Gujarat High Court
Bharat Petroleum Corporation Ltd vs Rajkot Municipal Corporation on 19 August, 2023
Author: Sangeeta K. Vishen
Bench: Sangeeta K. Vishen
NEUTRAL CITATION
C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 19990 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE SANGEETA K. VISHEN Sd/-
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1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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BHARAT PETROLEUM CORPORATION LTD.
Versus
RAJKOT MUNICIPAL CORPORATION
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Appearance:
MR AJAY R MEHTA(453) for the Petitioner(s) No. 1,2
MR NISHANT LALAKIYA(5511) for the Respondent(s) No. 1
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CORAM:HONOURABLE MS. JUSTICE SANGEETA K. VISHEN
Date : 19/08/2023
ORAL JUDGMENT
With the consent of the learned advocates appearing for the respective parties, the matter is taken up for final disposal.
2. Issue Rule, returnable forthwith. Mr Nishant Lalakiya, learned advocate waives service of notice of Rule on behalf of the respondent corporation.
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3. Challenge in the captioned writ petition, is to the demand for property tax as contained in the bill issued by the Rajkot Municipal Corporation i.e. respondent no.1 (hereinafter referred to as "the corporation") for the Financial Year 2018-19 as well as demand notice dated 16.12.2021 requiring the petitioners to pay the amount of Rs.30,43,000/-. Declaration is also sought that retrospective claim for property tax, would not be tenable under the provisions of the Gujarat Provincial Municipal Corporation Act, 1949 (henceforth "the Act of 1949").
4. Tersely stated are the facts:
4.1 The erstwhile Burmah Shell Oil Storage and Distributing Company had leased the land in question and had set up a fuel dispensing station and upon nationalization, it was transferred to the petitioner no.1 and since had been so operated. The petitioners purchased the land in question in the year 1998 on which the dispensing station existed and continued to operate the same. It is the case of the petitioners that the petitioners have paid the property taxes from time to time as demanded by the respondent.
For the financial Year 2016-17, the corporation had raised the bill for an amount of Rs.1,96,509/- towards property tax and for subsequent financial Year 2017-18, bill raised was for Rs.4,09,429/- wherein also the outstanding shown was of the Year 2016-17 i.e. general tax of Rs.76,999/-. It is the further case of the petitioners that payment of Rs.3,46,511/- was duly made on 22.03.2021; however, to the shock of the petitioners, for the year 2018-19, a bill was raised showing Rs.91,758/- as dues for the year and Rs.22,87,951/- as outstanding.
4.2 Corporation without bringing the outstanding amount to the notice of the petitioners simply uploaded the said details on its Page 2 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023 NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined website, which was noticed by the petitioner in September 2021 and hence, the petitioners addressed a letter on 06.09.2021 requesting the corporation to provide the basis for the outstanding amount and its calculation; however, there was no response which led to issuance of another letter by the petitioners requesting for the particulars. Even the petitioners personally tried to find out from the corporation; however, nothing was provided to the petitioners and it was only on 02.12.2021, the corporation issued letter together with the tabular form of the outstanding amount revised from 01.04.1999 and thereby claiming the outstanding amount of Rs.30,47,001/-.
4.3 It is also the grievance of the petitioners that on 16.12.2021, officers of the corporation had come to the land in question and demolished the monolith/signage possibly. According to the corporation, the same was in the margin of the road widening. The petitioners were informed to make the payment of the said outstanding amount and being aggrieved, the captioned writ petition.
