Delhi High Court
Smt. Jayshree Kumar vs New Delhi Municipal Council on 29 July, 2003
Equivalent citations: AIR2003DELHI449, 105(2003)DLT967, 2003(70)DRJ233, 2003RLR513, AIR 2003 DELHI 449, (2003) 70 DRJ 233 (2003) 105 DLT 967, (2003) 105 DLT 967
Author: Sanjay Kishan Kaul
Bench: Sanjay Kishan Kaul
JUDGMENT Sanjay Kishan Kaul, J.
1. The moot point which arises for consideration in the present writ petition is the consequence of stated consent to pay property tax in the absence of the fulfilllment of the requirement of statutory notice for increase of rateable value.
2. The petitioner is a co-lessee of property bearing Bungalow No. 21 and 21A, Amrita Shergill Marg, New Delhi-110003. The property was assessed to tax. The petitioner received two notices dated 19.3.1999 and 24.3.1999 proposing to amend the assessment list for the years 1989-90 and 1999-2000 on account of the revision of rent. The petitioner was called upon to submit objections, if any. The petitioner submitted objections vide letter dated 7.5.1999. The petitioner received an assessment order dated 14.3.2002 issued by the Assistant Secretary (Tax) of the respondent. A bill dated 153.2002 also accompanied the notice calling upon the two co-owners including the petitioner to pay an amount of Rs.13,58,324/- towards difference of house tax from 1.12.1996 to 31.3.2002 after adjustment of the payment already made.
3. The assessment order under Section 72 of the NDMC Act, 1994 (hereinafter referred to as " the Act") states that on the basis of the information furnished by the assessed as also information available on record, the rateable value was fixed on the basis of the rent realized. The assessment is for different amounts for the periods onwards of 1.12.1996, 1.12.1997, 1.12.1998 and 1.12.1999. The petitioner is seeking quashing of both the assessment order and the bill.
4. Learned senior counsel for the petitioner contended that the only dispute to be considered is on account of the revision of the rateable value in terms of the impugned assessment order for the period 1.12.1996 onwards and part of the period from 1.12.1997 onwards. This contention is based on the fact that the notices issued under Section 72(2) of the Act proposed to enhance the rateable value only for the years 1998-99 and 1999-2000. Thus, the revision could take place only from 1.4.1998. The increase in the rateable value for the period 1.12.1996 to 31.3.1998 is thus disputed on the ground that such revision cannot take place in the absence of any notice under Section 72(2) of the Act.
5. It would be relevant to reproduce Section 72 which is as under:
"72. Amendment of assessment list - (1) The Chairperson may, at any time, amend the assessment list -
(a) by inserting therein the name of any person whose name ought to be inserted; or
(b) by inserting therein any land or building previously omitted; or
(c) by striking out the name of any person not liable for the payment of property tax; or
(d) by increasing or reducing for adequate reasons the amount of any rateable value and of the assessment thereupon ; or
(e) by making or cancelling any entry exempting any land or building from liability to property tax; or
(f) by altering the assessment on the land or building which has been erroneously valued or assessed through fraud, mistake or accident ; or
(g) by inserting or altering any entry in respect of any building erected, re-erected, altered or added to, after the preparation of the assessment list.
Provided that no person shall by reason of any such amendment become liable to pay any tax or increase of tax in respect of any period prior to the commencement of the year in which the notice under sub-section (2) is given.
(2) Before making any amendment under sub-section (1) the Chairperson shall give to any person affected by the amendment, notice of not less than one month that he proposes to make the amendment and consider any objection which may be made by such person."
6. Learned senior counsel for the petitioner contended that the amendment to the assessment list for increasing the rateable value can take place in terms of the provisions of Section 72(1) of the said Act subject to the proviso to the said sub-section which stipulates that there can be no liability to pay any tax or increase of tax in respect of any period prior to the commencement of the year in which the notice under sub-section (2) is given. Sub-section (2) mandates that the affected person shall be given a notice of not less than one month proposing to make the amendment and to consider any objections which may be filed by such person.
