JUDGMENT
1. All these second appeals are filed by the plaintiffs aggrieved by a common judgment and decree dated 15-6-1998 of the I Additional District Judge, Visakhapatnam made in a batch of appeals.
2. All the appellants herein are taxpayers of Visakhapatnam Municipal Corporation. They have filed the suits in OS No.336 of 1991 and batch questioning the revision of assessment and enhancement of tax in respect of their houses. Ail the suits have been tried together, and the Principal District Munsif, Visakhapatnam dismissed the same on 22-8-1996. The plaintiffs filed appeals before the I Additional District Judge, Visakhapatnam and the lower appellate Court also dismissed all the appeals by judgment and decree dated 15-6-1998. The plaintiffs are thus before this Court questioning the aforesaid concurrent judgments in dismissing their suits.
3. Sri N. V. Ranganadham, the learned senior Counsel appearing for all the appellants submits that the averments in the plaint are common and the questions involved in all the suits and the appeals are also common, and therefore, both the Courts below have considered the matters by a common judgment.
4. As the facts and the questions to be considered are common, the facts relating to the first case, i.e., SA No.692 of 1998, are referred to herein. The appellant is the plaintiff in OS No.336 of 1991 and the appellant in AS No.246 of 1996. The parties herein are referred to as they arrayed in the suits.
5. The plaintiff filed the suit against the Municipal Corporation, Visakhapatnam alleging that she is the owner of the house bearing No.64-2-18 covered by new assessment No.76480 (old assessment No.44531) situated in Gullapalem, Visakhapatnam. The said house was originally assessed
to half-yearly tax of Rs.112/- prior to the half-year ending 30-9-1989. The Municipal Corporation enhanced the rental value from Rs.112/- to Rs.448/- with effect from 1-4-1977. Questioning the enhancement of tax, the plaintiff filed a suit in OS No.2102 of 1979 on the file of the 6th Additional District Munsifs Court, and the said enhancement was quashed by a decree dated 31-10-1983. But, the defendant has not sent a revised bill, but after a long lapse of time, a destraint notice dated 9-5-1989 was issued for collection of the tax from 1-4-1977 to 31-3-1989 for a sum of Rs.2,688/-. The plaintiff filed the suit OS No.703 of 1981 on the file of the III Additional District Munsif, Visakhapatnam questioning the legality of the destraint order issued without following due procedure. While so, the defendant-Corporation again issued a revised special notice dated 31-3-1990 bearing No.172618 enhancing the half-yearly tax from Rs.112/-to Rs. 1,400/- with effect from 1-10-1989, against which, the plaintiff filed a revision petition (complaint) on 12-4-1990, which was numbered as RP No.35/90. The said revision petition was/disposed of by the defendant on 29-9-1990, and by order dated 6-11-1990, the defendant-Corporation communicated that the annual rental value and the enhanced tax of Rs.1,400/-was confirmed. The said intimation dated 6-11-1990 was served on the plaintiff on 27-11-1990. The plaintiff questioned the said revised assessment and increase of tax as arbitrary, capricious, illegal and unenforceable for the following reasons:
6. The house of the plaintiff is an old one having been constructed more than 15 years ago and is governed by the provisions of A.P. Rent Control Act, which alone should be the basis for assessment, which is not done in respect of the property of the plaintiff; the said house is a tiled house, which is leased out to one Sanaboyina Srihari Rao under a registered lease deed dated 15-7-1989 on a monthly rent of
Rs.80/-4 and there are no additions, alterations or improvements effected or made to the house at any time; there is no increase in the rental value of the building from July, 1989 nor any increase in the rental values in the locality; the provisions of the Hyderabad Municipal Corporation Act as made applicable to the city of Visakhapatnam by virtue of Act 9 of 1979 dealing with the method and manner of assessment of the plaintiff’s property have not been complied with either in effect or in substance in revising the tax and no enquiries were made to arrive at the rental values; the rental value as mentioned in the special notice is arbitrary and baseless; the particulars mentioned in the special notice that the plaintiff is receiving a monthly rent of Rs.1,000/- is absolutely false and incorrect; before service of the special notice, the plaintiff was never called upon to furnish rental particulars in respect of her house; after the formation of the Visakhapatnam Municipal Corporation, none of the provisions of the Hyderabad Municipal Corporation Act have been followed and even the rate of tax has not been fixed by any resolution of the Standing Committee and the rate adopted under the A.P. District Municipalities Act is illegal, and therefore, the enhancement is also illegal; no public notice was issued regarding the preparation of the ward assessment books and even playcards were not displayed under the Act; the person whose facsimile signature appears on the special notice is not competent to make the assessment nor issue the special notice; and the assessment has not been finalised in the same financial year in which it is proposed to be made.
