Gujarat High Court
M/S Se Transstadia Private Limited vs Ahmedabad Municipal Corporation on 20 October, 2020
Author: J. B. Pardiwala
Bench: J.B.Pardiwala, Bhargav D. Karia
C/SCA/6018/2019 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 6018 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
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1 Whether Reporters of Local Papers may be allowed to YES
see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy of the NO
judgment ?
4 Whether this case involves a substantial question of law NO
as to the interpretation of the Constitution of India or any
order made thereunder ?
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M/S SE TRANSSTADIA PRIVATE LIMITED
Versus
AHMEDABAD MUNICIPAL CORPORATION
================================================================
Appearance:
MR. MIHIR JOSHI, SENIOR COUNSEL WITH MS. NISHA OZA FOR M/S
WADIAGHANDY AND CO(5679) FOR THE PETITIONER
MR. S.N. SHELAT, SENIOR COUNSEL WITH LEARNED ADVOCATE MS
JIRGA D JHAVERI(3471) FOR THE RESPONDENT
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CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date : 20 /10 /2020
CAV JUDGMENT
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C/SCA/6018/2019 CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1.By this petition under Articles 14, 226 and 227 of the constitution of India, the petitioner has prayed for the following reliefs:
A. This Hon'ble Court be pleased to issue a Writ of Mandamus or any other appropriate writ, order or direction to quash and set aside the Demand Notice dated 15th March, 2019 (Annexure-"A") issued to the Petitioner by the Respondent under the Gujarat Provincial Municipal Corporations Act, 1949, with respect to property of Petitioner being Tenement No. 0309-50-0001-0001-Q, the same being bad in law;
B. This Hon'ble Court be pleased to issue a Writ of Mandamus or any other appropriate writ, order or direction to quash and set aside the communication of Respondent dated 15th November, 2018 (Annexure-"H") issued to the Petitioner with respect to property of Petitioner being Tenement No. 0309-50-0001-Q, the same being bad in law;
C.This Hon'ble Court be pleased to issue a Writ of Mandamus or any other appropriate writ, order or direction to quash and set aside the Bills raised by the Respondent under the provisions of Gujarat Provincial Municipal Corporations Act, 1949 for the period of 2016-17 (Annexure-"B"), 2017-18 (Annexure-"D") and 2018-19 (Annexure-"J") upon the Petitioner with respect to property of Petitioner being Tenement No.0309-50-0001-0001-Q, the Page 2 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT same being issued without the authority of law;
D. This Hon'ble Court be pleased to issue a Writ of Mandamus or any other appropriate writ, order or direction restraining the Respondent from arising any other / further bills and/or demand notice on the Petitioner with respect to property of Petitioner being Tenement No. 0309-50-0001-0001-Q, under the provisions of Gujarat Provincial Municipal Corporations Act, 1949 until the complaint filed by Petitioner under Rule 16 of Chapter VIII of Schedule A of Gujarat Provincial Municipal th Corporations Act, 1949 on 12 March, 2019 (Annexure-"L" (Colly)), is disposed of after giving the Petitioner an opportunity of being heard;
E. Pending admission, hearing and final disposal of the present Petition, this Hon'ble Court be pleased to stay the operation, execution and implementation of the Demand Notice dated 15th March, 2019 (Annexure-"A") issued to the Petitioner by the Respondent under the Gujarat Provincial Municipality Corporation Act, 1949 with respect to property of Petitioner being Tenement No. 0309-50-0001-0001-Q;
F. Pending admission, hearing and final disposal of the present Petition, this Hon'ble Court be pleased to stay the operation, execution and implementation of the communication of Respondent dated 15th November, 2018 (Annexure-"H") issued to the Petitioner with respect to property of Petitioner being Tenement No. 0309-50-0001-0001-Q;
G.Pending admission, hearing and final Page 3 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT disposal of the present Petition, this Hon'ble Court be pleased to stay the operation, execution and implementation of the Bills raised by the Respondent under the provisions of Gujarat Provincial Municipal Corporations Act, 1949 for the period of 2016-17 (Annexure-"B"), 2017-18 (Annexure-"D") and 2018-19 (Annexure-"J") upon the Petitioner with respect to property of Petitioner being Tenement No.0309-50- 0001-0001-Q;
H. Pending admission, hearing and final disposal of the present Petition, this Hon'ble Court be pleased to restrain the Respondent from taking any coercive and/or adverse actions against the Petitioner in furtherance of the Demand Notice dated 15th March, 2019 (Annexure-"A") issued to the Petitioner by the Respondent under the Gujarat Provincial Municipal Corporations Act, 1949 with respect to property of Petitioner being Tenement No.0309-50- 0001-0001-Q;
I.Ex-parte, ad interim reliefs with respect to Prayers (E), (F), (G) and (H) may kindly be granted.
J.Such other and further reliefs as deemed fit to this Hon'ble Court in the interest of justice, equity and good conscience may kindly be granted.
2.The brief facts of the case are as under:
2.1. The petitioner is a private limited company incorporated under the provisions of the Indian Companies Act, Page 4 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT 1956. The petitioner has filed this petition through its authorized signatory Mr. Harit Sharadchandra Vyas.
The petitioner has created a set up providing for sports facilities in Ahmedabad to enhance and encourage sports amongst the general public in Public Private Partnership format with the Government of Gujarat. The petitioner company is incorporated for the sole purpose of providing the state of the art multipurpose sports facilities and sports infrastructure in the State of Gujarat. The State of Gujarat sanctioned the project of the petitioner company as a project of Special Nature considering the innovative and novel technologies. The entire project is based on a Public Private Partnership system and a Design Build Operate and Transfer Model, whereby, the petitioner would incur the entire expenditure of investment of approximately Rs.550 Crore and share the income earned with the Government. Ultimately the entire project shall stand vested in the Government.
2.2. The petitioner requested for a partial Building Use Permission (for short 'BU Page 5 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT permission') limited to the area constructed to enable the petitioner to host an international sporting event within the property of the petitioner company. In response, the partial BU permission was granted on 1st October, 2016 to the petitioner to facilitate the sporting event.
2.3. The respondent - Ahmedabad Municipal Corporation (for short 'the AMC') raised a property tax bill of Rs.1,32,15,033/- (Rupees One Crore Thirty Two Lakh Fifteen Thousand and Thirty Three only) on 23rd March, 2017 for the year 2016- 2017 for a period of 6 (six) months, as the BU permission was granted on 1st October, 2016.
2.4. It is the case of the petitioner that the bill raised by the AMC was unilateral; without prior verification and on the basis of the carpet area of 82,167.24 sq. mtrs. The bill was raised upon multiplying the carpet area with the factors as prescribed in Rule-8-B of Chapter-VIII, Schedule A of the Taxation Rules (Amendment) 2001 framed under the provisions of the Gujarat Provincial Municipal Corporations Act, 1949 (for Page 6 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT short 'the Rules').
2.5. The petitioner by letter dated 22nd April, 2017 requested the AMC to inspect the subject property and provide valuation of the same as per the Chapter-VIII of the Rules. The petitioner also objected for inclusion of the second basement admeasuring 24,950 sq. mtrs. for the valuation purpose of the property tax, as the same was not used and requested to delete the same from the calculation of the carpet area. The petitioner also submitted that no rent was charged for the area on which the sub-station is built by the Torrent Power and therefore, such area should also be excluded from the carpet area. The petitioner paid an amount of Rs.50,00,000/- (Rupees Fifty Lakh only) as token amount towards the bill for the year 2016-17.
2.6. It appears that, ignoring the request of the petitioner for proper valuation of the subject property and without taking any action as prescribed under Rule 15(2) of Chapter-VIII of the Rules, another bill of Rs.2,80,76,873/- (Rupees Two Crore Eighty Lakh Seventy Six Page 7 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT Thousand Eight Hundred Seventy Three Only) for the year 2017-18 was issued by the AMC for the carpet area of 83,874.98 sq. mtrs. by increasing the carpet area of 1708 sq. mtrs. without explaining on what basis such decision was taken by the AMC. The bill for the year 2017-18 also included an amount of Rs.48,76,902/- (Rupees Forty Eight Lakhs Seventy Six Thousand Nine Hundred and Two Only) as the outstanding dues of the previous year and with interest total demand was raised for an amount of Rs.3,29,53,775/- (Rupees Three Crore Twenty Nine Lakh Fifty Three Thousand Seven Hundred and Seventy Five Only).
2.7. The petitioner therefore once again by letter dated 08th March, 2018 disputed the amount of the bills and the method of calculation highlighting the purpose of the subject property and the massive investment required for setting up and running of the sports facilities by the petitioner. The petitioner also submitted that since the entire project is for the public good, it should be viewed with a lens of development, education and community benefits which would justify re-determination of the Page 8 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT property tax. The petitioner requested for a revised calculation to ensure smooth functioning of project which has greater community benefits.
