Case: New Delhi Municipal Committee Vs. Life Insurance Corporation of India &amp; Others

2. For convenience, we will refer to the appellant as the Municipal Committee and to the respondent as the LIC. The LIC is the owner of a building known as Jeevan Vihar, Parliament Street, New Delhi. The Municipal Committee assessed the building to house-tax for the years 1963-64, 1964-65, 1965-66, 1966-67 and 1967-68 on the basis of actual rent received by the LIC. The LIC paid the tax as assessed for these years but in February 1968 it received five notices from the Municipal Committee stating, that in exercise of the powers conferred by Section 67 of the Punjab Municipal Act, 3 of 1911, it had decided by a resolution dated January 27, 1968 to amend the lists of assessment for the aforesaid five years by including therein the rent of a portion of the basement of the building which had escaped inclusion in the respective lists.      3. In June 1968, the LIC filed a writ petition in the Delhi High Court praying that the aforesaid resolutions of the Municipal Committee be quashed and that it be restrained from realising the additional tax which it proposed to levy under its resolution, on the ground that it had no jurisdiction under Section 67 of the act to amend the assessment lists of previous years. In view of the importance of the question, the writ petition was referred for decision to a full bench of the High Court.      4. The High Court has held that the assessment lists settled under Section 66 of the Act, together with the amendments if any, can only operate prospectively in and for the financial year next following and not for any previous year. In this view, the High Court allowed the writ petition except in regard to the amendment made in the list of 1967-68. The other writ petition too was allowed except for the year 1966-67.

Reasoning:
In the instant case, a part of the basement is alleged to have escaped assessment and if that be true, we are unable to understand that the assessee, the LIC here, could in face of Section 67 raise a contention that the assessment lists of past years, though faulty, cannot now be corrected. The Municipal Committee has to find funds, within the limits of its authority, for discharging its statutory obligations. But the argument is that if, through mistake or oversight, or even due to fraud, a property has escaped assessment, the mistake cannot be corrected retrospectively and the fraud has to be suffered except in regard to a correction limited to the ensuing year. This is denying to the expression "at any time" even its plain, grammatical meaning, quite apart from ignoring the context in which it occurs and the beneficent purpose of its incorporation. The expression must, in our opinion be given its full force and effect which requires the recognition of the Committees power to amend an assessment list even after the expiry of the year following the one in which the list was finalised by due authentication12. Section 66 and 67 have to be read as two integral parts of a scheme which the legislature has prescribed for preparation, assessment and amendment of assessment lists. After preparing under Section 63 an assessment list of all buildings and lands on which a tax is proposed to be imposed, the Committee has to invite, hear and enquire into objections to the proposed assessment. The revision of valuation and assessment is then to be completed under Section 66 by incorporating in the list such amendments as are considered necessary after deciding upon objections. The tax so assessed in the authenticated list becomes under Section 66(1) the tax for the year commencing on the first day of January or first day of April next ensuing as the Committee may determine. But the scheme contemplated by Section 66 is subject to an important condition mentioned in the section itself, namely, that the tax assessed under an authenticated list becomes the tax for the particular period, "subject to such amendments as may thereafter, be duly made". The word "thereafter" means "after the list is finalised on the completion of revision of valuation and assessment" and "duly made" evidently refers to the exercise of the amending power under Section 67. Thus, the two sections read together yield the result that the list can be amended at any time after its finalisation, subject of course to the prescription of reasonableness14. Section 68A, it is true, came into force in 1974 but by providing a striking contrast with Section 67, it facilitates a clearer understanding of this latter section. Section 68A provides briefly that if any property is erroneously valued or assessed through fraud, accident or mistake, the prescribed authority may amend the assessment already made and thereupon the amended assessment list shall be deemed to have been amended with effect from the first day of January, or April, or July, or October next following the month in which the order of amendment is passed. Section 68A does not deal with cases in which a property has escaped assessment altogether. It deals with that limited class of cases in which a property has been included in the assessment list but has been erroneously valued or assessed. In such cases of erroneous valuation or assessment, the amendments made in the assessment lists have no retrospective operation with the result that valuation or assessment already made, though erroneous remains valid for the past years. Amendments falling within Section 68A operate in the future and can be effective only from the dates mentioned in the section and not from any earlier point of time. A comparison of the provisions of Section 68A with those of Section 67 shows that the words of limitation contained in the former section as regards the time from which an amendment can come into force are conspicuously absent in the latter. Since the purpose of Section 67 is to bring to assessment properties which have altogether escaped assessment, the legislature evidently thought that amendments made under it should have a wider operation as contrasted with those made under Section 68A15. The Full Bench of the High Court, with respect, has missed the real point in the case. It says that since by Section 66, both the unamended and the amended lists operate with effect from the year commencing on the first day of January or April "next ensuing", "the list settled under Section 66 together with the amendments, if any, is to operate prospectively in and for the financial year next following and not for any previous year". That the amended list operates prospectively is correct because after