Delhi District Court
Arjun Khosla vs New Delhi Municipal Council on 10 October, 2023
IN THE COURT OF SH. SUDHANSHU KAUSHIK :
ADDITIONAL DISTRICT JUDGE-02 & WAQF TRIBUNAL :
PATIALA HOUSE COURTS : NEW DELHI
(1) HTA NO.04/2017 (CNR NO.DLND01-001961-2017)
(2) HTA NO.15/2017 (CNR NO.DLND01-003865-2017)
IN THE MATTER OF :-
ARJUN KHOSLA
S/O LATE SH. R.K.KHOSLA,
R/O 167, GOLF LINKS,
NEW DELHI
.....APPELLANT
VERSUS
NEW DELHI MUNICIPAL COUNCIL
THROUGH ITS CHAIRMAN
PALIKA KENDRA, SANSAD MARG,
NEW DELHI
.....RESPONDENT
DATE OF INSTITUTION (HTA NO.04/2017) : 01.02.2017
DATE OF INSTITUTION (HTA NO.15/2017) : 21.03.2017
DATE OF CONCLUSION OF FINAL ARGUMENT : 10.10.2023
DATE OF PRONOUNCEMENT OF ORDER : 10.10.2023
JUDGMENT
1. These are two separate appeals filed under Section 115 of the New Delhi Municipal Council Act, 1994 (hereinafter referred to as 'the Act') against an order dated 10.01.2017 passed by Deputy Director (Tax)/Assessing Authority, NDMC whereby the rateable value of House No.167, Golf Links, New Delhi (hereinafter referred to as 'the property') was revised. By means of impugned order, respondent revised the rateable value of the property for previous years. HTA 04/2017 & HTA 15/2017 :
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2. The appeal HTA No.04/2017 titled as "Arjun Khosla Vs NDMC" has been filed against the revision of the rateable value of the property to Rs.20,38,100/- with effect from 30.10.2000 whereas appeal HTA No.15/2017 bearing the same title has been filed against the revision of rateable value to Rs.20,51,900/- with effect from 24.05.2007. Both the appeals shall be disposed off by this common order as the parties are same and similar issues are involved. The appeal bearing HTA No.4/2017 is treated as the main case.
Brief facts as disclosed in the appeal
3. Appellant Arjun Khosla claims himself to be the owner of the property having purchased the same from the previous owner in the year 2003. After purchasing the property, appellant filed an application with the respondent seeking additions and alterations in the property. The same was approved by the Chairperson of respondent and completion plans were sanctioned on 24.05.2007. The property is stated to be self occupied and it is being used by the appellant for residential purpose.
4. It has been disclosed that respondent issued a notice dated 22.12.2000 under Section 72 of NDMC Act proposing to revise the rateable value of the property from Rs. 31,084/- less 10% to Rs.32,02,080/- less 10% with effect from 01.04.2000 on comparable rent basis as per bye-law No.12 of NDMC House Tax Bye-Laws, 1962 and a notice in this regard was received by the previous owner. However, before the rateable value HTA 04/2017 & HTA 15/2017 :
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could be finalized, respondent introduced modified unit area method of tax assessment on the basis of provisions of NDMC (Determination of Annual Rent) Bye-Laws, 2009 which were notified on 24.02.2009. Appellant carried out the self assessment of property for the year 2009- 10 to 2012-13 at Rs.4,56,400, for the year 2013-14 to 2015-16 at Rs.5,47,400/- and for the year 2016-17 at Rs.6,56,900/- under the bye-
law 4 of Annual Rent Bye-Laws 2009 and paid the requisite tax.
