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Andhra High Court · body

2022 DIGILAW 1227 (AP)

Venkateswara Godowns v. State of A. P.

2022-11-08

D.RAMESH

body2022
ORDER : W.P.No.4355 of 2019 : The writ petition is filed under Article 226 of the Constitution of India seeking to declare the notification No.2829/2016/A2 dated 17.6.2016 issued by respondent no.3 and the consequential demand notice dated 20.9.2018 in assessment no.3187 bearing D.No.14-221, assessment no.511 bearing D.No.2-224, 2nd block and assessment no.3186 bearing D.No.14-220 at Yedidha village issued by respondent no.4 as illegal, arbitrary and consequently set-aside the same. W.P.No.4368 of 2019: The writ petition is filed under Article 226 of the Constitution of India seeking to declare the notification No.2829/2016/A2 dated 17.6.2016 issued by respondent no.3 and the consequential demand notice dated 20.9.2018 issued by the respondent no.4 as illegal, arbitrary and consequently set-aside the same. 3. As the issue involved in both the writ petitions is one and the same, both the writ petitions are being disposed of with a common order by taking the W.P.No.4355 of 2019 as a leading case. 4. Heard learned counsel for the petitioner in both the cases and learned Assistant Government Pleader appearing for the respondents. 5. The contention of the petitioner is that the petitioner is running business of storage of goods in godown in D.No.14-221, 14th block D.No.2-224, 2nd block at Yedidha village, Mandapeta Mandal, East Godavari District. The petitioner was regularly paying house tax to respondent no.4 gramapanchayat as per the tax receipts issued by 4th respondent for preceding years. In the year 2015-16, the petitioner on demand made payment of Rs.29,986/- towards house tax in D.No.14-221,14th block and pay Rs.18,167/- towards house tax in D.No.2-224, 2nd block. While that being the situation, the respondent no.4 had issued impugned demand notice dated 20.9.2018 calling up the petitioner to pay an amount of Rs.1,26,516/- within 30 days for assessment no.3187 property at D.No.14-221, 14th block and pay Rs.41,155/- towards assessment no.511 property at D.No.2-224, 2nd block towards house tax for the year 2018-19. As per the above said assessment, the house tax has been increased by 100% without having any reason mentioned in the impugned tax notice. On verification, the petitioner was informed that the respondent no.3 i.e. District Collector (Panchayat Raj wing), Kakinada has issued impugned notification No.2829/2016/A2 dated 17.6.2016 prescribing an uniform mode of building tax to be followed by all the gram panchayats in the East Godavari District. On verification, the petitioner was informed that the respondent no.3 i.e. District Collector (Panchayat Raj wing), Kakinada has issued impugned notification No.2829/2016/A2 dated 17.6.2016 prescribing an uniform mode of building tax to be followed by all the gram panchayats in the East Godavari District. In the said notification, the 3rd respondent has prescribed the guidelines to impose tax and for valuation of property, type and basis in calculation of capital value of the building. The impugned notification issued by the 3rd respondent on 17.6.2016 prescribing the manner of ascertaining the capital value for levy of house tax encroaches into the legislative function of the Government under Rule 61(4)(ii) of the A.P.Panchayat Act, 1994 (for short Act) and the notification is liable to be struck down on that ground. The present impugned notification of the 3rd respondent mandates calculation of house-tax as per the market value which is contrary to the Act which mandates assessment of house tax by capital method. The market value assessment of house tax is beyond the scope of the Act and the same cannot be equated with capital value method in the absence of definition under the Act. 6. After notice, the 4th respondent has filed its counter. As per the averments in the Counter, the respondent has issued demand notice on 20.9.2018 to the petitioner herein calling upon to pay towards house tax for the year 2018-19. House tax has increased by over 100% and no apparent reason was mentioned in the impugned tax notice for such a sudden jump. The 3rd respondent after taking into consideration of the provisions of law and the Governmental Orders into consideration has issued the notification dt.17.6.2016 duly directing the concerned executive authorities to impose house tax as per general revision u/Sec.61 of A.P.P.R.Act and G.O.Ms.No.30 dated 20.01.1995 by duly following the procedure established under law. House tax can be imposed on the basis of either annual rental value or capital value or such other basis as may be prescribed by the Government. The notification clearly says that tax should be imposed on capital value. In fact the property was assessed by taking into consideration the Sub-Registrar value. Further the house tax is most important source of revenue of the gramapanchayat. 7. He further averred that the petitioner has made a representation on 24.01.2017 requesting to reduce the enhanced house tax. The notification clearly says that tax should be imposed on capital value. In fact the property was assessed by taking into consideration the Sub-Registrar value. Further the house tax is most important source of revenue of the gramapanchayat. 7. He further averred that the petitioner has made a representation on 24.01.2017 requesting to reduce the enhanced house tax. The respondent has given reply stating that the tax was imposed on the measurement taken and if the petitioner found any fault in such measurement, directed him to inform the same within one week to the respondent. The petitioner without giving any reply to the notice dated 24.01.2017 straight away filed the writ petition. 