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Rameshwar Dayal v. State Of U.P. Thru' Secy. & Others - WRIT TAX No. 199 of 2004  RD-AH 450 (18 February 2005)
Court No. 37
Civil Misc. Writ Petition No. 199 of 2004
Rameshwar Dayal Vs.. State of U.P. and others
Hon'ble R.K. Agrawal, J.
Hon'ble Prakash Krishna, J.
Petitioner, Rameshwar Dayal is the owner of eight shops being shop nos. 115 to 122 situate at Bus Stand Pilkhua, Ghaziabad. The present writ petition is for a writ of certiorari, quashing the recovery certificate/proceedings issued by the respondents with respect to the aforesaid shops and also for a direction to respondent no. 2 not to give effect to the impugned recovery citation (Annexure-2) and to command respondent no.2 to modify the assessment on the basis of actual rent.
The facts giving rise to the present writ petition are as follows :-
The petitioner is owner of eight shops which have been let out by him to different tenants. Out of eight shops six shops are fetching rent at the rate of Rs. 225/- per month per shop and the remaining two shops have been let out at the rate of Rs. 375/- per month per shop. The dispute relates to the assessment years 2000-01 and 2001-02 with respect to the annual letting value of the aforesaid shops. According to the petitioner without giving any opportunity of hearing, suddenly respondent no.2 enhanced the municipal assessment of these shops and assessed them at the rate of Rs. 800/- per month. Before enhancement no enquiry was made and the said enhancement of the annual letting value of the shops has been done without affording any opportunity of hearing to him, in an arbitrary manner. As soon as the petitioner came to know about enhancement of the house tax, he filed objections on 5th March, 2003, a copy of which has been filed as Annexure-2 to the writ petition. The further allegations is that without deciding the objections and without affording any opportunity of hearing, respondent no.2, namely, Nagar Palika Parishad, Pilkhua, illegally issued recovery certificate through the Tehsildar, Hapur, who held up the petitioner and realized a sum of Rs. 12,500/- by force, a copy of the said receipt has been filed as Annexure-4 to the writ petition. Thereafter the petitioner again approached to respondent no. 2 with the request to correct the assessment and also met the District Magistrate, Ghaziabad on 1st September, 2003 for this purpose. He also approached the A.D.M. (F) on 8th September, 2003 by means of letter dated 8.9.2003. Thus the petitioner was made to run from pillar to post and ultimately filed present writ petition for the reliefs already mentioned above.
Respondent no. 2 filed a counter affidavit and justified the enhancement of the assessment on the basis of a Government Order, dated 19th July, 1997, a true copy of which has been filed as Annexure- C.A.1 to the counter affidavit. It has denied the filing of the objection dated 16th March, 2003, allegedly filed by the petitioner in his office and there was no illegality. Further, the petitioner has already paid the assessed tax for the year 2000-01. In para 5 of the counter affidavit it has been stated that against the assessment order the petitioner has remedy to file an appeal before the competent court of law.
In rejoinder affidavit the petitioner has denied the averments made in the counter affidavit and reiterated the contents of the writ petition.
Heard Sri A.N. Bhargava, learned counsel for the petitioner and Sri G.M. Tripathi, learned Advocate for the respondent no.2 and the learned Standing Counsel for the remaining respondents.
Learned counsel for the petitioner contended that the enhancement of the annual letting value of the shops in question has been done by respondent no.2 without following the principles of natural justice and arbitrarily. No notice of any kind was given to the petitioner before enhancing the annual letting value. It was further submitted that the shops in question are under the occupation of different tenants. The annual letting value of the shops should be fixed after taking into consideration the actual rent received by the petitioner from these tenants. He further submitted that the petitioner filed the requisite evidence by way of the copies of the rent receipts before respondent no.2 along with the objections challenging the enhancement of the annual letting value of the shops in question. At no stage any opportunity of hearing was afforded by respondent no.2 before enhancing the annual letting value of the shops in question. In reply Sri G.M. Tripathi, learned counsel for respondent no.2 submitted that this Court should not interfere in the matter in the exercise of jurisdiction under Article 226 of the Constitution of India as the petitioner has got an alternative remedy by way of appeal before the competent court of law and he has placed reliance on para 5 of the counter affidavit.
