2001 (6) TMI 818 - HC - Indian Laws

Challenging Tax Assessment Under Municipal Corporation Act: Civil Suit Valid Despite Appeal Process

Ganga Ram Hospital Trust Versus Municipal Corporation Of Delhi

The court held that a civil suit to challenge the levy and assessment of tax under the Delhi Municipal Corporation Act is maintainable, despite the ... - Issues Involved:1. Right to file a civil suit.2. Express or implied bar to the institution of a civil suit in the Delhi Municipal Corporation Act.3. Effect of provision under Section 169 of the DMC Act for appeal to challenge levy and assessment of tax.4. Adequacy and efficacy of the remedy of appeal in view of the provision regarding pre-deposit being a condition precedent to the hearing of appeal as per Section 170(b) of the Act.Issue-wise Detailed Analysis:1. Right to File a Civil Suit:There is an inherent right in every person to institute a civil suit unless the suit is barred by any statute. 'One may, at one's peril, bring a suit of one's choice. It is no answer to a suit, howsoever frivolous the claim, that the law confers no such right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit.' This principle is reinforced by Section 9 of the Code of Civil Procedure, which states, 'The Courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or implied barred.'2. Express or Implied Bar to the Institution of a Civil Suit in the Delhi Municipal Corporation Act:The DMC Act does not contain any explicit provision barring a civil suit to challenge the levy and assessment of tax. The court noted that many statutes contain express bars, such as Section 293 of the Income-tax Act. However, Sections 169 and 170 of the DMC Act do not contain any provision barring a civil suit. The Supreme Court in Dhulabhai v. State of Madhya Pradesh laid down principles regarding the exclusion of civil court jurisdiction, emphasizing that exclusion is not to be readily inferred unless the statute provides a special remedy and the remedy is adequate and efficacious. The court concluded that there is no express or implied bar to civil suits to challenge the levy and assessment of tax under the DMC Act.3. Effect of Provision under Section 169 of the DMC Act for Appeal to Challenge Levy and Assessment of Tax:Section 169 provides for an appeal against the levy or assessment of any tax under the Act to the court of the district judge of Delhi. Section 170 lays down conditions for the right to appeal, including the pre-deposit of the disputed amount. The court observed that while these sections provide a remedy of appeal, they do not bar a civil suit. The court emphasized that the availability of an alternative remedy may be a bar to the exercise of writ jurisdiction but not to the institution of a civil suit, as the exercise of jurisdiction to entertain a civil suit is not discretionary.4. Adequacy and Efficacy of the Remedy of Appeal in View of the Provision Regarding Pre-deposit Being a Condition Precedent to the Hearing of Appeal as per Section 170(b) of the Act:The court acknowledged that the remedy of appeal under Section 169, coupled with the pre-deposit condition under Section 170(b), is often onerous and can render the right of appeal illusory. The Supreme Court in Himmatlal Harilal Mehta v. State of Madhya Pradesh held that if the remedy provided by the Act is onerous and burdensome, it cannot be considered an adequate alternative remedy. The court also referred to Indian Hotels Company Limited v. New Delhi Municipal Council, where it was held that the condition of pre-deposit amounts to the negation of the right of appeal. The court concluded that the remedy of appeal under the DMC Act is not adequate or efficacious due to the pre-deposit condition, thereby justifying the maintainability of a civil suit.Conclusion:The court set aside the impugned judgment of the trial court, holding that a civil suit to challenge the levy and assessment of tax is maintainable. The case was remanded back to the trial court for a decision in accordance with the law. The appeal was allowed, and there was no order as to costs.