Delhi District Court
Janak Raj vs New Delhi Municipal Council (Ndmc) on 18 September, 2023
IN THE COURT OF SH. SUDHANSHU KAUSHIK :
ADDITIONAL DISTRICT JUDGE-02 & WAQF TRIBUNAL :
PATIALA HOUSE COURTS : NEW DELHI
HTA NO.88/2017
CNR NO.DLND01-013729-2017
IN THE MATTER OF :-
1. MR. JANAK RAJ
S/O SH. BALDEV RAJ
2. MRS. REETA RAJ
W/O SH. JANAK RAJ
BOTH RESIDENT OF:
22 WOOLLERTON PARK,
#03-24, SINGAPORE,
THROUGH:
MR. D.S.YADAV,
AUTHORIZED REPRESENTATIVE
.....APPELLANTS
VERSUS
NEW DELHI MUNICIPAL COUNCIL
THROUGH ITS CHAIRMAN,
PALIKA KENDRA, SANSAD MARG,
NEW DELHI
.....RESPONDENT
DATE OF INSTITUTION : 16.10.2017
DATE OF CONCLUSION OF FINAL ARGUMENT : 05.09.2023
DATE OF PRONOUNCEMENT OF ORDER : 18.09.2023
HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 1 of 28
JUDGMENT
1. This is an appeal under Section 115 of the New Delhi Municipal Council Act, 1994 (hereinafter referred to as 'the Act') against the assessment order dated 07.09.2017 passed by Joint Director (Tax), New Delhi Municipal Corporation (NDMC) whereby the rateable value of Flat No.C-3, 6, Aurangzeb Road, New Delhi was revised with effect from 01.04.1998.
2. The brief facts as disclosed in the appeal are; A) Appellants Janak Raj and his wife Reeta Raj claim themselves to be the registered owner of Flat No.C-3, 6, Aurangzeb Road, New Delhi (hereinafter referred to as 'the property/flat'). They have been residing abroad most of the time and the flat was let out to different individuals and companies.
B) Respondent/New Delhi Municipal Corporation (NDMC) issued notice dated 30.11.1998 to the appellants under Section 72 of NDMC Act for revising the rateable value of the property for the year 1998-1999 and 1999-2000. Thereafter, respondent issued another notice dated 20.02.2002 disclosing that the assessment list is proposed to be amended for the year 2001-2002 and the existing rateable value is proposed to be enhanced from Rs.6,30,000/- less 10% to Rs.21,60,000/- less 10% with effect from 01.04.2001 on the basis of comparable rent. Subsequently, respondent served a demand notice on the appellant demanding a sum of Rs.19,91,054/- as arrears of house tax.
C) In response to the demand notice, appellants wrote a letter dated 03.03.2017 to the respondent mentioning that they have already HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 2 of 28 paid the house tax till the year 2010-2011. They claimed in this letter that they have in fact deposited amount of house tax in excess of their liability. Respondent issued a letter dated 13.06.2017 intimating that appellants have been provided personal hearing for their objections on 22.06.2017 at 03:00 PM. In response to this letter, appellants issued letters dated 20.06.2017 and 21.06.2017 reiterating their stand that they have already deposited the house-tax. Appellants disclosed in their letter that they entered into an agreement with NDMC in the year 2002 and pursuant to that NDMC issued invoices for the relevant years against agreed rateable value of Rs.6,30,000/-. They claimed that they have paid the house tax upto the year 2015-2016. They also filed objections dated 31.08.2017 against the proposed enhancement of the rateable value.
D) Appellants have alleged that the respondent did not afford them an opportunity for personal hearing and passed the impugned order dated 07.09.2017. They have challenged the said order in the present appeal.
Grounds of Appeal
3. Appellants have challenged the impugned order dated 07.09.2017 on following grounds; (a) That the impugned order is a non- speaking order and the same has been passed mechanically; (b) That the impugned order has been passed arbitrarily and respondent failed to consider the objections filed by the appellants; (c) That the assessing authority ignored crucial facts while passing the impugned order; (d) That the assessing authority HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 3 of 28 did not take into account the fact that there was inordinate delay in finalizing the assessment list; (e) That the assessing authority failed to take into consideration that there was a gap of more than 19 years between the issuance of notice under Section 72 of the NDMC Act and the passing of the impugned order; (f) That the assessing officer failed to take into account the law laid down by the Division Bench of the High Court of Delhi in the matter of "Ved Marwah & Ors. Vs. New Delhi Municipal Corporation & Ors." 248 (2008) DLT 781; (g) That the assessing authority failed to afford an effective opportunity of personal hearing to the appellants; (h) That the personal hearing was given to the appellants by one officer while the impugned order was passed by some other officer; (i) That the assessing authority has not disclosed the criteria for calculating the rateable value of the property; (j) That the rateable value has been wrongly fixed on the basis of comparable rent of some other property; (k) That the assessing authority failed to appreciate that the liability to pay house tax stands extinguished with the expiry of each financial year within which the assessment list has not been finalized.
