Calcutta High Court
Kolkata Municipal Corporation And Ors. vs Bengal Club Limited And Anr. on 28 September, 2007
Equivalent citations: 2008(1)CHN639, AIR 2008 (NOC) 521 (CAL.)
Author: Kalyan Jyoti Sengupta
Bench: Kalyan Jyoti Sengupta
JUDGMENT Kalyan Jyoti Sengupta, J.
1. This is an appeal against judgment and order dated 29th November, 2005 of the learned Single Judge of this Court who has allowed prayer of the respondent club declaring that the surcharge on consolidated rate under Section 171(4) of the Kolkata Municipal Corporation Act, 1980 is not leviable and/or recoverable from the petitioner club in respect of the premises No. 33B, Chowringhee Road, Kolkata (hereinafter referred to as the said premises). The case in the writ petition is that the respondent club is the owner of the said premises. The club is a limited company and all the members thereof are using the same for residential purposes. Though the club is a corporate body the members thereof are contributing to the coffer of the club and income there from is distributed and/or utilized for the benefit and welfare of the members of the club no outsider is allowed to use it either on payment or on gratis. Therefore, there has been mutuality in income, surplus and loss of the club. In support of this case the respondent club had annexed to its writ petition the memorandum of association, articles of association and the balance sheets. In spite of the aforesaid mode of user the Corporation Authority has valued treating the same as being commercial user for the purpose of imposition of rates and also to levy the surcharge. It is alleged that on the basis of the valuation in the past the surcharge was realised and club had to pay in the fear of harassing measure being taken against it. Now the club has challenged that the surcharge under the Corporation law is not leviable and it is not obliged to pay. The case of the Corporation Authority is that upon inspection and hearing the valuation was made and for a long time on the basis of the valuation the Corporation Authority has levied and/or imposed rates and also surcharge under the law. There was no objection at any point of time and such imposition of rates as well as commercial surcharge has been accepted. Upon hearing both the parties learned Single Judge, while giving declaration as above, came to the conclusion based on the materials placed before him that the members of the club are not using it either for commercial purpose or for non-residential purpose. It is held by him further that the rooms and/or part thereof are used by the members themselves and it is not let out to the outsiders. It is further observed by the learned Single Judge that though the club is a separate juristic entity, the members of this club are synonymous with its members and they are the body and soul together.
2. Mr. Das Adhikari, appearing for the appellant, contends that the findings of the learned Single Judge are erroneous on the facts and circumstances of this case as this property was valued from time to time and no objection thereto was raised and as such the Corporation rates and taxes were levied and requisite surcharge was also imposed at the rate of 50% of the annual valuation from the day when the commercial surcharge was introduced to be levied. The Corporation authority thereafter proposed the annual valuation of the said building at a sum of Rs. 1,92,000/- in or about November, 1996 with effect from 4th quarter of 1990-91. This valuation was objected to by the club and hearing was given. The authorized representative duly appeared at the time of hearing and made submission before him In course of hearing authorized representative of the club admitted that the members are hiring part of the premises for their personal/family party, ceremony etc. Therefore, it is clear on the basis of the admission that the said building of the club is attracted with the provisions of Section 171 Sub-section (4) for imposition of surcharges. He has produced, in support of his submission, xerox copies of the records of the hearing of the above case. He contends after hearing the said proposed valuation it was found that the building is used as commercial purposes and as such the proposed valuation of Rs. 1,92,000/- was not changed.
3. In view of the aforesaid findings of the Hearing Officer it is no longer open to the petitioner club to ask for the relief as prayed for. The findings of the Hearing Officer is not challenged in the writ application. According to him, the learned Single Judge, therefore, erred to hold otherwise than the findings of the Hearing Officer which remains unchallenged. Moreover, he contends that there was no material before the learned Trial Judge to come to a different findings from that of the Hearing Officer. The aforesaid valuation could have been challenged by filing an appeal as provided under the statute and without exhausting this remedy the writ petitioner has approached this Court under Article 226 of the Constitution of India. He contends that the grievances raised by the club respondent in the writ petition unmistakably suggest the disputed question of facts as well as of law.