7. It is thus contended that the notices given on 19.3.1999 and 24.3.1999 for the assessment list for the years 1998-99 and 1999-2000 can be made applicable only w.e.f. 1.4.1998 and the revision of the rateable value for the period prior to that is without any authority of law.
8. It may be noticed that the petitioner did not dispute the assessment order for the remaining period and made a representation dated 27.3.2002 enclosing the payment towards admitted difference in house tax payment for the period 1998-99 onwards.
9. In the counter-affidavit, the factual matrix is not disputed but it is stated that a notice dated 22.1.1999 was issued by the respondent to the petitioner in reply whereto the petitioner's letter dated 8.2.1999 disclosed the fact that the portion known as 21, Amrita Shergill Marg, which was self-occupied earlier, had been let out by way of a registered lease deed dated 28.11.1996. It is further stated that the petitioner herself requested the assessment of the portion to be completed on the basis of the attached lease deed and the assessment was made accordingly. It is further stated that the petitioner while appearing before the assessing authority had agreed that the assessment can be made from the date when the property was let out by the petitioner and thus accordingly the respondent had assessed the property from 1.12.1996. The respondent has further relied upon the letter dated 11.3.2002 of the petitioner which, according to the respondent, informed the respondent that the petitioner had accepted the rateable value fixed by the respondent w.e.f. 1.12.1996 till 1.12.2001.
10. The aforesaid factual matrix shows that in fact there is no dispute about the absence of the notice under Section 72(2) of the Act for the period prior to the assessment year 1998-99 which would normally be an impediment in the attempt of the respondent to recover any tax prior to the same since in terms of the proviso to sub-section (2) of Section 72, no person is to be made liable for any such amendment for the period prior to the commencement of the year in which the notice has been given. The contention of the learned counsel for the respondent is thus solely based on the two letters issued by the petitioner dated 8.2.1999 and 11.3.2002.
11. The letter dated 8.2.1999 shows that in response to a notice dated 22.1.1999, the petitioner disclosed the factum of letting out of the portion known as 21, Amrita Shergill Marg which was previously in self-occupation having been let out on 1.12.1996. A copy of the lease deed dated 28.11.96 was enclosed which is a lease for a period of five years. The lease provides for a rental payment of Rs.1,70,000/- per month for the first two years, Rs.2,04,000 for the next two years and Rs.2,45,000 for the last year. It is stated in the letter "the assessment of this portion may kindly be completed on the basis of attached lease deed". Learned counsel for the respondent laid great emphasis on the contents of the letter dated 11.3.2002 to contend that the assessment order dated 14.3.2002 was issued in pursuance to the said letter. It is necessary to reproduce the said letter as under:
" Jayshree Kumar March 11, 2002 Asstt. Secretary Taxes NDMC New Delhi Sub : Your notice u/s 72(2) of the NDMC Act 1994 no.T-1-XII/10424/Tax dt :24.03.1999 for the Financial Year(s) 1998-99 & 1999-2000 regarding House Tax Assessment of 21 & 21 A Amrita Shergill Marg, New Delhi Reg : R.V. Computed by our office Sir, Further to my letter to you dt:21.02.2002 and subsequent discussions thereafter you have requested us to convey our acceptance to the rateable values for the relevant years computed by our office on the basis of actual rent received as per the registered Lease Deed submitted to your office. We have been given to understand that the computation of the rateable value(s) for the above stated and subsequent financial years would be calculated based on the following RVs:
Date Rateable Values (INR) 01.12.1996 23,00,800 01.12.1997 20,71,300 01.12.1998 22,09,000 01.12.1999 25,39,700 01.12.2000 26,51,800 01.12.2001 26,51,800 We wish to submit that all necessary information as requested by our office has been furnished by us and that we have been praying for early finalisation of the case which had been fixed for hearing before the Advisor Revenue on the 30th of January 2001. In the meantime it may be noted that we have already deposited Rs.4,69,311/- i.e. a sum of Rs.9,09,532/- over and above the amounts paid upon receipt of annual house tax bills. We are eager to clear all legally tenable dues to the NDMC in case the assessments are done on the above basis.
