Case: Municipal Corporation of Delhi Vs. Dharma Properties Pvt. Ltd

2. With regard to the property of the Respondent in Green Park Extension, New Delhi, the annual rateable value of the property was Rs. 16,300/-. On March 25, 1998, the Corporation issued a notice in terms of Section 126 of the Delhi Municipal Corporation Act, 1957 (hereinafter referred to as the Act) proposing to enhance the rateable value to Rs. 16,30,370/- w.e.f. April 1, 1997. This notice was dispatched under registered AD cover on March 27, 1998, which was received by the Respondent on April 4, 1998. The order finalising the assessment was made on March 11, 2001. As per the said order, rateable value was fixed at Rs. 11,35,260/- w.e.f. April 1, 1997; Rs. 15,66,720/- w.e.f. March 1, 1998 and Rs. 16,30,370/- w.e.f. January 1, 2001. The assessment order was challenged by the Respondent by filing an appeal Under Section 169 of the Act before the Additional District Judge, Delhi. The ground raised was that the notice dated March 25, 1998 was, in fact, received by it through registered post only on April 4, 1998 and, therefore, the same was time barred. Another ground taken was that the notice in question could not be used for finalising assessments of later and subsequent years in the absence of independent notices in that regard. The Additional District Judge, Delhi vide its judgment dated July 12, 2001 allowed the appeal, holding that the notice proposing enhancement in rateable value had to be served on or before March 31, 1998 and since it was served only on April 4, 1998, the same was time barred.Aggrieved thereupon, the Appellant filed Civil Writ Petition No. 672 of 2002 before the High Court of Delhi. The single Judge by order dated February 21, 2002 affirmed the view taken by the Additional District Judge and dismissed the writ petition. The said order of the single Judge was challenged by the Appellant herein before the Division Bench of the High Court in intra court appeal. By impugned order dated March 4, 2005, the High Court dismissed the appeal, thereby affirming the order of the Courts below.

Court's reasoning:
12. Insofar as first issue is concerned that need not detain us for long as we find that the treatment given thereto by the High Court is without any blemish.13. This Section prescribes the manner in which notices etc. are required to be served or issued. The High Court has rightly pointed out that four eventualities are contemplated in Section 444(1). However, the expression give does not find mention in any of those eventualities. Mandate of Section 126 is giving of a notice.14. From the aforesaid, it follows that notice as contemplated Under Section 126, was given only on April 4, 1998. Such a notice was clearly not valid for revising the assessment list for the year 1997-98. Reason is obvious and does not need elaboration. The entire basis of an assessment, and in the present case amendment to assessment list, is the issuance of notice. This factor assumes considerable significance because the rateable value is sought to be made effective from commencement of the year in which the notice is given. Even, if the notice is given on the last date of the concerned year, it nevertheless relates back and the consequence of a higher rateable value follows. However, if the notice is not so issued before the expiry of an assessment year, assessment list cannot be amended for that year. We, therefore, agree with the High Court that on the basis of such a notice, there could not have been assessment for the Assessment Year 1997-98.In case K. Narasimhiah, this Court has held that mere dispatch of notice would not amount to giving of notice. Giving would be complete only when it has been offered to the concerned person/addressee, even when it is not accepted by him on tendering. Likewise, in Banarsi Debis case, referring to Section 27 of the General Clauses Act, 1897 which deals with the expressions serve or give or sent, this Court held that all these expressions, namely, serve, give and sent are interchangeable terms and, therefore, notice would be treated to have been issued only when the entire process of sending the notice i.e. from dispatch till the service thereof, is complete.14. From the aforesaid, it follows that notice as contemplated Under Section 126, was given only on April 4, 1998. Such a notice was clearly not valid for revising the assessment list for the year 1997-98. Reason is obvious and does not need elaboration. The entire basis of an assessment, and in the present case amendment to assessment list, is the issuance of notice. This factor assumes considerable significance because the rateable value is sought to be made effective from commencement of the year in which the notice is given. Even, if the notice is given on the last date of the concerned year, it nevertheless relates back and the consequence of a higher rateable value follows. However, if the notice is not so issued before the expiry of an assessment year, assessment list cannot be amended for that year. We, therefore, agree with the High Court that on the basis of such a notice, there could not have been assessment for the Assessment Year 1997-98.16. Insofar as answer to this question given by the High Court is concerned, we find ourselves in disagreement therewith. It has to be kept in mind that notice in question which was dated March 25, 1998 sought to revise the assessment list w.e.f. April 1, 1997 i.e. from the Assessment Year 1997-98. However, it was received on April 4, 1998. Since the notice was received when the Assessment Year 1997-98 had come to an end and Assessment Year 1998-99 had commenced, we have held that assessment list could not be amended from the year 1997-98. It