IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:14-3-2008 CORAM: THE HON'BLE MR.JUSTICE P.JYOTHIMANI W.P.Nos.3440 and 5470 of 1999 ..... 1. M.V.R.A.Soundararajan 2. M.V.R.A.Pandiyarajan 3. M.V.R.A.Mohanrajan ... Petitioner in WP.No.3440 of 1999 Dindigul District Tax Payers Sangam rep. By its President M.V.R.A.Soundararajan. .. Petitioner in WP.No.5470 of 1999. vs. The Commissioner Dindigul Municipality Dindigul. ... Respondents in both the WPs. Writ petitions filed under Article 226 of the Constitution of India praying for issuance of a Writ of Declaration as stated therein. For petitioner : Mr.M.Venkatachalapathy,Sr.Counsel in both WPs. for Mr.M.Sriram For respondent : Mr. V.Raghupathy in both WPs. .. COMMON ORDER The issue involved in both the cases is relating to the basis of valuation adopted on zone-wise by the respondent Municipality, which according to the petitioner is, void, https://hcservices.ecourts.gov.in/hcservices/ arbitrary, unreasonable and against the provisions of the Tamil Nadu District Municipalities Act,1920. 2. While W.P.No.3440 of 1999 filed by the petitioners/individual owners questioning about the adoption of the rate of Rs.1.50 per sq.ft. for Zone-A in respect of the building belonging to the petitioners situated in Dindigul Municipality, W.P.No.5470 of 1999 is filed by the Dindigul District Tax Payers Sangam for the same relief. 3. Admittedly, the writ petitioner Sangam in W.P.No.5470 of 1999 has earlier filed writ petitions challenging the act of respondent Municipality in enhancing the annual value of the property tax of properties of the members of Tax Payers Association pursuant to the notice issued by the Municipality under Rules 9 and 10 of Schedule IV of Tamil Nadu District Municipalities Act,1920. 3(a). In that, a decision was rendered by the Hon'ble First Bench of this Court, vide: Dindigul Anna District Tax Payers Sangam represented by its President M.V.R.A.Soundararajan vs. Government of Tamil Nadu represented by its Secretary to Government, Municipal Administration and Water Supply Department, Fort St.George, Chennai 9 and others reported in 1994 Writ Law Reporter 805. At that time, the enhancement and assessment of the property tax were made in respect of Municipalities under the Tamil Nadu District Municipalities Act, 1920 (in short, "the Act"). Schedule IV of the Act contains Rules 9 and 10. Rule 9 of Schedule IV of the Act as it stood then was as follows: " 9. When assessment books have been prepared for the first time and whenever a general revision of such books has been completed, the executive authority shall give public notice stating that revision petitions will be considered if they reach the municipal office within a period of sixty days from the date of such notice in the case of the Government, a railway administration or a company and of thirty days from the said date in other cases. The notice shall be affixed to the notice board of the municipal office and on the same day be published in the municipality by beat of drum. Provided that in every case where there is an enhancement in the assessment, the executive authority shall also cause intimation thereof to be given by a special notice to be served on the owner or occupier of the property concerned." https://hcservices.ecourts.gov.in/hcservices/ 3(b). Various issues raised by the petitioner Association was decided by the Division Bench and the Bench has raised the following points for consideration in the said writ petitions: " 9. In the light of the rival contentions of the learned counsel for the parties, the following points arise for consideration in these Writ Petitions: 1. Whether the revision of property tax made by the municipalities in these cases with effect from 1.10.1993 is a general revision or whether it is special revision in between two general revisions? 2. Whether Rule 9-A of the Rules and the guidelines issued by the Commissioner of Municipal Administration in his Circular dated 14.5.1993 are liable to be declared as illegal and unconstitutional and whether the Municipal authorities are correct in following the guidelines in determining the annual value of the buildings for the purpose of the revision of the property tax? 3. Whether the fair rent formula and the provisions of the Act have been followed by the Municipal Authorities in determining the annual value of the properties while revising property tax? 4. In case, it is found on point No.1 that the revision undertaken by the Municipal Authorities in 1993 is general revision, whether the Municipal authorities have followed the procedure prescribed under Rule-9, by giving special notices to the payers, stating the reasons for enhancement of property tax? 5. Whether the reason as to why and how the revision of assessment has taken place in a particular case should be set out in the special notices issued under Rule-9 and whether the special notices issued by the municipal authorities under Rule-9 to the members of the petitioner association in these cases are valid? 6.To what relief if any the petitioners are entitled to in these writ petitions?" 