5. Mr Ajay R. Mehta, learned advocate appearing for the petitioners, submitted that the tax department of the corporation, issued the bill for the Financial Year 2016-17 whereby, the amount of Rs.4,086/- was mentioned towards the arrears and total amount towards various taxes was Rs.1,96,509/-, followed by another bill for the Financial Year 2017-18 wherein, arrears shown were Rs.2,17,026/- with the total amount towards the tax, was Rs.4,09,429/-. The petitioners deposited the said amount; however, for the bill issued by the corporation for the Financial Year 2018-19, the corporation, has shown the outstanding amount, towards the tax, to the tune of Rs.22,87,951/- and total amount to be recovered Page 3 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023 NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined from the petitioners was Rs.23,79,709/-. It is submitted that before issuing the bill for the Financial Year 2018-19, the petitioners were not provided with any opportunity or the basis as to how, the said amount has been determined.
5.1 It is further submitted that in response to the communication of the petitioners, what was provided was the communication dated 02.12.2021 together with a tabular form containing details of the revised tax bill from the year 1999 to 2017-18 for an amount of Rs.30,47,001/-. Undisputedly, till the Financial Years 2017-18, there were no arrears reflected and thereafter, without any notice, as required under the provisions of the Act so also the applicable Rules, property tax has been levied retrospectively which, would be illegal and untenable inasmuch as, the demand of the corporation is contrary to the provisions of the Act and it would be impermissible for the corporation, to have levied retrospective demand and that too, after more than 20 years.
5.2 It is further submitted that for the purpose of determining and levy of the property tax, the Act contains an inbuilt mechanism; however, without following the procedure, straightaway and that too, without any opportunity to the petitioners that the tax bill has been issued in the year 2017-18. It is submitted that the issue, now stands covered by the judgment of this Court in the case of Sushilaben Veljibhai Shah v. Jamnagar Municipal Corporation passed in Special Civil Application no.8323 of 2019. The Hon'ble Division Bench, has considered various provisions of the Act of 1949 contained in Chapter VIII titled "Taxation Rules" (hereinafter referred to as "the Rules"). It is submitted that this Court, has held and observed that considering the provisions of the Act and the Rules which, provides for assessment of the property tax, the Page 4 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023 NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined respondent Corporation could not have raised the retrospective demand. It is therefore submitted that the said judgment, would squarely apply to the facts of the present case.
5.3 Reliance is placed on the decision in the case of Bharat Petroleum Corporation v. Vadodara Municipal Corporation rendered in Special Civil Application no.2043 of 2022 wherein, the coordinate bench, has quashed and set aside the demand holding that it was not in accordance with law so also not following the due procedure of law. This Court, was pleased to quash and set aside the bills raised by the corporation with retrospective effect. It is therefore urged that the issue as regards the levy of tax by the corporation with retrospective effect having been crystalised, the captioned writ petition, deserves to be allowed.
6. Mr Nishant Lalakiya, learned advocate appearing for the respondent corporation, submitted that the Carpet Area Policy was introduced in the year 2018 whereby, the amount of tax payable is to be determined based on the carpet area held and occupied by an assesse. It is submitted that the assessment of the non residential commercial properties are assessed at four times whereas, banks, financial institutions as well as public limited companies are assessed at eight times. Therefore, in the year 2017, a survey was carried out when, it came to the notice of the corporation that the petitioner has to be assessed as the commercial property and not the industrial as per the policy.
6.1 It is further submitted that earlier, the assessment was done considering the premises being used for industrial purpose whereas, from the year 1998-99, it was used for the commercial purpose. Since it came to the knowledge of the corporation that the property Page 5 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023 NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined was used for commercial purpose, that revised bills, were issued accordingly.
6.2 While inviting attention of this Court to Rule 5 of the Rules, it is submitted that it is incumbent upon the party to issue a notice to the Commissioner of the erection of a new building; however, in the present case, the petitioners had not provided the said information and therefore the property could not be assessed. It is further submitted that as per Rule 21A of the Rules, assessment etc. of tax in the event of failure to give notice under Rule 5 is very much available. It provides that whenever it is noticed by the Commissioner that a new building has been erected or a building has been rebuilt or enlarged and that the person primarily liable for the property taxes on such building has failed to give notice as required by sub-rule (1) of Rule 5, it will be open to the Commissioner, within a period of one year from the date on which the facts came to his notice, proceed to fix or refix the rateable value of such building and assess or reassess the property taxes on such building in accordance with the provisions of the Act and the Rules. It is therefore submitted that it was very much permissible to the corporation to have reassessed the property tax which was done and accordingly, the bill, was raised requiring the petitioners to pay an amount of Rs.30,47,001/-.
