A demand notice for property tax must provide 15 days' time to the assessee to show cause before action is taken against them.

Headnote:
PROPERTY TAX - DEMAND NOTICE - [KEYWORD] - Interpretation of Section 116A of the Tamil Nadu Urban Local Bodies Act, 1998 - Demand notice issued without providing 15 days' time to show cause - Notice held to be invalid.
Fact of the Case:

The petitioner, a hotel owner, challenged a demand notice for property tax issued by the Greater Chennai Corporation. The demand notice was issued based on an order of the City Civil Court, which had increased the half-yearly property tax payable by the petitioner. The petitioner contended that the demand notice was invalid as it did not provide 15 days' time to show cause, as required by Section 116A of the Tamil Nadu Urban Local Bodies Act, 1998.
Finding of the Court:

The court held that the demand notice was invalid as it did not provide 15 days' time to the petitioner to show cause, as required by Section 116A of the Tamil Nadu Urban Local Bodies Act, 1998. The court also held that the restaurant operated by the petitioner had been sealed illegally, as the license to operate the restaurant was in force.
Issues: Whether the demand notice was valid, Whether the restaurant was sealed illegally.
Ratio Decidendi: Section 116A of the Tamil Nadu Urban Local Bodies Act, 1998 requires that a property tax assessee be given 15 days' time to show cause before action is taken against them. The demand notice in this case did not provide 15 days' time to show cause, and was therefore invalid.
Final Decision: The court quashed the demand notice and directed the Greater Chennai Corporation to de-seal the restaurant.

ORDER

The petitioner assails a demand notice dated 17.02.2024 and a consequential notice dated 12.02.2024 which was affixed at the premises of the second petitioner. The half yearly property tax in respect of the Pride Hotel was fixed by the Taxation Appeals Tribunal in a sum of Rs.11,63,702/- with effect from the second half of 2006-07. The said order was carried in appeal by the Greater Chennai Corporation before the Principal Judge, City Civil Court, Chennai.

2. By order dated 08.11.2023, the half yearly property tax was fixed in a sum of Rs.38,91,504/-. The impugned demand invoices were issued purportedly on the basis of the said order.

3. Learned senior counsel for the petitioner submits that the impugned demand notices are not in consonance with the Tamil Nadu Urban Local Bodies Act, 1998. With reference to notice dated 17.02.2024, he points out that the notice period was only three days. Even as regards notice dated 22.02.2024, he submits that it was not issued by the Commissioner and that Section 116A of the above mentioned enactment stipulates a minimum period of 15 days for the petitioner to show cause. He further submits that the restaurant operated by the petitioner has been placed under seal and that the petitioners are unable to operate the said restaurant.

4. Mr.P.Prithvi Chopda, learned standing counsel for the respondents, submits that the demand notices were issued by computing property tax dues in accordance with order dated

https://www.mhc.tn.go0v.8in./j1ud1is.2023 in M.T.A.No.19 of 2018. He further submits that the

petitioners have 15 days' time to show cause against the notice dated 22.02.2024. He points out that such 15 day period would expire on 08.03.2024 and that no action would be taken until then. With regard to the sealing of the restaurant, learned counsel submits that the licence was not renewed. This contention is countered by learned senior counsel by placing on record the renewal of licence on

30.03.2023.

5. Since Section 116 A of the Tamil Nadu Urban Local Bodies Act, 1998 mandates that 15 days' time should be provided to the property tax assessee to respond to the notice before action is taken, there is no immediate threat to the petitioners. In light of the order dated 08.11.2023 in M.T.A.No.19 of 2018, the recourse available to the petitioners would be to challange such order. The immediate concern is with regard to the restaurant. The renewal dated 30.03.2023 extends the licence up to 31.03.2024. Therefore, the licence to operate the restaurant is in force as on date.

6. In these circumstances, this writ petition is disposed of with

https://www.mhc.tn.gotvh.ine/ju fdoisllowing directions:

(i) The respondents are directed to de-seal the restaurant forthwith.

(ii) It is open to the petitioners to challenge the order dated 08.11.2023 in accordance with law.

(iii) It is also open to the respondents to take action in accordance with law if licence conditions are infringed.

Consequently, connected miscellaneous petitions are closed. No costs.

27.02.2024 Index : Yes / No Internet : Yes / No Neutral Citation : Yes / No kal To

1. The Greater Chennai Corporation, Rep. by its Commissioner, Rippon Buildings, Chennai-600 003.

2. The Additional Commissioner (R & F)

Greater Chennai Corporation, Rippon Buildings, Chennai-600 003.

SENTHILKUMAR RAMAMOORTHY J.

kal &

WMP Nos.5430, 5432, 5434, 5437 & 5438 of 2024

27.02.2024 and W.M.P.Nos.5438, 5434, 5337, 5430 & 5432 of 2024 SENTHILKUMAR RAMAMOORTHY,J The matter is listed upon being mentioned. Learned counsel for the petitioner points out that there are two clerical or typographical errors in the order dated 27.02.2024. She points out that the third respondent's name has not been shown in the cause title. She also points out that the date mentioned in line 2 of paragraph 1 should read as 22.02.2024 instead of 12.02.2024. Both these submissions are liable to be accepted. Therefore, the Registry is directed to re-issue the order after carrying out the corrections indicated above.

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