Sunil Raj & Co. Pvt. Ltd. vs Municipal Corporation Of Delhi ...
1992 Latest Caselaw 588 Del

JUDGMENT

P.K. Bahri, J.

(1) The short question which arises in this writ petition is as to whether the petitioner is liable to deposit the disputed property tax in respect of the assessment year commencing from 1986 before his nine house-tax appeals filed before the District Judge under Section 169 of the Delhi Municipal Corporation Act (hereinafter called the Act') can be heard. The matter is now covered by the judgment of the Supreme Court in Shyam Kishore & Others Vs. Municipal Corporation of Delhi & Another, .

(2) Before we analyze the aforesaid judgment we may briefly give the facts of this case. The petitioner took on perpetual lease a plot of land measuring 2200 sq. yards vide perpetual lease deed dated February 7. 1981 and building plans were sanctioned in August 1984 and the construction of building was commenced in October 1984 and it was completed in 1986. A notice dated March 27, 1986 issued under Section 126 of the Act was served on the petitioner proposing to increase the rateable value from Rs.1,00,000.00 to Rs. 7,02,000.00 with effect from April 1, 1986. Objections were filed by the petitioner in response to the said notice. The Deputy Assessor & Collector passed the order dated July 7, 1990 by which he fixed the, rateable value at Rs.6,300.00 per annum with effect from April 1, 1982 and fixed Rs. 3,22,580.00 per annum with effect from March 3, 1986 onw

(3) It is evident from the provisions of the Act particularly Section 127 that the Commissioner can prepare a new assessment list every year or can adopt rateable value for the following year meaning thereby that for every year assessment of the property has to be made. In case the previous assesment is to be varied, a notice under Section 126 has to be issued and after considering the objections, if any filed, the new assessment can be made for a particular year. Section 170 of the Act lays down that no appeal shall be heard or determined unless the disputed property tax is paid. Section 169 permits filing of an appeal against any levy or assessment of any tax.

(4) The apex court in the case of Shyam Kishore(supra) has now categorically laid down that the District Judge can entertain an appeal under Section 169 of the Act and can grant time to the appellant for depositing the disputed tax of a particular assessment and can hear the appeal only after the disputed tax has been deposited. The Supreme Court has also taken into consideration the assessment being made in respect of several years and the point as to how the matters regarding the subsequent years are to be dealt with by the Corporation in case the appeal is filed in respect of base year i.e. the assessment made in respect of first year it was observed by the Supreme-Court as follows:- "IN the present statutory context it sounds plausible to say that such an appeal can be admitted or entertained but only cannot be heard or disposed of without pre-deposit of the disputed tax. Such an interpretation will provide some much-needed relief from the harshness of the provision. These are not days in which the calculation of the property tax is simple and uncomplicated, the determination of the annual value of the property, except when based on the actual rent received from the property involves various subjective factors and not unoften, there is a wide gulf between the tax admitted and the tax demanded. Sometimes to compel the assessed to pay up the demanded tax for several years in succession might very well cripple him altogether. This apart an assessed may not be able to deposit the tax while filing the appeal but may be able to pay it up within a short time or at any rate before the appeal comes on for hearing in the normal course. There is no reason to construe the provision so rigidly as to disable him from doing this. Again, when an appeal comes on for hearing the appellate judge in appropriate cases, where he feels there is some great hardship or injustice involved may be inclined to adjourn the appeal for some time to enable the assessed to pay up the tax. Though it will not be expedient or proper to encourage adjournment of an appeal where it is ripe for hearing otherwise only on this ground and as a matter of course an interpretation which leaves some room for the exercise of a judicial discretion in this regard, where the equities of the case deserve it may not be inappropriate. The appellate judge's incidental and ancillary powers should not be curtailed except to the extent specifically precluded by the statute. We see nothing wrong in interpreting the provision as permitting the appellate authority to adjourn the hearing of the appeal thus giving time to the assessec to pay the tax or even specifically granting time or Installments to enable the assessed to deposit the disputed tax where the case merits it so long as it does not unduly interfere with the appellate court's calendar of hearings. His powers however should stop short of staying the recovery of the tax till the disposal of the appeal."

(5) The Supreme Court has also laid down in this very judgment that where assessments for one or more future years are made adopting the assessment or revision made for one year (which may be called 'the base year') which is under appeal the decision of the appeal will ensure that demands for successive years cannot been forced or recovered to the extent the appeal for the base year succeeds, even without the necessity of an appeal by the assessed for each of the successive years.

(6) In is evident that once an appeal in respect of the base year is heard and decided on merits and the assessment is either confirmed or varied the effect would be that the same would be valid for the subsequent years and there will be no necessity of filing any appeal for the subsequent assessment years if in subsequent assessment years the assessment of the base year has been adopted by the Commissioner under Section 127 of the Act.

(7) In the present case the assessment order has been made in respect of nine assessment years and the rateable value of Rs. 7,02,000.00 has been fixed for the first year with effect from April 1, 1986. In respect of the earlier year there was no construction on the plot in question and rateable value appears to have been fixed of the open .land. So far the purpose of nine appeals the base year would be 1986-87. The District Judge has now power to give some time to the appellant to deposit the disputed tax before hearing the appeal in.respect of the base year. It is evident that once that appeal is decided the decision would cover the following assessment years as well. The Supreme Court has clearly laid down that the appeals brought under Section 169 could be entertained without the necessity of appellant depositing the disputed tax and before the appeal is to be heard and determined the appellant has to deposit the disputed tax and discretion is given to the District Judge for postponing the payment of disputed tax or even getting it deposited in Installments keeping in view the facts and circumstances in each case till the District Judge takes up the appeal for hearing and determination.

(8) In other words, as in the present case, when vide one assessment order assessments have been framed for a number of years and there is assessment made in respect of base year which is followed in the subsequent years the proper exercise of the discretion of the appellate authority would be to have the disputed tax in respect of the base year deposited from the appellant and then to proceed to hear and decide the appeal filed in respect of base year assessment and after deciding the said appeal the decision of the appeal in respect of the base year would automatically govern the assessments of the subsequent years.

(9) It is clear that the District Judge can go on extending the time for deposit of disputed tax by passing necessary orders in respect of the appeals pertaining to the assessments of the subsequent years till the appeal in respect of the base year is heard and determined. The District Judge in its discretion can direct deposit of admitted tax in the said appeals and can extend the period of deposit of disputed tax. As soon as the appeal against assessment of the base year is determined, the legally payable tax in respect of subsequent years can be got deposited and appeals of subsequent years disposed of. Rather the decision of appeal of base year would automatically govern the subsequent years assessment of which is based on base year assessment.

(10) Under Section 166 of the Act if the person liable for the payment of tax does not within 30 days from the service of the notice of demand pay the amount due within the said period the tax can be recovered by coercive processes indicated in the Section. It is true that the District Judge has no jurisdiction to grant any stay of any coercive proceeding being taken by the authorities to recover the tax while entertaining the appeal but the District Judge has the discretion to extend the period of payment, of disputed tax. It is evident that as sow as such order is made by the District Judge extending the period of payment of disputed tax the assesses would not be deemed to be liable for payment of said disputed tax till the period so extended crores to an end. This writ petition is thus disposed of with the above, observations. The District Judge shall now proceed to decide the appeals keeping in view the observations made by us.