The Court upheld the authority of the KMC to reassess the property's annual valuation and affirmed the lessees' liability to pay property tax as possessors on ownership basis.

JUDGMENT

Amrita Sinha, J. - The matter relates to 3117 sq.ft. in the third floor of the building situated at premises no. 20B, Abdul Hamid Street formerly known as British India Street, Kolkata 700069. The petitioners are the lessees of the aforesaid portion under the respondent no. 5, the lessor EIC Holding Private Limited, formerly known as, East India Commercial Company Limited, a Company registered under the Companies Act. The indenture of lease dated 3rd March, 1967 entered by and between the parties was registered before the Registrar of Assurances, Calcutta on 21st March, 1967. The lease is valid till 27th May, 2053.

2. In terms of the aforesaid indenture of lease the petitioners were required to pay lease rent at the rate of twelve paise per sq.ft. of the floor area per month to the lessor on ownership basis amounting to Rs. 360/- per month.

3. According to Clause 13 of the indenture of lease, in the event of future enhancement of rates and taxes by the Kolkata Municipal Corporation ('KMC' for short) over and above the existing rate, the same is to be borne exclusively by the lessor. The lessor was also exclusively liable to bear and pay all future statutory taxes, levies and charges which may be imposed in respect of the lease hold property. Apart from the above clause there is no other provision in the lease deed requiring the lessees to pay any additional municipal rates and taxes.

4. By a notice dated 21st March, 2003 addressed to the petitioners, the lessor, through the learned advocate, claimed enhancement of rent under the West Bengal Premises Tenancy Act, 1997 and reserved its right to claim commercial surcharge and municipal rates and taxes. The petitioners through their learned advocate submitted a reply to the aforesaid notice.

5. Hearing notice under Sections 184(3)/184(4) of the Kolkata Municipal Corporation Act, 1980 dated 12th June, 2013 was issued to the petitioner no. 4, Anita Saraf addressing her as 'person liable to pay tax' in respect of the third floor of the premises in question indicating that the premises have been assessed at an annual value of Rs. 42,750/- with effect from first quarter of 1967-68. Hearing notices were issued mentioning an assessee number, different from the previous assessee number which was allotted in respect of the said building. Six similar notices were issued whereby the annual valuation stood revised from separate quarters and the date for hearing was fixed on 15th July, 2013. The petitioner no. 1 filed objection on behalf of all the petitioners before the hearing officer on 12th August, 2013.

6. Letters of Intimation dated 5th December, 2017 were issued in favour of the petitioner no. 4 intimating that a sum of Rs. 38,57,060/- was due and payable on account of property tax of the leased property. The assessee was requested to pay the amount if the figures mentioned in the Letters of Intimation were correct, and if the amount mentioned was incorrect, then to contact the Assessor-Collector within fifteen days with copyof document in support of their claim, failing which, it would be presumed that the assessee does not have any objection to the statement of the outstanding dues.

7. According to the petitioners, the Letters of Intimation were nullity and void ab initio as the KMC did not have the jurisdiction to revise the annual valuation. It has been submitted that the act of the KMC was contrary to the decision passed by the Hon'ble Supreme Court in the matter of East India Company Private Limited vs. The Corporation of Calcutta reported in (1998) 4 SCC 368.

8. It is the further case of the petitioners that the premises in question had a single assessee number. It was not proper for KMC to allot fresh assessee number in respect of the portion of the premises leased out in favour of the petitioners. According to the petitioners, the act of the KMC in suo motu taking steps to allot a new and separate assessee number in favour of the portion possessed by the petitioner is ex facie