P.R. Shivakumar, J.@mdashThis Second Appeal is directed against the judgment and decree dated 30.03.2007 made in A.S. No. 57 of 2006 on the file of the Principal Subordinate Judge, Thanjavur, confirming the judgment and decree of the trial Court (District Munsif, Thanjavur), dated 19.04.2006 made in O.S. No. 238 of 2001. The plaintiff in the Original Suit is the appellant in the Second Appeal. He had filed the Original Suit against the Thanjavur Municipality praying for a decree declaring the order of the Commissioner of the said Municipality making upward revision of the property tax for the suit property belonging to the appellant/plaintiff, as null and void and for a consequential injunction not to recover the tax at the enhanced rate.
2. The suit was resisted by the respondent/defendant contending that there was no illegality in the revision of tax; that initially the property had been assessed for tax wrongly at the rate applicable to the buildings used for domestic purposes; that the same was found out by the audit party and an objection was raised in the audit report and that hence, based on the audit objection, tax was levied to the suit property, a marriage hall, in the revised assessment order by adopting the rates applicable to commercial buildings. It was also contended by the respondent/defendant that the suit was not maintainable as the alternative remedy of statutory appeal provided under the Tamil Nadu District Municipalities Act, 1920 had not been exhausted.
3. After framing necessary issues, the trial Court conducted trial. At the conclusion of trial, upon a consideration of evidence adduced on both sides, the trial Court held that the appellant/plaintiff was not entitled to any one of the relief''s sought for in the plaint and dismissed the suit by its judgment and decree dated 19.04.2006. On appeal, the learned appellate Judge (Principal Subordinate Judge, Thanjavur), confirmed the same by judgment and decree dated 30.03.2007 made in A.S. No. 57 of 2006. Hence the second appeal at the instance of the appellant/plaintiff.
4. This Court heard the submissions made by Mr. V. Chandrasekar, learned counsel appearing for the appellant and also by Mr. V. Ragupathi, learned counsel appearing for the respondent and perused the materials available on record. As it was agreed by the counsel appearing for both parties, records were called for and after receipt of records, the appeal has been taken up for disposal on merits at the stage of admission itself.
5. Upon hearing the submissions made by the learned counsel appearing for both parties and after perusing the materials available on record, this Court is of the view that the Second Appeal involves the following substantial question of law:
Whether the impugned order of assessment made by the executive authority of the respondent Municipality is vitiated because of non-observance of the procedure prescribed under Sections 83 and 84 of the Tamil Nadu District Municipalities Act, 1920?
6. The appellant/plaintiff is the owner of the suit property. The suit property is a marriage hall situated within the limits of Thanjavur Municipality and hence, the same is assessable for property tax. It is not in dispute that initially the half yearly property tax for the suit property had been assessed by the Municipality at Rs. 15,720/- as evidenced by Ex.A.1-special notice dated 28.05.1996. There is also no controversy over the fact that the audit party raised an objection for the above said assessment on the ground that the assessment had been made at the rate applicable to residential buildings and that the suit property (marriage hall) should have been assessed to tax at the rate applicable to commercial buildings. Therefore, the said defect pointed out by the audit party in the audit report is the basis on which the executive authority, namely the Commissioner of Thanjavur Municipality revised the assessment and fixed the half yearly tax for the suit building at Rs. 82,147/-and issued notices under Exs.A.4 and A.5 directing payment of property tax at the revised rate from the year 1998-1999. Subsequently, the property was sought to be attached for the collection of property tax under Ex.A.3-attachment notice dated 30.01.2001.