This acceptance is limited to the rateable values only and not the tax assessed and is without prejudice and does not preclude our legal rights to appeal in case we feel aggrieved with the orders ultimately passed in this case.
Thanking you, Yours faithfully JAYSHREE KUMAR"
12. Learned counsel for the respondent submits that the petitioner himself had stated that the petitioner had been given to understand that the computation of the rateable value for the above stated and subsequent financial year would be calculated on the basis of the following rateable value set out in the letter. It was further stated by the petitioner that they were agreeable to clear their dues in case the assessment is done on the above basis. It is thus contended that the petitioner agreed to pay the enhanced tax on account of increase of rateable value from 1.12.1996 onwards.
13. Learned senior counsel for the petitioner, on the other hand, contended that a reference to the subject matter of the letter itself would show that the same referred to the notice under Section 72(2) of the said Act dated 24.3.1999 for the financial years 1998-99 and 1999-2000. Learned counsel further stated that the petitioner had clearly stated in the said letter that she was eager to clear all "legally tenable dues" to the NDMC in case the assessment was done on the above basis. It is thus stated that since the only legally tenable dues were for the period 1.4.1998 onwards, there could be no question of any increase in rateable value for the prior period or for the letter to be read as a consent for payment of the tax for the prior period.
14. Learned counsel for the petitioner relied upon the judgment of the Supreme Court in I.T. Commissioner v. Firm Muar, AIR 1965 1216. It was held by the Supreme Court that the plea of estoppel cannot operate against the provisions of statute as equity is out of place in tax law. The Supreme Court observed in para 13 as under:
"13. ... The doctrine of "approbate and reprobate" is only a species of estoppel; it applies only to the conduct of parties. As in the case of estoppel it cannot operate against the provisions of a statute. If a particular income is not taxable under the Income-tax Act, it cannot be taxed on the basis of estoppel or any other equitable doctrine. Equity is out of place in tax law; a particular income is either exigible to tax under the taxing statute or it is not. If it is not, the Income-tax officer has no power to impose tax on the said income."
15. Learned senior counsel for the petitioner further relied upon the judgment of the Supreme Court in Ramchandra Keshav Adke (Dead) by LRs v. Govind Joti Chavare & Ors., . The Supreme Court relied upon the age old doctrine that where the power is given to do a certain thing in a certain way, it must be done in that way or not at all, and referred, inter alia, to the judgment of the Privy Council in Nazir Ahmed v. Emperor . The Supreme Court observed in para 25 as under:
" 25. A century ago, in Taylor v. Taylor, (1875)1 Ch D 426 Jessel M.R. Adopted the rule that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and that other methods of performance are necessarily forbidden. This rule has stood the test of time. It was applied by the Privy Council, in Nazir Ahmed v. Emperor and later by this Court in several cases, Rao Shiv Bahadur Singh and Anr. v. The State of Vindhya Pradesh , Deep Chand v. State of Rajasthan, to a Magistrate making a record under Sections 164 and 364 of the Code of Criminal Procedure, 1898. This rule squarely applies "where, indeed, the whole aim and object of the legislature would be plainly defeated if the command to do the thing in a particular manner did not imply a prohibition to do it in any other. Maxwell's Interpretation of Statutes, 11th Edn., pp. 362-363."
16. Learned senior counsel for the petitioner next relied upon the judgment of the Supreme Court in Padma Sundara Rao (dead) & Ors. v. State of T.N. & Ors., to contend that it is the strict rule of construction which will have to be applied since the provision in question is a taxing statute and when the language of the provision is plain and unambiguous, the question of supplying the causes omissus does not arise as the court can interpret the law but cannot legislate.
