TaxTMI 
TaxTMI 
1992 (9) TMI 354
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....ection 170(b) of the Act is not ultra vires the Constitution but Nag. J. took the view that Sub-section (b) of Section 170 is violative of Article 14 of the Constitution of India and he accordingly struck it down and directed the appellate authority to entertain the appeal of the appellant without deposit of the amount and decide it on merits. The majority of the learned Judges, on the other hand, dismissed the writ petition affirming the order of the District Judge who had dismissed the appeal filed by the appellant under Section 169 of the Act challenging the enhancement of the rateable value of the property in dispute for non-deposit of the disputed tax. 2. The majority of the learned Judges took the view that the right of appeal is a creature of statute and there is nothing wrong in the statute making a provision for conditional appeal requiring that a person desirous of filing an appeal is to comply with the conditions. 3. Before examining the constitutional validity and meaning of Section 170(b) of the Act it will be useful to examine the provisions of the Act in relation to the levy of property taxes, particularly the general taxes, and the provisions for "payment and ....
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....en made to the rateable values or any other matters entered in the said list. (7) The assessment list so authenticated shall be deposited in the office of the Corporation and shall be open, free of charge during office hours to all owners, lessees and occupiers of lands and buildings comprised therein or the authorised agents of such persons, and a public notice that it is so open shall forthwith be published. 125. Subject to such alterations as may thereafter be made in the assessment list under Section 126 and to the result of any appeal made under the provisions of this Act, the entries in the assessment list authenticated and deposited as provided in Section 124 shall be accepted as conclusive evidence: (a) for the purpose of assessing any tax levied under this Act, of the rateable value of all lands and buildings to which such entries respectively relate. 126.(1) The Commissioner may, at any time, amend the assessment list: (a) (b) (c).... (d) by increasing or reducing for adequate reasons the amount of any rateable value and of the assessment thereupon; or (e) (f) (g).... Provided that no person shall by reason of any such....
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....e limit, specified in this behalf in the notice, the assessment list shall be finally amended by confirming the provisional amendment made in the assessment list. (5) Property taxes on the basis of the amended Assessment List shall be due on the day on which the Amendment is formally made in the Assessment List. Provided that payment of taxes on the basis of the Assessment List, existing before such amendment cannot be withheld on the ground that some amendment is to be made in the List under this bye-Law. 4. It will be noticed that proviso to Section 126(1) before its amendment read as under: Provided that no person shall by reason of any such amendment become liable to pay any tax or increase of tax in respect of any period prior to the commencement of the year in which the amendment is made. 5. The proviso before its amendment suggested as if the person could become liable by reason of amendment of the assessment list only in the year during which the amendment was made. The amendment of the proviso to Section 126(1) shows that the liability to pay any tax or increase of tax can go beyond the currency of the year in which a notice is given under Sub-section ....
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....essment thereupon must be completed within the year in which the notice is given to become effective from the year in which notice is given. 9. Section 124(1) casts a duty on the Corporation to prepare an assessment list of all lands and buildings in Delhi. Such assessment list has to be in such from and manner as prescribed by the Bye-laws. When the assessment list has been prepared under Sub-section (1) of Section 124, Sub-section (2) thereof requires that a public notice about its preparation and of the place where the list may be inspected shall be given and the owner, occupier or lessee shall be at liberty to inspect the list and to take extracts thereof. 10. Under Sub-section (3) of Section 124, the Commissioner has, also at the same time, to give a public notice of the date when he will proceed to consider retable values entered in the assessment list, and in all cases in which the rateable value for any land or building is being assessed for the first time of rateable value is sought to be increased, the Commissioner is required to give a written notice thereof to the owner or to the lessee or the occupier of such land of building. After such public notice or individu....
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....has to continue to pay the said taxes on the basis of the unamended assessment list. 16. Now the provisions of Section 125 of the Act may be examined for their effect. 17. The effect of Section 125 is that the assessment list finalised and authenticated and deposited under Sub-sections (6) and (7) of Section 124 of the Act is subject to such alterations as may be made under the provisions of Section 126 and/or the the result of any appeal under the provisions of this Act. 18. Once the list so authenticated under Section 124(6) is, by virtue of Section 125, made subject to the provisions of Section 126, the assessment list for any year where it is subject to a notice under Section 126 is really finalised only after the investigation to the proposed enhancement has been completed and finalised; authentication and deposit of the list under Section 124(6) and (7) is subject to such finalisation. 19. The scheme of Sections 124, 125 and 126 read with the bye-laws is that the assessment has to be duly authenticated by the Commissioner or an officer on his behalf but this list is subject to the other provisions of the Act including Section 126 and the bye-laws and once a notice....
