Gujarat High Court
Ashok Gondhia Memorial Trust Through ... vs State Of Gujarat on 9 October, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/5850/2024 ORDER DATED: 09/10/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 5850 of 2024
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ASHOK GONDHIA MEMORIAL TRUST THROUGH MANAGING TRUSTEE
GAURANG SHANGHVI & ORS.
Versus
STATE OF GUJARAT & ANR.
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Appearance:
AAYOG Y DOSHI(8519) for the Petitioner(s) No. 10,11,12,2,3,4,5,6,7,8,9
EVOLVE LEGAL(17686) for the Petitioner(s) No. 1,13
MS MEGHA JANI with TANAYA G SHAH(8430) for the Petitioner(s) No.
10,11,12,2,3,4,5,6,7,8,9
MS SHRUNJAL SHAH ASSISTANT GOVERNMENT PLEADER for the
Respondent(s) No. 1
DS AFF.NOT FILED (N) for the Respondent(s) No. 1
MR AV NAIR(5602) for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 09/10/2025
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned advocate Ms. Megha Jani with learned advocate Ms. Tanaya G. Shah on behalf of Evolve Legal for the petitioner and learned Assistant Government Pleader Ms. Shrunjal T. Shah for the respondent no. 1 and learned advocate Mr. A.V. Nair for respondent no. 2.
2. By this petition under Articles 226 and 227 of the Constitution of India, the petitioners have prayed for quashing and setting aside the tax bills issued by the respondent no. 2 as Page 1 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined stated in the following prayers :-
"13(A) That the Hon'ble Court be pleased to issue a writ of certiorari and /or mandamus or any other appropriate writ, order or direction to quash and set aside the Impugned Bills being (0) Bill no. 2023/0615521 dated 03.01.2024 for an amount of Rs. 33,028,272 (built up area 7524.03 sq. feet) with respect to assessee key no 0367/0009/000/22/14304/000/X00; (ii) Bill no. 2023/0615525 dated 03.01.2024 for an amount of Rs. 34,44,203 (built up ares to assessee key DO. And ) ( Bill по 612.91 sq. feet) with respect 0367/0010/000/22/14304/001/X00 2023/0620786 dated 27.02.2024 for an amount of Rs. 30,69,178 (built up area 827.62 sq. feet) with respect to assessee key no. 0367/0020/000/22/02417/000/X00 as served on the Petitioner on 27.02.2024 in as much as the said Impugned Bills retrospectively impose property tax for a period prior to the assessment year 2023-2024 and declare the levy to that extent as illegal and bad in law;
(B) That the Hon'ble Court be pleased to issue a writ of certiorari and /or mandamus or any other appropriate writ, order or direction to quash and set-aside the Impugned Bills being (1) Bill no. 2023/0615521 dated 03.01.2024 for an amount of Rs. 33,028,272 (built up area 7524.03 sq. feet) with respect to assess key no. 0367/0009/000/22/14304/000/X00; (ii) Bill no.
2023/0615525 dated 03.01.2024 for an amount of Rs. 34,44,203 (built up area 612.91 sq. feet) with respect 0367/0010/000/22/14304/001/X00 to assessee key and (iii) no. Bill no. 2023/0620786 dated 27.02.2004 for an amount of Rs.30,69,178/- (built up are 827.62 sq.feet.) with respect to assessee key no. 0367/0020/00/22/02417/000/X00 as served on the petitioner on 27.02.2024 in as much as the said tempo incorrectly calculated on basis of (a) multiplying "Use Factor valve 8 and (b) "Occupancy Factor 2 and declare the levy to that extent as illegal and bad in law;
(C) That the Hon'ble Court be pleased to issue & wit of mandamus of any other appropriate writ, order of direction, directing the Respondent no.2 Rajkot Municipal Corporation to re-assess the property tax in respect of the said land and building for the assessment year 2023-2024 and onwards and not for the any period prior thereto and further on the basis of multiplying 'Use Factor' 2.5 and Occupation Factor' 1.00, (E-1) That the Hon'ble Court be pleased to issue a writ of certiorari and/or mandamus or any other appropriate Page 2 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined appropriate writ, order or direction to quash and set aside (i) Bill Na 2024/0336222 with or respect to assessee key no. 0967/0010/000/22/14304/000/X00, (ii) Bill No. 2024/0336223 with respect to assessee key no. 2024/0336293 with respect to assessee key no. 0367/0010/000/22/14304/001/X00, (iii) Bill No. key respect 0367/0020/000/22/02417/000/X00 and all subsequent property tax bills that may be raised by the Respondent ms. 2 Corporation upon the Petitioner no. 1 Trust"; ( E-2) The pending the bearing and final disposal of this petition, the Han'ble Court be pleased to restrain the Respondent no. 2 Rajkot Municipal Corporation from demanding property e on basis of and taking any coercive steps for recovery of the amount levied/demanded vide Impugned Bills for AY 2024-2024 being (i) Bill No. 2024/0336222 with to key respect 0357/0010/000/22/14304/000/X00, (ii) Bill No. 2024/0336223 with respect to assessee key no.
0367/0010/000/22/14304/001/X00, (ii) Bill No. key respect 0367/0020/000/22/02417/000/X00 and all subsequent property tax bills that may the raised by the Respondent no. 2 Corporation upon the Petitioner no. I Trust."
5. The petitioner also prayed vide para 13(C) directing the respondent no. 2 Rajkot Municipal Corporation to re-assess the property tax in respect of the land and building for the Assessment Year 2023-24 onwards and not for any period prior thereto, and further on the basis of multiplying 'Use Factor' 2.5 and 'Occupation Factor' 1.00.
6. This Court passed the following order on 24.04.2024:-
"1. Heard learned advocate Ms. Megha Jani for learned advocate Ms.Tanaya G. Shah for the petitioners.
2. Learned advocate Ms.Megha Jani has tendered a draft amendment. The same is allowed in terms of the draft. To be carried out forthwith. Time to file appearance for the newly joined petitioner No.13 is granted till the next date of hearing.
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3. Issue Notice, returnable on 25th June, 2024. By way of ad- interim relief, no coercive steps shall be taken by the respondent No.2-Corporation qua the bills under challenge on condition of depositing Rs.20,00,000/- by the petitioner No.1 with the respondent No.2-Corporation before the next date of hearing without prejudice to the rights and contentions raised in this petition.
Direct service is permitted."
7. During the pendency of this petition, the petitioners also received tax bills for the Assessment Year 2024-25 and accordingly, the petition was amended by incorporating a challenge to the said bills and the amendment was granted by order dated 11.07.2025 passed in Civil Application (For Amendment) No. 1 of 2025.
