Dindigul District Tax Payers Sangam rep. By its President M.V.R.A.Soundararajan v. The Commissioner Dindigul Municipality Dindigul

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED:14-3-2008CORAM:THE HON'BLE MR.JUSTICE P.JYOTHIMANIW.P.Nos.3440 and 5470 of 1999.....1. M.V.R.A.Soundararajan2. M.V.R.A.Pandiyarajan3. M.V.R.A.Mohanrajan... Petitioner inWP.No.3440 of 1999Dindigul District Tax PayersSangam rep. By its PresidentM.V.R.A.Soundararajan... Petitioner inWP.No.5470 of 1999. vs.The CommissionerDindigul MunicipalityDindigul.... Respondents inboth the WPs.Writ petitions filed under Article 226 of the Constitutionof India praying for issuance of a Writ of Declaration as statedtherein.For petitioner: Mr.M.Venkatachalapathy,Sr.Counsel in both WPs. for Mr.M.SriramFor respondent : Mr. V.Raghupathyin both WPs. ..COMMON ORDERThe issue involved in both the cases is relating to thebasis of valuation adopted on zone-wise by the respondentMunicipality, which according to the petitioner is, void, https://hcservices.ecourts.gov.in/hcservices/ arbitrary, unreasonable and against the provisions of the TamilNadu District Municipalities Act,1920.2. While W.P.No.3440 of 1999 filed by thepetitioners/individual owners questioning about the adoption ofthe rate of Rs.1.50 per sq.ft. for Zone-A in respect of thebuilding belonging to the petitioners situated in DindigulMunicipality, W.P.No.5470 of 1999 is filed by the DindigulDistrict Tax Payers Sangam for the same relief.3. Admittedly, the writ petitioner Sangam in W.P.No.5470of 1999 has earlier filed writ petitions challenging the act ofrespondent Municipality in enhancing the annual value of theproperty tax of properties of the members of Tax PayersAssociation pursuant to the notice issued by the Municipalityunder Rules 9 and 10 of Schedule IV of Tamil Nadu DistrictMunicipalities Act,1920. 3(a). In that, a decision was rendered by the Hon'bleFirst Bench of this Court, vide: Dindigul Anna District TaxPayers Sangam represented by its President M.V.R.A.Soundararajanvs. Government of Tamil Nadu represented by its Secretary toGovernment, Municipal Administration and Water Supply Department,Fort St.George, Chennai 9 and others reported in 1994 Writ LawReporter 805. At that time, the enhancement and assessment ofthe property tax were made in respect of Municipalities under theTamil Nadu District Municipalities Act, 1920 (in short, "theAct"). Schedule IV of the Act contains Rules 9 and 10. Rule 9of Schedule IV of the Act as it stood then was as follows:"9. When assessment books have been preparedfor the first time and whenever a general revision ofsuch books has been completed, the executive authorityshall give public notice stating that revision petitionswill be considered if they reach the municipal officewithin a period of sixty days from the date of suchnotice in the case of the Government, a railwayadministration or a company and of thirty days from thesaid date in other cases. The notice shall be affixedto the notice board of the municipal office and on thesame day be published in the municipality by beat ofdrum.Provided that in every case where there isan enhancement in the assessment, the executiveauthority shall also cause intimation thereof to begiven by a special notice to be served on the owner oroccupier of the property concerned." https://hcservices.ecourts.gov.in/hcservices/ 3(b). Various issues raised by the petitioner Associationwas decided by the Division Bench and the Bench has raised thefollowing points for consideration in the said writ petitions:" 9. In the light of the rival contentions of thelearned counsel for the parties, the following pointsarise for consideration in these Writ Petitions:1. Whether the revision of property taxmade by the municipalities in these cases with effectfrom 1.10.1993 is a general revision or whether it isspecial revision in between two general revisions?2. Whether Rule 9-A of the Rules and theguidelines issued by the Commissioner of MunicipalAdministration in his Circular dated 14.5.1993 areliable to be declared as illegal and unconstitutionaland whether the Municipal authorities are correct infollowing the guidelines in determining the annual valueof the buildings for the purpose of the revision of theproperty tax?3. Whether the fair rent formula and theprovisions of the Act have been followed by theMunicipal Authorities in determining the annual value ofthe properties while revising property tax?4. In case, it is found on point No.1 thatthe revision undertaken by the Municipal Authorities in1993 is general revision, whether the Municipalauthorities have followed the procedure prescribedunder Rule-9, by giving special notices to the payers,stating the reasons for enhancement of property tax?5. Whether the reason as to why and how therevision of assessment has taken place in a particularcase should be set out in the special notices issuedunder Rule-9 and whether the special notices issued bythe municipal authorities under Rule-9 to the members ofthe petitioner association in these cases are valid?6.To what relief if any the petitioners areentitled to in these writ petitions?"3(c). In respect of the first point about the nature ofrevision effected by the Municipalities from 1.10.1993, whetherit was general or special, it was held that the same was only ageneral revision.3(d). While dealing with the legality or otherwise ofRule 9-A, which provided for the method of determination of theannual value of the buildings which was challenged by thepetitioner Sangam on the ground that while determining the valueit must be done as per Section 4 of the Tamil Nadu Buildings(Lease and Rent Control) Act and in accordance with Section 82 of https://hcservices.ecourts.gov.in/hcservices/ the Act. After elaborate discussion about the method ofvaluation explained as per the guidelines issued by theGovernment in Circular dated 14.05.1993 and comparing the samewith that of the Rent Control Act, and after referring to thejudgement of the Supreme Court in the case of Guntur MunicipalCouncil vs. Rate-Payers' Association (AIR 1971 SC 353) the Benchhas held that the guidelines are justified by declaring themethod as legal in the following terms:"16. On a careful examination of theguidelines dated 14.5.1993 issued by the Commissioner ofMunicipal Administration to the Municipal authorities,extracted above we are of the view that the saidguidelines have been issued only in conformity with theprovisions contained in S.82 of the Act and S.4 of theTamil Nadu Buildings (Lease and Rent Control) Act.Further, there is nothing wrong in the municipalauthorities fixing different basic value for differentzones depending upon the importance of the locality, themarket rate of the land and the other amenitiesavailable in that zone, for the purpose of the fixationof the annual rental value of the buildings providedthey are in conformity with the fair rent formula andthe provisions of the Act. We are inclined to hold thatthe said guidelines issued by the Government willcertainly avoid arbitrariness and ensure uniformity andobjectivity in the determination of the annual rentalvalue of the buildings. On a consideration of theassessment worksheets produced by the Municipalauthorities and the other materials available on record,we are clearly of the view that the annual value of thepremises have been arrived at by the Municipalauthorities in these cases on the basis of theprinciples laid down in S.4 of the Tamil Nadu Buildings(Lease and Rent Control) Act and S.82 of the Act. Forall these reasons stated above, it has to be held thatthe guidelines dated 14.5.1993 issued by theCommissioner of Municipal Administration to the variousmunicipal authorities are not liable to declared asillegal and unenforceable and that the municipalauthorities are justified in following the saidguidelines in determining the annual value of thebuildings."3(e). While deciding the last two points about Rule 9 inrespect of giving a special notice to the tax payers, theDivision Bench has quashed the special notices issued under Rule9 by the municipal authorities on the ground that the reasons forenhancement of property tax are not set out in the specialnotices and ultimately, the Bench has passed the followingorder: https://hcservices.ecourts.gov.in/hcservices/ "23. Accordingly we direct the executiveauthorities of Municipalities in question to issuefresh special notices under Rule 9 to the assessesgiving reasons for the enhancement of the property tax,for the year commencing from 1.10.1993. On receipt ofsuch notices, it is open to the members of thepetitioners Sangam to file their objections or applyfor revision of the proposed enhancement. As and whenrevisions are filed by the owners or occupiers ofproperties within the prescribed time, the MunicipalAuthorities shall consider the same and passappropriate orders on merits. With the abovedirections, these Writ Petitions are allowed. However,there will be no order as to costs."4. The said order was pronounced by the Hon'ble FirstBench of this Court on 21.09.1994. It was pursuant to thedirections issued in para 23 of the said judgement, therespondent Municipality has issued notices to the owners, whichare given under Rule 9 of Schedule IV of the Act.5. The notices which were issued proposing to enhance theproperty tax from 01.10.1998 specifically state that theMunicipality is proposing to increase the property tax for thereasons specified in the notice. It is also stated that if theowner concerned is not satisfied with the assessment, he canpresent a revision petition to the Executive Authority within30/60 days from the date of service of notice. The relevantportion of the notice is as follows:"Take notice that in virtue of the power vested in theExecutive Authority under rule 8 of Schedule IV to theMadras District Municipalities Act, 1920, theassessment in respect of your property Survey/DoorNo...... situated in ..... Street, this Municipalityhas until further notice been fixed at/increased forreasons specified to the amount shown below with effectfrom the half year commencing 1st October/1st April19... In case you are dissatisfied with the assessmentnow fixed you can present a revision to the ExecutiveAuthority within thirty/sixty days from the date ofservice of this notice. If a complaint against orobjection to the assessment is presented within theabove mentioned period of thirty/sixty days, theassessment will be final." https://hcservices.ecourts.gov.in/hcservices/

