THE HONOURABLE MR v. The Government of Tamil Nadu

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 28.4.2009CORAM:THE HONOURABLE MR.JUSTICE S.J.MUKHOPADHAYAANDTHE HONOURABLE MR.JUSTICE N.KIRUBAKARANWrit Appeal No.23 of 2009& M.P.No.1 of 2009V.S.Badhurunnisha Begum,D/o Late A.K.Minna Noordin Ambalam,rep. by her Power AgentHaji V.Syed Mohammed,S/o Late V.S.S.Varusai MohamedOld No.52, New No.22, Rajaji Salai. ..Appellantvs.1. The Government of Tamil Nadu, rep. by its Secretary, Dept. of Housing & Urban Development, Fort St.George, Chennai-600 009.2. The Commissioner, Corporation of Chennai, Park Town, Chennai-3.3. The Taxation Appeal Tribunal, Corporation of Chennai, Rippon Building, Chennai-600 003. ..RespondentsWrit Appeal against the order dated 4.8.2008 passed by thelearned single Judge in W.P.No.7231 of 2006 filed under Article 226of the Constitution of India, praying for a writ of declaration,declaring that the Rule 14 of Schedule IV, Part V, of Taxation Rulesof the Madras City Municipal Corporation Act 1919 as null and void asit does not provide any provision for waiver or exemption beforeentertaining the appeal before the third respondent in relation tothe property situated at No.52, Rajaji Salai, Chennai-1. https://hcservices.ecourts.gov.in/hcservices/ For Appellant : Mr.P.Subba Reddy For Respondents: Mr.A.Edwin Prabhakar, Addl.G.P. for R-1 Mr.V.Bharathidasan for R-2JUDGMENT(Judgment of the Court was delivered by S.J.Mukhopadhaya,J)The appellant-writ petitioner having unsuccessfully challengedthe vires and validity of Rule 14 of Schedule IV of Part V of theTaxation Rules of the Chennai City Municipal Corporation Act, 1919,has preferred this Writ Petition.2. The main plea taken is that Rule 14 of Schedule IV of Part Vof the Taxation Rules of the Chennai City Municipal Corporation Act,1919, is null and void, as it does not provide for waiver orexemption for entertaining an appeal before the Taxation AppealTribunal in relation to the property tax.3. The learned single Judge upheld the Rule as intra-vires, butdirected the second respondent to issue notice to the assessee andgrant an opportunity of personal hearing and follow the principles ofnatural justice before enhancing the property tax.4. We have heard the learned counsel appearing for the partiesand perused the records and noticed the relevant provisions.5. Chapter V of the Chennai City Municipal Corporation Act, 1919,deals with 'Taxation'. While Section 99 of the said Act relates todescription and class of property tax, Section 100 stipulates themethod of assessment of property tax. Under Section 138 of the saidAct, the Taxation Rules have been framed under Schedule IV. UnderSchedule IV, Part-I.A, the modes of assessment of property tax areenumerated, relevant portion of which reads as follows:"SCHEDULE IV.TAXATION RULESPART-I.AASSESSMENT OF PROPERTY TAX1-C(1). The Commissioner may, by giving publicityin the local newspapers and otherwise require theowner or the occupier of, any land or building, or aportion thereof to file a return within a period notexceeding one month from the date notified in thisbehalf by the Commissioner, containing the followingparticulars with regard to each assessable item,namely:- https://hcservices.ecourts.gov.in/hcservices/ (i) the name of the division and the street inwhich it is situated and the door number;(ii) description of the assessable item likenumber of storeys, plinth area in each storey and theextent of vacant land;(iii) the name of the owner;(iv) the name of the occupier;(v) the year in which the assessable item waslast assessed and the amount of annual value fixed bythe Commissioner;(vi) the amount of tax now being paid per half-year;(vii) whether the assessable item is used forresidential or non-residential purpose;(viii) whether the assessable item is whollyrented or partly occupied by the owner and partlyrented; and(ix) the amount received as rent or lease amountper year.2. If any person fails to file return within thenotified time, the Commissioner may authorise anyperson not below the rank of a Bill Collector to enterupon and make an inspection of the assessable item andprepare the return.3. The Commissioner shall assess the property taxhaving regard to,-(1) the annual value fixed for a building on thedate of general revision of the property tax;(2) the property tax payable by the owner or theoccupier on the basis of the particulars filed in thereturn; and(3) the property tax payable by the owner or theoccupier with reference to the guidelines, if any,issued by the council." https://hcservices.ecourts.gov.in/hcservices/

