Varadarajan v. The State of Tamil Nadu

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 27.01.2011CORAM:THE HONOURABLE MR.JUSTICE VINOD K.SHARMAW.P. No.14414 of 2010and M.P.No.1 of 2010Varadarajan.. Petitioner.Vs.1. The State of Tamil Nadu Rep. by its Secretary to GovernmentMunicipal Administration & Water, Supply Department, Fort St.George,Chennai2. The Director Municipal Administration,Ezhilagam Annexe Building,VI Floor, Chepauk,Chennai – 600 005.3.The Dharapuram MunicipalityRep. by its CommissionerDharapuram,Thiruppur District.. Respondents.Writ petition is filed under Article 226 of Constitution ofIndia for the issuance of a Writ of Mandamus, directing the secondand third respondents to accept the resolution No.1285 dated31.08.2009 and Resolution No.1571 dated 12.05.2010, passed by theDharapuram Municipality Council and act in accordance with law.For Petitioner : Mrs.Hema Sampath SC for M/s. S. RaveekumarFor R1 & R2:Mr.B.VijayGovt. AdvocateFor R3:Mrs.Malarvizhi Udhaya Kumar https://hcservices.ecourts.gov.in/hcservices/ O R D E RThe petitioner, who is the Ward Member of Municipal Council ofDharapuram Municipality, seeks a writ in the nature of Mandamus,directing the second and third respondents to accept the resolutionNo.1285 dated 31.08.2009 and Resolution No.1571 dated 12.05.2010,passed by the Dharapuram Municipality Council, quo the propertytax.2.In the affidavit to the writ petition, it has beenpleaded that the petitioner is an elected Ward Member and residentof Dharapuram municipality.3.The first respondent passed G.O.No.150 dated 12.11.2007to revise property tax of all municipalities. The Government orderwas followed by another G.O.No.110 dated 23.06.2008, wherein, theGovernment issued guidelines to the municipalities to reviseproperty tax. In the Government order No. 110, it was specificallyprovided that municipality shall not increase tax beyond,i) 25% for residential buildings ii) 100% for Industrial Establishments, andiii) 150% for Commercial Establishments. 4.The third respondent, i.e. Dharapuram Municipality,passed resolution dated 30.06.2008, vide which, it was decided toincrease property tax for residential buildings by 25% and 50% forIndustrial and Commercial Establishments. Under Section 78 of theTamil Nadu District Municipalities Act, the power is vested withMunicipality with regard to levying of taxes.5.Section 78 of the Tamil Nadu District Municipalities Act,1920, reads as under:78. Enumeration of ordinary taxes and powers ofcontrol of State Government – (1) Every municipal councilmay levy,(a) property tax;(b) a profession tax;(c) a tax on carriages and animals;(d) a tax on carts;(dd) a tax on advertisement other thanadvertisements published in the newspapers andadvertisements broadcast by radio or television.(2) A hill station municipal council may also levy a taxon servants. https://hcservices.ecourts.gov.in/hcservices/ (3) Any resolution of a municipal council determining tolevy a tax shall specify the rate at which any such taxshall be levied and the date from which it shall belevided.Provided that before passing or resolution imposinga tax for the first time or increasing the rate of anexisting tax on advertisement other than advertisementspublished in the newspapers and advertisements broadcastby radio or television, the council shall publish anotice in at least one vernacular newspaper, on thenotice board of the municipal office and in such otherplaces within municipal limits as may be specified by thecouncil and by beat of drum, of its intention fix areasonable period not being less than one month forsubmission of objections and consider the objections, ifany, received within the period specified;Provided also that any resolution abolishing anexisting tax or reducing the rate at which a tax islevied shall be immediately reported to the StateGovernment and in municipalities which have anoutstanding loan either from the Government or from thepublic or any other local body, such abolition orreduction shall not be carried into effect without thesanction of the State Government.Provided also that, where any resolution under thisSection has taken effect for a particular year, noproposals to alter the rates or date fixed in suchresolution so far as that year is concerned shall betaken into consideration by the Council"6.The case of the petitioner is that as no action was takenon the resolution, passed by Dharapuram Municipality, therepresentations were sent by the petitioner to the Ministry ofLocal Administration, with copies to respondents.7.The case pleaded by the petitioner is that videproceedings in Na.Ka.No.64310/2008/R-1 dated 29.12.2008, secondrespondent, i.e. The Director Municipal Administration, refused toaccept and ratify resolution dated 27.11.2008, on the ground thatproperty tax was being calculated at the first revised rate. 8.The order, passed by the second respondent, waschallenged by the petitioner vide W.P.No.1593 of 2009 and the writpetition was disposed of by this Court on 06.07.2010 by observingthat since financial year had commenced and tax had been calculatedat the revised rate, the Municipal Council would be at liberty totake steps for reduction of tax as per law. https://hcservices.ecourts.gov.in/hcservices/