17. Learned senior counsel lastly referred to the judgment of the Supreme Court in A.K. Roy & Anr. v. State of Punjab & Ors., to contend that where a statute confers the power to be exercised or performed in a specific manner other modes of exercise or performance are impliedly barred and that where there are negative words used in a statute, it shows the mandatory nature of the provision.
18. It is thus contended that Section 72 of the Act itself makes the assessed liable to pay tax only after the notice is issued and specially mandates in the negative that no person shall be liable, by reason of the amendment, to pay the tax or increase of tax in respect of any period prior to the commencement of the year in which the notice is given. In fact, it was contended that apart from the fact that the letters of the petitioner were not amounting to any consent to pay tax, such consent could not have force of law.
19. On a pointed query being raised, learned counsel for the respondent stated that though for subsequent periods, provision has been made providing for a house tax return to be filed, the same was not the position for the assessment years in question. It was further stated that provisions of Sections 74 and 77 put an obligation on the petitioner to inform about the occurrence of the property having been let out which would increase the rateable value and thus it was obligatory on the part of the petitioner to have informed so after the premises in question was leased out from 1.12.1996.
20. Section 73 mandates a notice of transfer whenever the title of any person primarily liable for payment of property tax is transferred. Section 74(1) is as under:
"74. Notice of transfers - (1) Whenever the title of any person primarily liable for the payment of property tax on any land or building is transferred, the person whole title is transferred and the person to whom the same is transferred shall within three months after the execution of the instrument of transfer or after registration, if it is registered, or after the transfer is effected, if no instrument is executed, give notice of such transfer in writing to the Chairperson."
21. Section 77 authorizes the Chairperson to call for information and returns and to enter and inspect the premises to determine the rateable value of any land or building and the person primarily liable for the payment of property tax is liable to give the information within a reasonable period of time to be fixed by the Chairperson. Sub-section (3) mandates that on an omission to comply with the said requisition or failure to give information or to return to the best of his knowledge or belief, the assessed, apart from the penalty which may be liable, shall be precluded from objecting to the assessment made by the Chairperson. Section 77 is as under:
" 77. Power of Chairperson to call for information and returns and to enter and inspect premises - (1) To enable him to determine the rateable value of any land or building and the person primarily liable for the payment of property tax leviable in respect thereof, the Chairperson may require the owner or occupier of such land or building, or of any portion thereof to furnish him within such reasonable period as the Chairperson fixes in this behalf, with information or with a written return signed by such owner or occupier -
(a) as to the name and place of residence of the owner or occupier, or of both the owner and occupier of such land or buildings;
(b) as to the measurements or dimensions of such land or building or of any portion thereof and the rent, if any, obtained for such land or building or any portion thereof; and
(c) as to the actual cost or other specified details connected with the determination of the value of such land or building.
(2) Every owner or occupier on whom any such requisition is made shall be bound to comply with the same and to give true information or to make a true return to the best of his knowledge or belief.
(3) Whoever omits to comply with any such requisition or fails to give true information or to make a true return to the best of his knowledge or belief, shall, in addition to any penalty to which he may be liable, be precluded from objecting to any assessment made by the Chairperson in respect of such land or building of which he is the owner or occupier."
22. I have considered the submissions advanced by learned counsel for the parties.
23. It is appropriate to consider the last aspect of the submission of the learned counsel for the respondent first dealing with the obligation of the petitioner. It appears that the respondent Council became wise after a certain number of years to the problem at hand and required the furnishing of returns by the assesseds which put an obligation on the assessed. This was, however, not the position in respect of the assessment years in question as admitted by learned counsel for the respondent. In my considered view, Section 74 of the said Act cannot come to the aid of the respondent since the same deals only with a case where the title of any person primarily liable for payment of property tax is transferred. Thus, it is a specific provision dealing with the issue of transfer of title which is not so in the present case. Similarly, Section 77 authorizes the Chairperson to call for information and sub-section (2) mandates that the assessed should comply with the same. Sub-section (3) states the consequences of the failure to supply such information precludes the assessed from objecting to the assessment order. However, the pre-requisite to the application of Section 77 is the calling for the information by the Chairperson and the failure to disclose by the assessed. This is again not so in the present case.