7. The learned counsel for the appellant, at the first instance, argued that any error apparent on the face of the record could be rectified by the Executive Authority of the Municipality u/s 87 of the Tamil Nadu District Municipalities Act. 1920, but the said power could be exercised only within six months and not thereafter and that the revised assessment made in this case based on audit objection was unauthorized as it was done after expiry of the above said period of six months from the date of initial assessment. This Court is not in a position to accept the above said contention of the learned counsel for the appellant. The said submission was made by the learned counsel for the appellant on the assumption that the Commissioner had simply corrected an error apparent on the face of the initial assessment order, to bring the impugned order under the mischief of the limitation provided u/s 87 of the District Municipalities Act, 1920. A proper consideration of the impugned order would show that it is not an order aimed at correcting an error apparent on the face of the record, but on the other hand, it is nothing but an order of reassessment. Such a reassessment is permitted u/s 81(2) of the Tamil Nadu District Municipalities Act, 1920. Therefore, the challenge made to the assessment order on the basis of Section 87 of the Tamil Nadu District Municipalities Act, 1920 cannot be sustained.
8. At the same time, this Court is able to find substance in the challenge made to the impugned assessment order in the light of Section 84 of the Tamil Nadu District Municipalities Act, 1920. Section 84 of the Tamil Nadu District Municipalities Act, 1920 deals with the procedure to be adopted in assessing and calculating property tax. It runs as follows:
Assessment and calculation of property tax:- (1) For the purpose of levy of property tax, every building shall be assessed together with its sites and other adjacent premises occupied as an appurtenance thereto:
(2) The property tax shall be calculated as follows:
(a) Firstly, the basic property tax for a building shall be calculated at the rate fixed by the municipal council;
(b) Secondly, the additional basic property tax for such building shall be calculated at the rate fixed by the municipal council and added to the basic property tax so arrived at under clause (a);
(c) Thirdly, on the quantum arrived at under clauses (a) and (b) the concession having regard to the age of the building at the rate fixed by the municipal council shall be deducted and the amount so arrived at shall be the property tax payable in respect of any building for every half-year and shall be paid by the owner or occupier of such building within the half-year period.
(3) The executive authority shall issue a properly tax book containing all the details of the building or land and the property tax payable in relation to such building or land in such form as may be prescribed.
[(4) (a) Where there is any land without any building situated within the municipal limits, the executive authority shall determine the property tax payable for such land at the rate fixed by the municipal council.
(b) Where there is any land with building situated within the municipal limit and if the extent of the land left vacant is twice the plinth area of the building, the executive authority shall determine the property tax on the vacant land which exceeds twice the plinth area of the building at the rate fixed by the municipal council.
Provided that no property tax on any land shall be levied under this sub-section of the extent of such land with or without any building thereon does not exceed two thousand and four hundred square feet.
(5) The municipal council may, subject to such rules as may be made by the Government, by notification, in this behalf, exempt any building having a carpet area not exceeding one hundred square feet constructed with wind walls and thatched roof from the levy of property tax.]
9. It is the contention of the learned counsel for the appellant that the mandatory procedure prescribed in the above said provision was not followed by the Executive Authority of the respondent Municipality and that hence, the impugned assessment order is liable to be declared null and void. It is the further contention of the learned counsel for the appellant that the principles found in Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 should have been followed in assessing the annual rental value; that the procedure prescribed under Sections 83 and 84 of the Tamil Nadu District Municipalities Act, 1920 was also not followed and that hence, the assessment order is vitiated. Per contra, the learned counsel for the respondent has not adverted to the above said vitiating factors pointed out by the learned counsel for the appellant. The learned counsel for the respondent was content with making a submission that the appellant had been rightly non-suited by the Courts below as he had not exhausted the alternative remedy of statutory appeal provided u/s 124-I read with Section 89. In this regard, the learned counsel for the appellant has relied on the following judgments:
(1)
(2)
(3)
(4)
All the four judgments relied on by the learned counsel for the appellant came from Madras High Court. In all the said cases, it was held that Section 82(2) of the Tamil Nadu District Municipalities Act provided the method of assessment of property tax; that as per the said provision, the annual rental value of the building should be calculated in accordance with Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 and that since such procedure was not followed, the assessments in those cases were vitiated.
10. In
The test essentially is what rent the premises can lawfully fetch if let out to a hypothetical tenant. The Municipality is thus not free to assess any arbitrary annual value and has to look to and is bound by the fair rent of the standard rent which would be payable for a particular premises under the Rent Act in force during the year 6f assessment.
