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HIGH COURT OF CALCUTTA
Altamas Kabir, J.
Shree Mahamaya Mining & Industries (P) Ltd. & Ors.
Versus
The Calcutta Municipal Corporation & Ors.
Matter No. 3493 of 1994
Decided On : March 20, 1995
MUNICIPAL CORPORATION - ASSESSMENT OF ANNUAL VALUE OF LANDS AND BUILDINGS - REVISION - CHANGE OF OWNERSHIP - WHETHER CAN BE THE GROUND FOR REVISION - CALCUTTA MUNICIPAL CORPORATION ACT, 1980, S. 179, 180(2)(I), 184(4) - CONSTITUTION OF INDIA, ENTRIES 49 OF LIST II, 86 OF LIST I OF THE SEVENTH SCHEDULE.
Fact of the Case:
The petitioners, who had acquired premises by purchase, challenged the vires of clause (i) of sub-section (2) of section 180 of the Calcutta Municipal Corporation Act, 1980, on the ground that it provided for revision of the annual valuation of lands and buildings merely on account of change of ownership, without any other taxable event. They contended that such change of ownership could at best be the reason for the taxable events referred to in clauses (ii) to (viii) of the said sub-section, but was not a taxable event in itself. The Corporation contended that the provisions of section 180(2)(i) were valid and could be invoked in cases of change of ownership, as it was a recognized method of determining the annual valuation of a land or building.
Finding of the Court:
The Court held that the provisions of clause (i) of sub-section (2) of section 180 of the Calcutta Municipal Corporation Act, 1980, were ultra vires the Constitution and were struck down. The Court held that change of ownership could at best give rise to the taxable events referred to in clauses (ii) to (viii) of sub-section (2) of section 180 of the said Act, and that mere change of ownership was not sufficient for invocation either of the provisions of sub-section (2) or sub-section (4A) of section 174 of the said Act.
Issues: Whether the provisions of clause (i) of sub-section (2) of section 180 of the Calcutta Municipal Corporation Act, 1980, were ultra vires the Constitution.
Ratio Decidendi: The Court held that the provisions of clause (i) of sub-section (2) of section 180 of the Calcutta Municipal Corporation Act, 1980, were ultra vires the Constitution on the following grounds: * Change of ownership cannot by itself be a ground for intermediate revision of the annual valuation. * The price mentioned in the transfer deed does not reflect the market value of the property conveyed and has no direct nexus with the determination of the annual valuation consequent upon change of ownership alone. * The intention to use the premises acquired by purchase for commercial purposes is not sufficient to attract the provisions of sub-sections (2) and (4A) of section 180 of the Act, without any actual change of user thereof.
Final Decision: The Court allowed the writ applications and quashed the notices issued to the petitioners under section 184(4) of the Calcutta Municipal Corporation Act, 1980. The Court, however, clarified that this would not prevent the Corporation from invoking any of the relevant provisions contained in clauses (ii) to (viii) of section 180 of the said Act, if there had either been a change of user or change in the rents payable in respect of the properties in question or if the change of ownership had resulted in a splitting up thereof.
Altamas Kabir, J.
A point of considerable interest has been raised in these four writ applications which have been taken up for disposal together as they involve common questions of law and the facts are also similar in nature.
2. In all these four cases, the petitioners acquired the respective premises owned by them by purchase at different points of time and a common challenge has been thrown to the vires of clause (i) of sub-so (2) of s. 180 of the Calcutta Municipal Corporation Act, 1980, hereinafter referred to as "the 1980 Act".
3. In the case of Shree Mahamaya Mining and Industries Pvt. Ltd., the petitioner company appears to have purchased premises No. 28, Hindustan Road, Calcutta, on 21st September, 1991, at a consideration of Rs. 58, 00,000/-. According to the petitioners, at the time of purchase of the said property there was an existing structure with foundation and construction upto plinth level with R.C.C. pillars upto the ground floor roof level. At the time of purchase, the existing Annual Valuation of the premises was Rs. 7,030/-, which was in effect from the third quarter of 1983-84.
4. On 11th August, 1983, the petitioners were served with a notice by the Calcutta Municipal Corporation, hereinafter referred to as "the Corporation", under sub-so (4) of s. 184 of the 1980 Act informing them that the Annual Valuation of the premises had been revised and re-assessed at Rs. 4,06,000/- with effect from the third' quarter of 1991-92, inter alia, on account of change of ownership, under S. 180(2)(i) read with S. 180(3) of the 1980 Act.
5. The petitioners appear to have filed an objection on 16th August, 1993, against such revaluation, which was heard and disposed of by the Assistant Assessor XVIV on 19th August, 1993, by confirming the valuation of Rs. 4,06,000/-.
6. In the case of Mis. Avenue Properties (P) Ltd., the petitioner company appears to have purchased premises No. 11/1, Judges' Court Road, Calcutta, on 16th July, 1991. The premises was in occupation of various tenants who continued to be in occupation of their respective portions even after such purchase.
7. On 29th November, 1992, a special notice under S. 184(3) of the 1980 Act was issued by the Corporation to the Vendor of the petitioner Company, wherein the proposed Annual Valuation was assessed at Rs.97,2001- from the first quarter of 1989-90. The petitioners filed an objection to the said proposed valuation on 1st December, 1992.
8. Thereafter, on 17th March, 1993, the petitioners were served with another Special notice under S. 184(4) of the 1980 Act informing them that the premises had been revalued and the Annual Valuation had been re-assessed at Rs. 8,64,000/- from the third quarter of 1991-92 inter alia on the basis of change of ownership under S. 180(2)(ii) read with S. 180(3) of the 1980 Act.
9. An objection filed by the petitioners against such re-valuation was heard and disposed of by the Assistant Assessor, Division XXII, and the valuation was reduced to Rs. 5,75,640/- from the third quarter of 1991-92.
10. An appeal preferred by the petitioners against such revaluation, being M.A.A. No. 159 of 1993, is still pending before the Municipal Assessment Tribunal.
11. M/s. G.R. Hotel (P) Ltd. claims to have purchased premises No.8B, Royd Street, Calcutta, in 1992 with the intention of running a hotel therein. According to the petitioner Company the said premises has been left in the said condition as it was in prior to purchase and the nature and character and user of the said property has not been changed in any manner whatsoever.
12. The name of the petitioner Company was duly mutated in the records of the Calcutta Municipal Corporation and the petitioner Company was paying the rates and taxes as fixed previously in respect of the said property.
13. On 11th June, 1993, the petitioner Company was served with a notice under s. 184(4) of the 1980 Act whereby it was informed that the Annual Valuation of the property had been re-assessed as Rs. 4.42,8
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