5. It has been stated that subsequently, respondent passed the impugned order on 10.01.2017 on the basis of notices dated 28.03.2002 and 08.03.2008. In terms of the impugned order, respondent enhanced the rateable value of the property as under:
i. Rs.20,38,100/- w.e.f 31.10.2000
ii. Rs.20,51,900/- w.e.f 24.05.2007
iii. Rs.5,52,000/- w.e.f 01.04.2013
iv. Rs.6,62,500/- w.e.f 01.04.2016
6. After passing of the impugned order, appellant filed an application with the respondent on 02.02.2017 for rectification of the rateable value of the property w.e.f 24.05.2007 but it did not yield result. Finally, the present appeals were filed against the impugned order. The appeal bearing HTA No.04/2017 was filed on 16.02.2017 while the appeal bearing HTA No.15/2017 was filed on 21.03.2017. Appellant has mentioned in the appeal that he is not disputing the rateable value of Rs.5,52,000/- w.e.f 01.04.2013 and Rs.6,62,500/- w.e.f 01.04.2016. HTA 04/2017 & HTA 15/2017 :
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Grounds of Appeal
7. The impugned order has been challenged on the following grounds; (a) That the order is a non-speaking order and the same has been passed mechanically; (b) That the order has been passed arbitrarily and respondent has ignored the provisions of law while carrying out the assessment; (c) That the assessing authority ignored crucial facts while passing the order; (d) That the assessing authority did not take into account the fact that there was inordinate delay in finalizing the assessment; (e) That the assessing authority wrongfully revised the rateable value on comparable rent basis under bye-law 12 of NDMC House Tax Bye-Laws 1962; and (f) That the Assessing Officer failed to take into account the decision of the Supreme Court of India in the matter of "State Trading Corporation Vs NDMC" AIR 2016 SCC 1269 wherein it has been held that it is impermissible to refer to the bye-laws framed under the Punjab Municipal Act, 1911 in view of specific provisions under Section 416(2) of NDMC Act.
Arguments
8. Counsel for the appellant supported the grounds taken in the appeal. He contended that the impugned order is a non-speaking order and the same has been passed in a mechanical manner. He mentioned that respondent passed the impugned order without considering the written objections filed by the appellant. He has argued that no material was available with HTA 04/2017 & HTA 15/2017 :
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the Assessing Officer to assess the reasonable expected rent of the property. He argued that respondent has arbitrarily revised the rateable value of the property and the same is not permissible. He has mentioned that the assessment order was passed hurriedly and the appellant was not provided an effective personal hearing. He has contended that there is an inordinate delay in finalizing the assessment and the impugned order cannot be sustained. He has mentioned that there is a substantial time gap between the initial notice and the finalization of the assessment.
9. On the other hand, counsel for respondent has questioned the maintainability of the appeal. He has contended that the appeal is not maintainable as the same was not filed within the period prescribed under Section 116 of the Act. He has mentioned that the impugned order was passed according to the provisions contained under the Act and all the relevant factors were taken into consideration before passing the order. Counsel has submitted that due notice under Section 72 of the Act was issued to the appellant and there is no infirmity in the impugned order. He has pointed out that appellant was granted adequate opportunity to file objections and personal hearing was also granted. He has mentioned that the written objections filed by the appellant were taken into consideration at the time of passing of impugned order. He has prayed that no period of limitation for finalizing the assessment has been prescribed under the Act. He has argued that there is an inordinate HTA 04/2017 & HTA 15/2017 :
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delay in filing the appeal and even otherwise, there is no merit in the contentions raised by the appellant. He has prayed for dismissal of the appeal.
Finding
10. I have perused the record in the light of respective arguments.
11. In order to adjudicate the present controversy, it would be appropriate to refer to the relevant provisions of the Act.
12. Section 60 of the Act is the charging section, which authorizes the NDMC to levy various type of taxes including property tax. Section 60(3) of the Act states that the property tax shall be levied, assessed and collected in accordance with the provisions of the Act and the bye-laws made thereunder. Section 61 of the Act prescribes the rates of the property tax.
13. Section 61 (1) of the Act provides that property tax shall be levied on lands and buildings in New Delhi and shall consist of not less than ten and not more than thirty per cent of the rateable value of lands and buildings. The proviso to Section 61(1) of the Act states that the NDMC may, while fixing the rate at which the property tax shall be levied during any year, determine the rate leviable in respect of lands and buildings or portions of lands and buildings in which any particular class of trade or business is carried on shall be higher than the rate determined in respect of other lands and buildings or portion of other lands and HTA 04/2017 & HTA 15/2017 :
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buildings by an amount not exceeding one-half of the rate so fixed.
