TaxTMI 
TaxTMI 
2003 (8) TMI 572
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....ovisions of M.P. Municipalities Act, 1961 (in short the Municipalities Act) and the rules framed for carrying out the purposes of the said statute. As the assail and attack is to the constitutional validity of such provisions in both the enactments relating to the imposition of property tax, the jurisdiction, the manner, the mode and the method, we are inclined to deal with the same in a composite order though we will be adverting to the pertinent provisions in both the statutes separately wherever it is necessitous. We may also hasten to state here that in addition to the challenge of the provisions in issue, there is also a prayer for quashment of the resolutions passed by the various Municipalities and Municipal Corporations, and the directions issued by the State Government and notices issued to the owners for levy of property tax and in some cases water tax and other taxes. It is condign to mention here that the centrum issue being relatable to the questioning of the constitutional validity of the provisions pertaining to property tax. we would be dealing with the said aspect and thereafter would address ourselves in relation to other facets depending upon the nature of the at....
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.... when notice was issued, adequate time was not granted to file the reply. It is pertinent to state here that various averments have been made relating to imposition of fire tax, water tax and property tax but we would be addressing to the basic averments which have the connectivity with the constitutional validity of the provisions. 5. In W.P. No. 2431/98 which relates to the imposition of property tax and other taxes under the Corporation Act. the factual score as has been exposited is that the petitioner No. 1 is a registered society working for the benefit of all the persons who are engaged in business. The petitioner No. 2 is a Public Trust having a 'Dharamshala' meant for charitable purposes. The Municipal Xorporation, Jabalpur in its meetings dated 11-3-1998 and 24-4-1998 discussed the resolution in regard to imposition of property tax but the passing of the resolution was opposed to by many a member. The matter was then referred to the prescribed authority as provided under Rule 7 of the Rules and a date was fixed in July, 1998 for the purpose of giving of self assessment by all the owners of the houses. In view of the aforesaid action, certain notices were issued t....
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....ts : (a) Article 243P(e) defines 'Municipality' as an institution of self governance and under Art. 243W the Legislature has been enjoined the power to confer the authority on the Municipalities to enable them to function as, institutions of self governance. The conditions are limited only to two subjects mentioned therein. Article 243X ordains the Legislature to authorise a Municipality to levy and collect specified taxes and only the procedure for levy etc. can be fixed by the State Legislature subject to the limits which are in accordance with the concept of institution of self governance. In other words, the Legislature cannot prescribe any particular criterion on the basis of which certain zones can be created for taxing purposes. The Municipalities or the Municipal Corporation has the exclusive power to take its own decision without being constrained or governed by the rules framed by the State Governments as the rules framed by the executive cannot be binding on the Municipalities or Municipal Corporation in the matter of imposition of taxes. Differently put, the local bodies have been conferred immense power under the Constitution and by framing of rules there has....
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....ent in the same zone and gross annual letting value cannot be determined on that criterion. Therefore, the real reference has to be the gross annual letting value of a particular/specific building for determination of annual quantum received or even hypothetical rent receivable. Fixation of the quantum of rent in any other manner is illegal and unjustified as it invites the frown of Art. 14 of the Constitution which in its second limb encompasses avoidance of arbitrariness and unreasonableness. (f) The provisions of General Clauses Act would not apply because in a case of this nature singular would not include plural as contrary intention is clearly demonstrated by use of the words "a buildings gross annual letting value." (g) The tax has to be assessed qua each building and not on the basis of a cluster of building based on the zone basis. When the law lays a postulate that each building has to be assessed on certain definitive criteriafore the purposes of taxes the said stipulation cannot totally succumb to the zonal system or any other categorisation or compartmentalisation. (h) The use of the word 'gross' can never convey the meaning 'average', e....