Arguments
4. Counsel for the appellants supported the grounds taken in the appeal. He contended that the impugned order is a non-speaking order and the same has been passed in a mechanical manner. He mentioned that respondent passed the impugned order without considering the written objections filed by the appellant. He argued that although, respondent has mentioned that the rateable HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 4 of 28 value was revised on the basis of comparable rent but no such similarly situated property was available in the vicinity. He has mentioned that respondent has arbitrarily revised the rateable value of the property and the same is not permissible. He has mentioned that the impugned order is liable to be set-aside as the principles of natural justice were not complied with. He has mentioned that the assessment order was passed hurriedly and the appellant was not provided an effective personal hearing. He has argued that while passing the impugned order, respondent ignored crucial details regarding the area of the property. He has contended that there is an inordinate delay in finalizing the assessment and the impugned order cannot be sustained. In order to support, counsel for appellants has relied on the judgment in the matter of "Ved Marwah & Ors. Vs. New Delhi Municipal Corporation & Ors." 248 (2008) DLT 781, "DCM Ltd. Vs Municipal Corporation of Delhi & Ors." 73(1998) DLT 227 DB, "State of Punjab & Ors. Vs Bhatinda District Cooperative Milk Producers Union Ltd." 2007(11) SCC 363, "Delhi Development Authority Vs Ram Prakash" II 2011 SLT 684, "State Trading Corporation Vs New Delhi Municipal Council" 2016 (12) SCC 603 and "Spring Dales School Vs NDMC & Ors." 238 (2017) DLT 487.
5. On the other hand, counsel for respondent has questioned the maintainability of the appeal. He has contended that the appeal is not maintainable as the same was not filed within the period prescribed under Section 116 of the Act. He has mentioned that the impugned order was passed according to the provisions contained HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 5 of 28 under the Act and all the relevant factors were taken into consideration before passing the order. Counsel has submitted that due notice under Section 72 of the Act was issued to the appellant and there is no infirmity in the impugned order. He has pointed out that appellant was granted adequate opportunity to file objections and personal hearing was also granted. He has mentioned that the written objections filed by the appellant were taken into consideration at the time of passing of impugned order. He has mentioned that appellant kept silent for a considerable period of time and approached the court only after receiving the bill raised on the basis of revised rateable value. He has prayed that no period of limitation for finalizing the assessment has been prescribed under the Act. He contended that the judgment in Ved Marwah's case (supra) was passed in peculiar set of circumstances and the same has no application in the present case. He has argued that the directions issued in Ved Marwah's case (supra) cannot be uniformly applied in all the cases for setting aside the assessment order merely because of the delay between the issuance of notice and the finalization of the assessment. He has argued that there is an inordinate delay in filing the appeal and even otherwise, there is no merit in the contentions raised by the appellant. He has prayed for dismissal of the appeal.
Finding
6. I have perused the record in the light of respective arguments.
7. In order to adjudicate the present controversy, it would be HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 6 of 28 appropriate to refer to the relevant provisions of the Act.
8. Section 60 of the Act is the charging section, which authorizes the NDMC to levy various type of taxes including property tax. Section 60(3) of the Act states that the property tax shall be levied, assessed and collected in accordance with the provisions of the Act and the bye-laws made thereunder. Section 61 of the Act prescribes the rates of the property tax.
9. Section 61 (1) of the Act provides that property tax shall be levied on lands and buildings in New Delhi and shall consist of not less than ten and not more than thirty per cent of the rateable value of lands and buildings. The proviso to Section 61(1) of the Act states that the NDMC may, while fixing the rate at which the property tax shall be levied during any year, determine the rate leviable in respect of lands and buildings or portions of lands and buildings in which any particular class of trade or business is carried on shall be higher than the rate determined in respect of other lands and buildings or portion of other lands and buildings by an amount not exceeding one-half of the rate so fixed.
10. The expression rateable value is defined under Section 2 (42) of the Act to mean the value of any land or building fixed in accordance with the provisions of this Act and the Bye-laws made thereunder for the purpose of assessment to property taxes.