14. The expression rateable value is defined under Section 2 (42) of the Act to mean the value of any land or building fixed in accordance with the provisions of this Act and the Bye-laws made thereunder for the purpose of assessment to property taxes.
15. Section 62 of the Act relates to the 'premises in respect of which tax is to be levied'. Section 62 (1) of the Act lists out such lands or buildings or portions thereof which will not be subject to levy of property tax. This includes lands exclusively occupied and used for public worship or by a society or body for a charitable purpose. It also includes lands and buildings vested in the NDMC in respect of which the tax, if levied, would be leviable primarily on the NDMC and agricultural lands and buildings (other than dwelling houses). Section 62 (3) of the Act clarifies that if a portion of the land or building is exempted from property tax by reason of the exclusive use or occupied for public worship or charitable purpose then such portion shall be deemed to be a separate property for the purpose of municipal taxation.
16. Section 63 of the Act sets out the method of determination of the rateable value of lands and buildings assessable to property tax. Section 63 (1) of the Act provides that the rateable value of any land or building assessable to property tax shall be the annual rent at which such land or HTA 04/2017 & HTA 15/2017 :
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building might reasonably be expected to let from year to year less a sum equal to 10% of the said annual rent which shall be in lieu of all allowances for cost of repairs and insurance, and other expenses necessary to maintain the land or building in a state to command that rent. The proviso to Section 63 (1) of the Act states that in respect of any land or building the standard rent of which has been fixed under the Delhi Rent Control Act, 1958, the rateable value thereof shall not exceed the annual amount of the standard rent so fixed.
17. Section 63(2) of the Act states that the rateable value of any land which is not built upon but is capable of being built upon and any land on which a building is in process of erection shall be fixed at five per cent of estimated capital value of such land. Under Section 63(3) the Chairperson of the NDMC can by public notice, with the approval of the NDMC, specify a plant and machinery which will be deemed to form part of such land and building for the purposes of determination of rateable value. Section 65(1) of the Act clarifies that lands and buildings being properties of the Union shall be exempt from the property tax specified in Section 61 of the Act.
18. Section 66 of the Act speaks of the incidence of the property tax. It is primarily on the lessor if a building or land is given on lease. It is on the superior lessor if the land or building is given on a sub-lease. If it is not HTA 04/2017 & HTA 15/2017 :Arjun Khosla Vs New Delhi Municipal Council (NDMC) Page 8 of 24
leased then on the person on whom the right to let the same vests.
19. Section 67 of the Act talks of apportionment of liability of the property tax when the premises are let or sub-let. Section 68 of the Act clarifies who will be primarily liable for the property tax due in respect of any land or building and in the event of default of the person liable to pay such property-tax as specified in Section 66 of the Act. It is clarified that this would be the occupier of such land or building.
20. Section 70 of the Act deals with the Assessment List. This is a list of all lands and buildings which contains such particulars with respect to each land and building as may be prescribed by the Bye-laws. When such Assessment List is prepared, the Chairperson under Section 70 (2) of the Act gives a public notice thereof and every person claiming to be an owner, lessor or occupier of a land or building included in the List shall be at liberty to inspect the List and take extracts therefrom free of charge. Under Section 70 (3) of the Act, the Chairperson is to give a public notice of a date not less than one month thereafter when he would proceed to consider the rateable value of the lands and buildings entered in the Assessment List. He is also to give the written notice where the rateable value is proposed to be increased. Section 70 (4) of the Act provides for objections to be filed to the Assessment List in writing to the Chairperson. Section 70 (5) of the Act talks of an objection being notified into and investigated, and the person making them shall be HTA 04/2017 & HTA 15/2017 :Arjun Khosla Vs New Delhi Municipal Council (NDMC) Page 9 of 24
allowed an opportunity of being heard either in person or by authorized agent before the final Assessment List is prepared under Section 70 (6) of the Act. Section 72 of the Act provides for amendment of the Assessment List and Section 73 for preparation of new Assessment List.