4. He further contends that in view of the valuation as above and upon payment being made it has reached its finality under Section 190 of the Kolkata Municipal Corporation Act.
5. Mr. P.K. Mullick, learned Senior Counsel with Mr. Jayanti Khaitan, learned Senior Advocate and Mr. Subrata Basu, learned Advocate, appearing for the respondents contends that the learned Trial Judge has come to perfect findings. It will appear from the memorandum of association and articles of association of the club that it has the mutuality amongst the members. The building is owned by the club and is being used by the members, some of them thereof has their extended residence. They come to Kolkata to use the rooms for temporary period and spend their leisure time with other members, hold meetings and arrange ceremonial functions, of course, upon payment of charges. All the club members pay subscriptions. The income derived from the members are used for the benefit and welfare of the members and such income is derived from the members themselves and not from outsiders. There has been no commercial activity in the club. He further contends that in Section 171 Sub-section (4) of the said Act it will appear surcharge is leviable only when the building is used for commercial and non-residential purpose but not otherwise. According to him, the word 'or' used in between the words 'commercial' and 'surcharge' should be construed and read in the context of the object of the provision as conjunctive not disjunctive. According to him, if it is read disjunctively then there is no meaning of using the word 'commercial' separately as the word 'non-residential' includes commercial or any other purpose other than residential. So, separate expression of commercial and non-residential is not really intended by the legislator. He further contends that as because in past the said premises was treated as being commercial, and payment of surcharges having been made this do not estop the writ petitioner from challenging illegal and erroneous findings and imposition of levy of surcharge as well as making valuation. He further contends that it is true that Hearing Officer has heard and held that the building is used for commercial purpose, then such findings is absurd and contrary to records and moreover there has been no reason. The conclusion arrived at by the Hearing Officer is inconsistent as he has held that the building is used as commercial on the one hand and as non-residential on the other hand. The club does not deal with outsiders excepting in case of reciprocity with the other club members who are treated to be the members of this club nor it is being used for commercial purposes.
6. He further contends that the learned Trial Judge has correctly found that the method of use of the building is for residential purpose and this Court should not interfere with this findings. He contends further that under the statute his client cannot prefer an appeal against the decision of the imposition of surcharges. An appeal can only be preferred against the imposition of basic rates, not against surcharge.
7. We have carefully considered the contention of the learned Counsel for the appellant and the respondents and examined the judgment and order of the learned Single Judge and the materials placed before us including xerox copies of the records produced before vis as the original could not be traced despite effort being made pursuant to the order of the Court. However, we do not find any difficulty to proceed to dispose of the appeal with the xerox copies of the records.
8. The whole question is as to whether the learned Single Judge was justified in coming to the fact finding on the basis of the material placed before him that the premises in question is used for residential purpose or for non-residential or commercial purpose. We find from the records that on or about 18t November, 1996 the valuation of the property was sought to be revised at a sum of Rs. 1,92,000/- and to be given effect from 4th quarter 1990-91. On behalf of the club an objection was filed and copy of the said objection was also produced before us. In the objection it was contended that the above valuation was too high. Therefore, the hearing was taken by the Hearing Officer on 1st November, 1996 in course of submission which was made admitting that the members of the club are using the said premises for their personal/family parties/ceremonies etc. upon payment of certain charges. However, the rate of charges for use by the members could not be told. Upon hearing the Hearing Officer came to the conclusion that the mode of use of the premises is for commercial purpose. Hence, the valuation of Rs. 1,92,000/- of the said property for imposition of rates and taxes remains unchanged.
9. Mr. Das Adhikary has correctly said that in the writ petition aforesaid findings has not been challenged. Though submission was made in this respect before the learned Single Judge he has not considered this aspect of the matter at all. The decision rendered by the Hearing Officer is a statutory exercise and it has got the statutory sanctity under the provision of Section 190 of the said Act as it reaches its finality. However, we do not accept the contention that the only remedy of the writ petitioner was to prefer an appeal against the aforesaid valuation as there are exceptions where judicial review under Article 226 is maintainable. We have checked up statutory provision for appeal viz. Section 189 which is set out hereunder:
189. Appeal before the Municipal Assessment Tribunal. (1) There shall be a Municipal Assessment Tribunal for hearing and disposal of an appeal against an order passed under Section 188.