11. Section 62 of the Act relates to the 'premises in respect of which HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 7 of 28 tax is to be levied'. Section 62 (1) of the Act lists out such lands or buildings or portions thereof which will not be subject to levy of property tax. This includes lands exclusively occupied and used for public worship or by a society or body for a charitable purpose. It also includes lands and buildings vested in the NDMC in respect of which the tax, if levied, would be leviable primarily on the NDMC and agricultural lands and buildings (other than dwelling houses). Section 62 (3) of the Act clarifies that if a portion of the land or building is exempted from property tax by reason of the exclusive use or occupied for public worship or charitable purpose then such portion shall be deemed to be a separate property for the purpose of municipal taxation.
12. Section 63 of the Act sets out the method of determination of the rateable value of lands and buildings assessable to property tax. Section 63 (1) of the Act provides that the rateable value of any land or building assessable to property tax shall be the annual rent at which such land or building might reasonably be expected to let from year to year less a sum equal to 10% of the said annual rent which shall be in lieu of all allowances for cost of repairs and insurance, and other expenses necessary to maintain the land or building in a state to command that rent. The proviso to Section 63 (1) of the Act states that in respect of any land or building the standard rent of which has been fixed under the Delhi Rent Control Act, 1958, the rateable value thereof shall not exceed the annual amount of the standard rent so fixed.
HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 8 of 2813. Section 63(2) of the Act states that the rateable value of any land which is not built upon but is capable of being built upon and any land on which a building is in process of erection shall be fixed at five per cent of estimated capital value of such land. Under Section 63(3) the Chairperson of the NDMC can by public notice, with the approval of the NDMC, specify a plant and machinery which will be deemed to form part of such land and building for the purposes of determination of rateable value. Section 65(1) of the Act clarifies that lands and buildings being properties of the Union shall be exempt from the property tax specified in Section 61 of the Act.
14. Section 66 of the Act speaks of the incidence of the property tax. It is primarily on the lessor if a building or land is given on lease. It is on the superior lessor if the land or building is given on a sub- lease. If it is not leased then on the person on whom the right to let the same vests.
15. Section 67 of the Act talks of apportionment of liability of the property tax when the premises are let or sub-let. Section 68 of the Act clarifies who will be primarily liable for the property tax due in respect of any land or building and in the event of default of the person liable to pay such property-tax as specified in Section 66 of the Act. It is clarified that this would be the occupier of such land or building.
16. Section 70 of the Act deals with the Assessment List. This is a list HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 9 of 28 of all lands and buildings which contains such particulars with respect to each land and building as may be prescribed by the Bye- laws. When such Assessment List is prepared, the Chairperson under Section 70 (2) of the Act gives a public notice thereof and every person claiming to be an owner, lessor or occupier of a land or building included in the List shall be at liberty to inspect the List and take extracts therefrom free of charge. Under Section 70 (3) of the Act, the Chairperson is to give a public notice of a date not less than one month thereafter when he would proceed to consider the rateable value of the lands and buildings entered in the Assessment List. He is also to give the written notice where the rateable value is proposed to be increased. Section 70 (4) of the Act provides for objections to be filed to the Assessment List in writing to the Chairperson. Section 70 (5) of the Act talks of an objection being notified into and investigated, and the person making them shall be allowed an opportunity of being heard either in person or by authorized agent before the final Assessment List is prepared under Section 70 (6) of the Act. Section 72 of the Act provides for amendment of the Assessment List and Section 73 for preparation of new Assessment List.
17. The question of the assessment of house-tax by NDMC was considered in detail by the Hon'ble Supreme Court in the matter of "New Delhi Municipal Council Vs Association of concerned Citizen of New Delhi & Ors." (Civil Appeal No.903/2019, decided on 22.01.2019) wherein it was held that the annual realizable rent shall be the basis for calculating the rateable value and the value HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 10 of 28 of holding cannot be taken into consideration. In this matter, the Apex Court referred to various previous decisions on the matter and held that the realizable rent of a property is the only criteria for determining the rateable value of the property. The court cited with approval the decision in the matter of "The Corporation of Calcutta Vs. Smt. Padma Debi and Ors." 1962 (3) SCR 49 wherein a provision similar to Section 63(1) of the Act was present in Calcutta Municipal Act, 1923 and it was held that the criteria for assessment should be rent of the property realizable by the landlord and not the value of the property. It was observed in this matter; "We shall first look at the provisions of the section to ascertain the meaning: The crucial words are "gross annual rent at which the land or building might at the time of assessment reasonably be expected to let from year to year". The dictionary meaning of the words "to let", is "grant use of for rent or hire". It implies that the rent which the landlord might realize if the house was let is the basis for fixing the annual value of the building. The criterion, therefore, is the rent realizable by the landlord and not the value of the holding in the hands of the tenant.