6. Under Schedule IV, Part-V of the Taxation Rules, there is aprovision of revision of assessment. As per Rule 14 therein, noappeal can be entertained by the Taxation Appeal Tribunal, unless theappellant deposits in the Corporation the existing tax and also 50%of the difference between the existing tax and the tax as assessed bythe Commissioner in the revision. In fact, the said Rule 14 waschallenged by the appellant before the Writ Court, which is quotedhereunder:"14. No appeal shall be entertained by the Tribunalunless the appellant deposits in the Corporation theexisting tax and also fifty percent of the differencebetween the existing tax and the tax as assessed by theCommissioner in the revision." 7. Learned counsel appearing on behalf of the appellant-writpetitioner took a plea that at the time of the assessment andenhancement of the property tax, no opportunity of hearing was given.He relied on the decision of the Supreme Court in the case of "MardiaChemicals Ltd. vs. Union of India", reported in 2004 (4) SCC 311, tosuggest that at the first stage, if no opportunity of hearing isgiven, such Rule being arbitrary, should be declared ultra-vires. Butwe are not inclined to accept such submission, in view of thespecific provision under Part I-A, as full opportunity is given atthe time of assessment by giving publicity in the local newspapers tothe owner or the occupier of the land or building or a portionthereof, to file a return and after inspection of the assembled item,preparation of return.8. In the case of "Mardia Chemicals Ltd." (supra), while dealingwith the original Section 17(1) of the SARFAESI Act, 2002, theSupreme Court observed that such Section is rendered illusory due tothe requirement of the condition of deposit of pre-deposit of 75% ofthe amount claimed by the secured creditor under Section 17(2) at thefirst instance and the Supreme Court declared Section 17(2) asunconstitutional, as at no stage, any opportunity was given. Therelevant portion of the observations of the Supreme Court in the caseof "Mardia Chemicals Ltd" (supra) reads as follows:"64. The condition of pre-deposit in thepresent case is bad rendering the remedy illusoryon the grounds that: (i)it is imposed whileapproaching the adjudicating authority of the firstinstance, not in appeal, (ii) there is nodetermination of the amount due as yet, (iii) thesecured assets or their management withtransferable interest is already taken over andunder control of the secured creditor, (iv) nospecial reason for double security in respect of an https://hcservices.ecourts.gov.in/hcservices/ amount yet to be determined and settled, (v) 75% ofthe amount claimed by no means would be a meagreamount, and (vi) it will leave the borrower in aposition where it would not be possible for him toraise any funds to make deposit of 75% of theundetermined demand. Such conditions are not aloneonerous and oppressive but also unreasonable andarbitrary. Therefore, in our view, sub-section (2)of Section 17 of the Act is unreasonable, arbitraryand violative of Article 14 of the Constitution."9. Whether at the first appellate stage, the requisite pre-deposit can be made a condition, fell for consideration before theSupreme Court from time to time. In the case of "Ganga Bai vs. VijayKumar", reported in 1974 (2) SCC 393, the Supreme Court made thefollowing observations:"There is a basic distinction between theright of suit and the right of appeal. There is aninherent right in every person to bring a suit ofcivil nature and unless the suit is barred bystatute one may, at one’s peril, bring a suit ofone’s choice. It is no answer to a suit, howsoeverfrivolous to claim, that the law confers no suchright to sue. A suit for its maintainabilityrequires no authority of law and it is enough thatno statute bars the suit. But the position inregard to appeals is quite the opposite. The rightof appeal inheres in no one and therefore an appealfor its maintainability must have the clearauthority of law. That explains why the right ofappeal is described as a creature of statute."10. In the case of "Seth Nand Lal vs. State of Haryana", reportedin 1980 Supp. SCC 574, while considering the question of validity ofpre-deposit before availing the right of appeal, the Supreme Courtheld as follows:"(SCC p.590 para 22)""[R]ight of appeal is a creature of the statuteand while granting the right the legislature canimpose conditions for the exercise of such right solong as the conditions are not so onerous as toamount to unreasonable restrictions rendering theright almost illusory."(emphasis supplied) https://hcservices.ecourts.gov.in/hcservices/

