M/S.Sudarsan Trading Co Ltd., v. The Commissioner,
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED 07.02.2019
CORAM
THE HONOURABLE DR.JUSTICE ANITA SUMANTH Writ Petition No.3645 of 2019 & WMP No.3995 of 2019 M/s.Sudarsan Trading Co. Ltd.
... Petitioner -vs1. The Commissioner, Greater Chennai Corporation, Ripon Buildings, Chennai.
2. Regional Deputy Commissioner (Central), Door No.36B, 2nd Cross Street, Pulla Avenue, Shenoy Nagar, Chennai - 600 030.
3. Assistant Revenue Officer, Zone - 9/Revenue Department, Greater Chennai Corporation, No.1, Lake View area, 4th Cross Street, Nungambakkam, Chennai - 600 034.
.. Respondents PETITION filed under Article 226 of The Constitution of India praying for the issuance of Writ of Certiorarified Mandamus calling for the records of the 1st respondent in respect of General Revision Notice No.S/1/18-19/387861 dated 29.09.2018 and the Demand Notice of the 3rd respondent in MA.Aa-9/Va.Tu.Na.Ka.No.R1/DN-111/994/2018 dated 14.11.2018 and quash the same, direct the respondent to refix the Property Tax, and permit the petitioner to pay the tax at the existing rate in accordance with G.O.Ms.No.73, MA & WS (MA IV) Dept., dated 19.07.2018. For Petitioner : Mr.B.Divakaran For Respondents : Mr.T.C.Gopalakrishnan Standing Counsel ----------
O R D E R
Mr.T.C.Gopalakrishnan, learned Standing Counsel takes notice for the respondents. At request and by consent of both sides, the Writ Petition itself is taken up for final disposal at the stage of admission.
2. The petitioner in this writ petition challenges Notice No.1:Property Tax General Revision 2018-19 dated 29.09.2018 revising the property tax assessment for the first half of 2018-19 as against which objections have been filed by the petitioner on 10.11.2018. Thereafter, demand notice dated 14.11.2018 was sent to the petitioner demanding payment of the arrears of tax, without reference to the objections filed by the petitioner.
3. Learned counsel for the petitioner submits that taxes due as on date, prior to the general revision, have been paid, which position is not disputed by the learned counsel for the Corporation.
4. Mr.Gopalakrishnan, learned counsel for the Corporation would submit that as per G.O.(Ms) 73, Municipal Administration and Water Supply (MA.IV) Department dated 19.07.2018 revision is to be restricted to 50% over and above the existing rates as far as residential units are concerned and 100% as far as non-residential units are concerned. The existing rate adopted in regard to the residential and non-residential units is Rs.1 and Rs.5.40 respectively, as against which, the revised rates are Rs.1.400 and Rs.9.720 respectively, which according to him, fall within the parameters prescribed under the Government Order. In such circumstance, he points out that the demand raised as per Notice No.1, is correct.
5. This Court has considered a similar challenge in W.P.No.3248 of 2019 dated 04.02.2019 (N.Krishnan V. The Secretary, Government of Tamil Nadu) and has passed orders as follows:
'3. The main contentions advanced by the learned counsel for the petitioner are that no show cause notice has been issued by the respondents prior to the issuance of the impugned notice and that no break up of the amount has been set out in the notice itself. The revision thus is contrary to G.O.(Ms) 73, Municipal Administration and Water Supply (MA.IV) Department dated 19.07.2018, which provides for a revision upto only 100% of the existing tax.
4. Per contra, learned Standing Counsel appearing for the Corporation states that the impugned document is only a provisional notice and
a final demand would be raised after consideration of the objections of the assessee/petitioner.
5. The notice, on the face of it, states 'Within 15 days of receipt of this Notice, appeal if any, may be preferred to the concerned Regional Deputy Commissioner, Greater Chennai Corporation as per the delegation provided, or else it will be assumed that the Half Yearly Tax is accepted.'
6. A Division Bench of this Court in the case of Sanjai Gupta V. The Commissioner, Corporation of Chennai (2009(2)CTC465) has considered a similar case holding that an occasion to file an appeal would arise only after a final order has been passed. The decision of the Bench reads as follows:
'1. ......
2. This Appeal arises out of an interlocutory order passed by the learned Single Judge in W.P.No.4237 of 2009. By consent of both the counsel, the Writ Petition itself is taken in the causelist of the Division Bench.
Both the counsel are heard.
`3.
The submission of Mr.K.V.Babu, learned counsel for the appellant/petitioner is that the Municipal Corporation sent a notice dated 25.4.2007 to the appellant asking him to show cause as to why the property tax should not be revised in the manner indicated in that notice.
The notice was supposed to be replied within 15 days. The appellant received that notice on 16.6.2007 and sent a reply to the same on 23.6.2007 pointing out amongst others that there was no alteration or addition in any manner in the building in which the appellant was running a lodging house. That apart, the grievance in the Writ Petition is that without deciding the objections, a subsequent order/notice dated 28.1.2009 has been issued calling upon the appellant/petitioner to pay the balance amount, as per the calculation of the respondents, to the tune of Rs.20,69,393/-. Being aggrieved by this order, the Writ Petition has been filed, wherein the learned Single Judge has directed the deposit of Rs.11 lakhs
for granting a stay.
