Delhi District Court
M/S Sharda Builders And Promotoers P Ltd vs New Delhi Municipal Council on 7 November, 2023
IN THE COURT OF SH. SUDHANSHU KAUSHIK :
ADDITIONAL DISTRICT JUDGE-02 & WAQF TRIBUNAL :
PATIALA HOUSE COURTS : NEW DELHI
HTA NO.19/2021
CNR NO.DLND01-007069-2021
IN THE MATTER OF :-
M/S SHARDA BUILDERS & PROMOTERS (P) LTD.
30, HANUMAN ROAD,
NEW DELHI-110001
.....APPELLANT
VERSUS
NEW DELHI MUNICIPAL COUNCIL
THROUGH ITS CHAIRMAN
PALIKA KENDRA, SANSAD MARG,
NEW DELHI
.....RESPONDENT
DATE OF INSTITUTION : 22.10.2021
DATE OF CONCLUSION OF FINAL ARGUMENT : 07.11.2023
DATE OF PRONOUNCEMENT OF ORDER : 07.11.2023
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 28.10.2020 passed by New Delhi Municipal Corporation (NDMC) whereby the rateable value of property bearing No.30, Hanuman Road, New Delhi-110001 was revised with effect from 01.04.2000 onwards.
2. The brief facts as disclosed in the appeal are; HTA No.19/2021 M/s Sharda Builders & Promoters Pvt. Ltd. Vs NDMC Page 1 of 12
A) Appellant M/s Sharda Builders & Promoters Pvt. Ltd. claims itself to be the registered owner of property bearing No.30, Hanuman Road, New Delhi-110001 (hereinafter referred to as 'the property') having purchased the same from the erstwhile owner vide sale-deed dated 12.01.1998. After purchasing the property, appellant applied for mutation but NDMC (respondent) failed to carry out the same. Appellant has disclosed that the property was in a bad shape and it reconstructed it and obtained the completion certificate dated 08.12.1998 from the respondent.
B) It is the case of the appellant that although, the property was self occupied but still, respondent issued it a notice dated 05.03.2001 under Section 72 of the NDMC Act proposing to enhance the rateable value from Rs.6,00,000/- to Rs.38,29,056/- less 10% due to erection election of building. In response to this notice, appellant raised objections by issuing a letter dated 30.03.2001 and thereafter, also filed formal objections dated 24.08.2001. Respondent awarded personal hearing to the appellant and thereafter passed an assessment order dated 14.09.2001 wherein the existing rateable value of Rs.1,44,000/- was maintained for the year 2001-02.
C) Appellant's case proceeds further that after about 3 year, it received a letter dated 02.09.2004 that a personal hearing has been fixed HTA No.19/2021 M/s Sharda Builders & Promoters Pvt. Ltd. Vs NDMC Page 2 of 12 in respect of notice dated 05.03.2001. In response to this notice, appellant again filed written objections vide letter dated 06.09.2004 and also appeared for personal hearing but the respondent did not finalize the assessment. Respondent remained silent for about 7 years and thereafter issued another notice dated 24.03.2011 under Section 72 of the NDMC Act for revising the rateable value of the property under the unit area method.
D) Appellant did not receive any communication from the respondent about the fate of the assessment proceedings. Later on, it came to know through the website of the respondent that notices dated 05.03.2001 and 24.03.2011 have been disposed of without giving an opportunity for personal hearing. On gaining this information, appellant issued a letter dated 21.12.2020 to the respondent requesting that the copy of the assessment order may be provided and the house tax bill may be corrected. On receiving no response from the respondent, appellant issued another letter dated 17.03.2021 mentioning that the assessment order may be supplied. Since, appellant was not receiving any response from the respondent, it was constrained to file a writ petition before the High Court of Delhi seeking directions that respondent may be directed to rectify the property tax bill and supply the copy of the assessment order.
HTA No.19/2021 M/s Sharda Builders & Promoters Pvt. Ltd. Vs NDMC Page 3 of 12 E) The High Court of Delhi disposed of the writ petition vide order dated 14.10.2021 directing the respondent to supply the copy of impugned order within 2 days. It also directed that on receiving the order, appellant shall be at liberty to assail it in accordance with law. In pursuance of the order passed by the High Court of Delhi, respondent transmitted the impugned order to the counsel of the appellant through email dated 06.10.2021 and the appellant filed the present appeal on 22.10.2021.
