Karnataka High Court

Ms. Shobha S/O Devendra Pastay, vs Hubli-Dharwad Municipal ... on 15 January, 2021

Author: P.Krishna Bhat

                                 -1-

                                                                R
               IN THE HIGH COURT OF KARNATAKA
                        DHARWAD BENCH

           DATED THIS THE 15TH DAY OF JANUARY 2021

                              BEFORE

           THE HON'BLE MR. JUSTICE P. KRISHNA BHAT


                       CRP.NO.1116 OF 2010

BETWEEN
MS. SHOBHA D/O DEVENDRA PASTAY,
AGE: 40 YEARS, OCC: BUSINESS,
STYLED AS SRI. SATHYA SAI DISTRIBUTORS,
F-23, LAXMI COMPLEX, CLUB ROAD, HUBLI-29.
                                                   ...PETITIONER
(BY SRI. D H PASTAY, ADV.,)
AND
HUBLI-DHARWAD MUNICIPAL
CORPORATION, HUBLI, REP. BY ITS
MUNICIPAL CORPORATION COMMISSIONER,
HUBLI-DHARWAD MUNICIPAL
CORPORATION, HUBLI.
                                                   ...RESPONDENT
(BY SRI. G. I. GACHCHINAMATH, ADV.,)
      THIS CRP IS FILED UNDER SECTION 115 OF C.P.C. AGAINST
THE   JUDGMENT   AND    DECREE    DATED   17.07.2010   PASSED   IN
MISCELLANEOUS APPEAL NO.36/2007 ON THE FILE OF THE I-
ADDITIONAL DISTRICT JUDGE, DHARWAD, SITTING AT HUBLI,
DISMISSING THE APPEAL FILED UNDER SECTION 113(3) OF THE
KARNATAKA MUNICIPAL CORPORATION ACT, 1976, R/W SECTION
471 AND RULE 19 OF PART-II OF SCHEDULE.
                                   -2-


     THIS CRP COMING ON FOR FINAL HEARING THIS DAY, THE
COURT MADE THE FOLLOWING:


                              ORDER

This revision petition is filed under Section 115 of the

Code of Civil Procedure, 1908 questioning the order dated

17.07.2010 passed in M.A.No.36/2007 by the learned I-

Additional District Judge, Dharwad sitting at Hubli,

dismissing the appeal as not maintainable.

2. The respondent which is Hubli-Dharwad Muncipal

Corporation issued tax demand notice upon one Sri. V. S.

Sadhunavar calling upon him to pay tax which was liable to

be paid for the premises Nos.F-23, F-24, F-25 and L-31 of

Laxmi complex, Hubli in the District of Dhaward. It is

alleged that the present petitioner had paid the said tax

demanded upon Sri. V. S. Sadhunavar. Upon paying such

taxes, she preferred an appeal before the learned District

Judge in M.A.No.36/2007 seeking following reliefs:

a) The respondent may be directed to refund Rs.1,11,695-00 with damages at the rate of 2% p.m. on the said amounts from 1 s t April

2007 on the date of refund of the said amount.

b) The Respondent be further directed to refund the excess amount of Rs.27,523-00 collected from the applicant, or so much of the excess amount which would be even more that may be determined by the Hon'ble Court in the proceeding.

c) The Respondent may be directed to treat the ratable value of the premises fixed prior to 2000-2001 as the basis for the years 2001- 2002 to 2006-2007.

d) It may be held that the applicant is not liable to pay the penalty in the circumstances of the case in respect of the alleged arrears of tax.

e) It may be held that applicant is not the defaulter.

f) It may be held that the applicant at any rate is not liable to pay the alleged arrears of tax for the period prior to 2001-2002.

g) The Respondent be ordered to pay the costs of the applicant.

h) The Hon'ble Court be pleased to pass such reliefs as deemed fir in order to meet the ends of justice.

3. In sum and substance, what she had sought in the

appeal before the learned District Judge was refund of the

entire tax that was said to be paid by her on the account of

Sri. V. S. Sadhunavar.

4. In support of this petition, learned counsel Sri.

D.H.Pastay, appearing for the petitioner, submitted before

me that the petitioner is neither the owner of the premises,

nor the lessee or the sub-lessee of the same. According to

the learned counsel for the petitioner, she is in permissive

possession of the premises under the owner Sri. V. S.

Sadhunavar. He submits that the tax demand notice was

issued 113(1) of the Karnataka Municipal Corporation

Act,1976 (for short "the Act") and in compliance with the

same the tax was paid. He further submitted that the

learned District Judge has not appreciated the above

aspects and he has erroneously dismissed the appeal as not

maintainable.

5. Learned counsel Sri. G. I. Gachchinmath, appearing

for the respondent-corporation, per contra, submitted that

the learned District Judge was entirely right and justified in

dismissing the appeal as not maintainable. He draws my

attention to Clause (b) of Sub-section 1 to Section 112 of

the Act and submits that the petitioner whose nature of

possession is said to be permissive from the owner is not

liable to pay the tax and even as per the showing of the

appellant, the tax demand was upon the owner of the

premises Sri. V. S. Sadhunavar and if the petitioner before

this Court had paid the tax amount on the account of the

owner, her claim should be as against the owner and appeal

at her instance questioning the tax demand or collection of

the tax is not at all maintainable. He therefore, submits

that the petition before this Court is liable to be dismissed.

