IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 20-07-2010 CORAM THE HONOURABLE MR.JUSTICE M.JAICHANDREN S.A.No.908 of 2007 Central Warehousing Corporation, A Government of India Undertaking, Represented By its Regional Manager, No.4, NorthAvenue, Srinagar Colony, Saidapet, Chennai-600 015. .. Appellant/Plaintiff Versus Chitlapakkam Town Panchayat Represented by its Executive Officer Chitlapakkam, Tambaram Taluk, Kancheepuram District. .. Respondent/Defendant PRAYER: Appeal against the judgment and decree, dated 26.10.2004, made in A.S.No.52 of 2003, on the file of the Additional Subordinate Judge, Chengleput, confirming the judgment and decree of the trial Court, dated 11.3.2003, made in O.S.No.77 of 2000, on the file of the District Munsif Court, Tambaram. For Appellant : Mr.A.J.Abdul Razak For Respondent : Mr.R.Revathi Government Advocate J U D G M E N T This second appeal has been filed against the judgment and decree, dated 26.10.2004, made in A.S.No.52 of 2003, on the file of the Additional Subordinate Court, Chengalpattu, confirming the judgment and decree, dated 11.3.2003, made in O.S.No.77 of 2000, on the file of the District Munsif Court, Tambaram. 2. The plaintiff in the suit, in O.S.No.77 of 2000, is the appellant in the present second appeal. The defendant in the said suit is the respondent herein. https://hcservices.ecourts.gov.in/hcservices/ 3. It has been stated that the plaintiff is a Government of India undertaking, having its building in the schedule mentioned properties, within the limits of the defendant Town Panchayat. The defendant Town Panchayat has been assessing the building for levying building tax. There are 22 house tax assessments levied by the defendant Town Panchayat, in respect of the plaintiff Corporation relating to which the suit had been filed. 4. It has been stated that the plaintiff Corporation has been exempted, under the Tamil Nadu Buildings (Lease and Rent) Control Act, 1960. It has also been stated that the plaintiff Corporation had let out the buildings to various government departments. It has been stated that the respondent Town Panchayat had enhanced the tax, substantially, by way of a special notice, dated 31.1.1999, served on the plaintiff Corporation. It has also been stated that the plaintiff Corporation had been asked to pay the enhanced tax, with retrospective effect, from the month of October, 1998, without giving any reason as to how the tax had been increased by more than 400 % per year. It has also been stated that the plaintiff Corporation had filed a revision, dated 14.7.1999, to the Director of Municipal Administration, marking a copy of the said revision to the defendant Town Panchayat. However, the defendant Town Panchayat had rejected the same, calling upon the plaintiff Corporation to pay the enhanced tax, as fixed by the defendant Town Panchayat, in its special notice. 5. It has also been stated that there cannot be an increase of more than 33.33 % of the existing tax, in respect of the buildings owned by the Government of India undertaking. However, since the Tamil Nadu Buildings (Lease and Rent) Control Act, 1960, is not applicable, the defendant Town Panchayat cannot fix the tax by taking into consideration the fair rent formula. As the defendant Town Panchayat had initiated distraint proceedings the plaintiff Corporation had paid 50% of the enhanced tax amount payable by the plaintiff Corporation, under protest. In fact the plaintiff Corporation had paid more than the admitted tax liability. In such circumstances, the plaintiff Corporation had filed the suit praying for a decree against the defendant to declare that the assessment levied by the defendant Town Panchayat, in respect of the schedule mentioned properties, is illegal, ultravires and void, and for a consequential interim injunction restraining the defendant and others from, in any way, collecting the enhanced tax from the plaintiff Corporation, and for costs. 6. In the written statement filed on behalf of the defendant Town Panchayat it has been stated that it is true that the plaintiff is a Government of India undertaking and that there are nearly 22 https://hcservices.ecourts.gov.in/hcservices/ buildings belonging to the plaintiff Corporation, which had been subjected to assessment. Though all the 22 buildings belonging to the plaintiff Corporation were situated at one and the same place, since the buildings had emerged separately, at different periods, the tax had been levied on each one of the buildings separately, under separate assessment numbers. Even though the buildings belonging to the plaintiff Corporation will not come under the ambit of the provisions of the Tamil Nadu Buildings (Lease and Rent) Control Act, 1960, it would not have the effect of preventing the defendant Town Panchayat from assessing and levying the property tax, based on the guidelines given under Section 4 of the said Act. The plaintiff Corporation had challenged only the enhancement of the tax assessment levied on its buildings and not the mode of tax. 7. It has been further stated that the plaintiff Corporation had made payments towards the arrears of the tax for the period covering the year 1998-1999 II Half Year, till 1999-2000 II Half Year, at the enhanced rate, without any protest. Further, the claim of the plaintiff Corporation seeking declaration of the assessment made by the defendant Town Panchayat cannot be maintained, as it is time barred. Further, the plaintiff Corporation has not been in a position to show that there are Government orders and guidelines to restrict the increase of tax only by 33.33% on the existing tax. Further, the plaintiff Corporation had not exhausted the statutory remedy of appeal and revision, before the appropriate authority, within the time limit prescribed by the relevant provisions of the Tamil Nadu District Municipalities Act, 1920. 