3. Appellant has challenged the assessment order on following grounds;
(a) That the impugned order is a non-speaking order and the same has been passed mechanically;
(b) That the assessing authority ignored the provisions of Section 63(1) of NDMC Act while passing the impugned order;
(c) That the impugned order does not provide any justification for revising the rateable value of the property;
(d) That there was considerable time gap between the notice and the impugned assessment order;
(e) That respondent failed to take into account various crucial facts and documents supplied by the appellant;
4. Notice of the appeal was issued to the respondent. Respondent filed a detailed reply and took preliminary objection of limitation. HTA No.19/2021 M/s Sharda Builders & Promoters Pvt. Ltd. Vs NDMC Page 4 of 12
5. Arguments were heard.
6. During the course of arguments, counsels of the parties conceded that there is a considerable delay in finalizing the assessment. Though several grounds were raised in the appeal to challenge the impugned order, however, Counsel for the appellant while relying on 'Ved Marwah & Ors. Vs. New Delhi Municipal Council & Ors. 248 (2008) DLT 781' confined the grounds of appeal to the aspect of limitation. It was argued by Counsel for the appellant that similar to the facts of the above case, there is inordinate delay in finalizing assessment list viz-a-viz the notice. Counsel argued that the notices under Section 72 of the Act were issued on 05.03.2001 & 24.03.2011 whereas the impugned order was passed on 28.10.2020 i.e. after a gap of almost 19 years. He has argued that the in view of law laid down in 'Ved Marwah' (supra), the impugned order is liable to be set aside.
7. I have perused the record in the light of respective arguments.
8. Before adjudicating on the aspect of delay, I deem it expedient to deal with the preliminary objection of the respondent about 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 should be dismissed on this ground. I do not find force in the said submissions. Section 116(a) of the Act mandates HTA No.19/2021 M/s Sharda Builders & Promoters Pvt. Ltd. Vs NDMC Page 5 of 12 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. Record shows that before filing the appeal, appellant approached High Court of Delhi by filing a writ petition. The High Court disposed of the writ petition vide order dated 04.10.2021 and granted liberty to the appellant to assail the impugned order after receiving its copy. Counsel for the appellant received the copy of order through email dated 06.10.2021 and filed the present appeal within 30 days i.e. 16.10.2021. In view of this, the objection that the appeal is barred by limitation deserves rejection.
9. Now coming to the arguments of the appellant about the inordinate delay in finalizing the assessment. It is an admitted position that the impugned assessment order dated 28.10.2020 has been passed in respect of notices dated 05.03.2001 and 24.03.2011 issued under Section 72 of the Act. Although, the 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 & Ors. Vs. New Delhi Municipal Corporation & Ors." 248 (2008) DLT 781 that the HTA No.19/2021 M/s Sharda Builders & Promoters Pvt. Ltd. Vs NDMC Page 6 of 12 proceedings initiated pursuant to Section 72 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 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 HTA No.19/2021 M/s Sharda Builders & Promoters Pvt. Ltd. Vs NDMC Page 7 of 12 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 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 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".HTA No.19/2021 M/s Sharda Builders & Promoters Pvt. Ltd. Vs NDMC Page 8 of 12
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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 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 HTA No.19/2021 M/s Sharda Builders & Promoters Pvt. Ltd. Vs NDMC Page 9 of 12 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.
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."
10. As observed in the preceding paras, the High Court of Delhi held in Ved Marwah's case (supra) that a delay of over 12 years in finalizing the HTA No.19/2021 M/s Sharda Builders & Promoters Pvt. Ltd. Vs NDMC Page 10 of 12 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 01.08.2023. Resultantly, the findings in Ved Marwah's case (supra) attained finality.
11. Coming back to the present case. In the present matter, there is an inordinate delay in finalizing the assessment. The notices under Section 72 of the NDMC Act were issued on 05.03.2001 and 24.03.2011 while the final assessment order was passed on 28.10.2020. There is a time gap of around 19 years between the issuance of notices and the finalization of the assessment. This, in itself, is a sufficient ground for setting aside the impugned order.
12. In view of the discussions in the aforesaid paras, I am of the considered opinion that the impugned order dated 28.10.2020 is bad in law. Relying HTA No.19/2021 M/s Sharda Builders & Promoters Pvt. Ltd. Vs NDMC Page 11 of 12 on the observations made in Ved Marwah's case (supra), the delay is certainly inordinate and arbitrary. Accordingly, the appeal is allowed and the impugned order is set aside.
13. Copy of the judgment be sent to the respondent/NDMC.
14. Decree Sheet be prepared.
15. File be consigned to record room.
Announced in the open court on 07.11.2023 (Sudhanshu Kaushik) Addl. District Judge-02 & Waqf Tribunal New Delhi District, Patiala House Courts, New Delhi HTA No.19/2021 M/s Sharda Builders & Promoters Pvt. Ltd. Vs NDMC Page 12 of 12