7. The plaintiff got issued a legal notice dated 6-12-1990 under Section 685 of the Hyderabad Municipal Corporation Act calling upon the defendant to cancel the enhancement of tax and confirm the tax at the old rate, and the said notice was received by the defendant on 13-12-1990
but no reply has been issued. Hence the suit is filed for declaration and permanent injunction.
8. The defendant-Corporation filed a written statement disputing the allegations made in the plaint and stated that the plaintiff, in order to evade tax to the defendant-Corporation, has been litigating in one Court or other since 1979 and is wilfully and skillfully avoiding the tax to the Corporation. It is stated that the building was never referred to the Rent Controller for the purpose of fixing the rent, and therefore, the Rent Control Act is not applicable for fixing the annual rental value in this case. The plaintiff, in collusion with his tenant S. Srihari Rao, created the lease deed dated 15-7-1989, and the said lease deed cannot be taken as a basis for fixing the tax. The building of the plaintiff is consisting of 4 portions and each portion is fetching a monthly rent of Rs.250/- and the total monthly rent is Rs.1,000/-. Hence, tax was levied on the basis of the rent that is actually received by the plaintiff. The plaintiff has not been following the Rent Control Rules in collecting the rents from her tenants, and therefore, she cannot seek shelter under the Rent Control Act in levy of tax. It is incorrect to state that the method and manner of assessment have not been complied within effect or substance in revising the lax and no enquiries were made to arrive at rental values etc. The Municipal Corporation followed all the procedures in levying the tax on the properties of the plaintiff. It is false to state that the house of the plaintiff is situated in a remote corner of the city, but in fact it is situated in the industrial locality where the rents are higher than the other localities in the city of Visakhapatnam. The Revenue Inspector, who is competent to arrive at levy of the tax, has made personal inspection of the building and enquired about the rental values, accommodation available and other amenities available before
levying the tax in accordance with the rules and regulations in force. It is stated that resolution has been made by the Municipal Council under the Municipalities Act and the same has been adopted by the Corporation.
9. On the aforesaid pleadings, the trial Court framed the following issues:
“1. Whether the plaintiff is entitled for declaration as prayed for?
2. Whether the plaintiff is entitled for permanent injunction as prayed for?
3. Whether the plaintiff’s suit is maintainable?
4. To what relief?
10. The plaintiff has not adduced any oral evidence. The defendant has also not adduced any oral evidence. It appears that by consent, Exs.A1 to A7 were marked on behalf of the plaintiff. They are : Special Notice dated 31-3-1990 (Ex.A1), Intimation (Ex.A2), Application of the plaintiff to the Corporation dated 12-4-1990 (Ex.A3), Legal Notice dated 6-12-1990 (Ex.A4), Postal Acknowledgment (Ex.A5), Judgment Copy in OS No.2102/81 (Ex.A6) and Decree Copy in OS No.703/81 (Ex.A7).
11. On behalf of the defendants, Property Tax Assessment List of the buildings (Ex.B1), RP No.51/90 (Ex.B2), notice in 51/90 dated 12-4-1990 (Ex.B3), Notice No.76434 (Ex.B4) and Intimation No.51/90 from the Corporation to the plaintiff (Ex.B5) are marked.
12. The trial Court, considering the oral submissions and the documentary evidence, answered all the issues against the plaintiff and in favour of the defendant and held that the plaintiff is not entitled for the declaration as prayed for, and accordingly dismissed the suit. The lower appellate
Court also confirmed all the findings of the trial Court and dismissed the appeal.
13. The learned Counsel for the appellants submits that both the Courts below failed to consider that the Corporation has not followed the procedure prescribed by the Act and the Rules, and therefore, the levy of tax is unauthorised and contrary to Article 265 of the Constitution of India; that the Revenue Inspector of the defendant-Corporation is not entitled to determine the tax; that the purported determination of lax has not been made by the Commissioner, and therefore, the assessment of tax is vitiated by non-application of his independent mind; that after formation of the Visakhapatnam Municipal Corporation, the provisions of the Hyderabad Municipal Corporation Act have not been followed, and the rate of tax has not been fixed by any of the resolutions of the Standing Committee, and the rate adopted under the A.P. Municipalities Act has no legal sanction; that both the Courts below have failed to see that the procedure contemplated under Sections 198, 199 and 212 of the A.P. Municipal Corporations Act has not been followed before levying the property tax, and therefore, the levy is illegal; that the public notice as contemplated under Section 220(1) of the Act has not been issued, and therefore, the levy is illegal; and that the special notice issued under Section 220(2) is not valid in law. It is further stated that the suit is maintainable; and that the judgment of the Supreme Court in Morvi Municipality v. State of Gujarat, , has no application to the case of the plaintiff, as the Gujarat Municipalities Act is different and not similar to the provisions of the Hyderabad Municipal Corporation Act, and therefore, the said judgment of the Supreme Court is distinguishable.