7. Heard Mr Ajay R. Mehta, learned advocate appearing for the petitioners and Mr Nishant Lalakiya, learned advocate appearing for the respondent corporation.
8. As recorded hereinabove, the petitioners, are aggrieved by the demand raised by the corporation towards the property tax as contained in the bill issued for the Financial Year 2018-19 as well as Page 6 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023 NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined demand notice issued under the provision of Rule 45 read with Rule 46 of the Chapter VIII of Schedule-A of the Act of 1949.
9. The corporation, issued a bill for the Financial Year 2016-17, requiring the petitioners to pay an amount of Rs.1,96,509/-, followed by the bill for Financial Year 2017-18 for an amount of Rs.4,09,429/- out of which, Rs.2,17,026/- was shown towards arrears. It is thereafter that the corporation issued the bill for the Financial Year 2018-19, and the amount indicated in the column of arrears was Rs.22,87,951/- and total amount was Rs.23,79,709/-. Clearly, when the bill was issued for the Financial Year 2018-19, no notice much less any procedure was followed by the corporation.
10. Petitioners were clueless as regards the basis on which the notice has been issued and hence, requested the corporation to provide the details which was responded by the corporation vide communication dated 02.12.2021 together with the tabulated form. In the said form, amounts have been mentioned under the various heads and the total amount which was indicated was Rs.30,47,001/-. According to the corporation, the amount towards the property tax, was revised from 01.03.1999. After the said communication, what followed was the demand notice dated 16.12.2021 giving bifurcation and requiring the petitioners to deposit the said amount, failing which, the corporation cautioned the petitioners to dispose of the property. Petitioners, being aggrieved, had filed the captioned writ petition mainly on the ground that it would be impermissible for the corporation to levy the property tax with retrospective effect.
11. At this stage, relevant would be Rule 5 of the Rules which reads thus:
Page 7 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined "Rule 5. Notice to be given to Commissioner of the erection of a new building, etc:-
(1) When any new building is erected, or when any building is rebuilt or enlarged, or when any building which has been vacant is reoccupied, [or when the user of any building is changed], the person primarily liable for the property-taxes assessed on the building shall within fifteen days give notice thereof, in writing to the Commissioner.
(2) The said period of fifteen days shall be counted from the date of the completion or of the occupation, Whichever first occurs, of the building which has been newly erected or rebuilt, or of the enlargement as the case may be, and in the case of a building which has been vacant, from the date of the reoccupation thereof [and where the user has been changed from date of such change]."
12. Rule 5 of the Rules, provides that when any new building is erected or when any building is rebuilt or enlarged or when any building which has been vacant is reoccupied, the person primarily liable for the property taxes or as the case may be, the property tax assessed on the building shall within fifteen days give notice thereof in writing to the Commissioner.
13. Rule 21A of the Rules would be relevant and reads thus:
"Rule 21A. Assessment etc., of tax in the event of failure to give notice under Rule 5:- Whenever it is noticed by the Commissioner that a new building has been erected or a building has been rebuilt or enlarged or any building which was vacant has been reoccupied or the user of any building has been changed and that the person primarily liable for the property taxes on such building has failed to give notice as required by sub-rule (1) of rule 5, the Commissioner may, within a period of one year from the date on which the aforesaid relevant facts came to his notice, proceed to fix or refix the rateable value of such building and assess or reassess the property taxes on such building in accordance with the provisions of this Act and these rules with reference to the period commencing from the year during which the building was newly erected or the building was rebuilt or enlarged or was reoccupied or the change of user took place and accordingly the taxes so assessed Page 8 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023 NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined may be levied, collected and recovered and the provisions of this Act and these rules shall so far as may be, apply to such levy, collection and recovery."
