Chennai Petroleum Corporation Limited v. George

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 14.07.2008CORAMTHE HON'BLE MR.JUSTICE S.NAGAMUTHUW.P.No.1547 of 2008 &M.P.Nos.1 and 2 of 2008Chennai Petroleum Corporation Limited,536, Anna Salai,Teynampet,Chennai-600 018 Rep byCompany Secretary. .. Petitioner Vs1.The Secretary, Department of Municipal Administration, and Water Supply, Government of Tamil Nadu Fort St. George, Secretariat, Chennai-600 009.2.The Accountant General, Government of Tamil Nadu 361, Anna Salai, Teynampet, Chennai-600 018.3.The Executive Officer, Manali Municipality, Chennai-600 068. .. Respondents Writ Petition filed under Article 226 of the Constitution ofIndia to issue a writ of Certiorari call for the records from thethird respondent culminating in order bearing reference ROCNo.15/2007/A1 dated 16.11.2007, quash the same. For Petitioner : Mr.R.Muthukumarasamy Senior Counsel Mr.R.Senthil kumar For Respondents : Mr.V.Arun for R1 Additional Government Pleader Mr.Vijayakumar for R2 Mr.P.S.Jayakumar for R3 https://hcservices.ecourts.gov.in/hcservices/ O R D E RThough the miscellaneous petitions are listed today, by consentof both sides, the writ petition itself is taken up for finaldisposal.2. Challenging a demand notice issued under Section 84 of theTamil Nadu District Municipalities Act, 1920 making a demand forpayment of vacant land tax from the petitioner, has come forward withthis petition.3. The petitioner-company has its petroleum refinery in about 700acres of land in Manali and Thiruvottiyur Municipalities. Therefinery, including plants and administrative buildings are situatedon the said land. It is stated that there are pipelines runningunderground and overground in the areas between plants/buildings. Itis further submitted that in addition, storm water drains have alsobeen provided. According to the petitioner, the entire land has beenutilised for the purpose of refinery and administrative buildings.4. While so, proposing to levy vacant land tax under Section 81(3) of the Tamil Nadu District Municipalities Act, 1920 to the tuneof Rs.1,40,27,013/-, the third respondent issued notice to thepetitioner by his proceedings ROC.No.15/2007/A, dated 09.03.2007calling upon the petitioner to depute a responsible person to attendthe discussion on 13.07.2007 in respect of the said proposal.Accordingly, the petitioner's representative participated in thediscussion and submitted a detailed report along with the recordsthereby contending that the petitioner company is not liable to payany vacant land tax under the Tamil Nadu Municipalities Act sincethere is no vacant land in the possession of the company. But,according to the petitioner, without considering the said explanationoffered by the petitioner, and without passing any detailed orderdetermining the issues involved, the third respondent has simply madea demand from the petitioner demanding him to pay the above saidamount for the assessment year 1998-1999 to 2003-2004. The saiddemand notice in Roc.No.15/2007/A1, dated 16.11.2007 is underchallenge in this writ petition.5. Heard Mr.R.Muthukumarasamy the learned Senior Counselappearing for the petitioner, Mr.V.Arun, the learned AdditionalGovernment Pleader appearing for the first respondent,Mr.Vijayakumar, the learned counsel appearing for the secondrespondent and Mr.P.S.Jayakumar the learned counsel appearing for thethird respondent.6. The first and foremost contention of the learned SeniorCounsel appearing for the petitioner is that the impugned demand https://hcservices.ecourts.gov.in/hcservices/ notice is without jurisdiction and the same is liable to be quashedsince it is not preceded by any assessment order. The next contentionis that when there are buildings on the property, the area which isequivalent twice the plinth area of the buildings should be excludedfrom vacant tax as provided under Section 84(4)(b) of the Act. Butthe demand notice shows that for the entire vacant land stated to bein the possession of the petitioner, vacant land tax has beenimposed, which according to the learned Senior Counsel is in grossviolation of Section 84(4)(b) of the Act. The third contention isthat the impugned order has been made without affording sufficientopportunity to the petitioner and without following the principles ofnatural justice.7. The third respondent has filed a detailed counter. Accordingto the learned counsel for the third respondent, vacant land tax hasbeen imposed on the petitioner only on the escaped assessment. Hewould further submit that such demand is well