Smt. Indra Devi Rathi & Ors vs The Kolkata Municipal ...
2023 Latest Caselaw 1638 Cal/2

                     IN THE HIGH COURT AT CALCUTTA
                       Constitutional Writ Jurisdiction
                                Original Side

Present :-   Hon'ble Justice Amrita Sinha


                              WPO 1350 of 2023

                        Smt. Indra Devi Rathi & Ors.
                                    Vs.
                  The Kolkata Municipal Corporation & Ors.

For the writ petitioners       :-    Mr. Raghunath Chakraborty, Adv.
                                     Ms. Tanusree Das, Adv.

For KMC                        :-    Mr. Biswajit Mukherjee, Adv.
                                     Mr. Fazlul Haque, Adv.

Heard on                       :-    12.07.2023

Judgment on                    :-    24.07.2023


Amrita Sinha, J.:-


      The order dated 24th February, 2021 passed by the Assessor-Collector

(North), Kolkata Municipal Corporation ('KMC' for short) allegedly in compliance

of the direction passed by this Court on 26th August, 2019 in WP No. 24 of

2019 (Indra Devi Rathi & Ors. vs. KMC & Ors.) is impugned in the present writ

petition.


      By the said order annual valuation of the premises was assessed at Rs.

1,65,510/- including non-residential annual valuation of Rs. 1,37,810/- with

effect from 3rd quarter of 2005-2006. Bills were accordingly raised considering

the premises as partly residential and partly non-residential.


      The petitioners are aggrieved by the same. It has been contended that the

petitioners have let out most of the portions of the subject property which is a

seven storied building. The ground and the first three floors of the premises are

used for commercial purpose and the rest for residential use.
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      The petitioners contend that the Corporation ought to have valued the

property by taking into consideration the mode of use of the same. The

Corporation ought to have apportioned the tax amount by segregating the

portion used for non-residential purpose and the portion used for residential

purpose.


      It has been contended that there are several tenants in the said property

and the Corporation ought to have issued notices upon all the tenants

individually prior to fixing the annual valuation of the subject property.


      It has been argued that the tenants and occupiers of the subject property

ought to be made liable for payment of tax and the entire burden of payment of

tax ought not to be thrust upon the petitioners who are the sebaits of the

debottor property.


      In support of the submission that the tenants and occupiers of the

subject property will be liable to pay tax, learned advocate for the petitioners

relies upon the decision passed by the Hon'ble Supreme Court in the matter of

Calcutta Gujrati Education Society & Anr. vs. Calcutta Municipal

Corporation & Ors. reported in (2003) 10 SCC 533.


      The petitioners contend that it is the obligatory duty of the Corporation

to inspect each premises and prepare the assessment book pursuant to which

valuation of a property is required to be calculated. In support of such

submission the learned advocate for the petitioners relies upon the provision of

Section 178(6) of the Kolkata Municipal Corporation Act, 1980 ('the Act' for

short).


      Prayer has been made for setting aside the impugned order of the

Assessor-Collector with further direction to apportion the property tax by

segregating the portion used for commercial purpose and residential purpose.
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      Learned advocate representing the Kolkata Municipal Corporation

submits that the petitioners are in possession of the subject property since

1983. The petitioners, being owners of the property, are obliged to furnish a

return in the prescribed form in accordance with Section 182 of the Act.

According to Rule 5 of the Kolkata Municipal Corporation, (Taxation) Rules,

1987 return in Form C is to be filed by the owner or the person responsible to

pay tax for the purpose of revision of annual valuation of the property. The

same has not been done. The petitioners failed to submit any such return.


      In compliance of the direction passed by the Court in the earlier writ

petition filed by the petitioners, the Assessor-Collector considered the issue and

passed reasoned order on 24th February, 2021. It was clearly mentioned in the

said order that the petitioners did not submit the detail list of tenants with

rental status of the individual tenants. Only memorandum of agreement dated

16th August, 1983 and two tenancy agreements of shop rooms for letting out to

the sub-tenants was submitted by the petitioners.


      As the property is recorded in the inspection book records of the

Corporation as partly commercial and partly residential, accordingly, the

assessment of tax has been made. The first four floors have been assessed as

non-residential as there are several shops/ offices/ godowns and the top three

floors were assessed as residential.