14. Rule 21A of the Rules provides for assessment etc. of tax in the event of failure to give notice under Rule 5. It further provides that whenever it is noticed by the Commissioner that a new building has been erected or has been rebuilt or enlarged etc. and the person primarily liable for the property taxes on such building has failed to give notice as required by sub-rule (1) of Rule 5, the Commissioner may within a period of one year from the date on which the aforesaid relevant facts came to his notice, proceed to fix or refix the rateable value of such building and assess or reassess the property taxes on such building in accordance with the provisions of the Act of 1949. Therefore, the prerequisites for initiation of the proceedings under Rule 21A of the Rules is, the knowledge to the Commissioner and action to be taken within a period of one year from the date of the knowledge.
15. In the present case, it is the stand taken by the corporation that in the year 2017, when the survey was carried out, the corporation learnt that property of the petitioner is to be assessed as a commercial property. Nothing has been stated in the affidavit that exactly on which date, the said factum had come to the notice of the corporation. Perceptibly, the bill was issued for the Financial Year 2016-17 and thereafter, for the Financial Year 2017-18; however, there was no such demand raised by the corporation.
16. Bill of the Financial Year 2017-18, must have been issued in the month of April 2018 and therefore, if during the survey in the year 2017 carried out by the corporation the change was noticed by it, it could have taken the action as provided under Rule 21A of the Page 9 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023 NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined Rules; however, no such steps were taken and only while issuing the bill for the Financial Year 2018-19, that the demand has been raised, that would be beyond one year.
17. In the affidavit, the corporation has not pointed out as to on which particular date the said aspect has come to the notice of the commissioner. In absence whereof, it would be difficult to accept the stand of the corporation that the action has been taken within a period of one year from the date of the fact having come to the notice of the corporation. Besides, the issue of the retrospective levy, is no longer res integra.
18. In the case of Sushilaben Veljibhai Shah v. Jamnagar Municipal Corporation (supra), the grievance was similar inasmuch as, the corporation, has raised the demand towards the property tax for the period from 1993 to 2006. Contention was raised as regards the provisions of Section 127 which authorizes the corporation to levy taxes including the property tax either under Section 129 or under Section 141AA of the Act of 1949. It was also argued before the Court that it was mandatory for the corporation to issue the notice and hear the concerned person before amending the assessment book as per the provisions of Rule 9 of the Rules. Considering the provisions namely Sections 127, 129, 141AA, 141B so also Rules namely Rules 15, 20 and 21A, this Court, had held and observed that the provisions, provide for assessment of the property tax and it is clear that the corporation could not have raised a demand with retrospective effect for the period from 1993 to 2006 in the year 2015. It has been further held that assuming that Rule 21A of Chapter VIII provides that, in the event of the owner having failed to give notice to the Corporation about additional construction, it would be permissible to the Commissioner to re-fix the rateable Page 10 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023 NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined value and assess the property on such additional construction within one year from the date on which the relevant facts, have come to its knowledge. This Court, did not accept the stand taken by the corporation and while allowing the writ petition, declared that the demand of the property tax raised by the corporation, was contrary to the provisions of the Act and it had no jurisdiction to demand property tax for the period from 1993 to 2006 in the year 2015. Paragraphs 6.1 to 7 read thus:
"6.1. Having heard the learned Advocates for the respective parties and having gone through the materials on record, the short question arises for consideration is whether the impugned order dated 17.12.2018 passed by the respondent no.2 is tenable in law or not.
