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2001 DIGILAW 19 (KAR)

Suresh Kumar v. Corporation of City of Bangalore

2001-01-04

H.N.TILHARI

body2001
ORDER Hari Nath Tilhari, J.—By this writ petition, the Petitioner has sought the quashing of notice dated 18.9.1993 whereby the Respondent had mentioned that the value of the property had been enhanced from Rs. 62,000.00 to Rs. 82,000.00 and tax to be assessed was proposed to be Rs. 21,380.00 and cess payable is Rs. 6,627.00. As such, total amount payable was Rs. 28,007.80 from 1.4.1993. This Annexure-'C' was issued and addressed to Sri Manickchand who had already died in 1986. No doubt it is mentioned in that notice that he should deposit the amount within fifteen days, if he has no objection or fails to file objections within thirty days. 2. The Petitioner's case is firstly that the Petitioner had not been given an opportunity and revision of tax had been made in violation of principles of natural justice without affording an opportunity of being heard to the Petitioner and without disclosing the material on the basis of which the Respondent had come to the conclusion to enhance and they had enhanced the valuation as well as cess tax on the basis thereof. 3. There is no dispute as regards the fact that Sri D. Manick Chand had died in the year 1986 namely on 14.11.1986. It has also come out that an application was made by the Petitioner as a heir of Manickchand for mutation of his name in the Municipal records and the matter was kept pending for long and mutation was not ordered till 1998 irrespective of the fact that the writ petition had been filed and a direction for the same had been issued by this Court. The name of the Petitioner was mutated only when petition for contempt was filed against the Respondents. This is a very sorry state of affairs that public bodies try to flout the orders and directions of the Court and really in such cases, the Court may take a serious view against the person who is responsible for flouting the orders of the Court. Any way according to the fact admitted that the Petitioner's name was brought on record of the Corporation or Municipal concerned in 1998 and notices were issued and tax was enhanced against a dead person. Any order passed against a dead person is illegal, null and void and not effective and binding on heirs, unless the heirs are brought on record. Any order passed against a dead person is illegal, null and void and not effective and binding on heirs, unless the heirs are brought on record. Apart from that, the Petitioner when challenged this notice, he was justified in saying that no notice was issued and no opportunity was given to him of showing cause because Petitioner's objections were not entertained on the ground that he is not the person in whose name the property stands. The Municipal or the Corporation cannot be allowed to take the benefit of its own fault and failure by not bringing on record the legal heirs and issuing notice to a dead person and then to urge that the Petitioner had opportunity and notice was given or on that basis he was required to file the objections. The assessment as such or enhancement of valuation which has been made in the present case after 1986 especially and in particular from Rs. 62,000.00 to Rs. 82,000.00 is per se illegal and null and void firstly because it has been made without giving an opportunity to show cause and to be heard to the person concerned or to say the Petitioner. The show-cause notice was issued to the dead person. So if no objection was filed, the Petitioner cannot be blamed. This really is the fault of the Corporation in not issuing notice to the proper person and in not following the directions of the Court. 4. Apart from that what should be the basis for assessment is very clear from a reading of Section 109 of the Karnataka Municipal Corporations Act, 1976. Section 109 of the Act reads as follows: Section 109. Method of assessment of property tax.-(1) Every building shall be assessed together with its site and other adjacent premises occupied as appurtenances thereto unless the owner of the building is a different person from the owner of such site or premises. Section 109 of the Act reads as follows: Section 109. Method of assessment of property tax.-(1) Every building shall be assessed together with its site and other adjacent premises occupied as appurtenances thereto unless the owner of the building is a different person from the owner of such site or premises. (2) The rateable value of a building or land shall be deemed to be the gross annual rent at which such building or land may at the time of assessment reasonably be expected to let from month to month or from year to year less a deduction in the case of buildings only of sixteen and two-thirds per cent of such annual rent and the said deduction shall be in lieu of all allowance for repairs or on any other account whatever: Provided that- (a) in the case of- (i) any Government or railway building; or (ii) any building of a class not ordinarily let, the gross annual rent of which cannot in the opinion of the commissioner be estimated, the rateable value of the premises shall be deemed to be six per cent of the total of the estimated market value of the land at the time of assessment and the estimated cost of erecting the building at such time after deducting for depreciation a reasonable amount which shall in no case be less than ten per cent of such cost, and (b) machinery and furniture shall be excluded from valuations under this section. 5. A reading of Section 109 per se reveals that every building is liable to be assessed to a tax together with its site and adjacent building occupied as appurtenances. Sub-section (2) very clearly provides that the rateable value of a building shall be deemed to be the gross annual rent at which such building or land may, at the relevant time i.e., at the time of assessment, be reasonably expected to be let on monthly or yearly rent minus the deduction that have been mentioned in the section. Sub-section (2) very clearly provides that the rateable value of a building shall be deemed to be the gross annual rent at which such building or land may, at the relevant time i.e., at the time of assessment, be reasonably expected to be let on monthly or yearly rent minus the deduction that have been mentioned in the section. The deductions to be made are referred to in the section and where any building of a class not ordinarily let, the assessment of the rateable value of the site shall be deemed to be six per cent per annum of the total assessment value of the land at the time of assessment and