(Prayer: The Civil Revision Petition is filed under Article 227 of the Constitution of India, to set aside order dated 28.02.2017 passed in C.M.A.No.72 of 2010, on the file of the First Additional District Judge, Coimbatore, reversing the order dated 31.01.2007 passed in Appeal in T.A.T.No.52 of 2000, on the file of the Taxation Appellate Tribunal, Coimbatore Municipal Corporation, by allowing this Civil Revision Petition.)
1. This Civil Revision Petition is directed against the judgment in C.M.A.No.72 of 2010 dated 28.02.2017 on the file of the learned First Additional District Judge, Coimbatore, reversing the order passed in T.A.T.No.52 of 2000 dated 31.01.2007 on the file of the Taxation Appellate Tribunal, Coimbatore Municipal Corporation.
2. Mr.Subbiah, learned Senior Counsel appearing for the petitioner submitted that the respondent has no power and right under the Coimbatore City Municipal Corporation Act, 1981 (hereinafter referred to as ‘the Act’ for short) to assess the annual rental value of the subject premises. The respondent ought to have followed the procedure as contemplated under Section 122 of the Act and the respondent ought not to have adopted the guidelines dated 04.02.1992 issued by the Government and its resolution dated 24.05.1993. Therefore, the respondent and its council are not the competent authorities to finalize the procedure to be adopted for fixation and assessment of the property tax. The respondent failed to follow the mandatory provisions contemplated under schedule-II part-II of the Act, providing for the method of taxation for the property tax. Accordingly, the petitioner shall file his return within a period of one month from the date of notification issued by the respondent and if the owner of the property fails to submit a return, then, it is open to the respondent to authorize his Bill Collector to prepare the return and there shall be an order of assessment, in the manner as provided. The respondent ought to have fixed the value of the property as contemplated under Section 122 of the Act, making clear the factors relating to the additional basic property tax for every building, with reference to its location, additional basic property tax for every building with reference to the type of the construction and age of the building. Without following these factors, the respondent by following the guidelines issued by the Government and also its resolution, passed the impugned assessment order. He further submitted that the order of remand dated 18.07.2002, passed in C.M.A.No.87 of 2000 on the file of the learned First Additional District Judge, Coimbatore (hereinafter referred to as the ‘lower Appellate Court’ for short) had become a non-est, in view of its indication to fix the monthly rental value in accordance with the admitted value of the property of the petitioner hotel and in accordance with a non-existent G.O.Ms.No.187/1998, as there was no such G.O.Ms.187/1998 in existence, more so, when it was also considered by the respondent that there was no such Government Order itself. Therefore, the order passed by the lower Appellate Court is perverse and illegal. The lower Appellate Court also failed to consider the order passed by this Court in W.P.No.727 of 2009 challenging the order or revision assessment passed by the respondent . In the said Writ Petition, this Court by a common order dated 13.07.2009 in W.P.No.26891 of 2009 etc., batch allowed the Writ Petitions, by setting aside the order of demands impugned therein and directed the respondent to follow the guidelines and the statutory provisions, arrive at the revision of annual value and property tax on provisional basis, serve the same on the petitioners calling upon them to file objections and thereafter, pass final assessment orders. However, the lower Appellate Court without considering the same, mechanically confirmed the order passed by the respondent herein. Therefore, the lower Appellate Court wrongly concluded that the Government had felt that the fair rent procedure was not correct and that it was not in the interest of Municipal Corporation, it had framed guidelines for assessing the property tax. As such, he prayed for a direction to set aside the order passed by the respondent and direct the respondent to assess the property tax as per the procedure contemplated under Section 122 of the Act.
3. Per contra, the learned counsel for the respondent submitted that as per standing order and G.O.Ms.No.170, Municipal Administration and Water Supply (Elec.) Department dated 02.09.1998, the respondent shall assess the property tax, having regard to the annual value fixed for a building on the date of general revision of property tax; the property tax payable by the owner of the occupier on the basis of the particulars filed in the return; and the property tax payable by the owner or the occupier with reference to the guidelines, if any, issued by the council. Therefore, the claim of the petitioner is baseless and incorrect. The petition premises is multi-storied 3 Star categoric hotel situated in the heart of the City. There are several rooms with different tariffs. It is non-residential and exclusively for commercial purpose. Though the petitioner valued the site at Rs.40,000/- per acre, the premises is situated in the middle of Coimbatore Town and the value of the land to be calculated on square feet basis. The value of the land is not less than Rs.10 lakhs per cent and the total value of the site admeasuring 30 cents is not less than 3 crore. Further, the petitioner valued the cost of construction at Rs.33 per sq.ft. It is ridiculously low and it cannot be less than Rs.500/- per sq.ft. The Government has issued a circular to the local bodies in which direction was given to the Corporation to assess the property tax on plinth area, location and type of construction as well as the year of construction and according to the circular, the respondent assessed the property tax of the petitioner hotel as Rs.8 per sq.ft. Further, G.O.Ms.No.1180 dated 10.12.1987 is superseded by G.O.MsNo.170 dated 02.09.1998 issued by the Government. The lower Appellate Court, while passing the judgment in C.M.A.No.87 of 2000, had oversight the so called Government Order and the same was wrongly typed as 187/1998 instead of 170/1998 dated 02.09.1998. As far as Section 122 of the Act is concerned, it is very clear how to assess the property tax. Second proviso to Section 122 is very clear that any building of a class not ordinarily let the gross annual value of which cannot, in the opinion of the commissioner, be estimated. The petition premises is a 3 star hotel and it cannot be ordinarily let out, so the assessment made by the respondent is in accordance with law. Therefore, he prayed for dismissal of this Civil Revision Petition.