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....ed with effect from the date as found in the assessment order and since the adoption of rateable value for any year was of the previous year in which the notice was given, as soon as, the assessment order for the previous year gets finalised, the demand is raised for the year in which the rateable value of the previous year was adopted for any year, on the basis of the finalisation of the assessment of the previous year. 22. While adopting the assessment list of any previous year for any year, it was not necessary that the assessment list for the previous year must have become final in the sense that the proceedings for increasing the rateable value in the previous year must also come to an end and failing which the rateable value for the previous year cannot be adopted for the following year. All that Section 127 contemplates is that for any year the rateable value contained in the list for the previous year may be adopted. To summarise - (a) An assessment list has to be prepared in respect of each land and building which is liable to tax which list contains all the particulars including the rateable value of the property. The procedure for preparing such an assessm....
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.... There are two sets of Bye-laws which relate to levy and collection of property taxes, namely the Property Tax Bye-Law, 1953 (hereinafter referred to as the Property Tax Bye-Laws) and the Assessment List Bye-Laws, referred to above. The latter set of Bye-laws deal with the procedure to be followed in amendment of the assessment lists. The former set of Bye-laws provides for the procedure and recovery of taxes. (c) Sections 154 to 158 deal with coercive process of recovery of tax. Section 155 deals with levy of penalty against a person in default. The scheme of these provisions has to be understood in the backdrop of the scheme of the Act in regard to the assessment of tax. The scheme of these provisions proceeds on the footing that the amendment or modification of the assessment list for one particular year may have ramifications for subsequent years. 24. Section 156(1) of the Act provides as under: Recovery of tax. (1) If the person liable for the payment of the tax does not, within thirty days from the service of the notice of demand, pay the amount due, such such together with all costs and the penalty provided for in Section 155, may be recovered under a....
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....granted, this proviso comes to the rescue. We do not agree With this view. The proviso deal with a case where assessments for one or more future years are made adopting the assessment or revision made for one year (which may be called the base year) which is under appeal. It ensures that demands for successive years cannot be enforced or recovered to the extent the appeal for the base year succeeds, even without the necessity for an appeal by the assessee for each of the successive years. 26. Having surveyed the provisions of the Act relating to the assessment of the property tax, we shall turn the crucial provision of the statute the validity of which has been canvassed before us. An appeal against levy of assessment of tax is provided for under Section 169. Section 170 qualifies this right of appeal. The relevant provisions of Sections 169 and 170 themselves may be noticed: 169. Appeal against assessment, etc. (1) An appeal against the levy of assessment of any tax under this Act shall lie to the court of the district judge of Delhi. (2).... (3).... (4).... (5).... (6).... 170 Conditions of right to appeal. No appeal shall be hea....
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....efer to certain judicial decisions relevant to this issue. 31. In Ganga Bai v. Vijay Kumar and Ors. Chandrachud, J. (as His Lordship then was) held that "there is a basic distinction between the right of suit and the right of appeal. There is an inherent right in every person to bring a suit of a civil nature, but the right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law." 32. In Anant Mills Co. Ltd. v. State of Gujarat and Ors. which is an appeal from the decision of the Gujarat High Court in the Anant Mills Co. Ltd. and Ors. v. State of Gujarat and Ors. XIV : 1973 GLR 826 the Supreme Court had occasion to consider vires of Section 406(2)(e) of the Bombay Provincial Muncipal Corporations Act (Bombay Act 59 of 1949) as amended by Gujarat Acts No. 8 of 1968 and No. 5 of 1970 to the entertainment of the appeal by a person who had not deposited the amount of tax due from him and who had not been able to show to the appellate judge that the deposit of the amount would cause him undue hardship arising out of his own omission and deafult. A disability or disadvantage arising out of a party's own default or omissio....
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....uirement. All that the statutory provision seeks to do is to regulate the exercise of the right of appeal. The object of the above provision is to keep in balance the right of appeal, which is conferred upon a person who is aggrieved with the demand of tax made from him, and the right of the Corporation to speedy recovery of the tax. The impugned provision accordingly confers a right of appeal and at the same time prevents the delay in the payment of the tax. We find ourselves unable to accede to the argument that the impugned provision has the effect of creating a discrimination as is offensive to the principle of equality enshrined in Article 14 of the Constitution. It is significant that the right of appeal is conferred upon all persons who are aggrieved against the determination of tax or rateable value. The bar created by Section 406(2)(e) to the entertainment of the appeal by a person who has not deposited the amount of tax due from him and who is not able to show to the appellate judge that the deposit of the amount would cause him undue hardship arises out of his own omission and default. The above provision, in our opinion, has not the effect of making invidious distinctio....
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.... v. Collector of Customs (Preventive) Bombay the Supreme Court had occasion to deal with the right of appeal created under Sections 129A and 129B of the Customs Act, 1962. The appeal provided was against the duty demanded or penalty levied under the Customs Act. The provision for appeal contemplated a condition for deposit of the duty or the penalty pending the appeal. Same plea was taken that the provision for deposit of duty or penalty pending appeal whittled down the appellant's right of appeal and is ultra vires. The Supreme Court speaking through Sabyasachi Mukharji, J. held as under: (ii) Right to appeal is neither an absolute nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant. 34. Reference may also be made to the decision of this Court in Collector of Customs and Excise, Cochin and Ors. v. A.S. Bava . In this case Section 35 of the Central Excise & Salt Act, 1944 conferred a right of appeal which was sought to be whittled down by applying the provisions of Section 129 of the Sea Custo....
