Madras High Court
Adyar Gate Hotel Limited vs Corporation Of Chennai on 3 November, 2020
Author: V.Bharathidasan
Bench: V.Bharathidasan
C.R.P.No.846 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 03.11.2020
CORAM:
THE HONOURABLE MR.JUSTICE V.BHARATHIDASAN
C.R.P.Nos.846 & 848 of 2019
and
C.M.P.Nos.5515 & 5517 of 2019
Adyar Gate Hotel Limited,
Rep. by its Managing Director,
No.132, T.T.K.Road,
Chennai - 600 018. .. Appellant in both the CRPS
Vs.
Corporation of Chennai,
Ripon Buildings,
Chennai - 600 003. .. Respondent in both the CRPs
Prayer: Civil Revision Petitions filed under Article 227 of the Constitution
of India seeking to set aside the order of the learned Principal Judge, City
Civil Court, Chennai passed in M.T.A.Nos.3 & 1 of 2016 dated 19.01.2018
and 12.01.2018 respectively.
For Appellant : Mr.V.Raghavachari
in both CRPs
For Respondent : Mrs.Narmadha Sampath,
in both CRPs Additional Advocate General,
Asst. by Mrs.Karthikaa Ashok
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http://www.judis.nic.in
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C.R.P.No.846 of 2019
COMMON ORDER
Since both the revisions have been preferred on the same set of facts, submissions being common, and parties are same, they are taken up together and disposed of by means of this common order.
2. These revisions have been filed by the petitioner Hotel challenging the orders passed by the learned Principal Judge, City Civil Court, Chennai in M.T.A.Nos.3 & 1 of 2016, dated 19.01.2018 and 12.01.2018 respectively, allowing the appeals filed by the respondent Corporation under Rule 15 of Schedule IV of the Chennai City Municipal Corporation Act, 1919 (hereinafter called as 'Rules').
3. Brief facts leading to the filing of these revisions are as follows:
(i) The petitioner is a posh hotel in the Chennai City. The petitioner hotel is located at New No.75, Old No.42A, Chamiers Road, Raja Annamalaipuram, Chennai - 600 018 and another at New No.560, Old No.132/1, T.T.K.Road, Alwarpet, Chennai - 600 018.
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(ii) Earlier, two separate property tax assessments have been made by the respondent Corporation. For the year 1998-1999, the respondent Corporation revised the property tax from Rs.7,35,757/- to Rs.26,07,485/- for the building situated at Chamiers Road and for the second building at T.T.K.Road, from Rs.7,86,291/- to Rs.12,56,461/-. However, on the objections filed by the petitioner hotel, the property tax was reduced to Rs.11,53,032/- and Rs.11,06,694/- respectively.
(iii) Thereafter, the respondent Corporation has once again revised the property tax from the year 2010-2011. The annual value of the property at Chamiers Road was fixed at Rs.8,06,58,589/- and the half year property tax was fixed at Rs.1,00,01,665/- from 2010-2011. In respect of the property at T.T.K. Road is concerned, the respondent Corporation fixed the annual value at Rs.7,79,36,621/- and fixed the half year property tax at Rs.96,64,140/- from 2010-2011.
(iv) Challenging the revised assessment orders, the petitioner hotel filed two appeals before the Taxation Appeals Tribunal. The Tribunal has set aside the order passed by the Commissioner and fixed the annual value for the building at Chamiers Road at Rs.1,73,51,083/- and fixed the half yearly http://www.judis.nic.in 3/13 C.R.P.No.846 of 2019 tax at Rs.21,51,534/-. In respect of the property at TTK road, the Tribunal fixed the annual value at Rs.14,62,477/- and revised the half yearly tax at Rs.19,80,310/-.
(v) Not being satisfied with the order passed by the Tribunal, the respondent Corporation filed appeals in M.T.A.Nos.1 and 3 of 2016 under Rule 15, before the City Civil Court, Chennai. The lower appellate Court allowed the appeals filed by the respondent Corporation and set aside the orders passed by the Tribunal. Now, challenging the judgment passed by the lower appellate Court, the petitioner Hotel is before this Court with these revisions.