18. It was observed in the matter of "Government Servant Cooperative House Building Society Limited and Others Vs Union of India and Ors." 16 (1998) 6 SCC 381:
"80. Therefore, the annual rent actually received by the landlord, in the absence of any special circumstances, would be a good guide to decide the rent which the landlord might reasonably expect to receive from a hypothetical tenant. Since the premises in the present case are not controlled by any rent control legislation, the HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 11 of 28 annual rent received by the landlord is what a willing lessee, uninfluenced by other circumstances, would pay to a willing lessor. Hence, actual annual rent, in these circumstances, can be taken as the annual rateable value of the property for the assessment of property tax. The municipal corporation is, therefore, entitled to revise the rateable value of the properties which have been freed from rent control on the basis of annual rent actually received unless the owner satisfies the municipal corporation that there are other considerations which have affected the quantum of rent.
81) In case there is a proof and/or material to find out that the reasonable rent could have been more than at which it is actually let out, the actual rent receipt can be discarded by adopting the expected rent which, on the basis of material, can be said to be reasonable. In those cases where the property is self-occupied or is vacant and not let out, it can be gathered from the rent at which a comparable property is let out. However, in such a case there would be two situations. Going by the dicta laid down in Dewan Daulat Rai Kapoor and other cases, the reasonable rent would be the standard rent which can be determined under the provisions of Delhi Rent Control Act. However, this principle would be applicable only in respect of those properties where Delhi Rent Control Act applies. In other cases, the yardstick would be the letting value of comparable properties, i.e., the rent at which comparable properties are let out. However, such criteria of fixation of standard rent has lost its relevance after the judgment of the Delhi High Court in Raghunandan Saran Ashok Saran (HUF) vide which Sections 4,6 and 19 of the Delhi Rent Control Act which deal with fixation of standard rent, were declared as ultra vires of the Constitution of India. The aforesaid decision has been affirmed by this Court in State Trading Corporation of India Ltd. case.
82) Be as it may, in the context of the issue at hand, we emphasize that it is the annual letting value fixed in the HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 12 of 28 aforesaid manner which can be the annual rent and not the value of the property in question. The expression annual rent is to be read in contradistinction to annual value. Two concepts are altogether different. In as much as the latter expression relates to annual value of the property which may be based on parameters different from fixing the annual rent of the property."
19. The aforesaid judgments give a clear indication that annual rent is to be the one which the landlord might realize if the house was let. The criteria, thus, is the rent realizable by the landlord and not the value of the holding. The test essentially is what rent the premises can lawfully fetch if let out to a hypothetical tenant. NDMC is not free to assess any arbitrary annual value and has to look to and is bound by the rent realizable by the landlord and not the value of holding. No doubt, in case, there is proof or material to find out that the reasonable rent could have been more than at which the property has been actually let out, the actual rent can be discarded by adopting the expected rent which, on the basis of material, can be said to be reasonable. In such cases, the letting value of comparable property can be taken into account for revising the rateable value.
20. Coming to the facts of the present case. Respondent has questioned the maintainability of the appeal on the ground of limitation. Counsel for respondent has argued that appeal was filed beyond the prescribed period of 30 days and it is not accompanied with any application seeking condonation of delay. He has contended that the appeal should be dismissed on this ground. I do HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 13 of 28 not find force in the said submissions. Section 116(a) of the Act mandates that the appeal against the assessment order should be filed within a period of 30 days of the date on which the amendment is finally made under Section 72 of the Act. In the present matter, the assessment order was passed on 07.09.2017 while the appeal has been filed on 14.10.2017. Admittedly, no application for condonation of delay was filed along with the appeal. Counsel for the appellant has submitted that application for condonation of delay was not filed as there was no delay in filing the appeal.
21. Although, appellants did not file the application for condonation of delay but they disclosed in the rejoinder that the certified copy of the assessment order was provided on 15.09.2017. It is a settled preposition of law that period of limitation shall start running from the day of knowledge. Respondent has not placed on record any document to indicate the date on which the assessment order was dispatched to the appellants. On the other hand, appellants have mentioned that the certified copy of the order was obtained by them only on 15.09.2017. Record indicates that the present appeal was filed on 14.10.2017. In view of this, it cannot be concluded that there was delay in filing the appeal. The appeal has been filed within the period of limitation prescribed under Section 116 of the Act. Further, Section 117 of the Act empowers the court to entertain an appeal even after the prescribed period provided he/she satisfies the court that there was sufficient cause for not preferring the appeal within the prescribed period. In the present HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 14 of 28 matter, appellants have tendered an explanation that appeal could not be filed within a period of 30 days of the assessment order on account of the time taken in obtaining the certified copy of the order. This, in my opinion, is a sufficient explanation and sufficient cause for not preferring the appeal within the contemplated period of 30 days. Thus, the argument of the respondent that the appeal calls for dismissal on the ground of limitation does not hold ground and the same is rejected.