6. There is no dispute about the fact that the property

in respect of which tax demand was made by the

respondent-corporation is premises and it is not a land

within the meaning of Karnataka Municipal Corporation Act,

1976. It is also not in dispute that the premises do not

belong to either the Government or the Corporation and it

is not held from the said authorities. The premises in

question is said to be F-23, F-24, F-25 and L-31 of Laxmi

Complex, Hubli of Dharwad District. There is also no dispute

about the fact that the said premises are owned by one Sri.

V. S. Sadhunavar. It is also admitted by the learned

counsel for the petitioner that the petitioner herein is

neither the owner of the premises, nor the lessee or the

tenant and not even the sub-tenant of the premises. He

characterized the nature of the possession of the petitioner

as one of the permissive occupier. Primary liability to pay

the tax concerning a commercial premises owned by a

private owner is spelled out from Section 112 of the Act.

Section 112 of the Act insofar as same is relevant for the

present purpose, reads as follows:

"112. Property tax from whom and when payable. - (1)

Subject to the provisions of sub-section (2), the property tax

shall be primarily payable as follows, namely:-

(a) if the premises are held immediately from

Government or the corporation, from the actual

occupier thereof:

[Provided that the property tax due in respect of

premises owned by the Government and occupied by any

person on payment of rent, shall be payable by the

Government:

Provided further that no property tax shall be payable

in respect of premises owned by the Corporation and

occupied by any person on payment of rent.]

(b) if the premises are not so held,-

(i) from the lessor if the premises are let;

(ii) from the superior lessor is the premises are sub-let;

(iii) from the person in whom the right to let the premises vests, if they are unlet.

(2) If any land has been let for any term exceeding one year to a tenant and such tenant or any person deriving title howsoever from such tenant has built upon the land, the property tax assessed upon the said land and upon the building erected thereon shall be primarily payable by the said tenant or such person whether or not the premises be in the occupation of the said tenant or the person.

(3) The property tax shall be paid by the person primarily liable within [ninety days] after the commencement of every [year]"

(Emphasis supplied)

7. Since the learned counsel for the petitioner has

relied on Section 112(A)(1) and Section 113(1) of the Act,

it is necessary to refer to the same also and they read as

follows:

"112A. Assessment of property tax. - (1) Every

owner o r occupier who is liable to pay prope rty tax

unde r this Act, shall e very ye ar submit to the

Commissioner o r the officer authorised by him in this

behalf (here inafte r referred to as autho rise d officer) a

return in such fo rm within such period and in such

manner as specifie d in schedule III.

Pro vide d that if the owne r or occupie r who is

liable to pay tax files return and also pays tax which is

due, within one month from the date of

commencement of the year, he shall be allo wed a

rebate o f five percent o n the tax payable by him."

"113. Demand f or payment of property tax an d

appeal against s uch demand. - ( 1) If the pro perty

tax including pe nalty leviable under sub-section (5) o f

section 112A is no t paid afte r it has been become due ,

the corpo ration may cause to be served upo n the

person liable for payment o f the same a notice of

demand in such fo rm as may be pre scribe d."

8. From a reading of the above, it is apparent that

these provisions form part of a scheme regarding the

liability to pay taxes, assessment of the same and the

respondent-corporation making a demand for payment of

the same. They are not independent of each other. It is

further evident that the primary liability to pay tax in

respect of commercial premises privately owned is upon the

owner of the premises (owner or lessor of the premises) or

the superior lessor or person in whom a right to let the

premises is vested if they are un-let. Insofar as the present

case is concerned, it is not the case of the petitioner that

she is either the lessor or the superior lessor or that she is

the person in whom a right to let the premises in question

is vested. On the other hand, the specific case of the

petitioner is that the tax demand was made upon the

undisputed owner of the premises namely Sri. V. S.

Sadhunavar and on such demand having been made, she

had paid the taxes. Sub-section 3 of Section 113, under

which this appeal is preferred before the learned District

Judge, reads as follows:

"[113. Demand for pay ment of property tax an d

appeal against s uch demand. -

(1) xxxx

(2) xxxx

(3) Notwithstanding anything containe d in se ctio ns

61A o r 62 or 444, any pe rson disputing the claim in

the no tice of de mand se rved under sub-section ( 1),

may within thirty days after the service o f such notice ,

appe al in such manner subject to such conditions and

to such authority as may be prescribed.]"

9. In the above provision "any person disputing the

claim" is referable only to the persons who are primarily

liable to pay the tax as adumbrated under sub-clause (b) of

Sub-section(1) of Section 112 of the Act and none else.

This view of mine receives support from the wordings

employed in Section 113(3) of the Act to the effect "..., any

person disputing the claim in the notice of demand served

under sub-section (1)...." Sub-section (1) of Section 113 of

the Act contemplates that "...., the corporation may cause

to be served upon the person liable for payment of the

same a notice of demand ......''. Admittedly the notice of

demand was addressed to V.S. Sadhunavar, the owner of