8. The gramapanchayat has taken uniformity in levying tax and the gramapanchayat use to collect very meagre amount towards property tax and there was no procedure for collecting tax, the gramapanchayat use to enhance 5% every year and gramapanchayat use to raise demands and collect tax and the same are very meagre amounts. After issuance of G.O.Ms.No.30 dated 20.01.1995 duly framing rules for imposition of tax, the present circular has been issued directing all the executive authorities to impose general revision by following the provisions of the Act. Further submitted that the assesse can move the executive authority by way of revision petition to reduce the tax as per Rule 10 of G.O.Ms.No.30 dated 20.01.1995. Aggrieved by the orders if any passed under the said revision, an appeal to the gramapanchayat under Rule 27 is available. The petitioner without availing such remedies had filed the present writ petition. 9. Learned counsel Sri N. Vijay, appearing on behalf of the petitioner submitted that the present impugned notification of the 3rd respondent dated 17.6.2016 is contrary to the provisions of the Act. In fact in the impugned notification, the District Collector has given guidelines/directions to the gram panchayats, the mode of levying tax and transaction of tax and the rate of tax also indicated which is beyond the scope of the 3rd respondent as per Section 61(1) and (4)(ii) of the Panchayat Raj Act. For better appreciation of the contention of the petitioner the said provisions are extracted below. 61. For better appreciation of the contention of the petitioner the said provisions are extracted below. 61. House Tax:- (1) The house tax referred to in clause (a) of sub-section (1) of section 60 shall subject to such rules as may be prescribed, be levied on all houses in the village on any one of the following basis, namely:- (a) annual rental value, or (b) capital value, or (c) such other basis as may be prescribed: Provided that no house tax shall be levied on poultry sheds and annexes thereto which are essential for running the poultry farms. (2) The house-tax shall, subject to the prior payment of the land revenue, if any, due to the Government in respect of the site of the house be a first charge upon the house and upon the movable property, if any, found within or upon the same and belonging to the person liable to pay such tax. (3) The house-tax shall be levied every year and shall, save as otherwise expressly provided in the rules made under sub-section (1) be paid by the owner within thirty days of the commencement of the year. It shall be levied at such rates as may be fixed by the Gram Panchayat, not being less than the minimum rates and not exceeding the maximum rates, prescribed in regard to the basis of levy adopted by the Gram Panchayat. (4) The Government may make rules providing for– (i) the exemption of special classes of houses from the tax; (ii) the manner of ascertaining the annual or capital value of houses or the categories into which they fall for the purposes of taxation. Section 4(ii): Constitution of Gram Panchayats for villages and their incorporation:- (2) Subject to the provisions of this Act, the administration of the village shall vest in the Gram Panchayat, but the Gram Panchayat shall not be entitled to exercise functions expressly assigned by or under this Act or any other law to its Sarpanch or executive authority, or to any other local authority or other authority. 62. 62. Levy of House Tax on a direction by Government:- (1) The Government may, by order published in the Andhra Pradesh Gazette, for special reasons to be specified in such order direct any Gram Panchayat to levy the house-tax referred to in clause (a) of sub-section (1) of section 60 at such rates and with effect from such date not being earlier than the first day of the year immediately following that in which the order is published, as may be specified in the order. Such direction may be issued in respect of all buildings in a Gram Panchayat or in respect of only such buildings belonging to the undertakings owned or controlled by the State Government or Central Government and the buildings belonging to the State Government as may be specified therein. (2) When an order under sub-section (1) has been published, the provisions of this Act relating to house-tax shall apply as if the Gram Panchayat had, on the date of publication of such order, by resolution determined to levy the tax at the rate and with effect from the date specified in the order, and as if no other resolution of the Gram Panchayat under section 60 determining the rate at which and the date from which the house-tax shall be levied, had taken effect. 