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2002 DIGILAW 261 (CAL)

M. M. ENTERPRISES v. C. M. C.

2002-04-22

J.K.BISWAS, TARUN CHATTERJEE

body2002
J. K. BISWAS, J. ( 1 ) THIS is an appeal from a judgment and order passed by a learned judge of this Court dismissing the writ petition which was filed at the instance of the appellants and in which an order dated 15th January, 1999 passed by the Hearing Officer-XIII of the Calcutta Municipal Corporation (hereinafter referred to as ?the Corporation?) was challenged. The order of the Hearing Officer was regarding intermediate revaluation of land and building of premises No. 99c, Garpar Road,calcutta-700 009 (in short ?the said premises?) w. e. f. 3rd quarter of 1997-98. ( 2 ) THE order dated January 15,1999 passed by the Hearing Officer is quoted herein below:a. R. appears today. Notice has been served duly to the new owner. No objection raised previously has been met up. Seen letter of authority and objection. Seen I. B. also. Heard both sides. C. M. C. is represented by A. A. The premises is newly purchased at deed value of Rs. 15,00,000/ -. There is however, no change in use and occupation. It is used partly for commercial and partly for residential use. Having considered all aspects carefully and having regard to Circular No. 61 of 1998-1999, A. V. is fixed @ 71/2% of Deed value less 10% to Rs. 11,01,250/ -. A. V. for M. R. is fixed at Rs. 28,620/ -. ( 3 ) THE case made out in the writ petition was as follows: in 1997 appellants purchased the said premises at a consideration of Rs. 15,00,000/- by seven registered Deeds of sale. On the basis of current annual valuation which was fixed at Rs. 21,840/-, the appellants had been duly paying rates and taxes to the Corporation. In terms of Circular No. 61 of 1998-99 of the Corporation, the Hearing Officer of the Corporation revised the previously determined and current annual valuation and fixed the valuation at Rs. 1,01,250/ -. The intermediate revaluation was made on the ground that the appellant had newly purchased the said premises at deed value of Rs. 15,00,000/ -. In terms of Circular No. 61 of 1998-99 of the Corporation, the Hearing Officer of the Corporation revised the previously determined and current annual valuation and fixed the valuation at Rs. 1,01,250/ -. The intermediate revaluation was made on the ground that the appellant had newly purchased the said premises at deed value of Rs. 15,00,000/ -. ( 4 ) ON May 19th 1999, after hearing the parties a learned judge of this Court passed an order in the following manner;the impugned determination of annual valuation on the basis of a Deed value in exercise of the power of First proviso to section 174 which provision has been challenged in this writ petition there will be stay of operation of the impugned determination dated 15th January 1999 until further orders on condition that the writ petitioner will go on paying Municipal taxes at the rates prior to such impugned determination. ( 5 ) THE Corporation contested the writ petition by filing an affidavit-in-opposition in which it was contended that the intermediate revaluation in respect of the said premises was made strictly in accordance with provision of section 174 of the Calcutta Municipal Corporation Act, 1980 (in short 'the Act'), and therefore, the order passed by the Hearing Officer was just and proper. However, this contention made in the affidavit-in-opposition to the writ petition was disputed by the appellants by filing an affidavit-in-reply. ( 6 ) FINALLY by the judgment and order dated April 24, 2001 a learned Judge of this Court dismissed the writ petition inter alia holding that section 174 of the Act empowered the Corporation to assess annual valuation of any land or building @ 7? % of the value mentioned in the deed of transfer and that as section 174 of the Act was then existing, the order dated 15th of January, 1999 passed by the hearing officer could not be challenged by the appellants. ( 7 ) IN the present appeal the only question was raised before us was; whether under the Act the annual valuation of the said premises could be revised when the determination already made in respect of the said premises was in force. ( 8 ) MR. ( 7 ) IN the present appeal the only question was raised before us was; whether under the Act the annual valuation of the said premises could be revised when the determination already made in respect of the said premises was in force. ( 8 ) MR. Bihani learned senior counsel appearing for the appellants submitted before us that the intermediate revision of annual valuation of the said premises was without jurisdiction as the first proviso to section 174 and section 180 (2) (i) of the Act were inserted into the statute book by amendment, only with effect from December 22, 1997. Mr. Bihani further argued that since circular No. 61 was not statutory in nature, reliance could not be placed by the Hearing officer of the Corporation on this said circular while determining the intermediate revision of annual valuation of the said premises. ( 9 ) IN support of his argument Mr. Bihani placed strong reliance on the decision in the cases of ?jaginder Singh and Ors. v. C. M. C. and Ors. reported in 1997 (2) CHN 403 and Narendra Kumar Maheshwari v. Union of India and Ors. reported in 1990 supp. SCC 440. Mr. Bihani also relied on a passage appearing under the heading 'circular' at page 871 of Wade's 'administrative Law' (7th edn. ). ( 10 ) BY referring to paragraph 107 of the decision of the Supreme Court in the case of Narendra Kumar Maheshwari (supra) Mr. Bihani contended that guidelines by their very nature did not fall into the category of legislation, direct subordinate or ancillary. As noted hereinearlier, he also referred to 'wade' in