1. The plaintiff owned lands within the limits of Srirangam Municipality, which lands, it is now common ground, were lands exclusively used for purposes of agriculture and which lands were liable to pay the property tax levied by the Municipality. The levy of such a tax is regulated by Section 81 of the District Municipalities Act, 1920. Section 81(2) provides:
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.
Section 81(3) runs:
The Municipal Council may, in the case of lands which are not used for agricultural purposes ...levy these taxes at such per centages of the capital value of such lands....
Section 81(4)(a) runs:
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 Section 79 of the Madras Local Boards Act, 1920.
Of the four items of lands involved in these proceedings three were held on ryotwari tenure and one on inam tenure. Section 79 of the Local Boards Act provides that in the case of ryotwari tenures the annual value shall be taken as the annual assessment payable on those lands. In the case of inam lands the annual value is to be taken as the notional annual assessment that could have been levied in those inam lands. Section 82 runs:
(1) Every building shall be assessed together with its site and other adjacent premises occupied as an appurtenance thereto....
(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 ....
2. 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....
That the properties involved in this appeal do not fall within the scope of Section 82(2) should be clear. Section 82(2) provides for assessment on the basis of an annual value of the lands and buildings, i.e., lands appurtenant to buildings and not lands independent of buildings, e.g., agricultural lands.
3. The plaintiff's case was that he should have been assessed under Section 81(4) of the Act, i.e., that he should have been called upon to pay only a proportion of the annual value of the lands, i.e., a proportion of the annual assessment payable on the lands. The learned Munsiff accepted that contention and decreed the plaintiff's claim. On appeal, however, the learned District Judge dismissed the plaintiff's suit. The plaintiff comes up in second appeal.
4. Though the three sub-issues framed under issue 1 by the learned Munsiff would imply that the real question the Court was called upon to consider was whether Section 82(2) offered an alternative to Section 81(4) as the basis on which the tax should be assessed, the real question now is whether the levy made by the Municipality should come within the scope of Section 81(4) only or whether it could be upheld as valid if it could be brought within the scope of Section 81(2) of the Act quite independent of the question whether the property could also be assessed under Section 81(4).
5. No doubt the annual value in the present case was calculated on principles analogous to those embodied in Section 82(2). That such a calculation of the annual value with reference to properties other than those specifically covered by Section 81(2) is not illegal is the scope of the decision of the Privy Council in M.S.M. Railway Co., Ltd. v. Bezwada Municipality (1944) 2 M.L.J. 25 L.R. 71 I.A. 113 (P.C.).
6. The real question for determination in this second appeal is the same as was formulated by Byers, J., in The Municipal Council, Chicacole v. Rajah of Vizianagaram S. A. No. 1025 of '943 (unreported) and the Municipal Council, Chicacole v. Sri Vyricherla Chandramani Pattamakadevi S.A. No. 1026 of 1943 (unreported), whether the assessment of property tzx on the plaintiff's agricultural lands by the Municipal Council under Section 81(4) of the District Municipalities Act was ultra vires.
7. Section 81(2), it will be remembered, applies where there is no other specific provision in the Act. That should be the scope of the expression " Save as otherwise provided in this Act." Section 81(4)(a) is certainly a provision otherwise than in conformity with the principles embodied in Section 81(2) of the Act. But again the question arises whether the Municipality has a right to avail itself of the provision of Section 81(2) despite the provisions of Section 81(4) or whether the right of the Municipality is limited to Section 81(4)(a) alone in assessing agricultural lands within the Municipality to property tax.
