Vipin Sanghi, J.(Oral)

1. The petitioner-Indian Oil Corporation Ltd.(IOCL) seeks the quashing of notice dated 20.06.1996 issued under Section 68(1) of the Cantonment Act, 1924, purporting to prepare the assessment list for the years 1995-98. The petitioner also assails the letter dated 02.08.1996 issued by the respondent calling upon the respondent to file further objections, if any. The petitioner also assails the communication dated 16.09.1996 issued by the respondent disclosing the basis for assessing the letting value of the property in question. The property tax bill No. 9382 issued for the years 01.04.2000 to 31.03.2001, with arrears for the year 1999-2000, for Rs.25,13,846/- has also been assailed by the petitioner. The petitioner seeks refund of an amount of Rs.1,47,552/- paid by the petitioner to the respondent towards property tax dues.

2. The case of the petitioner is that an agreement was entered into between the petitioner and the President of India on 05.11.1962 whereunder the petitioner agreed to construct fuel depots for Indian Air Force so as to provide storage and supply facility for aviation fuels. It was agreed that land for the construction of the depots shall be made available by the Government to the company on payment of 10% of the normal rates in force from time to time. According to the petitioner, in terms of the said agreement, the petitioner was allotted the site in question situated at Palam Air Force Station, Sadar Badar Road, Delhi Cantt, Delhi. According to the petitioner, the petitioner raised construction of the depot in the year 1962 itself. Subsequently, in the year 1988, a further agreement was executed between the parties on 13.12.1988. Clause 19 of this agreement provided that sales tax, local levies, octroi etc. will be paid by the Government at the rates applicable from time to time if so provided for in the appropriate DGS&D rates contract or posted Airfield price. This agreement also provided in Clause 29 that the initial period of the agreement shall be 20 years.

3. According to the petitioner, the respondent for the first time sought information under Section 103 of the Cantonment Act, 1924 vide a notice dated 16.02.1994. Prior to this notice, the respondent had not sought to tax the aforesaid facility of the petitioner. The petitioner communicated to the respondent that the cost of construction of the building at Palam Air Force Station was Rs. 169977.60/.

4. On 20.06.1996, the respondent issued the notice under Section 16(1) of the Cantonment Act, 1994 on the subject of assessment list for the year 1995-98. The respondent proposed the annual assessment of Palam Air Force Station, Sadar Bazar Road, Delhi Cantt, Delhi at Rs. 53,30,739/-. Objections were invited by the respondent to the said proposal. The petitioner responded on 26.07.1996. It was, inter alia, submitted that there was no perpetual lease and the period of lease has not been specified. Consequently no tax is leviable on the land provided by the Government. The petitioner also questioned the principle on the basis of which the assessment had been proposed by the respondent.

5. On 02.08.1996, the respondent responded to the petitioner's objections. It was stated that the formula adopted for calculation of price amendment is based on cost of land plus cost of construction which had been furnished by the petitioner on 16.02.1994 & 28.10.1994. The area of the depot was computed as 1,81,800 square feet = 16896 square metres. The cost of the land assumed by the respondent was Rs. 6,300/- per square metre, stated to be on the basis of the notified circle rates. A perusal of the statement of cost of land annexed to this letter would show that the land was treated as Category-I and the cost of land of Rs. 6,300/- per square metre was valid for the period from 01.04.1992 to 31.03.1993. The petitioner on 29.08.1996 disputed the assessment of cost of land at Rs. 8,87,04,000/- by calling the same as arbitrary. It was argued that the own