KMC's discretion under Section 197 to set off excess property tax payments is not absolute; it must refund unless a request for set-off is made, and such discretion must be exercised reasonably.

JUDGMENT :

Arijit Banerjee, J.

1. A judgment and order dated March 30, 2023, whereby the writ petition of the respondent no. 1 herein being W.P.O. 3374 of 2022, was disposed of by a learned Single Judge of this Court, is under challenge in this appeal.

2. The respondent/writ petitioner is the owner of premises no. 1, Rustamji Parsi Road, Kolkata-700002 under Ward No. 6 of Kolkata Municipal Corporation (in short ‘KMC’). The annual valuation of the said premises was assessed by the Hearing Officer at Rs. 8,82,600/- with effect from the 2nd quarter of 1997-98 and at Rs. 10,59,120/- with effect from the 2nd quarter of 2003-04.

3. Challenging such annual valuation, the writ petitioner preferred two appeals being MAA Nos. 1121/2012 and 1122/2012 before the Municipal Assessment Tribunal. The Tribunal by an order dated May 31, 2016, reduced the annual valuation of the said premises to Rs. 1.04,530/- with effect from the 2nd quarter of 1997-98 and to Rs. 1,21,110/- with effect from the 2nd quarter of 2003-04. As required under Section 189 of the Kolkata Municipal Corporation Act, 1980 (in short KMC Act), the writ petitioner had deposited the requisite sum of money with KMC as precondition for preferring the appeals before the Tribunal.

4. On account of reduction of the annual valuation of the said premises as aforesaid, it transpired that a sum of approximately Rs. 91.39 lakh was lying to the credit of the writ petitioner in the suspense account maintained by KMC, after adjustment of the bills raised by KMC. The writ petitioner made a representation dated February 5, 2020, to the Commissioner of KMC for necessary adjustment of pending bills against such outstanding credit amount and for refund of the balance amount.

5. Such representation of the writ petitioner not having been considered, it approached a learned Single Judge of this Court by filing W.P.O. 2267 of 2022. The said writ petition was disposed of by the learned Single Judge by a judgment and order dated June 20, 2022, with the following observations and directions:-

“The petitioner relies upon the provisions of Rule 25 of the Kolkata Municipal Corporation (Taxation) Rules, 1987. The petitioner also relies upon provisions of Section 197 of the Kolkata Municipal Corporation Act, 1980.

The petitioner submits that necessary directions may be passed upon the Commissioner of the Kolkata Municipal Corporation to take consequential steps pursuant to the judgment passed by the Municipal Assessment Tribunal.

Learned Advocate representing the Kolkata Municipal Corporation submits that the consequential steps are required to be taken by the Chief Manager, (Revenue) (North).

According to Rule 25(2) it is the duty of the Municipal Commissioner to give effect to the final order or to act according to the direction given by the Tribunal in its order, when the Tribunal varies or reverses the order appealed against.

Rule 25(3) mentions that the result of the appeal shall be noted in the Register of Appeals.

Section 197 of the K.M.C. Act, 1980 mentions that if after the disposal of the appeal under Section 189 , the valuation decided under Section 174 or Section 188 is altered, then, any sum paid or deposited under Section 189 in excess shall be refu