Dlf United Limited vs Municipal Corporation Of Delhi
1992 Latest Caselaw 573 Del

JUDGMENT

R.L. Gupta, J.

(1) This plaintiff-appellant filed three civil suit Nos.295 to 297 of 1972 challenging assessment for three separate years ending on 31.3.69, 31.3.69 and 31.3.68 respectively and parleyed for grant of perpetual injunction restraining the respondent Mcd from recovering and Realizing from the appellant property tax levied on the remaining part of' the land except Block E of Greater Kailash II. The suits were dismissed by a common judgment and decree dated 23.4.73. The appellant filed three separate appeals which were also dismissed by a common judgment and decree dated 18.2.75. Aggrieved against the aforesaid judgments and decrees the appellant has come up in second appeal. '

(2) The facts common to all the three suits are that the appellant is a colonising Company. It submitted a lay out plan of Greater Kailash Ii to the Corporation under Section 313 of the Delhi Municipal Corporation Act (in short "Act") for sanction. The lay out plan was sanctioned vide resolution No. 24 dated 1.7.1959. One of the terms and conditions of sanction was that no land covered by the sanctioned lay out plan will be sold, leased or built upon until the services covered by the lay out plan had been laid to the satisfaction of the Commissioner of the Corporation. Another important condition was that the sanction will lapse unless the services were provided within 12 months, which period could be further extended by another 12 months by the Commissioner for reasons to be recorded. Street lights and distribution mains were to be provided by the Desu according to the sanction. The appellant had to pay its share of the cost of the said street lighting but the electricity was not provided till the date of the filing of the suit with the result that building activites were sanctioned only in Block E of the colony while in the remaining part of the colony, sanction of building activities was not granted. As a necessary consequence, the plots of land in the remaining part of the colony remained incapable of being built upon. Since neither any building activities could be carried on such plots nor the same could be sold or leased out without the development of services covered by the lay out plan to the satisfaction of the Commissioner, it was alleged, property tax in respect of such vacant land could not be imposed. Despite that various amounts of property tax ending for the periods 31.3.68 and 31.3.69 were imposed illegally, hence the suits.

(3) The Corporation contested the suits raising various preliminary objections as well objections on merits. Following issues were framed: 1. Whether the imposition of the tax is ultravires and not granted by law? 2.Whether the suit has been properly valued for purposes of court fees and jurisdiction? 3.Whether the suit is barred under Section 41 of the Specific Relief Act? 4.Whether the D.E.S.U. is a necessary party? 5.Whether the suit is bad for misjoinder of cause of action, 6.Relief.

(4) Both the courts below answered issues I and 3 against the plaintiff while the remaining three issues i.e. issues 2.4, and 5 against the defendant.

(5) I have heard arguments advanced by learned counsel for the parties. The contention of the learned counsel for the appellant is that according to Section 116(2) of the ct. rateable value of any land which is not built upon but is capable of being built upon and of any land on which a building is in process of erection only is Liabl. to property lax. Learned counsel says that great significance is .attached to the words, "capable of.being built upon" as used in Section 116(2) of the Act and, therefore, unless a particular piece of land is. capable of being built upon, the argument goes property tax on such land con not be imposed. Since permission to the apellant to carry out building activity on the disputed land was granted only in March, 1972, and prior to (hat this land was not capable of being built upon because various services had not been provided upon this land, question of imposition of any tax upon such. land did not arise. The argument is further elaborated with reference .to one of the terms of the sanction according to which no land covered by the sanctioned lay out plan could be sold, leased or built upon unless the services had been laid to the satisfaction of the Commissioner. In this respect, my attention has also been drawn to section 313(5) of the Act according to which no person was entitled to utilise, sell or otherwise deal will) any land or lay out or make any new street without or otherwise than in conformity with the orders of the standing committee. Since in the present case the necessary service has not been provided till 1972, when building activity was released by the Commissioner upon satisfaction, imposition of tax for a prior period is illegal. It is contended further that if such an interpretation is not given to the words, "capable of being built upon" the very spirit underlying the aforesaid words will become redundant According to the learned counsel the rule of harmonious construction should be followed while bringing out the intention of the Legislature and taxing statute should be strictly construed. For that purpose my attention has been drawn to the cases of J.K. Steel Ltd. Vs. Uoi , M/s.' Murarilal Mahabir Prasad and Others Vs. Shri B.R. Vad and Others and the judgment in Lord Brussel in Inland Revenue Commissioner Vs. Duke of West minister cited with approval in the later authority.

(6) We may refer at this stage to the law laid down in the above Authorities. My attention was specifically drawn in the first case to the observations in para 26 at page 1182 which are to the following effect. "In interpreting a fiscal statute the Court .cannot proceed to make good deficiencies if there may be any: the Court must interpret the statute as it stands and in case of doubt in a manner favorable to the tax payer. In this very para are also quoted the observations in the case of Lord Russel of Killowen in Inland Revenue Commissioners V. Duke of Westminster 1936 Ac I to the effect that the subject is not taxable by inference or by analogy, but only by the plain words of a statute applicable to the facts and circumstances of his case,. In the case of Murarilal Mahabir Prasad and others (supra), it was held." The principle is variously expressed by saying that in fiscal statutes one must have regard t0 the letter of the law and not to the spirit of the law, that the subject cannot be taxed by inference or analogy, that in a taxing Act there is no governing principle to look at and one has simply to go on the Act itself to see whether the tax claimed is that which the statute imposes, that while construing taxing Acts it is not the function of the court to give to the words used a strained and unnatural meaning and that the subject can be taxed only if the revenue satisfies the court that the case falls strictly within the provisions of the law."