8. The brief facts of the case are that the petitioner no. 1 is a Public Charitable Trust registered under the provisions of the Bombay Public Trust Act, 1950, whereas petitioner nos. 2 to 12 are the Trustees of the said Trust. The petitioner no. 13 is joined as per the order passed by this Court on 24.04.2024. 8.1. It is the case of the petitioner that petitioner no. 1 Trust was setup and registered in the year 1976. The petitioner - Trust acquired the land bearing Survey No. 76 paiki, plot no.1 to Page 4 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined 10, situated at Rajkot in the year 1978 by way of donation and thereafter constructed a hospital under the name Navalben Manilal Virani Hospital on the said land from it from the year 1985 to July, 2006. The petitioner no. 1 Trust entered into Management Agreement on 30.03.2006 with petitioner no. 13 - Wockhardt Hospitals Limited whereby the petitioner - Trust entrusted the running operation and management of the hospital to the petitioner no. 13.
8.2. It is also the case of the petitioner that on a challenge by third party to such Management Agreement, the Charity Commissioner, Rajkot by order dated 15.06.2013 upheld the same and observed that the revenue earned by the petitioner no. 1 Trust under the Management Agreement with petitioner no. 13 has been applied for providing medical relief and/or aid to the said hospital and that the petitioner Trust continues to fulfill its charitable objects. It is the case of the petitioner that the land and buildings have been assessed by the respondent no. 2 and for the Assessment Years 2019-20 to 2022-23, annual property tax bills were raised wherein annual General Tax has been levied as under :-
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NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined "(i)Assessee Key no.0367/0009/000/22/14304/000/X00- Rs.5,90,971.
(ii) Assessee Key no. 0367/0010/000/22/14304/001/X00- Rs.16,434/-.
(iii) Assessee Key no.0367/0020/000/22/02417/000/X00-
Rs.62,289/-."
8.3. For the Assessment Year 2023-24, three property tax bills were generated wherein annual General Tax was increased as under :-
"(i) Assessee Key no.0367/0009/000/22/14304/000/X00- Rs.9,40,180/-.
(ii) Assessee Key no.0367/0010/000/22/14304/001/X00- Rs.23,700/-.
(iii) Assessee Key no.0367/0020/000/22/02417/000/X00-
Rs.99,096/-."
8.5. It is the case of the petitioner that two Special Notices dated 16.09.2023 were served upon the petitioner Trust along with property tax bills being Special Notice no. 2023/0018938 along with Bill No. 2023/060486 and Special Notice No. 2023/0018940 along with Bill No. 2023/0604866 by increasing annual General Tax as under :-
"(i)Assessee key no. 0367/0009/000/22/14304/000/X00-
Rs.30,08,577/-.
(ii) Assessee key no. 0367/0020/000/22/02417/000/X00- Rs.3,17,108/-."
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9. According to the petitioner, the Special Notices and property tax bills dated 16.09.2023 seek to levy property tax retrospectively for the first time for an undefined period by using the multiplier of 'Use Factor' value 8 as applicable to the category of Banks, Financial Institutions, Public Limited Co. Board/Nigams though the building was used to run in the name of N.M. Virani Wockhardt Hospital. The petitioner - Trust therefore filed a detailed written representation on 01.12.2023 against the Special Notices.
9.1. It is the case of the petitioner that the petitioner thereafter received three Special Notices along with three property tax bills dated 03.01.2024 being Bill No. 2023/0615521 with respect to assessee key no. 0367/0009/000/22/14304/000/ X00, Bill No.2023/0615523 with respect to assessee key no. 0367/0020/000/22/02417/000/X00, and Bill No. 2023/0615525 with respect to assessee key no. 0367/0020/000/22/14304/001/ X000.
9.2. According to the petitioner by Special Notices and bills dated 03.01.2024, the levy of property tax demand was Page 7 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined significantly increased from what was levied vide bills dated 16.09.2023 by considering the subject land and building as a rented premises instead of 'self occupied premises'. 9.3. The petitioner by letter dated 12.01.2024 followed by letter dated 22.01.2024 raised objections against the issuance of the Special Notices and bills dated 03.01.2024. The respondent Corporation by order dated 22.02.2024 mechanically rejected the objections raised by the petitioner confirming the demand of property tax as raised vide Carpet Area Bills dated 03.01.2024. The petitioner was also called upon to make payment in accordance with the bills dated 03.01.2024. 9.4. It is the case of the petitioner that petitioner no. 13 manages the hospital as the Management Agreement and the ownership of the property remains with the petitioner no. 1 - Trust. Being aggrieved by the bills issued by the respondent no. 2, the petitioner has preferred this petition and prayed for the reliefs as stated hereinabove.
10. Learned advocate Ms. Megha Jani appearing for the petitioners submitted that the impugned property tax bills Page 8 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined issued by the respondent no. 2 for prior period on retrospective basis from the period commencing prior to the relevant official Assessment Year 2023-24 are not tenable. Reliance was placed on the decision of this Court in case of Vijayan Rajamanicka Nadar Pagalam v. Jamnagar Municipal Corporation & Ors. rendered in Special Civil Application No. 18000 of 2018 and allied matters dated 15.07.2019 wherein it is held that as per the settled legal position the property tax being tax for the official year, must be levied during the official year. It was, therefore, submitted that the respondent no. 2 could not have issued the Bills raising demand with retrospective effect. 10.1. Learned advocate Ms. Jani also submitted that the judgment and order passed by this Court is also challenged before the Hon'ble Apex Court, however no stay order is granted in Special Leave Petition (Civil) Diary Nos. 37659/2019 and other allied matters. It was further submitted that in view of the decision of this Court the impugned bills so far as it relates to the prior period are liable to be quashed and set aside as the respondent no. 2 has no jurisdiction to issue such bills.
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10.2. It was further submitted that in the impugned bills the property tax is erroneously calculated on the basis of multiplying 'User Factor' of value '8' which is applicable to Banks, Financial Institutions, Public Limited Company, Board/Nigams as per the Taxation Rules governing the Corporation, as the correct multiplier factor ought to have been applied as 2.5 which is applicable to other hospital. It was submitted that petitioner no. 13 being a Private Limited Company cannot be the basis for considering the User Factor of 8 as petitioner no. 13 is running the hospital of the petitioner no. 1 Trust on the basis of the Management Service Agreement. 10.3. It was also submitted that the Occupancy Factor of 2 also could not have been applied by the respondent no. 2 by classifying the land and building of the ownership of the petitioner no. 1 Trust as rented premises instead of applying the multiplying Factor of 1 which is applicable to the self occupied non-residential premises. It was, therefore, submitted that the respondent no. 2 Rajkot Municipal Corporation was aware about the running of the hospital by the petitioner no. 1 Trust from 1985 onwards and by the petitioner no. 13 since 2006 onwards.
