(Judgment of the Court was delivered by S.J.Mukhopadhaya,J) The appellant-writ petitioner having unsuccessfully challenged the vires and validity of Rule 14 of Schedule IV of Part V of the Taxation 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 V of the Taxation Rules of the Chennai City Municipal Corporation Act, 1919, is null and void, as it does not provide for waiver or exemption for entertaining an appeal before the Taxation Appeal Tribunal in relation to the property tax.
3. The learned single Judge upheld the Rule as intra-vires, but directed the second respondent to issue notice to the assessee and grant an opportunity of personal hearing and follow the principles of natural justice before enhancing the property tax.
4. We have heard the learned counsel appearing for the parties and 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 to description and class of property tax, Section 100 stipulates the method of assessment of property tax. Under Section 138 of the said Act, the Taxation Rules have been framed under Schedule IV. Under Schedule IV, Part-I.A, the modes of assessment of property tax are enumerated, relevant portion of which reads as follows:
"SCHEDULE IV.
TAXATION RULES PART-I.A ASSESSMENT OF PROPERTY TAX 1-C(1). The Commissioner may, by giving publicity in the local newspapers and otherwise require the owner or the occupier of, any land or building, or a portion thereof to file a return within a period not exceeding one month from the date notified in this behalf by the Commissioner, containing the following particulars with regard to each assessable item, namely:-
(i) the name of the division and the street in which it is situated and the door number;
(ii) description of the assessable item like number of storeys, plinth area in each storey and the extent of vacant land;
(iii) the name of the owner;
(iv) the name of the occupier;
(v) the year in which the assessable item was last assessed and the amount of annual value fixed by the Commissioner;
(vi) the amount of tax now being paid per half-year;
(vii) whether the assessable item is used for residential or non-residential purpose;
(viii) whether the assessable item is wholly rented or partly occupied by the owner and partly rented; and
(ix) the amount received as rent or lease amount per year.
2. If any person fails to file return within the notified time, the Commissioner may authorise any person not below the rank of a Bill Collector to enter upon and make an inspection of the assessable item and prepare the return.
3. The Commissioner shall assess the property tax having regard to,-
(1) the annual value fixed for a building on the date of general revision of the property tax;
(2) the property tax payable by the owner or the occupier on the basis of the particulars filed in the return; and (3) the property tax payable by the owner or the occupier with reference to the guidelines, if any, issued by the council."
6. Under Schedule IV, Part-V of the Taxation Rules, there is a provision of revision of assessment. As per Rule 14 therein, no appeal can be entertained by the Taxation Appeal Tribunal, unless the appellant deposits in the Corporation the existing tax and also 50% of the difference between the existing tax and the tax as assessed by the Commissioner in the revision. In fact, the said Rule 14 was challenged by the appellant before the Writ Court, which is quoted hereunder:
"14. No appeal shall be entertained by the Tribunal unless the appellant deposits in the Corporation the existing tax and also fifty percent of the difference between the existing tax and the tax as assessed by the Commissioner in the revision."
7. Learned counsel appearing on behalf of the appellant-writ petitioner took a plea that at the time of the assessment and enhancement of the property tax, no opportunity of hearing was given. He relied on the decision of the Supreme Court in the case of "Mardia Chemicals Ltd. vs. Union of India", reported in 2004 (4) SCC 311, to suggest that at the first stage, if no opportunity of hearing is given, such Rule being arbitrary, should be declared ultra-vires. But we are not inclined to accept such submission, in view of the specific provision under Part I-A, as full opportunity is given at the time of assessment by giving publicity in the local newspapers to the owner or the occupier of the land or building or a portion thereof, to file a return and after inspection of the assembled item, preparation of return.
8. In the case of "Mardia Chemicals Ltd." (supra), while dealing with the original
Section 17(1) of the SARFAESI Act, 2002, the Supreme Court observed that such Section is rendered illusory due to the requirement of the condition of deposit of pre-deposit of 75% of the amount claimed by the secured creditor under
Section 17(2) at the first instance and the Supreme Court declared
Section 17(2) as unconstitutional, as at no stage, any opportunity was given. The relevant portion of the observations of the Supreme Court in the case of "Mardia Chemicals Ltd" (supra) reads as follows:
"64. The condition of pre-deposit in the present case is bad rendering the remedy illusory on the grounds that: (i)it is imposed while approaching the adjudicating authority of the first instance, not in appeal, (ii) there is no determination of the amount due as yet, (iii) the secured assets or their management with transferable interest is already taken over and under control of the secured creditor, (iv) no special reason for double security in respect of an amount yet to be determined and settled, (v) 75% of the amount claimed by no means would be a meagre amount, and (vi) it will leave the borrower in a position where it would not be possible for him to raise any funds to make deposit of 75% of the undetermined demand. Such conditions are not alone onerous and oppressive but also unreasonable and arbitrary. Therefore, in our view, sub-section (2) of
Section 17 of the Act is unreasonable, arbitrary and 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 the Supreme Court from time to time. In the case of "Ganga Bai vs. Vijay Kumar", reported in 1974 (2) SCC 393, the Supreme Court made the following observations:
"There is a basic distinction between the right of suit and the right of appeal. There is an inherent right in every person to bring a suit of civil nature and unless the suit is barred by statute one may, at ones peril, bring a suit of ones choice. It is no answer to a suit, howsoever frivolous to claim, that the law confers no such right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is quite the opposite. The right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of statute."