(7) Learned counsel for the respondent has no dispute with any of the propositions laid down by Hon'ble Supreme Court but she contends that by giving a very natural meaning to the relevant provisions of the Act. and without causing any strain upon their meaning and intent we will have to come to the conclusion that the land of Greater Kailash Ii was liable to property lax as has been done in this case. According to Section 114(1) of the Act. the property taxes are to be levied on lands and buildings in Delhi, save as otherwise provided in this Act. Then according to Section 115(4) general tax is leviable in respect of all langs and buildings in Delhi except lands and buildings or portion of lands and buildings exclusively occupied and used for public worshiper by a society or body for a charitable purpose. Therefore, it we look to the provisions of Sections 114 and 115 of the Act, all lands and buildings except those which arc excluded for purposes of property tax are chargeable to property tax. The determination of rateable value (RV) of lands and buildings assessable to property tax is provided in Section 116. Section 116(2) of the Act says. "The Rv of any land which is not built upon but is capable of being built upon and of any land on which a building is in process of erection shall be fixed at 5% of the estimated capital value of such land." According to learned counsel for the appellant, we should not strain the import and spirit of the words, "capable of being built upon" in Section 116(2) of the Act in a manner which is not intended by this Act. Since by that time the services had not been provided by the appellant to the satisfaction of the Commissioner, the land was not capable of being built upon as is clearly provided in the terms and conditions of the sanction of the lay outplan. I am afraid such an interpretation as is sought to. be placed by learned counsel for the appellant is not possible. It is one thing to say that a particular piece of land is not capable of being built upon and it is quite another that such a land shall not be built upon unless certain service have been provided. In the second case there is only a temporary disability attached to the land for a particular period, in this case 12 months only, during which period the land in the shape of plots could neither be sold nor leased nor built upon. The services were to be laid by the appellant itself to the satisfaction of the Commissioner within 12 months only. Simply because the appellant did not fulfill its obligations of providing the services in the colony, can it be said that the land in question was not capable of being built upon? The answer to this question must be in the negative. In this case, as rightly pointed out by the first appellate court, the appellant did not provide the services covered by the lay out plan for a period of more than 10 years. The initial sanction was granted on 1.7.59. It was the responsibility of the appellant to lay down the services to the satisfaction of the, Commissioner within a period of 12 months. Public Witness 1. Secretary of the appellant-Builder deposed that the appellant had applied to the Corporation for grant of completion certificate about two years before the date of statement which was recorded on 14.8.1970. That means it was applied for in the year 1968. But strangely enough copy of any such application was not produced or proved on record meaning thereby that no such application was ever made by the appellant to the Commissioner. When the responsibility of providing various services in the colony was upon the appellant within a period of 12 months, could it be said that even if the appellant was guilty of breach of terms of the sanction, it was not liable to pay property tax on the land of the colony. I am afraid that such a conclusion cannot be arrived at because it will amount to putting a premium upon the laches of a party itself. Suppose for instance the appellant had not provided the services for a period of 20 years or even more. It can never be the intention of the Act that during all these years, land of the colony was immune from property tax. In fact, an Authority which is more close to the facts of the present case is that of Delhi State Govt. Employees Co-operative House Building Society and Others Vs.. M.C.D. and Others, 1974 Municipalities and Corporation Cases, 569. It is a Division Bench authority of our own High Court. In that case the services of the Society were not taken over by the Corporation and it was the case of the Society that the Corporation was not entitled to charge any property tax unless it took over the services of the society. It was held." The levy and collection of property tax by the corporation under the Corporation Act are not dependent upon the taking over of the services or the furnishing of civic amenities mentioned .in the various clauses of Section 42 of the said Act.' Similarly in the present case it cannot be said that unless the appellant had provided various services in the colony to the satisfaction of the Commissioner, its land was immune from property tax.

(8) It may be stated that the spirit of the words, "capable of being built upon" as used in Section 116(2) of the Act, cannot be that the land in question could not at all be built, upon. Such a spirit in compatible only with such land which may be exclusively occupied or used for public worship or for a charitable purpose. As stated in Section 115(4) of the Act, the land which is the subject of property tax in this case was definitely capable of being built upon and simply because the appellant on its own did not provide various services to the satisfaction of the Commissioner, it did not become immune from property tax. This interpretation does not cause any strain upon the natural meaning which may be given to the words, "capable of being built upon". The appellant was even called upon to pay deficiency charges and the same amounting to Rs. 7,90,728.00 were paid only on 28.2.72 which fact is referred in the letter Ex. DW1/A dated 20.3.72 issued by the Deputy Commissioner (S) of the Corporation. On this account also it can be said that fault lay with the appellant in not paying the deficiency charges as calculated by the Corporation for so long and the appellant cannot claim any immunity from property tax on account of its own fault. Nobody can be allowed to put premium upon his own laches.

(9) In fact. it is Section 115(4) of the Act only which determines the lands and buildings upon which tax can be levied or cannot be levied. Section 116 of the Act only provides the method of determination of rateable value of lands and buildings which are assessable to property tax under Section 115(4)of the Act. This later section does not carve out any other class of lands in respect of which property tax cannot be levied. For that the substantive section is only 115(4) of the Act which does not create any difference between lands capable or incapable of being built upon. Irrespective of any such impediment and except only such lands and buildings exclusively occupied and used for public worship or held by a society or body for a charitable purpose, all lands and buildings in Delhi covered by the Act are liable to- property tax.

(10) I, therefore, do not find any merit in the second appeal which is dismissed with costs throughout.