6. That was a sample of notice issued to one of theowners. As directed by the Division Bench in the above saidjudgement, the said notice is annexed with the particularsshowing the method in arriving at such increased assessment, bydividing the properties by zone-wise into four zones viz., A, B,C, and D. That apart, the annexure also contains percentage ofdepreciation based on the rental assessment and also based on thenature of the building, whether the building is cement concreteor tiled or thatched house. It also contains the valuation madeon the basis of age of the building by giving depreciation of 10%in respect of the buildings of 5 to 15 years; 15% in respect ofbuildings of 15 to 25 years; and 20% in respect of buildingsbeyond 25 years. Therefore, the notice contains the valuationbased on detailed calculations. It is relevant to note that theTamil Nadu District Municipalities Act, 1920 deals with levy ofproperty tax, besides containing provisions relating to generalrevision of property tax in Sections 81 to 85.7. The learned senior counsel for the petitioners wouldplace specific reliance on Section 81(6) of the Act, whichenables the authority to assess the property tax afterinspecting, surveying and measuring the building and land andafter giving notice to the owner or occupier before suchinspection, and submit that in none of the cases in whichrevision of assessment was sought to be effected, especiallyafter the judgement of the Division Bench as stated supra, therespondent Municipality or its officials have inspected theproperty or given notice to the owners or occupiers. Therefore,according to him, the notice issued by the respondentMunicipality even after the Division Bench judgement withoutinspecting the premises after giving notice to the parties, isstill invalid in law. For the better appreciation of thecontention of the learned senior counsel for the petitioner,Section 81(6) of the Act is reproduced hereunder:"81. Levy of property tax:-1 to 5. xxxxxx6. For the purpose of assessment ofproperty tax for any building or land in theMunicipality the executive authority or any officerauthorised by him in this behalf may enter, inspect,survey and measure any building or land, after givingdue notice to the owner or occupier before suchinspection and the owner or occupier shall be bound tofurnish necessary information required for thispurpose."8. A reference to the annexure to the impugned noticeissued by the Municipality in these cases, as I have discussed https://hcservices.ecourts.gov.in/hcservices/ above clearly shows that in fact the Municipality has determinedthe basic property tax as per Section 83 of the Act byconsidering various factors such as, where the property issituated, whether it is on arterial roads, bus-route roadsleading to arterial roads or main roads; nature of building,whether it is a concrete, tiled or thatched house, etc. Forbetter appreciation, Section 83 of the Act is extractedhereunder:"83. Determination of basic property tax,additional basic property tax, etc. by MunicipalCouncil.- (1) The basic property tax, the additionalbasic property tax and the concession, if any, withregard to the age, for every building or land shall bedetermined by the municipal council subject to theminimum and maximum rates prescribed by the StateGovernment under Section 82.(2) The Municipal Council shall notify therates determined under sub-section (1) and such otherparticulars in such manner as may be prescribed.(3) (i)(a) The basic property tax for everybuilding shall relate to the carpet area of the buildingand its usage:Provided that the carpet area of anybuilding shall not include the open veranda, open court-yard or any other open space which is not enclosed.(b) The classification of the buildingfor the purpose of deciding the usage of any buildingshall be residential, commercial, industrial or anyother classification as may be prescribed.(ii) (a) The additional basicproperty tax for every building shall relate to locationand type of construction of the building.(b) For the purpose of thisclause, the location of the building shall be classifiedas follows:-(A) arterial roads, bus-route roadsleading to arterial roads and main roads;(B) bus-route roads other than thosespecified in item (A);(C) roads and streets in primarilyresidential colonies.