2.8. The petitioner thereafter by letter dated 11th May, 2018 made further submissions as to why the property tax bills raised for the years 2016-17 and 2017-18 are erroneous and not in consonance with the provisions of law. The petitioner submitted that the carpet area should not include the areas of parking, utilities open to sky, corridors, etc. as prescribed under the Gujarat Comprehensive Development Control Regulations, 2017 (for short 'the GCDCR'). The petitioner also contended that as per the circular of the Government of India dated 17th May, 1997, Tourism has been declared as an 'Industry' and the Ministry of Commerce and Industries has issued NIC code for industries including the hotels and motels, convention center and sports club so as to grant concession. The petitioner therefore submitted that the concessions available to such industries should also be made available to the petitioner. It was also submitted that Page 9 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT the parking area was open for the general public and no fees was charged for the same and therefore, such area should be deleted from carpet area. The petitioner also relied upon the Government Circular of the Assessment and Tax Collection Department dated 5th November, 1998, whereby, the open parking for the general public was not to be considered for the assessment of the property tax. It appears that pursuant to the request made by the petitioner, the officer of the AMC visited the subject property for measurement of the same in the month of July, 2018. However, the petitioner did not receive any communication / intimation from the AMC after completion of the measurement intimating as to the basis on which the measurement / investigation was undertaken and the conclusion of such spot inspection.
2.9. The petitioner therefore vide letter dated 31st August, 2018 raised additional contentions with respect to the carpet area, built up area and use factor and objected for the application of blanket 'use factor' to the entire premise, even though, different areas have different Page 10 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT use and different factors would apply. The petitioner therefore requested the respondent to reconsider the bills raised by it.
2.10. Thereafter, the respondent AMC by letter dated 15th November, 2018 rejected the request for proper valuation of the subject property of the petitioner and stated that upon the measurement of the subject property, the carpet area is calculated to be 1,06,779 sq. mtrs. which included the parking area to be used by the members of the petitioner. With regard to the non-used area, the AMC stated that the petitioner does not have separate bills for the premises and has one collated bill, and therefore, rebate for the non-used land cannot be granted.
2.11. The petitioner during the period of
2017-18, paid an amount of
Rs.1,50,00,000/- (Rupees One Crore Fifty Lakh Only) under protest. Thereafter, the AMC raised bill of property tax for the year 2018-19 on 7th March, 2019 for an amount of Rs.2,92,19,561/- (Rupees Two Crore Ninety Two Lakh Nineteen Thousand Five Hundred and Sixty One Page 11 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT Only). It also included the outstanding dues of the previous year along with the interest amounting to Rs.2,23,27,512/- (Rupees Two Crore Twenty Three Lakh Twenty Seven Thousand Five Hundred and Twelve Only). Thus, a total demand of Rs.5,15,47,073/- (Rupees Five Crore Fifteen Lakh Forty Seven Thousand and Seventy Three Only) was raised.
2.12. It is the case of the petitioner that after issuance of the bill for the year 2018-19, the AMC finally issued a notice under Rule 15(2) of Chapter VIII of the Rules, recording the carpet area as 1,06,779.39 sq. mtrs. and applied such valuation retrospectively from 2016.
2.13. The petitioner thereafter on receipt of the Notice under Rule 15(2) of Chapter VIII, filed a complaint on 12th March, 2019 within fifteen days as required under Rule 16 of the Chapter VIII of the Rules.
2.14. Thereafter, the AMC issued a Notice of Demand on 15th March, 2019 under Rule 41 of Chapter VIII of the Rules calling upon the petitioner to pay an amount of Page 12 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT Rs.5,15,47,073/- (Rupees Five Crore Fifteen Lakh Forty Seven Thousand and Seventy Three Only) within two days of the receipt of the notice, failing which, water and drainage connection of the petitioner would be disconnected. The petitioner thereafter deposited an amount of Rs.50,00,000/- (Rupees Fifty Lakh Only) under protest on 22nd March, 2019 along with a letter requesting the AMC not to take any adverse action until the contentions / averments of the petitioner raised in its complaint dated 12th March, 2019 were duly considered.
2.15. In such circumstances referred to above, the petitioner being aggrieved by the demand notice dated 15th March, 2019 issued by the AMC under the provisions of the Act, 1949 with respect to the property of the petitioner being Tenement No. 0309-50-0001-0001-Q, has preferred this petition.
3.On 26.03.2019, this Court (Coram: Hon'ble Mr. Justice A.J. Desai) passed the following order:
"Learned Senior Advocate Mr. Mihir Joshi assisted by Mr. Bhatt on behalf of M/s. Wadia Ghandy & Co. appearing on behalf Page 13 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT of the petitioner, on instructions, states that the petitioner shall deposit an amount of Rs.65 lakh, subject to rights and contentions of the petitioner that may be available to the petitioner at the time of hearing of the petition, within a period of 10 days from today with the Ahmedabad Municipal Corporation.
Issue NOTICE returnable on 02.05.2019.
Ad interim Relief in terms of paragraph 34(H) on condition that the petitioner shall deposit an amount of Rs.65 lakh within a period of 10 days from today with the respondent Ahmedabad Municipal Corporation. Direct service is permitted."
4.After passing of the afore-quoted order dated 26.03.2019, the AMC filed Civil Application No. 1 of 2019 for vacating the ad-interim relief. This Court (Coram: Hon'ble Mr. Justice A.J. Desai) passed the following order on 22.04.2019:
"A copy of CAV judgment dated 02.02.2011 passed in Special Civil Application No. 208 of 2000 by the Division Bench of this Court (Coram: Hon'ble Ms. Justice Page 14 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT Harsha Devani and Hon'ble Mr. Justice R.M. Chhaya) is placed on record. The issue involved in present petition is with regard municipal tax. I have gone through the said judgment. The Division Bench has dealt with the subjected related to the municipal tax.
Another copy of decision dated 18.12.2002 passed in Special Civil Application No. 7553 of 1996 and allied matter by the Single Judge of this Court (Coram : Hon'ble Mr. Justice Jayant M. Patel) placed on record. The similar issue involved in present petition is also decided by the Single Judge of this Court.
In view of the above fact, Registry is directed to examine the petition and to place the matter before the appropriate Court in the week commencing from 29.04.2019.Interim relief granted earlier to continue till the next date of hearing."
5.In view of the afore-quoted order dated 22.04.2019, after due verification, the Registry placed this matter before the Page 15 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT Division Bench taking up the property tax matters. This Court (Coram: Hon'ble Mr. Justice J.B. Pardiwala and Hon'ble Mr. Justice A.C. Rao) on 25.07.2019 passed the following order:
"Issue Rule returnable on 22nd August, 2019.
The ad-interim-relief granted earlier, to continue."
6.Heard learned Senior Advocate Mr. Mihir Joshi assisted by Ms. Nisha Ojha for M/s. Wadia Ghandhy and Co. for the petitioner and learned Senior Advocate Mr. S.N.Shelat assisted by learned advocate Ms. Jirga D. Jhaveri for the respondent AMC.
SUBMISSIONS ON BEHALF OF THE PETITIONER:
7.1. Learned Senior Advocate Mr. Joshi submitted that the bills issued by the AMC for the years 2016-17, 2017-18 and 2018-19 are without issuing any special notice to the petitioner as required under Rule 15(2) of Chapter-VIII of the Rules. It was submitted that, the bills have been raised without initiating the necessary steps for the valuation of the subject property and as such unilateral valuation is done by the AMC by taking away the right of the petitioner to Page 16 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT file complaint under Rule 16 of Chapter-VIII of the Rules, so as to challenge such valuation. It was submitted that, the respondent has no power to take away the right of hearing of the petitioner which has been granted by the statute which is even otherwise available to the petitioner under the principles of natural justice. It was therefore submitted that the AMC has acted without jurisdiction by raising the bills in breach of the powers under the law.
7.2. Learned Senior Advocate Mr. Joshi would submit that the special notice dated 7th March, 2019 issued under Rule 15(2) of Chapter-VIII of the Rules, after three tax bills having been already raised is illegal, as the AMC was aware that the notice under Rule 15(2) is mandatory and cannot be overridden, and as such all the three bills issued by the AMC are prima-facie without the force of law.
7.3. It was therefore submitted that the notice under Rule 15(2) of Chapter-VIII of the Rules at a belated stage making it retrospectively applicable is not valid, as there is no provision under the Act, 1949 that permits the respondent to make a valuation with retrospective effect without following the Page 17 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT due procedure.
7.4. Mr. Joshi therefore submitted that the impugned demand notice dated 15th March, 2019 issued in furtherance of the void bills would automatically be rendered void as well and no further action can be taken on the basis of such demand notice as the same is bad in law. Mr. Joshi pointed out that upon issuance of the special notice dated 7th March, 2019, the petitioner has already filed a complaint challenging the valuation under Rule 16 of the Chapter VIII of the Rules and during the pendency of the adjudication of such complaint, the impugned demand notice dated 15th March, 2019 could not have been issued, as opportunity of being heard, as stipulated under Rule-18 of Chapter VIII of the Rules is mandatory. It was therefore submitted that the impugned demand notice is in violation of the procedure prescribed by the Act,1949 and the Rules as well as principles of natural justice, and therefore, it is liable to be quashed and set aside.
7.5. Mr. Joshi without prejudice to the preliminary contentions raised as above, submitted on merits that, bills raised by the respondent for the years 2016-17, 2017-18 and 2018-19 are based on incorrect measurements Page 18 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT and calculations and therefore, the quantification of the alleged outstanding liability of the petitioner is improper.
7.6. Referring to the letter dated 15th November, 2018 of the AMC, Mr. Joshi submitted that the same is absolutely vague and that too without assigning any reasons for the method of measurement as well as the valuation made by the AMC, inasmuch as such the letter is in utter disregard to the contentions raised by the petitioner without assigning any reason for rejecting the same. It was further pointed out that the letter dated 15th November, 2019 came to be issued without following the procedure as prescribed under the Rules.