8. It has also been stated that the revision petition, dated 14.7.1997, said to have been sent by the plaintiff Corporation, had been, admittedly, addressed to the Director of Municipal Administration, who is not the competent authority to entertain the revision petition. Though a copy of the revision petition had been marked to the defendant Town Panchayat, since it had been sent belatedly, a suitable reply had been made to the plaintiff Corporation confirming the enhancement of the tax, made as per the available Government Orders and the guidelines. Since, the suit filed by the plaintiff Corporation is devoid of merits, it is liable to be dismissed. 9. In view of the averments made on behalf of the plaintiff, as well as the defendant the trial Court had framed the following issues for consideration: “1) Whether the assessment of tax in respect of the suit property is illegal, void and ultravires? https://hcservices.ecourts.gov.in/hcservices/ 2) Whether the plaintiff is entitled for an injunction, as prayed for by him? 3) Whether the plaintiff is entitled for a declaration, as prayed for by him? 4) To what relief, the plaintiff is entitled?” 10. One witness had been examined on the side of the plaintiff and Exhibits A-1 to A-25 had been marked on behalf of the plaintiff. Similarly, one witness was examined on the side of the defendant, Exs.B-1 to B-5 had been marked. 11. Analysing the evidence on record the trial Court had found that, though the plaintiff Corporation had relied on a Government Order to show that the defendant Town Panchayat can enhance the tax on buildings belonging to the plaintiff Corporation, which is said to be a Government of India undertaking, only by 33.33%, the same had not been produced before the Court. Further, the trial Court had rejected the contention of the plaintiff Corporation that the increase in tax is more than 400%. However, it has been found that the comparison had been erroneously made between the total amount of the existing tax on 14 buildings on the one hand and the enhanced tax on 14 buildings plus, the new tax on 8 buildings on the other hand, so as to give an erroneous impression that the tax enhanced had exceeded 400%. 12. From the exhibits marked as Ex.B-1, Government Order, dated 8.9.1998 and Ex.B-2 Circular, issued from the office of the Director of Municipalities, dated 1.2.1998, it had been established that the revision of tax was only a general revision made, strictly, as per the guidelines laid down therein. The trial Court had further found that the plaintiff Corporation had preferred an appeal, directly, to the Director of Municipal Administration, even though it should have been sent to the Executive Officer, Chitlapakkam Town Panchayat, in cases of any grievance regarding the enhancement of tax. In such circumstances, the trial Court had dismissed the suit, with costs, holding that it is devoid of merits. 13. Aggrieved by the judgment and decree of the trial Court, dated 11.3.2003, made in O.S.No.77 of 2000, the plaintiff had preferred an appeal before the Additional Subordinate Court, Chengalpattu, in A.S.No.52 of 2003. https://hcservices.ecourts.gov.in/hcservices/ 14. On considering the facts and circumstances of the case and in view of the evidence available on record, the First Appellate Court had confirmed the findings of the trial Court, by its judgment and decree, dated 26.10.2004. 15. Aggrieved by the judgment and decree of the First Appellate Court, dated 26.10.2004, the appellant in the first appeal, in A.S.No.52 of 2003, who was the plaintiff in the suit, in O.S.No.77 of 2000, had preferred the present second appeal before this Court, raising the following questions, as substantial questions of law. “(i) When the Hon’ble Supreme Court in A.I.R. 1998 Supreme Court at Page 2636 has held that in cases where the buildings are not controlled by any Rent Control Legislations, the actual income can be taken as annual value of the property for the assessment of property tax, the stand of the Courts below that fair rent formula has been adopted for assessment of property taxes, is correct in law? (ii) Whether the special notices are valid in law when no reasons have been assigned in the special notices for the proposed enhancement?” 16. The learned counsel appearing on behalf of the appellant had submitted that the Courts below had failed to note that no reason had been given in the special notices issued by the respondent Town Panchayat for enhancing the tax, except using the words “General Revision”. Thus, the appellant Corporation had been prevented from preferring a revision petition against the special notices. Thus, it is clear that no proper opportunity had been given to the appellant Corporation to agitate the matter further, by raising the necessary objections. 17. It had also been stated that the Courts below had failed to note that the statement of the respondent Town Panchayat that the increase in tax has been levied, in view of the general revision of property tax, cannot be shown as a reason for the enhancement of the property tax. Unless the assessee knows the grounds on which the enhancement had been made it would not be possible for the assessee to challenge the same, by resorting to the appropriate proceedings, in the manner known to law. He had also submitted that the enhancement of tax, by over 400 %, is arbitrary and illegal, as held by the various Courts of law. He had also submitted that the Courts below had failed to note that the suit buildings belong to the plaintiff Corporation, which is a Government of India undertaking, and as such, they are exempted from the application of the provisions of the Tamil Nadu Buildings (Lease and Rent) Control Act, 1960. Further, the Courts below had failed to note that the notices had https://hcservices.ecourts.gov.in/hcservices/ been issued, under the wrong provisions of the Tamil Nadu District Municipalities Act, 1920, and the rules framed therein. He had also submitted that the Courts below had not taken into consideration the Government orders and the guidelines restricting the enhancement of the property tax, by more than 33.33%, in respect of the Government buildings belonging to the Central Government and its undertakings. 