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....pal Corporation nor the Municipality can themselves impose property tax as that would tantamount to creating a sovereign within a sovereign. (iii) Article 243X of the Constitution does not denude the power of the State Legislature to make enactment and such an interpretation has the support of the law. The guidance has been given in the rules itself and power has conferred and specific circumstances have only been illustrated. When such rules have been made, they are supportable in law and they do not suffer from any vice. (iv) The criteria which have been fixed in the main enactment and the rules framed have a rationale behind it and, therefore. the averments made with regard to fixation of criteria by citing hypothetical examples are sans substance. Classifications have been made on the basis of intelligible differentia and the same are permissible for the purpose of taxation. (v) When number of methods are available to assess the tax, the State has the power to choose any of them and if a particular mode is chosen no fault can be found with it. (vi) The Incorporation of non obstante clause in the provision takes away the effect of other enactments. The submission that th....
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....) shall be ignored. In cases where the variation is more than ten percent, the owner of land or building, as the case may be. shall be liable to pay penalty equal to five times the difference of self assessment made by him and the assessment made by the Corporation. (4) An appeal shall lie to the Mayor "in-Council against the orders passed under sub-section (3)" 13. Section 126 of the Municipalities Act reads as follows : "126. Annual letting value of land or building. (1) Notwithstanding anything contained in this Act or any other law for the time being in force, the annual letting value of any building or land, whether revenue paying or not, shall be determined as per' the resolution of the Council adopted in this behalf on the basis of per square foot of the built up area of a building or per square foot of the land, as the case may be taking into consideration the area, in which the building or land is situate, its location, situation, purpose for which it is used, its capacity for profitable use, quality of construction of the building and other relevant factors and subject to the rules, as may be made by the State Government in this behalf. (2) On th....
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....e Rules 4, 5, 6, 10 and 11. They read as under :- "4. Classification of buildings and lands. -The classification of buildings and lands situated in every zone shall be as follows :- (a) Quality of construction - (i) Building having roof made of R.C.C.R.B.C. or stone; (ii) Buildings having roof made of sheets of cement or iron or tiles; (iii) Other semi pakka or kuccha buildings which does not fall within sub-clause (1) or (11). (i) Buildings/lands for the purpose of commercial or industrial; (ii) Buildings/lands for the purpose of residential. (c) On the basis of location - (i) Building/land situated at main road; (ii) Buildings/land situated at main market. 5. Rate of annual letting value,- Every Municipality as per criteria described in rule 4 shall fix separate rates for each type of houses and lands situated in each zone on the basis of their quality of construction, use and location for the purpose of determination of their annual letting value : Provided further that apart from the criteria described in this rule or Rule 4 the municipality subject to the provisions of Sections 135. 136 and 138 of the Madhya Pradesh Municipal Corporation Act. 1956 ....
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.... of water tax and the consolidated amount of general sanitary cess, general lighting tax and general fire tax as determined under sub-sections (4) and (5) of Section 132, in case of Municipal Corporation and under sub-sections (4) and (5) of Section 127 in case of Municipal Council and Nagar Panchayats, in the amount of property tax payable and after indicating the information in the return appended to these rules, deposit the consolidated amount of the aforesaid taxes in the municipality within the prescribed time along with the return. (2) If any person is the owner of more than one house or land in the municipal area, then every such owner shall pay the amount along with the separate return for each house or land, provided that the consolidated annual letting value of all his houses or lands or both, shall be deemed to be the basis for purpose of exemption under the provisions of clause (b) of Section 136 in ease of Municipal Corporation and clause (b) of sub-section (2) of Section 127-A in case of Municipal Council and Nagar Panchayats. (3) If the owner of building or land finds any mistake in the return filed by him as above, then such owner of building or land may submit ....
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....d have been given a free hand to take their own decision but the Legislature having prescribed the criteria, has transgressed the constitutional mandate. To appreciate the aforesaid submission, it is apposite to refer to certain provisions of the Constitution. Article 243Q deals with constitution of Municipality. By virtue of the said Article, the word 'Municipality' cover Municipal Corporation. This view has been taken by the Apex Court in the case of Cantonment Board, Secunderabad v. G. Venketram Reddy, AIR 1995 SC 1210. Article 243R deals with composition of Municipalities. Article 243S provides for constitution and composition of Wards Committees etc. Emphasis has been laid on Article 243Y which provides that the Finance Commission constituted under Article 243I shall also review the financial position of the Municipalities and make recommendations to the Governor as to the principles which should govern the distribution between the State and the Municipalities of the net proceeds of the taxes, tolls and fees leviable by the State. The said provision also prescribes the determination of the taxes, duties, tolls and fees which may be assigned to, or appropriated by, the ....