In order to answer the question arising in this petition, it would be germane to refer to the relevant provisions of the Act, 1949 and the Rules, which read as under:
"Section 127. Taxes to be imposed under this Act (1) For the purposes of this Act, the Corporation shall impose the following taxes, namely:--
(a) property taxes ;
(b) a tax on vehicles, boats and animals :
(c) a tax on mobile towers;
[Provided that in the case of a local area constituted to be a City under subsection(2) of section 3, until the expiry of a period of two years from the appointed day or of such further period not exceeding two years as the State Government] at the request of the Corporation for such City may, by notification in the Official Gazette, specify, the provisions of this section shall have effect as if there had been substituted for the words "the Corporation shall impose" the words "the Corporation may impose".] [(1A) Notwithstanding anything contained in the proviso to sub-section (1), in the case of the Municipal Corporation of the City of Rajkot, for a period of two years commencing on the 19th November, 1975, the provisions of sub-section (1) shall have effect, and shall be deemed to have had effect, as if with effect on and from the 19th November, 1975 there had been substituted for the words "the Corporation shall impose" the words "the Corporation may impose" in the said subsection (1).] Page 11 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023 NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined (2) In addition to the taxes specified in sub-section (1) the Corporation may for the purposes of this Act and subject to the provisions thereof impose any of the following taxes, namely:--
(a) * * * * * *
(b) Subject to and in accordance with the provisions of the Gujarat State Tax on Professions, Trades, Callings and Employments Act, 1976 (President's Act No. 11 of 1976) and the rule made thereunder, a tax on professions, trades, callings and employments;
c) a tax on dogs;
(d) a theatre tax ;
(e) a toll on animals and vehicles, (* * * * ) entering the City,
(f) any other tax [(not being a tax on professions, trades, callings and employment)] [or a tax on payments for admission to any entertainment] which the [State] Legislature has power under the9 [Constitution] to impose in the [State].
[(2A) Notwithstanding anything contained in sub-section (1) or subsection (2), no tax or toll shall be levied on motor vehicles save as provided in section 20 of the Bombay Motor Vehicles Tax Act 1958, (Bom. LXV of 1958).] (3) The municipal taxes shall be assessed and levied in accordance with the provisions of this Act and the rules. (4) Nothing in this section shall authorize the imposition of any tax which the [State] Legislature has no power to impose in the [State] under the [Constitution]."
"Section 129. Property taxes of what to consist and at what rate leviable:
For the, purposes of sub-section (1) of section 127 property taxes shall comprise the following taxes which shall, subject to the exceptions, limitations and conditions hereinafter provided, be levied on buildings and lands in the City:-- [ (a) a Water tax at such percentage of their rateable value as the Corporation shall deem reasonable. for providing a water supply for the City:
Provided that the Corporation shall with the previous sanction of the Staate Government, fix the minimum amount of such tax to be levied and may fix different minima for different classes of properties:
Provided further that the minimum amount of such tax to be levied shall,-
(i) in respect of any one separate holding of land or of any one building (not being premises used exclusively for residential Page 12 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023 NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined purpose) or of any one portion of a building which is let as a separate holding and which it not used exclusively for residential purpose, be not less than five rupees per mensem for any official year commencing on the first day of April' 1993;
(ii) in respect of any premises used exclusively for residential purpose, be not less than three rupees per mensem for any official year commencing on the first day of April, 1993;
(b) a conservancy tax at such percentage of their rateable value, as will in the opinion of the Corporation suffice to provide for the collection, removal and-disposal of all excrementitious and polluted matters from privies, urinals and cess-pools and for efficiently maintaining and repairing the municipal drains constructed or used for efficiently maintaining and repairing the municipal drains constructed or used for reception or conveyance of such matters:
Provided that corporation shall, with the previous sanction of the State Government, fix the minimum amount of such tax to be levied and may fix different minima for different classes of properties:
Provided further that the minimum amount of such tax to be levied in respect of any one separate holding of land or of any one building or of any one portion of a building which is let as a separate holding shall be not less than two rupees per mensem for any official year commencing on the first day of April, 1993 and that the amount of such tax to be levied in respect of any hotel, club, industrial premises or other large premises may be specially fixed under section 137; Provided also that while determining the rate of such tax under section 99 or 150, the Corporation may determine different rates for different classes of properties:]
(c) a general tax of not less than twelve per cent (but not more than thirty per cent.] of their rateable value, Which may be levied, if the corporation so determines on a graduated scale;
[(d) betterment charges leviable under Chapter XVI.] Explanation.--Where any portion of a building or a, land is liable to a higher rate of the general tax such portion shall be deemed to be a separate property for the purpose of municipal taxation."
