1. Heard Mohd. Isa Khan, learned counsel for the petitioners and Sri A.K.Goyal, learned counsel for the respondent.
2. The writ petition is directed against judgment and order dated 7.2.2011 passed by Additional District Judge, Court No.1, Meerut in Tax Appeal No.3 of 2010 whereby it has allowed aforesaid appeal and cancelled tax bill No.5, Book No.59 dated 31.3.2009, which is for Rs.5,23,470/- towards property tax for the period of 2002 to 2008 in respect of Bangalow No.17 (Part), The Mall, R.A. Lines, Meerut Cantt., Meerut.
3. The facts, in brief, giving rise to the dispute, subjected to the present writ petition, are as under:
4. Initially, Governor General-in-Council vide General Order dated 179 dated 12.9.1836, made provisions to regulate occupation of ground and disposal of land, building etc. situated within the limits of Military Cantonments, which was made applicable from different dates at different stations of the then Bengal Army of East India Company. The vacant land for the purpose of construction etc. could have been allowed on an application made to the Commanding Officer of concerned Military Cantonment. The land was allowed to be occupied as a Grant, subject to condition that the Government retain power of redemption at any point of time by giving a month's notice and paying value of such building, as may have been authorized to be erected. Further, the ground being property of Government, was not liable to be sold by grantee though constructed house etc. situate on the ground may be transferred by one military or medical officer to another in the manner provided in Clause 6 condition no.2, but by any other person, with previous consent of Officer Commanding the Station.
5. Subsequently, with enactment of Cantonment Act, 1924 (hereinafter referred to as "Act, 1924"), the property within the area of Cantonment became subject matter of provisions of the said Act.
6. In exercise of power under Section 280 of Act, 1924, Central Government framed Cantonment Land Administration Rules, 1925, which were replaced and new rules were framed namely Cantonment Land Administration Rules, 1937. Under Rule 4 thereof, a cantonment land, is classified as Class 'A', 'B' and 'C' land, for the purpose of preparing General Land Register under Rule 3. Rule 5 further classify Class 'A' land as 'A-1' and 'A-2'. Similarly, Rule 6 classify Class 'B' land as Class 'B-1', 'B-2', 'B-3' and 'B-4' land.
7. The land in dispute, as per Land Record Register maintained by Cantonment Board, Meerut, is measured 4.378 acres and occupancy rights are vested with Dr. Jagannath Madan and Smt. Lajwanti Madan. Nature of occupancy rights are mentioned as 'Old Grant'. A photocopy of General Land Register, as stood on 23.6.1997, has been filed as Annexure 2 to the writ petition. The class of land, as mentioned in General Land Register is 'B-3'. The landlord is Government of India, though the land is managed through Military Estate Officer.
8. Chapter 5 of Act, 1924 deals with taxation. Section 60 provides that Cantonment Board with previous sanction of Central Government, may impose, in any cantonment, any tax, which under any enactment, for the time being in force, may be imposed, in any municipality in State, wherein such cantonment is situated.
9. It is not disputed by parties that property tax i.e. tax on land and building and water tax, besides other, was chargeable by Cantonment Board, Meerut. The property tax is assessed on annual value of the building or land and same is the position in respect of water tax. The procedure for determining annual value has been provided from Sections 66 to 72 of Act, 1924. Vide notification dated 27.9.1941, Central Government imposed tax @ 12% p.a. on annual value of land and building situate within limits of Meerut Cantonment and rate of water tax was modified to 6.25% in place of 3.5% vide notification dated 23.7.1977, published in Government of India gazette dated 27.9.1977. Both these notifications are in respect to land within limits of Meerut Cantonment.
10. In order to assess property tax, Cantonment Board Meerut has to determine 'Annual Value of property' (hereinafter referred to as "AVP"), which is within limits of Meerut Cantonment.
