Delhi High Court

Municipal Corporation Of Delhi vs Shri Sardari Mal Rattan Lal Jain ... on 25 August, 2010

Author: Indermeet Kaur

*IN THE HIGH COURT OF DELHI AT NEW DELHI

%                        Date of Judgment : 25th August, 2010

+                  RSA No.21/1989


MUNICIPAL CORPORATION OF DELHI       ...........Appellant
            Through: Mrs.Amita Gupta and Mr.Praveen
                     Kumar, Advocate.

                   Versus

SHRI SARDARI MAL RATTAN LAL JAIN TRUST (REGD.)
                                   ..........Respondents

Through: None.

CORAM:

HON'BLE MS. JUSTICE INDERMEET KAUR

1. Whether the Reporters of local papers may be allowed to see the judgment?

2. To be referred to the Reporter or not? Yes

3. Whether the judgment should be reported in the Digest?

Yes

INDERMEET KAUR, J.(Oral)

1. This second appeal has impugned the judgment dated

18.8.1988 which had endorsed the finding of the Trial Judge dated

2.3.1985. The Trial Judge vide the judgment and decree dated

2.3.1985 had decreed the suit of the plaintiff namely Shri Sardari

Mal Rattan Lal Jain Trust (regd.) thereby restraining the

defendant i.e. the MCD from realizing a sum of Rs.22,600.20 at

the rateable value of Rs.26,240/- per annum with respect to

property no.412-17, Esplanade Road, Kuche Bulaki Begum, Delhi.

2. Plaintiff Shri Sardari Mal Rattan Lal Jain Trust was a

registered Trust created on 9.5.1943. The Trust had purchased

land measuring 485 sq. yards situated in 412-17, Esplanade Road,

Kuche Bulaki Begum, Delhi-110006. The Jain Dharamshala and

Digambar Jain Boarding House were constructed therein for the

advancement of education by the Trust. Income from the

premises attached and adjoining to the Dharamshala were used

only for promoting its aforenoted objectives. No dividend or

bonus was also paid to its members or trustees. The plaintiff had

claimed exemption being fully covered under Section 115(4) of the

Delhi Municipal Corporation Act (hereinafter referred to as „the

DMC Act). On 12.2.1980 a sum of Rs.22,600.20/- was claimed as

property tax from the plaintiff at the rateable value of Rs.26,240/-

per annum. This has been challenged in the present suit.

3. In the written statement the proceedings were contested. It

was stated that the plaintiff was not covered under Section 115(4)

of the DMC Act. The income from the Trust was not being used

solely for charitable purposes.

4. Five issues were framed by the Trial Court. It was held that

the plaintiff is entitled to seek exemption from the levy of property

tax as it is covered under Section 115(4) of the DMC Act; the

demand of Rs.22,600.20 is illegal. Section 477 of the said Act is

not applicable; there is no bar to the filing of the present suit.

Suit was decreed in favour of the plaintiff.

5. On 16.8.1988 the judgment of the Trial Court was endorsed.

Statement of PW-1 Rajinder Prasad Jain , PW-2 Suresh Chand

Chain was considered in detail. The trust deed Ex. PW-1/1 had

been proved on record spelling out the purpose for which the trust

was created i.e. for a charitable purpose. The rental income was

also being used for the purpose of the maintenance of the

Dharamshala and Piyao; there was no commercial activity; the

income from the property was used purely and solely for a

charitable purpose i.e. for promoting the objects of the

Dharamshala; the plaintiff was entitled to the exemption granted

to him under Section 115(4) of the DMC Act. Appeal was

dismissed.

6. This second appeal has been filed by MCD. The appeal has

not yet admitted although it has been shown on the Regular

Board. On 19.9.1990, the counsel for the appellant had made a

submission that the interpretation of Section 115(4) of the DMC

Act was a subject pending decision before the Full Bench of this

Court. The appeal had thereafter been adjourned time and again

for the said purpose i.e. for awaiting decision in CWP

No.962/1989. The said petition was dismissed as withdrawn on

1.10.2001.

7. On 16.8.2010, it had been pointed out by learned counsel for

the respondent that the questions of law which have been raised

by the appellant and as engrafted on page 3 of the memo of appeal

no longer survive.

8. For a better appreciation of this argument it would be

necessary to reproduce the said questions of law which have been

formulated by the appellant which inter alia reads as follows:

"A. Whether in view of the provisions as contained in Sec. 169/170 MCD Act, 1957 and the various decisions of this Hon‟ble Court is not the jurisdiction of civil courts to entertain matters impugning the validity of property taxes assessed/levied or against the authentication of assessment list or against the demand bills, barred by law.

B. Whether the principles of resjudicate application to assessment proceedings in as much as each assessment year is a separate year having a separate and distinct cause of action."