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.... perceptible that Article 243W clearly stipulates that subject to provisions of the Constitution, the Legislature of a State may, by law, endow the Municipalities with such powers. Thus the source of power rests within the State Legislature. True it is, there is some concept of self-governance but the Constitution has not empowered the Municipalities to impose taxes on its own as if it has the power to impose taxes by itself as that would have defeated and destroyed many a provision of the Constitution. Article 243X also postulates that the Legislature of a State may. by law, authorise a Municipality to collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits. The aforesaid provision is plain as day to indicate that the Legislature has the authority and it may authorise the Municipality to collect such taxes in accordance with such procedure and subject to such limits. The significance of the term 'such' used at three places under Article 243X(a) cannot be allowed to be marginalised. Thus the submission that the Legislature should have left it to the total discretion of the Municipality or Municipal Corporation ....
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.... legislature. Legislature itself has authorised under the statute the State Government to made rules. The second question that forms a part of this submission is whether such a power could have been delegated. It is well settled in law that the Legislature cannot visualize all circumstances. Some power has to be conferred on the rule making authority for carrying out the purposes of the Act. There are certain parameters and guidelines to which we shall advert to at a later stage. The decisions rendered in the cases of In re Art. 143. Constitution of India and Delhi Laws Act (1912). AIR 1951 332; Western-India Theatres Ltd. v. Municipal Corporation of the City of Poona, AIR 1959 SC 586; Banarsi Das v. State of M. P., AIR 1958 SC 909; D. S. Garewal v. The State of Punjab, AIR 1959 SC 512; The Corporation of Calcutta v. Liberty Cinema, AIR 1965 SC 1107; The Municipal Corporation of Delhi v. Birla Cotton. Spinning and Weaving Mills. Delhi, AIR 1968 SC 1232: State of Mysore v. M. L. Nagade and Gadag (1983) 3 SCC 253 : (AIR 1983 SC 762), Darshanlal Mehra v. Union of India, (1992) 4 SCC 28 : (AIR 1992 SC 1848), Almitra H. Patel v. Union of India, (1998) 2 SCC 416 : (AIR 1998 SC 993) suppo....
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....ioners." 23. In this regard, we may also refer with profit to the Division Bench judgment of this Court rendered in the case of Shahid Hussain Zahid Hussain v. Municipal Council, Bewda, 1995 MPLJ 581 : (1995 AIHC 4213) wherein the Court was dealing with the procedure for imposition of tax and the role ascribed to the Municipality. In that context, the Division Bench held as under 'The procedure for imposition of tax is contemplated in Section 129 of the M. P. Municipalities Act and the Legislature has specially left it to the discretion of the State to frame rules to effectuate the purpose of the Act i.e. collection under the M.P. Municipalities Act. Section 160 though it does not refer to collection of tax clearly authorises the Municipal Council to collect the levy of tolls, market dues and fees which may be imposed under the Act by auction. Section 127(2) and Section 355(2)(xxxv) authorise framing of any rules for the purpose of effectuating the purpose of the Act, All local authorities are invested with powers of taxation. The taxes have to be recovered. The taxes are required for their administration and as such it is left to the local authorities to impose and colle....