Section 141AA - Property taxes of what to consist and at what rate leviable.-
For the purposes of sub-section (1) of section 127, property taxes shall comprise the following taxes which shall, subject to exceptions, limitations and conditions hereinafter provided, be levied on buildings and lands in the City:
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(a) a water tax at such percentage of the amount of general tax levied under Section 141B as the Corporation shall deem reasonable, for providing water supply for the City:
Provided that the Corporation shall, with the previous sanction of the State Government, fix the minimum amount of such tax to be levied and may fix different minima for different classes of properties:
Provided further that the minimum amount of such tax to be levied shall,-
(i) in respect of any one separate holding of land or of any one building (not being premises used exclusively for residential purpose) or of any one portion of a building which is let as a separate holding and which is not used exclusively for residential purpose, be not less than five rupees per mensem for any official year;
(ii) in respect of any premises used exclusively for residential purpose, be not less than three rupees per mensem for any official year;
(b) a conservancy and sewerage tax at such percentage of the amount of general tax levied under section 141B as will in the opinion of the Corporation suffice to provide for the collection, removal and disposal of all excrementitious and polluted matters from privies, urinals and cess-pools and for efficiently maintaining and repairing the municipal drains constructed or used for the reception or conveyance of such matters:
Provided that the Corporation shall, with the previous sanction of the State Government, fix the minimum amount of such tax to be levied and may fix different minima for different classes of properties:
Provided further that the minimum amount of such tax to be levied in respect of any one separate holding of land or of any one building or of any one portion of a building which is let as a separate holding shall not be less than two rupees per mensem for any official year and that the amount of such tax to be levied in respect of any hotel, club, industrial premises or other large premises may be specially fixed under 137: Provided also that while determining the rate of such tax under section 99 or 150, the Corporation may determine different rates for difference classes of properties;
(c) a general tax which may be levied in accordance with the provisions of Section 141B, if the Corporation so determines on a graduated scale;
(d) betterment charges leviable under Chapter XVI.
Explanation, (i) Where any portion of a building or a land is liable to a higher rate of the general tax, such portion shall be deemed to be a separate property forth: purpose of municipal Page 14 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023 NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined taxation.
(ii) The water tax for providing water supply for the City and the conservancy tax for the collection, removal and disposal of all excrementitious and polluted matters from privies, urinals and cesspools and for efficiently maintaining and repairing the municipal drains may be levied and collected jointly as 'water and sewerage charges' at the rate based on the carpet area and the type of the property.] 141B. 'General tax] at what rate leviable.-
(l) For the purposes of (clause (c) of section 141AA, general tax] shall, subject to such exceptions, limitations and conditions hereinafter provided, be levied annually on buildings and lands in the City at such rate per square metre of the carpet areas of buildings and of the areas of lands (hereinafter referred to as "the rate of tax") as the Corporation may determine.
(2) For the purpose of levy of tax on buildings in the City under subsection (1),
(a) the buildings may be classified into residential buildings and building other than residential; and
(b) the Corporation may determine one rate of tax for residential building and the other rate of tax for buildings other than residential:
Provided that it shall be lawful for the Corporation to determine for residential buildings, the carpet area of which does not exceed forty square metres, such rate a tax as is lower than the rate of tax determined for residential buildings generally under this sub-section.