(2)The Tribunal shall consist of a Chairman and such number of other members not exceeding five as the State Government may determine: Provided that the Chairman may constitute one or more benches, each bench comprising two or more members, one of whom shall be a member of the West Bengal Higher Judicial Service (hereinafter referred to as the Judicial Member), and may transfer to any such bench any appeal for disposal or may withdraw from any such bench any appeal before it is finally disposed of:
Provided further that no such bench shall be constituted with any member of the West Bengal Higher Judicial Service other than one who is or has been a member of that Service for a period of not less than three years.
(2A) Where a separate bench is constituted under the first proviso to Sub-section (2), the Judicial Member shall exercise and perform all the powers and functions of the Chairman under this Act or the rules made thereunder.
(3) The Chairman and other members shall be appointed by the State Government on such terms and conditions as it may determine and shall be paid from the Municipal Fund.
(4) The Chairman shall be a person who is or has been a member of the West Bengal Higher Judicial Service for a period of not less than three years and the other members shall have such qualifications and experience as the State Government may prescribe.
(5) Any owner or person liable to payment of (property tax) may, if dissatisfied with the determination of objection under Section 188 appeal to the Tribunal:
Provided that such appeal shall be presented to the Tribunal within forty-five days from the date of service or (a copy of the order) under Section 188 and shall be accompanied by a copy of the said order.
(6) No appeal under this section shall be entertained unless the (property tax) in respect of any land or building for the period ending on the date of presentation of the appeal on the valuation determined under Section 188 has been deposited (in the office of the Corporation) and the appeal shall abate unless such (property tax) is continued to be deposited till the appeal is finally disposed of.
(7) The provisions of Part II of the Limitation Act, 1963 (36 of 1963) relating to appeal shall apply to every appeal preferred under this section.
(8) The procedure for hearing and disposal of appeals (as well as realisation of fees in connection with appeals) shall be such as may be prescribed.
(9) The decision of the Tribunal with regard to valuation or assessment shall be final and no suit or proceeding shall lie in any Civil Court in respect of any matter which has been or may be referred to or has been decided by the Tribunal.
(10) The valuation fixed after disposal of the appeal under this section shall take effect from the quarter in which such valuation would have taken effect and shall continue to remain in force during the period such valuation would have remained in force, had no appeal been filed.
(11) The Tribunal shall have an establishment consisting of such officers and other employees appointed on such terms and conditions as may be prescribed. The expenses of the establishment shall be paid out of the Municipal Fund.
10. It is clear from the above section read with Sections 186 and 188 that no appeal lay against the decision of imposition of surcharges but only against annual valuation. Therefore, according to us, the writ proceedings is the only and sole remedy available to the writ petitioner to challenge decision of levying surcharges. But the jurisdiction of the Writ Court is not akin to that of the Appellate Court and it can only examine in limited cases viz. whether there has been (i) infringement of fundamental right, and (ii) breach of principle of natural justice, and further decision has been rendered in violation of the provision of the statute patently and further the decision is without any evidence, irrationally and unreasonably.
11. But difficulty is that though challenge was made before the learned Trial Judge as regards legality of imposition of surcharges, the decision taken by Hearing Officer was not challenged nor it was examined by the learned Trial Judge. According to us so long the findings of the Hearing Officer would remain unchallenged the Court could not come to different findings inconsistent with the findings rendered by the Hearing Officer under the statute as in this regard the Writ Court has only co-extensive jurisdiction. Of course, had there been challenge certainly the Writ Court would have examined.
12. It appears from the recording of the learned Single Judge that this point was taken before him in course of hearing but in the affidavit-in-opposition it was merely stated that the surcharge was levied lawfully. No mention was made that Hearing Officer had come to fact finding of commercial use and/or non-residential activity.
13. According to us, the learned Trial Judge should have considered the point raised by the learned Counsel for the Corporation as to what was the implication of the decision taken by the Hearing Officer. This findings still remain untouched.
14. When this point has been taken before us and the records have been produced we think it fit to examine the implication of the decision taken by the Hearing Officer vis-a-vis the point raised by the respondent as regards authority and legality of imposition of the surcharge.