....
Assessment of valuation for the purpose of tax must be made in accordance with and in the light of the provisions of the Rent Act which would be in force during the period of assessment.
The Same has been followed in all the above said four cases cited by the learned counsel for the appellant. All the above said judgments squarely apply to the facts of the case on hand. Following the ratio laid down therein, this Court comes to the conclusion that the impugned order of the executive authority of the respondent Municipality revising the half yearly tax at Rs. 82,147/- is vitiated because the procedure for assessing the annual rental value, which shall form the basis of the fixation of property tax, was not followed.
11. In this case, the respondent has not only failed to follow the procedure prescribed for assessment of annual rental value and for fixation of the property tax but also failed to give the break up particulars to show how the figure was arrived at. In fact, the Commissioner of the respondent Municipality has arbitrarily fixed the half yearly tax at Rs. 82,147/-. The assessment order is bereft of particulars regarding how the assessment was made. When such is the case and the assessment, is vitiated because of the non-observance of the procedure, the statutory appeal cannot be construed to be an effective and efficacious remedy. All the above said cases cited in support of the appellant''s case were decided in favour of the assessee on the basis that the civil Court''s jurisdiction u/s 9 of the CPC had not been taken away either expressly or by necessary implication by the provisions of the Tamil Nadu District Municipalities Act, 1920.
12. Sub-section (1) and (2) of Section 354 provide that the assessment or demand or charge imposed under the authority of the Act shall not be impeached or affected by reason of any clerical error or by reason of any mistake in respect of the name, residence, place of business or occupation of any person, etc. Provided the provisions of the Act have, in substance and effect, been complied with. Sections 354(1) and (2) are reproduced here under for convenient reference:
Assessments, etc., not to be impeached.-
(1) No assessment or demand made and no charge imposed, under the authority of this Act shall be impeached or affected by reason of any clerical error or by reason of any mistake (a) in respect of the name, residence place of business or occupation of any person, or (b) in the description of any property or thing, or (c) in respect of the amount assessed, demanded or charged: provided that the provisions of this Act have been in substance and effect, complied with. And no proceedings under this Act shall merely for defect in form, be quashed or set aside by any Court of Justice.
(2) No suit shall be brought in any Court to recover any sum of money collected under the authority of this Act or to recover damages on account of any assessment, or collection of money made under the said authority:
Provided that the provisions of this Act have been, in effect, complied with.
A reading of the above Section will show that no challenge can be made to the assessment by reason of any clerical error or by reason of any mistake (a) in respect of the name, residence, place of business or occupation of any person, or (b) in the description of any property or thing, or (c) in respect of the amount assessed, demanded or charged. Here in this case, the challenge to the assessment order is made not on the ground that mere is any clerical error or mistake in respect of the above said aspects but on the ground that the assessment order itself is vitiated because of non-observance of the mandatory procedure prescribed in this statute. The above section also makes it clear that a suit shall not be entertained against the assessment order provided the provisions of the Act have been in substance and effect, complied with. In this case, we have seen that the provisions of the Act have not been complied with in substance and effect in making the assessment order and that hence, the assessment order is vitiated. Therefore, this Court comes to the conclusion that the suit is not barred by Section 354(1) of the Tamil Nadu District Municipalities Act, 1920
13. For all the reasons stated above, this Court comes to the conclusion mat the suit filed by the appellant is very much maintainable, especially in the light of the fact that the executive authority has totally disregarded the mandatory procedure prescribed by the statute for assessing property tax; that the Courts below have erred in non-suiting the appellant/plaintiff and that the decree of the trial Court confirmed by the lower appellate Court has got to be set aside with the result that the appellant/plaintiff shall be granted the relief''s as prayed for in the suit. In the result, mis Second Appeal is allowed and the decree of the trial Court confirmed by the lower appellate Court is set aside. The suit, is decreed as prayed for. However, it is clarified that this judgment shall not come in the way of the Municipality passing a fresh assessment order in accordance with law. There shall be no order as to costs.