7.7. Mr. Joshi thereafter referred to the contentions raised by the petitioner with respect to the non-inclusion of the parking area, utilities open to sky area, corridors, etc., while calculating the carpet area, as per the provisions of the GCDCR which provides for methodology of calculating carpet area. It was pointed out that the AMC without considering the GCDCR, has taken most of the built up area as carpet area. It was also pointed out that the AMC has erred in allotting usage rate as 6 as a blanket rate Page 19 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT for the entire subject property without inspecting the type of activities undertaken within the subject property, as the entire property is not for entertainment purposes and in fact a larger portion is dedicated to sports, education and research and therefore different usage rates as permissible under Rule 7 (2) of Chapter VIII of the Rules ought to have been allowed.
7.8. Mr. Joshi in the last, pointed out that the AMC has ignored the purpose for which the petitioner is incorporated as the petitioner has set up a multipurpose sports facilities in a Public Private Partnership with the Government of Gujarat for the uplift of sports in Gujarat by introducing the state of the art infrastructure, technologies, research centers, etc. which would ultimately vest with the Government of Gujarat.
7.9. Learned Senior Advocate Mr. Joshi in support of his submissions relied upon the following decisions:
(i) Relying upon the decision in the case of Municipal Corporation of the City of Ahmedabad v. Oriental Fire & General Insurance Co. Ltd. reported in (1994) 2 GLR 1498, , it was submitted that when the Page 20 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT property is newly constructed or rateable value is to be increased, an issuance of notice under Rule 15(2) is mandatory. It was submitted that the use of the word 'shall' in Rule 15(2) makes the issuance of such notice mandatory and if the same is not given, any assessment made would be null and void.
(ii) Relying upon the decision in case of P.T. Dilip v. Surat Municipal Corporation reported in 2003 (1) GLH 648,it was submitted by Mr. Joshi that opportunity of hearing is required to be given to the petitioner and without providing opportunity of hearing with regard to the complaint filed by it under Rule-16, no demand notice could have been issued.
(iii) Reliance was placed upon the decision of the Division Bench of this Court in case of Bina K. Baxi & Anr. V. Municipal Commissioner & Anr. rendered on 02.12.2011 in Special Civil Application No. 208 of 2000 and it was submitted that the petition is maintainable in this case as held by this Court in case of Municipal Corporation of the City of Ahmedabad v. Oriental Fire & General Insurance Co. Ltd. reported in (1994) 2 GLR 1498. It was emphasized that the impugned notice is issued without giving any Page 21 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT opportunity of being heard to the petitioner and without complying with the mandatory provision of Rules 15(1) and 15(2) of the Rules.
(iv) Lastly, the reliance was placed on the decision of this Court in group of petitions in case of Vijayan Rajamanicka Nadar Pagalam v. Jamnagar Municipal Corporation & Anr.
rendered on 15.07.2019 by the Coordinate Bench (Coram: Hon'ble Mr. Justice J.B. Pardiwala and Hon'ble Mr. Justice A.C. Rao), wherein, considering all previous judgments, this Court quashed and set aside the property tax bills raised by the Corporation in each of the writ petitions.
SUBMISSIONS ON BEHALF OF THE RESPONDENT:
8.1. Learned Senior Advocate Mr. S.N. Shelat for the respondent AMC submitted that the petition is not maintainable as the petitioner has an alternative statutory remedy against the tax determined and charged under Section 406 of the BPMC Act. He would submit that the Act provides for arbitration and appeal under Section 411 of the Act. Mr. Shelat would further submit that the question with regard to the measurement of the area and factors to be applied are disputed Page 22 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT questions of fact which cannot be gone into by this Court in exercise of writ jurisdiction under Article 226 of the Constitution of India.
8.2. It was also pointed out that, although the bill for the year 2016-17 was issued on 23rd March, 2017, bill for the year 2017-18 was issued on 7th March, 2018, and the bill for the year 2018-19 was issued on 1st March, 2019, yet the petitioner did not challenge such bills before the competent forum and as such he could be said to have waived his right to challenge such bills.
8.3. Learned Senior Advocate Mr. Shelat further submitted that, the AMC has rightly raised the bills considering the carpet area mentioned in the application made by the petitioner after following the due procedure prescribed under the Rules and the Act. It was pointed out that the Small Causes Court is empowered to look into the grievance related to the valuation of the property tax, and therefore, the petition may not be entertained.
8.4. Learned Senior Advocate Mr. Shelat thereafter relied upon the measurement carried out on the request of the petitioner and submitted Page 23 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT that the office has correctly measured the premises. It was also pointed out that the property tax bills were issued for every official year and the petitioner had preferred representation to the Municipal Commissioner from time to time which has been considered by the competent authority. The petitioner failed to raise any grievance at the relevant point of time. Mr. Shelat relied upon the statement at Annexure-C annexed to the affidavit-in-reply to point out that previously when the BU permission was partially granted, the area admeasured was 82,167 sq. mtrs. and thereafter it was decided that for the time being since the cellar was not being used the tax for the said amount be reduced on the basis of the conditional BU permission dated 01.10.2016. It was further pointed out that there is total outstanding dues of Rs.4,09,99,922/- to be recovered from the petitioner, and therefore, the petition is required to be rejected.
8.5. Learned senior advocate Mr. Shehat placed reliance upon the decision of the Supreme Court in the case of Assistant General Manager, Central Bank of India v. Commissioner, Municipal Corporation for the City of Ahmedabad reported in 1995 (1) GLH Page 24 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT 1153 to fortify his submission that the petitioner should have filed complaint within the time prescribed in the notice and the rules whether or not the special notice under Rule 15(2) was served upon him or not. It was also submitted that as the petitioner failed to deposit the disputed tax, the petitioner cannot challenge the impugned demand notice.
ANALYSIS:-
9. Having heard the learned counsel appearing for the respective parties and having gone through the materials on record, two questions arise for the consideration of this Court. First, whether the impugned demand notice dated 15th March, 2019 issued by the respondent AMC is valid or not and second, whether the bills for the years 2016-17 to 2018-19 are required to be quashed and set aside in the absence of any special notice as provided under the Rule 15(2) of Chapter-VIII of the Rules.
10. Both the above-referred issues arising in this petition are no longer res-integra as this Court in the case of Vijayan Rajamanicka Nadar Pagalam v. Jamnagar Municipal Corporation and other group matters (supra) has held as under:
Page 25 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT"8 Before adverting to the rival submissions canvassed by either side, we deem it appropriate to look into few provisions of the Act as well as the Rules :
8.1 Section 2(44) of the Act, 1949 defines the term "official year". The same reads as follows :
" official year means the year commencing on the first day of April;"
8.2 Section 127 reads as follows :
"127. Taxes to be imposed under this Act.-
(1) For the purpose of this Act, the Corporation shall impose the following taxes, namely :-
[(a) Property taxes either under section 129 or
(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 sub- section (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 Page 26 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT 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 19 th 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 19 th November, 1975 there had been substituted for the words "the corporation shall impose" the words "the Corporation may impose" in the said sub- section (1).] (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 :-
[* * * ] [(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 rules made thereunder, a tax on professions, trades, callings and employments;]
(c) a tax on dogs, Page 27 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT [(cc) a tax on entertainments,]
(d) a theatre tax
(e) a toll on animals and vehicles entering the City;
[(f) any other tax which the State Legislature has power under the Constitution to impose in the State.
[(2A) Notwithstanding anything contained in subsection (1) or sub-section (2), no tax or toll shall be levied on motor vehicles save as provided in section 20 of the Bombay Motor Vehicles 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 authorise the imposition of any tax which the State Legislature has no power to impose in the State under the Constitution."
8.3 Section 141AA reads as follows :
"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, Page 28 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT limitations and conditions hereinafter provided, be levied on buildings and lands in the City :-
(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 Page 29 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT 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 specifically 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 which may be levied in accordance with the provisions of section 141B, if the Corporation so determines on a graduate scale;Page 30 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT
(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 for the purpose of municipal 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 form privies, urinals and cess-pools 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.] "
8.4 Section 141B reads as follows :
"141B. General Tax at what rate leviable.-
(1) 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 sub-section Page 31 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT (1),-
(a) the buildings may be classified into residential buildings and buildings other than residential; and
(b) the Corporation may determine one rate of tax for residential buildings 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 of 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 sub-section (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 Page 32 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT determined under sub-section (1) read with subsections (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.
(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.Page 33 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT
(5) In lieu of the general tax leviable under sub-section (1) read with sub-
sections (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 year in which the addition is made."
