Commissiioner of Inland Revenue v Khan (Civil Appeal No. 37 of 1940) [1940] EACA 50 (1 January 1940)

# APPELLATE CIVIL

### Before HAYDEN, J.

# THE COMMISSIONER OF INLAND REVENUE, Appellant (Original Plaintiff) $\nu$

# AKBAR KHAN MUSA KHAN, Respondent (Original Defendant) Civil Appeal No. 37 of 1940

Limitation-Misjoinder-Suits by the Crown for recovery of Education Tax and Non-Native Poll Tax—Limitation Ordinance, 1934, section 5 (1)—Indian Limitation Act, 1877, article 149.

The Commissioner of Inland Revenue sued the respondent to recover Non-Native Poll Tax and penalty in respect of tax due for the years 1933 to 1936 inclusive. The District Commissioner, Nyeri, caused a notice to show cause to issue to the respondent under the Asiatic Education Tax Ordinance, 1926, in respect of tax for the years 1933 and 1934. The suits were evidently consolidated and dismissed on the ground of limitation.

*Held* $(4-2-41)$ .—<sup>(1)</sup> That section 5 (1) of the Limitation Ordinance, 1934, does not apply to claims by the Crown for the recovery of Education Tax or Non-Native Poll Tax.

(2) That there is nothing in the Limitation Ordinance, 1934, to show that the Crown is mentioned in that Ordinance by necessary implication.

(3) That the consolidation of the suits constituted misjoinder.

Stacey, Crown Counsel, for the Appellant.

#### Kapila for the Respondent.

JUDGMENT.—Proceedings were instituted in the Court of the First Class Magistrate, Nyeri, against the respondent (defendant) to recover (1) Sh. 174, being Non-Native Poll Tax, and penalty alleged to be due in respect of the years 1933, 1934, 1935 and 1936 plus costs, and (2) Sh. 80, Education Tax in respect of the years 1933 and 1934 plus costs. The Commissioner of Inland Revenue (appellant) was named as plaintiff in (1) and the District Commissioner was named as plaintiff in (2), which was a notice to show cause issued under the Asiatic Education Tax Ordinance, 1926. It is not understood how both claims came to be comprised in the one suit numbered 85 of 1940. Upon the suit coming on for hearing the defendant is recorded to have pleaded, through his advocate, that the suit was "time barred under section 5 of Ordinance No. 21 of 1934". Judgment was then delivered in the terms following: --

"In view of the fact that this suit was instituted on 24th August (July), 1940, and the last debt became due on 31st March, 1934, I find that the suit is time barred and the case is accordingly dismissed".

From this judgment the appellant has appealed on the following grounds: (1) that there was no evidence justifying the finding that the last debt became due on 31st March, 1934, inasmuch as the plaintiff claimed for taxes due after that date, and (2) that the magistrate erred in finding that the Limitation Ordinance, 1934, was applicable to the claim.

Mr. Stacey submitted that the magistrate misdirected himself in holding that the last debt became due on 31st March, 1934, he admitted that that was true as regards the claim for Education Tax, but clearly wrong in respect to the Non-Native Poll Tax claim. Mr. Kapila, for respondent, who said he was represented at the hearing before the lower Court by his clerk, stated that the only summons that was heard by that Court was the one issued under the Asiatic Education Tax Ordinance. From the wording of the judgment it would appear that the magistrate only considered the claim for Education Tax, as the claim for Non-Native Poll Tax included tax for the years 1935 and 1936. Be that as it may the effect of the judgment was to dismiss the whole suit which included both claims as above.

The claim for Non-Native Poll Tax in respect of the years 1935 and 1936 was clearly not barred under section 5 (1) of Ordinance No. 21 of 1934, the suit having been instituted within six years of the tax becoming due, so therefore the magistrate was clearly wrong in dismissing the suit as a whole.

I shall now proceed to consider the question involved in the second and main ground of appeal, viz.: —Whether the provisions of section 5 (1) of the Limitation Ordinance, 1934, apply to a claim by the Crown for recovery of Education Tax and Non-Native Poll Tax. It is conceded by respondent's counsel that the Crown is not bound by any enactment unless named therein expressly or by necessary implication. Mr. Kapila contended that the Crown is by implication bound by the Limitation Ordinance, 1934, and that the suit being a "personal suit" comes within section 5 (1) of that enactment. In support of his submission he urged that section 41 of the Limitation Ordinance does not refer to suits save suits relating to prescription and that the proviso to that section only referred to acts, matters or things in contradistinction to suits. He pointed out that the second schedule to the Indian Limitation Act, 1877, was divided into three divisions, i.e. the first division, which relates to suits and comprises articles 1 to 149 inclusive, and the second and third divisions, which relate to appeals and applications extending from article 150 to article 179, both inclusive. He contended that the acts, matters and things referred to in the said proviso related exclusively to the subjects dealt with in articles 150 to 179 and not to suits which are dealt with in the first division of the said schedule. Continuing, he submitted that there would have been no reference to the Indian Limitation Act of 1877 in Ordinance No. 21 of 1934 if the Government wanted to exclude any reference to the Crown from our Ordinance because, as he contended, the periods of limitation provided for in the first division of the second schedule to the Act were taken out entirely by our Ordinance and the periods of limitation provided for in the second and third divisions of the said schedule were kept alive by the proviso to section 41 of the Ordinance. His submission being that as the periods of limitation prescribed by the first division of the said schedule were repealed by Ordinance No. 21 of 1934, that ordinance by implication has prescribed periods of limitation for all matters dealt with from articles 1 to 149 inclusive of the said schedule to the Act-Article 149 relating to suits by the Crown. Further he pointed out that section 38 of the Ordinance did not provide an exception in favour of the Crown. It was unnecessary to provide such an exception as the Crown is not bound unless named expressly or by necessary implication. With reference to the meaning which Mr. Kapila sought to place on the words act, matter or thing in the proviso to section 41 of the Ordinance Mr. Stacey aptly remarked that a suit has to be filed and therefore it is an act which has to be done within a certain period.