15. We accept the argument of the respondent and it has been correctly found by the learned Single Judge on the proposition of law that though in the past surcharges were paid without any objection they are not still debarred from challenging realization of the surcharge as there cannot be any estoppel as against the statutory provision. If under the law statutory authority is not authorized to levy or realize any rates, tax or charges and it is realized illegally the same is refundable, for a statutory authority unlike private individual cannot act beyond the provision of the law. In case of individuals there is no limitation for their act and action unless the law limits and/or prohibits such action.
16. In order to examine this aspect we feel that the Section 171 of the aforesaid Act is required to be reproduced:
171. Property tax on lands and buildings. -(1) For the purposes of this Act, a property tax on the annual value, determined under this Chapter, of lands and buildings in Kolkata shall be imposed by the Corporation.
(2)Such property tax shall be-
(a) where the annual value does not exceed six hundred rupees, eleven per cent of the annual value;
(b) where the annual value exceeds six hundred rupees but does not exceed eighteen thousand rupees, such percentage of the annual value as is worked out by dividing the annual value by six hundred and adding ten to the quotient, the sum thus worked out being rounded off to the nearest first place of decimal;
(c) where the annual fee exceeds eighteen thousand rupees, forty per cent, of the annual value.
(3) In calculating the gross amount of property tax including tax under the Howrah Bridge Act, 1926 (Ben. Act IV of 1926) that may be imposed on lands and buildings (including huts) per quarter and the net amount payable per quarter after allowing rebate under Sub-section (2) of Section 215, the fraction of a rupee shall be rounded off to the nearest rupee, fifty paise being treated as rupee one.
(4) Notwithstanding the provisions of sub-Section (2) and Sub-section (9), the Corporation may, where any land and building or hut or portion thereof is used for commercial or non-residential purpose, levy a surcharge on the property tax on such land or building or hut or portion thereof at such rate not exceeding fifty per cent, of the property tax as the Corporation may from time to time determine:
Provided that where any portion of any land or building or hut is used for commercial or non-residential purpose, the amount of the property tax payable in respect of such portion shall, while fixing the property tax for the entire land or building or hut, be separately calculated:
Provided further that subject to such rules as may be made by the State Government in this behalf for the grant of exemption from surcharge in respect of any class or classes of lands or buildings or huts used for educational, medical, public health or cultural purposes or for purposes of sports, the Corporation may exempt any such land or building or hut from payment of the surcharge:
Provided also that such exemption shall in no case exceed seventy-five per cent of the surcharge.
(5) Where a newly constructed building is used exclusively for residential purposes, a rebate of twenty-five per cent, in the property tax as determined under Sub-section (2) shall be allowed of the first three years from the quarter following the date of issue of initial the occupancy certificate under the provisions of this Act:
Provided that such rebate shall not be allowed for old buildings which have been redeveloped through alternations or additions:
Provided further that such rebate shall be allowed in respect of such building in so far as it is a single unit of assessment under this Chapter.
(6) Notwithstanding anything contained in this Chapter, lands and buildings which are the properties of the Union, shall be exempt from the property tax:
Provided that nothing in this Sub-section shall prevent the Corporation from levying on such lands and buildings a property tax to which immediately before the commencement of this Act they were, or were treated as liable:
Provided further that the Corporation may levy a service charge on such buildings on the basis of such annual value and at such rate as may be determined by the Central Government from time to time.
(7) Notwithstanding anything contained in this Chapter, lands and buildings which vest in the Board of Trustees for the Port of Calcutta shall, for the purpose of levying a property tax thereon, be assessed in accordance with the provisions contained in Part IV of the Calcutta Port Act, 1890 (Ben. Act III of 1890) and the agreement, if any between the Board of Trustees for the Port of Calcutta and the Corporation under the said Act.