We have given the careful consideration to the respective submissions of the counsel for the parties, and first take up the question raised by the learned counsel for the respondent that the writ petition should be dismissed on the ground of alternative remedy. After hearing learned counsel for the parties at some length, we are of the considered opinion that the present writ petition is not liable to be thrown out on the ground of the alternative remedy. The relevant facts are not in dispute between the parties. There is absolutely no dispute that no notice was given to the petitioner before enhancing the annual letting value of the property in question. In para 3 of the petitioner it has been specifically stated that without giving any notice or opportunity of hearing suddenly assessment of the shops have been done at the rate of Rs. 800/- per month in an arbitrary manner by the Nagar Palika Parishad, Pilkhua, respondent no.2. The reply of this paragraph has been in paragraph 4 of the counter affidavit. The reply is wholly vague and evasive. It has not been denied that no opportunity of hearing or notice was given to the petitioner. Moreover, there is no dispute between the parties regarding rate of rent on which these shops have been let out by the petitioner to the different tenants. The specific case of the petitioner is that six shops are fetching rent at the rate of Rs. 225/- per month per shop and the remaining two shops are let at the rate of Rs. 375/- per month per shop. Since there is no dispute with regard to the rate of rent of the shops on which they have been let out by the petitioner and also that no opportunity of hearing was given to the petitioner nor any objection was invited by respondent no. 2 from the petitioner before fixing the assessment of these shops at Rs. 800/- per month, in our opinion, it is not a fit case to relegate the petitioner to statutory remedy, if any by way of appeal. No factual controversy is involved and counter and rejoinder affidavits have been exchanged, we proceed to hear and decide the writ petition on merits after over ruling the objections raised by respondent no.2.
On merits, the learned counsel for the respondent tried to justify the enhancement of annual letting value of the property in question on the basis of a Government Order, dated 19th July, 1997. Under the said Government Order the State Government has issued certain directions to the Nagar Palika Parishads and Nagar Panchayats directing them to take effective steps with a view to enhance the recovery of local taxes by one crore, and suggested that the property taxes on old properties may be revised and on new properties it may be levied. The State Government suggested that the income of local authorities be augmented by making enhancement of assessed annual value of the residential buildings by 40% and in respect of commercial building by enhancing it by 25%. The said Government Order would neither over ride the statutory provisions nor does it take away the right of the petitioner to file objections against the proposed enhancement of annual letting value of a building. It appears that in pursuance of the aforesaid Government Order, respondent no.2 carried the general revision of the annual valuation of the premises effective from 2000-01. From the objections filed by the petitioner before respondent no.2, it appears that the Inspector of respondent no.2 reported that the annual letting value of these shops should be fixed at the rate of Rs. 800/- per month. On the basis of the said report, respondent no.2 fixed the annual letting value of the shops in question without inviting any objection to the proposed valuation from the petitioner. There appears to be no determination of the annual value of the property under the U.P. Municipalities Act, or under any other relevant law by respondent no.2. Had there been any assessment order, revising the assessment of the shops in question, the same should have been enclosed along with the writ petition. It is relevant to note here that there is no whisper in the entire counter affidavit of the respondent no.2 with regard to the communication of the proposed valuation by it to the petitioner, nor there is any averment that the objections were invited by it from the petitioner before finalizing the annual letting value of the shops in question. At least it was not argued by the learned counsel for the respondent that there has been an assessment order enhancing the annual letting value of the shops in question.
