Dudhwala Builders Private Ltd vs The Assistant Commissioner And ...
2022 Latest Caselaw 2289 Bom

                                                  902-oswpl17198-2021


AGK


      IN THE HIGH COURT OF JUDICATURE AT BOMBAY
         ORDINARY ORIGINAL CIVIL JURISDICTION

          WRIT PETITION (L) NO. 17198 OF 2021

Dudhwala Builders Pvt. Ltd                    ...Petitioner

       V/s.

The Assistant Commissioner & Anr.             ...Respondents


Mr. Rafiq Dada, Senior Advocate with Mr. Yuvraj P. Narvankar
for the petitioner.

Mr. Suresh Pakale with Ms. Rupali Adhate for the respondent-
MCGM.

                        CORAM: DIPANKAR DATTA, CJ &
                               M. S. KARNIK, J.

RESERVED ON: MARCH 1, 2022 PRONOUNCED ON: MARCH 8, 2022

JUDGMENT: (PER DIPANKAR DATTA, CJ.)

1. This is a writ petition at the instance of a private limited company engaged in the business of construction and development of properties. The respondents are the Assistant Commissioner, Municipal Corporation of Greater Mumbai (hereinafter "MCGM", for short) and the Assistant Assessor and Collector, P/South Ward, MCGM. The aforesaid description appears from the array of respondents although, in paragraph 2 of the writ petition, the petitioner has pleaded that respondent no. 1 is the Commissioner, MCGM, being the principal authority under the Mumbai Municipal Corporation Act, 1888 (hereafter "the Act", for short). Be that as it may.

902-oswpl17198-2021

2. The challenge in the writ petition is to a series of special notices served on the petitioner by the Assessment and Collection Department, MCGM. Briefly put, the grievance of the petitioner as espoused by Mr. Dada, learned senior counsel is that such notices have been issued without jurisdiction and do not contain material particulars indicating application of mind and the petitioner is left to wonder what case it has to meet.

3. The pleaded case in the writ petition, however, reveals that after receiving the impugned special notices in two tranches [issued in exercise of powers conferred by section 154(1A) and (1B) of the Act], firstly on 13th November 2020 and then again on 15th January 2021, separate complaints have been lodged by the petitioner on 7th December 2020 and 12th February 2021 raising legitimate objections to the legality and validity of such notices. However, neither hearing was afforded to the petitioner to persuade the Assessor/Collector to withdraw such notices nor was the petitioner categorically told of the fate thereof. At the same time, it is further pleaded by the petitioner that as and when its representative visited the office of the Assessor/Collector to ascertain the fate of the impugned special notices, he was assured that no adverse action would be taken based on such notices without putting the petitioner on notice and without granting it reasonable opportunity of hearing. Reminder letters sent by the petitioner evoked no response.

4. While the matter stood thus, a message was received by the petitioner from the office of the respondents on 9 th March 2021 proposing to levy penalty at the rate of 2% on the

902-oswpl17198-2021

outstanding tax amount, an action purportedly in pursuance of section 202 of the Act. Immediately on receiving such message, the petitioner addressed a letter on 12th March 2021 placing on record its legitimate grievance as well as assurance that had been accorded in a prior meeting of giving due and fair hearing to the petitioner. Despite receipt of such letter, the respondents did not respond and finally, the petitioner addressed a representation/communication on 30th March 2021 addressed to the Commissioner and the Additional Commissioner (Western Suburb) requesting expeditious action on the request and representation of the petitioner.

5. Since such request also did not yield any result, the petitioner felt aggrieved by the inaction and the omission of the respondents in giving due hearing and addressing its legitimate grievances. Apprehending coercive action by the respondents without giving the petitioner hearing, this writ petition dated 5th August 2021 was instituted before this Court seeking inter alia the following relief:

"(a) This Hon'ble Court be pleased to issue under Article 226 and 227 of the Constitution of India a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, Order or direction under Articles 226 and 227 of the Constitution of India directing the Respondent fix the date of hearing and give an adequate opportunity of hearing to the Petitioner in respect of all the complaints raised by the Petitioner, as annexed to the petition;

(b) This Hon'ble Court be pleased to issue under Article 226 and 227 of the Constitution of India a Writ of Mandamus or a Writ in the nature of Certiorari or any other appropriate Writ, Order or direction under Articles 226 and 227 of the Constitution of India quashing and setting aside the impugned Notices and Assessments and Bills and declaring them as non-est and bad in law

902-oswpl17198-2021

in the light of the Ordinance dated 13 th November 2020 and breach of principles of natural justice.