support of his contention that departmental circulars by themselves had no legal effect whatsoever, as those circulars were not having any statutory authority. So far as the decision in the case of Jaginder Singh and Ors. (supra) is concerned Mr. Bihani contended relying on the said decision that insertion of first proviso to section 174 and clause (i) of sub-section (2) of section 180 of the Act must be held to be prospective. In our view, the principles discussed in Jaginder Singh's case does not help Mr. Bihani in any manner, as in that decision what had fallen for decision was whether a judgment declaring a particular section of an Act as unconstitutional would operate prospectively or retrospectively. According to Mr. In our view, the principles discussed in Jaginder Singh's case does not help Mr. Bihani in any manner, as in that decision what had fallen for decision was whether a judgment declaring a particular section of an Act as unconstitutional would operate prospectively or retrospectively. According to Mr. Bihani, the Hearing Officer of the Corporation had no authority to rely on the circular No. 61 which contains mere departmental guidelines, therefore, the order dated 15th of January, 1999 which was passed on the basis of the circular No 6, could not have been passed in the absence of any statutory provision permitting intermediate revaluation of annual value of the said premises during the currency period relating to valuation of the said premises. In our view, in the facts and circumstances of the case, the principles regarding the nature and force of the guidelines and departmental circulars would not at all be relevant for deciding the question raised before us in the present appeal. ( 11 ) ON the other hand Mr. Das Adhikary, the learned counsel appearing for the Corporation contended before us that the first proviso to section 174 of the Act, as inserted by amendment w. e. f. 22nd December 1997, being procedural in nature would haver retrospective effect, and as such, transfer , inter vivos, of ownerships of lands or buildings, taking place prior of 22nd December 1997 would also be governed and/or covered by the amendment first proviso of section 174 of the Act , and accordingly the intermediate revision of annual value relating to the said premises as made by the Hearing Officer by order dated 15th January, 1999 was just and proper. ( 12 ) MR. Das Adhikary further submitted that by section 170 of the Act, the Corporation was empowered to levy tax of the nature of the nature of 'a consolidated rate on lands and buildings'. He submitted that section 171 empowered the Corporation to impose a consolidated rate on the annual valuation of lands and buildings in Calcutta and that section 174 only prescribed the method of determination of the annual valuation. According to Mr. Das Adhikary, section 174 of the Act is nothing but a piece of procedural law, and this being a procedural law its operation can be retrospective in nature. In support of his argument Mr. Das Adhikary relied on the dictionary meaning of the word 'method'. According to Mr. Das Adhikary, section 174 of the Act is nothing but a piece of procedural law, and this being a procedural law its operation can be retrospective in nature. In support of his argument Mr. Das Adhikary relied on the dictionary meaning of the word 'method'. By referring to 'oxford? and 'webster' Mr. Das Adhikary contends that the meaning of word 'method' is 'a procedure'. In support of his contention Mr. Das Adhikary also relied on the decisions in the case of Delhi Cloth and General Mills Co. Ltd. v. Income Tax Commissioner, Delhi and Anr. , reported in AIR 1927 Privy Council 242, Paten Gordhandas Hargovindas and Ors. v. The Municipal Commissioner, Ahmedabad and Anr. , reported in AIR 1963 SC 742 , Jose Da Costa and Anr. v. Bascora Sadashiva Sinai Narcornin and Ors. , reported in AIR 1975 SC 1843 and Vigilance Council, Thiruvalla and Ors. v. Thiruvalla Municipality, reported in AIR 1977 Kerala 350. ( 13 ) BY referring to paragraph 12 of the decision in Patel Gordhandas's case Mr. Das Adhikary contended that the ways and modes of determining annual valuation of any land or building for the purpose of imposing a consolidated rate by way of tax were nothing but methods for arriving at the net annual value of the said premises. By this contention, Mr. Das Adhikari attempted to link with the meanings of the word 'method' given in the dictionaries like 'oxford' and 'webster'. He submitted that as the meaning of the word 'method' being 'procedure', section 174 of the Act was procedural in nature. The other three decisions on which reliance was placed by Mr. Das Adhikary clearly laid down the principle that while provisions of a statute dealing merely with matters of procedure may, unless that construction be textually inadmissible, have retrospective effect and the provisions which touch a right in existence to the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment. The submission of Mr. Das Adhikary was also disputed by Mr. Bihani appearing on behalf of the applicants. Before we take up the question raised before us for our decision we may consider the relevant provisions namely sections 170, 171, 174, 179 and 180 of the Act which are required to be looked into for deciding this appeal. The submission of Mr. Das Adhikary was also disputed by Mr. Bihani appearing on behalf of the applicants. Before we take up the question raised before us for our decision we may consider the relevant provisions namely sections 170, 171, 174, 179 and 180 of the Act which are required to be looked into for deciding this appeal. ( 14 ) SECTION 170 empowers the Corporation to levy tax in the shape of 'a consolidated rate on land and buildings'. Section 