18. The learned counsel appearing for the appellant had relied on the following decisions in support of his contentions: 18.1. In Dhulabhai V. State of Madhya Pradesh and another (AIR 1969 SC 78), it had been held as follows: “(1) Where the statute gives a finality to the orders of the special tribunals the civil courts’ jurisdiction must be held to be excluded if there is adequate remedy to do what the civil Court would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.” 18.2. In Chellammal V. Alandur Municipality, represented by its Commissioner (1992(1) LW 110), it had been held as follows: “It is well settled that when the basis of the levy itself is wrong or that there is no basis at all for the levy and in that sense there is no substantial compliance with the provisions of the Municipalities Act, it is open to the Civil Court to declare the levy as illegal and in fact it is its duty to do so.” 18.3. In Government Servant Co-operative Housing Building Society Ltd V. Union of India (AIR 198 SC 2636), it had been held as follows: “The annual rent actually received by the landlord, in the absence of any special circumstances, would be a good guide to decide the rent which the landlord might reasonably expect to receive from a hypothetical tenant. Since the premises in the present case are not controlled by any rent control legislation, the annual rent received by landlord is what a willing lessee, uninfluenced by other circumstances, would pay to a willing lessor. Hence, actual annual rent, in these circumstances, can be taken as the annual rateable value of the property for the assessment of property tax.” 18.4. In Rajkot Municipal Corporation and Ors. V. Union of India (Civil Appeal Nos.9458-9463 of 2003), it had been held as follows: “(i) The Union of India and its departments will pay service charges for the services provided by the appellant Municipal Corporations. https://hcservices.ecourts.gov.in/hcservices/ They will not pay any property tax. The service charges will be paid at 75%, 50% and 33 1/3% respectively of the property tax levied on private owners, depending upon whether Union of India or its department is utilising the full services, or partial services or nil services. The Union of India represented by its concerned department will enter into agreements/understandings in regard to service charges for each of its properties, with the respective Muncipal Corporation.” 19. Per contra, the learned counsel appearing on behalf of the respondent Town Panchayat had submitted that the assessment of property tax, made in respect of the buildings belonging to the appellant Corporation, is in accordance with the provisions of law applicable to the levying of such tax. Further, the appellant Corporation had preferred to challenge the enhancement of property tax, belatedly, without any basis. It has also been stated that the appellant Corporation had not availed the statutory remedy available, under the provisions of the Tamil Nadu District Municipalities Act, 1920. Even though the appellant Corporation had claimed that there are Government Orders and guidelines to restrain the enhancement of property tax, in respect of buildings belonging to the Central Government and its undertakings to 33.33% on the existing rate of tax, the appellant Corporation had not been in a position to produce the Government Orders and the guidelines before the Courts below. When the appellant Corporation had not challenged the mode of the levy of property tax, it would not be open to the appellant Corporation to challenge the enhancement of tax stating that it is arbitrary and illegal. Further, the appellant Corporation had already paid the tax to the respondent Town Panchayat, without any protest. In such circumstances, the second appeal preferred by the appellant Corporation is liable to be dismissed. 20. In view of the submissions made by the learned counsels appearing on behalf of the appellant, as well as the respondent, and on a perusal of the records available, this Court is of the considered view that the appellant has not shown sufficient cause or reason to interfere with the concurrent findings of the Courts below. There is nothing available on record to show that the enhancement of property tax, in respect of the buildings belonging to the appellant Corporation, should be restricted to 33.33%, as claimed by the appellant Corporation. Further, when there are alternative remedies available, under the provisions of the Tamil Nadu District Municipalities Act, 1920, the appellant Corporation ought to have challenged the assessment notices by resorting to such remedies. Instead the appellant Corporation had preferred to file a civil suit challenging the special notices issued by the respondent Town Panchayat stating that they have been issued in an arbitrary manner and without following the provisions of law. It is clear, from the https://hcservices.ecourts.gov.in/hcservices/ evidence available on record, that the appellant Corporation had preferred to challenge the special notices issued by the respondent Town Panchayat, for the assessment of the property tax, in respect of the buildings said to be belonging to the appellant Corporation, belatedly. In such circumstances, the contentions raised on behalf of the appellant cannot be sustained in the eye of law. Since, the second appeal is devoid of merits, it is liable to be dismissed. Hence, it is dismissed. No costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar csh To 1) The Additional Subordinate Judge, Chengleput. 2) The District Munsif Court, Tambaram. 1 cc To The Government Pleader, SR.52341 S.A.No.908 of 2007 SV (CO) RH (12.11.10) https://hcservices.ecourts.gov.in/hcservices/