Delhi District Court
Tikka B S Bedi vs New Delhi Municipal Council on 3 November, 2023
IN THE COURT OF SH. SUDHANSHU KAUSHIK :
ADDITIONAL DISTRICT JUDGE-02 & WAQF TRIBUNAL :
PATIALA HOUSE COURTS : NEW DELHI
HTA NO.03/2020
CNR NO.DLND01-002405-2020
IN THE MATTER OF :-
TIKKA BRIJINDER SINGH BEDI
132, GOLF LINKS,
NEW DELHI-110003
.....APPELLANT
VERSUS
NEW DELHI MUNICIPAL COUNCIL
THROUGH ITS SECRETARY
PALIKA KENDRA, SANSAD MARG,
NEW DELHI
.....RESPONDENT
DATE OF INSTITUTION : 12.03.2020
DATE OF CONCLUSION OF FINAL ARGUMENT : 31.10.2023
DATE OF PRONOUNCEMENT OF ORDER : 03.11.2023
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 14.06.2017 and the rectification order dated 16.08.2018 passed by New Delhi Municipal Corporation (NDMC) whereby the rateable value of property bearing No.132, Golf Links, New Delhi-110003 was revised with effect from 01.04.2007 onwards.
2. The brief facts as disclosed in the appeal are;
A) Appellant Tikka B.S.Bedi claims himself to be the owner of HTA No.03/2020 Tikks B.S.Bedi Vs NDMC Page 1 of 10 property bearing No.132, Golf Links, New Delhi-110003 (hereinafter referred to as 'the property'). It is the case of the appellant that till the year 2006-07, the property was being assessed at the rate of Rs.18,400/- per annum for the purpose of house-tax. It has been stated that respondent/New Delhi Municipal Corporation (NDMC) issued a notice dated 11.02.2008 to the appellant under Section 72 of NDMC Act for enhancing the rateable value of the property to Rs.23,84,000/- per annum with effect from 01.04.2007. In response to this notice, appellant filed objections vide letter dated 24.03.2008 and also attended the personal hearing before the assessing authority. On the directions of Assessing Officer, appellant again filed written objections on 28.08.2015.
B) It has been disclosed that respondent ignored the written objections and revised the rateable value of the property vide impugned order dated 14.06.2017. Appellant claims that the Assessing Officer wrongly observed in the impugned order that he did not receive any objections against the proposed enhancement of the rateable value. On gaining information about the impugned order, appellant wrote a letter dated 15.12.2017 to the respondent requesting for the review of the order. Considering the request made by the appellant, respondent granted him an opportunity for personal hearing on 18.07.2018. However, the appellant could not attend the personal hearing as the HTA No.03/2020 Tikks B.S.Bedi Vs NDMC Page 2 of 10 letter, whereby the date of personal hearing was communicated, was received by him after the said date. Nonetheless, appellant appeared before respondent on 19.07.2018 and made a request that the objections filed by him on earlier occasion may be taken into account and the assessment order may be reviewed.
C) It is the appellant's case that vide order dated 16.08.2018, respondent confirmed the findings given in the impugned order dated 14.06.2017 and confirmed the rateable value of Rs.23,84,000/- with effect from 01.04.2007. Appellant has alleged that respondent hurriedly passed this order and arbitrarily rejected his written objections without recording any reasons. By means of the appeal, appellant has challenged the impugned order dated 14.06.2017 as well as the review order dated 16.08.2018 passed by the respondent.
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 there was considerable time gap between the notice and the impugned assessment order;
(d) That respondent failed to take into consideration that the property was self-occupied by the appellant since the year 1986 and therefore, HTA No.03/2020 Tikks B.S.Bedi Vs NDMC Page 3 of 10 the rateable value could not have been computed on comparable rent basis;
(e) That the Assessing Officer ignored vital material while passing the impugned order.
4. Notice of the appeal was issued to the respondent. Respondent filed a detailed reply and took preliminary objection of limitation.
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 notice under Section 72 of the Act was issued 11.02.2008 whereas the impugned order was passed on 14.06.2017 i.e. after a gap of more than 11 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. It is an admitted position that the impugned assessment order dated HTA No.03/2020 Tikks B.S.Bedi Vs NDMC Page 4 of 10 14.06.2017 has been passed in respect of notice dated 11.02.2008 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 11 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's case (supra) that the 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 HTA No.03/2020 Tikks B.S.Bedi Vs NDMC Page 5 of 10 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 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 HTA No.03/2020 Tikks B.S.Bedi Vs NDMC Page 6 of 10 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".
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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. HTA No.03/2020 Tikks B.S.Bedi Vs NDMC Page 7 of 10 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.
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 HTA No.03/2020 Tikks B.S.Bedi Vs NDMC Page 8 of 10 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."
9. 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 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.
10. Coming back to the present case. In the present matter, there is an inordinate delay in finalizing the assessment. The notice under Section 72 of the NDMC Act was issued on 11.02.2008 while the final HTA No.03/2020 Tikks B.S.Bedi Vs NDMC Page 9 of 10 assessment order was passed on 14.06.2017. There is a time gap of more than 11 years between the issuance of notice and the finalization of the assessment. This, in itself, is a sufficient ground for setting aside the impugned order.
11. In view of the discussions in the aforesaid paras, I am of the considered opinion that the impugned order dated 14.06.2017 is bad in law. Relying on the observations made in Ved Marwah's case (supra), the delay is certainly inordinate and arbitrary. Since, the initial order cannot be sustained, therefore, the subsequent rectification order dated 16.08.2018 also deserves to be set-aside. Accordingly, the appeal is allowed and the impugned order is set aside.
12. Copy of the judgment be sent to the respondent/NDMC.
13. Decree Sheet be prepared.
14. File be consigned to record room.
Announced in the open court on 03.11.2023 (Sudhanshu Kaushik) Addl. District Judge-02 & Waqf Tribunal New Delhi District, Patiala House Courts, New Delhi HTA No.03/2020 Tikks B.S.Bedi Vs NDMC Page 10 of 10