Telangana High Court
Church Of South India Trust Association ... vs The Commissioner on 10 September, 2024
Author: G.Radha Rani
Bench: G.Radha Rani
THE HONOURABLE Dr.JUSTICE G.RADHA RANI
CIVIL MISCELLANEOUS SECOND APPEAL No.3 of 2022
ORDER:
This Civil Miscellaneous Second Appeal is filed by the appellant aggrieved by the judgment and decree dated 30.11.2021passed in M.A. No.24 of 2021 by the Chief Judge, City Small Causes Court, Hyderabad directing the appellant to pay 60% of the amount demanded under the demand notice dated 08.03.2021 for Rs.10,91,004/-.
2. The appellant is the Church of South India Trust Association, a company incorporated under the Companies Act, 1956. It was submitted that the property bearing No.7-1-6/2 to 6/4 St.Thomas Church, Secunderabad was owned and possessed by the Church of South India Trust Association Medak Diocese and the said premises was let out to Alfa Hotel and Stores who was carrying on hotel business for the past several decades. The respondents issued a notice of demand in respect of the premises bearing No.7-1-6/2 to 6/4 for the financial year upto 2020-21 on 25-2-2019 demanding an amount of Rs.10,91,004/-. The tax demanded was 500 times of the tax payable in the past. The respondent fixed the property tax @ Rs.4,58,406/- arbitrarily and the same was set aside by the judgment dated 21.04.2017 passed in M.A No.117 of 2015 and the 2 Dr.GRR,J CMSA No.3 of 2022 judgment dated 13.02.2020 passed in M.A. No.75 of 2019 by the Chief Judge, City Small Causes Court, Hyderabad. In spite of the judgment dated 21.04.2014 passed in M.A. No.117 of 2015 and the judgment dated 13.02.2020 in MA No.75 of 2019, the respondents not obeyed the directions and got issued the notice under the appeal without following the due process of law. The notice of demand of property tax issued by respondents Corporation did not confirm the provisions of the Greater Hyderabad Municipal Corporation Act, 1955 (for short 'GHMC Act'). The annual property tax in respect of the above premises was only Rs.97,451/-. The premises was an old one. While passing the judgment dated 13.02.2020 in MA No.75 of 2019, the learned Chief Judge, City Small Causes Court, remanded the matter back to the respondents Corporation to assess the tax of the petition schedule property afresh in accordance with the Rules including providing a reasonable opportunity of personal hearing to the appellant. The respondents without following the said judgment dated 13.02.2020 passed in MA No.75 of 2019, mechanically issued the demand notice claiming tax of Rs.10,91,004/-, and prayed to set aside the same.
3. The learned Chief Judge, City Small Causes Court on considering the contentions of the appellant and as the respondents 3 Dr.GRR,J CMSA No.3 of 2022 remained ex parte, observed that in the demand notice the rate of interest was not specified and the period from which the arrears were accumulated were also not specified, set aside the impugned demand notice. But, however, considering that the appellant had also not complied the orders of the court passed in MA No.75 of 2019 wherein he was directed to pay 30% of the balance amount of Rs.3,19,102/- within a period of four months, allowed the appeal in part remanding the matter to the respondent Corporation to re-assess and fix the property tax in respect of the schedule property in accordance with the procedure laid down under GHMC Act, 1955 after giving a reasonable opportunity to the appellant and to pass appropriate orders within a period of four months from the date of the order on condition that the appellant should deposit 60% of the amount demanded under the impugned notice within two months from the date of the order dated 30.11.2021.
4. Aggrieved by the said order passed by the learned Chief Judge, City Small Causes Court, Hyderabad in M.A. No.24 of 2021, the present appeal is filed by the appellant raising the following substantial questions of law:
a) Whether in an appeal under Section 282 of the GHMC Act, the appellant can be directed to pay any amount out of the amount as against the demand notice, when the 4 Dr.GRR,J CMSA No.3 of 2022 demand notice itself is found to be illegal and liable to be set aside?
b) Whether a court would have jurisdiction to decide any percentage of the demand notice when the very issuance of demand notice is found to be illegal, contrary to the provisions of the GHMC Act?
5. Heard the learned counsel for the appellant and the learned Standing Counsel for the respondents-GHMC.
6. Perused the record.
7. The learned counsel for the appellant submitted that the impugned judgment was contrary to law and without jurisdiction and relied upon the judgment dated 28.10.2022 passed by this Court in CMSA Nos.14 and 16 of 2017.
8. Learned Standing Counsel for the respondent Corporation, on the other hand, contended that the respondent Corporation issued demand notice to the appellant demanding to pay the property tax in respect of the premises bearing D.No.7-1-6/2 to 6/4, Monda Market, Secunderabad as per the gazette applicable to the locality and the nature and usage of the premises, and also followed the procedure and there was no illegality whatsoever on the part of the respondents-Corporation and prayed to dismiss the appeal.
5
Dr.GRR,J CMSA No.3 of 2022
9. Learned counsel for the appellant submitted that during the pendency of the appeal, the appellant paid tax to an amount of Rs.6,54,603/- on 04.04.2024 vide cheque bearing No.004040 dated 20.03.2024 and enclosed the receipt, and requested to adjust the said amount.