171 casts an obligation on the Corporation to impose a consolidated rate on the annual value of lands and buildings in Calcutta. What will be the extent of the consolidated rate has been specified in sub-section 2 of section 171. The methods of determining the annual value of lands and buildings in Calcutta have been laid down in section 174 of the Act. Section 179 (2) empowers the authorities mentioned therein to make the annual value of any land or building and also to revise the same periodically. It further provides that annual valuation once determined shall remain in force for a period of six years. Section 180 empowers the Corporation to make intermediate revaluation of annual value of any land or building during the period of six years of any annual valuation already determined under section 179 of the Act. The annual valuation determined by intermediate revaluation, in terms of section 180 of the Act would remain in force for the unexpired portion of the period during which, but for such revaluation, the annual valuation determined under section 179 would have remained in force. Therefore, it appears to us that power to make intermediate revaluation of the annual value of any land or building in Calcutta has been conferred upon the Corporation only by section 180 of the Act. What are the occasions, where such power to make intermediate revaluation can be exercised, have been specified in sub-sections 1 and 2 of section 180 of the Act. By exercising power conferred by section 180 (2) (i) of the Act the Municipal Commissioner may cause any revision to be made in the annual valuation of such land or building when there is a transfer, inter vivos, of ownership of any land or building. By exercising power conferred by section 180 (2) (i) of the Act the Municipal Commissioner may cause any revision to be made in the annual valuation of such land or building when there is a transfer, inter vivos, of ownership of any land or building. Keeping section 180 (2) (i) of the Act in our mind, we now proceed to take into consideration the order dated 15th of January 1999 passed by the Hearing Officer of the Corporation. From a plain reading of the order dated 15th of January 1999 passed by the Hearing Officer of the Corporation we find that the Hearing Officer had made the intermediate revaluation of the said premises on the ground that there was a transfer, inter vivos of the ownership of the land and building in question. Circular No. 61 of 1998-99 is dated 31st of October, 1998 which was issued by the Municipal Commissioner for the purpose of partially modifying the earlier circular No. 15 of 1998-99 dated June 10,1998. In circular No. 15 it was stipulated that any building or flat having a valuation above Rs. 6,00,000/-, based on the actual stamp duty paid, should be assessed at the rate of 7. 5 percent as per provision contained in section 174 (4a) of the Act. By circular No. 61 only the ceiling of Rs. 6,00,000/- was enhanced to Rs. 10,00,000/ -. It is also evident from the order of the Hearing Officer of the Corporation that he relied on circular No. 61 only for the purpose of ascertaining the rate at which the annual value was to be determined, and not for the purpose of treating the same as the source of his power to initiate a proceeding for making intermediate revaluation of the existing and current annual valuation of the said premises. From the discussions made hereinabove it is, therefore, pellucid that the Corporation has two types of powers to initiate proceeding for determining the annual valuation of any land or building. The first one is the power to make initial and then periodic assessments sunder section 179 and the other is the power to make intermediate revaluation under section 180 of the Act. The first one is the power to make initial and then periodic assessments sunder section 179 and the other is the power to make intermediate revaluation under section 180 of the Act. From the discussions made hereinabove it is also clear that section 174 of the Act confers powers to initiate further progress sunder any of the aforesaid two sections regarding the rates applicable to different cases for determining the amount of annual valuation of any land or building. Therefore, from a plain reading of the provisions as discussed hereinabove and the circulars it becomes apparent that it was open to the Hearing Officer to initiate a proceeding to make an intermediate revaluation of the annual value of the said premises only under section 180 (2) (i) of the Act, and only after exercising such power he could apply the methods provided in section 174 (4a) of the Act and circular No. 61 for determining the revised annual valuation. ( 15 ) IN our view, the first proviso to section 174 of the Act does not empower the Corporation or any of its authorities to initiate a proceeding either for periodical assessment under section 179 or for revision of assessment under section 180. The said first proviso or even section 174 of the Act in its entirety comes into play only when a lawful proceeding is initiated either under section 179 or under section 180 of the Act. Section 174 of the Act by itself is not a charging section to be invoked land applied on the happening of any taxable event. It only provides the methods or procedures for determining the annual valuation of any land or building. Therefore, in order to decide the validity of the order dated 15th January, 1999 passed by the Hearing Officer of the Corporation, in our opinion, we are not required at all to decide as to whether the first proviso to section 174 of the Act inserted by the amendment as noted hereinabove with effect from 22nd December 1997 is retrospective or not. Mr. Das Adhikary has not addressed us on the