(3) The rate of tax determined under sub-section (1) read with subsection (2) shall not-
(a) in respect of residential buildings, be less than ten rupees per square metre of carpet area and more than forty rupees per square metre of carpet area, and
(b) in respect of buildings other than residential, be not less than twenty rupees per square metre of carpet area and more than eighty rupees per square metre of carpet area. (4) The Corporation may, subject to rules, increase or decrease or neither increase nor decrease the rate of tax determined under subsection (1) read with sub-sections (2) and (3),-
(a) in the case of residential buildings, having regard to the following factors, namely:
(i) the market value of the land in the area of the City in which the buildings are situated,
(ii) the length of the time of the existence of the buildings.Page 15 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023
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(iii) the type of the buildings, and
(iv) whether the buildings are occupied by owners or tenants.
(b). in the case of buildings other than residential, having regard to the following factors, namely:
(i) the market value of the land in the area of the City in which the buildings are situated.
(ii) the length of the time of the existence of the buildings,
(iii) the purpose for which the buildings are used, and
(iv) whether the buildings are occupied by owners or tenants.
(b) In lieu of the [general tax] leviable under sub-section (1) read with subsections (2) and (3), there shall be levied annually on,
(a) residential huts, and
(b) residential tenements in a chawl, each such tenement having carpet area not exceeding twenty five square metres,-
such amount of tax as the Corporation may determine:
Provided that the amount so determined shall not be less than such amount as the State Government may, by notification in the official Gazette, specify.
Explanation.-For the purpose of levy of tax under this section, where an addition is made to an existing building whereby the carpet area of that building is increased, such addition shall be treated as a separate building and the length of the time of its existence shall be computed from the yea; in which the addition is made."
15. Time for filing complaints against valuations to be publicly announced.
(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-rule (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.
20. Assessment-book may be amended by the Commissioner during the official year.-
(1) Subject to the provisions of sub-rule (2), the Commissioner may upon the representation of any person concerned or upon any other information at any time during the official year to which the assessment-book relates amend the same--
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(a) by inserting therein the name of any person whose name ought to be so insertedor any premises previously ommitted;
(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 assessmentbased thereupon;
(d) by altering the assessment on any land or building [or premises] 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 any premises from liability to any property tax.
(2) Where any amendment is made under sub-rule (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-rule (2) of rule 15 shall be given by the Commissioner and, as far as may be, the procedure laid down in rules 16, 17 and 18 shall be followed.
(3) Every such amendment shall be deemed to have been made, for the purpose of determining the liability or exemption of the person concerned in accordance with the altered entry, from the earliest day in the current official year when the circumstances justifying the amendment existed. 21A. Assessment etc. of tax in the event of failure to give notice under rule-5.-
Whenever it is noticed by the Commissioner that a new building has been erected or a building has been rebuilt or enlarged or any building which was vacant has been reoccupied or the user of any building has been changed and that the person primarily liable for the property taxes on such building has failed to give notice as required by sub-rule (1) of rule 5, the Commissioner may, within a period of one year from the date on which the aforesaid relevant facts came to his notice, proceed to fix or refix the rateable value of such building and assess or reassess the property taxes on such building in accordance with the provisions of this Act and these rules with reference to the period commencing from the year during which the building was newly erected or the building was rebuilt or enlarged or was reoccupied or the change of user took place and accordingly the taxes so assessed may be levied, collected and recovered and the provisions of this Act and these rules shall so far as may be, Page 17 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023 NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined apply to such levy, collection and recovery. 6.2. In view of the above provisions of the Act and Rules, which provides for assessment of the property tax, it is apparent that the respondent Corporation could not have raised a demand for the period from 1993 to 2006 in the year 2015. The submissions made on behalf of the respondent Corporation that the Corporation was kept in dark about the additional construction raised on the land in question, and therefore, no assessment could be made with regard to the property in question, resulting into non-assessment is also without any basis, because there is nothing on record to show in which year such additional construction was done nor the Corporation has specified the nature of such additional construction and whether the same if at all would be taxable for more than 13 years and raising such demand after 9 years. As the respondent No.1 Corporation has admitted the fact that the measurement was carried out on 27.02.2003 recording the construction of 442.50 sq. mtrs., but no assessment was made on the basis of actual construction on the property since then. Assuming that Rule 21A of Chapter-VIII of the Rules provides that, in the event of the owner having failed to give notice to the Corporation about additional construction, the Commissioner may re-fix the ratable value and assess the property on such additional construction within one year from the date on which the relevant facts of additional construction came to its knowledge. Assuming that such additional construction was done in the year 1993 and the said fact came to the knowledge of the Corporation in the year 2003, even then the Corporation failed and neglected to levy the tax with respect to such additional construction for the period from 1993 to 2003 within the period of obtaining such knowledge of it or at any time during the subsequent assessment of the property tax.