8.5 Section 453 reads as follows :
"453. Rules in Schedule to be part of the Act.- The rules in Schedule A as amended from time to time shall be deemed to be part of this Act."Page 34 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT
9 We shall now look into few relevant rules.
9.1 Rule 9 of the Rules, reads as under:
"9. Assessment book what to contain.- The Commissioner shall keep a book, to be called the assessment book, in which shall be entered every official year-
(a) a list of all buildings or lands or as the case may be, premises in the City, distinguishing each either by name or number as he shall think fit, and containing such particulars regarding the location or nature of each as will, in his opinion, be sufficient for identification;
(b) the rateable value of each such building or land or as the case may be, premises determined in accordance with the provisions of this Act and the rules;
(c) the name of the person primarily liable for the payment of the property taxes, if any, leviable on each such building or land or as the case may be premises;
(d) if any such building or land or as the case may be premises is not liable to be assessed to the general tax, the reason of such non-liability;
(e) when the rates of the property-taxes to be levied for the year have been duly Page 35 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT fixed by the Corporation and either the period fixed by public notice, as hereinafter provided, or the receipt of complaints against the amount of rateable value entered in any portion of the assessment book has expired, or the complaint, if any, made against any entry has been disposed of in accordance with the provisions hereinafter contained, the amount of which each building or land or premises entered in such portion of the assessment-book is assessed to each of the property taxes, if any, leviable therein;
(f) if, under section 134 or 135, a charge is made for water supplied to any building or land or premises by measurement, or the water-tax or charge for water by measurement is compounded for, or if, under section 137, the conservancy tax for any building or land or premises is fixed at a special rate, the particulars and amount of such charges, composition or rate;
(g) such other details, if any, as the commissioner from time to time thinks fit to direct."
9.2 Rule 15(2) reads as under :
"15(2). In every case in which any premises 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 Page 36 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT 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."
9.3 Rule 21B reads as under :
"21B. Circumstances in which assessment book may be prepared, completed etc., after the expiry of year to which it relates.- Nothing in the foregoing provisions of this Chapter shall affect the preparation and completion of the assessment-book or of any part thereof or of any entry therein after the expiry of the year to which it relates, if such preparation or completion was not possible before the expiry of the year on account of any order of a court or any other competent authority, and the levy, collection and recovery of any tax based on such assessment-book, part or as the case may be entry shall not be called in question merely on the ground that the assessmentbook, part or as the case may be, entry was not prepared or completed during the year to which it relates."
10 The issue raised in the present writ application is no longer res integra. A Division Bench of this Court in the case of (The) Anant Mills Co. Ltd. (Under Liquidation) vs. Municipal Corporation for the city of Ahmedabad and Others reported in 1993 (2) G.L.H. Page 37 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT 897 had the occasion to look into the entire scheme of the Act alongwith the Rules and also the issue whether the assessment of property tax for any particular official year must be completed before the expiry of the official year. P.N. Bhagwati (C.J.) (as His Lordship then was) speaking for the Bench observed as follows :
"Then follows Rule 21-B which is a new rule introduced by the Amending Act and it sets out certain contingencies in which the Commissioner may prepare and complete the assessment book even after the expiration of the official year. It may be pointed out here that while construing the corresponding provisions relating to assessment and levy of property tax contained in the Bombay Municipal Boroughs Act, 1925 which provisions are similar though not identical with the provisions of the Corporation Act and the rules it was held by a Division Bench of this Court in Municipal Corporation of the city of Ahmedabad v. Keshavlal (1965) 6 G.L.R. 228 that the procedure for assessment and levy of property tax set out in those provisions, must be completed before the expiry of the official year and no assessment can be made after the official year has ended. The scheme of the provisions of the Boroughs Act and the present rules relating to assessment and levy of property tax being substantially the same, it would follow a fortiori that the ratio of this decision must apply equally in construing the provisions of the Corporation Act and the Rules and the assessment of property tax for any particular official year must be Page 38 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT completed before the expiry of the official year. This position has now been impliedly recognised by the Legislature in enacting Rule 21B. Rule 21B accepts by necessary implication that having regard to the scheme of the Corporation Act and the Rules, the assessment of property tax for any particular official year must be completed before the expiry of the official year and thus give legislative approval to the decision in Keshavlal s case (supra) and recognises that its ratio would also be applicable in the construction of the provisions of the Corporations Act and the Rules and having done so enacts an exception to the rule by providing that in cases falling within it, the assessment book may be prepared and completed even after the expiry of the official year. These are the relevant provisions of the Corporation Act and the Rules having bearing on the determination of the questions arising in these petitions."
10.1 The aforesaid decision of this Court in Anant Mills Co. Ltd. (Supra) later came to be followed by this Court in the case of Kanaiya Prints Pvt. Ltd. vs. Assessment and Recovery Officer and Anr. reported in 2003 (1) G.L.H. 449, wherein the Court held as under :
"6. The impugned notices which are challenged in these petitions show that they were special notices issued under Rule 15(2) and Rule 20(2) of the Taxation Rules. These notices were necessitated, because, the properties for which they were issued were brought within the city limits by the Page 39 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT notification extending the limits. Under section 3(1) of the said Act, the local areas within the limits specified by the State Government by notification in the official gazette shall constitute the City of Ahmedabad. These limits can be altered from time to time after consultation with the Corporation by the State Government by notification in the official gazette, as provided by sub- section (3) of section 3 of the said Act.
6.1 By virtue of the provisions contained in section 3A of the said Act, taxes, rules etc. applicable in the City automatically extend to the areas included in the City limits from the date on which they are so included and by superseding the taxes, rules etc. which were in force before such inclusion. When the area is included by a notification under section 3(3) of the said Act, the State Government may provide, by an order published in official gazette, for the matters enumerated in subsection (3) of section 3A, which included in its clause (vii) the continuance within the area so included of all or any budget estimates, assessments, assessment list, or, as the case may be, assessment book, valuations, measurements or divisions made or authenticated by, or in respect of, the surrendering local authority and in force within its area immediately before the notified day, until they are superseded or modified. The buildings in the plots of the petitioners already existed before these plots were included in the City area. The taxes applicable in the City, therefore, became applicable to them on the inclusion of Page 40 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT the area of these plots in the City from the date of their inclusion, which admittedly was 15-11-1994.
6.2 Under Rule 15(2), it has been provided that, in every case in which any premises has 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 any complaint against the same will be received in his office at any time within 15 days from the service of the special notice. Therefore, in all cases where the premises were entered for the first time in the assessment book are liable to payment of property taxes, a notice under Rule 15(2) could be issued and this was done in view of the inclusion of the premises in question within the municipal limits with effect from 15-11- 1994.
7. Under Rule 9 of the Chapter VIII of the Schedule, the Commissioner is required to keep a book, to be called "the assessment book", in which, he is required to enter every official year (which starts from 1 st of April each year, as defined in section 2(7) of the Act), a list of all buildings or lands or premises in the City with particulars sufficient for identification, rateable value thereof, the amount at which the Page 41 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT property is assessed after the complaint, if any, made against any entry, has been disposed of as per the Rules. It appears from the record that the entries were made in the assessment book under Rule 9 with effect from 15-
11-1994 in respect of the premises of these petitioners. That date fell in the official year 1-4-1994 to 31-3-1995 and the property taxes applicable in the City applied to these properties from 15-11-1994 to 31-3-1995 in respect of that official year.
7.1 Under Rule 20(1) of the said Taxation Rules, the Commissioner is empowered upon any information at any time during the official year to which the assessment book relates, to amend the same, by inserting any premises previously omitted. Under subrule (2) of Rule 20, it is provided that, 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. Therefore, the provisions of Rule 15(2) of the said Rules became applicable by virtue of Rule 20(2) in respect of these premises and special notice was required to be issued to these petitioners under Rule 15(2) read with Rule 20(2) of these Rules. There was, therefore, no question of a person primarily liable failing to Page 42 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT give notice under Rule 5(1) as stipulated in Rule 21A in this case, because, these were not any new buildings for which such notice was required to be given under Rule 5(1) to the Commissioner by the persons primarily liable, but these were the properties to which City taxes became applicable by virtue of the notifications issued under sections 3(3) and 3A(3) of the said Act. The Commissioner would obviously have known about these notifications and that is why, he amended the assessment book under Rule 9. There was no question in this case of the Commissioner not having notice of the premises, because, the assessment lists etc. of these premises in force in the area immediately before the notified day were the relevant record from which the absorbing local authority would have already known about the constructions existing on these premises. Even the Commissioner has not taken up the plea which was toyed with by the learned Senior Counsel for the Corporation that he came to know about the existence of these premises at some later date from which the period of one year should be contemplated under Rule 21A. Under Rule 21A, it has been provided that, whenever it is noticed by the Commissioner that a new building has been erected or a building has been re- built or enlarged or any building which was vacant has been re-occupied 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 Page 43 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT or re-fix the rateable value of such building and assess or re-assess the property taxes on such building in accordance with the provisions of the Act and the 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 re-occupied or the change of user took place and accordingly the taxes so assessed may be levied, collected and recovered and the provisions of the Act and the Rules shall so far as may be, apply to such levy, collection and recovery.
8. By Rule 21-B, it is provided that, nothing in the foregoing provisions of the Chapter VIII shall affect the preparation and completion of the assessment book or of any part thereof or of any entry therein after the expiry of the year to which it relates, if such preparation or completion was not possible before the expiry of the year on account of any order of a Court or any other competent authority, and the levy, collection and recovery of any tax based on such assessment book, part or as the case may be, entry shall not be called in question merely on the ground that the assessment book, part, or, as the case may be, entry was not prepared or completed during the year to which it related.