within the period oflimitation prescribed under law. He would further submit that properassessment of the tax has been made and so the demand notice isperfectly valid under law. Lastly he would contend that sufficientopportunity was, in fact, given to the petitioner before passing theimpugned order.8. The learned Additional Government Pleader would adopt thearguments of the learned counsel for the third respondent.9. I have considered the rival submissions and also perused therecords available carefully. A plain reading of Section 84(4)(a)ofthe Act would go to show that the executive authority, at first,shall determine the property tax and convey the same to theparty/assessee. Before determining the said property tax, it is thebounden duty of the executive authority to afford an opportunity tothe party to submit his explanation. If only such an order ofdetermination of the property tax is made, it gives furtherjurisdiction to the executive authority to make a demand from theassessee. In the absence of any such determination order, any demandfor payment of tax shall be void as the same is without jurisdiction.In the case on hand, admittedly after his discussion with thepetitioner on 16.11.2007 the executive authority has not chosen topass any order determining the tax after considering the objectionsraised by the petitioner. Therefore, in the absence of any suchorder, in my considered opinion, the impugned demand notice iswithout jurisdiction and So, the same is liable to be quashed.10. The learned counsel for the third respondent would submitthat the writ petition is not maintainable as the petitioner has gotalternative remedy of appeal. In my considered opinion, the saidargument is only to be rejected for the simple reason that any order https://hcservices.ecourts.gov.in/hcservices/ determining the property tax alone is appealable. In this case sincethere is no order determining the property tax, there is no occasionfor the petitioner to prefer any appeal. Since impugned demand noticeis wholly without jurisdiction, it would be very appropriate for thisCourt to exercise the power of judicial review under Article 226 ofthe Constitution of India. 11. Further a close reading of Section 84(4)(b) of the Act wouldgo to show that an area which is equivalent twice the plinth area ofthe building should be excluded. But in this case, the executiveauthority has imposed the tax for the entire so called vacant landwithout making any such exclusion. On this ground also the impugnednotice suffers from legal infirmity. 12. As pointed out by the learned Senior Counsel for thepetitioner, there is a serious disputed question of fact involved.According to the Executive Authority the entire area for which vacantland tax has been imposed remains vacant, whereas according to thepetitioner, there are pipelines running underground and overground inthe areas between the plants and the building and there are alsostorm water drains prevailing and thus there is no vacant land at allavailable so as to impose vacant land tax. The executive authorityhas not decided this disputed question of fact by holding properenquiry and passing any determination order. Thus the impugned orderis grossly in violation of the principles of natural justice. 13. For all the above reasons, the impugned demand notice isliable to be quashed. In the result, the writ petition is allowed;the impugned demand notice is quashed and the matter is remanded backto the second respondent for fresh disposal in accordance with law.The second respondent is, more particularly, directed to adhere toSection 84 of the Act scrupulously and to pass appropriatedetermination order after affording sufficient opportunity to thepetitioner and then to proceed in accordance with law. It is furtherdirected that the second respondent shall pass final orders within aperiod of four months from the date of receipt of a copy of thisorder. Consequently, the connected miscellaneous petitions areclosed. Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.kpr/jikr https://hcservices.ecourts.gov.in/hcservices/ To1.The Secretary, Department of Municipal Administration, and Water Supply, Government of Tamil Nadu Fort St. George, Secretariat, Chennai-600 009.2.The Accountant General, Government of Tamil Nadu 361, Anna Salai, Teynampet, Chennai-600 018.3.The Executive Officer, Manali Municipality, Chennai-600 068.+ 1 CC to the Government Pleader SR NO.37369+ 1 CC To Mr.R.Senthilkumar, Advocate SR NO.37311+ 1 CC To Mr.P.S.Jayakumar, Advocate SR NO.37003W.P.No.1547 OF 2008MRD {CO}TP/1.8.08