Failure to provide mandatory notice in tax assessment renders the assessment order invalid, emphasizing the necessity of adhering to principles of natural justice.

JUDGMENT

Rajiv Shakdher, J. (ORAL):--This is a second appeal preferred against the judgement and order dated 21.05.2020, passed by the learned Additional District Judge [in short "ADJ"].

2. Via the judgement and order dated 21.05.2020, the learned ADJ partially reversed the order dated 31.07.2018, passed by the trial court.

3. The broad facts which are required to be noticed in this case are as follows:

3.1 The respondents before me are the original plaintiffs in the matter. The respondents filed a suit impugning the assessment order passed by the appellant/defendant dated 09.09.2003.

3.2 There were other reliefs also claimed in the suit. However, essentially, the grievance veered around two grounds insofar as the assessment order was concerned: first, that the appellant/defendant had applied the "purchase price" formula in fixing the rateable value, and second, that the aforementioned assessment order was issued without a mandatory notice being served as was the requirement under Section 126 (2) of the Delhi Municipal Corporation Act, 1957 [hereafter referred to as "1957 Act"]. In effect, the respondents/plaintiffs asserted that the principles of natural justice had not been followed.

3.3 It is relevant to note that the subject property qua which the assessment order was issued was purchased by the respondents/plaintiffs vide registered deed dated 31.07.2002 and at that point in time, property tax amounting to Rs. 3,136/- for the Assessment Years 2002-2003 and 2003- 2004 was paid by the then owner, one, Shri Anil Kumar Marwah. The receipts in respect of the same dated 29.07.2002 and 01.08.2003 were generated; an aspect which is not disputed by Mr. Sanjeev Sagar, who appears for the appellant/defendant.

3.4 Furthermore, it is also not disputed by Mr. Sagar, and something which emerges from the record as well is that the respondents/plaintiffs paid the property tax on the subject property up-until 2010. However, the respondents/plaintiffs sold the subject property further to Mr. Sahil Bhandari and his wife, Mrs. Aysha Malhotra. A registered sale deed, in that behalf, was executed between them on 22.06.2010. It is at this point that it came to light that against the subject property, there were arrears of property tax amounting to Rs. 22,745/- plus interest concerning Assessment Year 2003- 2004. Because Mr. Sahil Bhandari and Mrs. Aysha Malhotra were interested in having subject property mutated in their name, the outstanding demand, which is the subject matter of the assessment order dated 09.09.2003 became an impediment.

4. The respondents/plaintiffs made their first endeavour to correct the wrong by filing a suit, albeit in 2012. This suit was, however, withdrawn with liberty to file a fresh suit. The order in that regard was passed on 21.02.2012. Thereafter, in consonance with the liberty given to the respondents/plaintiffs, the instant suit for permanent and mandatory injunction was filed which, unfortunately for them, was also dismissed.

5. It may be relevant to note at this stage that the trial court had framed two issues in the suit. These being:

"(i) Whether the assessment by MCD in accordance with 1994 bye-laws applying the purchase price method in [the] assessment order dated 09.09.2003 is legal?

(ii) Whether plaintiffs are entitled to refund from MCD for any excess tax charged & paid?"

6. As indicated above, the trial court, while dismissing the suit, ruled against the