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....ecision of this Court rendered in the case of Meera Khandelwal v. State of M. P. (1997) 2 MPLJ 333 : (AIR 1997 Madh Pra 163). In the aforesaid case, the Division Bench after referring to the scheme of the Act, held as under (at p. 170 of AIR) : "In this connection, learned counsel invited our attention to the case of A.N. Parasuraman v. State of Tamil Nadu, AIR 1990 SC 40. In this case, it was held : "It is well established that determination of legislative policy and formulation of rule of conduct are essential legislative functions which cannot be delegated. What is permissible is to leave to the delegated authority the task of implementing the object of the Act after the Legislature lays down adequate guidelines for the exercise of power." In the instant case, the Legislature has laid down the procedure by amending Section 129 of the Act and left the State Government to implement the same by laying down the guidelines and which have been laid down in terms of Ex. P-l." In view of the aforesaid, the submission though advanced with astute ingenuity is actually sans substance. 26. The next spectrum that is to be dwell upon is whether the provisions under c....
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....rent contracts, and if by different contracts, whether such contracts are made simultaneously or at different times. Explanation II. The term "gross annual rent" shall not include any tax payable by the owner in respect of which the owner and tenant have agreed that it shall be paid by tenant. (c) the annual value of any building, the gross annual rent of which cannot be determined under clause (b), shall be deemed to be five per cent on the sum obtained by adding the estimated present cost of erecting the building, less any amount which the Commissioner may deem it reasonable to deduct for depreciation, to the estimated market value of the land valued with building as part of the same premises : Provided that - (i) in calculating the annual value of any land or building under this section the value of any machinery on such land or in such building shall be excluded: and (ii) when a building is occupied by an owner under such exceptional circumstances as to render excessive a valuation of five per cent on the cost of erecting the building, less depreciation, a lower percentage may be taken." 27. In that context, their Lordships of the Apex Court held as un....
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....udicial discipline. The decision of the Division Bench of the High Court was, therefore, rightly overruled by the Full Bench in the impugned judgment." 29. Submission of the learned counsel for the petitioners is that though there is total substitution of provision in both the Acts, namely, Municipal Corporation Act and Municipality Act, the said amendment does not take away the effect of the decision rendered in the case or Ratnaprabha (supra). On the contrary Mr. Jha has argued with vehemence that by way of amending the provisions the basic concept which was in" trinsically woven to the fabric of Ratnaprabha (supra) has been wiped out. In this context, before we enter into the discussion whether the effect and impact of Ratnaprabha (supra) has been taken away, we think it appropriate to refer to certain decisions in the field under what circumstances such a thing does occur and the concept gets concretised. 30. In the case of I. N. Saksena v. State of Madhya Pradesh, AIR 1976 SC 2250, the Apex Court expressed the view that Legislature cannot by bare declaration, without more. directly overrule, reverse or override a judicial decision. It may, at any time in exercise o....
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....ted out in the judgment in question, all well as alteration or substitution of provisions of the enactment on which such judgment is based, with retrospective effect." 31. This being the position of law the decisions at hand are to be seen whether by incorporating of amendments of provisions contained in Section 138 the position has so fundamentally altered that the decision rendered in the case of Ratnaprabha (AIR 1977 SC 308) (supra) has lost its binding force. To put it differently, decision in the case of Ratnaprabha (supra) could not have been rendered in the manner as it has been done had the present provisions been in existence on the statute book. This being the heart of the matter, we have reproduced both the provisions and the relevant paragraph from Ratnaprabha (supra) which has been reiterated in the case of Indian Oil Corporation Ltd. [AIR 1995 SC 1480 [supra). In the earlier provision, there was the non-obstante clause but the wording used in the unamended Section 138 were "might reasonably" had garnered Immense significance. The unamended Section 126 of the Municipalities Act read as under : "126. Definition of annual letting value. In this Cha....
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....pected to be let from year to year." While therefore, the requirement of the law is that the reasonable letting value should determine the annual value of the building. It has also been specifically provided that this would be so "notwithstanding anything contained in any other law for the time being in force." It appears to us that it would be a proper interpretation of the provisions of clause (b) of Section 138 of the Act to hold that in a case where the standard rent of a building has been fixed under Section 7 of the Madhya Pradesh Accommodation Control Act, and there is nothing to show that there has been fraud or collusion, that would be its reasonable letting value, but, where this is not so, and the building has never been let out and is being used in a manner where the question of fixing its standard rent does not arise, it would be permissible to fix its reasonable rent without regard to the provisions of the Madhya Pradesh Accommodation Control Act. 1961, This view will, in our opinion, give proper effect to the non-obstante clause in clause (b), with due regard to its other provision that the letting value should be "reasonable". 33. Thus, the....