22. Coming to the ground of the appeal that sufficient opportunity was not afforded to the appellants by the assessing authority before passing the impugned order. It has been argued on behalf of appellants that the assessing officer did not consider the objections raised by them and passed the impugned order arbitrarily. It has also been argued by the appellants that effective personal hearing was not afforded to them as the hearing was done by one officer while the impugned order has been passed by another officer. Counsel for the appellants has argued that the orders were passed arbitrarily and in violation of principles of natural justice.
23. On perusal of the Act, it becomes apparent that the principles of natural justice have been incorporated in various provisions. Section 70 of the Act vests a power with the counsel of NDMC for preparation of an assessment list in respect of each land and building in New Delhi. Section 70(2) of the Act provides that after preparing the assessment list, Chairperson shall give public notice so as to facilitate the inspection of assessment list by the interested HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 15 of 28 persons. Section 70(3) of the Act states that the Chairperson shall also give public notice of not less than a month as to when he will proceed to consider the rateable value of land & building entered in the assessment list and in case, the rateable value is increased, he shall also given written notice to the owner or occupier of land & building. Section 70(4) of the Act conceives that an objection on the rateable value could be made to the Chairperson before the date fixed in the notice. Section 70(5) of the Act states that the objection filed by the effected party shall be inquired into and investigated and the person making them shall be allowed an opportunity of being heard. Similarly, Section 72 (2) of the Act dealing with the amendment of assessment list also provides that Chairperson shall give a notice to a person effected and consider any objection that may be made by him. Thus, giving notice and considering the objections raised by the effected persons is sacrosanct before passing an assessment order.
24. In the present matter, assessing authority did not indicate in the initial notice dated 30.11.1998 as to on what basis the rateable value of the property is proposed to be increased. The notice also does not indicate as to what extent the rateable value was proposed to be increased. It simply mentioned that the assessment list for the year 1998-1999 and 1999-2000 is proposed to be amended. The notice does indicate that the rateable value is proposed to be enhanced but it does not specify the extent of proposed enhancement. The proposed rateable value was not quantified or indicated in this notice. Subsequently, respondent HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 16 of 28 issued another notice dated 20.02.2022 proposing to enhance the rateable value for the year 2001-2002. In this notice, the proposed rateable value was quantified. Record indicates that appellants filed objections dated 31.08.2017 against the proposed enhancement and raised various objections. The Assessing Officer did not consider those objections while passing the impugned order dated 07.09.2017 and enhanced the rateable value with effect from 01.04.1998. These circumstances lend support to the argument of the appellants that the impugned order has been passed hurriedly and arbitrarily. The assessing authority was under
an obligation to consider the objections raised by the appellants but he failed to do so. He ignored the objections and passed the impugned order. The impugned order cannot be sustained on this ground.
25. It has been held in the matter of DCM Ltd.'s case (supra) that notice for revising the rateable value should disclose the proposed figure of rateable value so as to enable the assessee to file objections against the proposed enhancement. It was further held in this matter that it is expected in a quasi judicial inquiry that the final order should be passed by the same officer, who has afforded the personal hearing to the parties. The court observed in the matter that the requirement of personal hearing cannot be rendered meaningless in the manner that the hearing is done by one officer while orders is passed by another officer. The court made the following observation in para-22, 24 & 27 of the judgment.