8.1 The contention that the notification by which the areas covered by the plots of the petitioners were included in the City area with effect from 15-11-1994 should be treated as an order of the competent authority within the meaning Page 44 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT of Rule 21-B is nothing but an exercise in desperation. It cannot be said that, by issuance of such a notification, it was not possible for the Commissioner to complete the assessment book or any part thereof or any entry made therein before the expiry of the year to which it related. The assessment and levy in respect of the period from 15- 11-1994 upto 31-3-1995 was obviously required to be completed in the official year ending on 31 st March 1995. As per the settled legal position, the assessment must be completed before the close of the official year [Anand Mill s case (supra)]. Therefore, to this limited extent, the recovery sought to be made for the period between 15-11-1994 to 31- 3-1995, cannot be sustained since it was not open to the Commissioner to assess and levy property tax for that period on the basis of the special notices issued on 13-2-1996. Therefore, to the extent to which the impugned notice relates to the aforesaid period of 15-11-1994 to 31-3-1995 and purports to assess the taxes for that period, it cannot be sustained, and if any recovery of tax is effected for that period, the petitioners would be entitled to adjustment of the same.
8.2 The impugned special notices dated 13-2-1996 are, therefore, declared to be inoperative only to the limited extent to which they related to the assessment of taxes for the period from 15-11-1994 to 31-3-1995, and the petitioners would be entitled to adjustment of the taxes recovered, if any, for the said period. Rule is made absolute accordingly with no order as to costs."
Page 45 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT10.2 In L.M. Patel and Ors. vs. Baroda Municipal Corporation reported in 1995 (1) G.L.H. 1198, the learned Single Judge of this Court considered Anant Mills Co. Ltd. (Supra) and held as under
:
"Under Rule 9 of the said Rules Assessment Book which is required to be kept by the Commissioner has to contain the entries mentioned therein every official year. Accordingly ratealbe value at item No. (b) determined in accordance with the provisions of this Act and the Rules, is required to be entered in the Assessment Book every official year. Under Rule 21B it is only when the said entry cannot be made in the Assessment Book on account of any order of a Court or any other competent authority, the levy, collection or recovery of tax made on the basis of an entry made after expiry of the order cannot be questioned. The procedure four (sic.) assessment of levy set out in the provisions of the Rules is required to be complied with before expiry of the official (sic.) and no assessment can be made after the official year. This is clear from reading of Rules 9, 17 and 21 and 21B of the said Rules. Rule 21B accepts by necessary implication that having regard to the scheme of the Corporation Act and the Rules, the assessment of property tax for any particular official year must be completed before the expiry of official year, by indicating exception that for any case falling within 21B, assessment book may be prepared and completed even after expiry of the official year. The requirement that assessment must be completed before the close of the Page 46 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT official year is mandatory requirement only subject to express provision in Rule 21B and once the official year has expired it would not be open to the commissioner to assess and levy property tax. This position of law is settled in view of the decision of the Division Bench of this Court in the case of Anant Mills Co. Ltd. v. Municipal Corporation of city of Ahmedabad and Ors. Reported in 1993(2) G.L.H. 897 and the earlier decision of the Division Bench of this Court in the case of Municipal Corporation of City of Ahmedabad v. Keshav, reported in VI G.L.R. 228."
10.3 The similar provision occurring in Bombay Municipal Boroughs Act, 1925 (for short, "the Act of 1925"), came up for consideration before the Full Bench of the Bombay High Court in Solapur Municipal; corporation v. Ramchandra Ramappa Madgundi, 1972 (74) BLR 469 :
(1972 Tax LR 2581). The expression "current official year" occurring in Section 82(3) of the Act of 1925 was construed to mean the earliest day in the official year which is current when the amendment of the assessment list takes place. In other words, the expression "current official year", as per the Full Bench, refers to only that official year which is running at the time when the amendment is made by insertion or alteration of an entry.
10.4 The aforesaid view of the Full Bench was approved by the Apex Court in Municipal Corporation of City of Hubli v. Subha Rao Hanumatharao Prayad, (1976) 4 SCC 830 : (AIR 1976 SC 1398).Page 47 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT
10.5 The Supreme Court in the case of Municipal Corporation of City of Hubli v. Subha Rao Hanumantharao Prayag and others reported in AIR 1976 SC 1398 had the occasion to consider few provisions of the Bombay Municipal Boroughs Act (18 of 1925), quite analogous to the provisions of the Act with which we are concerned. The principle contention before the Supreme Court was that on a true construction of the relevant provisions of the Act, the the authentication of the assessment list, in order to be valid and effective, need not be made before the expiry of the official year to which the assessment list relates and it is sufficient to impose liability to tax for the official year even if it is made at any time after the expiry of the official year.
In the case before the Supreme Court, though authentication of the assessment list for the official year 1951-52 was made on 24th July, 1952 after the expiry of the official year, it was argued that the same was valid and effective and operated to create liability on the tax payers for the payment of tax at the revised rates.
10.6 The Supreme Court took into consideration Section 78 to 89 of the act dealing with the assessment of and liability to rates of buildings and lands. The Supreme Court took into consideration Section 84 treating it to be important Section which provided for the adoption of valuation and assessment contained in the assessment list of any particular year for the year immediately following. The Supreme Court reproduced Section 84, which reads as follows :
Page 48 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT"84. (1) It shall not be necessary to prepare a new assessment list every year. Subject to the condition that every part of the assessment list shall be completely revised not less than once in every four years, the Chief Officer may adopt the valuation and assessment contained in the list for any year, with such alterations as may be deemed necessary, for the year immediately following.
(2) But the provisions of Section 80, 81 and 82 shall be applicable every year as if a new assessment list had been completed at the commencement of the official year."
10.7 Ultimately, the Supreme Court proceeded to held as under :
"6. It is clear from the scheme of these provisions that the official year is the unit of time for the levy of the tax. The provisional assessment list is prepared for the official year. This may be done before the commencement of the official year or even thereafter in the course of the official year. Then objections are invited and when made, they are disposed of and amendments consequential upon the decisions on the objections are carried out in the assessment list. The assessment list is then authenticated. The process of assessment and levy of the tax which begins with the preparation of the provisional assessment list is thus completed when the assessment list is authenticated. The assessment list, when authenticated, becomes effective from Page 49 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT the first day of the official year and gives rise to the liability to pay tax. It is on the authentication of the assessment list that the liability of the ratepayers to pay tax arises and the tax is levied on the ratepayers. This position would seem to be clear as a matter of plain interpretation and in any event there is a long line of decisions of the Bombay High Court commencing from Sholapur Municipality v. Governor General, 49 Bom LR 752 = (AIR 1948 Bom 145) and ending with Sholapur Municipal Corporation v. Ramchandra, 74 Bom LR 469 = (1972 Tax LR 2581) which has consistently accepted this position and the learned counsel appearing on behalf of the Municipal Borough did not dispute the correctness of these decisions. The only contention raised by him was as to within what time the assessment list must be authenticated, if it is to be a valid and effective assessment list. If is to this contention that we must now address ourselves.
7. Now, once we take the view that the process of levying the tax is complete only when the assessment list is authenticated and it is only then that the tax is levied on the rate-payers, it is difficult to resist the conclusion that the authentication must be made within the official year. The tax, being a tax for the official year, must obviously be levied during the official year and since the levy of the tax is complete only when the assessment list is authenticated, it must follow a fortiori that the authentication on the making of which alone the levy of the tax is effected, must take place in the Page 50 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT official year. Any other view would result in an anomalous and rather absurd situation, namely, that the tax for an official year would be leviable at any time, even years after the expiration of the official year. That could not possibly have been intended by the legislature. That would indeed be a strange consequence in case of a tax which is annual in its structure and organisation and which is intended to be levied for each official year.
8. But, apart from this consideration, there is inherent evidence in the sections themselves which shows that the authentication was intended by the legislature to be a step which must be taken before the close of the official year. Section 84 provides that it shall not be necessary to prepare a new assessment list every year but, subject to the conditions that every part of the assessment list shall be completely revised not less than once in every four years, the Chief Officer may adopt the valuation and assessment contained in the list for any year, with such alterations as may be deemed necessary, for the year immediately following. This provision postulates that there would be an assessment list for each official year at the close of that official year, so that the valuation and assessment contained in it can be adopted by the Chief Officer for the immediately following year. Now clearly the assessment list which can be adopted for the immediately following year is the authenticated assessment list and it would, therefore, seem that the legislative assumption underlying this provision is that in respect of each Page 51 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT official year, there would be an authenticated assessment list before the close of that official year, so that the valuation and assessment contained in it can be adopted by the Chief Officer for the immediately following year. Otherwise, it would not be possible for the Chief Officer to adopt the valuation and assessment of the preceding official year and he would have to prepare a new provisional assessment list every time when the assessment list for the preceding year is not finalised and authenticated and this might lead to the rather starting result of there being several provisional assessment lists for different official years in the process of finalisation at the same time. We should be slow to accept an interpretation which might lead to such a strange consequence.
