JUDGMENT
R.C. Lahoti, J.
(1) The petition seeks quashing of the levy and demand of the General Tax on the farm house premises of the petitioner situated over khasra Nos.487 and 2226/489 of Village Khirki, Tehsil Mehrauli, New Delhi-known as.36, Sainik Farms, New Delhi.
(2) The location of the petitioner’s property is not in dispute. According to the petitioner, the annual rateable value of the property was fixed in the year 1990 at Rs.4880.00 w.e.f. 1.4.83. The petitioner has paid the general tax payable on the property upto the year 1993-94. The petitioner has now received a bill dated 30th September, 1994 by which the petitioner has been asked to pay a sum of Rs.33,592.00 to the Municipal Corporation of Delhi by way of arrears of gen
(3) The respondent-MCD has in its brief counter placed reliance on various relevant provisions of the Act, the Notification issued and the bye-laws framed thereunder to submit that not only the petitioner’s property is liable to tax but it has been taxed correctly.
(4) We have heard Mr.R.K. Aggarwal, learned counsel for the petitioner and Ms. Madhu Tewatia, learned counsel for the respondent-MCD. To appreciate the controversy arising for decision, it will be useful to peruse the relevant statutory provisions.
(5) The Delhi Municipal Corporation Act, 1957 extends to Delhi. [See Section 1(2)]. Sub-Section 10 of Section 2 defines ‘Delhi’ to mean the entire area of the Union Territory of Delhi except New Delhi and Delhi Cantt. Thus the Act extends in its applicability to Delhi without regard to the fact whether any land within Delhi is rural or urban.
(6) Taxes on lands and buildings are authorised under Entry 49 of List Ii of the Schedule-VII of the Constitution of India. The tax is to be levied on the annual or capital value of the land and/or the building. The Delhi Municipal Corporation Act, 1957 contemplates levy on the annual value of lands and buildings. It is known as rateable value of lands and buildings as defined in Section 2(47) of the Act.
(7) Sections 114 and 115 of the Act provide as under :- 114. Components and rates of property taxes
(1) Save as otherwise provided in this Act, the property taxes shall be levied on lands and buildings in Delhi and shall consist of the following, namely :- (a)*****] (b)*****] (c)*****] (d) a general tax-
(i) of not less than ten and not more than [thirty] per cent of the rateable value of lands and buildings within the urban areas, and (ii) on lands and buildings within rural areas at such lower rates and with effect from such date as may be determined by the Corporation. Provided that the Corporation may when fixing the rate at which the general tax shall be levied during any year, determine that the rate leviable in respect of lands and buildings of portions of lands and buildings in which any particular class of trade or business is carried on shall be higher than the rate determined in respect of other lands and buildings or portions of other lands and buildings by an amount not exceeding one half of the rate so fixed [provided further that the general tax may be levied on a graduated scale, if the Corporation so determines]. Explanation : Where any portion to a higher rate of the general tax such portion shall be deemed to be a separate property for the purpose of municipal taxation.
(2)The Corporation may exempt from the general tax lands and buildings of which the rateable value does not exceed one hundred rupees.
115. Premises in respect of which property taxes are to be levied. (1)*****] (2)*****] (3)*****] (4) Save as otherwise provided in this Act, the general tax shall be levied in respect of all lands and buildings in Delhi except-
(A)lands and buildings or portions of lands and buildings exclusively occupied and used for public worship or by a society or body for a charitable purpose:
Provided that such society or body is supported wholly or in part by voluntary contributions, applies its profits, if any, or other income in promoting its objects and does not pay any dividend or bonus to its members. Explanation : “Charitable purpose” includes relief of the poor, education and medical relief but does not include a purpose which relates exclusively to religious teaching.
(B)lands and buildings vested in the Corporation [****] in respect of which the said tax, if levied, would under the provisions of this Act be leviable primarily on the Corporation;
(C)agricultural lands and buildings (other than dwelling houses).
(5)Lands and buildings or portions thereof shall not be deemed to be exclusively occupied and used for public worship or for a charitable purpose within the meaning of clause (a) of sub- section(4), if any trade or business is carried on in such lands and buildings or portions thereof or if in respect of such lands and buildings or portions thereof, any rent is derived.