"22. Keeping the various decisions of this Court on this HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 17 of 28 question in view we are of the considered opinion that in order to enable the notice to effectively meet the case proposed against him in the notice, the basis of arriving at the proposed figure of rateable value ought to be disclosed to the assessee specially when the assessee makes a demand for the same as in the present case. Thee is nothing secret or sacrosanct - after all the Corporation must have arrived at the proposed figure of rateable value on some basis, it cannot be that the proposed figure mentioned in the notice has dawned on some officer of the Corporation from the blue. When the proposed figure has been worked out on some basis we see nothing secret or confidential in it so as not to make it available to the assessee. The proposal in the notice has serious repercussions so far as the assessee is concerned and that is why the assessee has been given a right to file objections against the proposal. Saying that the entire facts are available with the petitioner is no answer to the requirement of disclosing the basis of the proposed figure of rateable value. In order to ensure that the right is effectively exercised and that it is not rendered illusory, we are of the view that the Corporation must disclose the basis of arriving at the figure contained in the proposal specially when the assessee has asked for the same. Setting aside the notice on this ground will mean that the petitioner will get a complete tax holiday with effect from the date of the proposed revision in the rateable value till a fresh notice is given. We are mindful of the fact that a fresh notice will be effective only from the year in which it is given and the result will be that the petitioner will get the benefit of the entire period till a fresh notice containing a proposal for revision of rateable value is given. Therefore, without invalidating the notice under section 126 of the Act given to the petitioner in the present case, we would direct that the Corporation supply the information sought for by the petitioner vide its objections dated 5th May 1994 which were filed in response to the notice under section 126 of the act. The supplementary notice/information may be supplied to HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 18 of 28 the petitioner within four weeks from the decision in this case.
23. The next point is regarding hearing given by one officer while the order was passed by another officer. In this context the facts are not in dispute. The admitted position is that the petitioner's representative was heard on the basis of the objections filed by the petitioner by one officer while the objections were decided by another officer. According to the learned counsel for the petitioner on the face of it this procedure is repulsive and repugnant to the basic principles of natural justice and the impugned order has to be quashed on this ground alone. On the other hand the learned counsel for the Corporation tried to justify this procedure followed by the Corporation by stating that the present is not a case of any oral evidence where demeanor of a witness may be of any significance. The decision of the case is based on material on record. The petitioner had filed detailed objections as well as written submissions in support thereof. The order has been passed by the Assessing Authority on the basis of notice, reply to the notice, objections, written submissions on behalf of the assessee and other relevant documents on record. All the arguments advanced by the petitioner are contained in the replies. In short, it is submitted that the entire material was before the Assessing Officer and he passed the order after looking into the same.
24. In support of this submission the learned counsel for the counsel for the respondent relied on certain decisions. First he cited Ossein and Gelatine Mfrs. Association Vs. Modi Alkalies & Chemicals Ltd., (1989) 4 S 264. This was a case of grant of licence to manufacture ossein and gelatine in the State of Rajasthan. The appellant Association had represented against grant of license to the respondent. They had made written representations in this behalf. Oral hearing was given to them by an officer of the Govt. Final order granting permission to respondent was HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 19 of 28 passed long after by another officer. In these facts it was held that there was no violation of principles of natural justice. In our view this case has no application in the facts of the present case. This was a case of purely administrative inquiry whereas the case we are dealing with is one requiring discharge of quasi judicial functions. The requirement of oral hearing to be given to the assessee is implicit in view of the statutory provisions. Section 124(5) which deals with objections to the assessment list clearly provides for an opportunity of hearing to the party affected. Section 126 which has been applied in the present case, as noticed earlier, contains a mandatory requirement of notice and also provides for an opportunity to the assessee to file objections to the proposal. It also enjoins on the Commissioner to consider the objections of the assessee in response to the notice under section 126. In fact the learned counsel for the respondent admitted that the Corporation gives an opportunity of oral hearing in all such cases. When the requirement of oral hearing is conceded, the right cannot be rendered meaningless in this manner, i.e. hearing by one officer and order by another officer. The right of hearing has to be given some meaning and has to be made effective which can be possible only if the officer who gives oral hearing also passes the final order.
27. The question under consideration before us is fully covered by the decision of Supreme Court in G. Nageswara Rao Vs. A.P.S.R. T. Corpn. 1959 SC 308 (para 31). This was a case of quasi judicial inquiry and the Supreme Court clearly laid down that the decision has to be given by the same officer who heard the party concerned. In our view in a quasi judicial inquiry this is no answer that the order has been passed in accordance with the material on record specially when oral hearing is envisaged and has in fact been given to the party. The importance of oral hearing cannot be nullified by saying that the authority has considered all the submissions contained in the written arguments. Oral hearing HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 20 of 28 generates discussion and leads to clarification of doubt, if any, which the authority while has to decide might be having in its mind. The importance of benefit of a healthy discussion can never be over emphasised. It is a basic tenet of law by which we are governed. If what has been urged on behalf of the respondent was to be accepted, it would be as good as saying that no oral hearing is required in judicial or quasi judicial matter.
26. Coming back to the present case, appellants have contended that personal hearing was afforded to them by one officer while the final assessment order has been passed by another officer. In view the observations made in the aforesaid judgment, it is evident that no effective personal hearing was given to the appellants. To add to it, the assessing officer did not even bother to consider the objections raised by the appellants. The order is liable to be set- aside on these grounds.