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However, the impugned bills are issued for the first time for the year 2023-24 and detailed objections raised by the petitioners are not at all considered while passing the impugned order dated 22.02.2024. It was submitted that by the impugned order passed by the respondent no. 2, none of the objections raised by the petitioner is dealt with except the rent agreement for the canteen is taken into consideration to modify the impugned bills.
11. On the other hand, learned advocate Mr. A.V. Nair appearing for the respondent no.2 submitted that the impugned order dated 22.02.2024 is passed under Section 407 of the Gujarat Provincial Municipal Corporation Act (For Short "GPMC Act") read with Rule 21A of the Taxation Rules in Chapter VIII of Schedule A to the GPMC Act which is not challenged in the petition. It was submitted that the petitioners have prima facie even failed to plead and prove that the impugned bills have been issued without jurisdiction and therefore, the petitioner should be relegated to avail the alternative efficacious remedy provided under Section 406 of the GPMC Act by way of an appeal challenging the tax bills and the Special Notices.
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11.1. Learned advocate Mr. Nair submitted that the petition preferred by the 'owners' as defined under Section 2(45) of the GPMC Act along with 'occupier' as defined under Section 2(41) of the GPMC Act is not maintainable inasmuch as the impugned bills of the Official Year 2023-24 have been issued after revision/reassessment of the property tax for the subject premises/building upon disclosure of the facts that the petitioner no. 13 was occupying the subject non-residential premises and it is a Pubic Limited Company and, therefore, the User Factor 8 is required to be applied as per Taxation Rules (Amendment) 2018 in Chapter VIII of Schedule 3A of the GPMC Act applicable to the respondent no. 2 which have been further amended with effect from 01.04.2020 vide resolution dated 18.12.2020 by the respondent no. 1 State of Gujarat. 11.2. It was therefore submitted that as per the relevant provisions of the GPMC Act and the Taxation Rules applicable to the respondent no. 2, the impugned property tax bills have been issued by considering the User Factor of value 8 applicable to the Public Limited Company and occupancy Factor 2 as the Page 12 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined premises in question are treated as rented premises as per the Management Service Agreement as the petitioner no. 1 Trust is getting a fixed amount per year for allowing petitioner no. 13 to run the hospital professionally.
11.3. It was, therefore, submitted that the petitioners have raised disputed questions of fact by seeking interpretation of the so called Management Agreement dated 30.08.2008 which in fact is a camouflaged lease agreement whereby the petitioner no. 1 Trust has leased the entire hospital to the petitioner no. 13 by terming as a "license" to manage. It was, therefore, submitted that the allegation of invoking incorrect Factors F3 and F4 in the impugned tax bills are liable to be not taken into consideration and the petition being devoid of merits is liable to be dismissed.
11.4. Learned advocate Mr. Nair refer to and relied upon Rule 21A of the Taxation Rules for reassessment of the property tax after issuing the Special Notice dated 04.01.2024 to submit that as per the Rule 5 of the Taxation Rules, the competent authority had exercised jurisdiction under the said Rule 21A of the Page 13 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined Taxation Rules and, therefore, there is no illegality in the impugned Special Notices or the property tax bills issued as per the provisions of the GPMC Act read with Taxation (Amendment) Rules, 2018 applicable to the respondent no. 2. 11.5. Learned advocate Mr. Nair further submitted that the premises in questions were subjected to the assessment in the year 2003 by giving effective date of the year 1998, wherein the hospital was running in the name of the petitioner no. 1 Trust and during the initial assessment, the building was classified as a non-residential to the extent of 78,094 sq.ft. and residential to the extent of 7,117 sq.ft., and thereafter, by communication dated 04.10.2023, details regarding occupancy and usage were sought from the petitioner to determine the property tax as per the applicable Rules. It was therefore submitted that on receipt of such information and on receipt of the Management Agreement between the petitioner no. 1 and petitioner no. 13 and other documents like Certificate of Incorporation, GST registration certificate, the competent authority revised the assessment of the property of tax by resorting to Rule 21A read Page 14 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined with Rule 5 of of the Taxation Rules and issued the impugned bills. Therefore, it was submitted that no interference may be made by exercising extraordinary jurisdiction under Articles 226 and 227 of the Constitution of India.
11.6. Learned advocate Mr. Nair further referred to the affidavit-in-reply filed on behalf of respondent no. 2 and relied upon the following averments made in the reply :-
"11. In response to the contentions and averments made in para- 2, 5 and 6 of the petition, it is humbly submitted that the same are factually erroneously, misconceived. misconstrued and misleading, and accordingly denied in toto. Without prejudice, it is humbly submitted that the impugned bills have been issued on 03/01/2024 and 27/02/2024 for the Official/Financial Years 2023- 2024, prior to the commencement of the next Official year i.e. 01/04/2024, and accordingly the contention of the petitioner that the Property Tax herein have been issued after the expiry of the Official year is erroneous and misconceived. Even otherwise, the revision of property tax herein for the Official year 2023-2024 have been carried out in exercise of the jurisdiction vested under Rule 21A read with Rule 5 of the Taxation Rule, in consonance with the Taxation (Amendment) Rules 2018 (as amended in 2020) applicable to the Rajkot Municipal Corporation, and hence the ground of retrospective levy of Property Tax has no factual or legal force. Further, the contention of Factor F3 (Use factor) of "8" and Factor F4 (Occupancy factor) of "2" having being incorrectly applied to the subject building-premises is also misconceived and erroneous, as it is well established on record and already demonstrated herein-above that the occupier- Petitioner no. 14 herein is a "Public Limited Company" for applying factor-F3 as "8" and it is also not the "Owner" but an Occupier-Lessee-Tenant for applying factor-F4 as "2". It is further submitted that the ground of substantial increase in Property Tax payable on the subject building-premises is legally not tenable, as the impugned Bills for property tax have been issued, in consonance with the provisions of the Taxation Rules applicable to limits of the Rajkot Municipal Corporation, after Page 15 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined following the due principles of natural justice, by issuing the communications dated 04/10/2023 and the Special notices dated 2009/2023and 04/01/2024 and considering the submissions made on behalf of the Petitioners.:
11.7. Referring to the above averments made on oath on behalf of the respondent no. 2, it was submitted that the petitioner is not justified in making allegations regarding the applicability of Factor F3 i.e. User Factor of value 8 and Factor F4 i.e. Occupancy Factor of 2 having being incorrectly applied to the subject building premises inasmuch as as per the facts available on record, the petitioner no. 13 is a Public Limited Company for applying Factor F3 as '8' and is also not the owner, but an occupier i.e. the lessee-tenant and therefore occupancy Factor F4 of F2 is rightly applied and the impugned bills are therefore required to be upheld atleast for the year under consideration.