4. Mr.V.Raghavachari, learned counsel appearing for the petitioner hotel would contend that while revising the property tax, no notice has been issued to the petitioner hotel, no enquiry was conducted and the respondent Corporation has erroneously revised the property tax exorbitantly. The learned counsel further submitted that while arriving at the annual rental value, the respondent Corporation failed to follow the fair rent procedure, and based on the tariff details as advertised by the petitioner hotel in its website, calculated the annual rental value as if all the rooms have been http://www.judis.nic.in 4/13 C.R.P.No.846 of 2019 occupied in the hotel throughout the year and failed to note that not all the rooms were fully occupied every day.
5. The learned counsel appearing for the petitioner hotel further submitted that the hotel was also providing several compliments to its guests and also providing various facilities which were not taken into consideration while arriving at the annual rental value of the building. That apart, the buildings are more than 30 years old and no rebate has been given considering the age of the building. That apart, imposing property tax for hotels in the city, the Government has issued guidelines in G.O.Ms.No.856, Rural Development and Local Administration Department, dated 19.04.1972. While fixing the property tax, the respondent Corporation failed to follow the guidelines issued by the Government and arbitrarily revised the property tax. Thus, the Tribunal considering all these issues, rightly allowed the appeals filed by the petitioner hotel and revised the property tax. Further, the lower appellate Court without issuing any notice whatsoever, without hearing the petitioner hotel has passed ex parte orders thereby setting aside the orders passed by the Tribunal and confirmed the final assessment orders issued by the respondent Corporation.
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6. The learned counsel further contended that earlier the respondent Corporation has filed appeals along with delay, wherein, the petitioner contested the delay petitions, however the lower appellate Court allowed the applications and condoned the delay. Thereafter, in the appeals, no notice was served on the petitioner hotel and the lower appellate Court passed ex parte orders. The learned counsel further submitted that the original assessment orders passed by the Commissioner itself is in violation of the principles of natural justice, without giving any opportunity of hearing to the petitioner, without considering any objections and without permitting the petitioner to produce necessary materials, the respondent Corporation has passed the revised assessment orders.
7. Mrs.Narmatha Sampath, learned Additional Advocate General appearing for the respondent Corporation would contend that the Commissioner has taken into consideration all the relevant Rules and also the guidelines issued by the Government in G.O.Ms.No.856, Rural Development and Local Administration Department, dated 19.04.1972 and only 10% of the room tariff has been fixed as the annual rental value.
8. The learned Additional Advocate General further submitted that the http://www.judis.nic.in 6/13 C.R.P.No.846 of 2019 earlier assessment was made during the year 1988-1999, and thereafter the room tariffs of the petitioner's hotel were very steeply increased, which is very much available in the website of the petitioner hotel and only based on their own tariff, the property tax was assessed and the petitioner hotel cannot have any grievance over the same.
9. That apart, the learned Additional Advocate General further submitted that before passing the final assessment order, appropriate opportunity has been given to the petitioner hotel and only after considering all its objections, final assessment order has been issued. According to the learned Additional Advocate General, the Tribunal without considering the objections mechanically revised the property tax. The lower appellate Court while considering the entire materials available on record has rightly allowed the appeals and set aside the orders passed by the Tribunal and there is no illegality in the same.
10. Further according to the learned Additional Advocate General, after condoning the delay, notice has been issued to the petitioner hotel in the appeal. Even after receipt of the notice, the petitioner hotel remained absent, hence the lower appellate Court has passed orders on merits based on http://www.judis.nic.in 7/13 C.R.P.No.846 of 2019 the materials available on record. Now it is not open to the petitioner hotel to contend that no notice has been issued to them and the order is an ex parte order. She would further submit that subsequently, the petitioner filed a petition to set aside the order along with a petition to condone the delay in filing the petitions, however the lower appellate Court dismissed the petitions filed by the petitioner hotel. She further submitted that the orders passed by the lower appellate Court is in order and there is no reason to interfere with the same at this stage.
11. I have considered the rival submissions.
12. The primordial contention of the learned counsel appearing for the petitioner hotel is that the respondent Corporation revised the property tax without giving any provisional assessment notice and no opportunity was given to the petitioner to raise their objections. The respondent Corporation has mechanically revised the same based on the tariff rates which was available in the website of the petitioner hotel without following the Rules in proper perspective and also the guidelines issued by the Government relating to assessment of property tax in respect of hotels. However, the same was disputed by the respondent Corporation and it submitted that before issuing http://www.judis.nic.in 8/13 C.R.P.No.846 of 2019 final assessment notice, a provisional assessment order was issued and proper opportunity of hearing were given to the petitioner hotel.