14. On the aforesaid contentions, the learned Counsel for the appellants submits
that the following Substantial Questions of Law arise for consideration in these second appeals:
1. Whether the Commissioner has not applied his independent mind before making determination of annual rental value and the tax?
2. Whether the procedure contemplated under Sections 198, 199, 212 and 214 has not been followed and whether the annual rateable value is vitiated?
3. Whether the public notice is required to be given or only a special notice is required to be given for revision of the tax?
15. Before considering the aforesaid contentions, the relevant provisions of the Hyderabad Municipal Corporations Act, 1955 as applicable to the Visakhapatnam Municipal Corporation are referred to as follows:
By Visakhapalnam Municipal Corporation Act, 1979 (Act No. 19 of 1979) (for short ‘the VMC Act’), the Visakhapatnam Municipal Corporation has been established, which came into force on 16-4-1979. Prior to 16-4-1979, Visakhapatnam was a Municipality.
16. As per Section 6(3) of the VMC Act, all notifications, rules, bye-laws, regulations, orders, directions and powers, made, issued or conferred under the Andhra Pradesh Municipalities Act, 1965, and in force at the commencement of this Act shall, so far as they are not inconsistent with the provisions of this Act continue to be in force in the local area comprised within the city of Visakhapatnam, until they are replaced by the notifications, rules, bye-laws, regulations, orders, directions and powers to be made or issued or conferred under this Act.
17. By Section 7(1) of the VMC Act, all the provisions of the Hyderabad Municipal Corporation Act, 1955 including the provisions relating to the levy and collection of any tax or fees are extended to and shall apply mutatis mutandis to the Corporation and the said Act shall, in relation to the Corporation be read and construed as if the provisions of the Act had formed part of the said Act.
18. Section 8 of the VMC Act relates to transitional provisions, and Section 8(3), which is relevant, reads as follows:
“Save as otherwise provided in subsection (3-A) all taxes, fees and duties, which immediately before the commencement of this Act, were being levied by the said Council, shall be deemed to have been levied by the Corporation under the provisions of this Act and shall continue to be, in force accordingly until such taxes, fees and duties are revised, cancelled or superseded by anything done or any action taken under this Act”.
19. Under Section 197 of the Hyderabad Municipal Corporation Act, it is open for the Corporation to levy taxes on lands
and buildings.
20. Under Section 198 of the Hyderabad Municipal Corporation Act, before the Corporation passes a resolution adopting the new rate of tax or imposing the tax for the first time as specified under Section 197(1), the Commissioner shall publish a notice of not less than one month in the Andhra Pradesh Gazette and in the local newspaper calling for the objections; and after considering the objections, if any, within the said period, the rate of tax or the revised rate of tax has to be determined by the resolution.
21. Under Section 212 of the Hyderabad Municipal Corporation Act, rateable value
of the buildings has to be determined. The gross annual rent or the expected annual rent of a building if left out from month to month or year to year with reference to its location, type of construction, plinth area, age of the building, nature of use to which it is put and such other criteria, has to be taken into account while fixing the annual rateable value. The annual rental value of the building shall be deemed to be the gross annual rent, subject to certain deductions depending upon the age of the building, and if it is occupied by the owner, 40% of the annual rental value will be deducted.
22. Under Section 213 of the Hyderabad Municipal Corporation Act, the Commissioner may require the owner or occupier of such building to furnish him within such reasonable period as specified in this behalf, with information or with a written return signed by such owner or occupier- as to the name and place of abode of the owner or occupier, dimensions of such building, particulars of portions, rental value, etc.
23. Under Section 214 of the Hyderabad Municipal Corporation Act, the Commissioner shall keep a book called “assessment book” in which shall be entered every financial year-
(a) a list of all buildings;
(b) the particulars of rateable values of such buildings;
(c) the names of the persons liable to pay property taxes in respect of such buildings;
(d) the rates of property taxes to be levied for the year duly fixed by the Corporation; etc.