11.8. Learned advocate Mr. Nair also refer to and relied upon the following averments made in paragraph 12 of the affidavit-
in-reply filed on behalf of the respondent to substantiate that for the first time it came to the knowledge of the respondent no. 2 in September, 2024 about the occupancy of the petitioner no. 13 as a lessee-tenant and only after issuance of the Page 16 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined communication dated 04.10.2023 and on receipt of the copy of the Management Agreement executed between the petitioner no. 1 and petitioner no. 13.
"12. In response to the factual averments made in Para-7.1 to para-7.7 of the Petition read with Municipal Bills issued prior to the impugned Bills, it is humbly submitted that the Petitioners herein have impliedly admitted that they have never intimated or given notice about the change in name of the hospital from "Navalben Manilal Virani Hospital" to "N.M. Virani Wockhardt"
and kept on paying the Property tax in the names of "Navalben Manilal General Hospital", "Navalben M. Virani General Hospital" and "Ashok Gondhiya Memorial Trust" till 2023-2024, and even the change in Occupier of the building-premises in question since 2008, as mandated in Rule 5 of the Taxation Rules, was never intimated to Respondent no. 2, and accordingly the invocation of jurisdiction under Rule 21A herein was duly justified for revision/re-assessment of the property tax for the official year 2023-2024, when these facts were brought to the notice of the Respondent no. 2 in the month of September-2024. It is further submitted that it was only upon issuance of the communication dated 04/10/2023, the Petitioners herein had submitted the copy of the So-called Management Agreement executed between Petitioner No. 1 and 14 and the copies of the certificate of registration of the Petitioner no. 14 under the CGST Act and the Companies Act, and only upon perusal of the same, it was learned that the property tax for the subject building- premises have been incorrectly levied in the three Bills dated 15/04/2023, 15/04/2023 and 17/04/2023 (at Annexure-I colly), and accordingly before the completion of the official year 2023- 2024, the impugned Bills have been issued prior to 31/03/2024, after following the due procedure of law."
12. It was submitted by learned advocate Mr. Nair that in view of the above facts and averments made on oath the petition is liable to be dismissed.
13. Having heard the learned advocates for the respective Page 17 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined parties and considering the facts of the case as well as the material placed on record, we have entertained this petition in view of the decision of this Court in case of Vijayan Rajamanicka Nadar Pagalam (supra), as the impugned bills are issued retrospectively for the prior period than the Official Year 2023-
24. This Court in the said decision has held as under :-
"10. The issue raised in the present writ application is no longer res integra. A Division Bench of this Court in the case of (The) Anant Mills Co. Ltd. (Under Liquidation) vs. Municipal Corporation for the city of Ahmedabad and Others reported in 1993 (2) G.L.H. 897 had the occasion to look into the entire scheme of the Act alongwith the Rules and also the issue whether the assessment of property tax for any particular official year must be completed before the expiry of the official year. P.N. Bhagwati (C.J.) (as His Lordship then was) speaking for the Bench observed as follows :
"Then follows Rule 21-B which is a new rule introduced by the Amending Act and it sets out certain contingencies in which the Commissioner may prepare and complete the assessment book even after the expiration of the official year. It may be pointed out here that while construing the corresponding provisions relating to assessment and levy of property tax contained in the Bombay Municipal Boroughs Act, 1925 - which provisions are similar though not identical with the provisions of the Corporation Act and the rules - it was held by a Division Bench of this Court in Municipal Corporation of the city of Ahmedabad v. Keshavlal (1965) 6 G.L.R. 228 that the procedure for assessment and levy of property tax set out in those provisions, must be completed before the expiry of the official year and no assessment can be made after the official year has ended. The scheme of the provisions of the Boroughs Act and the present rules relating to assessment and levy of property tax being substantially the same, it would follow a fortiori that the ratio of this decision must apply equally in construing the provisions of the Corporation Act and the Rules and the assessment of property tax for any particular official year must be completed before the Page 18 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined expiry of the official year. This position has now been impliedly recognised by the Legislature in enacting Rule 21B. Rule 21B accepts by necessary implication that having regard to the scheme of the Corporation Act and the Rules, the assessment of property tax for any particular official year must be completed before the expiry of the official year and thus give legislative approval to the decision in Keshavlal's case (supra) and recognises that its ratio would also be applicable in the construction of the provisions of the Corporations Act and the Rules and having done so enacts an exception to the rule by providing that in cases falling within it, the assessment book may be prepared and completed even after the expiry of the official year. These are the relevant provisions of the Corporation Act and the Rules having bearing on the determination of the questions arising in these petitions."
10.1 The aforesaid decision of this Court in Anant Mills Co. Ltd. (Supra) later came to be followed by this Court in the case of Kanaiya Prints Pvt. Ltd. vs. Assessment and Recovery Officer and Anr. reported in 2003 (1) G.L.H. 449, wherein the Court held as under :
"6. The impugned notices which are challenged in these petitions show that they were special notices issued under Rule 15(2) and Rule 20(2) of the Taxation Rules. These notices were necessitated, because, the properties for which they were issued were brought within the city limits by the notification extending the limits. Under section 3(1) of the said Act, the local areas within the limits specified by the State Government by notification in the official gazette shall constitute the City of Ahmedabad. These limits can be altered from time to time after consultation with the Corporation by the State Government by notification in the official gazette, as provided by sub-section (3) of section 3 of the said Act.
6.1 By virtue of the provisions contained in section 3A of the said Act, taxes, rules etc. applicable in the City automatically extend to the areas included in the City limits from the date on which they are so included and by superseding the taxes, rules etc. which were in force before such inclusion. When the area is included by a notification under section 3(3) of the said Act, the State Government may provide, by an order published in official gazette, for the matters enumerated in sub-section (3) of section 3A, which included in its clause (vii) the continuance within the Page 19 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined area so included of all or any budget estimates, assessments, assessment list, or, as the case may be, assessment book, valuations, measurements or divisions made or authenticated by, or in respect of, the surrendering local authority and in force within its area immediately before the notified day, until they are superseded or modified. The buildings in the plots of the petitioners already existed before these plots were included in the City area. The taxes applicable in the City, therefore, became applicable to them on the inclusion of the area of these plots in the City from the date of their inclusion, which admittedly was 15-11-1994.
