Aligarh Muslim University v. Municipal Board — 1973 DIGILAW 274 (ALL)

JUDGMENT Yashoda Nandan, J. - This is a special appeal directed against the decision of a learned single Judge of this Court dismissing the appellant University's writ petition under Art. 226 of the Constitution. 2. The relevant facts giving rise to the present appeal are that the appellant-University possesses properties in the form of land and buildings situate within the territorial limits of the respondent-Municipal Board constituted under the provisions of the U. P Municipalities Act, 1916-hereinafter referred to as the Act. The respondent-Board imposed House Tax with effect from 1st April, 1955. Properties of the appellant-University were shown in the Assessment List prepared in the year 1955 and the total tax assessed against the University was Rs. 16,501.63 paise. In the year 1960-61 the respondent-Board revised the Assessment List prepared by it in the year 1955. Fresh assessment of the properties within the territorial limits of the Board was effected and a new Assessment List was prepared which was duly published under Section 142 of the Act and authenticated in accordance with Section 144. The revised Assessment List became effective from the 1st April, 1962 as provided by Section 145(2) of the Act. 3. In the revised Assessment List, House Tax on certain buildings belonging to the appellant-University was enhanced while the tax was assessed for the first time on certain new buildings which had been constructed after the initial assessment made in the year 1955. On receipt of the Notice of Demand for payment of the tax as assessed at the revised assessment, the University filed Writ Petition No. 4234 of 1964 in this Court challenging the validity of the new assessments made in respect of the properties belonging to it. It was stated in the, petition that the Assessment List had been prepared incorporating the properties of the appellant-University without giving it any notice in compliance with the requirements of Section 143(1) of the Act. The allegation was not controverted by the Board by means of a counter-affidavit. When the petition came up for hearing before R.L Gulati, J. on the 22nd October, 1969 the learned counsel who appeared for the Board stated that the respondent Board would make fresh assessment of the House Tax in respect of the buildings in dispute after affording an opportunity to the petitioner-University to file objections, if any. When the petition came up for hearing before R.L Gulati, J. on the 22nd October, 1969 the learned counsel who appeared for the Board stated that the respondent Board would make fresh assessment of the House Tax in respect of the buildings in dispute after affording an opportunity to the petitioner-University to file objections, if any. The statement of the Board's counsel evidently was because no counter-affidavit had been filed disputing the allegations of the University. In view of the concession made by the Board's counsel, the petitioner did not press its petition which was dismissed by R. L. Gulati, J. by his order dated 22nd October, 1969. 4. After the dismissal of the petition, the respondent Board issued a notice on the 15th January, 1970, to the appellant under Section 143(1) of the Act calling upon it to file objections, if any, against the proposed assessments of its lands and buildings a list whereof was attached to the notice. In that notice it was stated that the assessments were being made with effect from 1st April, 1962. A number of objections to the proposed assessments were filed on behalf of the University. Respondent No. 3, the Revising Officer, Municipal Board, Aligarh, was authorised to hear and decide the objections filed under Section 143 of the Act. He heard the objections filed on behalf of the University. On the 22nd July, 1970, a supplementary objection was filed on behalf of the University. By means of this supplementary objection the appellant challenged the power of the Board to assess its lands and buildings retrospectively with effect from 1st April, 1962. This objection was rejected by the Revising Officer by his order dated 22nd August, 1970. Ultimately, the objections filed by the University were disposed of by the Revising Officer by his order dated 14th January, 1971. Respondent No. 3 partly allowed the objections of the appellant by granting a number of exemptions and in the result the quantum of tax proposed was considerably reduced. Respondent No. 3 directed that the Tax as determined by him would be leviable on the appellants properties with effect from the 1st April, 1962, the date on which the new revised Assessment List took effect. 5. On the 15th January, 1971, a fresh notice consequent to the order dated 14th January, 1971, was served on the University for payment of the tax as determined. 5. On the 15th January, 1971, a fresh notice consequent to the order dated 14th January, 1971, was served on the University for payment of the tax as determined. The University thereupon filed the writ petition leading up to the present appeal. By means of the petition, the appellant-University challenged the legality of the orders of the Revising Officer dated 22nd August, 1970 and 14th January, 1971 as well as the Notice of Demand. 