24. Under Section 218 of the Hyderabad Municipal Corporation Act, when the entries
required by clauses (a), (b), (c) and (d) of Section 214 have been completed, as far as practicable, in a ward assessment book, the Commissioner shall give public notice thereof and of the place where the ward assessment book or copy of it, may be inspected.
25. Under Section 220 (1) of the Hyderabad Municipal Corporation Act, the Commissioner shall give a public notice of not less than twenty-one days for receiving complaints against the amount of rateable value entered in the ward assessment book. Under Section 220(2), a special written notice has to be given to the owner or occupier informing him that any complaint against the same will be received in his office within 15 days from the date of receipt of the special notice.
26. The complaints will be received under Section 221 of the Act, and the said complaints have to be enquired by issuing a notice under Section 222, and after hearing the complaints under Section 223, the complaints have to be disposed of either amending the proposal or confirming the same for entering into the assessment book. Under Section 224, after all the complaints are disposed of, it should be authenticated in the ward assessment book with any alterations or confirmation of the proposed tax levied on each property.
27. Under Section 225, the Commissioner may, upon the representation of any person concerned or upon any other information at any time during the financial year to which the assessment book relates, amend the same-
(a) by inserting therein the name of any person whose name ought to be so inserted or any premises previously omitted;
(b) by striking out the name of the person not liable to the property-tax;
(c) by increasing or reducing the amount of any rateable value and of the assessment based thereupon;
(d) by altering the assessment on any building which has been erroneously valued or assessed through fraud, accident or mistake;
e) by inserting or altering an entry in respect of any building erected, re-erected, altered, added to or reconstructed in whole or of in part after the preparation of the assessment book; etc.
28. Section 226 of the Hyderabad Municipal Corporation Act states that it shall not be necessary to prepare a new assessment book every financial year; and the new assessment book shall be prepared atleast once in every 5 years; and the Commissioner may adopt the entries in the last preceding years’ book with such alterations as he thinks fit, as the entries for each new financial year.
29. Under Section 264 of the Hyderabad Municipal Corporation Act, the property tax shall be payable in advance either in half-yearly or quarterly instalments. In the case of half-yearly instalments, the tax shall be payable in advance on each first day of April and October; and in the case of quarterly instalments, the tax shall be payable on each first day of April and July and each first day of October and January.
30. Against the revision of rateable value or tax fixed or charged under the Act, appeal is provided under Section 282 of the Hyderabad Municipal Corporation Act, to be heard and determined by a Judge. Such an appeal is available –
(a) if the said appeal is brought within fifteen days after the accrual of the
cause of complaint;
(b) if a complaint has previously been made to the Commissioner under Section 221 and such complaint has been disposed of; and
(c) if a complaint has been made, by the person aggrieved within fifteen days after the first received notice of any amendment made in the assessment book under Section 225 and his complaint has been disposed of.
31. As per Section 284 of the Hyderabad Municipal Corporation Act, any appeal filed under Section 282, if the parties agree, may be referred to an arbitrator; and before hearing of the appeal under Section 282, on the application of the parties, the Judge may refer the matter again to the competent person to make the valuation in respect of the building. As per Section 287 of the Hyderabad Municipal Corporation Act, against the appellate order under Section 282, appeal lies to the High Court. Thus, there is an effective alternative remedy provided under the Act with regard to the rateable value, revision of tax fixed or charged, etc.
32. With regard to matters other than the matters relating to the rateable value, revision of tax fixed or charged, etc., suit is contemplated under Section 685 of the Hyderabad Municipal Corporation Act, which says that no suit shall be instituted against the Corporation or against the Commissioner or a Deputy Commissioner or against any officer or servant, appointed under the Act, in respect of any act done in pursuance of or execution or intended execution of the Act or in respect of any alleged neglect or default in the execution of this Act until the expiration of one month next after notice in writing has been issued.
33. Rules have been issued called “Hyderabad Municipal Corporations (Assessment of Property Tax) Rules, 1990.
Questioning the mode of determination of annual rateable value under the said rules, a batch of writ petitions has been filed; and a Division Bench of this Court in S.B.H. Co-op. Bank Officers Welfare Association v. Govt. of A.P., , recorded the conclusions in Para 25 of the judgment, which reads as follows:
“(1) The power for determination of the rateable value of the building and the property-tax belongs to the Commissioner which cannot be fettered by rules framed under the Acts.