13. Section 99 of the Chennai City Municipal Corporation Act, 1919, (hereinafter referred to as the 'Act'), empowering the Corporation to levy property tax on the building and land within the city. Section 100 of the Act provides the method of assessment of property tax and the Corporation has to follow the provisions of the Rent Control Act and determine the fair rent before assessing the property to tax. Thus, in order to arrive at the annual value of the property, the Corporation is entitled to assess and estimate the rent which the property may reasonably be expected to fetch and it depends upon each case and it should be determined based on the material available with the Corporation. Further, the Corporation cannot fix the annual value of the building arbitrarily without any material whatsoever. While fixing the property tax various remissions which are available to the land owners also have to be considered. That apart, before issuing the final assessment order, the Corporation is also expected to issue provisional assessment order and to give a fair opportunity to the owner of the building. As per Rule 3 of Part I-A of Schedule IV of the Act, the Commissioner is empowered to assess the property tax having regard to the annual value fixed for the building on the http://www.judis.nic.in 9/13 C.R.P.No.846 of 2019 date immediate before the property tax and the property tax payable by the owner or the occupier on the basis of the particulars filed in the return, also with reference to the guidelines, if any, issued by the Council. The said Rule 3 reads as follows:
"Rule 3. The Commissioner shall assess the property tax having regard to,--
(1) the annual value fixed for a building on the date immediate before the property tax;
(2) the property tax payable by the owner or the occupier on the basis of the particulars filed in the return; and (3) the property tax payable by the owner or the occupier with reference to the guidelines, if any, issued by the council."
14. While assessing the property tax, principles of natural justice requires that before enhancing or revising the property tax, the tax payer should be given an opportunity of being heard. A perusal of the revised final assessment notice orders issued by the respondent Corporation, it could be seen that no opportunity has been given to the petitioner hotel before revising the assessment. The revised final assessment orders were issued only in a printed format without reference to any of the materials considered http://www.judis.nic.in 10/13 C.R.P.No.846 of 2019 by the respondent Corporation and do not contain any material for revising the tax. Even though, it is stated that before revised final assessment orders are passed, an opportunity was given to the petitioner hotel but nothing available in the orders indicating that the petitioner hotel has been given an opportunity of hearing.
15. In the above circumstances, this Court is of the view that the property tax assessment revision has been passed without issuing any provisional assessment order to the petitioner hotel and without giving any opportunity of being heard. In such circumstances, this Court is of the considered view that the instant matter has to be remanded back to the Commissioner to pass fresh order after affording reasonable opportunity of hearing to the petitioner hotel. The learned Additional Advocate General, on instructions from the respondent Corporation, also fairly submitted that the matter may be remanded back to the Commissioner to pass assessment orders afresh after hearing the petitioner hotel within a time frame fixed by the Court.
16. Considering the above circumstances, without going into the merits of the case, this Court is inclined to set aside the orders and remand the matter back to the respondent Corporation for fresh consideration. http://www.judis.nic.in 11/13 C.R.P.No.846 of 2019
17. In the result, both the Civil Revision Petitions are allowed. The orders passed by the Commissioner, Corporation of Chennai dated 11.02.2011 and 19.03.2013 and the consequential orders passed by the Taxation Appellate Tribunal and the lower appellate Court are set aside and the matters are remitted back to the respondent Commissioner for fresh consideration. The respondent Commissioner is directed to conduct a fresh enquiry and pass appropriate orders on merits and in accordance with law after giving sufficient opportunity to the petitioner hotel. The petitioner hotel is permitted to produce whatever material available with them during enquiry before the Commissioner to substantiate their claim. The respondent Commissioner is directed to complete the above said exercise within a period of six weeks from the date of receipt of a copy of this order. No costs. Consequently, the connected miscellaneous petitions are closed.
03.11.2020 kk To The Principal Judge, City Civil Court, Chennai http://www.judis.nic.in 12/13 C.R.P.No.846 of 2019 V.BHARATHIDASAN, J.
kk C.R.P.Nos.846 & 848 of 2019 and C.M.P.Nos.5515 & 5517 of 2019 03.11.2020 http://www.judis.nic.in 13/13