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.... the time being in force be deemed to be the gross annual rent at which such building, together with its appurtenances and any furniture that may be let for use or enjoyment therewith might reasonably at the time of assessment be expected to be let from year to year, less an allowance of ten per cent for the cost of repairs and for all other expenses necessary to maintain the building in a state to command such gross annual rent." It is for this reason, namely, the existence of non-obstante clause in Section 138(b) of the said Act, that Ratnaprabha case was distinguished and was held to be non-applicable in Dewan Daulat Rai case (AIR 1980 SC 541) because the Delhi Act did not contain any non-obstante clause like the one with which this Court was concerned in Ratnaprabha case (AIR 1977 SC 308), This distinction has again been emphasized by this Court in Indian Oil Corporation Ltd. v. Municipal Corporation (AIR 1995 SC 1480) which was a case relating to Section 138(b) of the M. P. Municipal Corporation Act, 1956 where Ratnaprabha case was followed and the other decisions in the cases of Dewan Daulat Rai. Balbir Singh were distinguished because of the existence of the non-obsta....
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....stante clause found in the Madhya Pradesh Act. It is relevant to state here that in the case of Indian Oil Corporation Ltd. (supra) a plea to reconsider the correctness of the ratio in Ratnaprabha (supra) was rejected on the ground that the view taken by the Apex Court in the case of Ratnaprabha (supra) was a reasonably permissible construction of Section 138(b) of the M.P. Act. It was also observed that in later decisions the Apex Court invariably distinguished the case of Ratnaprabha (supra) and not referred for reconsideration by a larger Bench. We have referred to the aforesaid decisions only to show how the case of Ratnaprabha (supra) was dealt with in the aforesaid cases. In this regard a derision rendered by the three-Judge Bench of the Apex Court in the case of Commissioner v. GrijhaYajamanula Samkhya (2001) 5 SCC 651 : (AIR 2001 SC 2046) is useful to be referred to. In the aforesaid case, their Lordships were considering the provisions of Hyderabad Municipal Corporations Act. 1955 and Hyderabad Municipal Corporations (Assessment of Property Tax) Rules. 1990. In the said case, the Apex court referred to the decision rendered in the case of East India Commercial Co. (P) Ltd.....
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.... of the annual rental value which is the basis for calculation of the rateable value is also provided in the Act and the Rules. The Act mandates that the Commissioner shall determine the tax to be paid by the person concerned in the manner prescribed under the statute and the Rules. It is our view that the Act and the Rules provide a complete code for assessment of the property tax to be levied for the buildings and lands within the municipal Corporation. There is no provision in the statute that the fair rent determined under the Rent Control Act in respect of a property is binding on the Commissioner. The legislature has wisely not made such a provisions because determination of annual rent value under the Act depends on several criteria. The criteria for such determination provided under the Act may not be similar to those prescribed under the Rent Control Act. Further the time when such determination was made is also a relevant factor. If in a particular case the Commissioner finds that there has been a recent determination of the fair rent of the property by the authority under the Rent Control Act he may be persuaded to accept the amount as the basis of determining the annual....