4. Heard the learned Senior Counsel for the petitioner as well as the learned counsel appearing for the respondent.
5. The subject property originally belonged to one C.S.Ram Mohan and by virtue of sale deed dated 08.02.1984, the Coimbatore Auto Carriage Company purchased the subject property and in the month of September 1996, it had executed a lease deed in favour of the petitioner. The ownership of the subject property still remains with the Coimbatore Auto Carriage Company. The extent of the property is 30 cents. The petitioner constructed building with seven floors basement floor, cellar with annex building in that property. The total construction area is 66,385 sq.ft. The respondent assessed the half year property tax for the petitioner hotel at Rs.2,97,971/-. However, while remanded back the matter to consider the appeal afresh, the lower Appellate Court mistakenly mentioned G.O.Ms.No.187/98 instead of 170/98. Therefore, the respondent could not able to produce the G.O.Ms.No.187/98.
6. On a perusal of G.O.Ms.No.187/98, which was issued by the personal and Administrative Reforms (H) Department with regards to the appointment as senior personal clerks. Therefore, the Government Order is not applicable with regards to the assessment of the property tax. The Government has issued a circular dated 04.02.1992 to the local bodies in which the local bodies were directed to assess the property tax as per the guidelines sent along with the circular. As per the Act, the option has given to the respondent to chose the method of calculating the property tax. Pursuant to the circular, the respondent Council passed resolution on 24.05.1993 to adopt the mode of assessment.
7. As rightly pointed out by the learned counsel for the respondent that G.O.Ms.No.1180 dated 10.12.1987 was superseded by G.O.Ms.No.170 dated 02.09.1998. Accordingly, the respondent adopted the guidelines issued by the Government vide D.O.letter No.2079/ME/92-1 dated 04.02.1992 and its resolution dated 24.05.1993. It is relevant to extract the G.O.Ms.No.170/98 as follows:-
“3. For the sake of uniformity and also to ensure that the spirit of the intention of the rule making authority is reflected correctly in the rules, it is ordered that the relevant Taxation Rules of Chennai, Madurai and Coimbatore Corporations incorporated under the relevant Acts my be amended as follows:-
3. The Commissioner shall assess the property tax, having regard to:-
(1) the annual value fixed for a building on the date of general revision of property tax;
(2) the property tax payable by the owner or the occupier on the basis of the particulars filed in the return; and
(3) the property tax payable by the owner of the occupier with reference to the guidelines, if any, issued by the council.
4. Since, the Taxation Rules forms part of the Corporation Acts, for amending any provision in that rules, a resolution will have to be passed in the Tamil Nadu Legislative Assembly. The next session of the Legislative Assembly is likely to be commenced in the month of October, 1998. Since it has been decided to undertake the general revision of property tax with effect from 01.10.1998 pending amendment to the taxation rules, the Commissioners of all Corporations are hereby advised to take into account among others, the existing annual value fixed for a building on the date of general revision to be undertaken i.e., as on 01.10.98.
5. According to rule 14(2) of the Taxation and the Finance Rules under the Tamil Nadu District Municipalities Act, 1920, a general revision shall be deemed to have taken effect on the 1st day of half year following that in which the notice under rule 9 is published, or in case where a special notice is required to be served on the owner or occupier of the property under the first proviso to that rule, on the first day of half-year following that in which such special notice is served on the owner or occupier of the property. Since, it has been decided to undertake the general revision with effect from 01.10.1998 and the time gap is too short, it will be practically difficult to give special notice on or before the 1st day of the half-year in which the general revision is undertaken i.e. on 01.10.1998. It has therefore, been proposed to amend this rule to the effect that the special notice should be served on the owner or occupier of the property during the period of half-year in which the general revision of property tax is to be given effect to. Pending amendment to the rules, the Commissioner of Municipal Administration / Director of Town Panchayats are requested to issue suitable instructions/guidelines to all the executive authori
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ties under their control that the special notice shall be issued to the owner or occupier of the property by all the executive authorities of town Panchayats and municipalities during the half year period from 01.10.1998 to 31st March 1999. 6. The Commissioner of Municipal Administration and the Director of Town Panchayats are requested to send the copies of the instructions issued in this regard to the Government for information.” 8. Based on G.O.Ms.No.170/98, the learned counsel for the respondent resolved as follows:- “TAMIL” 9. As per the said guidelines, the assessee, viz., the petitioner has to submit his return within the notified period. Whereas, the petitioner failed to submit his return within the stipulated time. Therefore, the respondent assessed the half year property tax of the petitioner hotel at Rs.2,97,971/-. Therefore, the respondent rightly assessed the property tax and the lower Appellate Court rightly allowed the appeal and confirmed the order passed by the respondent. As such, this Court finds no infirmity or illegality in the Judgment passed by the lower Appellate Court. 10. Accordingly this Civil Revision Petition is dismissed. Consequently, the connected Miscellaneous Petition is closed. No costs.