10. As seen from the record, the main grievance of the appellant was that the impugned notice was vague in nature and did not disclose any particulars of various heads under which the tax was demanded and further such enhancement of the tax was made without following the procedure under the GHMC Act.
11. As per Section 225 of the GHMC Act, the Commissioner can amend the assessment book during the financial year. Section 225 of the GHMC Act is extracted for a better perusal:
"Section 225: "Assessment book may be amended by the Commissioner during the financial year:- (1) Subject to the provisions of sub-section(2) the Commissioner may upon the representation of any person concerned or upon any other information at any time during the financial year to which the assessment book relates amend the same -
(a) By inserting therein the name of any person whose name ought to be so inserted or any premises previously omitted;
(b) By striking out the name of any person not liable to the property tax;
(c) By increasing or reducing the amount of any rateable value and of the assessment based thereupon;6
Dr.GRR,J CMSA No.3 of 2022
(d) By altering the assessment on any land or building which has been erroneously valued or assessed through fraud, accident or mistake;
(e) By inserting or altering an entry in respect of any building erected, re-erected, altered, added to or reconstructed in whole or in part after the preparation of the assessment book;
(f) By making or cancelling any entry exempting with the approval of the Standing Committee any premises from liability to any property tax.
(2) Where any amendment is made under sub-
section (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-section(2) of Section 220 shall be given by the Commissioner, and as far as may be, the procedure laid down in Sections 221, 222 and 223 shall be followed.
(3) Every such amendment shall be deemed to have been made, for the purpose of determining the liability of exemption of the person concerned in accordance with the altered entry, from the earliest day in the current financial year when the circumstances justifying the amendment existed.
(4) (a) If at any time it appears to the Commissioner that any person or property has been inadvertently omitted from the assessment records or inadequately or improperly assessed relating to any tax, or a clerical or arithmetical error is committed in the records maintained in relation to such assessment, he may assess or reassess or correct such errors, as the case may be:
Provided that no such Action shall be taken where it involves an increase in the assessment, unless the person affected is afforded an opportunity to show cause against the proposed Action.
(b) Such assessment or reassessment or correction of records shall not relate, to a period earlier than the five half years immediately preceding the current half year."7
Dr.GRR,J CMSA No.3 of 2022
12. A reading of the above provision would indicate that the Commissioner, GHMC, Hyderabad has an independent power to make an amendment in the assessment book, either by increasing or reducing the amount of any rateable value. While exercising such power, the Commissioner, GHMC is obligated to follow the procedure prescribed under Section 220 (2) of the GHMC Act.
13. As per Section 220 (2) of the GHMC Act:
"220. (1) The Commissioner shall, at the time and in the manner provided in section 218, give public notice of a day, not being less than twenty-one days from the publication of such notice, on or before which complaints against the amount of any rateable value entered in the ward assessment book will be received in his office.
(2) In every case in which any premises have 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-section (1), give a special written notice to the owner or occupier of the said premises specifying the nature of such entry and informing him that any complaint against the same will be received in his office at any time within fifteen days from the service of the special notice."
14. Thus, a special notice is contemplated under sub section (2) of Section 220 of the GHMC Act in addition to the public notice with an object to give an opportunity to the owner of the premises to be heard. The assessee has a remedy of appeal before the Chief Judge, City Small Causes 8 Dr.GRR,J CMSA No.3 of 2022 Court, Hyderabad under Section 282 of the GHMC Act if aggrieved by the order of the assessment. As per Section 282 (2) (d) of the GHMC Act, before the appeal is taken up for hearing, the appellant is required to deposit the amount of tax demanded in the demand notice. Learned counsel for the appellant submitted that the appellant deposited the entire amount demanded in the notice at the time of preferring the appeal before the first appellate court as per Section 282 (2) (d) of the GHMC Act.
15. The grievance of the appellant before the first appellate court was that the enhancement of rateable value was done without following the procedure prescribed under Section 220 or Section 223 of the GHMC Act and the said contention was accepted by the first appellate court and quashed the demand notice and directed the Commissioner to make a fresh enquiry after giving reasonable opportunity of hearing to the assessee by following the procedure contemplated under the Act. However, a condition was imposed to deposit 60% of the amount demanded under the demand notice. The first appellate court can impose the condition of deposit of the amount while invoking the provisions of Section 282(2)(d) of the GHMC Act while granting interim orders, but ought not to have imposed the condition of deposit of 60% of the amount demanded while disposing of the appeal.
9
Dr.GRR,J CMSA No.3 of 2022
16. However, as the learned counsel for the appellant stated that the appellant paid 60% of the amount demanded under the impugned demand notice during the pendency of the appeal as directed by the learned Chief Judge, City Small Causes Court, Hyderabad, the appeal is disposed of directing the Assessing Authority to dispose of the assessment proceedings within a period of three (3) months from the date of receipt of a copy of this order by adjusting the amount already paid by the appellant. No costs.
Miscellaneous Applications pending, if any, shall stand closed.
_____________________ Dr. G.RADHA RANI, J September 10th, 2024 KTL