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....se (AIR 1977 SC 308), AGM (1975 (4) SCC 696), Central Bank of India case (1995 (4) SCC 696), East India Commercial Co. case (AIR 1998 SC 1789) Balbir Singh case (AIR 1985 SC 339), Indian Oil Corpn. case (AIR 1995 SC 1480) and Srikant case (AIR 1985 SC 288) deal with the second group. As already noticed, this Court in L1C case dealt with the first category as in Section 168 of the Calcutta Municipal Corporation Act, there existed no non-obstante clause. The observations of the Bench of this Court which dealt with the case on 10-10-2001 cannot be taken in isolation." 36. In this context, we may refer with profit to the decision recently rendered by the Apex Court in the case of Municipal Corporation of Greater Mumbai v. Kamla Mills Ltd. (2003) 5 JT (SC) 462 : (AIR 2003 SCC 2998). Their Lordships in paragraph 11 referred to earlier decisions in the field and specifically referred to the case of East India Commercial Co. (P) Ltd. (AIR 1998 SC 1789) (supra) and observed that the Municipal Act did not contain any non-obstante clause. Thereafter, their Lordships referred to paragraphs 21 and 23 of India Automobiles (1960) Ltd. (AIR 2002 SC 1089) (supra). We have referred to the afor....
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....ng with asbestos/corrugated sheet roof and in the third all other buildings not covered by the aforesaid two. Rule 6 therein provide rate of tax. Rule 7 empowers the Corporation to revise the rate of tax on Annual Rental value. The Apex Court referred to various decisions in the field, namely, Twyford Tea Co. Ltd. v. State of Kerala, AIR 1970 SC 1133: State of Maharashtra v. M. B. Badiya, AIR 1988 SC 2062 and P. M. Ashwathanarayana Setty v. State of Karnataka. 1989 Suppl (1) SCC 696: (AIR 1989 SC 100) and eventually in paragraph 16 came to hold that the grounds upon which the Rules have been invalidated are unsupportable in law. Their Lordships also in para 17 held that grounds upon which the notifications have been invalidated area also unsustainable in law. 38. Recently in the case of Rai Vimal Krishna v. State of Bihar, 2003 AIR SCW 3360 : (AIR 2003 SC 2676. a two-Judge Bench of the Apex Court was dealing with the Patna Municipal Corporation Act referred to Sections 133, 137, 138(1), 149 and 150 of the Act and after scanning the scheme of the Act in paragraph 13 referred to the decision rendered in the case of S. K. P. Sinha (AIR 1995 SC 885) (supra) wherein the constitutional ....
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....hand. 40. At this juncture, we may hasten to state that while dealing with the effect and impact of the decision rendered in the case of Ratnaprabha (AIR 1977 SC 308) (supra) and Indian Oil Corpn. Ltd. (AIR 1995 SC 1480} (supra), we have referred to the various decisions dealing with the imposition of property tax in various States and how they have been dealt with by the Apex Court. We have already referred to few citations to show that by legislative process the base of a decision can be taken away. We have referred to the earlier provisions which were considered in the case of Ratnaprabha (supra) and Indian Oil Corporation (supra). The moot question that arises for consideration whether by virtue of the present amendment, the effect and impact of both the decisions have been taken away. It is worth noting here that Ratnaprabha (supra) is the parent decision in the field which was followed in Indian Oil Corporation Ltd. (supra) and it was held that the said decision still holds the field as far as the State of Madhya Pradesh is concerned. By that time the amendments had not come into force. The amendment in the statute book were brought in the year 1997. Rules were framed therea....
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....fect of the decision rendered in the case of Ratnaprabha (supra) and Indian Oil Corporation (supra) has been wiped away on to put it differently the ratio laid down therein is no more applicable to the State of Madhya Pradesh. To say so we have to proceed to test the aforesaid provisions on the anvil and touchstone of Article 14 of the Constitution of India. We have already reproduced the provisions and they need not be re-stated. Before we consider the provisions, we think it proper to quote a passage from the decision rendered in the case of R. K. Garg v. Union of India, (1981) 4SCC 675 : (AIR 1981 SC 2138) wherein the Constitution Bench expressed thus : "Now while considering the constitutional validity of a statute said to be violative of Article 14, it is necessary to bear in mind certain well established principles which have been evolved by the Courts as rules of guidance in discharge of its constitutional function of judicial review. The first rule is that there is always a presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. ............