(6)Where any portion of any land or-building is exempt from the general tax by reason of its being exclusively occupied and used for public worship-or for a charitable purpose such portion shall be deemed to be a separate property for the purpose of municipal taxation.”
A perusal of Sections 114 and 115 of the Act makes it clear that all lands and building in Delhi excepting those which are either excepted or exempted from tax are liable to tax.
(8) Section 2(47) defines ‘rateable value’ as meaning the value of any land and building fixed in accordance with the provisions of the Act and the bye- laws made thereunder for the purpose of assessment of property taxes.
(9) ‘LANDS’ includes benefit to arise out of land, things attached to the earth or permanently fastened to anything attached to the earth and rights created by law over any street [Section 224]. ‘Building’ means a house, out-house, stable, latrine, urinal shed, hut, hall (other than a boundary wall) or any other structure whether of masonry bricks, wood, mode, metal or other material, but does not include any portable shelter [Section 2(3)]. A perusal of the two definitions above said makes it clear that while defining land and building, the legislature has chosen not to observe any distinction between rural and urban land and building; whether agricultural or non- agricultural, the land and building would remain so for the purpose of the Act.
(10) We may now notice .the definitions of ‘rural areas’ and ‘urban areas’ as provided in sub-sections 52 and 61 of Section 2 of the Dmc Act :-
(52)”RURALareas” means the areas of Delhi which immediately before the establishment of the Corporation are situated within the local limits of the District Board of Delhi established under the Punjab District Boards Act, 1883 (Punjab Act 20 of 1883), but shall not include such portion thereof as may, by virtue of a notification under section 507, cease to be included in the rural areas as herein defined; (61) “urban areas” means the areas of Delhi which are not rural areas;
THUS’urban areas’ is a wider definition. It includes all the areas of Delhi excepting the rural areas. The definition of rural areas has a historical source. All the areas forming ‘part of local limits of the Distt. Board of Delhi shall be included in rural areas but on a notification being made under Section 507 of the Act, the areas shall cease to be included in the rural areas and stand fallen within the ken of urban areas.
(11) Section 507 of the Act provides as under :- 507. Special provisions as to rural areas Notwithstanding anything contained in the foregoing provisions of this Act,-
(A)the Corporation with the previous approval of the [****] Government, may by notification in the Official Gazette, declare that any portion of the rural areas shall cease to be included therein and upon the issue of such notification that portion shall be included in and form part of the urban areas;
(B)the Corporation with the previous approval of the [****] Government may, by notification in the Office Gazette,-
(I)exempt the rural areas or any portion thereof from such of the provisions of this Act as it deems fit
(II)levy taxes, rates, fees and other charges in the rural areas or any portion thereof at rates lower than those at which such taxes, rates fees and other charges are levied in the urban areas or exempt such areas or portion from any such tax, rate, fee or other charges are levied in the urban areas or exempt such areas of portion from any such tax, rate,fee or other charge;
(C)the Corporation shall pay a Gaon Sabha
(I)an amount equal to the proceeds of the tax on profession, trades, callings and employements, as and when th tax is levied in the Gaon Sabha area, and
(II)an amount equal to such portion of the proceeds of the property taxes on lands and buildings in that area as may from time to time be determined by the Corporation after deducting the cost of collection from such proceeds.
(12) Here itself we may notice the contents of the Notification dated 23rd May, 1963 issued by the Delhi Administration whereby in exercise of the powers conferred by Clause-(a) of Section 507 of the Act, the Corporation with the previous approval of the Central Government has declared that localities mentioned in schedule appended therewith and forming part of the rural areas shall cease to the rural areas. At SI.No.l7 is mentioned – ‘South Zone Revenue Estate of Mehrauli’. Particulars of area proposed to be urbanised have been mentioned as “the entire remaining area of the said revenue estate which has so far not been urbanised.” It is clear that the entire remaining area of the revenue estate of Mehrauli – which would include the petitioner’s property as well – stands urbanised w.e.f. 23rd May, 1963 -and has ceased to be the rural area with effect therefrom.