11. The aforesaid decisions in the cases of "Ganga Bai vs. VijayKumar" (supra) and "Seth Nand Lal vs. State of Haryana" (supra), werenoticed by the Supreme Court in the case of "Mardia ChemicalsLtd."(supra). In the case of "Mardia Chenicals Ltd.", no interferencewas made with regard to Section 18(1) of the SARFAESI Act, though thevalidity of the said Act, was under challenge.12. We have noticed that at the first stage, at the time ofassessment of property tax including the enhancement of propertytax, an opportunity is required to be given to the owner of theland/building or the occupier of a portion thereof, to file returnby giving publicity in the newspapers and other methods. Therein, thename of the divisions, street, description of the assessable item,name of the owner, name of the occupier, the year in which theassessable item was last assessed, etc., and all those details are tobe submitted by the owner or occupier. If any person fails to filereturn, then the competent authority may make inspection of theassessable item and prepare the return, thereby it will be evidentthat the total opportunity is given under the Taxation Rules framedunder Section 138 of the Chennai City Municipal Corporation Act andthereby, relying the condition of pre-deposit for preferring appealagainst such assessment, cannot be held to be ultra-vires Article 14of the Constitution of India.13. So far as the appellant-writ petitioner is concerned, it wasnot the case that she has not been given an opportunity in terms ofRules as quoted above and no publicity in the local newspapers wasgiven or that she had filed return with all details. In that view ofthe matter and that there being an alternative remedy of appeal underRule 14, Part V, Schedule IV of the Taxation Rules under the ChennaiCity Municipal Corporation Act and with regard to the appellant'schallenge, we are of the view that there was no occasion for thelearned single Judge to direct the respondents to give anotheropportunity to the appellant as ordered at paragraphs 19 and 20 ofthe impugned order dated 4.8.2008 in W.P.No.7231 of 2006.14. Another ground appears to have been taken with regard to thewaiver of pre-deposit amount, but that cannot be deliberated by thisCourt under Article 226 of the Constitution of India, as it is forthe Legislators while framing the Rules to decide as to whether theyshould keep any provision for pre-deposit at the time of appeal orshould make any provision of waiver of such pre-deposit.15. In view of the findings aforesaid, while we uphold thevalidity of Rule 14 in Part V, Schedule IV of the Taxation Rules ofthe Chennai City Municipal Corporation Act, 1919, as declared intra-vires by the learned single Judge, we set aside that part of thedirection given to the respondents-authorities to give another https://hcservices.ecourts.gov.in/hcservices/ opportunity to the appellant, as contained at paragraphs 19 and 20 ofthe impugned order of the learned single Judge.16. However, this order shall not stand in the way of theappellant to prefer appeal under Rule 14 of Part V, Schedule IV ofthe Taxation Rules of the Chennai City Municipal Corporation Act,1919, and may bring the same to the notice of the Taxation AppealTribunal that she was pursuing the matter before this Court and insuch a case, the Taxation Appeal Tribunal will entertain the appeal,if the appellant prefers such appeal within four weeks with therequisite pre-deposit amount.17. The Writ Appeal stands disposed of with the aforesaidobservations. No costs. The Miscellaneous Petition is closed. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar.csTo1. The Secretary, Government of Tamil Nadu, Dept. of Housing & Urban Development, Fort St.George, Chennai-600 009.2. The Commissioner, Corporation of Chennai, Park Town, Chennai-3.3. The Chairman, Taxation Appeal Tribunal, Corporation of Chennai, Rippon Building, Chennai-600 003.+ 1 c.c. to Mr. P. Subba Reddy, Advocate. S.R.No.18479.+ 1 c.c. to The Government Pleader. S.R.No.18620.Writ Appeal No.23 of 2009JSV (CO)GSK 08.06.2009.