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2014 Supreme(Del) 302
High Court of Delhi
THE HONOURABLE MR. JUSTICE VALMIKI J. MEHTA
M.C.D.
Versus
Ashfaq Ahmed & Another
RSA No. 120 of 2001 & CM No. 6310 of 2011
Decided On : 28-01-2014
Advocate Appeared:
For the Appellant:Amita Gupta, Advocate.
For the Respondents:Anju Lal, Advocate.
A licensee with rights similar to a lessee is liable to pay property tax under Section 120 of the DMC Act, and long occupation with entitlement to construction indicates sufficient rights for property tax assessment.
Headnote:
property tax - Delhi Municipal Corporation Act - Section 120
Fact of the Case:
The respondent-plaintiff sought injunction against the Municipal Corporation of Delhi from claiming house tax on the suit property. The respondent-plaintiff, a licensee of the property, argued that they were not liable to pay property tax under Section 120 of the DMC Act.
Finding of the Court:
The court found that the respondent-plaintiff, as a licensee, had sufficient interest and rights in the land to be liable for property tax under Section 120 of the DMC Act. The court held the respondent-plaintiff liable to pay property tax for the suit property and any building erected on the plot.
Issues: The main issue was whether the respondent-plaintiff, as a licensee, was exempt from paying property tax under Section 120 of the DMC Act.
Ratio Decidendi: The court relied on the judgment of the Supreme Court in Pradeep Oil Corporation Vs. Municipal Corporation of Delhi & Anr.2011(5) SCC 270, which established that a licensee with rights similar to a lessee is liable to pay property tax. The court also emphasized that long occupation with entitlement to construction is an indication of rights sufficient for property tax assessment under Section 120 of the DMC Act.
Final Decision: The appeal was allowed, and the respondent-plaintiff was held liable to pay property tax for the suit property and any building erected on the plot. The court directed the appellant to issue a fresh notice for property tax assessment, and the assessment proceedings would determine the amount the respondent-plaintiff is liable to pay.
Valmiki J. Mehta, J. (Oral)
1. In this regular second appeal, the following substantial question of law was framed on 23.4.2007:-
“1. Whether the suit filed by the respondent was maintainable before Civil Court in view of bar provided by Section 169 of the DMC Act read with Section 41(h) of the Specific Relief Act?”
2. In exercise of my powers under Section 100 (5) proviso CPC, in addition, I also frame the following substantial questions of law:-
2. Whether a licencee such as the respondent-plaintiff is not liable to pay property tax under Section 120 of the Delhi Municipal Corporation Act (in short ‘DMC Act’), 1957?
3. Whether the occupier of the land is not liable to pay property tax once occupation is found to be long, continuous and with an entitlement/right to stay in possession by virtue of a licence?
4. Whether the appellate court violated the law in not deciding the issue that property tax can be imposed independently on land or on building or both land and building taken together under Section 120 of the DMC Act?”
3. This regular second appeal impugns the judgment of the first appellate court dated 7.5.2001 by which the first appellate court accepted the appeal filed by the respondent-plaintiff and set aside the judgment of the trial court dated 6.5.2000. Trial Court had dismissed the suit of the respondent-plaintiff by which injunction was sought against the defendant/ Municipal Corporation of Delhi (appellant herein) from claiming house tax on the suit property bearing plot nos. A-98 and A-99, Jhandewalan, Junk Maket, New Delhi admeasuring 76 sq. yds.
4. The admitted facts are that the respondent-plaintiff does not dispute that it is a licensee of the suit property. Respondent-plaintiff had filed in the trial court the letter of DDA dated 21.7.1967 Ex.PW1/1, allowing the respondent-plaintiff to occupy the land as an alternative site for the land which was vacated by the respondent-plaintiff. I may state that governmental authorities in view of its policies to bring about proper zonal usage in the capital of the country, particularly for commercial or industrial activities, allots/gives licencee rights in alternative site to the person who has to be relocated. Respondent-plaintiff in addition to Ex.PW1/1, admitted the license fee receipts and which were proved and exhibited by the appellant/defendant as Ex.PW1/D-1 to D-3. These receipts show payment of ground rent by the respondent-plaintiff to DDA. Appellant-plaintiff issued a notice under Section 126 of the DMC Act dated 30.4.1974 to assess the property for the purpose of property tax and to which a reply was sent by the respondent-plaintiff objecting that he was not liable in view of Section 120 of the DMC Act. A second notice dated 27.3.1979 was issued to the respondent-plaintiff for assessing the ratable value of Rs.8,640/- w.e.f 1.4.1978 on the ground of erection of property on the suit land. The case of the respondent-plaintiff was that in spite of filing objections appellant did not decide the same but instead issued a demand for payment of tax dated 28.3.1989, and therefore, the subject suit for injunction came to be filed. The appellate court by the impugned judgment has proceeded on the basis that a licencee of a property is not an owner or a lessee and therefore no property tax can be charged from such a person as per Section 120 of the DMC Act.
5. Section 120 of the DMC Act reads as under:-
“120. Incidence of property tax.-(1)(a) The property tax on any land on building shall be primarily leviable upon the owner thereof.
(b) The liability of the several owners of any land or building constituting a single unit of assessment, which is, or purports to be, severally owned in parts including flats or rooms, for payment of property tax or any instalment thereof, payable during the period of such ownership, shall be joint and several:
Provided that the Commissioner may apportion the amount of property tax on such land or building among several co-owners:
Provide