(13) Rates of taxes are provided by Section 109 of the Act in the following manner “109.Adoption of budget estimates (1) The Corporation shall, on or before the 31st day of March of every year, adopt for the ensuing year the budget estimate which shall be an estimate of the income and expenditure of the Corporation to be received and incurred on account of the municipal government of Delhi. (2) On or before the 15th day of February of each year the Corporation shall determine the rates at which various municipal taxes, rates and cesses shall be levied in the next following year and save as otherwise provided in this Act the rates so fixed shall not be subsequently altered for the year for which they have been fixed. (3) Budget estimates shall be prepared in such form as may be approved by the standing Committee and presented and adopted in such manner and shall provide for all such matters as are prescribed by regulations made in this behalf.”
(14) From time to time the rates of taxes for ‘rural areas’ and ‘urban areas’ have been fixed by the Corporation and notified. We may quote the rates as notified for the year 1991-92 which are as under :- (A) In The Rural Areas, As Defined In Section 2(52) Of The Delhi Municipal Corporation Act, 1957, The General Tax On All Lands And Buildings Or Part Thereof Believed As Under :- (i) On all lands and buildings in village abadi area :-
R.V. of lands and Used or to be used for Used or to be used for Buildings or part thereof residential purposes only purposes other than residential. Where the R.V. does not 3% of the R.V . 4-1/2% of the Rateable exceed value. Where the R.V. exceeds Rs.3,000.00 plus 20% Rs.4,500.00 plus 25% the of the Rs.1,00,000.00 amount by which the R.V. amount by which R.V. exceeds Rs.1,00,000/ Exceeds Rs.1,00,000.00 .
PROVIDED that no general tax shall be payable on owner-occupied lands and buildings used for residential purposes.
(II)On all lands and buildings including farm houses godowns, hotels etc outside village abadi area;
R.V. of lands and Buildings Used or to be used for Used or to be used for or part thereof. residential purposes non-residential purposes including farm including hotels, godowns office complex etc. Where the R.V. does not 3% of the Rateable value. 4-1/2% of the Rateable exceeds Rs.30,000.00 . value. Where the R.V. exceeds Rs.900 plus 7% of the Rs.1350 plus 10% of the Rs.30,000.00 but does not amount by which the R.V. amount by which the R.V. exceeds Rs.1,00,000.00 exceeds Rs.30,000.00 . exceeds Rs.30,000.00 . Where the R.V. exceeds Rs.5800 plus 20% of the Rs.8350 plus 25% of the Rs.1,00,000. amount by which Rateable amount by which the value exceeds Rs.1,00,000. Rateable Value exceeds Rs.1,00,000.00 .
(B) In Urban Areas, The General Tax On All Lands And Building Or Part Thereof Be Levied As Under R.V, of lands & Building Used or to be for Used or to be used for or part thereof residential purposes purposes other than residential Where the R.V. does not 12% of the R.V. 15% of the R.V. exceed Rs. 10,000 Where the R.V. exceeds Rs. 1200- plus 20% of Rs. 1500.00 25% of Rs. 10,000 but does not amount by which exceeds the amount by the R.V. exceeds Rs. 20,000.00 Rs.10.000.00 exceeds Rs. 10,000 Where the R.V. exceeds Rs. 3200 plus 30% of Rs.4000.00 plus 30% amount by which the of the amount by R.V. exceeds Rs. 20,000.00
(15) The above said review of the various statutory provisions and notifications clearly goes to show that the petitioner’s property is situated within the territory of Delhi. It is an urban area and not a rural area. It is exigible to tax and on urban rates as notified by the Corporation from time to time. The petitioner’s property is not covered by any exemption or exception.
(16) A few decisions cited by learned counsel for the petitioner may now be noticed and dealtwith. Vasantkumar Radhakisan Vora VS. The Board of Trustees of the Port of Bombay, ; Delhi Cloth & General Mills Ltd. VS. Union of India, ; Union of India & Ors. VS. Godfrey Phillips India Ltd., , lay down the law as to promissory estoppel. We do not think that the facts of the present case warrant the applicability of the doctrine of promissory estoppel being considered. Assuming for the sake of argument that the Municipal Corporation of Delhi at any time made some announcement or published a pamphlet for general information of the public and it contains some statement which may be at variance with the law, it is the law which will prevail and not any statement made by any official of the MCD. In any case, we have in our judgment dealt with the law and the law has to prevail. No statement made contrary to law can attract the applicability of doctrine of promissory estoppel.