(8) Land owned by or belonging to
(i) The Board of Trustees for the improvement of Calcutta, constituted under the Calcutta Improvement Act, 1911 (Ben. Act V of 1911), or
(ii) the Calcutta Metropolitan Development Authority, constituted under the Calcutta Metropolitan Development Authority Act, 1972 (West Ben. Act IX of 1972), or
(iii) the West Bengal Housing Board, constituted under the West Bengal Housing Board Act, 1972 (West Ben. Act XXXIII of 1972), or
(iv) the West Bengal Industrial Infra-structure Development Corporation, established under the West Bengal Industrial Infra-structure Development Corporation Act, 1974 (West Ben. Act XXV of 1974), or
(v) such other statutory body as may be notified by the State Government in this behalf from time to time, for the purposes of development schemes in accordance with the published or approved plans but not put to such use, shall be twenty-one per cent of the annual value of such land as determined under this Chapter;
(b) Land or building acquired, constructed, purchased or owned by the Government or any of the statutory bodies mentioned in Clause (a) for any Government approved scheme for the purpose of subsidized housing for persons belonging to low income group or industrial workers and comprising of tenements let out to such persons on a monthly rent shall be twenty-one per cent, of the annual value of such land or building determined under this Chapter;
(c) Land or building acquired, constructed, purchased or owned by Government or any of the statutory bodies mentioned in Clause (a) for any other purpose shall be at the rate determined under Sub-sections (2) and (4) of this section;
(9) Notwithstanding anything contained in Sub-section (2) the property tax shall not exceed,-
(a) in respect of land, hut or building in a bustee improved under the West Bengal Slum Areas (Improvement and Clearance) Act, 1972 (West Ben. Act X of 1972), eighteen per cent, and
(b) in respect of land, hut or building in any other bustee, fifteen per cent, of the annual value of such land, hut or building in a bustee referred to in Clause (a) or Clause (b), as the case may be, determined under this Chapter.
17. It is clear from the aforesaid section that the basis of the imposition of the surcharges is linked up ultimately with the valuation of the building as property tax is assessed basing annual valuation. The valuation can be done under Section 174 which inter alia provides if the property in question is let out to any third party the annual income fetched there from, or in case the property is not let out then the valuation is arrived at on the basis of the comparable instances in that locality meaning thereby on the basis of the rent which could have been fetched from a hypothetical tenant.
18. We are of the view the findings of the learned Single Judge that the property is not let out to any third party nor the Corporation Authority has found it, is not supportable. The proposition of law with regard to the dealings and transactions done by the members of the club is that there exists element of mutuality. It appears from the document and materials placed before us, that the premises is used by the club members but the mode of use cannot be found conclusively. It may or may not, be residential. Though the building is used by the members of the club which is a corporate body then factually one cannot rule out the fact that members might have or might not have used for residence or let it out to the outsiders, and these can only be established upon enquiry and fact finding. From the records we find that the Hearing Officer came to the conclusion that it is a commercial premises but this finding is based on no evidence. From the submission made by the representative of the club it appears that there is a doubt whether the premises is used for residential purpose or not. Mr. Mullick wants us to say that the said provision having regard to expression of word used in between two words 'commercial' and 'nonresidential' should be read conjunctively and it is wholly unacceptable because if such contention is accepted then use of the word 'non-residential' would have sufficed. The word 'commercial' is always meant for profit motive meaning thereby there must be dealing with the third party with a motive to earn surplus amount after accounting of income and expenditure but the meaning of the 'non-residential' does not necessarily mean 'commercial'. But we hasten to add that the word 'non-residential' includes 'commercial' but not vice versa. Nonresidential premises may not be always used for profit motive. For example, there are buildings and premises which are used for various purposes viz. running a school, charitable dispensary, social services or place of worshipping which are not for commercial purposes nor for residential purposes. Therefore, going by the language of the said section and the object sought to be achieved by the legislator the word used cannot be conjunctive, rather disjunctive. The rate stipulated by the legislator for imposition of surcharges is a clear indication that such rate varies from premises to premises, depending upon the mode of user. It is not a fixed one and it can be a flexible one but the rate for imposition shall not exceed 50%. Our discussion in this regard is also clear from Section 174 of the said Act whereby and where under determination of annual valuation has been laid down in respect of this section. Various methods for determination of annual valuation have been stipulated depending upon the mode of user. The said section is set out hereunder:
