may fix, subject to compliance with the proviso to the sub-section. If either of the alternative methods permitted by sub-s. (3) is adopted the assessment is not on annual value. Appropriate as this sub-section was to the case of the appellants' lands the respondents did not in fact avail themselves of it in making the assessment complained of. In particular, they did not levy the tax at a percentage of the capital value of the appellants' lands; they levied it at a percentage on their annual value. Section 82 (2) prescribes how the annual value of lands and buildings is to be ascertained. It is to be deemed to be the gross annual rent at which they may reasonably be expected to let from month to month or from year to year, less 10 per cent. in the case of buildings. The spectre of the hypothetical tenant, so familiar an apparition in English rating law, is here invoked. The appellants did not dispute that, if this sub-section had not had a proviso appended to it, it would have been open to the respondents to resort to any of the recognized methods of arriving at the rent which a hypothetical tenant might reasonably be expected to pay for the lands in question, including the method of taking a percentage of their capital value. But the proviso, they say, makes all the difference. It expressly enjoins resort to this last-mentioned method of arriving at annual value in the case of two specified classes of buildings. Therefore they say, resort to this method is by necessary implication prohibited in every other case, and in particular in the case of their lands. The respondents contest this reading and maintain that the proviso does not impliedly prohibit resort to capital value as a means of getting at annual value in every case not covered by the proviso, and that the chief purpose of the proviso is to be found in the limitation to 6 per cent. which it contains. Their Lordships cannot accept the appellants' argument which in their opinion involves a misinterpretation of the effect of the proviso. The proviso does not say that the method of arriving at annual value by taking a percentage of capital value is to be utilised only in the case of the classes of buildings to which the proviso applies. It leaves the generality of the substantive enactment in the sub-section unqualified except in so far as concerns the particular subjects to which the proviso relates. The proper function of a proviso is to except and deal with a case which would otherwise fall within the general language of the main enactment, and its effect is confined to that case. Where, as in the present case, the language of the main enactment is clear and unambiguous, a proviso can have no repercussion on the interpretation of the main enactment, so as to exclude from it by implication what clearly falls within its express terms.
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