RAJIV SAHAI ENDLAW, J.

1. The writ petitions were filed seeking quashing of the orders of the assessment of property tax qua the respective properties of the petitioners including by impugning the Bye Laws, more specifically Bye Laws 2 (1) (b) (i) & 3 (1) (c) (iii) of the Delhi Municipal Corporation (Determination of Rateable Value) Bye Laws. 1994. Rule D.B. was issued on 24th April, 1997 and 8th September, 1999 respectively. On the applications of the petitioners for interim relief, the petitioners were directed to pay the entire amount of tax in terms of the assessment orders impugned in these petitions, with a further direction that in the event of the petitioners succeeding, the excess amount if any of the tax so paid by the petitioners, shall be refunded to the petitioners; in the order dated 8th September, 1999 in W.P.(C) No.4892/1999 it was further directed that such refund will be with interest @ 18% per annum.

2. On 7th January, 2010 the counsel for the petitioners stated that the challenge to the Bye Laws did not survive as the Bye Laws had been upheld and the only question remaining to be examined in the writ petitions was as to the validity of the assessment orders impugned in each of the petitions. The petitions were accordingly directed to be listed before the Single Judge.

3. However, the respondent MCD vide its Departmental Instruction No.18/2000 dated 31st March, 2000 rendered a clarification owing whereto the orders of assessment challenged in these petitions became liable for rectification and the tax already received by the respondent MCD in pursuance thereto rendered in excess.

4. The counsel for the petitioners on 29th April, 2010 drew attention to the proceedings in W.P.(C) No.1463/1996 before the Lok Adalat held on 12th November, 2005, when the Joint Assessor & Collector of the respondent MCD had admitted that the petitioners had deposited `2,40,000/- in excess with the respondent MCD and that the respondent MCD was willing for refund thereof but was not willing to pay any interest thereon; the petitioner expressed unwillingness to take refund without interest. Though there is no corresponding order in W.P.(C) No.4892/1999 but the counsels for the parties have made joint submissions in the two petitions and have stated that the only question remaining for

determination is as to whether the respondent MCD is liable to pay any interest on the excess tax received and if so at what rate.

5. The counsel for the petitioners has drawn attention to

(i) order dated 1st December, 2004 in W.P.(C) No.18441/2004 titled MCD v Ramesh Chand Aggarwal where the plea of the MCD that the excess tax received should be allowed to be adjusted in future tax dues was negatived and it was held that payment of tax being a condition precedent for the assessee to avail the right to appeal, if the assessee succeeds, excess tax has to be refunded and cannot be adjusted;

(ii) judgment dated 15th May, 2008 of the Division Bench in LPA No.1750/2005 titled MCD v. Ramesh Chand Aggarwal against the order aforesaid directing refund of excess tax with interest @15% per annum. The Division Bench held that there is no provision in the Delhi Municipal Corporation Act, 1957 permitting adjustment of excess tax towards future payment and the assessee is entitled to refund thereof. It was further held that MCD having enjoyed the amount of excess tax which it was not entitled to have, there is no reason why the assessee should be deprived of the benefit of interest which otherwise he was entitled to if he had deposited the said amount in a Bank or invested in the market. It was yet further observed that MCD itself during the relevant time used to charge interest@ 22% per annum for delayed payment of tax and hence the direction for refund with interest @15% per annum could not be said to be excessive or unreasonable. Reliance was placed on a Division Bench judgment in Ahmedabad Municipal Corporation v. Vireshchand Chandrakant Desai AIR 2002