all, the amendment is made to the original list and that list has prospective operation. As we have explained above, each assessment list is effective for the ensuing year, so that the list settled before March 31, operates for the year commencing with the ensuing April 1 and ending with March 31 following. But the list in force for such an ensuing year can under Section 67 be amended at any time with the result that when a list which was finalised say on March 25, 1970 is amended in August 1973, the amendment becomes effective for the year for which the list itself was effective, that is to say, for the year April 1, 1970 to March 31, 1971. The words "next ensuing" which occur in Section 66 cannot, as the High Court thinks, be co-related to the date of the amendment so as to mean "the year next ensuing after the year in which the amendment is made". This reasoning overlooks the true purpose and purport of the Committees power to amend a list at any time and robs that power of its meaningful content. We are clear that the Full Bench is wrong in its conclusion that the "expression at any time in Section 67.. . . . has reference only to the point of time when the list can be amended"16. We may in passing observe, though that aspect of the matter ceases to have importance in the view we are disposed to take, that the High Court further fell into an error in applying the ratio of its judgment to the facts before it. It held that an amendment can operate only on the year ensuing the one in which it is made, but in working out this principle, it unwittingly gave some retrospective effect to the impugned amendments. It has declared that the amendment made in January 1967 will be effective for the year 1966-67 and that made in February 1968 will be effective for the year 1967-68. Consistently with its reasoning, it should have held that the two amendments would be effective for the years 1967-68 and 1968-69 respectively, each year commencing on April 1 and ending with March 31, But that, as we said, is not relevant17. The decision of this Court in Punjab National Bank on which for the LIC relies does not support the view contended for by him. In that case a building belonging to the Punjab National Bank was not entered in the assessment list which was to be operative for the period April 1, 1958 to March 31, 1959. That list was amended on December 21, 1959, The only point that arose from consideration in the appeal, as is expressly mentioned by Mathew, J., in his judgment, was whether the Municipal Committee was entitled to include the building in the assessment list which was operative from April 1, 1959 to March 31, 1960 by amending it in December 1959. Repelling the Banks contention that the list once finalised could not be amended thereafter, the Court held that the amendment was effective for the year during which the original list was operative18. Finally, we are unable to accept the contention of the learned Counsel for the LIC that the question which arises for our consideration in these appeals is concluded by a decision of this Court in Municipal Corporation of City of Hubli v. Subha Rao Hanumantharao Prayag [(1976) 3 SCR 883   : (1976) 4 SCC 830.]  . That is a decision on the Bombay Municipal Boroughs act, 18 of 1925, and as the judgment of Bhagwati, J., in that very case says, in interpreting a particular provision of a statute the court must consider other parts of that statute and read the statute as a whole. We have discussed the entire scheme of the Punjab Municipal Act and have pointed out how on a consideration of its various provisions it is not possible to sustain the view taken by the High Court19. In Municipal Corporation of City of Hubli, on which the respondent strongly relies the Corporation followed the due procedure for the assessment year 1951-52 except that the list of assessment containing the revised assessment was authenticated on July 24, 1952 which was after the expiry of the official year on March 31, 1952. The Corporation having sought to levy property tax in accordance with the revised rates for the year 1951-52, a suit was filed by the assessees for a declaration that it was not entitled to recover the tax at the revised rates for that year. The suit was decreed by the trial Court and the High Court. In appeal to this Court, two contentions were raised on behalf of the Municipal Corporation, namely, that (1) the authentication of the assessment list in order to be valid and effective need not be made before the expiry of the official year to which the assessment list relates and (2) the suit was barred under Section 206A of the Act. We are not concerned with the second question nor indeed with the first; but in order to understand the respondents argument it is necessary to state that this Court held on the first question that an assessment list intended for a particular year must be authenticated before the expiry of the previous official year and that if it is not so authenticated it will not give rise to any liability in the rate-payers to pay the tax for the year for which it is intended to be effective. This pronouncement does not touch the points in controversy before us20. Nor indeed can any assistance be derived from the interpretation put on Section 82(3) of the Bombay Act in that case. That provision contemplates, inter alia, amendments or alterations in two cases : (i) Those in regard to buildings constructed, altered, added to or reconstructed, and (ii) those in regard to other cases. As regards the first category. Section 82(3) of the Bombay Municipal Boroughs Act provides that the amendment or alteration shall have the same effect as if it had been made in the case of a building constructed, altered, added to or reconstructed on the day on which such construction, alteration, addition or reconstruction was completed or on the day on which the new construction, alteration, addition or reconstruction was first occupied, whichever first occurs. As regards the second category, namely the "other cases", the alteration takes effect as if it had been made "on the earliest day in the current official year on which the circumstances justifying the entry or alteration existed". The discussion of this sub-section at page 890 of the report is in respect of the second category of cases in regard to which there is an express statutory provision that the amendment takes effect only from the earliest day of the official year current when the amendment is made. We do not think that there is any parallel between Section 82(3) of the Bombay Act and Section 67 of the Punjab Municipal Act.