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....o be forgotten that, once the assessment list is amended after hearing the assessee, it may stand adopted for several subsequent years and demands for all these years will have to be met until the assessment for the first year is altered in appeal. It is argued that the right of appeal itself becomes illusory, if subjected to such a rigid and absolute condition. The provision will, therefore, be invalid, it is said, as imposing an unreasonable restriction on the fundamental rights of the appellant assessee. 37. As against this, it is contended for the Corporation that the validity of similar provisions have been upheld in the cases discussed earlier. It is submitted that even though an appeal, in such cases, may have to be thrown out, the assessee is not without redress. He will always have the alternative remedy of taking recourse to proceedings under Article 226 of the Constitution of India before the High Court and in appropriate cases, where a case of hardship is made out, the High Court has the undisputed powers to grant relief. It is true that the High Court would not ordinarily entertain the petition under Article 226 of the Constitution when the alternative remedy of app....
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....e reasons adduced on behalf of the assessee. 38. The decisions of the Bombay and Calcutta High Courts earlier referred to (Ellora & Chatter Singh) have upheld the validity of a rigid provision banning the entertainment of an appeal altogether where the taxes are not paid. However, the Supreme Court decisions in Anant Mills, Vijay Prakash Mehta and Batra had occasion to consider only the vires of a milder provision which permitted the appellate authority to waive or relax the condition of deposit. As explained in Nandlal v. State of Haryana these decisions settle the principle "that the right of appeal is a creature of statute and there is no reason why the legislature while granting the right cannot impose conditions for the exercise of such right so long as the conditions are not sc onerous as to amount to unreasonable restrictions rendering the right almost illusory" (emphasis added). The Court in those cases had no occasion to consider what the position would be if the conditions placed on the right of appeal were unduly onerous or such as to render the right of appeal totally illusory. 39. The question whether the imposition of a condition which makes a right of appeal is....
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....ingle Judge in the matter of Punj Sons. The reason is simple as Section 457 itself states that the procedure provided in the CPC in regard to suits are to be followed "as far as it can be made applicable". The other provisions of the statute totally bars the grant of such relief. The other provisions have to be harmoniously read with it and not in derogation thereto. Section 457 itself, therefore, does not help the assessee whose case depends entirely on the construction to be placed on Section 170(b). But still one has to examine Section 170(b) carefully to see whether, short of dismissing an appeal for default of payment of tax, the District Judge has any latitude in the matter. 41. On behalf of the Corporation, it is contended that the words "heard and determined" used in Section 170(b) are comprehensive enough to cover not merely the final hearing of an appeal on merits but also its preliminary hearings to find out whether the appeal is in time [Section 170(a)], whether the disputed tax has been paid along with the appeal [Section 170(b)], whether the appeal is otherwise defective or to dismiss the appeal straightaway if it is found defective in any of those respects. It is,....
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.... that it means either 'to deal with or admit to consideration'. We are also of the same opinion. The question, therefore, is at what stage can the appeal be said to be entertained for the purpose of the application of the proviso? Is it 'entertained' when it is filed or is it 'entertained' when it is admitted and the date is fixed for hearing or is it finally 'entertained' when it is heard and disposed of? Numerous cases exist in the law reports in which the word 'entertained' or similar cognate expressions have been interpreted by the courts. Some of them from the Allahabad High Court itself have been brought to our notice and we shall deal with them in due course. For the present, we must say that if the legislature intended that the word 'file or receive' was to be used, there Was no difficulty in using those words. In some of the statutes which were brought to our notice such expressions have in fact been used.... (10)...When the proviso speaks of the entertainment of the appeal, it means that the appeal such as was filed will not be admitted to consideration unless there is satisfactory proof available of the making of t....
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....ether. This apart, an assessee may not be able to deposit the tax while filing the appeal but may be able to pay it up within a short time, or at any rate, before the appeal comes on for hearing in the normal course. There is no reason to construe the provision so rigidly as to disable him from doing this. Again, when an appeal comes on for hearing, the appellate judge, in appropriate cases, where he feels there is some great hardship or injustice involved, may be inclined to adjourn the appeal for some time to enable the assessee to pay up the tax. Though it will not be expedient or proper to encourage adjournment of an appeal, where it is ripe for hearing otherwise, only on this ground and as a matter of course, an interpretation which leaves some room for the exercise of a judicial discretion in this regard, where the equities of the case deserve it, may not be inappropriate. The appellate judge's incidental and ancillary powers should not be curtailed except to the extent specifically precluded by the statute. We see nothing wrong in interpreting the provision as permitting the appellate authority to adjourn the hearing of the appeal thus giving time to the assessee to pay ....