Learned counsel for the petitioner invited attention of the Court towards Section 140 (1) of the U.P. Municipalities Act, 1916. The said Section reads as follows :-
140 (1) "Annual Value" means -
(a) In the case of railway stations, hotels, colleges, schools, hospitals, factories, and other such buildings, a proportion not exceeding five per centum, to be fixed by rule made in this behalf of the sum obtained by adding the estimated present cost of erecting the building to the estimated value of the land appurtenant thereto, and
(b) In the case of a building or land not falling within the provisions of 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."
The aforesaid Section divides the buildings in two categories mentioned in Clause (a) and (b) thereof. If the building falls under one category it would not fall under other category, meaning thereby both the clauses are exclusive to each other. Under Clause (b) of Section 140 (1), where the building is actually let out, the gross annual rent for such building exclusive of furniture or machinery therein in the amount on which it is actually let. In the present case we are not concerned with the remaining part of Clause (b) of Section 140. A specific query was put by the Court to Sri G.M. Tripathi, Advocate to explain as to how the aforesaid provision is not applicable in the facts of the present case. He could not give any reply except that the petitioner should be relegated to the alternative statutory remedy. He submitted that in view of the Government Order dated 19th July, 1997, the respondent no.2 was justified to enhance the annual letting value of the property in question. The said submission is misconceived. The Government Order is by way of guideline or suggestion to the Nagar Parishads and Nagar Panchayats inviting their attention to increase the assessment of the properties for the purposes of augmenting the income. No where it says that the objections need not be invited from the respective owners on the proposed valuation calling the attention of the authorities concerned to invoke its power of enhancement is one thing and how the said power is to be exercised is another thing. The said Government Order can not possibly over ride the statutory provisions. Moreover, it is a case where the tax was enhanced without affording any opportunity of hearing to the person concerned.
The crux of the matter according to the learned counsel for respondent no.2 is para 5 of the counter affidavit, which reads as follows :-
"5. That in reply to the contents of paragraph No. 6 of the writ petition it is submitted that the recovery of Rs. 22040/- was made which is the tax of 8 shops calculated as per Government Order dated 19.7.1997 and there is no illegality. Against the assessment the petitioner has remedy to file the appeal in the competent court of law. It is relevant to mention here that these shops are situated adjacent to the Bus Station and actual rent values is more than alleged Rs. 225 or 375. In fact the actually the shops have current rental value of Rs. 2000 per month. The petitioner is paid actual rent 40 per month to the respondent no. 2 for one shop."
According to him the whole case of respondent no.2 is condensed in the aforesaid paragraph. The aforesaid paragraph speaks only this much that the "actual rent value of the shops is more than the alleged Rs. 225/ or 375/-"But what is the basis it is not disclosed. The petitioner produced the copies of the rent receipts along with the objections before respondent no.2 as well as they have been enclosed in the writ petition also. Significantly the genuineness of these rent receipts having not been disputed by the contesting respondents. It is also not pleaded that the petitioner is receiving more rent but issuing the receipts for a smaller sum.
In view of the above discussion, we are of the considered opinion that the contesting respondent has arbitrarily enhanced the annual letting value of the shops in question without following the principle of natural justice and without following the procedure established by law. The respondent no.2 should have invited the objections from the petitioner to the proposed assessment before its finalization. The upward revision of the annual letting value in respect of the property which has been let out can be done when there is upward revision of rent or there is any addition or alteration in the property. We are conscious of this fact that the house tax is one of the main source of income of a local authority but the local authority can not act whimsically or arbitrarily and in violation of the principles of the natural justice. Therefore, the enhancement of annual letting value in the present case can not be justified and is liable to be quashed. However, it is left open to the respondent no. 2 to take appropriate steps to revise the annual letting value of the property in question in accordance with law after giving adequate opportunity of hearing. It is made clear that while revising the annual letting value, respondent no. 2 shall take into account the actual rent receipts or receivable by the petitioner from the tenants and also the fact whether the building is covered by the provisions of Rent Control Act (U.P. Act. No. XXIII of 1972) or not.
In the result the writ petition succeeds and is allowed with costs. The impugned recovery certificate (Annexure-2) is quashed.
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