Calcutta High Court (Appellete Side)
Mr. Radhyshyam Bansal vs The Kolkata Municipal Corporation And ... on 14 August, 2018
Author: Sabyasachi Bhattacharyya
Bench: Sabyasachi Bhattacharyya
In the High Court at Calcutta Civil Revisional Jurisdiction Appellate Side The Hon'ble Justice Sabyasachi Bhattacharyya C.O. No. 936 of 2018 Mr. Radhyshyam Bansal Vs. The Kolkata Municipal Corporation and others For the petitioner : Mr. R.N. Chakraborty, Mr. M. Ahmed For the opposite parties : Mr. Aloke Kr. Ghosh, Mr. S.K. Debnath Hearing concluded on : 27.07.2018.
Judgment on : 14.08.2018. Sabyasachi Bhattacharyya, J.:‐
The present revisional application has been preferred by an assessee against an order passed by the Municipal Assessment Tribunal at Kolkata, dismissing an appeal preferred by the present petitioner against an order fixing the annual valuation of the petitioner's premise.
2. The Hearing Officer‐XIII of the Kolkata Municipal Corporation (KMC), vide order dated January 18, 2011 fixed annual valuation of the premise no. 5, J.B.S. Haldane Lane, 7th Floor, Block - 700 105 (commonly known as Silver Spring), with effect from the third quarter of 2007‐2008, at Rs.1,05,600/‐.
3. Being aggrieved by the said order, the petitioner filed an appeal, bearing Municipal Assessment Appeal No. 447 of 2011, which was disposed of on September 17, 2014.
4. The petitioner, being still aggrieved, challenged the said order of the Tribunal in a writ petition bearing W.P. No. 1277 of 2014, which was disposed of by a co‐ordinate Bench of this Court on February 12, 2015, thereby directing re‐hearing of the appeal in accordance with law. Thereafter an application was filed by the KMC, in connection with the appeal before the Tribunal, praying for adducing additional evidence, against which a written objection was filed by the present petitioner. The Tribunal allowed such application on October 9, 2015, against which the petitioner moved this Court in revision, giving rise to C.O. No. 4426 of 2015, which was allowed on February 3, 2016, setting aside the order of the Tribunal.
5. Subsequently, the Tribunal re‐heard the appeal and disposed of the same by assessing annual valuation to the tune of Rs. 70,990/‐. The opposite party no. 1, that is, KMC, challenged the said order by preferring C.O. No. 816 of 2017, which was allowed by another co‐ ordinate Bench of this Court, thereby setting aside the impugned order and relegating the said appeal again to the Tribunal.
6. Thereafter on November 28, 2017 the petitioner filed, in the appeal, an application under Rule 15, read with Rule 26(B) of the Calcutta Municipal Corporation Taxation Rules, 1987, which was disposed of without any direction for production of lower court documents.
7. Ultimately, on January 31, 2018, the First Bench of the Municipal Assessment Tribunal dismissed the appeal on contest, maintaining the annual valuation of Rs. 1,05,600/‐ passed by the Hearing Officer. The present revisional application has been preferred against such dismissal by the Tribunal.
8. Learned counsel for the petitioner contends that the entire assessment was made by the appellate Tribunal on the basis of an Inspection Book relating to the ITC Sonar Bangla (since renamed as "ITC Sonar") , which is a posh hotel on the Eastern Metropolitan Bypass itself. It is contended that the assessment valuation of any portion of the said posh hotel which was earning money commercially from the said hotel, could not in any manner be equated with the Silver Spring, in particular the residential section thereof, which included the flat of the petitioner. A reading of the impugned judgment would show, according to the petitioner, that the only 'objective' yardstick considered by the Tribunal was the Inspection Book with regard to the said hotel. Such a yardstick was entirely de hors the law, since comparison has to be between equals and not between disparate entities. Leaned counsel for the petitioner cites in this context a judgment reported at (2008) 1 CHN 640 [Kolkata Municipal Corporation and others vs. Bengal Club Limited and another], where a Division Bench of this Court held inter alia that annual valuation can be done under Section 174 of the Kolkata Municipal Corporation Act, 1980 which inter alia provides, if the property in question was let out to any third party, the annual income fetched therefrom, or in case the property was not let out, then the valuation is arrived at on the basis of comparable instances in that locality, meaning thereby, on the basis of the rent which could have been fetched from a hypothetical tenant. Relying upon such judgment, it is submitted that the ITC Sonar Bangla could not be a comparable unit vis‐à‐vis the petitioner's residential flat at the Silver Spring.