the estimated cost of erecting the building at such time after making deduction. This is the method that is indicated in Section 109. Sub-section (2) of Section 109 clearly states that the rateable value of a building or land shall be deemed to be the gross annual rent. But the section does not stop at that stage. Had it been only monthly rateable value, the position might have been different i.e., the actual rateable value, but the Legislature further uses the expression, "at the time of assessment the building may reasonably be expected to let out on monthly or yearly rent". The cases in which a building situates in an area where the Rent Control Act ordinarily applies, a person can reasonably expected to let out a building on the rent as described or provided in the Rent Control Act. The cases may stand on a different footing where the buildings are situated in those areas where the Rent Control Act does not apply. But where the Rent Control Act applies and controls and regulates the rent, then it can only be expected that it is the rent which can be reasonably expected. No doubt at times it has been realised by the persons that the law made in 1947 is made applicable even in 1990. The value of a building is always fluctuating. The material becomes costlier. No doubt it is for the Legislature to have provided the criteria. It is well settled that the rent which can be expected for those buildings could be said to be the one which the Rent Control Act prescribes and not the one which the landlords may exorbitantly charge from their tenants. The material becomes costlier. No doubt it is for the Legislature to have provided the criteria. It is well settled that the rent which can be expected for those buildings could be said to be the one which the Rent Control Act prescribes and not the one which the landlords may exorbitantly charge from their tenants. No doubt the learned Counsel for the Respondents contended that this may really allow a person to exploit and make unlawful gains. That may be so. I do not want to express any opinion. But as regards such cases, the Rent Control Law may be required to be amended and the public spirited persons may suggest the amendment to that. Matters apart, Sub-section (2) of Section 109 clearly indicates the gross annual value on which the building may be expected to be let out shall be deemed to be the rateable value of the building. The expression "shall be deemed" introduces a legal fiction that the rateable value under the Rent Control Act may not be the actual or rental value. But for the purpose of assessment of the tax it shall be deemed to be the rateable value even if the landlord is charging more than what is prescribed by the Rent Control Law. When I so opine, I find support for my view from the decision of the Division Bench of this Court in the case of Maruthy Enterprises v. The Corporation of City of Bangalore reported in ILR 1998 Kar 3856 and I follow this decision so far as the basic principle of law interpreting Section 109 of the Act has been laid down following the earlier decisions of the Supreme Court. In that case the principle laid down reads as under: 11. The correct position of law is that in a case where it is admitted that the Rent Control Act is applicable to a building, the ARV would be determined on the basis of the hypothetical rent which the landlord can reasonably be expected to receive under such Rent Act. In that case, the actual rent received by the landlord is not material. In that case, the actual rent received by the landlord is not material. The rateable value of the building, whether tenanted or self occupied shall be deemed to be determinable by the measures of standard rent arrived at by the assessing authority by applying the principle laid down in Rent Acts which cannot exceed the standard or fair rent so arrived and the standard or the fair rent determinable on the principle set out in the rent laws would be the upper limit of the rent which the landlord may expect to receive from a hypothetical tenant. The applicability of the standard and fair rent shall however not be resorted where it is established that the building in dispute was not subject to the provisions of the rent control statutes. In that event, the actual rent received by the landlord shall be the basis for determining his tax liability. We are, therefore, of the opinion that the law laid down in J. Suresh's case is not correct law. 6. Thus considered in my opinion, in the present case the notice which had been issued to a dead person and any demand of the amount mentioned in the petition would be illegal. No doubt the Corporation has got authority to issue a fresh notice in the name of the Petitioner for the year 1993 and onwards and assess the property tax and cess-tax and whatever is taxable under the Municipal/Corporation Act which it can charge, but in accordance with law and principles of natural justice i.e., after issuing notice to show-cause against proposed value assessed and to tax propose to the Petitioner. The Petitioner may be allowed to file objection and thereafter the rateable value is to be determined and tax is to be determined afresh with reference to period from April 1st, 1993 and onwards, in accordance with law and after giving an opportunity to the Petitioner. Till this is not done, Petitioner will not be compelled or coerced to deposit the tax except as had been assessed earlier to its proposed enhancement. 7. The writ petition, as such, is allowed. Annexure-'C' is hereby quashed. It is directed that the authorities will determine the tax payable by the Petitioner at the earliest. Till this is not done, Petitioner will not be compelled or coerced to deposit the tax except as had been assessed earlier to its proposed enhancement. 7. The writ petition, as such, is allowed. Annexure-'C' is hereby quashed. It is directed that the authorities will determine the tax payable by the Petitioner at the earliest. It is expected that in the interest of the Corporation itself and not only of the Petitioner, the Corporation authorities would proceed expeditiously, but in accordance with law, to determine the rateable valuation and the tax. But till that is not determined, the Petitioner will not be compelled to pay the enhanced tax. 8. As for as relief for reference which is sought, at the present it has to be rejected as firstly the authorities have to determine the tax and the valuation and on that basis, they will be entitled to charge the tax as per law laid down in Section 109. If any deposit exceeds, then the Petitioner may make a request to the Corporation for adjustment at proper stage later.