(2) The Committee constituted by the Government has no role to play and the Commissioner is not bound by their recommendations.
(3) The annual rental value to be fixed by the Commissioner in the Corporation areas shall be limited to the fair rent either determined or determinable under the A.P. Buildings (Lease, Rent and Eviction) Control Act.
(4) Subject to the maximum as above the Commissioner may fix a lesser annual rental value keeping in consideration the factors as provided for in Section 212 of the Corporations Act.
(5) The annual rental value in respect of all buildings in Municipal areas, where rent has been determined under the rent control legislation, would be the gross annual rental on the basis of such rent determined unless there is any fraud or collusion and that in respect of other buildings in the Municipality areas, the Commissioner has to determine the amount keeping in consideration the factors under Section 87(2).
(6) In determining the annual rental value the Commissioner may resort to plinth area method so as to serve him as a basis and guide but it will be open to the assesses to contest the annual rental
value, rateable value or property-tax determined in respect of fheir buildings and when objections are raised, the Commissioner has to decide those objectively without fettering his discretion because of the determination already made on the basis of the plinth area method.
(7) Rules 3 to 7 of the Corporation and the Municipal Rules are to be read only as enabling provisions for the Commissioner to aid him in discharge of his functions under the Corporation or the Municipal Act to arrive at working figures for the purpose of determination but not as fettering his discretion in the matter as conferred upon him under the statutes.
(8) The Form-A publications already made would be deemed to have been issued by the Commissioner only on such basis as is stated above and not in pursuance of recommendations of the Committee.
(9) Before Form-B is issued in respect of the buildings and lands, the Commissioner shall afford opportunity to the assesses to object to the determinations made and shall decide the objections on considerations as directed above and provisions of Sections 214 to 225 of the Corporations Act shall be scrupulously followed subject to the provisions of appeal”.
In para 5 of the afore said judgment, the Division Bench held that if the decision is to levy a tax for the first time or to levy it at a new rate, it has to be by resolution passed for the purpose; and under Section 198, before revising the tax, resolution has to be passed for levy of tax for the first time or levy has to be revised at a new rate; and then, the Corporation has to direct the Commissioner to give notice inviting objections. It is held
that if there is any revision of the new rate of tax and if the tax is not for the first time or changing the rate of the property tax, the question of compliance under Section 198 does not arise.
34. The learned Counsel for the appellant cited several decisions in support of his contentions. He placed reliance on a decision of the Supreme Court in Corporation of Calcutta v. SM. Padma Debi, , to the effect that the property-tax cannot be levied without reference to the fair-rent determined or determinable under the Rent Control Act. The facts in that case are that the Corporation of Calcutta fixed the annual valuation of the premises at a sum of Rs.14,093/- for the second quarter of 1950-51. In fixing the annual valuation, the Corporation took as basis Rs.1,450/- as the monthly rental value of the premises. A notice was issued in June, 1950, based on the said annual valuation. The owner filed objections stating that the rent at Rs.550/- per month was fixed by the Rent Controller under the Rent Control Act with effect from April, 1951, and at Rs,632-8-0 per month with effect from August, 1951, and therefore, the Corporation has no power to fix the annual valuation, as the figure is higher than the standard rent. The Special Officer disallowed the objections and confirmed the assessment. Being aggrieved by the said order, the owner of the building filed an appeal in the Court of Small Causes, Calcutta, and the appeal was allowed fixing the annual valuation for the purpose of assessment at Rs.6,831/- based on the standard rent of Rs.632-8-0 per month. The Corporation filed an appeal in the High Court, and the High Court dismissed the appeal, against which, a special leave petition has been filed by the Corporation, and the Supreme Court dismissed the appeal on the ground that in that case, the fair-rent has been fixed by the Rent Controller and the actual rent received by the landlord was only
Rs.632-8-0, and therefore, annual rateable value must be based on the fair-rent fixed, which has been received by the landlord, but for the purpose of municipal tax, it cannot be fixed without reference to the actual rent received.
35. In Calcutta Municipality v. LIC India, , the actual rent mutually agreed by the landlord and the tenant was Rs.2,800/- per month from November, 1953, and the tenant sub-let the premises and was getting rent at Rs.4,520/-per month. The Corporation determined the annual value taking into consideration the rents received from the sub-tenants by the main tenant. The landlord was receiving only Rs.2,800/- per month, but the tenant was receiving monthly rents from the subtenants at the rate of Rs.4,250/-. The Supreme Court held that in determining the assessment of the annual value, the Assessing Authority is not concerned with the rent, which the tenant may receive from the subtenants; and it is the gross rent which the owner may realise by letting the land or building under the bargain uninfluenced by extraneous considerations. The appeal filed by the landlord, which was allowed by the lower Court and the High Court, was confirmed by the Supreme Court under those circumstances.