4. Mr.K.V.Babu, learned counsel submits that the demand notice, dated 28.1.2009 is not based on any order passed by the Commissioner and, therefore, the order of the learned Single Judge, asking the appellant to deposit an amount of Rs.11 lakhs for granting a stay, is unjustified.
5.
Mr.L.N.Praghasam, learned ocunsel appearing for the Municipal Corporation submits that the appellant has a remedy to go to the Taxation Appellate Tribunal under Part V of the Taxation Rules read with Section 138 of the Chennai City Municipal Corporation Act, 1919.
6.
In our opinion, this submission is misconceived.
The occasion to file an Appeal will arise only after an order is passed and based thereon a demand is made. In the present case, the appellant having filed the objections, they were expected to be decided.
Without deciding the same, this levy has been calculated and the balance amount of Rs.20,69,393/- has been demanded.
7. In the circumstances, we set aside the order passed by the learned Single Judge. The demand notice dated 28.1.2009, which is impugned in the Writ Petition is also set aside. The Writ Appeal as well as Writ Petition are allowed.
Consequently, the connected M.Ps. are closed. There shall be no order as to costs.'
7. In the present case, the impugned document is styled as a Notice bearing No.S/1/18-19/1095813 dated 31.10.2018 and states in conclusion, that an appeal is to be filed before the Regional Deputy Commissioner if the demand is not accepted by an assessee. However, since the notice imposes a demand upon the petitioner it should be in conformity with the principles of natural justice and ought to have afforded an opportunity of hearing to the petitioner prior to issuance of the
same.
8. The Taxation Rules in Schedule IV of the Chennai City Municipal Corporation Act, 1919 ('Act') provide for the procedure to be adopted in regard to the assessments of property tax. Part IA of the Taxation Rules provides for assessment of property tax and Rule 1 thereof requires the Commissioner to give due publicity in the local media calling upon the owner or occupier of land/building to file a return containing various particulars of the property. In the event of failure to file such return, Rule 2 authorises a person not below the rank of Bill Collector to enter and inspect the assessable property and prepare the return.
9. Rule 3 provides for the methodology for such assessment, Rule 4(1) for the issuance of a property tax card and Rule 4(4) states that the property tax card shall be valid till such time the assessment is revised by way of general revision or as the Government may direct. Rule 4
(5) states that the Commissioner shall make arrangements for the verification of the return filed by the owner/occupier of every assessable property immediately after a general revision and before the next general revision.
10. Rule 4(6) is relevant for the purpose of this Writ Petition and is extracted below:
'4.(6) Consequent on the verification made under rule 5, if any discrepancy is noticed in the particulars furnished in the return filed by the owner or occupier, the Commissioner may, after giving such owner or occupier a reasonable opportunity, of being heard and after considering the objection, if any, received from him, modify the assessment from the date on which the assessment was made and collect the arrears of tax.'
11. The impugned notice is one for General Revision and, in terms of Rule 4(6) of the Taxation Rules, a reasonable opportunity is to be granted to the owner/occupier of being heard on the objections for the proposed revision of the assessment. This has, admittedly, not been done in the present case.
12. In the light of the above discussion, the impugned notice shall be treated as a show cause notice upon receipt of which an assessee shall be entitled to file objections, if any. Thereafter, a final appealable order shall be passed by the Assessing Authority after due consideration of the objections filed. '
6. The observations and conclusions of this Court in the aforesaid matter are equally applicable in the present case as well and may be read as part and parcel of the present order.
7. It is necessary in order to appreciate the contentions of the learned counsel for the respondent recorded at paragraph No.4 of this order that a working sheet of the demand be furnished. However, that has not been done. The respondent shall furnish the petitioner with a working sheet setting out the break up of the demand prior to finalisation of the assessment proceedings.
8. The petitioner in the present case has rightly filed its objections to the Demand Notice dated 29.09.2018, on 10.11.2018 and will appear before the Officer on 26.02.2019 at 10.30 a.m. for a personal hearing without any further notice in this regard. The officer shall pass an order after affording due opportunity of hearing to the petitioner within a period of three (3) weeks from the date of conclusion of the hearing before him.
9. The demand raised in the impugned notice, in excess of 100% of the existing rates, shall be kept in abeyance till such time orders are passed by the Assessing Authority.
10. The Writ Petition is disposed of in the above terms.
No costs.
Consequently, the connected Miscellaneous Petition is closed.
Sd/- Assistant Registrar(CS) //True Copy// Sub Assistant Registrar sl To
1. The Commissioner, Greater Chennai Corporation, Ripon Buildings, Chennai.
2. Regional Deputy Commissioner (Central), Door No.36B, 2nd Cross Street, Pulla Avenue, Shenoy Nagar, Chennai - 600 030.
3. Assistant Revenue Officer, Zone - 9/Revenue Department, Greater Chennai Corporation, No.1, Lake View area, 4th Cross Street, Nungambakkam, Chennai - 600 034.
+1cc to Mr. T.C.Gopalakrishnan, Advocate SR.No. 10723 +1cc to Mr.B.Divakaran , Advocate SR.No. 12798 (13/02/2019) Writ Petition No.3645 of 2019 & WMP No.3995 of 2019 A.SK(12/02/2019)