Supreme Court Quashes Assessment Order in Municipal Tax Case Due to Invalid Exercise of Review Powers. Committee Composition Under Sections 386 and 117 of Bihar and Orissa Municipal Act, 1922, Must Be Followed Even After Supersession, and Burden of Proving Mistake Lies on Assessing Authority.

Civil suit challenging enhancement of municipal valuation and tax assessment as without jurisdiction.

Appellant sought declaration that alteration of assessment list by Assistant Special Officer was invalid and without jurisdiction, and permanent injunction restraining realization of enhanced tax.

Assistant Special Officer enhanced valuation and taxes after rejecting review petition; appellant alleged the officer lacked jurisdiction to review the assessment under Section 117.

Trial court dismissed suit; appellate court decreed suit; High Court in second appeal allowed respondents, restoring trial court's dismissal.

Whether after supersession of Municipality, a Committee under Section 117 of the Bihar and Orissa Municipal Act, 1922, could be constituted, and consequently whether the Assistant Special Officer had jurisdiction to hear and determine the review petition. Whether the burden of proof under Section 107(1)(c) lies on the assessing authority to establish mistake, fraud, or misrepresentation in the earlier assessment. Whether the preliminary objection to maintainability of the suit could be raised for the first time before the Supreme Court.

Appellant argued that High Court wrongly held Section 117(1) unworkable after supersession; committee could be constituted; and that burden of proof for mistake was on Municipality, not appellant. Respondent argued that after supersession no committee could be constituted under Section 117; Special Officer had jurisdiction to devise his own machinery; and sought to raise preliminary objection that suit was not maintainable.

Under Section 386(1)(b), upon supersession, the State Government may direct persons to exercise powers of Commissioners, but the statutory composition of a Committee under Section 117 must still be followed; a single officer cannot replace the Committee. Further, under Section 107(1)(c), the burden is on the assessing authority to prove fraud, misrepresentation, or mistake before amending an existing assessment.

The order of the officer rejecting the objections filed by the appellant and enhancing the value of the holdings was without jurisdiction. Under s. 107(1)(c) of the Act, the burden is upon the Commissioners, before they could amend the valuation and assessment already made, to establish that the previous assessment was incorrectly made by reason of fraud, misrepresentation or mistake. To say that when once the Commissioners vacated their office on supersession it was impossible for them to nominate or elect two other taxpayers to the committee within the meaning of s. 117(1) would render inoperative all sections whereunder powers were conferred or duties imposed on Commissioners, and would make s. 117(1) unworkable leading of the anomaly that the same officer who revised the assessment would sit in judgment over it.

The appellant filed Title Suit No. 60 of 1952 in the Court of the Third Munsif, Patna, seeking a declaration and permanent injunction. The Munsif dismissed the suit, holding the Assistant Special Officer's order valid. On appeal, the Subordinate Judge, Patna, held that the Assistant Special Officer lacked jurisdiction under Section 107(c) as there was no fraud, misrepresentation, or mistake, and decreed the suit. The respondents then preferred a second appeal to the Patna High Court. A Division Bench of the High Court allowed the appeal, holding that after supersession no committee could be constituted under Section 117 and the Special Officer had jurisdiction to dispose of the review application; it also held that the assessee had not established absence of mistake. The assessee then appealed to the Supreme Court by special leave.

• Bihar and Orissa Municipal Act, 1922: 107(1)(c), 117(1), 386(1)(b)