27. One of the main grounds of appeal is that there is an inordinate delay in finalizing the assessment. It is an admitted position that the impugned assessment order dated 07.09.2017 has been passed in respect of notices dated 30.11.1998 and 20.02.2002 issued under Section 72 of the Act. Although, the NDMC Act does not specify any period of limitation for finalizing the assessment but this does not mean that respondent is at liberty to sleep over the matter for a period of more than 19 years. It is expected that after issuance of notice, respondent should finalize the assessment within a reasonable period. The Division Bench of the High Court of Delhi has observed in the matter of Ved Marwah Vs. NDMC & Ors. (supra) that the proceedings initiated pursuant to Section 72 HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 21 of 28 of the NDMC Act should be concluded in a reasonable period of not more than three years. In the said matter, notices for revising the assessment list were issued over a decade prior to passing of the final orders by the NDMC. The High Court observed that the inordinate delay was unreasonable and quashed the assessment orders. While doing so, the High Court issued the following directions :
"16. In Sunil Rai v. Municipal Corporation of Delhi & Ors. 48 (1992) DLT 621 (DB) after the judgment in Shyam Kishore (supra) a Division Bench of this Court had interpreted a provision identical to Section 116 (b) and held that the proper exercise of discretion by the appellate forum in cases where assessment orders are framed for a number of years, is to direct the assessee to deposit the disputed tax in respect of the base year and then to proceed to hear and decide the appeal in respect to the base year assessment and after deciding the said appeal the decision of the appeal in respect of the base year would automatically govern the assessment for the subsequent years. Adoption of such an approach, in the opinion of this Court, saves the provision of Section 116 of the Act.
17. In view of the above reasoning, it is held the impugned final orders of assessment and the demands issued are clearly unreasonable and void. They are hereby quashed. Consequently, it is held that the NDMC is at liberty to rework the assessments in respect of the properties that are the subject matter of these proceedings, by issuing fresh notices for the periods commencing from 3 years prior to the date on which the final notices were issued, and finalize the assessments within reasonable time. In the event of grievance on the part of the assessee to such fresh assessment orders, it is open to them to approach the appellate tribunal; provided they deposit the amount towards the tax liability for the base year."HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 22 of 28
28. The High Court of Delhi categorically held in Ved Marwah's case (supra) that there cannot be any unreasonable delay in finalizing the assessment after a notice has been issued under Section 72 of the Act. The High Court relied on various decisions of the Supreme Court of India and observed that the Assessing Officer must finalize the assessment within a reasonable period. It made the following observations;
"Analysis and Conclusions
13. The notices for revising the assessment list in all these cases were issued over a decade prior to the passing of final orders. In one case, it was 16 years; in others, it was 14 years. In two cases, the same property was subject to multiple notices for later periods, without finalization of rateable value, for the previous year. Clearly, the finalization of these cases after inordinate delay of 14 to 16 years was plainly unreasonable. Where such open ended power-like in the present case, in Section 72 was conferred upon a statutory authority, i.e. a sales tax authority official in Punjab, the Supreme Court had outlined the correct approach in State of Punjab & Ors. v. Bhatinda District Co-op Milk P. Union Ltd 2007 (11) SCC 363 with respect to the limitations to exercise of such power. It was held that:
"5. In respect of the assessment for the year ending 31.3.2000, the assessment proceedings were completed relying on the return filed by the appellant on 20.3.2001. Indisputably, in terms of Section 11 of the 1948 Act, a period of three years has been prescribed as a period of limitation as contained under sub-section (3) of Section 11 for completing assessment from the last date for filing of return. Sub-section (6) of Section 11 reads as under :
"_If upon information which has come into his possession, the Assessing Authority is HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 23 of 28 satisfied that any dealer has been liable to pay tax under this Act in respect of any period but has failed to apply for registration, the Assessing Authority shall, within five years after the expiry of such period, after giving the dealer a reasonable opportunity of being heard, proceed to assess to the best of his judgment, the amount of tax, if any, due from the dealer in respect of such period and all subsequent periods and in case where such dealer has willfully failed to apply for registration, the Assessing Authority may direct that the dealer shall pay by way of penalty, in addition to the amount so assessed, a sum not exceeding one and a half times that amount. Section 21 of the said Act provides for revision. Section 21 of the Act with which we are concerned herein reads as under :
"21. Revision-(1) The Commissioner may of his own motion call for the record of any proceedings which are pending before, or have been disposed of by any authority subordinate to him, for the purpose of satisfying himself as to the legality or propriety of such proceedings or order made therein and may pass such order in relation thereto as he may think fit.