6.2 Under Rule 15(2), it has been provided that, in every case in which any premises has for the first time been entered in the assessment book as liable to the payment of property - taxes, or in which the rateable value of any premises liable to such payment has been increased, the Commissioner shall, as soon as conveniently may be after the issue of the public notice under sub-rule (1), give a special written notice to the owner or occupier of the said premises specifying the nature of such entry and informing him any complaint against the same will be received in his office at any time within 15 days from the service of the special notice. Therefore, in all cases where the premises were entered for the first time in the assessment book are liable to payment of property taxes, a notice under Rule 15(2) could be issued and this was done in view of the inclusion of the premises in question within the municipal limits with effect from 15-11-1994.
7. Under Rule 9 of the Chapter VIII of the Schedule, the Commissioner is required to keep a book, to be called "the assessment book", in which, he is required to enter every official year (which starts from 1st of April each year, as defined in section 2(7) of the Act), a list of all buildings or lands or premises in the City with particulars sufficient for identification, rateable value thereof, the amount at which the property is assessed after the complaint, if any, made against any entry, has been disposed of as per the Rules. It appears from the record that the entries were made in the assessment book under Rule 9 with effect from 15-11-1994 in respect of the premises of these petitioners. That date fell in the official year 1-4-1994 to 31-3-1995 and the property taxes applicable in the City applied to these properties from 15-11-1994 to 31-3-1995 in respect of that official year.
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7.1 Under Rule 20(1) of the said Taxation Rules, the Commissioner is empowered upon any information at any time during the official year to which the assessment book relates, to amend the same, by inserting any premises previously omitted. Under sub-rule (2) of Rule 20, it is provided that, where any amendment is made under sub- rule (1) which has the effect of imposing on any person any liability for the payment of property taxes which would not be incurred but for such amendment or which has the effect of increasing the rateable value of any premises as stated in the assessment book, a special written notice as provided in sub-rule (2) of Rule 15 shall be given by the Commissioner and, as far as may be, the procedure laid down in Rules 16, 17 and 18 shall be followed. Therefore, the provisions of Rule 15(2) of the said Rules became applicable by virtue of Rule 20(2) in respect of these premises and special notice was required to be issued to these petitioners under Rule 15(2) read with Rule 20(2) of these Rules. There was, therefore, no question of a person primarily liable failing to give notice under Rule 5(1) as stipulated in Rule 21A in this case, because, these were not any new buildings for which such notice was required to be given under Rule 5(1) to the Commissioner by the persons primarily liable, but these were the properties to which City taxes became applicable by virtue of the notifications issued under sections 3(3) and 3A(3) of the said Act. The Commissioner would obviously have known about these notifications and that is why, he amended the assessment book under Rule 9. There was no question in this case of the Commissioner not having notice of the premises, because, the assessment lists etc. of these premises in force in the area immediately before the notified day were the relevant record from which the absorbing local authority would have already known about the constructions existing on these premises. Even the Commissioner has not taken up the plea which was toyed with by the learned Senior Counsel for the Corporation that he came to know about the existence of these premises at some later date from which the period of one year should be contemplated under Rule 21A. Under Rule 21A, it has been provided that, whenever it is noticed by the Commissioner that a new building has been erected or a building has been re-built or enlarged or any building which was vacant has been re- occupied or the user of any building has been changed and that the person primarily liable for the property taxes on such building has failed to give notice as required by sub- rule (1) of Rule 5, the Commissioner may, within a period of one year from the date on which the aforesaid relevant facts Page 21 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined came to his notice, proceed to fix or re-fix the rateable value of such building and assess or re-assess the property taxes on such building in accordance with the provisions of the Act and the Rules with reference to the period commencing from the year during which the building was newly erected or the building was re-built or enlarged or was re-occupied or the change of user took place and accordingly the taxes so assessed may be levied, collected and recovered and the provisions of the Act and the Rules shall so far as may be, apply to such levy, collection and recovery.
8. By Rule 21-B, it is provided that, nothing in the foregoing provisions of the Chapter VIII shall affect the preparation and completion of the assessment book or of any part thereof or of any entry therein after the expiry of the year to which it relates, if such preparation or completion was not possible before the expiry of the year on account of any order of a Court or any other competent authority, and the levy, collection and recovery of any tax based on such assessment book, part or as the case may be, entry shall not be called in question merely on the ground that the assessment book, part, or, as the case may be, entry was not prepared or completed during the year to which it related.
8.1 The contention that the notification by which the areas covered by the plots of the petitioners were included in the City area with effect from 15-11-1994 should be treated as an order of the competent authority within the meaning of Rule 21-B is nothing but an exercise in desperation. It cannot be said that, by issuance of such a notification, it was not possible for the Commissioner to complete the assessment book or any part thereof or any entry made therein before the expiry of the year to which it related. The assessment and levy in respect of the period from 15-11- 1994 upto 31-3-1995 was obviously required to be completed in the official year ending on 31st March 1995. As per the settled legal position, the assessment must be completed before the close of the official year [Anand Mill's case (supra)]. Therefore, to this limited extent, the recovery sought to be made for the period between 15-11-1994 to 31- 3-1995, cannot be sustained since it was not open to the Commissioner to assess and levy property tax for that period on the basis of the special notices issued on 13-2- 1996. Therefore, to the extent to which the impugned notice relates to the aforesaid period of 15-11-1994 to 31-3-1995 and purports to assess the taxes for that period, it cannot be sustained, and if any recovery of tax is effected for that Page 22 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined period, the petitioners would be entitled to adjustment of the same.
8.2 The impugned special notices dated 13-2-1996 are, therefore, declared to be inoperative only to the limited extent to which they related to the assessment of taxes for the period from 15-11-1994 to 31-3-1995, and the petitioners would be entitled to adjustment of the taxes recovered, if any, for the said period. Rule is made absolute accordingly with no order as to costs."
10.2 In L.M. Patel and Ors. vs. Baroda Municipal Corporation reported in 1995 (1) G.L.H. 1198, the learned Single Judge of this Court considered Anant Mills Co. Ltd. (Supra) and held as under :
"Under Rule 9 of the said Rules Assessment Book which is required to be kept by the Commissioner has to contain the entries mentioned therein every official year. Accordingly ratealbe value at item No. (b) determined in accordance with the provisions of this Act and the Rules, is required to be entered in the Assessment Book every official year. Under Rule 21B it is only when the said entry cannot be made in the Assessment Book on account of any order of a Court or any other competent authority, the levy, collection or recovery of tax made on the basis of an entry made after expiry of the order cannot be questioned. The procedure four (sic.) assessment of levy set out in the provisions of the Rules is required to be complied with before expiry of the official (sic.) and no assessment can be made after the official year. This is clear from reading of Rules 9, 17 and 21 and 21B of the said Rules. Rule 21B accepts by necessary implication that having regard to the scheme of the Corporation Act and the Rules, the assessment of property tax for any particular official year must be completed before the expiry of official year, by indicating exception that for any case falling within 21B, assessment book may be prepared and completed even after expiry of the official year. The requirement that assessment must be completed before the close of the official year is mandatory requirement only subject to express provision in Rule 21B and once the official year has expired it would not be open to the commissioner to assess and levy property tax. This position of law is settled in view of the decision of the Division Bench of this Court in the case of Anant Mills Co. Ltd. v. Municipal Corporation of city of Ahmedabad and Ors. reported in 1993(2) G.L.H. 897 and the earlier decision of Page 23 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined the Division Bench of this Court in the case of Municipal Corporation of City of Ahmedabad v. Keshav, reported in VI G.L.R. 228."