21. The question of the assessment of house-tax by NDMC was considered in detail by the Hon'ble Supreme Court in the matter of "New Delhi Municipal Council Vs Association of concerned Citizen of New Delhi & Ors." (Civil Appeal No.903/2019, decided on 22.01.2019) wherein it was held that the annual realizable rent shall be the basis for calculating the rateable value and the value of holding cannot be taken into consideration. In this matter, the Apex Court referred to various previous decisions on the matter and held that the realizable rent of a property is the only criteria for determining the rateable value of the property. The court cited with approval the decision in the matter of "The Corporation of Calcutta Vs. Smt. Padma Debi and Ors." 1962 (3) SCR 49 wherein a provision similar to Section 63(1) of the Act was present in Calcutta Municipal Act, 1923 and it was held that the criteria for assessment should be rent of the property realizable by the landlord and not the value of the property. It was observed in this matter; "We shall first look at the provisions of the section to ascertain the meaning: The crucial words are "gross annual rent at which the land or building might at the time of assessment reasonably be expected to let from year to year". The HTA 04/2017 & HTA 15/2017 :Arjun Khosla Vs New Delhi Municipal Council (NDMC) Page 10 of 24
dictionary meaning of the words "to let", is "'grant use of for rent or hire". It implies that the rent, which the landlord might realize if the house was let, is the basis for fixing the annual value of the building.
The criterion, therefore, is the rent realizable by the landlord and not the value of the holding in the hands of the tenant.
22. It was observed in the matter of "Government Servant Cooperative House Building Society Limited and Others Vs Union of India and Ors." 16 (1998) 6 SCC 381:
"80. Therefore, the annual rent actually received by the landlord, in the absence of any special circumstances, would be a good guide to decide the rent which the landlord might reasonably expect to receive from a hypothetical tenant. Since the premises in the present case are not controlled by any rent control legislation, the annual rent received by the landlord is what a willing lessee, uninfluenced by other circumstances, would pay to a willing lessor. Hence, actual annual rent, in these circumstances, can be taken as the annual rateable value of the property for the assessment of property tax. The municipal corporation is, therefore, entitled to revise the rateable value of the properties which have been freed from rent control on the basis of annual rent actually received unless the owner satisfies the municipal corporation that there are other considerations which have affected the quantum of rent.
81) In case there is a proof and/or material to find out that the reasonable rent could have been more than at which it is actually let out, the actual rent receipt can be discarded by adopting the expected rent which, on the basis of material, can be said to be reasonable. In those cases where the property is self-occupied or is vacant and not let out, it can be gathered from the rent at which a comparable property is let out. However, in such a case there would be two situations. Going by the dicta laid down in Dewan Daulat HTA 04/2017 & HTA 15/2017 :
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Rai Kapoor and other cases, the reasonable rent would be the standard rent which can be determined under the provisions of Delhi Rent Control Act. However, this principle would be applicable only in respect of those properties where Delhi Rent Control Act applies. In other cases, the yardstick would be the letting value of comparable properties, i.e., the rent at which comparable properties are let out. However, such criteria of fixation of standard rent has lost its relevance after the judgment of the Delhi High Court in Raghunandan Saran Ashok Saran (HUF) vide which Sections 4,6 and 19 of the Delhi Rent Control Act which deal with fixation of standard rent, were declared as ultra vires of the Constitution of India. The aforesaid decision has been affirmed by this Court in State Trading Corporation of India Ltd. case.
82) Be as it may, in the context of the issue at hand, we emphasize that it is the annual letting value fixed in the aforesaid manner which can be the annual rent and not the value of the property in question. The expression annual rent is to be read in contradistinction to annual value. Two concepts are altogether different. In as much as the latter expression relates to annual value of the property which may be based on parameters different from fixing the annual rent of the property."
23. The aforesaid judgments give a clear indication that annual rent is to be the one which the landlord might realize if the house was let. The criteria, thus, is the rent realizable by the landlord and not the value of the holding. The test essentially is what rent the premises can lawfully fetch if let out to a hypothetical tenant. NDMC is not free to assess any arbitrary annual value and has to look to and is bound by the rent realizable by the landlord and not the value of holding. No doubt, in case, there is proof or material to find out that the reasonable rent could have been more than at which the property has been actually let out, the HTA 04/2017 & HTA 15/2017 :
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actual rent can be discarded by adopting the expected rent which, on the basis of material, can be said to be reasonable. In such cases, the letting value of comparable property can be taken into account for revising the rateable value.