36. It is to be seen that in the aforesaid two cases, against the revision of tax, statutory appeals have been filed before the High Court. But, in those two earlier cases, without availing the remedy of appeal available under the statute, suits have not been filed as in the instant case.
37. In Himayatnagar Ratepayers Association v. Commissioner, M.C. Hyd. 1971 (1) An.WR 78, attacking the validity of increase in the rate of tax, another batch of writ petitions has been filed; and a Division Bench of this Court held that any alterations in the entries enhancing the
rateable value have to be authenticated before the end of the financial year. It is open to authenticate even on the last day of the financial year making liable the owner to pay the tax from the beginning of the financial year. But, the authentication cannot be made with retrospective effect prior to the financial year. In Para 41 of the said judgment, their Lordships have held that in cases where tenants are occupying the buildings, the actual rent paid by the tenants forms the basis of determining the rental value. In case of dispute as to what rent is paid, it is evident that the Commissioner will have to enquire and determine it. It has to be remembered that as long as fair-rent is not determined under the Rent Act, the rent paid would be presumed to be the fair-rent and the same can be taken as the basis. The difficulty arises in cases where the buildings are occupied by the owners themselves, and in such cases, the Commissioner has to determine the rent, which the property is likely to fetch.
38. In Guntur Municipal Council v. Rate-Payers’ Association, , the Supreme Court held that in the absence of any fair-rent fixed by the Rent Controller and in respect of the buildings occupied by the owners, the Municipality cannot discriminate the buildings, where the fair-rent has been fixed and the buildings occupied by the owners where fair-rent has not been fixed. In that case, it is not the case of either party that annual rateable value has been fixed without reference to the actual rent received. The question arose in that case was, whether in the absence of any actual rent received, the fair-rent determinable under the Rent Control Act has to be considered?
39. Sri N. K Ranganadham, the learned senior Counsel, relying on a decision of the Supreme Court in Hubli Municipality v. Subha Rao, , submits that the notice issued for the assessment
year 1989-90 was issued on the last day, i.e., on 31-3-1990, and the revision was filed thereafter within the stipulated time, and the complaint was disposed of subsequently, and the authentication of the book amending the assessment list levying the tax was done after expiry of the financial year, and therefore, the assessment is void and inoperative and cannot give rise the liability for the plaintiff to pay the tax.
40. Sri T.S. Venkataramana, the learned Counsel for the respondents on the other hand submits that a contrary view has been taken by the later judgment of the Supreme Court in Shyam Kishore v. Municipal Corporation of Delhi, . Similar sections, namely, Sections 224, 225 and 226 of the Hyderabad Municipal Corporation Act are therein Delhi Municipal Corporation Act, namely Sections 124, 125 and 126, and while considering the said provisions of Sections 124, 125 and 126 of the Delhi Municipal Corporation Act, the Apex Court held in paras 4, 5 and 7 of its judgment as follows:
“4. The proviso before its amendment suggested as if the person could become liable by reason of amendment of the assessment list only in the year during which the amendment was made. The amendment of the proviso to Section 126(1) shows that the liability to pay any tax or increase of tax can go beyond the currency of the year in which a notice is given under subsection (2) of Section 126 of the Act. Therefore, even if the notice is given during the currency of a financial year but the amendment in fact after investigation is completed later on after the expiry of the financial year, the amended list would still have the effect retrospectively for the financial year during which the notice of increase was given. This can be the only reasonable view of the proviso to Section 126(1) if
one takes into account the legislative history of the amendment and it is the duty of the Court to take notice of the legislative changes and give effect to the intention exhibited by the changes.
5. It will be noticed from the opening words of Section 125 of the Act that the assessment list prepared under Section 124 of the Act is subject to any alteration that may be made under Section 126 of the Act and is also subject to the result of any appeal made under the provisions of the Act. It cannot be the scheme of the Act that though the assessment list prepared under Section 124 is subject to any appeal, the appeal must itself be decided within the year for which the amendment relates to.
7. We are, therefore, of the considered view that it is not necessary that the proceedings in pursuance of a notice for increasing the rateable value and of the assessment thereupon must be completed within the year in which the notice is given to become effective from the year in which notice is given”.
