Delhi High Court
M.C.D vs M/S Sachdeva Promoters And Properties ... on 12 March, 2012
Author: Hima Kohli
Bench: Hima Kohli
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 9073/2005
Date of Decision:12th March, 2012.
IN THE MATTER OF:
M.C.D ..... Petitioner
Through: Ms. Shyel Trehan, Adv.
versus
M/S SACHDEVA PROMOTERS AND PROPERTIES PVT. LTD.
..... Respondent
Through: Mr. R.P. Sharma, Adv.
CORAM:
HON'BLE MS. JUSTICE HIMA KOHLI
: HIMA KOHLI, J (Oral)
1. The petitioner/MCD is aggrieved by the order dated 23.07.2003 passed by the ADJ in HTA No.275/2002, an appeal preferred by the respondent/Assessee under Section 169 of the Delhi Municipal Corporation Act, 1957 (hereinafter referred to as `the DMC Act') against the assessment order dated 31.03.2002 passed in respect of property bearing No. 23(Part), Najafgarh Road, Industrial Area, New Delhi. While passing the impugned order dated 23.07.2003, the learned ADJ had allowed the appeal of the respondent/Assessee and had modified the impugned assessment order dated 31.03.2002 which was a rectification order passed by the Joint Assessor and Collector, W.P.(C) No.9073/2005 Page 1 of 8 MCD on the basis of documents submitted by the respondent.
2. Counsel for the petitioner/MCD states that prior to the passing of the assessment order dated 31.3.2002, the Assessing Authority had issued a notice to the respondent/Assessee under Section 126 of the DMC Act, proposing to revise the rateable value of the subject premises @ `28,20,000/- w.e.f. 1.4.1988. As the respondent/Assessee had failed to appear before the Assessing Authority, an assessment order dated 22.03.1994 was passed by the petitioner/MCD assessing the rateable value of the subject premises at `28,20,000/- per annum w.e.f. 01.04.1988. Another notice was served by the Assessing Authority to the respondent/Assessee under Section 126 of the DMC Act proposing to revise the rateable value of the subject premises @ `51,11,220/- w.e.f. 01.04.1997. The said proposal was decided by an ex-parte order dated 13.03.2001. Thereafter, the assessing authority had issued a notice under Section 126 of the DMC Act proposing to revise the rateable value of the subject premises @ `80,00,000/- w.e.f. 01.04.1999.
3. In the second ex-parte assessment order dated 13.3.2001, passed by the petitioner/MCD, the rateable value of the subject premises was fixed at `51,11,220/- w.e.f. 01.04.1997. While passing the aforesaid ex-parte order, it was observed that the decision of the pending proposal of rateable value of the subject premises @ W.P.(C) No.9073/2005 Page 2 of 8 `80,00,000/- w.e.f. 01.04.1999 would be taken up separately. Thereafter, on 18.03.2002, the respondent/Assessee made a representation to the petitioner/MCD for rectification of the ex-parte assessment orders in respect of two assessment years, i.e., assessment years 1988-89, 1997-98 and for rectification of the decision of pending proposal in respect of the assessment year 1999- 2000.
4. It is submitted by counsel for the petitioner/MCD that based on the aforesaid representation, the impugned rectification order dated 31.03.2002 was passed by the Joint Assessor and Collector, MCD which was challenged by the respondent/Assessee in the appeal preferred by it and the same came to be decided by the impugned order dated 23.07.2003 passed by the learned ADJ. She states that the impugned order is erroneous inasmuch as the learned ADJ had failed to appreciate the fact that the rateable value as fixed by the petitioner/MCD w.e.f. 01.04.1988 by passing the assessment order dated 22.03.1994, and w.e.f. 01.04.1997 by virtue of the assessment order dated 13.03.2001, that was rectified on the request of the respondent, was solely on the basis of the submissions made and documents placed by the respondent before the Assessing Authority. She states that in view of the fact that the basis of passing the rectification order was the information that had been supplied by the W.P.(C) No.9073/2005 Page 3 of 8 respondent itself, it was not for the said respondent to have assailed the rectification order in appeal and therefore, the modification of the said rectification order by the learned ADJ was erroneous.
5. Counsel for the respondent disputes the aforesaid submission and supports the impugned order dated 23.7.2003 by submitting that while passing the rectification order, the Assessing Authority had failed to consider the fact that the MCD had not issued any notice to the assessee under Section 126 of the DMC Act for any of the years that are the subject matter of the rectification order, except for the assessment years w.e.f. 1988-89, 1997-98 and 1999-2000. He states that it is settled law that for carrying out amendments in the assessment list in terms of Section 124 of the DMC Act, the MCD is required to issue a notice of not less than one month to the assessee proposing to make the amendment under the provisions of Section 126 and after considering any objections to such a proposal, the assessment list can be amended under Section 126. In support of the aforesaid submissions, he relies on the decision of the Supreme Court in the case of Municipal Corporation, Indore Vs. Rai Bahadur Seth Hiralal and Ors. reported as AIR 1968 SC 642 and in the case of Municipal Corporation of City of Hubli Vs. Subha Rao Hanumantharao Prayag & Ors. reported as AIR 1976 SC 1398.