10. In the case of "Seth Nand Lal vs. State of Haryana", reported in 1980 Supp. SCC 574, while considering the question of validity of pre-deposit before availing the right of appeal, the Supreme Court held as follows:
"(SCC p.590 para 22)"
"[R]ight of appeal is a creature of the statute and while granting the right the legislature can impose conditions for the exercise of such right so long as the conditions are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory."
(emphasis supplied)
11. The aforesaid decisions in the cases of "Ganga Bai vs. Vijay Kumar" (supra) and "Seth Nand Lal vs. State of Haryana" (supra), were noticed by the Supreme Court in the case of "Mardia Chemicals Ltd."(supra). In the case of "Mardia Chenicals Ltd.", no interference was made with regard to
Section 18(1) of the SARFAESI Act, though the validity of the said Act, was under challenge.
12. We have noticed that at the first stage, at the time of assessment of property tax including the enhancement of property tax, an opportunity is required to be given to the owner of the land/building or the occupier of a portion thereof, to file return by giving publicity in the newspapers and other methods. Therein, the name of the divisions, street, description of the assessable item, name of the owner, name of the occupier, the year in which the assessable item was last assessed, etc., and all those details are to be submitted by the owner or occupier. If any person fails to file return, then the competent authority may make inspection of the assessable item and prepare the return, thereby it will be evident that the total opportunity is given under the Taxation Rules framed under Section 138 of the Chennai City Municipal Corporation Act and thereby, relying the condition of pre-deposit for preferring appeal against such assessment, cannot be held to be ultra-vires
Article 14 of the Constitution of India.
13. So far as the appellant-writ petitioner is concerned, it was not the case that she has not been given an opportunity in terms of Rules as quoted above and no publicity in the local newspapers was given or that she had filed return with all details. In that view of the matter and that there being an alternative remedy of appeal under Rule 14, Part V, Schedule IV of the Taxation Rules under the Chennai City Municipal Corporation Act and with regard to the appellant's challenge, we are of the view that there was no occasion for the learned single Judge to direct the respondents to give another opportunity to the appellant as ordered at paragraphs 19 and 20 of the impugned order dated 4.8.2008 in W.P.No.7231 of 2006.
14. Another ground appears to have been taken with regard to the waiver of pre-deposit amount, but that cannot be deliberated by this Court under
Article 226 of the Constitution of India, as it is for the Legislators while framing the Rules to decide as to whether they should keep any provision for pre-deposit at the time of appeal or should make any provision of waiver of such pre-deposit.
15. In view of the findings aforesaid, while we uphold the validity of Rule 14 in Part V, Schedule IV of the Taxation Rules of the Chennai City Municipal Corporation Act, 1919, as declared intra-vires by the learned single Judge, we set aside that part of the direction given to the respondents-authorities to give another opportunity to the appellant, as contained at paragraphs 19 and 20 of the impugned order of the learned single Judge.
16. However, this order shall not stand in the way of the appellant to prefer appeal under Rule 14 of Part V, Schedule IV of the Taxation Rules of the Chennai City Municipal Corporation Act, 1919, and may bring the same to the notice of the Taxation Appeal Tribunal that she was pursuing the matter before this Court and in such a case, the Taxation Appeal Tribunal will entertain the appeal, if the appellant prefers such appeal within four weeks with the requisite pre-deposit amount.
17. The Writ Appeal stands disposed of with the aforesaid observations. No costs. The Miscellaneous Petition is closed.
(S.J.M.J) (N.K.K.J) 28.4.2009 Index: Yes Internet: Yes cs To
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.
S.J.MUKHOPADHAYA,J and N.KIRUBAKARAN,J cs Writ Appeal No.23 of 2009 28.4.2009