9. Then again considerable light on this question is thrown by the provision enacted in S. 82. It is a wellsettled rule of interpretation that the Court is "entitled and indeed bound, when construing the terms of any provision found in a statute, to consider any other parts of the Act which throw light on the intention of the legislature, and which may serve to show that the particular provision ought not to be construed as it would be alone and apart from the rest of the Act." The statute must be read as a whole and every provision in the statute must be construed with reference to the context and other clauses in the statute so as, as far as possible, to make a consistent enactment of the whole statute. Obviously, therefore, Sections 78 to 81 must be so construed as to harmonise Page 52 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT with Section 82. They must be read together so as to form part of a connected whole, Section 82, sub-section (1) provides for making of an amendment in the assessment list by insertion or alteration of any entry in certain events after hearing objections which may be made by any person interested in opposing the amendment. Sub-sec. (3) of Section 82 makes the amendment effective from "the earliest day in the current official year on which the circumstances justifying the entry or alteration existed." The expression current official year in the context in which it occurs in S. 82, sub-section (3) clearly signifies the earliest day in the official year which is current when the amendment in the assessment list takes place and that expression refers only to the official year which is running at the time when the amendment is made by insertion or alteration of an entry under sub-section (1) of Section 82. It would, therefore, seem clear, on a combined reading of sub-secs. (1) and (3) of Section 82, that an amendment, in order to be effective in levying tax for an official year, must be made during the currency of the official year. That is now well settled as a result of several decisions of the Bombay High Court culminating in the Full Bench decision in Sholapur Municipal Corporation v. Ramchandra, (1972 Tax LR 2581 (Bom)) (supra) and we do not see any reason to take a different view. Now the scheme of Sections 78 to 81 is identical with that of Section 82 and in both cases what is contemplated first is a proposal to which objections are invited and after the objections are investigated and disposed of, the assessment list in the one case and the Page 53 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT altered entry in the other are authenticated giving rise to liability in the rate-payer. It must follow a fortiori that if an alteration in the assessment list, in order to fasten liability on the rate-payer, is required to be made during the currency of the official year, equally, on a parity of reasoning, the assessment list, in order to give rise to liability in the rate-
payer, must also be authenticated before the expiry of the official year. Moreover, it is difficult to believe that the legislature did not intend that there should be any time-limit in regard to the levy of tax for an official year and that the tax should be legally leviable at any time after the close of the official year. There is, in our opinion, sufficient indication in the various provisions of the Act to show that the authentication of the assessment list, in order to be valid and effective, must be made within the official year, though the tax so levied may be collected and recovered even after the expiry of the official year."
10.8 Subsequently in Kalyan Municipal Council v. Usha Paper Products (P) Ltd., (1988) 3 Supreme Court Cases 306, the Apex Court while dealing with the identical provisions contained in the Maharashtra Municipalities Act, 1965 followed its earlier judgment given in the Municipal Corporation of City of Hubli (supra) and in paragraph 5 of the report held thus :
"5. The aforesaid statement in the judgment of this Court clearly shows that the decision of the Full Bench of Page 54 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT the Bombay High Court in Sholapur Municipal Corporation v. Ramchandra was approved by this Court. The decision of the aforesaid Bench of this Court is binding on us and is clearly applicable to the case before us. In that judgment this Court pointed out that once it was accepted that the process of levying the tax is complete only when the assessment list is authenticated and it is only then that the tax is levied on the rate payers, it is difficult to resist the conclusion that the authentication must be made within the official year. The tax, being a tax for the official year, must obviously be levied during the official year and since the levy of the tax is complete only when the assessment list is authenticated it must follow that the authentication must take place in the official year."
10.9 The law laid down by the Full Bench of the Bombay High Court in the case of the Solapur Municipal Corporation and approved by the Apex Court in the Municipal Corporation of City of Hubli and further re-iterated in the Kalyan Municipal Council is applicable on all fours in the light of the statutory provision contained in the Rules and the definition of the expression "official year" occurring in Section 2(44). Any amendment in the assessment book by inserting or altering an entry in respect of any building erected, reiterated, altered, added to or reconstructed in whole or in part of the assessment book shall be and can only be effective during the currency of official year. The expression "official year" defined under Section 2(44) of the Act 1949 read with Rule 20(1)(e) Page 55 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT indicates without doubt the legal position that the property tax being tax for the official year must be levied only during the official year.
10.10 The submission of Mr. Soparkar, the learned senior counsel appearing for the Corporation that the rules are subservient to the main provisions of the Act and when the Act is silent, it is open for the Corporation to issue a property tax bill even of the prior years. We are not impressed by such submission because Section 127(3) of the Act, 1949 makes it very clear that the municipal taxes shall be assessed and levied in accordance with the provisions of the Act and the Rules. Apart from the same, Section 453 of the Act, 1949 makes it clear that the Rules in schedule A, as amended from time to time, shall be deemed to be part of the Act, 1949.
10.11 We may only say as observed by the Supreme Court in Municipal Corporation of the city of Hubli (supra) that the statute must be read as a whole and every provision in the statute must be construed with reference to the context and the other clauses in the statute so as, as far as possible, to make a consistent enactment of the whole statute.
10.12 We are also not impressed by the submission that the writ applicants are not entitled to seek any relief from this Court by invoking the extraordinary jurisdiction under Article 226 of the Constitution of India having regard to their conduct. We are dealing with a tax Page 56 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT matter. The provisions are to be construed strictly. The conduct of the writ applicant is not sufficient to give a total go-bye to the mandatory provisions of the Act as well as the Rules. Even otherwise, we are not convinced with such submission canvassed on behalf of the Corporation. The Corporation wants this Court to reject the writ application on the ground that as the writ applicants were negotiating with the Corporation, the time period consumed should be taken into consideration and the Court should not go strictly by the definition of the term "official year" as defined under Section 2(44) of the Act. We are not at all impressed by such submission. We may remind the Revenue of the observations made by the Supreme Court in the case of Parashuram Pottery Works Co. Ltd. v. Income Tax Officer, Circle I, Ward A, Rajkot, reported in (1977) 106 ITR 1, which read thus :
"It has been said that the taxes are the price that we pay for civilization. If so, it is essential that those who are entrusted with the task of calculating and realising that price should familiarise themselves with the relevant provisions and become well-versed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue."
11 In such circumstances referred to above, all the writ applications succeed and are hereby allowed. The impugned respective tax bill as issued by the Corporation in each of the writ Page 57 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT application is hereby quashed and set aside."
11. Moreover, in the case of Bina K. Baxi v. Municipal Commissioner (supra), the coordinate Bench of this Court (Coram:
Hon'ble Ms. Justice Harsha Devani and Hon'ble Mr. Justice R.M. Chhaya) has held as under:
"14 The contention raised by Ms.Jhaveri that the present petition is not maintainable against the impugned notice and alternative remedy by way of an appeal is available is incorrect in law and facts. Firstly, it has been averred in the petition that no bill or a notice under Rule 15(1) of the Rules or a special notice under Rule 15(2) of the Rules has been issued by the respondent- Corporation. The respondent-Corporation has not filed any rebuttal to the said contention of the petitioners, save and except making a statement in the affidavit-in-reply that the record is not available. As held by this Court in the case of Municipal Corporation of the City of Ahmedabad (supra), a petition under Article 226 of the Constitution of India would be maintainable against a bill and hence, a notice of recovery issued by the respondent-Corporation in pursuance to the bill can be challenged by way of a petition under Article 226 of the Constitution of India.
15 The notice impugned in the present petition is issued without giving any opportunity of being heard to the petitioners. The respondent-Corporation has not been able to even assert and/or Page 58 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT prove that the notice as contemplated under Rule 15(1) of the Rules and/or a special notice under Section 15(2) of the Rules has been issued and that the same has been received by the petitioners. The respondent-Corporation was well aware that the GRV fixed for the premises in the same building having same area is much lower still, however, the impugned notice is issued without even observance of principles of natural justice as aforesaid. Hence, the impugned notice dated 16.12.1999 of recovery deserves to be quashed and set aside and is hereby quashed and set aside. The respondent-Corporation shall give an opportunity of being heard to the petitioners before making any recovery, if any. The respondent- Corporation after hearing the petitioners shall take appropriate decision in accordance with law. The respondent-Corporation is further directed to refund the excess amount of tax, if any, collected from the petitioners."
12. In case of P.T. Dilip v. Surat Municipal Corporation (supra), a Single Judge of this Court has held as under:
"10. The first contention on the principles of natural justice deserves consideration. There is no dispute on the point that earlier the assessment of the property in question was made for tax of Rs. 22,802.71 ps for the period 1994-95, i.e. upto 31-3-1995 and, thereafter, it is sought to be revised by the impugned assessment of the property in question for Rs. 16,52,646/-Page 59 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT
possibly on account of agreement and use by petitioner No. 1. The petitioners themselves have also admitted that the special notice dated 15-9-95 was served upon the second petitioner for assessment of rateable value of the property at Rs. 1,88,80,000/-. It appears that the petitioners have submitted objections dated 18-9-95 in response to the aforesaid special notice. However, thereafter, the case of the petitioners is that no decision is communicated to them whereas the case of the respondents is that the objections are deemed as rejected and the bill dated 22-9-95 was issued for assessment of tax at Rs. 16,52,646.58ps on the basis of rateable value of Rs. 1,88,80,000/-. The respondents have not produced any decision for rejecting the objections and confirming the amendment made in the assessment. Therefore, in the absence of any documentary proof produced on behalf of the respondents it cannot finally concluded that the decision is taken by the Commissioner. Further, the respondents have not produced any material on record to show that opportunity of hearing was given to the petitioners and in spite of the same they have not availed the opportunity or the order has been passed after giving opportunity of hearing. In view of the provisions of Rule 20 of the Rules provided under chapter VIII of the Bombay Provincial Municipal Corporation Act, 1949, it appears that for the amendment in the assessment book, a special notice in the manner as provided under sub-rule (2) of Rule 15 is required to be given which was given in the present case. However, the procedure as laid down under Rules 16, 17 and 18 is also required to be followed while Page 60 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT making any amendment in the assessment book as provided under sub-rule (2) of Rule 20 of the aforesaid Rules. Rule 16 provides for time and manner of filing complaints against valuation which in the present case was submitted by way of objections by the petitioners. Rule 17 provides for notice to complainants of day fixed for investigating their complainants. Rule 18 provides for hearing of complaints and disposal of complaints. It appears that in the present case there is no authenticated material produced on behalf of respondent-Corporation for compliance of Rule 17 or, in any case, Rule 18. It is true that bill dated 22-9-95 has been issued for recovery of a sum of Rs. 16,56,646.58ps. However, merely because the bill is issued I cannot accept the contention raised by Mr. Desai for the respondent-Corporation that it is deemed that the objections are heard and decided and deemed that the objections are heard and decided and deemed as rejected. Normally, there may be a presumption, but when a challenge has been made, it is obligatory on the part of the Corporation to prove by authenticated material for compliance of Rules 17 and 18 of the aforesaid Rules and in the absence of the material produced on record I cannot accept the contention of Mr. Desai that there is due compliance and objections are deemed as rejected. In that view of the matter, it appears that there is breach of principles of natural justice and also noncompliance of mandatory procedure as required under Rule 18 of the Rules of hearing complaints and disposal of complaints. Mr. Mehta is right in contending that the decision or action of assessment of bill is in breach of Page 61 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT principles of natural justice.
