Prem Lata Bhatia & Ors. vs New Delhi Municipal Council
2017 Latest Caselaw 6648 Del

$~46
*    IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                      DECIDED ON: 22.11.2017

+                         LPA 741/2017

PREM LATA BHATIA & ORS.                         .....Appellants
             Through: Mr. Darpan Wadhwa, Sr. Advocate with
             Mr. Nikhil Singhvi, Mr. Aubert Sebastian and Ms.
             Nikita Pandey, Advocates.

                   Versus

NEW DELHI MUNICIPAL COUNCIL                  .....Respondent
            Through: Mr. Arjun Mitra, Adv. for NDMC with
            Mr. Abhishek Misra and Ms. Jaskaran, Advocates.


CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
S.RAVINDRA BHAT, J. (ORAL)

CM APPL.42326 & 42327/2017 (exemption) Exemptions are allowed subject to all just exceptions. LPA 741/2017 & CM APPL.42325/2017 (stay)

1. Issue notice. Mr. Arjun Mitra, Advocate accepts notice on behalf of the respondent/New Delhi Municipal Council (hereafter referred to as "NDMC"). In view of the order that the Court proposes, learned counsel for the parties are agreeable for final disposal of this appeal.

2. The grievance urged by the appellant is that on 07.12.2016, the assessing authority of the New Delhi Municipal Council (NDMC)

fixed a rateable value for No.13, Kasturba Gandhi Marg, New Delhi (hereafter referred to as the "suit property") at ₹5,35,80,600/-. Subsequently, a demand notice claiming a sum of ₹21,99,83,328/- for the years 2003-2017, on the basis of the rateable value fixed for the previous years was issued. The demand notice was issued on 13.12.2016. Subsequently, on 12.01.2017, the NDMC issued another letter stating that adverse action including attachment of the property would be resorted to. The appellant, it seems, paid the demand of the property tax to the tune of ₹2,14,450/- for the year 2016-17.

3. The appellant questioned the fixing of rateable value at one go - for 14 years - besides impugning the demand notice in a writ petition, before this court, under Article 226 of the Constitution of India. The grounds on which the appellant approached the Court under Article 226 of the Constitution of India were that in the absence of any period of limitation (as in this case), the authority concerned has to exercise its powers within the reasonable time and there ought to be no inordinate delay in passing the order. It was pointed out that the notice proposing rateable value revision was issued first on 27.02.2004 and later on 28.03.2006. Both these were objected to and nothing further was heard from the NDMC. During the interregnum period, the assessee/petitioner continued to deposit the payment of property tax on the basis of the existing rateable value in terms of the demands made during that time. Reliance is placed in this regard upon the demand notices issued on 30.01.2006, 03.12.2008 and 26.11.2009 for ₹2,14,450/- and subsequent periods as well, ending up to the period covered in the demand notice for 2014-15. The writ

petitioner/appellant urged that all these demands were duly satisfied and that it had no reason to suspect that upward revision would be resorted to on retrospective basis as it were for 13 years. Reliance is also placed upon the objections to the proposals for enhancement of rateable value, lodged by the appellant with the NDMC on 27.02.2004 and 22.03.2004.

4. It is urged on behalf of the appellant that the suit property was sealed by the NDMC upon allegations of misuse and unauthorized construction by notice dated 18.04.2006 under Section 250 of the New Delhi Municipal Council Act. A copy of the notice dated 18.04.2006 has been produced. The factual basis for this was that a school was functioning in the premises, which was however, discontinued when the lease/agreement was cancelled on 25.04.2007. It is stated that so far as the allegation of unauthorized construction was concerned, repeated representations were made to the NDMC asking for demolition - even a representation through letter of 15.05.2009 is pressed into service; and the earlier representation dated 25.04.2007 has also been placed on the record. It is submitted that eventually the property was unsealed. Seals placed upon the property were removed in 2016 pursuant to the orders made in the writ proceedings by this Court.

5. Learned counsel appearing on behalf of the appellant urged that the rationale for rejection of the petition, i.e., that an alternative efficacious remedy exists by way of an appeal to the Tribunal does not provide any relief. It is submitted that the judgment of this Court in Springdales School v. North Delhi Municipal Corporation and Others,

238 (2017) DLT 487 where the Court had held - in similar circumstances - that the appeal could be entertained upon condition that tax for one year, i.e., the base year is deposited, was cited but without any effect. The learned Single Judge merely relegated the writ petitioner to the remedy of an appeal which is onerous. Besides, it was urged that the appellate authority - a mere tribunal - cannot consider the question of validity or the arbitrariness of the bye laws as was sought to be urged in the present case. Learned counsel lastly urged that the collective assessment order impugned in the writ petition is also not legally enforceable because for the period 2009 onwards, the manner of fixing rateable value changed and the Unit Area Method was adopted by the NDMC.

6. Learned counsel for the NDMC urged that the decision of this Court in Springdales School (supra) had been carried in appeal and that the operative part of the order had been stayed. He next urged that the parent enactment does not place any restriction in terms of the timeline within which a show cause notice fixing the rateable value is to be decided. Being a matter of revenue, the assessing authority had the full liberty to fix the rateable value in accordance with the market rates and raise the demands which it did.

7. During the course of hearings, the Court had suggested to the parties, instead of adjudication on the issue, that having regard to the peculiarity of the demand, i.e., its collective nature and furthermore that the rateable value in the present case determined on 7.12.2016 on the basis of the market rent indicated for the concerned assessment year, i.e., 2016-17 made applicable for all past years is facially

questionable. It is also evident that the impugned order fixing the rateable value did not take into account the fact urged, i.e., the premises were not utilized for over ten years as they had been sealed. In these circumstances, the Court felt that the most appropriate course would be to set aside the impugned order under Section 72 dated 7.12.2016 as well as the consequential demands and direct the concerned officer, i.e., the assessing authority to fix the rateable value on a proper basis. This course appears to be acceptable to the NDMC.

8. Having regard to the above discussion, the following direction are issued: -

(1) The order impugned in the writ petition, i.e., the one dated 07.12.2016 fixing the rateable value @ ₹5,35,80,600/-w.e.f. 01.04.2003 is hereby set aside.

(2) The assessing authority/official is directed to take into consideration the objections of the petitioner as to the fixation of the rateable value (which was proposed to be fixed at ₹155.71 per square feet per month) having regard to two factors; one that the rateable value appears to be fixed on current market rental and two that to the assertion of the writ petitioner/assessee that the property was never let out but occupied by the owner itself. It is open in this regard for the appellant to file additional representation/objections within four weeks to the Assessing Officer.

(3) The Assessing Officer shall also take into consideration the period when the building or any part thereof was sealed and give appropriate remission having regard to the correct

position in law based upon the records of the NDMC and such records as may be relied upon by the appellant. (4) The fixation of the rateable value pursuant to the directions of this Court shall be on the basis of the objections, materials and the points urged during the hearing (to be granted to the appellant in this regard). The assessing authority shall pass a reasoned order dealing with all aspects urged before it, by the appellant.

9. All rights and contentions of the parties are reserved. The demand notice dated 13.12.2016 and subsequent letter dated 17.01.2017 are hereby quashed. A fresh demand notice shall be issued to the appellant consequent to the order fixing the rateable value, made pursuant to this order, after giving due credit for the amount received from the assessee/appellant for the period 2004-2017.

10. The appeal is disposed of in the above terms.

S. RAVINDRA BHAT (JUDGE)

SANJEEV SACHDEVA (JUDGE) NOVEMBER 22, 2017 /vikas/