9.It was in pursuance to observation, made by this Court,the third respondent passed resolution No.1285 dated 31.08.2009,giving effect to the reduced rate with effect from 01.04.2010.Thereafter, resolution No.1571 was also passed on 12.05.2010,confirming reduction of property tax. Resolutions were also broughtto the knowledge of the second and third respondents.10.In addition, the petitioner made number ofrepresentations to levy tax as per resolution passed by themunicipality. However, without considering the resolution of theMunicipal Council, third respondent is collecting tax at old rate,which is in violation of the resolution of Municipal Council,passed under Section 78 of the Act.11.On notice, counter has been filed by the firstrespondent, wherein, it has been stated as under:"5. It is submitted that based on the aboveinstructions a resolution was passed by the council on30.06.2008 to revise the property tax. As per the taxfixed and collected as noted for various expenditureinvolved in the Municipality Tax was fixed and collectedas per the revised basic rates. While so, the petitionersent a representation dated 06.11.2008 to the Chairman,Dharapuram, Municipality, pursuant to resolution No.1046dated 27.11.2008 was passed revising the Property Tax as15% to the residential building and 30% for an Industrialand Commercial Establishment which cannot be implementedas per Section 78(3) of said Act, 1920, without thesanction of the Government since the Municipality is indeficit and not in a position to repay various loans andalso to contribute to the various essential services likeWater Supply, Road, Street Light, Sanitation etc., forwhich Municipality is to increase the income of theMunicipality."12.In view of averments made in Paragraph No.5 of theaffidavit, the petitioner cannot question the action of thirdrespondent in collecting tax at old rate, as resolution passed byMunicipality is required to be approved by the State Government, asthe third respondent is shown to be under debt to the local bodies,regarding payment of certain tax and duties. 13.However, at the same time, the first respondent is, understatutory obligation, to take decision on the resolution passed bythe Municipal Council in view of proviso to Section 78 of the TamilNadu District Municipalities Act, 1920. https://hcservices.ecourts.gov.in/hcservices/

14.Till time resolution is approved by the State Government,it cannot have force of law, therefore, third respondent isjustified in claiming tax on the basis of old rates. 15.As the first respondent has failed to perform itsstatutory duty, this writ petition is disposed of, by directingthe first respondent to take a decision on the resolution, passedby the second respondent, reducing tax. The decision be takenwithin a period of three months from the date of receipt ofcertified copy of this order. No costs. Consequently, connectedmiscellaneous petition is closed. Sd/- Asst.Registrar. /true copy/ Sub Asst.Registrar.arTo1. The Secretary to GovernmentState of Tamil Nadu Municipal Administration & Water, Supply Department, Fort St.George,Chennai2. The Director Municipal Administration,Ezhilagam Annexe Building,VI Floor, Chepauk,Chennai – 600 005.3.The CommissionerDharapuram MunicipalityDharapuram,Thiruppur District1 cc to Mr.S. Raveekumar, Advocate,a Sr. 61591 cc to Government Pleader Sr. 6500W.P. No.14414 of 2010RK (CO)kk 8/2