Case Note & Summary
The Municipal Corporation of Greater Mumbai (MCGM) appealed against a decree passed by the City Civil Court, Mumbai, in a suit filed by Kalpita Enclave Co-operative Housing Society and others (the Society) seeking refund of excess property tax paid under protest. The Society owned a building and was assessed to property tax by MCGM. The Society disputed the assessment and paid taxes under protest from 1995 onwards. The assessment was finalized by MCGM on 30th September 2005. The Society filed a suit on 5th October 2005 claiming refund of excess tax paid from 1995 to 2005. The trial court decreed the suit, ordering refund of Rs. 1,50,000 with interest, holding that the suit was within limitation as the cause of action was continuing. MCGM appealed, arguing that the suit was barred by limitation because the payments were made from 1995 and the suit was filed in 2005, beyond three years from the date of each payment. The High Court dismissed the appeal, holding that the limitation period for a refund claim runs from the date of the final assessment order, not from the date of each payment, as the payments were made under protest and the liability was disputed. The court applied Section 23 of the Limitation Act, 1963, which provides for a continuing cause of action. The court also noted that the Society had filed a statutory appeal against the assessment, which was pending, and the final assessment order was passed on 30th September 2005. The suit filed on 5th October 2005 was within three years from that date. The court upheld the trial court's decree and dismissed the appeal, also dismissing the cross-objections as not pressed.
Headnote
A) Limitation Act, 1963 - Section 23 - Continuing Cause of Action - Property Tax Refund - Where payments are made under protest and the liability is disputed, each payment does not give rise to a fresh cause of action; the cause of action continues until the final assessment order is passed. The limitation period for a refund claim runs from the date of the final assessment order, not from the date of each payment. (Paras 8-10) B) Mumbai Municipal Corporation Act, 1888 - Section 217 - Refund of Property Tax - Limitation - A suit for refund of property tax paid under protest is governed by the residuary Article 113 of the Limitation Act, 1963, and the limitation period of three years runs from the date when the right to sue accrues, i.e., the date of the final assessment order. The court held that the trial court's finding that the suit was within limitation was correct. (Paras 8-10) C) Civil Procedure Code, 1908 - Order 41 Rule 22 - Cross-Objections - The respondent's cross-objections challenging the quantum of refund were dismissed as not pressed. (Para 11)
Issue of Consideration
Whether the suit for refund of property tax paid under protest is barred by limitation when the cause of action is continuing and the limitation period runs from the date of the final assessment order, not from the date of each payment.
Final Decision
Appeal dismissed. The trial court's decree is upheld. Cross-objections dismissed as not pressed.
Law Points
- Limitation for refund of property tax paid under protest runs from date of final assessment order
- not from date of payment
- Section 217 of Mumbai Municipal Corporation Act
- 1888
- Section 23 of Limitation Act
- 1963
- continuing cause of action