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....t to conceive of a legislation which is not capable of being abused by .perverted human ingenuity. The Court must therefore adjudge the Constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable mandatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues." 41. In this context, it is also profitable to refer to the observation of the Apex Court in the case of State of J&K v. Triloki Nath Khosa, (1974) 1 SCC 19 : (AIR 1974 SC 1). "Let us not evolve, through imperceptiable extensions, a theory of classification which may subvert, perhaps submerge, the precious guarantee of equality. The eminent spirit of an ideal society is equality and so we must not be left to ask in wonderment, what after all is the operational residue of equality and equal opportunity?" 42. We have referred to the aforesaid decisions as the learned counsel for the petitioner....
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....ile urging the aforesaid submission with vehemence. In our considered opinion, had read Rule 3 in total isolation but the same is not to be read as if the singular rule governing the whole scenario. It has to be read along with Rule 4 which deals with classification of buildings and lands on three criteria, namely, quality of construction, the basis of use and the basis of location. That part, needless to emphasize the provisions in the main enactment are to be taken into consideration. Thus, classification of the municipal area on zone basis is not the sole governing formula for classification. As we have understood there will be classification of area by zone and thereafter there would be classification of building and land situated in the zone shall be done as per Rule 4 and the rates are to be determined. Thus. the submission made by the learned counsel for the parties in this regard is totally sans substance. 43. Quite apart from above, it is worthnoting that in Section 126(1) of the Municipalities Act and 138(1) of the Municipal Corporation Act while providing guidelines the Legislature has used the words "other relevant factors". In this context, we may profitably....
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....Municipal Corporation. There is no provision in the statute that the fair rent determined under the Rent Control Act in respect of a property is binding on the Commissioner. The legislature has wisely not made such a provision because determination of annual rent depends on several criteria". We are, therefore, unable to accept the contention of Shri Singhvi in this regard." 44. At this juncture, it is necessitous and useful to refer to decision rendered in the case of India Automobiles (1960) Ltd. (AIR 2000 SC 1089) (supra) (though we have already referred and quoted para 21 of the said judgment) wherein their Lordships in paras 23 and 24 expressed the view thus ; "23. As already noticed even without specific determination, the standard rent was held to have been statutorily determined under Section 2(10) (b) of the Rent Act. Upon, analysis of the various municipal laws and the judgments of this Court it is held that in cases where the municipal laws exclude the applicability of the Rent Acts by incorporating non-obstante clause in the taxing statute, the powers of the authorities under the Municipal Acts are not circumscribed by the limits indicated in Padma Deb....
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....itself has taken care by making sufficient provision in Sections 193 and 194 regarding the liability to pay the rent and apportionment of such liability when the premises are assessed, let or sublet. On proof of creation of sub-tenancy, the owner of the building may also be entitled to seek eviction of their tenants under the relevant provisions of the Rent Acts applicable in the State where the land or property is located, We find some substance in the submission of the learned counsel for the appellant that permitting the municipal authorities to assess the annual value on the basis of the rent paid by the sub-tenant to the tenant and fixing its liability on the owner may adversely affect the owners of the buildings who have let their premises at a time when rents were meagre and who under the rent control statutes are deprived of getting possession back of the lands and buildings from their tenants. The 1980 Act, therefore, requires application of mind by the municipal authorities to determine the rents on the basis of reasonableness by keeping into account all relevant circumstances including the actual rent received by the owner, hypothetical standard rent. the rent being rece....
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.... there is provision of fixation of standard rent under the M. P. Accommodation Control Act, that must be the sole criterion as laid down in Ratnaprabha (AIR 1977 SC 308) (supra). By virtue of the amendment that has come into existence in both the statutes a complete code has come into being. In view of the aforesaid, we are of the considered opinion that the nature inasmuch as the base of the aforesaid decisions have been removed by the legislative amendment which has fundamentally altered the situation. 46. Now we shall deal with the submissions relating to Section 138(3) of the Municipal Corporation Act. It is submitted by the learned counsel for the petitioners that Section 138(3) creates a discrimination inasmuch as a person who files the return on his own and there is a variation more than ten per cent. he is compelled to pay five times of the penalty whereas a person who has not taken the burden of self-assessment and adopted evasive attitude, is not visited with penalty. The aforesaid submission on a first flush looks quite attractive but on a deeper probe its fulcrum is sans substance. It is 2004 M. P./14 XI G-35 because though there is a provision for imposition of penalt....