174. Determination of annual valuation. (1) Notwithstanding anything contained in the West Bengal Premises Tenancy Act, 1956 (West Ben. Act XII of 1956) or in any other law for the time being in force, for the purpose of assessment to the property tax, the annual value of any land or building shall be deemed to be the gross annual rent including service charges, if any, at which such land or building might at the time of assessment be reasonably expected to let from year to year, less an allowance of ten per cent for the cost of repairs and other expenses necessary to maintain such land or building in a state to command such gross rent:
Provided that while determining the annual value in the case of any land or building or portion thereof exclusively used by the owner for his residential purpose, the gross annual rent of such land or building or portion, as the case may be, shall be reduced,
(a) where the gross annual rent does not exceeds six hundred rupees, by thirty per cent;
(b) where the gross annual rent exceeds six hundred rupees but does not exceed eighteen thousand rupees, by such percentage of the gross annual rent as is worked out by dividing the gross annual rent by six hundred and subtracting the quotient from thirty-one, the difference being rounded off to the nearest place of decimal:
Provided further that no such reduction in gross annual rent shall be made-
(a) in case the total covered area in any land or building under occupation for residential purpose by the owner exceeds one hundred and fifty square metres, or
(b) where a person owns or occupies for residential purpose more than one plot of land or building or portions thereof within the municipal limit of Kolkata;
(2) The annual value of any land which is not built upon shall be fixed at seven per cent of the estimated market value of the land;
(3) If the gross annual rent of any class or classes of lands or buildings used exclusively for hospital or educational purposes or for the purposes of sports or as a place of worship or as a place for disposal of the dead cannot be easily estimated, the gross annual rent of such building shall be deemed to be five per cent of the value of the building obtained by adding the estimated cost of erecting the building at the time of assessment less a reasonable amount to be deducted on account of depreciation, if any, to the estimated present market value of the land valued with the building as part of the same premises;
(4) In the case of any land or building or part thereof used for public cinema shows or theatrical performances or as a place of similar public recreation, amusement or entertainment, the gross annual rent of such land or building or part thereof, as the case may be, shall be deemed to be seven and a half per cent, of the gross annual receipts in respect of such cinema shows or theatrical performances or place of public recreation, amusement or entertainment, including receipts from rent and advertisements and sale of admission tickets but excluding taxes on the sale of such tickets:
Provided that the provisions of this Sub-section shall not apply in the case of temporary fairs, circuses, and casual shows or performances.
(4A) If the gross annual rent of any land or buildings or part thereof cannot be easily estimated, the gross annual rent of such land or building for the purposes of sub-section (1) shall be deemed to be seven and half per cent of the value of the building obtained by adding the estimated present cost of erecting the building at the time of assessment less a reasonable amount to be deducted on account of depreciation, if any, to the estimated present market value of the land: Provided that the estimated present cost shall not include the cost of any plant or machinery, excepting those enumerated in Schedule VIII, on the land or the building as aforesaid;
(5)The annual value as determined under this Chapter shall be rounded off to the nearest ten rupees.
19. From Sub-section (1) it will appear that if there is no fixed mode of user in respect of a land or building then the method of determination is one thing. It will appear from Sub-section (2) that in case of a vacant land the method of valuation provided is different from that of Sub-section (1). It will appear from Sub-section (3) that if the mode of user of the building or land is for nonresidential purposes then method is different from those in case of vacant land and other mode of user. Similarly Sub-sections (4) and (4A) provide for other modes in case of user of the buildings. As such, it is clear that the legislator in one section has provided for separate methods of calculation depending upon the mode of user of the building which includes residential, non-residential, non user and commercial user.
20. It cannot be the intention of the legislator to contemplate different meaning in different sections in one Act unless it is expressly intended. The golden rule of statute particularly fiscal statute is that the Court will give literal meaning which expressly provides, and not to try to give any intrinsic meaning.
21. We, therefore, conclude that surcharge under Sub-section (4) of Section 171 is leviable in case of both 'commercial user' and 'non-residential user'.