8. The learned District Judge followed the principles laid down by Byers, J., in Municipal Council, Chicacole v. Rajah of Vizianagaram S.A. No. 1025 of 1943 (unreported) and in Municipal Council Chicacole v. Sri Vyricherla Chandramani Pattamahadevi S.A. No. 1026 of 1943 (unreported); and Byers, J., himself based his decision on M.S.M. Railway v. Bezwada Municipality (1944) 2 M.L.J. 25 : L.R. 71 I.A. 113(P.C). In the Bezwada case by which name I shall refer to the case decided in M.S.M. Railway Co. Ltd. v. Bezwada Municipality (1944) 2 M.L.J. 25 : L.R. 71 I.A. 113(P.C) lands which belonged to the railway company were assessed by the Municipality on an annual value calculated on lines analog us to those made applicable by Section 82(2) of the Act to a different kind of property, i.e., lands appurtenant to a building. As I have already pointed out, their Lordships of the Privy Council held that merely because there was a provision in Section 82(2) For calculation of annual value on a particular basis with reference to a given type of land, adoption of that basis was not ruled out with reference to other properties also, i.e., those liable to assessment under Section 81(2) of the Act, again on the annual value. Their Lordships pointed out that Sub-section 3 of Section 81 could have been availed of. But it was common ground that the levy in that case by the Bezwada Municipality was not under Section 81(3). In dealing however with the scope of Sub-section 3 of Section 81 their Lordships observed:
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 or appurtenant to building ' 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-section (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 the per centage of the capital value of the appellants' lands; they levied it at a percentage on their annual value.
9. Both in Sub-section 3 and Sub-section 4(a) of Section 81 of the Act the word is " may. No doubt, the learned Munsiff construed the word in Sub-section (4) as " shall." That point was not specifically decided by the learned District Judge. The learned advocate for the appellant contended that the observations of their Lordships of the Privy Council in the Bezwada case with reference to the scope of Sub-section 3 of Section 81 must be viewed as obiter dictum, because their Lordships specifically refrained from deciding the question, whether the levy could have been justified under Section 81(3), and whether that Sub-section alone should have been invoked. Treating it even as obiter dictum, those observations on the scope of the expression " may " in Section 81(3) are entitled to considerable weight. There seems to be no real basis for differentiating the expression " may " in Section 81(4) from that used in Section 81(3). Their Lordships pointed out that Sub-section (3) did not otherwise provide within the meaning of Section 81(2). Their Lordships also pointed out that with reference to the properties assessed by the Bezwada Municipality, Sub-section (3) of Section 81 would have been the more appropriate section. All the same, their Lordships made it clear that Sub-section (3), though it was a specific provision otherwise, was merely permissive and was not mandatory. In the words of their Lordships, " It permitted, but did not enjoin." If that is the scope of Sub-section (3) of Section 81, I am unable to see any basis for holding that the scope of Section 81(4)(a) is different. Section 81(2) the main provision for taxation makes it. clear that the basis of levy shall be the annual value. Section 81(3) provides for a different basis,' the capital value. Section 81(4) again refers to the annual value, but specifically provides with reference to the agricultural lands the basis for fixing the annual value, i.e., the annual assessment payable to the Government. Except this there is no real difference between the scope of Section 81(3) and the scope of Section 81(4)(a) as detracting from or limiting the powers of a Municipality conferred upon it by Section 81(2). If, despite Sub-section (3) of Section 81 the Municipality could still levy the tax under Sub-section (2) of Section 81, I see nothing in Section 81(4) to prevent the Municipality from levying taxes on agricutural lands under Section 81(2), though the Municipality could very well have levied that tax on the annual value calculated on the basis of Section 81(4). It was for the assessing authority to decide, not for the assesses to tell the assessing authority, which of the two modes of assessment permitted by the statute the assessing authority should elect.
10. To sum up, the question is whether Section 81(4) provides merely an alternative method of levy. That question is answered in the affirmative. There is authority, the decision of Byers, J, for it. Besides, the observations of their Lordship in the Bezwada case leave room for no other construction.
11. The second appeal fails and is dismissed with costs. Leave to appeal is refused.
12. Note.-The clauses of Section 81 have been referred to in this judgment as they stood during the period of assessment in question and before the amending Act of 1946.