is to be kept in mind that for the aforesaid reason, notice itself does not invalidate. Therefore, if it was not permissible to amend the list w.e.f. April 1, 1997, at the same time it could always be done w.e.f. April 1, 1998 as the notice had been received in that Assessment Year, namely, on April 4, 1998.17. In this context, we have to keep in mind the scheme of assessment of buildings for the purposes of property tax as contained in the Act. Section 124 of the Act deals with assessment list i.e. where the assessment is to be made for the first time in respect of any land or building in Delhi. That provision lays down the procedure for making the assessment list and the manner in which rateable value of the property is to be fixed for the purpose of determining the property tax. What is important is that tax Under Section 124 of the Act can be demanded only from ensuing year in which the assessment has been authenticated or finalised. On the other hand, by virtue of Sub-section (4) of Section 126 of the Act, an amendment cannot be carried out after the expiry of three years from the end of the year in which the notice is given. However, if it is done within the period of three years then the increase proposed in the notice Under Section 126 of the Act automatically gets amended and Under Section 127, it is that rateable value which is adopted for the following year. When the proceedings Under Section 126(2) of the Act get finally determined, the assessment list gets amended with effect from the date as found in the assessment order.18. Once we keep in mind the aforesaid scheme of the Act, it is obvious that in the normal course, the amendment could have been applicable with effect from the date proposed in the notice. In the instant case, though the date given in the notice was April 1, 1997, it was not permissible for the Corporation to release the tax from April 1, 1997 as the notice was not received in that Assessment Year but was received only in the next Assessment Year i.e. 1998-99. Therefore, the assessment carried out, which was done within three years from the issuance of notice i.e. the time stipulated by Sub-section (4) of Section 126 of the Act, the assessment was otherwise valid and could be made applicable from April 1, 1998. This view of ours gets due support from classic judgment of this Court in the case of Shyam Kishores case. Following discussion, germane to the issue at hand, needs to be noted in this behalf:18. The scheme of Sections 124, 125 and 126 read with the bye-laws is that the assessment has to be duly authenticated by the Commissioner or an officer on his behalf but this list is subject to the other provisions of the Act including Section 126 and the bye-laws and once a notice has been issued Under Section 126(2) of the Act, the assessment list though authenticated Under Section 124(6) is subject to the result of that notice and the assessment list as a result of the investigation Under Section 126 automatically gets amended from the date of the order or (sic of) assessment passed as a result of notice Under Section 126(2) with effect from the date as found in the order of assessment and for the amount the rateable value is finally arrived at.xxx xxx xxx20. What do we understand when it is said that the Commissioner may adopt the rateable values contained in the list for any year for the year following? This really refers to adopting the rateable values given in the previous year in respect of land or building. Once a notice Under Section 126 proposing an increase has already been given in respect of the land or building by virtue of bye-law 9, the assessment list in the year in which notice is given automatically gets amended and Under Section 127 it is that rateable value which is adopted for the following year. When the proceedings Under Section 126(2) get finally determined, the assessment list gets amended with effect from the date as found in the assessment order and since the adoption of rateable value for any year was of the previous year in which the notice was given, as soon as, the assessment order for the previous year gets finalised, the demand is raised for the year in which the rateable value of the previous year was adopted for any year, on the basis of the finalisation of the assessment of the previous year.19. Therefore, merely because the notice dated March 25, 1998 was received on April 4, 1998 cannot be a ground to defeat the liability to pay the tax, so determined, as a result of revision in the assessment even for subsequent years i.e. w.e.f. April 1, 1998.20. Reliance by the High Court on explanation to Section 126(4) of the Act, having regard to our aforesaid discussion would be of no consequence. Similarly, Constitution Bench judgment in Onkarmal Nathmal Trust case is not applicable insofar as issue at hand is concerned as that case was concerned only with the period of limitation prescribed in a taxing statute.8. On the second issue, the High Court has rejected the contention of the Corporation about the notice being valid for a future period, other than the one for which it is given in view of the Explanation to Section 126(4). The High Court has held that it provides for only one situation where the time period can be stretched, viz. where the assessment is held up (after due service of notice) due to a stay order by a court of law. That covers only one eventuality, namely assessment proceedings. The fact that the other periods have not been mentioned leads to the inference that the delay in issuance of notice, or delays in other situations have been intentionally left out, and the consequence of such imperatively framed time period being breached, result in invalidity of the act.