24. Coming to the facts of the present case. It is evident from the impugned order that the assessing officer has not assessed the rateable value of the property in terms of Section 63 (1) of the Act. Appellant filed objections dated 03.01.2013 before the Assessing Authority mentioning categorically that the property cannot yield rent equivalent to Rs. 2,86,000/- per month in case it is rented out to a single tenant. He mentioned that the proposed revision was exceptionally high and arbitrary. He also raised objection about the delay in finalizing the assessment by mentioning that the notices have become time barred. None of the objections was dealt with by the Assessing Officer. The impugned order shows that the Assessing Officer simply recorded that he had gone through the objections and the same have not been found sustainable. There is nothing in the impugned order that may demonstrate as to on what basis the objections were not found to be sustainable. This substantiate the argument of the appellant that the order is a non speaking order, in so far as the aspect of rejection of objections is concerned. The assessing authority was under an obligation to consider the objections raised by the appellants but he failed to do so. HTA 04/2017 & HTA 15/2017 :
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He ignored the objections and passed the impugned order. The impugned order cannot be sustained on this ground.
25. Coming to the criteria adopted by the assessing authority for revising the rateable value. The Supreme Court of India has held in the matter of "State Trading Corporation India Vs. NDMC" 2016 AIR (SC) 1269 that only basis of fixation of rateable value is the annual rent at which the land and building might reasonably be expected to let from year to year, subject to deductions provided under the Act. It further held that for calculating the rateable value of a property, it is impermissible to refer to the bye-laws framed under the Punjab Municipal Act, 1911. The relevant paras of the judgment are as under :-
"4. In the cases before us there are two categories of buildings 1)self- occupied and 2) out of the leased premises a portion which is self occupied and the rest let out on sub- lease under due permission from the Government of India. In case the premises is sub-let, there is a condition that the lessee should pay to the Government 25% of the gross rent fetched out of the sub-lease.
5. In the impugned judgments, the High Court has taken the view that since there is already a payment of rent by the sub- lessee, there need not be any other exercise for assessment of the reasonable rent. The High Court has based its decision under bye-law 12 of the New Delhi Municipal Committee Byelaws Relating to the Assessment and Collection of House Tax. For the purpose of reference, we may extract the provision of bye-law 12:
"12. The annual value of a building or house which is in the owner's own occupation either for residential purposes or for commercial purposes and the standard rent of which has not so far been fixed by a competent authority may be calculated HTA 04/2017 & HTA 15/2017 :Arjun Khosla Vs New Delhi Municipal Council (NDMC) Page 14 of 24
under section 8(1)(b) on the basis of rents of similar accommodation prevalent in the locality and in the event of the Committee being of the opinion that the same is not feasible, the annual value may be calculated under section 3(1)(c)."
6. However, it is pointed out that the Punjab Municipal Act, 1911 has been repealed and as per Section 416(2) of the NDMC Act what is saved is only the provisions under the bye-laws which are not otherwise inconsistent with the provisions of the NDMC Act. Since there is a provision and procedure under Section 63 the NDMC Act for calculating the annual rent, one need not refer at all to the bye-laws as quoted above since they are apparently inconsistent with the provisions of the NDMC Act. In short, it is impermissible to refer to the bye-laws framed under the Punjab Act in view of specific provisions made under the NDMC Act providing for the levy, assessment and collection of property tax.
7. Therefore, the only basis for fixation of rateable value is the annual rent at which the land or building might reasonably be expected to be let from year to year, subject to the deductions provided under the Act.
8. The basis of the impugned judgments which was wholly based on the bye- laws having been thus knocked down, we have to get back to the provisions under the NDMC Act for the purposes of the fixation of the rateable value which is based on the rent which can be reasonably fetched by letting out the premises.
9..............
10............