9. Learned counsel for the appellant has placed reliance upon a

judgment of this Court reported in 2001(60) DRJ 549 Ganga Ram

Hospital Trust Vs. Municipal Corporation of Delhi to support his

submission that a suit is maintainable to challenge the levy and

assessment of the property tax. Section 169 of the DMC Act deals

with an appeal against assessment; Section 170 stipulates the

condition of the right to appeal. They are reproduced as follows:

169. Appeal against assessment, etc.-(I) An appeal against the levy or assessment or revision of assessment of any tax under this Act shall lie to the Municipal Taxation Tribunal constituted under this section:

Provided that the full amount of the property tax shall be paid before filing any appeal:

Provided further that the Municipal Taxation Tribunal may, with the approval of the District Judge of Delhi, also take up any case for which any appeal may be pending before the court of such District Judge:

Provided also that any appeal pending before the court of such District Judge shall be transferred to the Municipal Taxation Tribunal for disposal, if requested by the applicant for the settlement thereof on the basis of annual value.

(2) (a) The Government shall constitute a Municipal Taxation Tribunal consisting of a Chairperson and such other members as the Government may determine:

Provided that on the recommendation of the Government, the Chairperson may constitute one or more separate Benches, each Bench comprising two State or a Union territory and the other member from the higher administrative service, and may transfer to any such Bench any appeal for disposal or may withdraw from any Bench any appeal before it is finally disposed of.

(b) The Chairperson, and not less than half of the other members, of the Municipal Taxation Tribunal shall be persons who are or have been the members of the Higher Judicial Service of a State or a Union territory for a period of not less than five years, and the remaining members, if any, shall have such qualifications and experience as the Government may by rules determine.

(c) The Chairperson and the other members of the Municipal Taxation Tribunal shall be appointed by the Government for a period of five years or till they attain the age of sixty-five years, whichever is earlier.

(d) The other terms and conditions of service of the Chairperson and the other members of the Municipal Taxation Tribunal, including salaries and allowances, shall be such as may be determined by rules by the Government.

(e) The salaries and allowances of the Chairperson and the other members of the Municipal Taxation Tribunal shall be paid from the Municipal Fund.

(3) In every appeal, the costs shall be in the discretion of the Municipal Taxation Tribunal or the Bench thereof, if any.

(4) Costs awarded under this section to the Corporation shall be recoverable by the Corporation as an arrear of tax due from the appellant.

(5) If the Corporation fails to pay any costs awarded to an appellant within ten days from the date of the order for payment thereof, the Municipal Taxation Tribunal may order the Commissioner to pay the costs to the appellant.

170. Conditions of right to appeal.- No appeal shall be heard or determined under section 169 unless-

(a) the appeal is, in the case of a property tax, brought within thirty days next after the date of authentication of the assessment list under section 124(exclusive fo the time requisite for obtaining a copy of the relevant entries therein) or, as the case may be, within thirty days next after the date of the receipt of the notice of assessment or of alteration of assessment or, if no notice has been given, within thirty days after the date of the presentation of the first bill or, as the case may be, the first notice of demand in respect thereof:

Provided that an appeal may be admitted after the expiration of the period prescribed therefor by this section if the appellant satisfies the [Municipal Taxation Tribunal] that he had sufficient cause for not preferring the appeal within that period;

(b) the amount, if any, in dispute in the appeal has been deposited by the appellant in the office of the Corporation."

10. The relevant extract of the judgment which answers the

question (A) formulated by the appellant reads as follows:-

"16. Section 169 provides for a remedy of appeal against levy or assessment of any tax under the Act while section 170 lays down conditions subject to which the right of appeal conferred by section 169 can be exercised. Neither of these two sections contain any provision barring a civil suit to challenge levy and assessment of tax under the Act. At best it may be argued that in view of the remedy of appeal provided under section 169 of the Act a party should have recourse to the said remedy. But a party filing a civil suit to challenge the levy and assessment of tax under the Act may like to urge that the levy and assessment of tax is not in accordance with the Act or is vocative of the provisions of the Act. In other words it may be the case of a plaintiff that the authorities under the Act have not acted in accordance with the provisions of the Act while levying and assessing tax and, therefore, it is entitled to exercise its inherent right to challenge such a levy and assessment by way of a civil suit. Availability of an alternative remedy may be treated as a bar by the court while exercising its writ jurisdiction because writ jurisdiction under Article 226 of the Constitution of India is a matter of exercise of discretionary jurisdiction of the court but it is not the same case while entertaining a civil suit. Exercise of jurisdiction to entertain civil suit is not a discretionary matter before the civil court. A civil court may reject the plaint as per law or dismiss a civil suit on merits. It cannot refuse to entertain the suit unless barred by law. The DMC Act does not contain any such bar to a civil suit in matters of levy and assessment of tax."

11. It is clear that the question No.A as formulated by the

appellant no longer survives.

12. Question No.B as has been pointed out by the learned

counsel for the respondent is not borne out from the pleadings of

the parties.

13. The present suit was a suit for injunction. It had impugned

the act of the respondent on the levy of the property tax at the

rateable value of Rs.26,240/- i.e. a sum of Rs.22,600/-. The written

statement filed by the defendant has also been perused. Issues

framed were as follows:-