6. In the case of Rai Bahadur Seth Hiralal & Ors. (Supra), the W.P.(C) No.9073/2005 Page 4 of 8 Supreme Court had observed as below:
"8. Ordinarily, therefore, the Municipal Corporation has to prepare a fresh assessment list every year. The legislature however has empowered by Section 79, as other State legislatures have similarly done in several Municipal Acts, to adopt the valuation and assessment contained in the assessment list prepared in an earlier year provided, however, that it prepares a fresh list once in every 4 years. But sub-section (2) of section 79 provides expressly that when such a previous list is adopted for a particular official year it can be done subject to the provisions of sections 75 and 76. In other words, an assessment list being for a particular official year even when an assessment list prepared in an earlier year is adopted it becomes the list for such subsequent year subject to the procedure laid down in sections 75 and 76. The list so adopted has therefore to be published, has to invite objections and has to be authenticated in the manner prescribed by section 76(6) after disposing of the objections if any and it is then only that it becomes conclusive evidence of the valuation and the tax assessed thereon for that particular official year. If it were otherwise, the annual letting value or the value estimated on a particular building or house would be static for 4 years during which the Corporation can go on adopting the assessment list prepared in an earlier year and the owner or the occupier of the building would be deprived of the right to object to the valuation or the annual letting value or the tax assessed thereon for at least 4 years even though the valuation or the annual letting value thereof may, have decreased for one reason or the other. In order to prevent such a result the legislature has provided by sub-section (2) of section 79 that where a municipality adopts a previously prepared list for any subsequent year the provisions of sections 75 and 76 shall be applicable as if a new assessment list has been completed at the commencement of that particular official year. The word, "if" appearing in sub-section (2) of section 79 is obviously a mistake and must be read as "as if" because the word "if" standing by itself makes no sense at all. Section 79 therefore has to be construed to mean that though a Municipality need not prepare a fresh assessment list every W.P.(C) No.9073/2005 Page 5 of 8 year and need prepare such list once in every 4 years and can adopt an earlier assessment list such an adopted list becomes the assessment list for that particular year as if it was a new list and to which sections 75 and 76 apply."
7. In the case of Subha Rao Hanumantharao Prayag & Ors. (Supra), the Supreme Court had 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 rate-payers 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 Vs. 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. It is to this contention that we must now address ourselves."W.P.(C) No.9073/2005 Page 6 of 8
8. The provisions of the DMC Act, 1957 make it apparent that the preparation of assessment list is an annual feature and the Municipal Corporation is required to prepare the same after issuing a public notice, inviting objections, investigating the said objections, if any and disposing of the same on an annual basis. Thereafter, the assessment list so authenticated is retained in the records of the MCD and is subject to any alteration only in terms of Section 125 of the Act. Section 126 of the DMC Act stipulates that the increase in the assessment list so authenticated are accepted as a conclusive evidence of rateable value of all lands and building to which such entries respectively relate for the purpose of assessing any tax levied under the Act.
9. In the present case, the petitioner/MCD has not placed on record, any notice issued by it under Section 126 of the DMC Act for making an amendment to the Assessment list as prepared by it in respect of the subject premises for all the other years in question, except for the assessment years 1988-89, 1997-98, and 1999-2000. In such circumstances, while passing the rectification order dated 31.3.2002, the petitioner/MCD could not have taken into consideration and/or revised the assessment list for the years 1992-93, 1993-94, 1994-95, 1995-96, 1996-97, 1998-99 and hence the rateable value for the said years could not have been revised as had been done by the W.P.(C) No.9073/2005 Page 7 of 8 MCD.
10. For the aforesaid reasons, the learned ADJ was justified in holding that the MCD having failed to place on record any notices issued by it under Section 126 of the DMC Act for revision of the rateable value, other than rateable values for the years 1988-89, 1997-98 and 1999-2000, the rateable values fixed for the other assessment years under the order passed by the Assessing Authority, were not sustainable in the eyes of law and were liable to be set aside.
11. In view of the above discussion, the impugned order dated 23.07.2003 is maintained while dismissing the present petition filed by the petitioner/MCD. Parties are left to bear their own costs.
(HIMA KOHLI) JUDGE MARCH 12, 2012 'anb' W.P.(C) No.9073/2005 Page 8 of 8