By the aforesaid paragraphs, it is clear that even if the notice is given in the currency of a financial year but the amendment in fact after investigation is completed later on after the expiry of the financial year, the amended list would still have the effect retrospectively for the financial year during which the notice of increase was given. Any authentication of the ward assessment book will be subject to the alterations and disposal of the complaints in respect of the financial year to which the book relates. The assessment book may be amended on the information at any time during the financial year to which the assessment book relates, subject to the exigencies either with regard to the change of the name or increase or reduction of the rateable value or rectification of the assessment etc.; and as
per Section 225(2), any amendment can be effected after following due procedure; and as per Section 225(3), the amendment shall be deemed to have been made for the purpose of determining the liability of exemption from the earliest day in the current financial year. Under Section 226, there is no need or any necessity to prepare a new assessment book for every financial year and the Commissioner may adopt entries in the last preceding year’s book with such alterations as he deems fit as the entries of the new financial year, but however, after giving notice in accordance with the provisions of Sections 221 to 225 insofar as they are applicable. Under Section 220(4), the Corporation shall take into consideration the rent component of cost of living index prevailing at me time of preparation of new assessment books. In Shyam Kishore ‘s case (supra), the Supreme Court also held that similar analogous appeal provision under Section 282 is not ultra vires the Constitution, merely because there is a condition of depositing the demanded tax for entertaining the appeal.
41. The learned Counsel for the appellant finally relied upon a decision of the Supreme Court in Dhulabhai v. State of M.P., , with regard to the proposition that the suit filed by the plaintiff alleging that the defendant-Corporation has not followed the due procedure contemplated under the Hyderabad Municipal Corporation Act, is maintainable. The said case arose under the Sales Tax Act, and the Sales Tax was imposed under a notification declared as void.
42. In Srikant Kashinath Jiluri v. Belgaum Corpn., , decided by the Supreme Court, a suit was filed for declaration that the revision of the property-lax effected by the defendant-Corporation is arbitrary, unreasonable and illegal and coufd not be enforced against the owners of the houses in Belgaum. The
trial Court dismissed the suit as not maintainable in view of the appeal provided under Rule 25. On appeal, the Appellate Court held that the suit is maintainable and the matter was remanded to the trial Court. Aggrieved by the said Appellate Court’s order, the Municipal Corporation filed a CMA before the High Court and the High Court allowed the appeal. Against the said order, the Tax-payers carried the matter to the Supreme Court. The Supreme Court held that the suits are not maintainable in view of the appeal provided under Rule 25 and also no reasons are given as to why they have not filed appeals before the Taxation of Appeals Committee. Reiterating the principles laid down in Dhulabhai’s case (supra), for filing the civil suits in exceptional cases, it was held that the civil suits filed complaining that the enhancement is excessive, arbitrary and unreasonable per se not sufficient to override the express statutory bar, and therefore, the suits are not maintainable. The Apex Court did not agree with the argument that the remedy of appeal cannot be called as an adequate or efficacious remedy.
43. Recently, in Tirumala Tirupathi Devastation v. Tirupathi Municipality, LPA Nos.234 and 413/1992, dated 20-1-2001 (DB), a Division Bench of this Court (of which I was a member), following the aforesaid judgment of the Apex Court in Srikant Kashinath Jituri’s case (supra), held that non-compliance of the provisions of the statute or any irregularity can also be rectified by the machinery provided under the statute. As in the instant case, questioning the revision of the property-tax as arbitrary, unreasonable illegal and should not be enforced against the owners of the houses are grounds to file appeal but not cases to file civil suits.
44. Coming to the facts of the instant case, Ex.A1 special notice dated 31-3-1990 was issued under Section 225 of the
Hyderabad Municipal Corporation Act for the amendment of the assessment book in respect of the property-tax of the plaintiff’s building proposing for the revision of the tax for the year starting from October, 1989 for enhancement of the tax from Rs.l 12/- to Rs.1,400/- on the ground that the monthly rateable value of the building is Rs.1,000/-, as there are 4 tenants occupying the building, namely, Md Sharif (BHPV), V.V. Ramana (Contractor), V. Adinarayana (Naval Dockyard) and K. V. Raju (HSC); and the portion occupied by Md. Sharif was locked and the remaining tenants have stated that each of them are paying a monthly rent of Rs.250/-; and the payment of the said monthly rents has also been certified by them; and based on the said statements of the tenants, the proposed Monthly Average Rental Value at the rate of Rs.250/- is made calling upon the objections.