point as to whether section 180 (2) (i) is retrospective in operation or not. Mr. Mr. Das Adhikary has not addressed us on the point as to whether section 180 (2) (i) is retrospective in operation or not. Mr. , Das Adhikary, defended the order of the Hearing Officer inter alia, contending that section 174 of the Act empowered the Corporation to make the intermediate revaluation and that the said section being procedural in nature would have retrospective effect so as to cover the purchases made by the appellants. In our view, section 174 of the Act being not a charging section, the Corporation was not empowered thereunder to initiate a proceeding for making intermediate revaluation of the said premises. It could be done, if at all, only under said section 180 (2) (i) of the Act. Therefore, now the position emerging from the aforesaid facts and circumstances is that whether in the instant case the intermediate revaluation proceeding could either be initiated under section 180 (2) (i) of the Act which came into force only with effect from 22nd December, 1977. In our view, intermediate revaluation of any property can be made on the happening of any of the taxable events enumerated under said section 180 (2) of the Act. Clause (i) of the section 180 (2) of the Act in our view has not been given retrospective effect. It is now well settled that the legislation imposing liability, like fiscal legislation, is generally governed by the normal presumption that it is not retrospective, and that the above ruled applies to the charging sections and other substantive provisions and does not apply to machinery or procedural provisions of a taxing Act which are generally retrospective. It is also well known that the taxing Act cannot , however, be called retrospective if taxes are imposed on events, which are continuing and not complete when the Act comes into force. In the instant cases the taxing events, if any, had happened on the transfer of the premises having taken place and such events had happened before the charging provision i. e. section 180 (2) (i) of the Act was inserted in the statute book. In view of the above discussion we are of the view that the transfers in question could not be said to be continuing taxing events when the charging section was inserted. In view of the above discussion we are of the view that the transfers in question could not be said to be continuing taxing events when the charging section was inserted. The transfers which had taken place once for all were complete as far as the question of happening of any taxing event was concerned. Thus the events of transfers, inter vivos, having taken place before such events became taxing under the law, cannot be considered to be events, which could empower the Corporation to impose enhanced tax by making intermediate revaluation of the properties. Therefore, the order impugned in the writ petition could not be validly passed by exercising the powers available under section 180 (2) (i) of the Act. ( 16 ) FOR reasons aforesaid, we are of the view that the judgment and or order passed by the learned Judge as also the order passed by the Hearing Office of the Corporation cannot be sustained and both of them are liable to be set aside. We therefore, hold that the order dated 15th January, 1999 passed by the Hearing Officer and as impugned in the writ petition is without jurisdiction and accordingly liable to be quashed. Before we part with this judgment we may consider a short submission made by Mr. Das Adhikary before us as to the entertainability of the writ petition when there was an alternative remedy available to the appellants by way of statutory appeal. Mr. Das Adhikary submitted that the appeal should be dismissed and the writ petition must be held to be not maintainable in view of the alternative remedy available to the appellant against the order of the Hearing Officer. We are not in a position to say that the facts and circumstances of this case would lead us to hold that the statutory appeal was the only remedy for the appellants against the order of the Hearing Officer of the Corporations. It was not disputed nor it could be disputed that when an order of a Hearing Officer was without jurisdiction, it was open to the writ Court to entertain a writ petition on the ground that the order of the Hearing Officer was without jurisdiction. At the same time we have been informed that in fact an appeal was preferred by the appellant, which was subsequently withdrawn by them. At the same time we have been informed that in fact an appeal was preferred by the appellant, which was subsequently withdrawn by them. Therefore, in view of the fact that the question of jurisdiction of the Hearing Officer was the only question involved in the writ petition, the availability of an alternative remedy of an appeal was not an absolute bar to the moving of the writ petition at the instance of the appellants as law is well settled on this point. We should also remind ourselves of the fact that the writ petition was entertained contested and decided on merit. Therefore, at this stage it would not be proper to the appellate Court to throw out the writ petition only on the plea that the writ petition was not entertainable as there was an alternative remedy available to the appellant by way of an appeal. Accordingly this submission of Mr. Das Adhikary is rejected. ( 17 ) FOR the reason aforesaid the impugned order of the learned trial judge as well as the order passed by the Hearing Officer are set aside and the appeal is allowed to the extent indicated above and however there will no order as to costs. Urgent xerox certified copy of this judgment may be supplied to the parties on usual undertaking. T. Chatterjee, J.-I agree. Appeal allowed.