11. The AVP, as such, has been defined under Section 64 of Act, 1924, and reads as under:
"For the purposes of this Chapter, "annual value" means--
(a) in the case of railway stations, hotels, colleges, schools, hospitals, factories and any other buildings which a1[Board] decides to assess under this clause, one-twentieth of the sum obtained by adding the estimated present cost of erecting the building to the estimated value of the land appertaining thereto; and
(b) in the case of building or land not assessed under clause (a), the gross annual rent for which such building (exclusive of furniture or machinery therein) or such land is actually let or, where the building or land is not let or in the opinion of the Board is let for a sum less than its fair letting value, might reasonably be expected to let from year to year:
Provided that, where the annual value of any building is, by reason of exceptional circumstances, in the opinion of the Board, excessive if calculated in the aforesaid manner, the Board may fix the annual value at any less amount which appears to it to be just."
12. The respondent no.1 is occupying part of Bungalow No.17, The Mall, R.A. Lines, Meerut Cantt., Meerut and running an educational institution imparting professional education i.e. "Sri Deen Dayal Upadhyay of Management Studies" (hereinafter referred to as "Management College"). It is said by petitioners that land in question was granted for residential purpose but use has been changed unauthorizedly and without any sanction or permission of competent authority in the Cantonment Board. Further, Management College is charging exorbitant tuition fee from students and is being run by Founder and Owner thereof, for minting money and not for charitable purpose. However, this Court is not concerned, whether the present user of building by respondent no.1 is valid, unauthroized or legal etc. since that is not the subject of dispute of this writ petition. Here quantum of tax is the real cause of action and therefore, I am confined my scrutiny to that only.
13. In order to determine property tax for the period of 2002 and onwards, a technical staff of Cantonment board inspected Bungalow No.17 and recommended 'AVP' thereof as Rs.58,48,940/-. A public notice dated 29.4.2002 was issued under Section 68 of Act, 1924 for triennial assessment, 2002-2005, effective from 1.4.2002 proposing 'AVP' of Bungalow No.17 (Part) as Rs.58,48,940/-.
14. The respondent no.1 submitted objection against proposed triennial assessment for 2002-2005. The Assessing Committee considered objections as also proposed assessment and determined 'AVP' as Rs.23,000/- per annum only. This authentication was notified under Section 69(2) of Act, 1924 by Cantonment Executive Officer on 01.3.2003 making aforesaid assessment applicable from 1.4.2002.
15. The General Officer Commanding-in-Chief, Central Command, Lucknow, however, issued an order dated 23.6.2004 addressed to all Cantonment Boards stating that Assessment Committee while considering 'AVP' was not adhering the principles/norms set up in Section 64(a) of Act, 1924, particularly in respect of schools and educational institutions. It, therefore, directed all of them to reconsider assessment, already made and it specifically directed Cantonment Board, Meerut to review and finalize assessment in respect to all educational institutions/schools and other properties mentioned in Section 64(a) in terms of the said provision.
16. The matter was placed before Assessment Committee on 03.9.2004. It recommended that matter be placed before Cantonment Board, Meerut to take decision, as directed by General Officer Commanding in Chief. Consequently, Cantonment Board took up the matter in its meeting dated 4.9.2004 and resolved that notice under Section 71(C) of Act, 1924 be issued in all the cases, mentioned at serial 1 to 57 therein, which included respondent no.1 also at serial no.4. A notice dated 13.9.2004, therefore, was issued to respondent no.1 proposing assessment as Rs.58,48,940/- instead of Rs.23,000/-. Respondent no.1 filed objection dated 7.10.2004, seriously disputing exorbitant assessment of Rs.58,48,940/-. The aforesaid objection is on record as Annexure 12 to the writ petition. Date for oral hearing was fixed as 29.3.2005 and intimation was given to respondent no.1 by notice dated 24.3.2005. Thereafter Board considered respondent no.1's matter and after hearing him, who was represented through advocate, ultimately resolved to determine 'AVP' at Rs.52,64,046/-. The arrears of house tax and water tax was consequently computed and a notice of demand was issued to respondent no.1 on 1.4.2005 demanding house tax at Rs.18,86,777/-. This assessment and demand was challenged by respondent no.1 in Cantonment Tax Appeal No.5 of 2005 filed before District Judge, Meerut.