6. Before the learned single Judge the legality of the imposition of House Tax by the Board was not challenged. The quantum of tax as determined by the Revising Officer also does not appear to have been challenged. The only point argued was that it was not open to the Revising Officer to order levy of tax against the appellant-University retrospectively with .effect from 1st April, 1962, the appellant's objections not having been disposed of till the 14th January, 1971. The submission made by the learned counsel appearing on behalf of the University did not find favour with the learned single Judge who heard the petition. The learned Single Judge was also of the opinion that the University had a right of appeal under Section 160 of the Act against the order of respondent No. 3 and consequently it was not a fit case for interference in exercise of powers under Art. 226 of the Constitution. In the result the writ petition was dismissed. 7. In appeal before us, the learned counsel for the University has reiterated the submission made by him before the learned single Judge and has contended that in view of Sub-sec. (4) of Section 147 of the Act the assessment of House Tax as determined by the Revising Officer on the objections filed by the appellant could take effect only from the date on which the next instalment of the tax succeeding the date of the order of the Revising Officer fell due. It was urged that respondent No. 3's direction that tax be levied with retrospective effect from 1st April, 1962 was in disregard of the express provisions of Section 147, Sub-sec. (4) of the Act. It was urged that respondent No. 3's direction that tax be levied with retrospective effect from 1st April, 1962 was in disregard of the express provisions of Section 147, Sub-sec. (4) of the Act. Learned counsel appearing for the Board, on the other hand, contended that on the facts and in the circumstances of cases, Section 147 was not applicable at all and respondent No. 3 had justly and legally directed that the tax would be levied with effect from 1st April, 1962 which was the date on which the new Assessment List took effect by operation of law. In order to appreciate the respective contentions of the learned counsel for the parties, a brief survey of the relevant provisions of the Act relating to the procedure for assessment of House Tax may usefully be made. 8. What has popularly come to be known as House Tax is really a tax on the "annual value of buildings or lands or both" which Municipal Boards are authorised to impose in exercise of powers under Section 128(1) (1) of the Act. Section 140 defines "annual value" which forms the basis of assessments of this tax. Section 141 provides that when a tax on buildings or lands or both has been imposed, the Board shall cause an assessment list of all buildings or lands or both in the municipality to be prepared, containing particulars regarding the location of the properties so that they might be clearly identified, the names of the owners and occupiers thereof, if known, the annual letting value or other particulars determining the annual value and the amount of the tax assessed. When the List containing the particulars required by Section 141 has been prepared, the Board is required by Section 142 to give public notice of the place where the list or copy thereof may be inspected. The list has to be open to inspection and every person claiming to be either the owner or occupier of any property included in the list as well as agents of such persons are at liberty to make extracts therefrom. Section 143(1) of the Act provides that at the same time as the Assessment List is published under Section 142, the Board shall give public notice of a date not less than one month thereafter when it will proceed to consider the valuations and assessments entered therein. Section 143(1) of the Act provides that at the same time as the Assessment List is published under Section 142, the Board shall give public notice of a date not less than one month thereafter when it will proceed to consider the valuations and assessments entered therein. This provision further provides that in all cases in which any property is for the first time assessed or the existing assessment is increased, the Board shall also give notice of the proposal to the owner or occupier of the property, if known. Those aggrieved by the entries in the Assessment Lists have a right to file objections thereto under Sub-sec. (2) of Section 143. Under Sub-sec. (3) of Section 143, the Board or a Committee empowered on its behalf or an officer of the Government or the Board to whom, with the permission of the Prescribed Authority. the Board has delegated powers in that behalf must after allowing the objector an opportunity of being heard in person or by an agent investigate and dispose of the objections. The results of the objections are required to be noted in the book maintained under the Sub-sec. (2) of Section 143. The authority which hears and decides the objections has to cause necessary amendments in accordance with the results arrive at to be made in the Assessment List in accordance with Section 143(3) (c) of the Act. When the objections made under Section 143 have been disposed of, and amendments in the Assessment List consequent on the orders passed on the objections have been made, the Assessment List so finalised has to be authenticated under Section 144(1) by the signature or signatures as the case may be of the President or such Officers as are mentioned in that provision. Under Sub-sec. (2) of Section 141. the List authenticated in accordance with Sub-sec. (1) has to be deposited in the municipal office and has to be declared by public notice to be open for inspection. Section 145(1) provides that a new Assessment List shall ordinarily be prepared in the manner described by Section 141 to 144, once in every five years. Section 