(17) B.R.GUPTA Vs. Union of India & Ors., was cited to show that at one point of time the land on which Sainik Farms are situated were proposed to be acquired for. Planned Development of Delhi but the acquisition proceedings were struck down by the High Court. This event in our opinion does not in any mariner affect the liability of the Sainik Farms to General Tax, if otherwise leviable under the law.
(18) We may with advantage refer to a recent Division Bench Decision of this Court in Naresh Kumar Vs. Union of India & Ors., . The property was situated in the Revenue estate of Village Bijwan Tehsil Mehrauli, New Delhi which is a rural area. The petitioner disputing the right of Delhi Municipal Corporation to recover tax on the property had submitted that the building constructed on the property was being used for agricultural purposes and was not liable to be taxed also because it was situated in a rural area. Repelling the contention it was held that rural areas of Delhi were also part of Delhi as contemplated by Section 2(52) of the Acts. It was further held :- “In the cases pending before the assessing authority or the appellate authority, it will be for the said authority to decide, with reference to the building or Farm House involved in each case, the question of taxation as per the following principles:(1) if it is a building in the abadi area and is owner-occupied then, as per the scheme of 1989-90 referred to above, it will be exempt from tax; (2) in case it is a building in the abadi are and is not owner-occupied, though used for residential purposes, it will be liable to tax; (3) Again in case it is used for non-residential purposes and is in abadi area, it is liable to tax; (4) If however the building or farm house is located in the non-abaci area or what is treated as the agricultural land of the village, then the building or farm house (if it is not a dwelling house) will, together with the agricultural land, be again exempt because of Section 115(4)(c). (5) The building or farm house last mentioned, for the purpose of getting exemption, need not be solely or exclusively used in connection with or for agricultural purposes. It is sufficient if, the said building or farm house in the non-abaci area, is used substantially for agricultural purposes. (6) On the other hand, if said building or farm house is used substantially as a dwelling house, with a definite degree of continuity and permanence, then it will not be entitled to exemption from the tax. (7) In each case, it will be a question to be decided on the particular facts and circumstances, depending of course on what could be ‘agricultural purposes’ in law.”
As to the contention that the house alone and not the large tract of agricultural land over which it stood would be liable to be taxed it was held :- “When the legislature exempts ‘agricultural lands’ and buildings used substantially for agricultural purposes from the purview of the property tax as stated by us and makes only ‘dwelling houses’ located therein subject to tax, it will not, in our opinion, be permissible for the assessing authority to take the entirety of the agricultural land – whatever be its extent – on which the building or farm house is located, for purposes of levying property tax. We are of the view that only such land around the dwelling house which can be said to be reasonably required for the beneficial enjoyment of the dwelling house or farm house, must alone be the subject matter of the tax. This will again depend on the facts and circumstances of each case to be decided by the assessing authority or by the appellate authority before which the matters may be pending. We notice that the Delhi Act does not contain any definition of ‘appurtenant land’ and therefore the question as to what is ‘appurtenant land’ in the context of each dwelling house will have to be determined with reference to the size and extent of the dwelling house and on the basis of what can be said to be the land reasonably required for the beneficial enjoyment of the dwelling house. The remaining part of the agricultural land cannot be subjected to property tax.” The Division Bench concluded that in case of a farm house the above said will be the principles for assessing the building and appurtenant land to tax.
(19) It was submitted at the end that the Municipal Corporation of Delhi is not providing any civic amenities at the Sainik Farms and hence it should either be restrained from recovering the tax or be directed to provide the basic civic amenities. The Refugees Co-Operative Housing Society Ltd. & Ors. VS. The Municipal Corporation of Delhi & Am., Ilr 1972 (1) Delhi 725 was cited.
(20) We have perused the decision cited. The law is clear. Recovery of General Tax cannot be restrained merely because the Municipal Corporation may not be performing its obligatory functions. However, the Corporation is duty bound to perform its obligatory functions within its territories. If it fail to do so, the petitioner is at liberty to approach the Court but only after inviting the attention of the Municipal Corporation to the demands of the locality, the alleged failure of the Municipal Corporation to perform its obligatory functions and making out a specific case with particulars as to such non-performance.
(21) The petition is dismissed though without any order as to costs.