9. Learned counsel for the petitioner further argues, placing reliance on Rules 15 and 19(6) of the Calcutta Municipal Corporation (Taxation) Rules, 1987, that the Chairman has the power of a Civil Court under the Code of Civil Procedure to call for any document from its custodian and to summon a witness at the hearing of the appeal, if he considers it necessary to do so for proper disposal of any appeal or any proceeding before the Tribunal.
10. The parties to an appeal shall not be entitled to produce before the Tribunal any evidence in addition to the evidence adduced at the hearing under Section 188 unless
a) The Officer hearing the appeal under Section 188 has refused to take evidence, which, in the opinion of the Chairman, ought to have been taken, or;
b) The Chairman considers the production of any evidence to be essential in order to enable the Tribunal to pronounce the judgment, that too after recording his reasons therefor.
11. Since only in the aforesaid circumstances additional evidence could be permitted to be produced, it is submitted by the petitioner that the Tribunal acted without jurisdiction in placing reliance on the Inspection Book of ITC Sonar Bangla in the appeal, without compliance of such formalities.
12. In this context, learned counsel for the petitioner places reliance on a judgment of a co‐ordinate Bench of this Court reported at 2002(2) CHN 377 [Calcutta Municipal Corporation and Anr. vs. Kapoor and Company Private Limited], where it was held inter alia that from Rule 10 of the Calcutta Municipal Corporation (Taxation) Rules, it appeared that at the time of presentation of memorandum of appeal, copies of the documents including additional evidence, which the appellant intends to rely upon, must be filed along with memorandum of appeal. Additional evidence, it was held, can be admitted before the Appellate Tribunal only if the conditions laid down in Rule 19(6) are satisfied and the Tribunal records reasons for acceptance of such additional evidence. The principles of natural justice demands that once an authority is permitted to adduce additional evidence the other party should also be given opportunity to give evidence in rebuttal. In the present case, the Tribunal did not comply with such yardsticks. It was lastly argued that the purported assessment of the tribunal as well as the Hearing Officer were entirely subjective. Despite the petitioner having specifically sought for a direction on the KMC to produce all relevant documents, the tribunal only granted a general liberty to the KMC to produce documents, without any specific direction as to the nature of documents to be produced. The KMC, in fact, did not produce any relevant document as to assessment of any comparable residential unit of the neighbourhood. It is further argued by the petitioner that the provisions of Sections 188 and 189 of the Kolkata Municipal Corporation Act, 1980 were not adhered to by the tribunal in passing the impugned judgment. Hence, it is argued, the impugned judgment ought to set aside.
13. In controverting such arguments, learned counsel for the opposite party‐KMC submits that the Inspection Book of ITC Sonar Bangla was not the only yardstick applied by the tribunal in arriving at the assessment of valuation. It is argued by learned counsel for the opposite party that the tribunal observed that modern amenities are available to the owners and their family members of the disputed property, that the objective nature / standard of the flat in question in a posh area by the side of the Eastern Metropolitan Bypass, surrounded by high profile restaurant, famous car shop and club house as well as other amenities were considered and only then an assessment was arrived at.
14. It is further observed that since there was no previous assessment of any other proximate residential unit available with the KMC, the Inspection Book of ITC Sonar Bangla was produced. The said Inspection Book was not produced as an independent additional evidence but only to indicate the previous assessment as to the said hotel. Hence, Rule 19(6) need not have been complied with by the opposite party.