24. The factual matrix is also not disputed that the notices issued were only for the assessment years 1998-99 onwards. The reading of the provision of Section 72 is absolutely clear. In fact, the proviso is in the negative form making the assessed not liable to pay any tax or increase of tax as a consequence of the amendment of the list under sub-section (1) unless a notice is issued under sub-section (2). Thus, a plain reading of the Section itself makes it clear that there would be no liability on the assesse for the period where no such notice has been issued.
25. There can be no doubt that the provision in question being a taxing section under the said Act has to be construed strictly. The mode and manner has been prescribed in the said section for increase of rateable value. The observations referred to by the Supreme Court in A.K. Roy and Anr. Case (supra) and Padma Sundra Rao (dead) and Ors. case (supra) would thus squarely apply to the present case.
26. There is also force in the contention of the learned counsel for the petitioner based on the judgment of the Supreme Court in Ramchandra Keshav Adke (dead) by LRs (supra) relying upon the judgment of the Privy Council in Nazir Ahmed case (supra) that since the power has been given to the respondent Council to increase the rateable value only in a particular manner, it is only in that manner that it can be increased. The mandate to do so implies a prohibition to do the same in any other manner. The Supreme Court has further held in Firm Muar Case (supra) that equitable principles can have no application to taxing statutes and the doctrine of approbate and reprobate is only a species of estoppel which cannot operate against the provisions of such statute. It is thus not open for the respondent to contend that since the consequence of the non-increase of the rateable value will be that the petitioner would not be liable for the increased tax prior to the issuance of notice, the respondent is liable to impose tax for the same. This contention would in fact negate the negative clause contained in the proviso to sub-section (1) of Section 72.
27. Even assuming that the respondent can rely upon the contents of the letters of the petitioner dated 08.02.1999 and 11.03.2002, it has to be appreciated that the letter of 08.02.1999 only sent the information and asked for completion of assessment on the basis of the lease deed attached. The subject matter was the assessment of house tax for the year 1998-1999 and there was no reference to the prior period. Similarly the letter dated 11.03.2002 which, according to the respondent is the very basis of the assessment, itself refers to the notice under Section 72(2) of the Act dated 24.03.1999 for the financial years 1998-1999 and 1999-2000. There is no reference to the assessment for the previous periods. The first part of the letter indicates that the petitioner had come to understand the computation of the rateable value would be calculated on the basis of the below stated rateable value which includes the period 01.12.1996 onwards. The same is however clarified by the subsequent paragraph of the letter where it is stated that the petitioner is eager to pay all legally tenable dues. But period prior to 01.04.1998 cannot be said to be the period for which the dues could be illegally recovered. Thus the reading of the two letters as a whole or so does not convey any clear acceptance of the liability of the petitioner.
28. In my considered view, in fact there could have been no such consent in view of the mandate in the proviso to sub-section (1) of Section 72. The said proviso makes a person non-liable to tax or increase of tax as a consequence of an amendment of the list prior to the issuance of the notice under sub-section (2) of the Act.
29. In view of the aforesaid, I am of the considered view that the impugned order of the assessing authority as also the impugned bill cannot be sustained to the extent that they seek to assess and recover tax on increased rateable value for the period prior to 01.04.1998. The petitioner thus would not be liable to pay the increased tax for the period 01.12.1996 to 31.03.1998.
30. The writ petition is allowed and the rule is made absolute leaving the parties to bear their own costs.