(c) The type of construction ofthe building shall be classified into different groupsas follows, namely:-(A) thatched and tiled roof;(B) reinforced concrete cement roof;(C) reinforced concrete cement roof withmosaic flooring partly or fully; https://hcservices.ecourts.gov.in/hcservices/ (D) granite, ceramic tiles and marbleflooring and walls partly or fully;(iii) A concession on the basicproperty tax shall be allowed in calculating theproperty tax having regard to the age of the building,in such manner as may be prescribed."9. On the other hand, it is the contention ofMr.V.Ragupathy, learned counsel appearing for the Municipalitythat even if the owners are aggrieved by the assessment ofproperty tax made, Section 89 of the Act provides for appeal tothe Taxation Appeals Committee. The said Section provides forfiling an appeal by any person who is not satisfied with theorder of the executive authority under the DistrictMunicipalities Act. In fact, as against the decision of theTaxation Appeals Committee, there is a further appeal to theDistrict Court. He would also rely upon a Division Benchdecision of this Court in M.L.Krishnamoorthy (died) and anothervs. The Government of Tamil Nadu rep. By Secretary to Government,Municipal Administration and Water Supply Department, FortSt.George, Chennai 9 and another (2007(5)CTC 465), tosubstantiate his contention that in view of an effectivealternative remedy being available, the writ petitions cannot beentertained. 10. In such circumstances, the reliance placed by thelearned senior counsel for the petitioners on the judgment inThe R.C.Diocese of Madurai through ProcuratorRev.Fr.A.Vedamanickam,K.Pudur, Madurai vs. SrivilliputturMunicipality through its Commissioner, Srivilliputtur, RamnadDistrict (2002 (1) M.L.J.391), is not applicable to the facts ofthe present case for more than one reasons. First of all, thatwas a case wherein a civil suit was filed against the assessmentand ultimately, on analysis of evidence, in the second appeal,this Court has held that on evidence there is nothing to show asto how the annual rental value was arrived at. It was also foundon fact that the Municipality itself has submitted that it hasnot followed the provisions of the Tamil Nadu Buildings (Leaseand Rent Control) Act, for fixing the annual rental value. But,finding that the Municipality even without inspection hasassessed the property tax, this Court allowed the appeal,relying on the judgement of the Supreme Court in The GunturMunicipal Council vs. Guntur Town Rate Payers' Association (1971(2) MLJ (SC) 7). On the facts and circumstances of the presentcase, the judgement is of no help to the petitioners.11. In any event, as it is stated in the notice issued bythe respondent Municipality, as per the directions of theDivision Bench in 1994 WLR 805 (cited supra), if the owner or https://hcservices.ecourts.gov.in/hcservices/ occupier is not satisfied about the assessment now fixed, he canalways present a revision petition to the executive authoritywithin thirty/sixty days from the date of service of the saidnotice on the basis that the notice does not contains the detailsabout the manner in which the assessment has been made, and thereis no difficulty to come to the conclusion that the said noticehas been issued as per the directions of the Division Bench ofthis Court in the writ petitions filed by the petitionerAssociation, stated supra.12. The notice issued is only a proposal for assessmentmade on the basis of the materials which are available and therespondent has permitted the occupants as well as owners,including the petitioners to raise their objections, if any andthereafter only, final assessment order will be passed. As statedby the learned counsel for the respondent, after such assessmentorder is passed, the petitioners have got further right of appealunder Section 89 of the Act to the Taxation Appeals Committee andthereafter, a further appeal to the District Court. Therefore,it is not as if the petitioners have no remedy under law,especially when there is such a specific clause in the noticeissued by the respondent Municipality itself.13. In view of the same, I have no hesitation to come tothe conclusion that the writ petitions are premature at thisstage and therefore, liable to be dismissed. Accordingly, thewrit petitions are dismissed with liberty to the petitioners inWP.No.3440 of 1999 and members of the petitioner Association inWP.No.54790 of 1999, who have been individually given suchnotices, to file their appropriate objections by way of revisionto the executive authority. It is made clear that in the eventof the petitioner as well as the members of the petitionerAssociation making such objections to the executive authoritywithin a period of 60 days from the date of receipt of copy oforder the executive authority of the Municipality shall, withoutraising the question about the limitation since the matter ispending in this court all these years, pass appropriate orders onmerit and in accordance with law expeditiously. Needless tostate that as against such order of executive authority in makingassessment, it is always open to the petitioners and the membersof the petitioner association to resort to the provisions of theTamil Nadu District Municipalities Act in filing an appeal to theTaxation Appeals Committee. https://hcservices.ecourts.gov.in/hcservices/ The writ petitions are dismissed with the abovedirections. No costs.khSd/Asst.Registrar/true copy/Sub Asst.RegistrarToThe CommissionerDindigul MunicipalityDindigul.+ 1 cc to Mr. V. Raghupathi, Advocate SR No.14852+ 2 ccs to Mr. M. Sriram, Advocate SR No. 14435 Common Order inW.P.Nos.3440 & 5470/99TEJ(CO)SR/24.3.2008