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High Court Of Calcutta
S. B. SINHA, DIBYENDU BHUSAN DUTTA
CALCUTTA MUNICIPAL CORPORATION - Appellant
Versus
ABDUL HALIM GAZNAVI MOLLA - Respondent
Appeal 581 Of 1997
Decided On : 04/02/1998
CALCUTTA MUNICIPAL CORPORATION ACT, 1980 - SECTION 174, 179, 180, 182, 182A, 184, 188, 189, 214, 216, 217, 220, 232, 573 - LIMITATION ACT, 1963 - SECTION 29 - CONSTITUTION OF INDIA - ARTICLE 226 - RECOVERY OF TAXES - LIMITATION - INTEREST AND PENALTY - ATTACHMENT OF PROPERTY - LIABILITY OF OCCUPIERS.
Fact of the Case:
The appellant, Calcutta Municipal Corporation, issued a distress warrant to recover consolidated rate, interest, and penalty from the writ petitioners, who were the owners of a building in Calcutta. The writ petitioners filed a writ petition challenging the distress warrant, arguing that the annual valuation of the building was revised without notice, that the bills were not served, and that the demand was barred by limitation. The appellant contended that the writ petitioners were liable for the dues, that the question of service of bills was a disputed question of fact, and that the limitation period did not apply to the recovery proceedings.
Finding of the Court:
The Court held that the annual valuation was determined under Section 174 of the Calcutta Municipal Corporation Act, 1980, and a periodic assessment was to be made under Section 179. Section 182A imposed a liability on the owners to pay consolidated rate on the basis of self-assessment. Section 214 provided for the modes of recovery, which included presentation of a bill as a sine qua non for imposing any interest or penalty. Section 217(3) and (4) provided for the accrual of interest and the imposition of penalty, respectively. The Court further held that the distress proceedings could only be initiated against the person liable to pay taxes under Section 193 of the Act, and that the occupiers were only liable for rent under Section 225. The Court also held that Section 573 of the Act, which provided for a limitation period for the recovery of certain dues, did not apply to the recovery of taxes, interest, or penalty under Chapter XVI of the Act. Finally, the Court held that the writ petitioners were liable to pay the balance amount of the consolidated rate, but that the demand for interest and penalty was vague and no distress warrant could have been issued for its realization.
Issues: 1. Whether the annual valuation of the building was revised without notice. 2. Whether the bills were served on the writ petitioners. 3. Whether the demand for consolidated rate, interest, and penalty was barred by limitation. 4. Whether the writ petitioners were liable for the dues. 5. Whether the question of service of bills was a disputed question of fact. 6. Whether the limitation period applied to the recovery proceedings.
Ratio Decidendi: 1. The Court held that the annual valuation was determined under Section 174 of the Calcutta Municipal Corporation Act, 1980, and a periodic assessment was to be made under Section 179. Section 182A imposed a liability on the owners to pay consolidated rate on the basis of self-assessment. 2. The Court held that Section 214 of the Act provided for the modes of recovery, which included presentation of a bill as a sine qua non for imposing any interest or penalty. 3. The Court held that Section 217(3) and (4) of the Act provided for the accrual of interest and the imposition of penalty, respectively. 4. The Court held that the distress proceedings could only be initiated against the person liable to pay taxes under Section 193 of the Act, and that the occupiers were only liable for rent under Section 225. 5. The Court held that Section 573 of the Act, which provided for a limitation period for the recovery of certain dues, did not apply to the recovery of taxes, interest, or penalty under Chapter XVI of the Act.
Final Decision: The Court allowed the writ petition in part and dismissed the appeal in part. The Court directed the writ petitioners to pay the balance amount of the consolidated rate within 4 weeks from the date of the order. The Court also held that the appellant was at liberty to calculate the amount of interest payable and initiate penalty proceedings, if necessary.
( 1 ) BOTH these appeals are directed against a judgment and order dated 19-9-97 passed by a learned single Judge of this Court in Writ petition No. 774/97 and Writ petition No. 633/97 whereby and whereunder the said learned Court allowed the writ applications filed by the first respondent in each appeal. Factsthe fact of the matter lies in a very narrow compass. A huge amount was said to be due by way of payment of consolidated rate, interest and penalty imposed thereon from Abdul Halim Gaznavi Mollah and others who are Writ petitioners of W. P. No. 774/97. The premises No. 8, Lenin Sarani, Calcutta 6 the annual valuation whereof was the subject-matter of the said writ application was owned by the writ petitioners. There had been a revision in the said valuation in the year 1972-73 as a result whereof the same was enhanced from Rs. 54,071/- to Rs. 1,05,193/- with effect from 4th quarter of 1972-73 without any notice. An objections was taken to the said decision consequent whereto the matter was referred to the special officer of the Corporation who by an order dated 23rd June, 1978 fixed the annual valuation of Rs. 91,708/- relying on or on the basis of alleged monthly rent of Rs. 10,200/ -. Subsequently allegedly other structures had been put in and the annual valuation of the building was revised from time to time. The petitioners were alleged served with the bills by the Corporation which had been denied and disputed by them. A demand for a sum of Rs. 25,000/- was made thereafter a distress warrant was issued. While taking recourse to the recovery proceedings locks were put in some shops belonging to the tenant's and three cars were attached. The writ petition was filed, inter alia, stating :-1. Keeping in view the fact that the annual valuation since 4th quarter of 1973-74 had been stayed by this Court, no bill could be raised and realised on that basis and as such the demand made and consequently other steps taken for recovery of the amount in questions was bad in law.
( 2 ) THE demand raised in 1986 has also been stayed by this Court by an ex parte order and, therefore, the said demand also could not be realised.
( 3 ) THE appellant-Corporation had no right to stop the business of the tenants in respect of a shop-room which is owned by a private company, and thus, a separate entity.
( 4 ) BILLS having not been served and demands having not been raised upon the owners of the property including the owners of the car, the Distress Warrant could not have been executed.
( 5 ) THE bills in question were barred under the law of limitation. The appellant-Corporation's case before the learned trial Judge was :-1. The writ petitioner being the landlords and they having let out a part of the premises to a company, it had no right to question the impugned action on the part of its officers. In any event, the said tenants having not approached to this Court, the writ petitioners had no locus standi to maintain the writ application. 2. The question of service of bills of demands involving disputed questions on fact; the writ proceeding could not have been taken recourse to for adjudication thereupon. 3. Since the building is the subject to first charge so far as the dues of Corporation are concerned, the appellant-Corporation was entitled to take recourse to the action taken. 4. The question of limitation in the recovery proceedings does not arise as the jural relationship between the parties continues. In any event, the limitation was saved by reason of the interim orders passed by this Court. So far as the second writ applications is concerned, the same was filed by one Sahir Haque Molla who was owner of a Maruti car which was seized. By an interim order the said Maruti car was directed to be released on furnishing security to the extent of Rs. 2 lakhs which direction of this Court has been complied with. Mr. Das Adhikari, the learned Counsel appearing on behalf of the appellant, inter alia, submitted t
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