THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.5581 of 2009 Dated:28.01.2011 Between: Anand Modern Rice Mill. …Petitioner and The Municipality, Miryalaguda, Nalgonda District, Represented by its Commissioner. …Respondent THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.5581 of 2009 ORDER: (per Hon’ble Sri Justice V.V.S.Rao) The petitioner is a firm running a rice mill. Being aggrieved by the demand notice purportedly issued under Rules 29 to 34 of Schedule-II of Andhra Pradesh Municipalities Act, 1965 (the Act), demanding a sum of Rs.4,81,284/- being the property tax for the rice mill for the period from 1986 to 30.09.2008, they have invoked the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. The brief background facts necessary for disposal of the writ petition are as follows. The petitioner’s rice mill was established long ago. In 1985 it was closed due to financial problems. The partners sold away the machinery on 14.04.1987 to M/s.Sri Lakshmi Venkata Maruthi Modern Boiled and Rice Mill, Narsannapalem. The power connection was also disconnected. The petitioner statedly surrendered all the licenses/registrations under the Central Sales Tax Act, 1956, and the civil supplies control orders. They also ceased to pay income tax. It appears that the petitioner paid property tax to the respondent-Municipality in 1985 and, thereafter, did not pay any amount. The demand notice dated 27.09.2007 was issued under Rules 10 and 11 of Schedule-II to the Act enhancing the property tax from Rs.9,658/- to 85,875/-. The petitioner filed a revision petition on 29.09.2007 contesting the enhancement. The petitioner alleges that, without inspecting the premises, the respondent issued another demand notice dated 24.10.2007. Half yearly property tax of Rs.24,145/- was determined. After receiving the notice the petitioner filed petitions on 04.11.2007 and 10.04.2008 requesting inspection of the rice mill for verifying the plinth area and age of building before fixing the correct property tax, in vain. The respondent issued another demand notice dated 14.05.2008 directing the petitioner to pay a sum of Rs.14,487/- for the current year, Rs.2,07,634/- as arrears and Rs.2,33,378/- towards penalty and arrears upto 30.03.2008. The petitioner then filed a writ petition. The same, being W.P.No.26768 of 2008 was, however, dismissed as withdrawn with liberty to file a fresh writ petition. Therefore, the petitioner filed the present writ petition assailing the demand notice dated 14.05.2008. Counsel for the petitioner relies on Section 365 of the Act, and contends that it is not permissible in law for the Municipality to demand property tax arrears beyond a period of nine years and the impugned notice, which purports to be a demand notice for a period of twenty years, is unsustainable. On a plain reading of Section 365 of the Act it is clear that the Municipality is barred from issuing a distraint order or filing a suit or launching a prosecution in respect of any sum due to the Municipality after expiration of a period of three years from the date on which the distraint might first have been made, or after expiration of a period of nine years from the date on which a suit might first have been instituted, or after expiration of a period of six years from the date on which prosecution might first have been launched. A closer look at the provisions would show that the time prescribed for filing the suit is three years from the date of distraint which might have been made, and nine years from the date on which the suit might have been instituted. It means, in addition to the period of limitation prescribed under the Limitation Act, 1963, the Municipality is given extra time either for passing a distraint order or filing a suit or launching prosecution. Admittedly, recovery of tax from the petitioner is at the stage of demand notice, and no distraint order has been issued. Therefore, in our view, Section 365 of the Act is neither attracted nor is it of any assistance to the petitioner. However, we hasten to add that Section 369 of the Act bars a suit against the Municipality in respect of any act done pursuant to the provisions of the Act, rules, byelaws or regulations. But, if it is contended by a person that any act is not in accordance with the Act, rules or byelaws, a suit is certainly not barred. This was so held in Majeti Veerabhadrarao v Pithapuram Municipality[1]. Therefore, we deem it proper to give liberty to the petitioner to agitate the matter by filing a suit as the issues involved are mainly in the realm of questions of fact, and we are not inclined to exercise our discretion in this case. In the result, for the above reasons, the writ petition is disposed of giving liberty to the petitioner to avail the common law remedy in a civil Court. This order shall not be construed as an order on merits. There shall be no order as to costs. _______________ (V.V.S.RAO, J) _____________________________ (RAMESH RANGANATHAN, J) 28.01.2011 vs [1] 2008 (1) ALT 729 (para 5)