6. The grounds urged in support of the relief claimed in the writ petition would reveal the reason for the issuance of the impugned special notices, namely, tax payable by the petitioner had escaped assessment earlier.

7. The case of the respondents in their affidavit in reply is that upon receipt of the impugned special notices, statutory complaints under section 163(1) and (2) of the Act were lodged by the petitioner. A hearing was fixed on 20 th September 2021 when the petitioner appeared and filed written submissions in support of its case before the concerned authority. After receipt of such written submissions, the answering respondents were directed by such authority to respond and the next date of hearing was fixed on 1st October 2021. However, no final decision appears to have been given presumably because of the pendency of this writ petition.

8. It is also claimed by the respondents that once assessment is made, the petitioner has the remedy of a statutory appeal under section 217 of the Act and that on such ground too, the writ petition is not maintainable.

9. Paragraphs 27 and 28 of the reply affidavit reads as follows:

"27. I categorically say and submit that no revision under Section 154 (IC) of property tax in the year 2020- 21 has taken place as alleged by the Petitioner. This Respondent has simply rectified the omissions/escape found in the earlier assessments and recalculated the property tax amount after taking into account the rule and correct CV of the property.

902-oswpl17198-2021

28. Lastly, I say that the CV of the property has a direct bearing on the amount of FSI available to it. The FSI is a relevant consideration/factor for the purpose of calculation of CV. However, if the Petitioner is aggrieved against the decision of the competent authority, he has a remedy filing appeal under Section 217 of the MMC Act. I respectfully say and submit that the Petitioner cannot agitate such grievances under Article 226 of the Constitution of India."

10. The writ petition was heard by us on 7th September 2021 in the presence of the learned advocates for the parties. An interim order was passed to the extent that no coercive action shall be taken against the petitioner without granting its authorized representative a prior hearing. By a subsequent order dated 21st October 2021, the interim protection was extended till 30th November 2021, and the parties were requested to complete their pleadings. Such interim protection stood further extended till the end of February 2022 by an order dated 2nd December 2021. The writ petition has since been heard finally in the presence of Mr. Dada and Mr. Pakale, learned counsel for the respondents.

11. Appearing on behalf of the petitioner, Mr. Dada contended that the impugned special notices contain no reasons and it is difficult for the petitioner to raise an effective defence before the Assessor/Collector. Relying on the coordinate Bench decision of this Court in Ajanta Pharma Ltd., Mumbai V/s. Assistant Commissioner of Income Tax,1 it was contended that no material having been disclosed on the basis of which the respondents could have re-opened the case, the impugned special notices ought to be held to be

2003(5) Mh.L.J. 352

902-oswpl17198-2021

without jurisdiction and consequently, set aside. Our attention was drawn to the decision of the Supreme Court in Calcutta Discount Co. Ltd V/s. Income-Tax Officer, Companies District 1, Calcutta, and another2 where it was held that if an action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts, it is well settled, will issue appropriate orders or directions to prevent such consequences. The other decisions of this Court which the coordinate Bench in Ajanta Pharma Ltd., Mumbai (supra) had relied upon were also referred to by Mr. Dada while reading from the judgment.

12. Mr. Dada also invited our attention to paragraphs 27 and 28 of the reply affidavit to contend that the respondents have pre-judged the issue and further appearance before the concerned authority would be an idle formality.

13. Per contra, Mr. Pakale invited our attention to the first prayer in the writ petition. According to him, the petitioner claims a writ of mandamus on the respondents to grant it a hearing and to afford adequate opportunity to raise all points in support of the complaints lodged by it. This Court having precluded the respondents from taking coercive action against the petitioner without granting an opportunity of hearing and such hearing having been afforded and further hearing is also likely to be afforded to the petitioner by the concerned authority, the stage is premature for this Court to rule on the legality and validity of the impugned special notices.

41 ITR 191

902-oswpl17198-2021

14. Mr. Pakale has relied on the decision of the Supreme Court in Assistant General Manager, Central Bank of India & Ors. V/s. Commissioner, Municipal Corporation for the City of Ahmedabad & Others3 as well as a coordinate Bench decision of this Court in The Municipal Corporation of Greater Bombay & Ors. V/s. M. Visvesvaraya Industrial Research and Development Central & Another4 for the proposition that there is no infirmity in the impugned special notices issued by the respondents and that it is for the petitioner to satisfy the concerned authority that the impugned special notices have been mistakenly issued. He has, accordingly, prayed for dismissal of the writ petition.

