The court emphasized that the gifting of a portion of the property for Open Space Reservation did not alter the basis of assessment, and the rates applicable to the original road continued to apply.

JUDGMENT :

ANITA SUMANTH, J.

Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, to call for the records of the order dated 25.04.2018 in M.T.A. No. 2 of 2016 passed by the Principal City Civil Court, Chennai and quash the same and consequently direct the respondent confirm the Order of Taxations Appellate Tribunal, Corporation of Chennai in T.A.T. No. 18 of 2011 passed on 10.08.2012.

1. The petitioner is a company engaged in the development of a special type of building. It has constructed a composite structure that includes a mall, 10 lodging houses and theatre screens. The property is situated at the postal address, New No. 349-357, Periyar E.V.R. Road, Aminjikarai, Chennai-600029.

2. Prior to construction of the property and inauguration thereof in September 2009, a hotel by name, Hotel Arun, was being run in this above location, that was being assessed on the basis of rates applicable to Poonamallee High Road. Post development of the property in question, the petitioner had sought re-assessment of the property and had filed Form No. 6 under the Chennai City Municipal Corporation Act, 1919. The postal address continues to be the same i.e. on Poonamallee High Road and the petitioner's assessement continued to adopt the rates applicable to Poonamallee High Road.

3. Based upon the request of the petitioner dated 08.02.2011, a provisional assessment had come to be made. The petitioner was aggrieved by the provisional assessment and challenged the same including on the aspects of valuation and period for which tax was levied. The assessment was thus assailed before the Taxation Appeals Tribunal (TAT), Corporation of Chennai.

4. The Tribunal heard the petitioner on the various question raised, including, whether the property tax leviable was proper as regards the adoption of rental rates, that is, what would the more appropriate rate to be adopted, whether the rates applicable to Poonamallee High Road or Nelson Manickam Road. According to the petitioner, it was liable to be assessee on the rates applicable to Nelson Manickam Road whereas, according to the Corporation, the applicable rate was that applicable to Poonamallee High Road.

5. The arguments of the petitioner on the question of adoption of rental rate came to be accepted in the following manner:

“The appellant has not disputed the Commercial area and the manner of assessment; since admittedly entire area is covered by roof. The only contention raised by the appellant is that entire building faces Nelson Manickam Road. The portion of Property faces on the Poonamallee High way is converted into park. The respondent Corporation also has not denied that all the entries to the building faces on the Nelson Manickam Road. In that area rate per sq. ft. is Rs. 3.30. Hence the rental value is Rs. 2157312/-.”

6. Thus, the conclusion of the Tribunal was to the effect that the rates applicable to Nelson Manickam Road ought to be applied in the petitioner's case insofar as that portion of the property facing Poonamallee High Road, had been gifted to the Corporation and converted into a park by way of Open Space Reservation (OSR). The Tribunal also notes that the entries to the building were on Nelson Manickam Road and it was only the exit points that were on Poonamallee High Road.

7. As against the aforesaid order, the Corporation of Chennai had filed an appeal before the Principal Judge, City Civil Court, in respect of which impugned orders dated 25.04.2018 have come to be passed. On the question of whether the rents to be adopted would be the rates applicable to Poonamallee High Road or Nelson Manickam Road, the Principal Judge concludes that the conclusion of the Tribunal was liable to be reversed.

8. That apart, another issue that came to be considered was whether the quantification of the tax was itself correct, bearing in mind Government Order in G.O.Ms.No. 856, Rural Development under Local Administrative Departmen