145 Sub-sec. the List authenticated in accordance with Sub-sec. (1) has to be deposited in the municipal office and has to be declared by public notice to be open for inspection. Section 145(1) provides that a new Assessment List shall ordinarily be prepared in the manner described by Section 141 to 144, once in every five years. Section 145 Sub-sec. (2) runs as follows :- "Subject to any alteration or amendment made under Section 147 and to the result of any appeal under Section 160, every valuation and assessment entered in a valuation list shall be valid from the date on which the list takes effect in the municipality and until the first day of the April next following the completion of a new list." In the present case the tax on the annual value of buildings and lands situate within the limits of the Aligarh Municipality was imposed with effect from 1st April, 1955 by means of a notification issued under Section 135(2) of the Act. An Assessment List was admittedly prepared by the Board. Proceedings for the revision of the assessments undisputedly were taken in 1960-61. According to the appellant, during proceedings for revision of the Assessment Lists, no notice in accordance with Section 143(1) of the Act had been served on it though some of its properties were assessed at this assessment for the first time and the assessments in respect of some other properties belonging to it which had been assessed at the assessments made in 1955 were increased. The Assessment List prepared in 1960-61 was, however, after disposal of such objections as had been received, authenticated in accordance with Section 144(1). The revised Assessment List though defective as far as the appellant's properties were concerned thus stood completed on its authentication and declaration by a public notice that it was open for inspection. The valuations and assessments entered in the Assessment List prepared in 1955 become valid and took effect in the municipality according to paragraph 10 of the petition with effect from 1st April, 1955. Subject to any alterations or amendments that were made therein under Section 147 and on account of the results of any appeals under Section 160, valuations and assessments entered in that list remained effective till the 1st day of April next following the completion of the revised list that was prepared in 1960-61. Subject to any alterations or amendments that were made therein under Section 147 and on account of the results of any appeals under Section 160, valuations and assessments entered in that list remained effective till the 1st day of April next following the completion of the revised list that was prepared in 1960-61. With effect from the 1st day of April, following the completion of the new list, the list prepared in 1955 ceased to have any legal enforcibility. Though the exact date is not available from the material on record but admittedly the revised Assessment List was authenticated in accordance with Section 144 of the Act sometime before the 1st of April, 1962. By reason of Section 145(2) as quoted above, the assessments and valuations entered in the revised list consequently became effective from the 1st April, 1962, subject to any alteration or amendment incorporated therein under Section 147 or as a result of appeals under Section 160. If any objection made under Section 143 Sub-sec. (2) of the Act had been decided against the party concerned and it had filed an appeal under Section 160, in case the appeal succeeded the Assessment List had to be brought in accordance with the decision in the appeal. The alteration effected as a consequence of the appellate order though made subsequently undoubtedly would become operative from the date on which the list itself took effect. This would be so because the objection must be deemed to have been pending throughout the period till the decision of the appeal. 9. In the instant case, according to the appellant the revised Assessment List was authenticated without it having been given an opportunity of filing objections under Section 143, Sub-sec. (2) on account of the failure of the Board to serve on it a notice under Section 143(1). It was subsequently served with a notice under Section 143, Sub-sec. (1) filed objections under Sub-sec. (2) thereof. The objections as already stated were ultimately partly allowed on the 14th April, 1971. The entries in the Assessment List initially made stood corrected as a result of the disposal of the appellant's objections. The correct entries, in our judgment, related back to the date when the revised Assessment List was authenticated in the same manner as the corrections made consequent on the disposal of an appeal under Section 160. The entries in the Assessment List initially made stood corrected as a result of the disposal of the appellant's objections. The correct entries, in our judgment, related back to the date when the revised Assessment List was authenticated in the same manner as the corrections made consequent on the disposal of an appeal under Section 160. The Act, except in cases envisaged by Section 147, does not contemplate entries in the Assessment List taking effect on different dates. All the entries in the Assessment List whether made prior to its authentication or subsequently corrected attain enforceability on the same date, the date being the first day of April next following the completion of the new list by its authentication. The only exceptions to this rule are the cases where the Assessment List operative is amended or altered in compliance with Section 147 of the Act. If the appellant's contention were to be accepted, the result would be that from the 1st April, 1962 its lands and buildings situate within the respondent Municipality ceased to be liable to levy of any tax under the Assessment List prepared in 1955 because it became inoperative from that date by reason of Section 145(2) and it could not be taxed under the revised Assessment List which became effective from the 1st April, 1962 because its objections were not decided till 14th January, 1971. This would be so inspite of the fact that undoubtedly the appellant's properties were liable to taxation. No principle of law or provision of the Act compels us to take a view resulting in such consequences. 