15. We have heard parties and perused the decisions cited at the bar.

16. The only question that we are tasked to decide is whether, at this stage of the proceedings pending before the concerned authority as noted above, it would be a prudent exercise of discretion in exercise of writ powers to examine the legality and/or validity of the impugned special notices, particularly in the light of the first prayer of the petitioner. Upon due consideration of all relevant facts and circumstances, we are of the view that having regard to the tenor of the petitioner's grievances that had driven it to approach this Court, it would be more appropriate not to delve deep into the matter and to leave the petitioner to pursue the proceedings before the concerned authority in

1995 SCC (4) 696.

Appeal No. 1224 of 1989 arising out of Writ Petition No. 2422 of 1989, decided on 16 th June 1992.

902-oswpl17198-2021

accordance with law. Had the petitioner approached the Court immediately after receipt of the impugned special notices and questioned the jurisdiction of the Assessment and Collection Department of the MCGM to issue the same on the ground of a complete lack of jurisdiction, the situation would have been otherwise. However, having lodged complaints availing the right conferred by section 163 of the Act and having urged this Court to issue a writ of mandamus or order/direction in the nature of mandamus for fixing a date of hearing and for affording opportunity in fair measure to contest the impugned special notices, the scales would tilt in favour of MCGM and against the petitioner for such notices to be taken to its logical conclusion, leaving all contentions raised in this writ petition open for the petitioner to urge before the concerned authority at the first instance or if any adverse order is made to raise all contentions that are available to it in law before the competent forum under section 217 of the Act.

17. Our conclusion as above is based on the observations in the decision of the Supreme Court in Union of India V/s. Kunisetty Satyanarayana5. Although made in relation to a service matter, the observations have relevance to any matter concerning a challenge to a show cause notice. The Court ruled as follows:

"14. The reason why ordinarily a writ petition should not be entertained against a mere show-cause notice or charge- sheet is that at that stage the writ petition may be held to be premature. A mere charge-sheet or show-cause notice does not give rise to any cause of action, because it does not amount to an adverse order which affects the rights of any party unless the same has been issued by a person having no

(2006) 12 SCC 28

902-oswpl17198-2021

jurisdiction to do so. It is quite possible that after considering the reply to the show-cause notice or after holding an enquiry the authority concerned may drop the proceedings and/or hold that the charges are not established. It is well settled that a writ petition lies when some right of any party is infringed. A mere show-cause notice or charge-sheet does not infringe the right of anyone. It is only when a final order imposing some punishment or otherwise adversely affecting a party is passed, that the said party can be said to have any grievance.

15. Writ jurisdiction is discretionary jurisdiction and hence such discretion under Article 226 should not ordinarily be exercised by quashing a show-cause notice or charge-sheet.

16. No doubt, in some very rare and exceptional cases the High Court can quash a charge-sheet or show-cause notice if it is found to be wholly without jurisdiction or for some other reason if it is wholly illegal. However, ordinarily the High Court should not interfere in such a matter."

18. The contention of Mr. Dada that the issue has been decided, as it appears from paragraphs 27 and 28 of the reply affidavit, has not really impressed us. The statements in such paragraphs (27 and 28) were made in an attempt to sustain the impugned special notices, if at all this Court were to decide the petitioner's claims on merits. That not being the case and having regard to what we propose to conclude, such statements in the affidavit are not considered to weigh against the petitioner.

19. We, therefore, dispose of the writ petition without interfering with the impugned special notices; however, the respondents are directed to ensure that the proceedings which have been initiated by issuance of such notices are taken to its logical conclusion in accordance with law as early as possible, and preferably within a month from date of receipt of a copy of this order. Since written submissions have been filed by the petitioner, it shall only be entitled to a

902-oswpl17198-2021

further opportunity of oral hearing. The concerned authority entrusted to decide the matter shall proceed to do so strictly in accordance with law and without being influenced by the contents of paragraphs 27 and 28 of the reply affidavit extracted above.

20. No costs.

                       (M. S. KARNIK, J.)                      (CHIEF JUSTICE)



         Digitally
         signed by
         ATUL
ATUL     GANESH
GANESH   KULKARNI
KULKARNI Date:
         2022.03.08
         17:27:49
         +0530