3(c). In respect of the first point about the nature of revision effected by the Municipalities from 1.10.1993, whether it was general or special, it was held that the same was only a general revision. 3(d). While dealing with the legality or otherwise of Rule 9-A, which provided for the method of determination of the annual value of the buildings which was challenged by the petitioner Sangam on the ground that while determining the value it must be done as per Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act and in accordance with Section 82 of https://hcservices.ecourts.gov.in/hcservices/ the Act. After elaborate discussion about the method of valuation explained as per the guidelines issued by the Government in Circular dated 14.05.1993 and comparing the same with that of the Rent Control Act, and after referring to the judgement of the Supreme Court in the case of Guntur Municipal Council vs. Rate-Payers' Association (AIR 1971 SC 353) the Bench has held that the guidelines are justified by declaring the method as legal in the following terms: " 16. On a careful examination of the guidelines dated 14.5.1993 issued by the Commissioner of Municipal Administration to the Municipal authorities, extracted above we are of the view that the said guidelines have been issued only in conformity with the provisions contained in S.82 of the Act and S.4 of the Tamil Nadu Buildings (Lease and Rent Control) Act. Further, there is nothing wrong in the municipal authorities fixing different basic value for different zones depending upon the importance of the locality, the market rate of the land and the other amenities available in that zone, for the purpose of the fixation of the annual rental value of the buildings provided they are in conformity with the fair rent formula and the provisions of the Act. We are inclined to hold that the said guidelines issued by the Government will certainly avoid arbitrariness and ensure uniformity and objectivity in the determination of the annual rental value of the buildings. On a consideration of the assessment worksheets produced by the Municipal authorities and the other materials available on record, we are clearly of the view that the annual value of the premises have been arrived at by the Municipal authorities in these cases on the basis of the principles laid down in S.4 of the Tamil Nadu Buildings (Lease and Rent Control) Act and S.82 of the Act. For all these reasons stated above, it has to be held that the guidelines dated 14.5.1993 issued by the Commissioner of Municipal Administration to the various municipal authorities are not liable to declared as illegal and unenforceable and that the municipal authorities are justified in following the said guidelines in determining the annual value of the buildings." 3(e). While deciding the last two points about Rule 9 in respect of giving a special notice to the tax payers, the Division Bench has quashed the special notices issued under Rule 9 by the municipal authorities on the ground that the reasons for enhancement of property tax are not set out in the special notices and ultimately, the Bench has passed the following order: https://hcservices.ecourts.gov.in/hcservices/ "23. Accordingly we direct the executive authorities of Municipalities in question to issue fresh special notices under Rule 9 to the assesses giving reasons for the enhancement of the property tax, for the year commencing from 1.10.1993. On receipt of such notices, it is open to the members of the petitioners Sangam to file their objections or apply for revision of the proposed enhancement. As and when revisions are filed by the owners or occupiers of properties within the prescribed time, the Municipal Authorities shall consider the same and pass appropriate orders on merits. With the above directions, these Writ Petitions are allowed. However, there will be no order as to costs." 4. The said order was pronounced by the Hon'ble First Bench of this Court on 21.09.1994. It was pursuant to the directions issued in para 23 of the said judgement, the respondent Municipality has issued notices to the owners, which are given under Rule 9 of Schedule IV of the Act. 5. The notices which were issued proposing to enhance the property tax from 01.10.1998 specifically state that the Municipality is proposing to increase the property tax for the reasons specified in the notice. It is also stated that if the owner concerned is not satisfied with the assessment, he can present a revision petition to the Executive Authority within 30/60 days from the date of service of notice. The relevant portion of the notice is as follows: "Take notice that in virtue of the power vested in the Executive Authority under rule 8 of Schedule IV to the Madras District Municipalities Act, 1920, the assessment in respect of your property Survey/Door No...... situated in ..... Street, this Municipality has until further notice been fixed at/increased for reasons specified to the amount shown below with effect from the half year commencing 1st October/1st April 19... In case you are dissatisfied with the assessment now fixed you can present a revision to the Executive Authority within thirty/sixty days from the date of service of this notice. If a complaint against or objection to the