10.3. The similar provision occurring in Bombay Municipal Boroughs Act, 1925 (for short, "the Act of 1925"), came up for consideration before the Full Bench of the Bombay High Court in Solapur Municipal; corporation v. Ramchandra Ramappa Madgundi, 1972 (74) BLR 469 : (1972Tax LR 2581). The expression "current official year" occurring in Section 82(3) of the Act of 1925 was construed to mean the earliest day in the official year which is current when the amendment of the assessment list takes place. In other words, the expression "current official year", as per the Full Bench, refers to only that official year which is running at the time when the amendment is made by insertion or alteration of an entry. 10.4. The aforesaid view of the Full Bench was approved by the Apex Court in Municipal Corporation of City of Hubli v. Subha Rao Hanumatharao Prayad, (1976) 4 SCC 830 : (AIR 1976 SC 1398).
10.5. The Supreme Court in the case of Municipal Corporation of City of Hubli v. Subha Rao Hanumantharao Prayag and others reported in AIR 1976 SC 1398 had the occasion to consider few provisions of the Bombay Municipal Boroughs Act (18 of 1925), quite analogous to the provisions of the Act with which we are concerned. The principle contention before the Supreme Court was that on a true construction of the relevant provisions of the Act, the the authentication of the assessment list, in order to be valid and effective, need not be made before the expiry of the official year to which the assessment list relates and it is sufficient to impose liability to tax for the official year even if it is made at any time after the expiry of the official year. In the case before the Supreme Court, though authentication of the assessment list for the official year 1951-52 was made on 24th July, 1952 after the expiry of the official year, it was argued that the same was valid and effective and operated to create liability on the tax payers for the payment of tax at the revised rates.
10.6. The Supreme Court took into consideration Section 78 to 89 of the act dealing with the assessment of and liability to rates of buildings and lands. The Supreme Court took into consideration Section 84 treating it to be important Section which provided for the adoption of valuation and assessment contained in the assessment list of any particular year for the Page 24 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined year immediately following. The Supreme Court reproduced Section 84, which reads as follows :
"84. (1) It shall not be necessary to prepare a new assessment list every year. Subject to the condition that every part of the assessment list shall be completely revised not less than once in every four years, the Chief Officer may adopt the valuation and assessment contained in the list for any year, with such alterations as may be deemed necessary, for the year immediately following.
(2) But the provisions of Section 80, 81 and 82 shall be applicable every year as if a new assessment list had been completed at the commencement of the official year."
10.7. Ultimately, the Supreme Court proceeded to held as under :
"6. It is clear from the scheme of these provisions that the official year is the unit of time for the levy of the tax. The provisional assessment list is prepared for the official year. This may be done before the commencement of the official year or even thereafter in the course of the official year. Then objections are invited and when made, they are disposed of and amendments consequential upon the decisions on the objections are carried out in the assessment list. The assessment list is then authenticated. The process of assessment and levy of the tax which begins with the preparation of the provisional assessment list is thus completed when the assessment list is authenticated. The assessment list, when authenticated, becomes effective from the first day of the official year and gives rise to the liability to pay tax. It is on the authentication of the assessment list that the liability of the ratepayers to pay tax arises and the tax is levied on the rate-payers. This position would seem to be clear as a matter of plain interpretation and in any event there is a long line of decisions of the Bombay High Court commencing from Sholapur Municipality v. Governor General, 49 Bom LR 752 = (AIR 1948 Bom 145) and ending with Sholapur Municipal Corporation v. Ramchandra, 74 Bom LR 469 = (1972 Tax LR 2581) which has consistently accepted this position and the learned counsel appearing on behalf of the Municipal Borough did not dispute the correctness of these decisions. The only contention raised by him was as to within what time the assessment list must be authenticated, if it is to be a valid and effective assessment list. If is to this contention that we must now address ourselves.
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7. Now, once we take the view that the process of levying the tax is complete only when the assessment list is authenticated and it is only then that the tax is levied on the rate-payers, it is difficult to resist the conclusion that the authentication must be made within the official year. The tax, being a tax for the official year, must obviously be levied during the official year and since the levy of the tax is complete only when the assessment list is authenticated, it must follow a fortiori that the authentication on the making of which alone the levy of the tax is effected, must take place in the official year. Any other view would result in an anomalous and rather absurd situation, namely, that the tax for an official year would be leviable at any time, even years after the expiration of the official year. That could not possibly have been intended by the legislature. That would indeed be a strange consequence in case of a tax which is annual in its structure and organisation and which is intended to be levied for each official year.
8. But, apart from this consideration, there is inherent evidence in the sections themselves which shows that the authentication was intended by the legislature to be a step which must be taken before the close of the official year. Section 84 provides that it shall not be necessary to prepare a new assessment list every year but, subject to the conditions that every part of the assessment list shall be completely revised not less than once in every four years, the Chief Officer may adopt the valuation and assessment contained in the list for any year, with such alterations as may be deemed necessary, for the year immediately following. This provision postulates that there would be an assessment list for each official year at the close of that official year, so that the valuation and assessment contained in it can be adopted by the Chief Officer for the immediately following year. Now clearly the assessment list which can be adopted immediately following year is the for the authenticated assessment list and it would, therefore, seem that the legislative assumption underlying this provision is that in respect of each official year, there would be an authenticated assessment list before the close of that official year, so that the valuation and assessment contained in it can be adopted by the Chief Officer for the immediately following year. Otherwise, it would not be possible for the Chief Officer to adopt the valuation and assessment of the preceding official year and he would have to prepare a new provisional assessment list every time when the assessment Page 26 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined list for the preceding year is not finalised and authenticated and this might lead to the rather starting result of there being several provisional assessment lists for different official years in the process of finalisation at the same time. We should be slow to accept an interpretation which might lead to such a strange consequence.