Section 41 of the Limitation Ordinance reads: -

"The Indian Limitation Act, 1877, as applied to the Colony save in so far as it relates to prescription is hereby repealed:

Provided that where in the said Indian Limitation Act any act, matter or thing is required to be done within a specified period, and a period of limitation in respect of any such act, matter or thing is not provided for in this Ordinance or in any other law or ordinance now or hereafter in force in the Colony then notwithstanding the provisions of this section, the period of limitation provided for in the said Indian Limitation Act in respect of the said act, matter or thing shall remain in full force and effect."

There is nothing in the proviso to support Mr. Kapila's contention that the articles in the first division of the second schedule to the Act only are repealed and therefore no longer operative and that the articles in the second and third divisions are the only articles still in force. To my mind the proper construction to be placed upon the proviso is that wherever the Ordinance has not prescribed a period of limitation for the institution of, *inter alia*, any particular suit the period of limitation provided for in the Indian Limitation Act in respect of such suit shall apply. In the case of McCoy v. Esmail Allibhai (1938), 5 E. A. C. A. 70, Whitley, C. J., Uganda, said at page 72: "Section 41 repeals (save as to prescription) from 1st December, 1934 inclusive, the old Indian Limitation Act with that one exception and the whole of the Indian Limitation Act is thenceforward dead and has no longer any effect in law. The proviso does not keep alive any part of the Indian Limitation Act. It merely provides for any unforeseen contingencies which may have been overlooked. It provides that if in the new Ordinance (which is now the law) no period is laid down for such cases, then the period shall be the same as were laid down in the now extinct Indian Limitation Act. It is the new Ordinance which makes such period, the periods prescribed by law for the future just as they had been prescribed by the Indian Limitation Act in the past."

In further support of the construction which I place upon section 41 of the Ordinance I would cite the following extracts from the judgments of Sheridan, C. J., Kenya, and Whitley, C. J., Uganda, in Jethwa v. Mulji Bhanji (1939), 6 E. A. C. A. 28, Sheridan, C. J. at p. 29:-

"I will say this that had I been appearing in the case on circuit and been unaware of the decisions in Dupleix v. de Roven (23 E. R. 950) and the unreported Civil Case No. 29/1936 .... to the effect that a foreign judgment falls within section 5 of the Ordinance, I would certainly have pleaded article 117 of the Indian Limitation Act. . . . A careful reading of the Ordinance, and particularly section 41, would lead one ordinarily to conclude that article 117 was kept alive and was the proper provision to plead."

## Whitley, C. J. at pp. 30 and 31: $\rightarrow$

"Until 1934, when the Kenya Limitation Ordinance was enacted, the Indian Limitation Act was the law in this Colony. The new legislation was brought into force in order to bring the law as far as possible into line with that of England. It was realized, however, that there might remain cases specifically provided for in the Indian Act which were not covered by the more condensed sections to the new Ordinance. . . . . It is clear that the legislature contemplated that there might still be cases in which it would be proper to plead the Indian Act and that they purposely left the matter to a certain extent open. It is not as though they had repealed certain articles and kept other specified ones alive. In that case there would of course have been no excuse for pleading one of the repealed articles. But the present case seems very different. By implication article 117 may have been and, in my opinion, now that we have had an opportunity of considering the English cases, has in fact been replaced by section 5 (1). But it must I think be conceded that it is far from obvious from the wording of the Ordinance that such was the intention."

In further support of his submission that this case is governed by section 5 $(1)$ of the Limitation Ordinance, Mr. Kapila cited the following extract from the judgment of Webb, J. in Jethalal and another v. Ujagar Singh, 17 K. L. R. 84 at p. 86:-

"It is true that there are suits for which the Ordinance prescribes a period of limitation which is shorter in the absolute than that prescribed by the Indian Limitation Act, see, for example, articles 129, 133, 145-149 of Schedule II".

Article 149 prescribes a period of sixty years for suits by the Government. Mr. Kapila's contention was that Webb, J. would not have referred to article 149 had not the Crown been by necessary implication included in section 5 (1) of our Limitation Ordinance. In that case Webb, J. was merely giving examples of the articles of the Schedule to the Indian Limitation Act, which appeared to prescribe periods of limitation longer than those fixed by the Limitation Ordinance. The case had nothing to do with the rights of the Crown and the fact that article 149 is one of those mentioned cannot justify me in regarding that case as a decision on the question of how far the rights of the Crown are affected by the Ordinance. The Crown is not expressly mentioned in the Ordinance and there is nothing therein to show it is mentioned by necessary implication.

The appeal is therefore allowed and the judgment is set aside with costs against the respondent of this appeal. No costs are awarded in respect of the proceedings in the Court below owing to misjoinder. The appellant to be at liberty to institute two separate suits de novo against the respondent for recovery of the taxes in question.