11. As for the first category, where the building is self- occupied and where there is no sub-lease, the annual rent will have to be fixed as held by this Court in the case of Dewan Daulat Rai Kapoor (supra) and in the case of India Automobiles Ltd. Vs. Calcutta Municipal Corporation and Another reported in (2002) 3 SCC 388 on the basis what the landlord might reasonably expect to get from a hypothetical tenant. Such fixation has to be made only as per the NDMC Act. It is for the assessing officer to make the fixation in accordance with law. The assessment for the disputed period shall be completed within three months from today." HTA 04/2017 & HTA 15/2017 :
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26. The observations made by the Supreme Court in the matter of State Trading Corporation of India (Supra) were reiterated in the matter of Association of concerned citizens of New Delhi's case (supra). Thus, the only criteria for determining the rateable value of a property is the one laid down under Section 63 of the Act. The impugned order shows that the assessing officer separately assessed the basement, ground floor, first floor and second floor of the properties and did not assess the property as a single unit, although, the entire property was the self occupied property of the appellant. The order does not record the reasons for adopting this approach. The approach and the method of the assessing officer in calculating rateable value of the property runs counters to the mandate of Section 63 (1) of the Act. The impugned order cannot be sustained on this ground.
27. Coming to the other grounds of appeal. One of the main grounds of appeal is that there is an inordinate delay in finalizing the assessment. It is an admitted position that the impugned assessment order dated 10.01.2017 has been passed in respect of notices dated 28.03.2002 and 08.03.2008 issued under Section 72 of the Act. Although, the Act does not specify any period of limitation for finalizing the assessment but this does not mean that respondent is at liberty to sleep over the matter for a period of more than 16 years. It is expected that after issuance of notice, respondent should finalize the assessment within a reasonable period.
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The Division Bench of the High Court of Delhi has observed in the matter of "Ved Marwah & Ors. Vs. New Delhi Municipal Corporation & Ors." 248 (2008) DLT 781 that the proceedings initiated pursuant to Section 72 of the NDMC Act should be concluded in a reasonable period of not more than three years. In the said matter, notices for revising the assessment list were issued over a decade prior to passing of the final orders by the NDMC. The High Court observed that the inordinate delay was unreasonable and quashed the assessment orders. While doing so, the High Court issued the following directions :
"16. In Sunil Rai v. Municipal Corporation of Delhi & Ors. 48 (1992) DLT 621 (DB) after the judgment in Shyam Kishore (supra) a Division Bench of this Court had interpreted a provision identical to Section 116 (b) and held that the proper exercise of discretion by the appellate forum in cases where assessment orders are framed for a number of years, is to direct the assessee to deposit the disputed tax in respect of the base year and then to proceed to hear and decide the appeal in respect to the base year assessment and after deciding the said appeal the decision of the appeal in respect of the base year would automatically govern the assessment for the subsequent years. Adoption of such an approach, in the opinion of this Court, saves the provision of Section 116 of the Act.
17. In view of the above reasoning, it is held the impugned final orders of assessment and the demands issued are clearly unreasonable and void. They are hereby quashed. Consequently, it is held that the NDMC is at liberty to rework the assessments in respect of the properties that are the subject matter of these proceedings, by issuing fresh notices for the periods commencing from 3 years prior to the date on which the final notices were issued, and finalize the assessments within reasonable time. In the event of grievance HTA 04/2017 & HTA 15/2017 :Arjun Khosla Vs New Delhi Municipal Council (NDMC) Page 17 of 24
on the part of the assessee to such fresh assessment orders, it is open to them to approach the appellate tribunal; provided they deposit the amount towards the tax liability for the base year."
