Calcutta High Court (Appellete Side)

The Kolkata Municipal ... vs Sunbeam Tradecom Private Limited on 24 March, 2021

Sn   24.3.21                      C.O.681 of 2021


                       THE KOLKATA MUNICIPAL CORPORATION
               VS. SUNBEAM TRADECOM PRIVATE LIMITED


                           Mr. Alok Kumar Ghosh
                           Mr. S.K. Debnath
                           Ms. Manisha Nath
                                         ..for the petitioner
                           Mr. Rachit Lakhmani
                           Mr. Arnab Basu Mallick
                                      ..for the opposite party

This revisional application arises out of an

order dated April, 25, 2018 passed by the learned

Municipal Assessment Tribunal, 1st Bench, in M.A.A.

No.540 of 2013.

The petitioner before this Court is the Kolkata

Municipal Corporation. The Kolkata Municipal

Corporation (KMC) has challenged the above order on

several grounds, inter alia, that the learned Tribunal:- (i)

failed to take into account the provisions of Section 174

of the Kolkata Municipal Corporation Act, 1980; (ii)failed

to take into account the reasonable rent the premises

would have fetched had the premises been let out; (iii)

failed to take into account the reasons supplied by the

Hearing Officer while fixing the annual valuation at

Rs.65,770/- with effect from 2/2007-2008.

Mr. Ghosh, learned advocate appearing on

behalf of the petitioner submits that the KMC was

advised by their learned advocate to prefer this revisional

application challenging the aforementioned order

belatedly as the officers of KMC had not considered the

order impugned in its right perspective and had failed to

take steps immediately against the said order. He further

submits that once the opposite party/assessee prayed for

refund of the excess amount paid on the basis of the

valuation made by the Hearing Officer, after reduction in

the annual valuation by the order impugned, only then

the senior officials of the KMC sought to take legal advice

and accordingly, their learned advocate advised the KMC

to prefer this revisional application. He further submits

that the junior officers were complacent and did not

bother to take any initiative or consider the impact of the

order impugned until the writ petition was served upon

them. Such explanation for the delay in filing the

revisional application appears in Paragraph-17 thereof.

Reliance is placed on the decision of the

Hon'ble Apex Court in the matter of Executive Officer,

Antiyur Town Panchayat Vs. G. Arumugam (Dead) by

Legal Representatives reported in (2015) 3 SCC 569,

wherein the Hon'ble Apex Court condoned the delay of

1373 days in filing a second appeal on the ground that in

case of a lapse of an officer at the relevant point of time to

take action, the Court should take a lenient view,

condone the delay and allow the matter to be decided on

merits.

Mr. Lakhmani, learned advocate appearing on

behalf of the opposite party/assessee submitted that

although the period for filing an application under Article

227 of the Constitution of India has not been prescribed

by law but the said application should be filed within

reasonable time and there must be some explanation for

the delay caused by the authority in filing this revisional

application. He further relies on the decision of the

Hon'ble Apex Court in the matter of Bithika Mazumdar

& Anr. Vs. Sagar Pal & Ors. reported in (2017) 2 SCC

748 to counter the argument of Mr. Ghosh on the point

of limitation, Mr. Lakhmani submitted that the

explanation was not satisfactory and it was only because

the writ petition was filed by the assessee claiming the

refund that the KMC woke up from its slumber and

preferred this revisional application.

I find justification in the contention of Mr.

Lakhmani but the issue involved is of a larger public

interest as property tax is public money to be paid by the

owner of the property to the concerned municipal

authorities under a constitutional mandate as also under

the statute itself. The money collected by the civic body is

used for providing means of better living in terms of civic

amenities and essential services. Thus, this Court holds

that the explanation of the KMC as to the reasons for

delay in filing this application before this Court is

satisfactory and the KMC cannot be deprived of an

opportunity to move this Court challenging an order,

which has caused injustice and loss of revenue.

In my opinion, this revisional application is

not barred by limitation and should be considered on

merits.

Coming to the question of sustainability of the

order impugned before this Court, it appears that the

learned Tribunal considered the annual valuation of an

adjoining premises and added 20 per cent to the same in

order to arrive at the annual valuation of the premises in

question.

It has been settled by several judicial decisions

that the annual valuation of a premises should be

considered on the basis of the annual rent such premises

would fetch in case it is let out. Although, the learned

Tribunal has come to a finding that the premises was

being used for non-residential purpose, yet, the learned

Tribunal failed to perform the exercise of considering the

reasonable rent that the premises would fetch. The

premises measures around 2436.09 Sq. ft. on the 14th

floor at Premises No.10, Belvedere Road, Amarjyoti

Apartment, Kolkata - 700027 and was being used

exclusively for commercial purpose. The Hearing Officer

upon taking the reasonable rent to be Rs.2.50/- per

square feet per month had arrived at a figure of

Rs.65,770/- as the annual valuation. The learned

Tribunal did not take into account the reasons assigned

by the Hearing Officer and also failed to mention why the

Hearing Officer's calculation could not be accepted. The

position of law has been clarified by the Hon'ble Apex

Court in the matter of India Automobiles (1960) Ltd.

Vs. Calcutta Municipal Corporation and Anr.

reported in (2002) 3 SCC 388. The relevant portion of

the said judgment is set out hereunder, for convenience.

"We find some substance in the submission of the learned counsel for the appellant that permitting the municipal authorities to assess the annual value only on the basis of the rent paid by the sub-tenant to the tenant and fixing its liability on the owner may adversely affect the owners of the buildings who have let their premises at a time when rents were meagre and who under the rent control statutes are deprived of getting possession back of the lands and buildings from their tenants. The 1980 Act, therefore, requires application of mind by the municipal authorities to determine the rents on the basis of reasonableness by keeping into account all relevant circumstances including the actual rent received by the owner, hypothetical standard rent, the rent being received by the tenant from his sub-tenant and other relevant consideration, such as prevalent rate of rent of lands and building in the vicinity of the property being assessed. Only because the owner of the building is not getting the same rent which the sub-tenant is paying to his lessor, cannot be made a basis to deprive the corporations from determining the annual valuation and taxing the land or building on that basis. If such a plea is accepted, it would be against the provisions of the statute which has been enacted to provide civic services in the form of water, drainage, sewerage, collection, removal and disposal of solid waste, fire prevention and fire safety maintenance of street and public places etc., in the municipal area where such land or building is situate."

"We are of the view that the basis for determination of annual rent value has to be the standard rent where the Rent Control Act is applicable and in all other cases reasonable determination of such rent by the municipal authorities keeping in view various factors as indicated herein earlier, including the rent which the tenant is getting from his sub- tenant. In appropriate cases the owner of the property may be in a position to satisfy the authorities that the gross annual rent of the building of which the annual valuation was being determined cannot be more than the actual rent received by such owner from his tenant. The municipal authorities shall keep in mind the various pronouncements of this Court, the statutory provisions made in the specified Municipal Acts, keeping in mind the applicability or non- applicability of the Rent Act and the peculiar circumstances of each case, to find out the gross annual rent of the building including service charges, if any, at which such land or building might, at the time of assessment, be reasonably expected to let from year to year in terms of Section 174 of the 1980 Act."

Mr. Lakhmani submitted that the annual

valuation of the other similar units have been fixed at the

same rate by the KMC. However, such averment or

contention is not a part of the records and it also does

not appear in the order impugned that the learned

Tribunal was persuaded by such contention while coming

to the annual valuation of the property in question at

Rs.29,280/- with effect from 2/2007-2008.

Under such circumstances, this revisional

application is allowed. The order impugned is quashed

and set aside.

The learned Tribunal is directed to hear out