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....yment for the purposes-of assessment.- (1) The Corporation may. if it thinks fit, employ any person to determine the annual value of lands and buildings in accordance with the principles laid down in Section 138. (2) Any person so employed shall have power, at all reasonable times and after giving due notice, and on production, if so required of authorisation in that behalf from the Commissioner, to enter on, survey and value any land or building within the city which the Commissioner may direct him to survey and value. (3) If any person wilfully delays or obstructs any person in the exercise of any of his powers under this section, he shall be liable to a fine not exceeding one hundred rupees." 48. It is also essential to reproduce Section 135 in this context which was substituted by M.P. Act 18 of 1997 and came into force with effect from 21-4-1997. It reads thus : "135. Imposition of property tax.- (1) Notwithstanding anything contained in this Act, the tax under clause (a) of sub-section (1) of Section 132 shall be charged, levied and paid, at the rate not less than six per cent and not more than ten per cent of the annual letting value, as may be determined ....
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....to Civil Judge under Section 139. The relevant part of the said provision reads as under: "139. Appeal to Civil Judge.- (1) If any dispute arises as to the liability of any land or building to assessment or as to the basis or principle of assessment or. as to the amount of tax assessed an appeal shall lie from the decision of the Council to the Civil Judge Class I having Jurisdiction over the Municipal area and if there be no Civil Judge Class I at the headquarter of the Municipality to the Civil Judge Class II having jurisdiction at such headquarter and if there be no Civil Judge Class II at such headquarter to the Civil Judge Class III having Jurisdiction. and in case of more than one such Civil Judges at the headquarter or having Jurisdiction as the case may be, to such one of them as the District Judge may specify." 51. We are of the considered view the analysis which has been done in respect of the Municipal Corporation Act shall also apply to the provision under Municipalities, [Act. Accordingly, we do not perceive any in-1 consistency therein. 52. At this stage, it has become imperative to advert to the contention raised at the Bar that resolutions have been pa....
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....oot of land. Keeping certain facets in view rules have been framed by making various classifications. If a person who is affected by the imposition of property tax can assail the order under Section 149 calling in question the quantum, liability, categorization of the building and various other aspects which fall in the rule. But as far as the rate provided in the resolution square foot basis cannot be challenged in appeal before the District Court. We may hasten to clarify that while passing the resolution, it is incumbent on the part of the Municipal Corporation or the Municipality to act in accordance with the statute and the rules. The rules provide various type of classifications which include quality of construction, basis of use and basis of location. A resolution cannot be passed stipulating a flat rate putting all the lands or buildings into one category. The resolution must clearly spell out what is the rate qua a particular category. Once such a rate is fixed that may be subject to challenge before the appropriate authority as has been stated but as far as the assessment of individual building it can be assailed before the appellate authority in respect of every aspect e....
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....) The property owner who is under legal obligation to file the return in regard to self assessment but fails to do so, would be liable to pay surcharge which is irreducible. (xi) The imposition of penalty can be assailed by way of an appeal before the Mayor -in-Council inasmuch as the assessment is done by a authority so designated under the statute and the Mayor-in-Council being the microcosm of Municipal Corporation has the competence to deal with the same in appeal. i (xii) It would be incumbent on the Municipal Corporation or the Municipality to pass a resolution by fixing the rate on per square foot basis taking into consideration the concept of standard rent fixed under the M. P. Accommodation Control Act though fixation of standard ren' would not be the governing or principal primal factor but would be one of the factors. It is also clarified that the fixation of standard rent in respect of a singular house would not meet or subserve the purpose of guidance but when there is fixation of standard rent in respect of a cluster of houses or group of houses that would be taken cognizance of by Municipality or by Municipal Corporation while fixing the annual letting value pe....