11. Normally, when the decision is taken by the authorities either by not following the mandatory procedure or in breach of principles of natural justice, the court while quashing the decision of the authority either decide of its own if sufficient material is available on record or will leave the matter to the authority to follow the procedure of observance of principles of natural justice or mandatory procedure required under law and will further leave the authority to pass appropriate orders thereafter. In the present case there is no material produced on record either by the petitioner to support that the property tax could be only Rs. 22,802.71ps. nor the respondents have produced sufficient material to show that the property tax could be of Rs. 16,52,646.58.ps. What could be the rateable value of the property is the essentially question of fact for which various relevant circumstances including the situation and location of property, use of the property, the value of nearby property, etc. are required to be taken into consideration. Mr. Desai is right in contending that this Court while exercising the power under Article 226 of the Constitution would normally not undertake the exercise of fact-finding inquiry but even if this Court has to undertake the exercise of fact-finding inquiry in the present case, then also, in my view, neither the petitioner nor the respondents have produced sufficient material to arrive at a final conclusion on the same.Page 62 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT
12. In normal circumstances, when the complaint is disposed of there is a statutory alternative remedy available under Section 406 of the Act of preferring appeal before the judge authorised for such purpose. In the proceedings of appeal, there can be full-fledged inquiry and, thereafter the final decision can be arrive at for confirming or modifying the rateable value assessed by the Commissioner. It is true that the appeal is not preferred as required under Section 406 of the Act before the appropriate forum. However, Mr. Mehta is right in contending that in view of Section 406 (2) appeal shall not be entertained unless his complaint (which is known as objections) has been disposed of by the authority concerned. As observed earlier, since no authenticated material is produced on behalf of Corporation regarding the disposal of complaint and, in any case, since the mandatory procedure as required of hearing is not followed, in my view, the petition cannot be thrown away on the ground that there was alternative statutory remedy available and the same is not exhausted. At the same time, on account of nonavailability of sufficient material on record, it is not possible for this Court to undertake the exercise of fact-finding inquiry either confirming, or upsetting or modifying the value of the property made by the Corporation.
13. The question as to whether it is mandatory for the Corporation to complete the process of assessment within an outer limit or not, in my view, is not required to decided at this stage since Mr. Mehta has fairly Page 63 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT submitted that in view of the later judgment in the matter of Municipal Corporation of Delhi (supra) decision can be taken subsequently. The petitioner has not produced sufficient material on record to show that the Appellate Officer has modified the assessment for the year 1995-96 from Rs. 16,52,646.58ps. to Rs. 1,68,542.52ps. The aforesaid stand appears to be self- contradictory inasmuch as on one hand it is contended before this Court that no decision for disposal of complaint is communicated and, therefore, appeal could not have been preferred whereas on the other hand the contention is that the Appellate Officer has reduced the assessment. Further, had the Appellate Officer reduced the assessment even pending the objections, the petitioner would not have deposited the amount of Rs. 16,58,646.58ps. with interest in the Corporation and, therefore, it cannot be said that the Appellate Officer has reduced the assessment from 16,52,646.58ps to Rs. 1,68,542.52ps. As observed earlier, the payment was made pending the petition to avoid further coercive action, hence, it would hardly by a valid defence of the Corporation that the amount is utilised and, therefore, the same cannot be refunded.
14. In view of the above discussion, I am of the view that the following directions would meet with the ends of justice :
(i) The Commissioner shall give opportunity of hearing to the petitioners on the basis of objections filed by them on 18-9-95 (copy at Page 64 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT Annexure "D" to the petition) and the petitioners will be at liberty to produce necessary material to object the assessment made of the property in question by the Corporation for the year 1995-96.
(ii) The aforesaid exercise shall be completed within a period of 2 months from the date of receipt of writ of this Court.
(iii) The Commissioner shall render the decision of finalising the complaint after taking into consideration the objections and submissions made by the petitioners within a period of one month thereafter.
(iv) The Commissioner shall also issue a fresh bill on the basis of such decision and if the Commissioner takes the view to reduce the amount of tax, then the refund shall be permitted by the Commissioner of balance amount from the amount which is already deposited by the petitioner pending the objections and the refund shall be disbursed to the petitioner within a period of one month thereafter."
13. In the case of Municipal Corporation of the City of Ahmedabad v. Oriental Fire & General Insurance Co. Ltd. (supra), a Division Bench of this Court after examining the scheme of the Act and more particularly Rule 15(2) has held as under:
Page 65 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT"59. The Scheme of the Act and the Rules clearly is that liability for payment of property tax is on the person primarily liable. This is clearly provided by Section 139, read with Rule 8. In order to find out who is the person primarily liable, information may be sought from the owner or occupier. The person primarily liable under Section; 139(1)
(b) is the lessor or the superior lessor. This liability, however, shifts to the occupier at the stage of assessment, and before the raising of the bill only where the provisions of Rule 13(2) are-attracted. If true information with regard to the name of the person, who is primarily liable, is not given by the person in occupation of the premises, then sub-rule (2) of Rule 12 makes the occupier himself to be liable for all property taxes leviable.
Rule 15(2), which follows Rule 12, when it refers to special notice being given to the occupier, can have reference to a case, where Rule 12(2) is applicable and the name of the person primarily liable is not known. Special notice under Section 15(2) will also have to be given to a tenant where he, under Section 139(2) of the BPMC Act, and not the owner, is liable to pay the tax by virtue of his being the tenant of the land on which premises are constructed by him. There is no third situation where a special notice has to be given to tenant.
60. The Rules cannot travel beyond the scope of the Act. The liability to pay property tax, according to Section 139(1) in case of tenanted premises, is on the lessor. It is the name of the person, who is primarily liable, which Page 66 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT is to be entered in the assessment book, as provided by Rule 9(c). The Act, in contradistinction to the Rules, contemplates realisation of property tax from the tenant under Section 140(1) in a case only after bill has been submitted to the lessor and the same remains unpaid. The stage of Rule 15(2) is prior in point of time to the raising of the bill. Under the Act, the liability to pay property tax is fastened on the occupier or the tenant only under the provisions of Section
140. The demand for property tax can be made only after the assessment book has been finalized and a bill raised. The assessment book is finalised only when provisions of the Rules, including Rule 15, have been complied with and complaints received and determined under Rule 18. Therefore, interpreting Rule 15(2), in the light of the provisions of the Act. the inference can only be that the Rules require only one assessment to be made on the person, who is primarily liable and not on any one else. Notice under Rule 15(2) to an occupier, and not to an owner, is, therefore, contemplated only when the occupier does not inform about the name of the owner, thereby attracting the provisions of Rule 12(2), which, by a fiction, makes him the person liable till the requisite information is obtained or where provisions of Section 139(2) are applicable.
61. It was also submitted that special notice under Rule 15(2) must be given both to the owner and occupier. It was contended that even if the liability to pay the tax is of the owner, by virtue of Section 139 of the Act, nevertheless, Page 67 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT in the event of the rent having been fixed as being inclusive of taxes, then, if a special notice is served on the occupier-tenant, the landlord, for no fault of his, would be punished and penalized if the tenant does not inform the owner about the service of such a notice or he himself does not take any action in pursuance of such notice. Therefore, it is just and expedient to read the conjunction 'or' of Rule 15(2) as 'and'. We see no substance in this submission. The Act provides that the person primarily liable is the lessor, vide Section 139. Provisions of Rule 15(2) come into play during the course of assessment. The assessment is to be made in respect of the premises and, obviously, the person concerned would be the owner. In this background, when duty is cast to serve a notice under Rule 15(2), on owner or occupier, the implication clearly is that, normally, special notice will be issued to the owner. It is only where the provisions of Rule 12(2) come into play and the occupier becomes liable that a notice under Rule 15(2) would be required to be issued to him.
