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2024 Supreme(AP) 228
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
Subba Reddy Satti, J.
G.V.M.Krishna Arya (Died) & Ors. - Appellants
Versus
The Commissioner, Municipal Corporation of Vijayawada - Respondent
Writ Petition No.14571 of 2002
Decided On : 16-04-2024
Sri V.Subrahmanyam, Counsel for the Petitioner; Sri M.Manohar Reddy, Counsel for Respondent.
IMPORTANT POINT
The main legal point established in the judgment is the interpretation of the provisions of the Andhra Pradesh Municipalities Act related to distress notices and the applicability of the Limitation Act, 1963 in determining the validity and limitations on recovery of taxes.
Headnote:
DISTRESS NOTICE - Property Tax - Section 266(1), Section 278 - The court discussed the legal framework related to distress notices, recovery of taxes, and the limitations on such recovery. It highlighted the interpretation of Section 278 and the applicability of the Limitation Act, 1963 in distraint proceedings.
Fact of the Case:
The writ petition was filed to challenge a demand notice for property tax issued by the respondent, contending it to be illegal and arbitrary. The petitioner, who was the property owner, received the demand notice after 13 years, demanding a substantial amount within 15 days.
Finding of the Court:
The court analyzed the nature of the notice, the provisions of the Andhra Pradesh Municipalities Act, and the applicability of previous judgments related to distress notices. It found that the notice in question was not a distress notice and therefore dismissed the writ petition.
Issues: The key issues considered by the court were whether the notice was a demand notice or a distress notice, and whether the respondent was entitled to recover arrears of tax after the expiry of three years when the tax becomes due.
Ratio Decidendi: The court relied on the interpretation of Section 278 of the Andhra Pradesh Municipalities Act and the applicability of the Limitation Act, 1963 in determining the validity of the demand notice and the limitations on recovery of taxes.
Final Decision: The court dismissed the writ petition, stating that the notice in question was not a distress notice and therefore the previous judgments related to distress notices did not apply.
ORDER
Subba Reddy Satti, J. - The Writ Petition is filed to declare the demand notice dated 10.07.2022 vide Bill No.256 for assessment No.19899 issued by the respondent as illegal and arbitrary and violative of law laid down in V.K. Roy Vs. Commissioner, Municipal Corporation of Hyderabad and another, 2002 (4) ALD 711 (DB) and consequently direct the respondent not to take any coercive steps.
2. Pending the writ petition, sole petitioner died, and his legal representatives were brought on record, as petitioners 2 and 3, as per order in I.A.No.4 of 2015 dated 05.03.2024.
3. In the affidavit, it was contended, inter alia, that 1st petitioner is the owner of property bearing Door No.27-14-38, Ward No.23, Rajagopalachary Street, Vijayawada. Respondent-authority issued impugned demand notice after 13 years to pay huge amount of Rs.1,48,567.25p within 15 days. In the demand notice, petitioner is directed to pay the amount failing which, articles of the petitioner will be auctioned and essential services like water and drainage connections will be disconnected. Petitioner also reserved the right to challenge fixation of half yearly property tax.
4. Counter affidavit was filed on behalf of respondent. It was contended, inter alia, that demand notices are being served to petitioner for several half years. Dues were upheld owing to filing of suits from time to time. Tax on the building was enhanced from the existing tax of Rs.1,193.25 to Rs.7,010.50 with effect from 01.04.1986. The petitioner filed revision and the was registered as S.No.77/86 and the revision was disposed of reducing the tax for Rs.5,747.32p. Petitioner filed CMA in Subordinate Judge, Vijayawada and the same was disposed of on 02.12.1991 reducing the M.R.V with N.R. Rs.2,450/- + Rs.400/-. Petitioner filed CMSA No.43632 of 1992. Hence, claiming arrears after lapse of 13 years does not arise. The bill contains the conditions that are commonly mentioned in all demand notices. If the corporation intends to disconnect the essential service, it should give another disconnection notice. No distraint notice was served on the petitioner. The conditions of distraint were commonly noted in all bills and the bill was served on the petitioner in routine and eventually, prayed to dismiss the writ petition.
5. On 09.08.2002, while ordering Notice Before Admission, the Court granted interim stay of recovery of tax, on condition of petitioner depositing one fourth of the demand, within a period of six weeks. Learned counsel for petitioner would submit that said condition was complied with.
6. When this Court posed a question about the result of CMSA, pleaded in the counter affidavit, both counsels pleaded ignorance.
7. Heard Sri V.Subrahmanyam, learned counsel for petitioner and Sri G.Naresh Kumar, learned counsel appearing for respondent-Corporation.
8. Learned counsel for petitioner reiterated the contentions as per averments in the affidavit. Learned standing counsel for respondent reiterated the contentions as per the averments in the counter affidavit.
9. Now, the points for consideration are:
1) Whether the notice impugned in the writ petition, is a notice or demand notice or distraint notice?
2) Whether the respondent-Corporation is entitled to recover the arrears of tax by way of distress after expiry of three years when the tax becomes due?
10. Answer to the 2nd point is no longer res integra. In V.K.Roy's case, the Division Bench of the composite High Court dealt with identical issue and held thus:
14. Thus, the emerging scenario from the above discussion of the Division Bench of this Court, it is clear that though distress proceedings are provided in the Act, but recourse to such proceedings would not be initiated as a matter of routine but can only be resorted to for recovery of taxes for the preceding three years from the date when the tax becomes due and in cases where the period is more than three years, proceedings for recovery of such tax can be initiated in terms of Section 278 of