      The annual valuation of the property was assessed at Rs. 1,65,510/- out

of which non-residential annual valuation is Rs. 1,37,810/- with effect from 3rd

quarter of the year 2005-2006.


      It has been submitted that the petitioners failed to approach the Court in

proper time. More than two years have elapsed since the impugned order

rejecting the prayer of the petitioners for setting aside the impugned demand

was made known to them. There isn't sufficient explanation in approaching the

Court after such long delay.
                                        4




      The decision relied upon by the petitioners in the matter of Calcutta

Gujrati Education Society (supra) will not be applicable in the present case as

the said decision was passed relying upon the pre-amended provision of the

Act. The present demand has been raised on the basis of the amended

provision.


      The respondents pray for dismissal of the writ petition.

I have heard and considered the submissions made on behalf of both the

parties.

According to the provisions of the amended Act, it is obligatory for the

owner to submit before the Corporation return within the prescribed time and

in the prescribed format disclosing the details of the tenants and the rent

received from each of them. The petitioners, for the reasons best known to

them, failed to submit the relevant details to the Corporation. In the absence of

the necessary details, it is not possible for the Corporation to apportion the tax

to be paid by the tenants/ occupiers of the subject property.

The Corporation has disclosed in the impugned order that out of the

seven floors of the subject property, first four floors have been assessed as non-

residential and the top three floors as residential. The non-residential annual

valuation has also been disclosed in the impugned order.

As the petitioners defaulted in providing the required details to the

Corporation, accordingly, the case made out by the petitioners that the

Corporation failed to apportion the tax amount cannot be accepted. The

impugned annual valuation has attained finality by now. The Court is not

minded to interfere with the same at this stage.

The demand impugned in the present writ petition is of the year 2018.

The petitioners, through their learned advocate, by communicated dated 10th

February, 2021 intimated the Assessor-Collector that there were tenants in the

first, second and third floor and the average rent of the shop room is rupees six

thousand per month. A prototype agreement was allegedly annexed with the

advocate's communication. Had the details of the tenants been made available

to the authority, then the necessary apportionment could have been made. By

forwarding the details of the tenants/occupiers of the subject premises in

February 2021, the petitioners cannot claim apportionment of tax prior thereto.

The apportionment of tax, if any, will be prospective in nature.

According to provision of Section 184 of the Act as amended in July

2019, the Municipal Commissioner is to give written notice for revision of

annual valuation to the recorded owner or the recorded person liable to pay

tax. The same suggests that the names of the owners and/ or the persons

liable to pay tax ought to have been recorded in the records maintained by the

Corporation. In the absence of proper recording of names of the persons liable

to pay tax, the Commissioner raises tax demand on the recorded owner.

In the present case, as the details of the occupiers of the subject

premises are not recorded in the records of the Corporation, accordingly, the

tax demand has been raised on the recorded owners. It does not appear that

there is any illegality or irregularity in raising such demand.

In Calcutta Gujrati (supra) the Hon'ble Supreme Court, inter alia, held

that the returns submitted by the tenant or occupier with regard to

determination or revision of annual valuation shall be considered by the

Corporation. Non issuance of public notice or notices and/or non service of

written notices to the persons primarily liable to pay would not necessarily

invalidate the proceedings of assessment or reassessment of valuation, unless

it is established by the party aggrieved that a serious prejudice was caused for

want of notice.

The Hon'ble Supreme Court further held that the portion of tax liable to

be paid by the occupier is recoverable through the landlord and the landlord

has the right of reimbursement by demanding it from the tenant/occupier.

It has already been discussed in the previous paragraphs of this

judgment that as the details of the persons liable to pay tax were not updated

in the records of the Corporation, accordingly, there was no scope on the part

of the Corporation to issue any notice to them. In such a situation the

petitioners being the owners of the subject premises shall remain primarily

liable to pay tax and it will be open for them to recover the proportionate

amount of tax from the tenants/occupiers in accordance with law.

If the petitioners provide the details of the tenants along with their

respective rental, then the Corporation shall take steps to apportion the tax

amount in accordance with law from the future assessment year.

The writ petitions stand disposed of.

No costs.

Urgent certified photocopy of this judgment, if applied for, be supplied to

the parties or their advocates on record expeditiously on compliance of usual

legal formalities.

(Amrita Sinha, J.)