62. The Act and the Rules do not contemplate two notices in respect of the same premises for a single official year being issued to two different persons. If the contention of Mr. Modi is correct, the effect would be that for a single official year, one notice will have to be issued to the occupier and another notice to the tenant. This may, then, result in conflicting situations arising. Supposing the owner does not file any objections and accepts the proposed assessment, can the tenant file Page 68 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT a complaint and oppose the same. The reverse situation would be where the tenant accepts the proposed rateable value, but the owner objects. In each of such cases, a very anomalous situation will result when no objections are filed pursuant to one notice, which is issued under Rule 15(2) and the assessment would become final, but in respect of the same premises, if the other person, viz., either the owner or the tenant, files complaints, then the proposed assessment would not be final. The conjunction 'or' in Rule 15(2) can, under no circumstances, in our opinion, be regarded as 'and'.
63. It was further submitted that when the property is newly constructed or the rateable value is to be increased, then issuance of a notice under Rule 15(2) is mandatory. Such a notice in writing is to be issued in addition to the public notice given under Rule 13(1). It was also submitted that the use of the word 'shall' in Rule 15(2) makes the issuance of such a notice mandatory and if the same is not given, any assessment made would be null and void.
64. The requirement of giving a notice under Rule 15(2) is clearly in consonance with the principles of natural justice. The Rules contemplate that once entries have been entered in the assessment book, then they can be adopted in subsequent years and that a new assessment book must be made once every four years. The advertisement, contemplated by Rule 13, is only to the effect that the assessment book is ready and that it can be inspected at a place Page 69 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT to be notified therein. In case of a property newly constructed or where the rateable value is to be enhanced, such public notice under Rule 13 would give no indication regarding the entries made. The requirement of Rule 15(2) of giving a special notice is only to make the person concerned aware of the fact that the premises are going to be entered in the assessment book for the first time or the rateable value is liable to be changed.
65. What will be the effect, if a special notice, as contemplated by Rule 15(2), is not issued ?
66. Reading of Rule 15(2) shows that giving of special notice is mandatory. The use of the word 'shall' in Rule 15(2) clearly indicates that there is an obligation which is cast on the authorities concerned to issue a notice in writing notwithstanding the fact that a general notice may have been published under Rule 13. A notice under Rule 13, published in the newspaper, would not indicate the properties, which are newly added in the assessment book or the changes with regard to the rateable value, which have been made. The public notice under Rule 13 would merely state that the entries in the assessment book have been completed and the same is open for inspection. In the case of new properties, where rateable value has been increased, special notice must be given under Rule 15(2). As we have already observed, the requirement of giving a special notice under Rule 15(2) incorporates one of the cardinal principles of natural justice. The owner Page 70 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT is required to be put to notice as to what action is contemplated by the Corporation with regard to the fixation of rateable value. If no such notice is given, then the result, which must, normally, follow is that the said assessment will have to be quashed. The Small Causes Court, once it is satisfied that a special notice, as required under Rule 15(2), has not been given, would, normally, set aside the assessment. We are saying 'normally' because, one situation may arise, in which case, even if notice under Rule 15(2) has not been given, the Small Causes Court ought not to set aside the assessment. Such a situation will arise where notice under Rule 15(2) is waived. The principle of waiver, in such cases, is that if certain requirements or conditions are provided by a statute, in the interest of a particular person, then the requirements, or conditions, even if mandatory, may be waived by that person, if no public interest is involved, and in such a case, the act done will be valid even if the requirement or condition has not been performed (See Dhirendra Nath Gorai and Others v. Sudhir Chandra Ghosh and Others, AIR 1964 SC 1300, at page 1304, Indian Electric Works Ltd. v. James Mantosh & Another, AIR 1971 SC 2213, Suprintendent of Taxes, Dhubri and Others v. Onkarmal Nathmal Trust and Others, AIR 1975 SC 2065.)
67. Where, therefore, an assessee chooses to file a complaint against the proposal to fix or increase the rateable value, even without the issuance of a valid special notice under Rule 15(2), the principle of waiver would apply. The Page 71 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT requirement of issuing a notice under Rule 15(2) is to give an opportunity, of filing a complaint, to the assessee. If a complaint is filed then the purpose for which the notice was to be issued, is fulfilled. In such a case, even if no notice is issued or the notice, which is issued, suffers from any defect, the principle of waiver would apply and an assessee, in appeal before the Small Causes Court, or even thereafter, cannot be allowed to contend that non compliance with the provisions of Rule 15(2) must result in the assessment being regarded as a nullity. In those appeals, therefore, where complaints were filed under Rule 16 and the same were disposed of under Rule 18, a contention that no notice under Rule 15(2) was not served cannot be raised.
68. But, where the principle of waiver does not apply and a notice under Rule 15(2) is not issued and an assessment is made, then after coming to the conclusion that the assessment is a nullity, can the Small Causes Court quash the assessment simpliciter or does it have a duty or jurisdiction to take further action in the matter.
69. The provisions of Rule 20 clearly show that the power of the Commissioner to make changes in the entry can be exercised only during the official year itself. Once this official year is over, the Commissioner will have no jurisdiction to make any alteration. In Anant Mills Co. Ltd. v. Municipal Corporation, Ahmedabad, 1993(2) G.L.H. 897, it was held by a Division Bench of this Court, after examining the scheme Page 72 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT of the Act, that the assessment must be completed before the close of the relevant official year and once the official year has expired, the Commissioner cannot assess and levy property tax and, therefore, the Court also cannot issue direction to the Commissioner to do something which was not permissible under the Act. The quashing of the assessment would mean that the Commissioner would not be in a position to reassess and levy property taxes and the taxes for those official years would be totally lost to the Corporation. This being the position, the appellate court cannot and should not set aside the assessment and remand the case for de novo assessment by the Commissioner. Any remand would, obviously, serve no useful purpose.
70. In view of the aforesaid position in law, it was submitted by the learned Counsels for the Corporation that in such cases, the Chief Judge or the Judges of the Small Causes Court themselves should determine the rateable value in accordance with law. The Counsel for the respondents, however, contended that if the assessment is a nullity, because of non-compliance with the provisions of Rule 15(2), or otherwise, then the Small Causes Court has no option but to quash the assessment, in toto.
86. To sum up, therefore, the legal position is as follows :
1. In the case of self-occupied premises, the rateable value has to Page 73 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT be arrived at by applying the principles enunciated by the Supreme Court in Devan Daulat Rai Kapoor and Dr. Balbir Singh's cases and the decision of this Court in the case of Rajnikant Jeshingbhai Sheth & Ors.;
2. In the case of tenanted premises for the period prior to 1-4-1984, applying the principles of Devan Daulat Rai Kapoor and Dr. Balbir Singh's cases, the first rent fixed is the standard rent and if no order under Section 11 of the Rent Act is passed, then that rent will be the annual letting value;
3. In the case of tenanted premises, after 1st April 1984, in view of proviso (aa) to Section 2(lA)(ii), the contractual rent will be the annual rent;
4. Special notice under Rule 15(2) is mandatory and if it is not given, the assessment will be set aside, but the Small Causes Court should itself decide as to what should be the rateable value after recording necessary evidence;
5. An appeal against the assessment can only be filed by a person, who has filed or could have filed a complaint against the proposed rateable value, i.e. appeal can only be filed by the owner;
6. The tenant can file an appeal Page 74 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT only if notice is issued to him under Section 140(1) or he is a tenant of land to whom the provisions of Section 139(2) applies. Tenants of constructed properties cannot file an appeal challenging the rateable value fixed;
7. An appeal cannot be filed against a bill, for the purpose of challenging the rateable value if complaint against the proposed fixation of rateable value had not been filed though opportunity been given;
And
8. Powers of the Municipal Commissioner can be delegated to his subordinate Officers under Section 49 and Section 69 of the BPMC Act."
14. In view of the afore-discussed settled legal position, the reliance placed by the learned advocate for the respondent upon the decision of the Assistant General Manager, Central Bank of India (supra) is of no assistance to the respondent AMC, as the said decision is in relation to the provision pertaining to the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 vis-a-vis the provisions of the BPMC Act with regard to the Page 75 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT appeals filed by the tenants challenging the assessment of the property tax where as in the facts of the present case, the issues is whether the notice under Rule 15(2) of Chapter-VIII is a mandatory requirement or not. Therefore, in view of the above dictum of law, it is now well settled legal position that notice under Rule 15(2) of Chapter-VIII is a mandatory requirement and the impugned demand notice for recovery of tax bills issued by the AMC cannot be held to be legal and valid and is therefore liable to be quashed and set aside.
15. In view of the foregoing reasons, the petition succeeds and is hereby allowed. The impugned notice of demand being issued without giving any opportunity of being heard to the petitioner is held to be not tenable in law. As the complaint filed by the petitioner under Rule- 16 of the Rules is pending for adjudication, pursuant to the notice dated 7th March, 2019 issued under Rule 15(2) of Chapter-VIII of the Rules, the impugned demand notice is hereby quashed and set aside. The respondent AMC is directed to adjudicate the complaint filed by the petitioner under Rule-16 as per the prescribed procedure under Rule-18 within a Page 76 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021 C/SCA/6018/2019 CAV JUDGMENT period of three months from the date of the receipt of the writ of this order. Rule is made absolute to the aforesaid extent. No order as to costs.
(J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) Pradhyuman Page 77 of 77 Downloaded on : Mon Feb 15 04:00:14 IST 2021