10. Learned counsel for the appellant urged that the entries in the new Assessment List prepared in the year 1960-61 as far as its properties are concerned were made in accordance with Section 147(1) (a) of the Act which runs as follows : "The Board may at any time alter or amend the assessment list -- (a) by entering therein the name of any person or any property which ought to have been entered or any property which has become liable to taxation after the authentication of the assessment list .............." Sec. 147(1) (a) is attracted either when the name of any person or property which ought to have been entered in the Assessment List had not been entered therein or when any person or property becomes liable to taxation after its authentication. Learned counsel for the appellant urged that both the conditions envisaged by Section 147 (1) (a) existed in the instant case. He submitted that though in fact the lands and buildings of the appellant in respect of which its objections had been rejected or partly rejected did find mention in the Assessment List authenticated but because the entries had been made in disregard of Section 143(1), the entries were non-existent in the eye of law. The legal effect, according to his contention, was the same as if those properties found no place in the Assessment List. It was submitted that since respondent No. 3 had subsequently found those properties liable to taxation, it would be a case where those properties ought to have been entered in the Assessment List but were in the eye of law not entered therein and consequently the first part of Section 147 (1) (a) was attracted. It was further urged that till its objections under Section 143 Sub-sec. (2) were entertained and ultimately decided it was not liable to taxation. It was submitted that the properties of the appellant in respect of which its objections have been either wholly or in part rejected by respondent No. 3 became liable to taxation within the meaning of the later part of Section 147(1) only after the decision on its objections which was subsequent to the authentication of the Assessment List. Learned counsel contended that since the case is covered by Section 147 (1) (a), Sub-sec. (4) of that provision, which runs as follows, is attracted "Every alteration made under Sub. Section (1) shall be authenticated by the signature or signatures of the person or persons authorised by Section 144 and, subject to the result of an appeal under Section 160, shall take effect from the date on which the next instalment falls due." Learned counsel submitted that the 7, order of the Revising Officer was pass-ed on the 14th January, 1971. The order being one for the alteration under Section 147(1) (a) of the already authenticated list, the alteration itself had to be authenticated as required by Sub. The order being one for the alteration under Section 147(1) (a) of the already authenticated list, the alteration itself had to be authenticated as required by Sub. Section (4) of Section 147 and consequently the alteration shall be effective only from the date on which the next instalment of the tax as assessed fell due consequent on the order passed in 1971 by respondent No. 3 and he had no jurisdiction to direct levy of the tax on. the appellant's properties frith effect from 1st April, 1962. 11. In our opinion there..is no merit in the contention of the learned counsel for the appellant since Section 147(1) (a) of the Act has no application to the facts of the present case. Section 147(1) (a) is a provision for the benefit of the Board in cases where for some reason some person or property had escaped assessment because of the omission in the Assessment List to include a person's name or property. In the present case undoubtedly the appellant-University's name and its properties were factually included in the revised Assessment List. Its name and properties physically did find place therein though illegally. In our view the earlier part of Section 141(1) (a) is attracted only to those cases where a person's name or property factually is not in existence in the Assessment List and not to cases where the entries are illegal for one reason or the other as was the situation .in the present case. This is made clear by Sub-sec. (2) of Section 147 which requires the Board to give atleast one month's notice to any person interested of any alteration which the Board proposes to make under clauses (a), (b), (c) or (d) of Sub-sec. (1) and of the date on which the alteration would be made. In the present case, the appellant's property had been entered in the revised Assessment List though the entries were made in disregard of Section 143(1). The entries physically did exist. The Board which itself was responsible for the entries could not he expected, in the circumstances, to treat those entries as non-existent and as not having been made