assessment is presented within the above mentioned period of thirty/sixty days, the assessment will be final." https://hcservices.ecourts.gov.in/hcservices/ 6. That was a sample of notice issued to one of the owners. As directed by the Division Bench in the above said judgement, the said notice is annexed with the particulars showing the method in arriving at such increased assessment, by dividing the properties by zone-wise into four zones viz., A, B, C, and D. That apart, the annexure also contains percentage of depreciation based on the rental assessment and also based on the nature of the building, whether the building is cement concrete or tiled or thatched house. It also contains the valuation made on the basis of age of the building by giving depreciation of 10% in respect of the buildings of 5 to 15 years; 15% in respect of buildings of 15 to 25 years; and 20% in respect of buildings beyond 25 years. Therefore, the notice contains the valuation based on detailed calculations. It is relevant to note that the Tamil Nadu District Municipalities Act, 1920 deals with levy of property tax, besides containing provisions relating to general revision of property tax in Sections 81 to 85. 7. The learned senior counsel for the petitioners would place specific reliance on Section 81(6) of the Act, which enables the authority to assess the property tax after inspecting, surveying and measuring the building and land and after giving notice to the owner or occupier before such inspection, and submit that in none of the cases in which revision of assessment was sought to be effected, especially after the judgement of the Division Bench as stated supra, the respondent Municipality or its officials have inspected the property or given notice to the owners or occupiers. Therefore, according to him, the notice issued by the respondent Municipality even after the Division Bench judgement without inspecting the premises after giving notice to the parties, is still invalid in law. For the better appreciation of the contention of the learned senior counsel for the petitioner, Section 81(6) of the Act is reproduced hereunder: "81. Levy of property tax:- 1 to 5. xxxxxx 6. For the purpose of assessment of property tax for any building or land in the Municipality the executive authority or any officer authorised by him in this behalf may enter, inspect, survey and measure any building or land, after giving due notice to the owner or occupier before such inspection and the owner or occupier shall be bound to furnish necessary information required for this purpose." 8. A reference to the annexure to the impugned notice issued by the Municipality in these cases, as I have discussed https://hcservices.ecourts.gov.in/hcservices/ above clearly shows that in fact the Municipality has determined the basic property tax as per Section 83 of the Act by considering various factors such as, where the property is situated, whether it is on arterial roads, bus-route roads leading to arterial roads or main roads; nature of building, whether it is a concrete, tiled or thatched house, etc. For better appreciation, Section 83 of the Act is extracted hereunder: " 83. Determination of basic property tax, additional basic property tax, etc. by Municipal Council.- (1) The basic property tax, the additional basic property tax and the concession, if any, with regard to the age, for every building or land shall be determined by the municipal council subject to the minimum and maximum rates prescribed by the State Government under Section 82. (2) The Municipal Council shall notify the rates determined under sub-section (1) and such other particulars in such manner as may be prescribed. (3) (i)(a) The basic property tax for every building shall relate to the carpet area of the building and its usage: Provided that the carpet area of any building shall not include the open veranda, open court- yard or any other open space which is not enclosed. (b) The classification of the building for the purpose of deciding the usage of any building shall be residential, commercial, industrial or any other classification as may be prescribed. (ii) (a) The additional basic property tax for every building shall relate to location and type of construction of the building. (b) For the purpose of this clause, the location of the building shall be classified as follows:- (A) arterial roads, bus-route roads leading to arterial roads and main roads; (B) bus-route roads other than those specified in item (A); (C) roads and streets in primarily residential colonies. (c) The type of construction of the building shall be classified into different groups as follows, namely:- (A) thatched and tiled roof; (B) reinforced concrete cement roof; (C) reinforced concrete cement roof with mosaic flooring partly or fully; https://hcservices.ecourts.gov.in/hcservices/ (D) granite, ceramic tiles and marble flooring and walls partly or fully; (iii) A concession on the basic property tax shall be allowed in calculating the property tax having regard to the age of the building, in such manner as may be prescribed." 