45. For the special notice issued for the revision of assessment, the plaintiff filed a complaint- dated 12-4-1990 (Ex.A3) under Section 221 of the Act stating that the building is an old building constructed more than 10 years and covered by the provisions of the Rent Control Act, and the said property consists of a small tiled house and was leased out to one Sanaboyina Srihari Rao under a Registered Lease Deed dated 15-7-1989 on a monthly rent of Rs.80/-which should alone be taken into account in fixing the rental value and the provisions of the HMC Act made applicable by virtue of Act 9 of 1979 have not been complied with. The proposed revision of assessment and the increase of the half yearly tax from Rs.112/- to Rs.1,400/- is contrary to law and unwarranted. No additions, alterations or improvements have been made to the house. The rental value as mentioned in the said notice that Rs.1,000/-was received by the landlord, is false and incorrect. Before serving the notice, the plaintiff was not required to furnish any data regarding his building and no competent
person ever inspected the building and he has previously filed a suit in OS No.2102 of 1979 on the file of the VI Additional District Munsif s Court, Visakhapatnam and the Court declared the increase of the tax as arbitrary and without any basis.
46. On receipt of the said complaint, a notice of hearing dated 12-4-1990 (Exs.B4 and B5) was issued for disposal of the complaint, and after hearing the complaint, revision was rejected by Intimation No.76482 in RP No.35/90 dated 6-11-1990 (Ex.B3) confirming the annual rental value of Rs.12,000/ – and half-yearly tax of Rs.1,400/-.
47. A perusal of the special notice, complaint and the rejection of the revision shows that they do not relate to any particular assessment year, but the fact remains that the special notice dated 31-3-1990 was issued for the year starting from 1st October, 1989 and the plaintiff also has not objected for the revision of the tax for the particular assessment year. On the other hand, it is stated that the special notice is relating to the Assessment No.76482 only. In the complaint, the plaintiff has not disputed the particulars and the names of the four tenants mentioned in the notice and the monthly rent of Rs.250/- paid by each of them, but a general denial has been made. After rejection of the revision petition and also the complaint, a lawyer’s notice (Ex.A4) has been issued developing the case of the plaintiff. Admittedly, no reasons have been shown as to why the plaintiff has not filed an appeal as provided under Section 282. Even on the factual aspect also, the plaintiff was searching for the general grounds to make out a case forgetting the factual things. The plaintiff has not adduced any oral evidence to substantiate the averments made in the complaint. He has not disputed the amount of the rent paid by the tenants. It is not the case of the plaintiff that he is not receiving the rents at the rate of Rs.250/-
per month from each of the four tenants. It is the case of the plaintiff that irrespective of the actual rent received, the building being an old building more than 10 years old, the Corporation cannot take into consideration the actual rent received as long as the fair-rent is not determined under the A.P. Rent Control Act and any rateable value must be arrived based on the fair-rent receivable by the landlord under the Rent Control Act. The trial Court as well as the lower appellate Court, on facts, confirmed that the appellant is receiving a total monthly rent of Rs.1,000/-, and therefore, based on the actual rent received by the appellant, the respondent assessed the annual rateable value. The concurrent findings of both the Courts below are the questions of facts and not questions of law. The learned senior Counsel contended that there is no resolution by the Municipal Corporation of Visakhapatnam, and therefore, unless there is a fresh resolution by the Municipal Corporation by following due procedure and the revision of tax is authenticated, the respondent-Corporation is not entitled for the collection of the revised tax. The resolution made by the Visakhapatnam Municipality prior to the commencement’ of the Visakhapatnam Municipal Corporation Act is saved by virtue of Sections 6(3) and 8 of the Hyderabad Municipal Corporation Act, which are applicable, in view of Section 7 of the Visakhapatnam Municipal Corporation Act, and therefore, no fresh resolution is necessary, and it is only a revision of the existing tax to make revised entries under Section 225 in the assessment book. The assessment book is contemplated at the time of imposing the tax for the first time and for the revision of the tax, the procedure as contemplated for the imposition of tax for the first time need not be followed as it is only the amendment of the assessment book and the revision of the tax based on the exigencies and the subsequent change of the material particulars.
48. In view of the aforesaid rulings of
the Apex Court and in view of the concurrent
findings of both the Courts below, I do
not find any merit in the second appeals and
the second appeals are dismissed. Having
regard to the facts and circumstances of the
case, there shall be no order as to costs.
Both the Counsel have strenuously argued
for three days and referred individual
cases also, and therefore, the respective
learned Counsels are entitled for fees in
individual cases.