6.3. Therefore, it is not open for the respondent Corporation to raise any bill retrospectively at any time without any basis for providing any calculation for raising such demand. In the facts of the case, as the petitioners have paid all the taxes with respect to the property in question, and there was nothing outstanding. The demand of property tax of Rs.4,21,167/- raised by impugned order is contrary to the provisions of the Act, 1949 and the Rules framed there under.
7. In view of the foregoing reasons, the respondent Corporation had no jurisdiction to pass the impugned order dated 17.12.2018 raising the demand of property tax of Rs.4,21,167/- for the period from 1993 to 2006, for the first time in the year 2015, at the time when the petitioners preferred an application seeking change of name, on the basis of the sale deed executed in their favour. In such circumstances, the petition succeeds and is accordingly allowed. The impugned order dated 17.12.018 passed by the Page 18 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023 NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined respondents is hereby quashed and set aside. The respondents are directed to consider the application filed by the petitioners on 11.08.2014 within a period of three months from the date of the receipt of the writ of this order."
19. Yet in another decision in the case of Bharat Petroleum Corporation v. Vadodara Municipal Corporation (supra), this Court, with similar set of facts, relied upon the judgment in the case of Sushilaben Veljibhai Shah v. Jamnagar Municipal Corporation (supra). Corporation has raised the demand from the year 2005 to 2020, and considering the facts so also applying the principle laid down by this Court in the case of Sushilaben Veljibhai Shah v. Jamnagar Municipal Corporation (supra), this Court, allowed the writ petition declaring the action of the corporation of raising the demand as arbitrary and illegal.
20. Mr Nishant Lalakiya, learned advocate appearing for the respondent corporation could not point out any distinguishing feature and the fact that principle laid down in the above referred judgments would not apply to the facts of the present case. Mr Nishant Lalakiya, learned advocate indeed, fairly conceded that there are no distinguishing features and the judgment, would apply to the facts of the present case.
21. In view of the above discussion, the principle laid down by this Court in the case of Sushilaben Veljibhai Shah v. Jamnagar Municipal Corporation (supra) would apply on all fours to the facts of the present case, and therefore, the action of the respondent corporation in raising the demand vide bill for the Financial Year 2018-19, would be arbitrary and illegal and thus, deserves to be quashed and set aside and is hereby quashed and set aside. Consequently, demand notice issued under Rule 45 read with Rule 46 of Chapter VIII of Schedule-A of the Act of 1949 also deserves to Page 19 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023 NEUTRAL CITATION C/SCA/19990/2021 JUDGMENT DATED: 19/08/2023 undefined be quashed and set aside and is hereby quashed and set aside.
22. The petition succeeds and is accordingly allowed. Rule is made absolute. No order as to costs.
Sd/-
(SANGEETA K. VISHEN,J) RAVI P. PATEL Page 20 of 20 Downloaded on : Sun Sep 17 01:50:40 IST 2023