28. The High Court of Delhi categorically held in Ved Marwah's case (supra) that there cannot be any unreasonable delay in finalizing the assessment after a notice has been issued under Section 72 of the Act. The High Court relied on various decisions of the Supreme Court of India and observed that the Assessing Officer must finalize the assessment within a reasonable period. It made the following observations;
"Analysis and Conclusions
13. The notices for revising the assessment list in all these cases were issued over a decade prior to the passing of final orders. In one case, it was 16 years; in others, it was 14 years. In two cases, the same property was subject to multiple notices for later periods, without finalization of rateable value, for the previous year. Clearly, the finalization of these cases after inordinate delay of 14 to 16 years was plainly unreasonable. Where such open ended power-like in the present case, in Section 72 was conferred upon a statutory authority, i.e. a sales tax authority official in Punjab, the Supreme Court had outlined the correct approach in State of Punjab & Ors. v. Bhatinda District Co-op Milk P. Union Ltd 2007 (11) SCC 363 with respect to the limitations to exercise of such power. It was held that:
"5. In respect of the assessment for the year ending 31.3.2000, the assessment proceedings were completed relying on the return filed by the appellant on 20.3.2001. Indisputably, in terms of Section 11 of the 1948 Act, a period of three years has been prescribed as a period of limitation as contained under sub-section (3) of Section 11 for completing assessment from the last date for filing of return. Sub-section (6) of Section 11 reads as under :
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"_If upon information which has come into his possession, the Assessing Authority is satisfied that any dealer has been liable to pay tax under this Act in respect of any period but has failed to apply for registration, the Assessing Authority shall, within five years after the expiry of such period, after giving the dealer a reasonable opportunity of being heard, proceed to assess to the best of his judgment, the amount of tax, if any, due from the dealer in respect of such period and all subsequent periods and in case where such dealer has willfully failed to apply for registration, the Assessing Authority may direct that the dealer shall pay by way of penalty, in addition to the amount so assessed, a sum not exceeding one and a half times that amount. Section 21 of the said Act provides for revision. Section 21 of the Act with which we are concerned herein reads as under :
"21. Revision-(1) The Commissioner may of his own motion call for the record of any proceedings which are pending before, or have been disposed of by any authority subordinate to him, for the purpose of satisfying himself as to the legality or propriety of such proceedings or order made therein and may pass such order in relation thereto as he may think fit.
(2) The State Government may by notification confer on any Officer the powers of the Commissioner under sub-section (1) to be exercised subject to such conditions and in respect of such areas as may be specified in the notification.
(3) A Tribunal, on application made to it against an order of the Commissioner under sub-section (1) within ninety days from the date of communication of the order, may call for and examine the record of any such case and pass such orders thereon as it thinks just and proper.
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(4) No order shall be passed under this section which adversely affects any person unless such person has been given a reasonable opportunity of being heard".
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15. Sub-section (1) of Section 11 empowers the Commissioner to extend the period of three years for passing the order of assessment where for reasons are required to be recorded in writing subject, however, to the maximum period of five years. Ordinarily, therefore, a period of three years has been prescribed for completion of the assessment in terms of the provisions of the Act. We may also notice that in cases where an assessment order is to be reviewed, the same should be done within a period of one year.
16. A bare reading of Section 21 of the Act would reveal that although no period of limitation has been prescribed therefor, the same would not mean that the suo-moto power can be exercised at any time.
17. It is trite that if no period of limitation has been prescribed, statutory authority must exercise its jurisdiction within a reasonable period. What, however, shall be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors.
18. Revisional jurisdiction, in our opinion, should ordinarily be exercised within a period of three years having regard to the purport in terms of the said Act. In any event, the same should not exceed the period of five years. The view of the High Court, thus, cannot be said to be unreasonable. Reasonable period, keeping in view the discussions made hereinbefore, must be found out from the statutory scheme. As indicated hereinbefore, maximum period of limitation provided for in sub- section (6) of Section 11 of the Act is five years. HTA 04/2017 & HTA 15/2017 :
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14. Bhatinda (supra) was noticed and followed subsequently in Ram Prakash (supra). In a more recent decision Ram Karan (D) by LRs v. State of Rajasthan 2014 (8) SCC 282, it was held that:
"38. State of Punjab & Ors v Bhatinda District Co-op Milk P. Union Ltd (supra) this Court held that if no period of limitation has been prescribed, statutory authority must exercise its jurisdiction within a reasonable period. However, what shall be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors. In the present case, neither any objection was raised nor was any application filed by vendors for restoration of land in their favour. The suit was filed by the Tehsildar, Viratnagar after more than 31 years. No ground is shown to file such petition after long delay nor it was mentioned as to whether the vendors i.e. original landholders made any application for restoration of land in their favour.
39. In view of the matter, we hold that the suit being filed beyond the reasonable period was fit to be dismissed. The Additional Collector rightly dismissed the suit being barred by limitation."