and to issue a notice under Sub-sec. (2) of Section 147. The entries physically did exist. The Board which itself was responsible for the entries could not he expected, in the circumstances, to treat those entries as non-existent and as not having been made and to issue a notice under Sub-sec. (2) of Section 147. On a consideration of the relevant provisions of the Act, we find no difficulty in holding that the First part of Section 147(1) (a) cannot be applied to a case where a person's name or property do, in fact though illegally, find place in the Assessment List. 12. The submission made on the basis of the latter part of Section 147(1) (a) of the Act is, in our judgment, equally devoid of force. According to the learned counsel for the appellant, the phrase "liable to taxation" occurring in the latter part of that provision has the same connotation as "liable for payment of tax". It was urged by the learned counsel that till the assessment proceedings had been completed against it, the University and its properties did not become liable to taxation. In our view, there is no legal justification for holding that the words "any property which has become liable to taxation" have the same meaning as "any property which has become liable for payment of tax assessed". Section 131 (1) of the Act is as follows :- "Where a board desires to impose a tax, it shall, by special resolution, frame proposals specifying - (a) the tax, being one of the taxes described in Sub-sec. (1) of Section 128, which it desires to impose; (b) the persons or class of persons to be made liable, and the description of property or other taxable thing or circumstances in respect of which they are to be made liable, except where and in so far as any such class or description is already sufficiently defined under clause (a) or by this Act; (c) the amount or rate leviable from each such person or class of persons; (d) ......................." Thus in the preliminary proposals framed by it the Board has to specify the persons or class of persons be made liable and the description of the properties which are to be made liable to taxation and also the amount or rate leviable from each such person or class of persons. Under Sub-sec. (2) of Section 153. Under Sub-sec. (2) of Section 153. It is such proposals which after consideration of objections, if any, received are finalised by the Board under Section 132(4) and have to be submitted along with the objection, if any, made in connection therewith to the Prescribed Authority and are by the Prescribed Authority or the State Government, as the case might be, under Sub-secs. (1) or (2) of Section 133 either refused sanction or returned to the Board for further consideration or sanctioned without modification or with such modifications not involving an increase of the amount to be imposed as is deemed fit. When the proposals containing the particulars required by Section 131 have received the sanction of the State Government and Rules have been framed by it, the order of sanction and a copy of the Rules are sent to the Board which is required by Section 134(2) to pass a special resolution directing the imposition of the tax with effect from a date to be specified in the resolution the State Government or the prescribed authority, as the case may be notifies under Section 135(2) the imposition of the tax from the appointed date, the appointed date being the date fixed by the special resolution contemplated by Section 134. (2). 13. On a consideration of the provisions of the Act discussed above, we are of the opinion that as soon as the notification under Section 135 (2) has been issued the properties or persons or class of persons sought to be taxed by the sanctioned proposals are rendered liable to taxation at the rates proposed and sanctioned with effect from the date appointed by the notification. The assessment proceedings that subsequently follow are merely to determine the extent and quantum of the liability to taxation. It appears to us to be plain that before the question of assessing the amount of a tax which is to be payable by a person or in respect of a properly can arise, the persons or properties must already have incurred the liability to be taxed. It is not insignificant that while the expression used in Section 147(1)(a) is "liable to taxation" the heading of Section 149 is "liability for payment of certain taxes on annual value". The Act thus itself contemplates a distinction between "liability to taxation" and "liability for payment of taxes". It is not insignificant that while the expression used in Section 147(1)(a) is "liable to taxation" the heading of Section 149 is "liability for payment of certain taxes on annual value". The Act thus itself contemplates a distinction between "liability to taxation" and "liability for payment of taxes". For the reasons given, we unhesitatingly reject the submission based on Section 147 of the Act. 14. In the view taken by us with regard to the validity of the Notice of Demand issued by the Board levying tax on the appellant's Properties from the 1st April, 1962 and the orders of respondent No. 3 making the tax assessed effective from the 1st April, 1962, we consider it futile to decide the question as to whether the dismissal of the petition by the learned single Judge on the ground that the appellant had an alternative remedy of filing an appeal against the order of respondent No. 3 under Section 160 of the Act was correct or otherwise. 15. In the result, the appeal of the Aligarh University is dismissed with costs to the respondent-Board.