9. Then again considerable light on this question is thrown by the provision enacted in S. 82. It is a well-settled rule of interpretation that the Court is "entitled and indeed bound, when construing the terms of any provision found in a statute, to consider any other parts of the Act which throw light on the intention of the legislature, and which may serve to show that the particular provision ought not to be construed as it would be alone and apart from the rest of the Act." The statute must be read as a whole and every provision in the statute must be construed with reference to the context and other clauses in the statute so as, as far as possible, to make a consistent enactment of the whole statute. Obviously, therefore, Sections 78 to 81 must be so construed as to harmonise with Section 82. They must be read together so as to form part of a connected whole, Section 82, sub-section (1) provides for making of an amendment in the assessment list by insertion or alteration of any entry in certain events after hearing objections which may be made by any person interested in opposing the amendment. Sub-sec. (3) of Section 82 makes the amendment effective from "the earliest day in the current official year on which the circumstances justifying the entry or alteration existed." The expression 'current official year' in the context in which it occurs in S. 82, sub-section (3) clearly signifies the earliest day in the official year which is current when the amendment in the assessment list takes place and that expression refers only to the official year which is running at the time when the amendment is made by insertion or alteration of an entry under sub-section (1) of Section 82. It would, therefore, seem clear, on a combined reading of sub-secs. (1) and (3) of Section 82, that an amendment, in order to be effective in levying tax for an official year, must be made during the currency of the official year. That is now well settled as a result of several decisions of the Bombay High Court culminating in the Full Bench decision in Sholapur Municipal Corporation v. Ramchandra, (1972 Tax LR 2581 (Bom)) (supra) and we do not see any reason to take a different view. Now the scheme of Sections 78 to 81 is identical with that of Section 82 and in both cases what is contemplated first is a proposal to which Page 27 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined objections are invited and after the objections are investigated and disposed of, the assessment list in the one case and the altered entry in the other are authenticated giving rise to liability in the rate-payer. It must follow a fortiori that if an alteration in the assessment list, in order to fasten liability on the rate-payer, is required to be made during the currency of the official year, equally, on a parity of reasoning, the assessment list, in order to give rise to liability in the rate-payer, must also be authenticated before the expiry of the official year. Moreover, it is difficult to believe that the legislature did not intend that there should be any time-limit in regard to the levy of tax for an official year and that the tax should be legally leviable at any time after the close of the official year. There is, in our opinion, sufficient indication in the various provisions of the Act to show that the authentication of the assessment list, in order to be valid and effective, must be made within the official year, though the tax so levied may be collected and recovered even after the expiry of the official year."
10.8. Subsequently in Kalyan Municipal Council v. Usha Paper Products (P) Ltd., (1988) 3 Supreme Court Cases 306, the Apex Court while dealing with the identical provisions contained in the followed earlier its Maharashtra Municipalities judgment given in the Act, 1965 Municipal Corporation of City of Hubli (supra) and in paragraph 5 of the report held thus :
"5. The aforesaid statement in the judgment of this Court clearly shows that the decision of the Full Bench of the Bombay High Court in Sholapur Municipal Corporation v. Ramchandra was approved by this Court. The decision of the aforesaid Bench of this Court is binding on us and is clearly applicable to the case before us. In that judgment this Court pointed out that once it was accepted that the process of levying the tax is complete only when the assessment list is authenticated and it is only then that the tax is levied on the rate payers, it is difficult to resist the conclusion that the authentication must be made within the official year. The tax, being a tax for the official year, must obviously be levied during the official year and since the levy of the tax is complete only when the assessment list is authenticated it must follow that the authentication must take place in the official year."
10.9. The law laid down by the Full Bench of the Bombay High Court in the case of the Solapur Municipal Corporation and approved by the Apex Court in the Municipal Corporation of City Page 28 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined of Hubli and further re-iterated in the Kalyan Municipal Council is applicable on all fours in the light of the statutory provision contained in the Rules and the definition of the expression "official year" occurring in Section 2(44). Any amendment in the assessment book by inserting or altering an entry in respect of any building erected, re-iterated, altered, added to or reconstructed in whole or in part of the assessment book shall be and can only be effective during the currency of official year. The expression "official year" defined under Section 2(44) of the Act 1949 read with Rule 20(1)(e) indicates without doubt the legal position that the property tax being tax for the official year must be levied inly during the official year.
10.10 The submission of Mr. Soparkar, the learned senior counsel appearing for the Corporation that the rules are subservient to the main provisions of the Act and when the Act is silent, it is open for the Corporation to issue a property tax bill even of the prior years. We are not impressed by such submission because Section 127(3) of the Act, 1949 makes it very clear that the municipal taxes shall be assessed and levied in accordance with the provisions of the Act and the Rules. Apart from the same, Section 453 of the Act, 1949 makes it clear that the Rules in schedule A, as amended from time to time, shall be deemed to be part of the Act, 1949.
10.11. We may only say as observed by the Supreme Court in Municipal Corporation of the city of Hubli (supra) that the statute must be read as a whole and every provision in the statute must be construed with reference to the context and the other clauses in the statute so as, as far as possible, to make a consistent enactment of the whole statute. 10.12. We are also not impressed by the submission that the writ applicants are not entitled to seek any relief from this Court by invoking the extraordinary jurisdiction under Article 226 of the Constitution of India having regard to their conduct. We are dealing with a tax matter. The provisions are to be construed strictly. The conduct of the writ applicant is not sufficient to give a total go-bye to the mandatory provisions of the Act as well as the Rules. Even otherwise, we are not convinced with such submission canvassed on behalf of the Corporation. The Corporation wants this Court to reject the writ application on the ground that as the writ applicants were negotiating with the Corporation, the time period consumed should be taken into consideration and the Court should not go strictly by the definition of the term "official year" as defined under Section 2(44) of the Act. We are not at all impressed by such submission.
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We may remind the Revenue of the observations made by the Supreme Court in the case of Parashuram Pottery Works Co. Ltd. v. Income Tax Officer, Circle I, Ward A, Rajkot, reported in (1977) 106 ITR 1, which read thus :
"It has been said that the taxes are the price that we pay for civilization. If so, it is essential that those who are entrusted with the task of calculating and realising that price should familiarise themselves with the relevant provisions and become well-versed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue."
10.13. At this stage, Ms. Megha Jani, the learned counsel appearing for the writ applicants in Special Civil Application No.7181 of 2018, submitted that the facts of her case are slightly on a different footing and therefore, the Special Civil Application No.7181 of 2018 may be considered separately. Ms. Jani has tendered a brief note in writing of her submissions. The same is as follows :
"1. The petitioner is an Association of Industrialists and Plot Holders of GIDC Phase-II and Phase-III at Dared, Jamnagar. The members of the Petitioner Associate comprise of approximately 1030 Plot Holders of Phase-II and 1485 Plot holders of Phase-III. The members of the Association have been regularly paying service charges to GIDC. Regulations Setting Out Procedures, Principles And Other Details For Allotment Of Buildings And Premises As Framed Under Section 54(1) Of GIDC Act provide for payment of service charges by plot holders to GIDC.
