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2009 Supreme(Mad) 3542
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K. MOHAN RAM
P. Ramankutty Menon & Another
Versus
The Commissioner, Tiruvottiyur Municipality
Second Appeal Nos.626 & 449 of 2009 & M.P.Nos.1 & 1 of 2009
Decided On : 07-09-2009
For the Appellant:M.K. Kabir, Senior counsel, A. Dhiraviyanathan, Advocate.
For the Respondent: -
The assessment or demand made under the Act shall not be impeached unless the provisions of the Act have not been complied with.
Headnote:
Property Tax - Assessment of Property Tax - Tamil Nadu Buildings (Lease and Rent Control) Act - Section 4, Section 89 and Section 354(1) of the Tamil Nadu District Municipalities Act - The court discussed the enhancement of property tax, the procedure for arriving at annual value, and the availability of alternative remedy under the Act. The court held that the assessment or demand made under the Act shall not be impeached unless the provisions of the Act have not been complied with.
Fact of the Case:
The plaintiffs filed separate suits challenging the enhancement of property tax, contending that it was arbitrary and unjustified. The defendant argued that the property tax was enhanced as per the circular issued by the Commissioner of Municipal Administration.
Finding of the Court:
The court held that the suits were not maintainable as an effective alternative remedy was available under the Act to question the enhancement of property tax. The appellate court concurred with this reasoning and dismissed the appeals.
Issues: The issues included the entitlement of the plaintiff to a decree for declaration and permanent injunction, and the jurisdiction of the court to try the suit.
Ratio Decidendi: The court found that the suits challenging the assessment or enhancement of property taxes were not maintainable unless it was pleaded and established that the procedure contemplated in the Act had not been followed. The court also emphasized that no assessment or demand made under the Act shall be impeached unless the provisions of the Act have not been complied with.
Final Decision: The second appeals were dismissed, and the court found no reason to interfere with the concurrent findings of the lower courts.
The respective unsuccessful plaintiffs in O.S.Nos.137 and 41 of 2002 on the file of the District Munsif cum Judicial Magistrate, Tiruvottiyur, who also lost in A.S.Nos.53 and 51 of 2006 on the file of the Fast Track Court No.IV and Additional District Court, Ponneri, are the appellants in S.A.Nos.449 and 626 of 2009 respectively.
2. For the sake of convenience, the parties are referred to as per their ranking in the suit.
3. The plaintiff filed a suit in O.S.No.137 of 2002 on the file of the District Munsif cum Judicial Magistrate Court, Tiruvottiyur, for a decree declaring that the enhancement of property tax in pursuance of the special notice dated 30.09.1999 is arbitrary, illegal and unjustified and for a consequential permanent injunction restraining the defendants from taking any coercive steps to collect the enhanced tax. The plaintiff filed a suit in O.S.No.41 of 2002 on the file of the District Munsif cum Judicial Magistrate Court, Tiruvottiyur, for a decree declaring the demand of property taxes under demand notices dated 30.09.1999 bearing the Nos.25538, 25535, 25536, 36437, 25539, 25540 and 36396 with respect to the property described in the schedule are illegal and invalid and consequently grant a permanent injunction restraining the defendant from taking any coercive steps to collect the taxes levied under the said demand notices from the plaintiff.
4. The case of the plaintiff in O.S.No.137 of 2002 in brief is as follows:-
(i) The plaintiff therein is the owner of the building bearing Door Nos.88 and 89, T.H.Road, Kaladipet, Tiruvottiyur, and the same is assessed to property tax in the name of the plaintiff. Previously, the annual value of the suit property was fixed at Rs.30,000/-and the half yearly property tax was assessed at Rs.4,062/-and the plaintiff was paying the same promptly. According to the plaintiff, all of a sudden, a notice was served on the plaintiff by the defendant on 30.09.1999 by which the property tax was enhanced from Rs.4,062/- to Rs.8,124/- by arriving at the annual value of Rs.60,000/-. It is the further case of the plaintiff that the Government had issued a Government Order with a specific direction that the property tax should not be enhanced by 100% and under no circumstances it should exceed 30% of the existing tax, but the special notice did not mention any reason for enhancement of property tax. It is contended by the plaintiff that the annual value of the property should be arrived at only as per the formula contained under Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, but the special notice does not mention how the annual value was arrived at. It is the further case of the plaintiff that the defendant has not followed the procedure contemplated under the Act to arrive at the annual value and the enhancement of the property tax is unjustified. Admittedly, the plaintiff preferred an appeal dated 010. 1999 to the Commissioner and thereafter a revision dated 11.01.2000 to the Chairman, Tiruvottiyur Municipal Council, but, according to the plaintiff, there was no proper response. Since the property tax has been enhanced arbitrarily and unreasonable the same is not valid.
(ii) The suit was contested by the defendant by filing a written statement interalia contending as follows:-
The suit property was originally assessed as commercial building and the property tax was levied taking consideration of the market value of the land and the building prevalent then and following the procedure as laid down in Section 4 of the said Rent Control Act. The property tax was levied by the defendant before 010. 1998 as per Rule 14 (2) of the Taxation and Finance Rules Framed under the Tamil Nadu District Municipalities Act, 1920 (hereinafter referred to as "the Act"). The defendant enhanced the property tax as per the circular issued by the Commissioner of Municipal Administration in R.O.C.No.60572/98 R1 dated 08.01.1999. The plaintiff preferred an appeal dated 010. 1999