(2) The State Government may by notification confer on any Officer the powers of the Commissioner under sub-
section (1) to be exercised subject to such conditions and in respect of such areas as may be specified in the notification.
(3) A Tribunal, on application made to it against an order of the Commissioner under sub-section (1) within ninety days HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 24 of 28 from the date of communication of the order, may call for and examine the record of any such case and pass such orders thereon as it thinks just and proper.
(4) No order shall be passed under this section which adversely affects any person unless such person has been given a reasonable opportunity of being heard".
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15. Sub-section (1) of Section 11 empowers the Commissioner to extend the period of three years for passing the order of assessment where for reasons are required to be recorded in writing subject, however, to the maximum period of five years. Ordinarily, therefore, a period of three years has been prescribed for completion of the assessment in terms of the provisions of the Act. We may also notice that in cases where an assessment order is to be reviewed, the same should be done within a period of one year.
16. A bare reading of Section 21 of the Act would reveal that although no period of limitation has been prescribed therefor, the same would not mean that the suo-moto power can be exercised at any time.
17. It is trite that if no period of limitation has been prescribed, statutory authority must exercise its jurisdiction within a reasonable period. What, however, shall be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors.
18. Revisional jurisdiction, in our opinion, should ordinarily be exercised within a period of three HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 25 of 28 years having regard to the purport in terms of the said Act. In any event, the same should not exceed the period of five years. The view of the High Court, thus, cannot be said to be unreasonable. Reasonable period, keeping in view the discussions made hereinbefore, must be found out from the statutory scheme. As indicated hereinbefore, maximum period of limitation provided for in sub- section (6) of Section 11 of the Act is five years.
14. Bhatinda (supra) was noticed and followed subsequently in Ram Prakash (supra). In a more recent decision Ram Karan (D) by LRs v. State of Rajasthan 2014 (8) SCC 282, it was held that:
"38. State of Punjab & Ors v Bhatinda District Co- op Milk P. Union Ltd (supra) this Court held that if no period of limitation has been prescribed, statutory authority must exercise its jurisdiction within a reasonable period. However, what shall be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors. In the present case, neither any objection was raised nor was any application filed by vendors for restoration of land in their favour. The suit was filed by the Tehsildar, Viratnagar after more than 31 years. No ground is shown to file such petition after long delay nor it was mentioned as to whether the vendors i.e. original landholders made any application for restoration of land in their favour.
39. In view of the matter, we hold that the suit being filed beyond the reasonable period was fit to be dismissed. The Additional Collector rightly dismissed the suit being barred by limitation."
15. In the present case, the finalization of assessment list or its revision, after over 12 years in all the cases, cannot be countenanced. It is clearly unreasonable and arbitrary and calls for interference."
HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 26 of 2829. It was observed by the High Court of Delhi in Ved Marwah's case (supra) that a delay of over 12 years in finalizing the assessment of property tax is arbitrary and the same cannot be countenanced. In the said matter, the High Court quashed the order of the assessing authority on the ground of unreasonable delay. While quashing the order, it granted liberty to NDMC to rework the assessment by issuing fresh notice for the period commencing from three years prior to the date on which final notices were issued. NDMC was further directed to finalize the assessment within a reasonable time. NDMC challenged the order of the High Court by filing a Special Leave Petition No.25403/2018 titled as "New Delhi Municipal Council Vs. Pyare Lal & Sons Pvt. Ltd." but the same was dismissed by the Supreme Court of India vide order dated 22.01.2019. Resultantly, the findings in Ved Marwah's case (supra) attained finality.
30. Coming back to the present case. In the present matter, there is an inordinate delay on the part of NDMC in finalizing the assessment. The initial notice under Section 72 of the NDMC Act was issued on 30.11.1998 while the final assessment order was passed on 07.09.2017. There was a time gap of around 19 years between the issuance of notice and the finalization of the assessment. Relying on the observations made in Ved Marwah's case (supra), the delay is certainly inordinate and arbitrary. This, in itself, is a sufficient ground for setting aside the impugned order. The impugned is bad in law. Accordingly, the appeal is HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 27 of 28 allowed and the impugned order is set aside.
31. Copy of the judgment be sent to the respondent.
32. Decree Sheet be prepared.
33. File be consigned to record room.
Announced in the open court on 18.09.2023 (Sudhanshu Kaushik) Addl. District Judge-02 & Waqf Tribunal New Delhi District, Patiala House Courts, New Delhi HTA 88/2017 Janak Raj Vs New Delhi Municipal Council (NDMC) Page 28 of 28