2. Regulation 5(37) define service charges (Regulation 5(37) reproduced on Pg.6 of the Petition). Regulation 13 provides that service charges are to be paid till a local authority takes over (Regulation 13 reproduced on Pg.6 of the Petition). The Plot Holders are paying service charges to GIDC regularly (the calculation of service charges at Annexure-C, Pg.-32 to
39).
3. Municipal limits of Jamnagar Municipal Corporation came to be extended by Notification dated 04.10.2013 (Annexure -
N, Pg.180 to 184). It appears that the area of GIDC came to be covered under the aforesaid Notification.
4. Though the municipal limits were extended, no bills were Page 30 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined issued by Municipal Corporation for property tax.
5. The property tax bills were received by some of the Plot holders for the first time in March, 2018 (copy of list of plot holders and details of bills raised on them is produced at Annexure-P, Pg.237 to 384, copies of Bills dated 31.03.2018 raised on plot holders within Phase-II and Phase-III are produced at Annexure-Q, Pg.385 to 914).
6. The Petitioner submits that levy of property tax on the Plot Holders by Jamnagar Municipal Corporation is ex-facie bad, illegal and is required to be quashed and set aside as :-
(i) The bills are raised without following procedure mandatory to demanding property tax. Under Taxation Rules contained in Chapter-VIII of Schedule-A of GPMC Act, manner and method of levy of tax is laid down (Relevant Rules are summarized in Para-8.2, Pg.16 to 18 of the Memo of Petition). The Petitioner states that the Corporation has not issued either General Notice or Special Notice and has not prepared assessment books.
Corporation has filed affidavit at Pg.915, Sur-Rejoinder at Pg.1001 and further Sur-Rejoinder at Pg.1018. In none of the aforesaid pleadings,details about preparation of assessment book or issuance of Special or General Notice as required in law is mentioned. It is an established principle of law that it is mandatory for the Corporation before imposing tax on anyone to prepare assessment book, issue General Notice as required under Section 13 and 15, issue Special Notice as required under Section 15(2), make entries in the assessment book and authenticate the same entries in the same official year to which the assessment book relates. The said proposition is well settled as laid down in the following judgments :
(a) Ahmedabad Municipal Corporation V/s. Jhaveri Keshavlal Lallubhai, 1965 GLR 228 (Paras-20, 21, 35, 36, 38, 42, 43,46)
(b) Kalyan Municipal Council & others V/s. Usha Paper Products (P) Ltd. & another, (1988) 3 SCC 306 (Pare-5)
(c) L.M. Patel & others V/s. Baroda Municipal Corporation, 1995 (1) GLH 1198 (Para-4, 5 and 6)
(d) Adani Gas Limited V/s. Ahmedabad Municipal Corporation in Special Civil Application No.2576 of 2012 Page 31 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined and other allied matter, judgment dated 04.08.2015 (Para-13.14, 19.2 and20).
(ii) The bills are raised for the first time in March, 2018, seeking recovery of tax from October, 2013 to 31.03.2018.
Retrospective levy of municipal tax is not permissible as is laid down in the judgments mentioned above.
(iii) Plot holders have paid service charges to GIDC till date. The service charges paid by the Plot Holders are levied in place of property tax levied by a local authority. JMC cannot demand property tax for the period during which service charges are paid to GIDC.
The Regulations authorizes GIDC to levy service charges till a local authority takes over. There is nothing to indicate in the present case that JMC has taken over the maintenance of the roads, water supply, drainage, street lights and such other services from GIDC. JMC, in the circumstances, cannot demand property tax from the plot holders of GIDC. In any case, claim of JMC, if any, for taxes for the period during which service charges are levied by GIDC would be against GIDC. The situation of double taxation continues to exist as plot holders face demands from both GIDC and Corporation.
7. The petition is filed also with respect to declaration of GIDC Phase-II and Phase-III as notified areas. The said issue is pending consideration before GIDC and/or State. The Petitioner does not press for relief in terms of para-14A(i) and (ii) at this stage."
10.14 At the outset, Ms. Jani submitted that she is not pressing for the relief as prayed for in terms of paragraph 14(A)(i) and (ii) at this stage. She submitted that her clients may avail appropriate legal remedy before the appropriate forum in accordance with law, so far as the relief in terms of paragraph 14(A)(i) and (ii) is concerned. As the relief in terms of paragraph 14(A)(i) and (ii) has not been pressed, the other submissions which have been canvased are covered by the reasons we have assigned in the judgment."
14. From the above dictum of law, it is discernible that the Page 32 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined respondent no. 2 was not justified in issuing the impugned tax bills for the prior period 2023-24. The impugned bills are, accordingly, quashed and set aside.
15. Without entering into the merits of the matter, the respondent no. 2 is directed to make reassessment of the premises in question of the petitioners for the year 2023-24 and 2024-25 after considering the objections raised by the petitioners in detail and shall pass a speaking order after giving an opportunity of hearing to the petitioner so as to meet with the principles of natural justice.
16. The respondent no. 2 is also required to take into consideration the decision of this Court in case of Vijayan Rajamanicka Nadar Pagalam (supra), which is quoted herein above while passing a fresh de novo order. It is pertinent to note that the order dated 22.02.2024 cannot be said to be a speaking order for assigning any reason for the purpose of considering the objections raised by the petitioner though the petitioner has not challenged the said order in this petition, as the impugned bills are not in accordance with the law laid by this Court in the Page 33 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025 NEUTRAL CITATION C/SCA/5850/2024 ORDER DATED: 09/10/2025 undefined aforesaid decision as it also includes the prior period retrospectively, the same therefore are quashed and set aside. There is no requirement to quash and set aside the order dated 22.02.2024 as the competent authority of respondent no. 2 Rajkot Municipal Corporation is directed to pass a fresh for reassessment order as directed herein above.
17. Such exercise shall be completed within a period of twelve (12) weeks from the date of receipt of copy of this order.
18. It goes without saying that the amount of Rs. 20 lakhs deposited by the petitioners shall be treated as advance payment of property tax and the same may be adjusted against the fresh property tax bills which may be issued from the period 2023-24 onwards which may be subject to challenge by the petitioners in accordance with law.
18. With the aforesaid observations and directions, the petition stands disposed of accordingly.
(BHARGAV D. KARIA, J) (PRANAV TRIVEDI,J) phalguni Page 34 of 34 Uploaded by PHALGUNI PATEL(HC00175) on Thu Oct 16 2025 Downloaded on : Thu Oct 16 21:31:23 IST 2025