9. On the other hand, it is the contention of Mr.V.Ragupathy, learned counsel appearing for the Municipality that even if the owners are aggrieved by the assessment of property tax made, Section 89 of the Act provides for appeal to the Taxation Appeals Committee. The said Section provides for filing an appeal by any person who is not satisfied with the order of the executive authority under the District Municipalities Act. In fact, as against the decision of the Taxation Appeals Committee, there is a further appeal to the District Court. He would also rely upon a Division Bench decision of this Court in M.L.Krishnamoorthy (died) and another vs. The Government of Tamil Nadu rep. By Secretary to Government, Municipal Administration and Water Supply Department, Fort St.George, Chennai 9 and another (2007(5)CTC 465), to substantiate his contention that in view of an effective alternative remedy being available, the writ petitions cannot be entertained. 10. In such circumstances, the reliance placed by the learned senior counsel for the petitioners on the judgment in The R.C.Diocese of Madurai through Procurator Rev.Fr.A.Vedamanickam,K.Pudur, Madurai vs. Srivilliputtur Municipality through its Commissioner, Srivilliputtur, Ramnad District (2002 (1) M.L.J.391), is not applicable to the facts of the present case for more than one reasons. First of all, that was a case wherein a civil suit was filed against the assessment and ultimately, on analysis of evidence, in the second appeal, this Court has held that on evidence there is nothing to show as to how the annual rental value was arrived at. It was also found on fact that the Municipality itself has submitted that it has not followed the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act, for fixing the annual rental value. But, finding that the Municipality even without inspection has assessed the property tax, this Court allowed the appeal, relying on the judgement of the Supreme Court in The Guntur Municipal Council vs. Guntur Town Rate Payers' Association (1971 (2) MLJ (SC) 7). On the facts and circumstances of the present case, the judgement is of no help to the petitioners. 11. In any event, as it is stated in the notice issued by the respondent Municipality, as per the directions of the Division Bench in 1994 WLR 805 (cited supra), if the owner or https://hcservices.ecourts.gov.in/hcservices/ occupier is not satisfied about the assessment now fixed, he can always present a revision petition to the executive authority within thirty/sixty days from the date of service of the said notice on the basis that the notice does not contains the details about the manner in which the assessment has been made, and there is no difficulty to come to the conclusion that the said notice has been issued as per the directions of the Division Bench of this Court in the writ petitions filed by the petitioner Association, stated supra. 12. The notice issued is only a proposal for assessment made on the basis of the materials which are available and the respondent has permitted the occupants as well as owners, including the petitioners to raise their objections, if any and thereafter only, final assessment order will be passed. As stated by the learned counsel for the respondent, after such assessment order is passed, the petitioners have got further right of appeal under Section 89 of the Act to the Taxation Appeals Committee and thereafter, a further appeal to the District Court. Therefore, it is not as if the petitioners have no remedy under law, especially when there is such a specific clause in the notice issued by the respondent Municipality itself. 13. In view of the same, I have no hesitation to come to the conclusion that the writ petitions are premature at this stage and therefore, liable to be dismissed. Accordingly, the writ petitions are dismissed with liberty to the petitioners in WP.No.3440 of 1999 and members of the petitioner Association in WP.No.54790 of 1999, who have been individually given such notices, to file their appropriate objections by way of revision to the executive authority. It is made clear that in the event of the petitioner as well as the members of the petitioner Association making such objections to the executive authority within a period of 60 days from the date of receipt of copy of order the executive authority of the Municipality shall, without raising the question about the limitation since the matter is pending in this court all these years, pass appropriate orders on merit and in accordance with law expeditiously. Needless to state that as against such order of executive authority in making assessment, it is always open to the petitioners and the members of the petitioner association to resort to the provisions of the Tamil Nadu District Municipalities Act in filing an appeal to the Taxation Appeals Committee. https://hcservices.ecourts.gov.in/hcservices/ The writ petitions are dismissed with the above directions. No costs. kh Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar To The Commissioner Dindigul Municipality Dindigul. + 1 cc to Mr. V. Raghupathi, Advocate SR No.14852 + 2 ccs to Mr. M. Sriram, Advocate SR No. 14435 Common Order in W.P.Nos.3440 & 5470/99 TEJ(CO) SR/24.3.2008 https://hcservices.ecourts.gov.in/hcservices/