15. In the present case, the finalization of assessment list or its revision, after over 12 years in all the cases, cannot be countenanced. It is clearly unreasonable and arbitrary and calls for interference."
29. As observed in the preceding paras, the High Court of Delhi held in Ved Marwah's case (supra) that a delay of over 12 years in finalizing the assessment of property tax is arbitrary and the same cannot be countenanced. In the said matter, the High Court quashed the order of the assessing authority on the ground of unreasonable delay. While quashing the order, it granted liberty to NDMC to rework the assessment by issuing fresh notice for the period commencing from three years prior HTA 04/2017 & HTA 15/2017 :
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to the date on which final notices were issued. NDMC was further directed to finalize the assessment within a reasonable time. NDMC challenged the order of the High Court by filing a Special Leave Petition No.25403/2018 titled as "New Delhi Municipal Council Vs. Pyare Lal & Sons Pvt. Ltd." but the same was dismissed by the Supreme Court of India vide order dated 01.08.2023. Resultantly, the findings in Ved Marwah's case (supra) attained finality.
30. Coming back to the present case. In the present matter, there is an inordinate delay in finalizing the assessment. The initial notice under Section 72 of the NDMC Act was issued on 28.03.2002 while the final assessment order was passed on 10.01.2017. There is a time gap of around 16 years between the issuance of notice and the finalization of the assessment. Similarly, there is time gap of around 9 years between the subsequent notice dated 08.03.2008 and the assessment order. Relying on the observations made in Ved Marwah's case (supra), the delay is certainly inordinate and arbitrary. This, in itself, is a sufficient ground for setting aside the impugned order. The impugned order is bad in law.
31. Before parting, I deem it expedient to deal with the argument of the respondent about the delay in filing of the appeals. Respondent has questioned the maintainability of the appeals on the ground of limitation. Counsel for respondent has argued that appeals were filed HTA 04/2017 & HTA 15/2017 :
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beyond the prescribed period of 30 days and no plausible explanation has been tendered for the delay. Record shows that the impugned order was passed on 10.01.2017 and appeals bearing HTA No.04/2017 and HTA No.15/2017 were filed on 16.02.2017 and 21.03.2017 respectively. Section 116 of the Act expressly provides that in case amendment is made under Section 72 of the Act, the appeal needs to be filed within 30 days on which an amendment is finally made. On appreciating the record in the light of the provisions of Section 116 of the Act, it becomes apparent that there is a delay in preferring the appeal. However, I am of the considered opinion that the appeal need not be rejected on this ground. Section 117 of the Act empowers the court to entertain an appeal even after the prescribed period provided appellant satisfies the court that there was sufficient cause for not preferring the appeal within the prescribed period. In the present matter, after passing of the impugned order, appellant filed an application dated 02.02.2017 before the respondent for rectification of the rateable value and thereafter, filed the present appeal. This fact needs to be taken into account while dealing with the argument about the delay in filing the appeal. Record does not indicate as to when the impugned order was communicated to the appellant. I am of the considered opinion that in view of these circumstances, the delay needs to be condoned, more particularly, in view of the fact that the impugned order has been passed in complete HTA 04/2017 & HTA 15/2017 :Arjun Khosla Vs New Delhi Municipal Council (NDMC) Page 23 of 24
disregard of the mandate of the Act and the law laid down by the superior courts. Accordingly, the delay stands condoned.
32. In view of the discussions held in the afore-mentioned paras, the impugned order is liable to be set-aside. The Assessing Officer has not revised the rateable value in accordance with the provisions of Section 63(1) of the Act. The objections filed by the appellant were not dealt with by the Assessing Officer while passing the impugned order. There is an inordinate delay in finalizing the assessment. The result is obvious. Both the appeals stand allowed and the impugned order is set-aside.
33. Copy of the judgment be sent to the respondent.
34. File be consigned to record room.
Announced in the open court on 10.10.2023 (Sudhanshu Kaushik) Addl. District Judge-02 & Waqf Tribunal New Delhi District, Patiala House Courts, New Delhi HTA 04/2017 & HTA 15/2017 :
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