17. Respondent no.1 also moved an application before Cantonment Executive Officer requesting for re-inspection of premises by a technical staff and review the assessment of one-third portion of Bungalow No.17. On the direction of Cantonment Executive Officer, Engineering Section of the Board made an inspection on 20.12.2007 and submitted report to the following manner:
"1. Total area of bunglow - 4.738 acres
2. Area under occupation of Sri Yogesh Mohan Gupta - 1.46 acres
3. Area under occupation of Shri Sachin Agrawal - 1.459 acres
4. Area under occupation of Sri Praveen Gupta - 1.459 acres"
18. The aforesaid report was placed before Cantonment Board and considered in meeting dated 4.1.2008. Since earlier assessment was made on the total area of land as 4.738 acres while land under occupation of respondent no.1 was 1.46 acres, the Cantonment Board, vide resolution dated 04.01.2008, resolved that 'AVP' for the period 2002-2005 be corrected so as to make it applicable to 1.46 acres of land under occupancy of respondent no.1. Similarly for the Block period of 2005-08 it was directed to be revised. Respondent no.1 also agreed to withdraw all pending court cases. The revised 'AVP' then came to Rs.20,70,394.4. The respondent no.1 moved an application dated 17.1.2008 requesting District Judge to dismiss tax appeal No.5 of 2005 as not pressed.
19. In view of revised assessment, demand of house tax for two blocks of 2002-05 and 2005-08 collectively was issued vide bill dated 02.02.2009 for Rs.14,90,682/-. Respondent no.1 again filed Tax Appeal no.3 of 2010 challenging aforesaid bill dated 2.2.2009 alleging that it was again for the whole area of Bangalow No.17 and not one-third part thereof, which was in possession of respondent no.1. The petitioner then revised bill on 31.3.2009 (Annexure 20) demanding Rs.5,23,470/- only for 2002-05 and 2005-08. The aforesaid amount was paid by respondent no.1 vide receipt dated 31.1.2011.
20. However, the Tax Appeal No.3 of 2010 remained pending and came to be heard by District Judge, Meerut, who has allowed the same vide order dated 07.02.2011. For the first time it was contended before Appellate Court that under Section 99(2)(b) of Act, 1924, Educational Institution of respondent no.1 was exempted from property tax and therefore, aforesaid bill was incorrect. The lower Appellate Court noticed that there is a change in language of corresponding provision i.e. Section 111(2)(b) of Cantonment Act, 2006 (hereinafter referred to as "Act, 2006"), which has replaced Act, 1924, but observed that since demand included that part also, which was covered by provisions of Act, 1924, during which period premises in question of respondent no.1 was exempted from tax, therefore, demand of bill is incorrect. It also observed that revised tax and reduction was not pursuant to any resolution passed by Cantonment Board, since revision/reduction was made only by clerical staff, therefore, also demand of aforesaid tax was illegal. It is this order of appellate court, which is under challenge before this Court.
