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Basant Palace & Another v. State Of U.P. & Others - WRIT TAX No. 1235 of 2004  RD-AH 1738 (17 December 2004)
Civil Misc. Writ Petition No. 1235 of 2004
Basant Palace and another Vs. State of U.P. and others.
Hon'ble R.K.Agarwal, J.
Hon'ble Prakash Krishna, J.
By means of the present writ petition under Article 226 of the Constitution of India the two petitioners namely Basant Palace and its partner/manager Dinesh Kumar seek the following reliefs:-
(a) to issue a writ, order or direction in the nature of certiorari quashing the impugned order/demand notice dated 7.8.2004 issued by the Respondent No.3 (filed as Annexure-1 to this petition);
(b) to issue a writ, order or direction in the nature of mandamus directing the Respondents not to take any coercive action against the petitioner in pursuance of the impugned demand notice/order dated 7.8.2004 (Annexure-1 to this writ petition) and further not to interfere in the business activities of the petitioner;
(c) to issue any other writ, order or direction which this Hon'ble Court may deem fit and proper in the circumstances of the case;
(d) to award costs of the petition to the petitioners.
Briefly stated the facts giving rise to the present writ petition are as follows:-
The petitioner no.1 is a cinema hall which is being run by a partnership firm of which the petitioner no.2 is one of the partners. The cinema hall is located within the municipal limits of Nagar Palika Parishad Chhaprauli, District Baghpat. It was established in the year 1989 and was being assessed to house tax. According to the petitioner they have deposited the house tax regularly as per the assessment orders upto 2000-01. The house tax has been deposited pursuant to the orders of the assessment. They have further deposited the house tax upto the period 2003-04. All of sudden the petitioners were served with notice dated 7th August 2004 issued by the Executive Officer, Nagar Panchayat Chhaprauli, District Baghpat, respondent no.3, calling upon them to deposit a huge sum of Rs.5,03,730/- towards the arrears of show tax and house tax for the assessment years 1989-90 to 2001-02. The notice dated 7th August, 2004 is under challenge in the present writ petition.
As the counter affidavit and rejoinder affidavit have been exchanged between the parties, with the consent of the learned counsel for the parties the writ petition is being finally heard and disposed off at the admission stage itself in accordance with the Rules of the Court.
We have heard Shri Anurag Khanna, the learned counsel for the petitioners, the learned standing counsel appearing for the respondent No.1 and Shri Prem Chand appearing for the respondent nos. 2 and 3.
The learned counsel for the petitioner submitted that the petitioners had paid house tax upto the assessment year 2003-04 as per the assessment orders and the value of the house assessed. He further submitted that the show tax has been imposed for the first time vide Government Notification dated 6th of March 2004 and therefore there is no liability for payment of show tax upon the petitioners prior to that date.
The fact that the petitioners had deposited the house tax upto the assessment year 2003-04 and as also the show tax has been imposed for the first time vide Notification dated 6th of March 2004, has not been disputed by Shri Prem Chand, learned counsel appearing for the respondent nos. 2 and 3. However, he submitted that the Senior Auditor, Local Fund Account, U.P. Meerut vide report submitted on 24th December, 02 had raised an objection that the cinema building has been under assessed and show tax has not been realized from the petitioners for the period 1989 to 2002. On the basis of the audit objection raised by the Officers of the State Government, the impugned demand has been raised.
Having heard the learned counsel for the parties we find that even in a case where a building has been assessed at a low rate for the purposes of house tax a detailed procedure has been given under the Statutory Enactment namely U.P. Municipalities Act 1961 for revaluation of the annual value of the building and only deficiency/short fall in the house tax can be recovered. Moreover, show tax could not have been levied retrospectively. It has been imposed for the first time vide Notification dated 6th of March, 2004. It appears that the Senior Auditor did not at all address himself on this aspect and had blindly given a report just to harass the petitioners.
In view of the foregoing discussion we are of the considered opinion that the impugned demand for the huge amount of Rs.5 Lakhs and odd has been raised just to harass the petitioners. It is not in accordance with law and also without jurisdiction.
In this view of the matter, the respondent nos. 2 and 3 have exposed themselves for payment of exemplary cost. The demand notice dated 7th of August 2004 is hereby quashed. The respondent nos. 2 and 3 shall pay a sum of Rs.10,000/- to the petitioners towards the cost and after its payment will be at liberty to realize the same from the Audit Officer who has exceeded his jurisdiction in submitting the report on the basis of which the impugned action has been taken.
The writ petition succeeds and is allowed.
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