10. Learned counsel for the petitioner has submitted that the 3rd respondent in the impugned notification has issued guidelines by fixing the rate of tax from 0.121/2 ps to Rs.1/- to all the gram panchayats in the District and also directed to collect 0.25ps for residential houses and 0.50ps for business and commercial business which is quite contrary to Section 61(4)(ii) of the Act. 11. According to Section 61(4) of the Act, Government may make rules for providing the manner of ascertaining the annual or capital value of the houses. But, here the 3rd respondent who is having no power to fix the rate of tax i.e. solely for the Government to fix the rate under Section 61(4)(ii) of the Act. However learned counsel has submitted that the present impugned notification is also contrary to G.O.Ms.No.30 dated 20.01.1995. In the said G.O. the rules relating to certain taxes and lodging of moneys received by the gramapanchayats and payment of money from the gramapanchayat was issued. However learned counsel has submitted that the present impugned notification is also contrary to G.O.Ms.No.30 dated 20.01.1995. In the said G.O. the rules relating to certain taxes and lodging of moneys received by the gramapanchayats and payment of money from the gramapanchayat was issued. According to the above said Rules, Rule 4 deals that gramapanchayat has to resolve to assess houses for the purpose of house tax either on their annual rentals or their capital value, the rates fixed by the gramapanchayat may either be proportionate to the value of each house and Rule 13 deals that the executive authority shall, subject to the provisions of rule 9, maintain the assessment books relating to the house tax in accordance with hike of 5% on the existing house tax. Subsequently vide G.O.Ms.No.382, Panchayat Raj and Rural Development (Pts.I), dated 14.12.2012 has amended certain rules more particularly Rule 12. According to the original rules, Rule 12 deals with executive authority shall be bound to cause new lists or assessment books to be prepared every year and the same was amended by replacing the assessment book shall be made once in every five years. Even according to the above amendment, it is only power has been given to executive authority to prepare books once in every five years. But there is no description with regard to fixation of rate of tax by the 3rd respondent. However, learned counsel has submitted that the proceedings issued by the Commissioner of Panchayatraj and Rural Employment dated 28.5.2013 delegating the powers of the Commissioner to 3rd respondent as per Section 260 of the A.P. Panchayatraj Act 1994 is also misconceived. According to Section 260(2), the Commissioner authorize the District Collectors to exercise the powers vested in him under Sub rule 2(a) and (b) of Rule 3 issued in G.O.Ms.No.382, dated 14.12.2012. The Commissioner has delegated the powers to the District Collector to exercise their powers as per the provisions of the Act only. 12. But in the instant case, the present notification issued by the 3rd respondent on 17.6.2016 is contrary to the provisions of the Act more particularly Section 61(4)(ii) of the Act. At any rate, the 3rd respondent has no power to fix the rates, the power of the gramapanchayat to fix the rate. Utmost he can give directions as executive authority and give guidelines for collection of the taxes. At any rate, the 3rd respondent has no power to fix the rates, the power of the gramapanchayat to fix the rate. Utmost he can give directions as executive authority and give guidelines for collection of the taxes. But he cannot fix the tax with particular rates. 13. Learned standing counsel appearing on behalf of the respondent has submitted that the Collector has issued only uniform guidelines in the entire district as per delegation of powers by the Commissioner in its proceedings dated 28.5.2013. In fact as per Rules framed under G.O.Ms.No.30 dated 20.01.1995 which were amended by G.O.Ms.No.382 dated 14.12.2012, rules were framed by fixing the preparation of tax once in five years and also as per the provisions of the Act, the authorities are entitled to fix the tax basing on the rental value or basing on the capital value. In fact in the instant case, they have fixed the tax on the basis of capital value by taking the market value from the concerned sub-registrars. Only to follow uniformity, the 3rd respondent has fixed the rate by giving liberty to certain grama panchayats. Hence impugned memo is in accordance with the provisions of the Act. Further submitted that if at all the petitioners have any grievance against the fixation of the rates they are entitled to file a revision before the authority as per the provisions of the Act. Hence requested for dismissal of the petition. 14. On perusal of the notification dated 07.6.2016 issued by the 3rd respondent, apart from other aspects wherein he has clearly given directions to the Commissioners to fix/levy the rate by fixing from 0.121/2 ps to Rs.1/- and collect the rate by fixing rate from 0.25ps for residential and 0.50ps for business and commercial buildings which is contrary to the Act. More specifically according to Section 61(4)(ii) of the Act, the Government alone is competent to fix the rates. But in the instant case, the Collector has fixed the rate of 0.25ps for residential building which is beyond the jurisdiction of the 3rd respondent. 15. More specifically according to Section 61(4)(ii) of the Act, the Government alone is competent to fix the rates. But in the instant case, the Collector has fixed the rate of 0.25ps for residential building which is beyond the jurisdiction of the 3rd respondent. 15. In view of the same, the impugned demand notices issued by the 4th respondent dated 20.9.2018 in both the cases are set aside and both the matters are remanded to the 4th respondent to take appropriate decision without taking the reference of notification of 3rd respondent dated 17.6.2016 and fix/levy the tax as per the resolutions of the gramapanchayat. Till such time, the respondents are directed not to insist the petitioner in both the petitioners in both the writ petitions to pay the tax as per the notice dated 20.9.2018. 16. Accordingly, the writ petitions are disposed of. No costs. Miscellaneous petitions, if any, pending in both the petitions shall stand closed.