22. It appears to us that the valuation was sought to be revised from the quarter as mentioned above and it was objected to and hearing was given by the Officer concerned and passed order under Section 188. According to us while making valuation the mode of user in case where it is available is also one of the guiding factors as it is clear from Section 174 of the said Act. Therefore, the Hearing Officer must have taken into consideration the factum of mode of user by the club. Whatever may be the thought process but conclusion is certain to the extent that the user of the building is not for residential. But the Hearing Officer is not sure whether it is 'commercial' or 'non-residential'. We have already observed that both the terms are not synonymous. The Hearing Officer should have come to the conclusion with certainty of either of the two but not both. From the records we find he has recorded at some places N.R. meaning thereby as explained by Mr. Das Adhikary and also explained in the affidavit as 'nonresidential' and at another place it is recorded as 'commercial'. Both the conclusions cannot be arrived at, therefore, apparently such an exercise is absurd and irrational.
23. Mr. Das Adhikary has laid emphasis that it is an appellable Order. Mr. Mullick says in the negative. We are of the view that it is an appellable order as it is clear from Section 189 of the said Act whereby appeal lies against an order passed under Section 188. Order of valuation has been passed, as we have already recorded, under Section 188 as this determination is the basis for imposition of surcharge.
24. But appeal is an alternative remedy and such remedy cannot stand in the way of entertaining the writ petition. If it is found that it is an ineffective one and secondly if the allegation is irrational, unreasonable and based on no evidence the Writ Court hardly shuts the doors on the face of the litigants in entertaining such dispute. It appears to us that the writ petition was heard without any reservation on affidavits. So, on that ground the writ petition cannot fail and the learned Single Judge has rightly entertained the writ petition and proceeded to dispose of the same on merit.
25. Under such circumstances, we are of the view that order of the Hearing Officer is not sustainable and the same is set aside. Order of the learned Single Judge is also set aside. We, therefore, think it fit to send back this matter for fresh hearing before the Hearing Officer to make a fresh valuation having regard to the mode of user. It would be open for the Hearing Officer to cause enquiry and inspection to be made. If any report is obtained on such enquiry and copy of such report of inspection shall also be supplied to the writ petitioner/appellant. Similarly, the respondent/writ petitioner shall produce all the documents viz. memorandum of association, articles of association, audited balance sheet and other documents, if any, in support of their case. The Hearing Officer, after considering all materials, shall come to a finding with reasons, of mode of user. Thereafter annual valuation would be fixed for considering the aspect of the levy of surcharge as stipulated in Section 171 Sub-section (4).
26. It appears from the records that the appellant/Municipal Authority has levied the maximum surcharge. We think the intention of the legislator is that the levy of surcharge cannot be done uniformly and irrespective of mode of user. The decision of levying at a flat rate and at a maximum range is wholly unreasonable and irrational because the respondent authority would be justified in levying at a maximum rate only in case of commercial venture. But in the case of non-residential use where there is no element of commerciality and the building is used for running a school, charitable dispensary and for other social activities the rate cannot be the same as in case of a commercial user. If for any reason appellant Corporation decides to impose surcharge having regard to the mode of user then such rate of surcharge cannot be maximum. Of course, if it is found upon fresh materials the building is used for commercial purposes then Corporation Authority will be free to levy surcharge as they may think fit and proper.
27. Thus, the appeal is allowed without any order as to costs. The fallowing direction is made today by Sengupta, J. & Arun Kumar Bhattacharya, J. to be incorporated in the judgment and order passed today in Court.
28. Before the judgment is pronounced Mr. Basu appearing for the respondent-writ petitioner submits that his client has filed a cross-objection against the judgment and order. He wants that the cross-objection should be disposed of with this judgment. Mr. Das Adhikary submits that the cross-objection was never placed for hearing only the appeal was heard. We also feel so. Under the law if the cross-objector wants to proceed even after delivery of the judgment they may do so, as may be advised.
29. Therefore, we make it clear that this judgment and order cannot stand in the way for rendering a decision in the cross-objection separately, if so advised.
30. After the judgment is pronounced Mr. Basu submits that the provision of Sub-section (4) of Section 171 has been done away with on and from 1st May, 2007. Whether this can be levied or not in view of the amendment cannot be decided by this Court as, when this matter was heard and particularly when the issue of surcharge was raised, this provision was very much there. This point also may be agitated before the appropriate Forum, if so advised.
31. Urgent xerox certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
A.K. Bhattactoarya, J.
32. I agree.