J C Mills Ltd
v.
Municipal Corporation Gwalior
(High Court Of Madhya Pradesh)
No. | 11-01-1985
(2.) ACCORDING to the petitioner, the petitioner is a company under the companies Act and is engaged in the business of manufacture of yarn and textiles. It has also constructed quarters and houses to accommodate some of the employees working in it and the quarters and bungalows, are situate in Gwalior. Part of these buildings including the factory are situated on the north of the road leading from Hazira Chouraha to Gola Ka Mandir and the rest are on the south of the aforesaid road. According to the petitioner, the company commenced production in the year 1 923 and the quarters and bungalows were constructed since 1956.
(3.) IT is further alleged that on 27-6-1964 the President gave assent to the M. P. Nagariya Stbawar Sampatti Kar Adhiniyam, 1914 and section 4 of this Adhiniyam made a provision for levying of tax on immovable property. The said section provided for imposition of property tax on lands and buildings situate in an urban area and the "urban area" has been defined in the under section 2 (b) as an area comprised within the corporation limits, Gwalior. It is alleged that the competent authority under the aforesaid Act purported to complete the assessment proceedings under that Act and the petitioner company raised a dispute that all the lands and buildings belonging to the petitioner company were beyond the area comprised in the Municipal Corporation, Gwalior and hence not subject to property tax. This dispute ultimately was decided by the Second additional District Judge, Gwalior, in Civil Original Suit No. 4-A of 1975 by his judgment dated 31-3-1977 and in this judgment the Court held that all buildings and lands belonging to the petitioner company which were situate to the north or the road running from Hazira Chouraha to Gola Ka Mandir fall beyond the area of Municipal Corporation, Gwalior, and were not liable to imposition of property tax and hence the assessment proceedings in relation to these properties are without jurisdiction. It is alleged that in consequence of this decision the Property Tax Officer assessed and imposed property tax on lands and buildings belonging to the petitioner company and situate to the south of the road leading from Hazira chouraha to Gola Ka Mandir at Rs. 2372. 16 per year. This assessment, according to the petitioner, was applicable to the petitioner from 1964-65 to 1975-76, and in 1976 by Act No. 50 of 1976 the provisions of the M. P. Municipal Corporation Act were amended by Municipal Laws (Amendment) Act, 1976, and this amendment came into force on 1-4-1976 and it is alleged that because of this amendment the property tax now became leviable by the Municipal Corporation. It is alleged that the Municipal corporation, Gwalior, is also entitled to assess, impose or levy tax only in respect of properties situated within the area comprised in the Municipal corporation limits and those limits continued as they existed on 31-3-1977 and in this notice it was contended that no details of properties have been mentioned to indicate about which properties this notice is issued.
(4.) IT is contended that under section 143, as amended, of the M. P. Municipal Corporation Act, 1956, the annual value of any land or building situate within the city as determined under the M. P. Nagariya Sthawar Sampati Kar Adhiniyam 1964, or the rules made thereunder, and in force for the purpose of that Act immediately before the last day of April 1976 shall be deemed to be the annual value for the assessment of property tax on such land or building under this Act until such time as the Commissioner makes a fresh valuation and determines annual value under this Act of the land or properties and the annual value of such land or building assessment, it was contended that as the proceedings under section 143 were started in 1981, and the notice under section 146 talks of levy of tax from 1981, therefore it could not be said to be retrospective.
(5.) A perusal of this notice clearly shows that what is contemplated under section 146 has not been clearly stated in this notice. This notice even does not mention the properties and their situation nor mentions the reasons for the increase. It is also apparent that this notice is issued on 13-9-1983 and it proposes to enhance the tax from 1-1-1981 which is apparently retrospective.
(6.) IT is unfortunate that such a notice was issued under section 146 which would confer no jurisdiction on the Commissioner to proceed with the enhanced assessment. Although an attempt was made to contend that the procedure under section 143 is followed but there is nothing on record to suggest that the procedure under sections 143, 144 and 145 was strictly followed nor any documents in that regard have been filed. Apart from it, it is clear from the language of section 146 that the tax could only be levied on the basis of the changed valuation after a notice under section 146 is issued to the person. Section 146:
"sec. 146. Notice when valuation made for the first time is increased.-The Commissioner shall, in all cases in which any land or building is for the first time valued, or in which the valuation of any land or building previously as increased under section 143 give "special notice thereof, to the occupier of the same, and when the valuation is so increased, the said notice shall contain a statement of grounds, of the increase. "
It is, therefore, plain that after this notice under section 146 is issued, the valuation could only be altered prospectively and not retrospectively as has been held by this Court in the decision in Second Appeal No. 81 of 1971 and other decisions on which reliance is place in that decision. It is also clear that notice under section 146 should mention the statement of grounds for the increase. Admittedly this notice has not mentioned any one of those grounds although it appears that four grounds were printed in the notice so that in every case the relevant ground may be tick-mark the rest may be scored but unfortunately in the notice in hand nothing is tick-marked nor anything is scored out and ultimate result is that no reasons for increase are stated in this notice and on this ground also the notice could not be held to be good. It is also significant that in view of the decision of the Additional District Judge part of the properties of this petitioner fall within the Corporation limits and part of the properties are outside the corporation limits and under these circumstances the notice should have mentioned the properties about which this increase was proposed but unfortunately that has also not been done. For all these reasons it is apparent that this notice under section 146 could not be said to be a legal and proper notice which could confer jurisdiction on the Commissioner to proceed to enhance the valuation of the properties and impose the tax on that basis.
(7.) THE petition is allowed. The notice issued to the petitioner, dated 13-9-1983 purporting to be under section 146 of the M. P. Municipal corporation Act, 1956, in hereby quashed and it is directed that if the respondent Corporation proposes to proceed, they may do so after following the appropriate procedure. In the circumstances of the case, parties are directed to bear their own costs. Security amount if deposited, be refunded to the petitioner. Petition allowed.
Advocates List
For the Appearing Parties J.P. Gupta, M.G. Khedkar, Advocates.
For Petitioner
- Shekhar Naphade
- Mahesh Agrawal
- Tarun Dua
For Respondent
- S. Vani
- B. Sunita Rao
- Sushil Kumar Pathak
Bench List
HON'BLE CHIEF JUSTICE MR. G.L. OZA
HON'BLE MR. JUSTICE RAMPAL SINGH
Eq Citation
1985 JLJ 667
ILR [1986] MP 585
1985 MPLJ 380
LQ/MPHC/1985/12
HeadNote
A. Town Planning — Property tax — Notice under S. 146, M. P. Municipal Corporation Act, 1956 — Notice issued on 13-9-1983 purporting to be under S. 146 — Notice did not clearly state what is contemplated under S. 146 — Notice did not mention properties and their situation nor mentioned reasons for increase — Notice issued on 13-9-1983 and it proposes to enhance tax from 1-1-1981 which is apparently retrospective — Held, unfortunate that such a notice was issued under S. 146 which would confer no jurisdiction on Commissioner to proceed with enhanced assessment — Although an attempt was made to contend that procedure under S. 143 was followed but there is nothing on record to suggest that procedure under Ss. 143, 144 and 145 was strictly followed nor any documents in that regard have been filed — Apart from it, it is clear from language of S. 146 that tax could only be levied on basis of changed valuation after a notice under S. 146 is issued to person — M. P. Municipal Corporation Act, 1956 (3 of 1956), S. 146