15. Learned counsel for the opposite party‐KMC relied on a judgment reported at (2002) 3 SCC 388 [India Automobiles (1960) Ltd. vs. Calcutta Municipal Corporation and another] as well as a judgment reported at (2000) 4 SCC 577 [Lt. Col. P.R. Chaudhary (Retd.) vs. Municipal Corpn. of Delhi]. In both such judgments, certain yardsticks of assessment of annual valuation were laid down. Learned counsel for the opposite party submits that such yardsticks were followed by the tribunal in the present case. It is further submitted that the provisions of Sections 188 and 189 of the Calcutta Municipal Corporation Act, 1980 were fully adhered to by the tribunal and as such there was no infirmity in the judgment of the tribunal.
16. Upon hearing both sides, it is found that the primary basis of the tribunal's order was the Inspection Book of ITC Sonar Bangla, a posh hotel somewhat near the property in question. Although the assessment of the disputed property was fixed somewhere between the rates fixed for the hotel rooms and the complex containing a health club, swimming pool, restaurant, lobby, etc. of the ITC Sonar Bangla, which 'lucrative' location might have 'elevated' the status of the property in dispute, such arbitrary assessment does not satisfy judicial conscience, since the disputed premises is situated in a residential wing of the Silver Spring and no proof exists on record to suggest that the same has been let out or is not being used for the personal residence of the petitioner and his family. The assessment for a commercially exploited posh hotel cannot, by any stretch of imagination, be comparable with a residential unit, however sophisticated the amenities and facilities available to the latter may be. This is for the simple reason that a residential premise only incurs expenses for the owner, whereas a commercially exploited hotel is designed to fetch huge income for the owner.
17. As to the other yardsticks governing assessment, as laid down in the various judgments cited by the parties, as pointed out by learned counsel for the opposite party, the tribunal only paid lip‐service to such yardsticks and did not enter into any objective enquiry for satisfaction of such criteria.
18. From a perusal of the judgments cited, it is seen that the Hon'ble Supreme Court was of the opinion therein that properties can generally be divided into four broad categories:
(i) Self‐occupied (occupied by owners);
(ii) Part self‐occupied, part tenanted;
(iii) Land on which property constructed is leasehold land with restriction that leasehold interest shall not be transferable without approval of lessor; and
(iv) Where property has been constructed in stages.
19. The yardsticks for assessment of rateable value or annual rent, as fixed by the Hon'ble Supreme Court in the various judgments cited, are as follows:
(a) Fair rent/standard rent is the upper limit;
(b) Size, situation, locality and condition of premises and amenities;
(c) Annual rent which the owner may reasonably expect to get, if the premises were let out to a hypothetical tenant (comparable instances to be seen).
Apart from the aforesaid yardsticks another criterion could be factored in, in the opinion of this court, which is:
(d) Assessment by the KMC of nearby properties of similar nature - only if such assessment has attained finality, either by dint of non‐preference of any appeal therefrom or by expiry of the statutory limit for appeal.
20. In the present case, no such yardstick was followed by the Tribunal, which mechanically affirmed the unreasoned assessment of annual rent for the disputed property by the Hearing Officer. As such, C.O. No. 936 of 2018 is allowed on contest, thereby setting aside the impugned judgment and order dated January 31, 2018 passed by the First Bench of the Municipal Assessment Tribunal in Municipal Assessment Appeal No. 447 of 2011 and sending the matter back on remand to the said tribunal. The tribunal will re‐hear the appeal and pass a reasoned judgment in accordance with law, in terms of the yardsticks stipulated hereinabove and in the light of the observations made above, in accordance with law. The tribunal is further directed to dispose of the appeal after remand as expeditiously as possible, without granting any unnecessary adjournments to either side preferably within four months from the date of communication of this order to the tribunal.
21. There will be no order as to costs.
22. Urgent certified website copies of this order, if applied for, be made available to the parties upon compliance with the requisite formalities.
( Sabyasachi Bhattacharyya, J. )