21. It is contended that question, whether building in question was exempted from tax and is covered by Section 99(2)(b) of Act, 1924 was never raised earlier. For the first time it has been raised before appellate authority, therefore, there was no occasion for appellate court to consider relevant material on this aspect and to decide whether building in question is actually covered by Act, 1924 or not for the purpose of property tax. My attention is drawn to another matter where such a question was not adjudicated by Assessing Authority, having no such occasion, and matter was decided by this Court. In these circumstances, Apex Court held that question of exemption first ought to have been considered and decided by Assessing Authority. In Civil Appeal No. 73 of 2003 (Cantonment Board, Meerut Vs. St. John's School) decided on 6.8.2008, Apex Court set aside judgment of this Court in Cantonment Board Vs. St. John's School and another 2002 (4) AWC 2795 whereby Board's Writ Petition was dismissed holding that respondent's School was exempted from tax under Section 99 (2) (b) of Act, 1924. Apex Court has held that this issue must have been decided first by Assessing Authority. In my view also, before attracting Section 99 (2) (b) of Act, 1924, several facts have to be considered, whether property Grant was made in favour of an educational institution or it was for individual purpose, whether the educational institution was started validly with the consent/permission of Cantonment Board or not and whether Section 99 of Act, 1924 at all is attracted and other incidental questions. In absence of any issue raised before Assessing Authority, there was no occasion for Assessing Authority to look into this aspect of the matter. That is how necessary facts and material have not come on record. In these facts and circumstances, in my view, it is a fit case where matter should be remanded to Assessing Authority permitting him to pass a fresh order in accordance with law after giving adequate opportunity of hearing and also permitting parties to file requisite documents/evidence, which may be relevant for deciding the issue in question.
22. At this stage one more argument advanced by learned counsel for the petitioner may be dealt with. It is contended that once issue regarding exemption was not raised by respondent, he is estopped from raising such issue subsequently and therefore, also he should not be allowed to raise this issue now.
23. I am afraid to accept this contention particularly when dispute relates to exigibility to tax. In the matter of tax, question of estoppel, waiver or acquiescence in the manner, as argued, have no place. If a person is liable to pay tax, he has to pay and authorities cannot give up power of realization of such tax by their conduct. Similarly, if a person is not exigible to tax, his conduct or admission etc. cannot make him exigible to tax. The imposition of tax is by and in accordance with law and has to be observed strictly.
24. A three Judges Bench of Court in Union of India & Ors. Vs. Godfrey Philips India Ltd., 1985 (4) SCC 369, while considering the application of doctrine of promissory estoppel in the context of fiscal statute, said:
"there can be no promissory estoppel against the legislature in the exercise of its legislative functions nor can the Government or public authority be debarred by promissory estoppel from enforcing a statutory prohibition. It is equally true that promissory estoppel cannot be used to compel the Government or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make. We may also point out that the doctrine of promissory estoppel being an equitable doctrine, it must yield when the equity so requires, if it can be shown by the Government or public authority that having regard to the facts as they have transpired, it would be inequitable to hold the Government or public authority to the promise or representation made by it, the Court would not raise an equity in favour of the person to whom the promise or representation is made and enforce the promise or representation against the Government or public authority. The doctrine of promissory estoppel would be displaced in such a case, because on the facts, equity would not require that the Government or public authority should be held bound by the promise or representation made by it."
25. The above authority has been consistently followed since then and recently reiterated in Jasbir Singh Chhabra and Ors. Vs. : State of Punjab and Ors., 2010 (4) SCC 192.
26. Even otherwise, in order to attract plea of estoppel, there are four necessary ingredient, which have to be satisfied i.e. Firstly, one party should make a factual representation to the other party. Secondly, the other party should accept and rely upon the aforesaid factual representation. Thirdly, having relied on the aforesaid factual representation, the second party should alter his position. Fourthly, the instant altering of position, should be such, that it would be iniquitous to require him to revert back to the original position. These indisias have recently been indicated by referring to the earlier authorities on the subject, in Pratima Chowdhury Vs. Kalpana Mukherjee and Anr., AIR 2014 SC 1304.
27. Unless the aforesaid conditions are pleaded and proved, there is no question of attracting the principle of estoppel.
28. In the result, the writ petition is allowed in part. The impugned appellate order dated 07.2.2011 as well as assessment made by Assessing Committee in respect to Assessment years 2002-08 is hereby set aside. The petitioner is directed to place the matter again before Assessment Committee to re-consider assessment including exigibility of tax upon occupier of Bungalow in question, in the light of various provisions of Act, 1924 read with Section 99 (2) (b) thereof and Section 111(2)(b) of Act, 2006 and pass a reasoned order in accordance with law.
Order Date :- 15.4.2014 KA