TaxTMI 
TaxTMI 
2020 (3) TMI 1260
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....ndent had paid a booking advance under a Memorandum of Agreement dated 06.06.2012 for purchase of a flat being constructed by the petitioner in a project named as 'January'. The total sale consideration settled between the parties was Rs. 48,47,400/- towards which the second respondent complainant advanced a sum of Rs. 28,33,440/-. The flat was to be delivered within thirty months with a grace period of 90 days. The complaint was filed claiming that the flat is not complete and the complainant was put to heavy losses on account of such delay of the project, therefore, a relief was prayed for, alleging violation of Section 18 of the Act by moving an application before the Competent Authority under Section 71 read with Section 72 of the said Act. 3.The Competent Authority is the Adjudicating Officer as defined under Section 2 (a) of the Act, appointed by the Real Estates Regulatory Authority established under Sub-section (1) of Section 20, in consultation with the appropriate Government, who is or has been a District Judge as provided for in Section 71 (1) of the 2016 Act. 4.The Adjudicating Officer has proceeded to hold that the complainant had availed of a loan facili....
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....ing Officer presiding over a non-judicial forum and appointed by a non-judicial Authority, the violation of fundamental rights due to the onerous condition on such parameters is available for challenge questioning the validity of the proviso to Sub-section (5) of Section 43 of the 2016 Act. To substantiate the submissions, learned counsel has laid stress on the judgment of the Delhi High Court in the case of Gagan Makkar and Anr. vs. Union of India, (2012) 192 DLT 186, where the challenge was to the provision of appeal in a matter arising out of a property tax imposed by the Delhi Municipal Corporation and it was held that the provision for deposit of the entire amount before the appeal is heard is an onerous condition rendering the right of appeal illusory and the said provision was struck down as being ultra vires. The judgment of the Delhi High Court and other similar matters arising out of the action taken by the Bombay Municipal Corporation in a case decided by the Bombay High Court are under consideration before the Apex Court, where interim orders have been passed continuing the interim orders that were made available by the High Court. 8.Learned counsel has also invit....
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.... Appeal No.7574 of 2014), decided on 10.07.2019. 12.Countering the said submissions raised on behalf of the petitioner, the learned Additional Solicitor General, contends that the contention that the right of appeal is the first adjudicatory forum is absolutely incorrect, inasmuch as under Section 71(1), the Authority, in consultation with the appropriate Government, appoints the Adjudicating officer, who is or has been a District Judge. Thus, the argument advanced that the Authority as defined under Section 22 constitutes of persons having no experience in adjudication is futile, inasmuch as the Selection Committee, consists of the Chief Justice of High Court or his nominee, which selects the Chair Person and Members of the Authority, who, in consultation with the State Government appoint an Adjudicatory Officer. In this view of the matter, the argument being advanced that the forum itself may not be constitutionally ordained is misconceived. 13.Learned Additional Solicitor General further submits that there are several other enactments like the Workmen's Compensation Act, where the entire amount has to be deposited. He submits that appeal is not a common law right and i....
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....t nor an ingredient of natural justice. He has also invited the attention of the Court to other judgments to substantiate his submissions. 15.We may further point out that the learned counsel for the petitioner has also placed before us the judgment of the Apex Court in the case of M/s.Tecnimont Pvt. Ltd. vs. State of Punjab and Ors., (Civil Appeal No.7358 of 2019), decided on 18.09.2019, where a condition of 25% pre-deposit for hearing the appeal was challenged as onerous, harsh and unreasonable. Another question as to whether the Appellate Authority had an inherent power to grant an interim order was also raised. While answering the said questions, the Apex Court held that the High Court could not have culled out a power of granting interim protections and therefore, if the statute did not make any prescription, the Appellate Authority could not have exercised such powers. On the issue of pre-deposit, the High Court upheld the provision and while relying on the judgment in the case of Shyam Kishore (supra), it went on to hold that the condition of 25% pre-deposit was not onerous, harsh or unreasonable, but in paragraph 18 proceeded to hold that in case of extreme hardship, a w....
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....se of entertainment of an appeal by a person who had not deposited the amount of tax and who had not been able to demonstrate undue hardship, which, in that case, arose out of his own omission and default and then, held that such a provision would not be violative of Article 14 of the Constitution of India. It was further held that it was open to the legislature to impose an accompanying liability upon a party upon whom a legal right is conferred or to prescribe conditions for the exercise of the right. The same being valid, no violation of Article 14 was discernible. However, the said case turned on the point that a disability or a disadvantage arising out of the party's own default or omission cannot be taken to be a differentiation so as to attract Article 14 of the Constitution of India. 18.The Apex Court then considered the provisions of the Delhi Municipal Corporation Act, namely Section 170 aforesaid and decided the same in the light of the judgment in the case of Seth Nand Lal (supra). In paragraph 14 of the judgment in the case of Shyam Kishore (supra), the Apex Court held as under:- "41. On behalf of the Corporation, it is contended that the words "hear....
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....that the payment of disputed tax is not a condition precedent to the entertainment or admission of the appeal. In the present statutory context, it sounds plausible to say that such an appeal can be admitted or entertained but only cannot be heard or disposed of without pre-deposit of the disputed tax. Such an interpretation will provide some much-needed relief from the harshness of the provision. These are not days in which the calculation of the property tax is simple and uncomplicated; the determination of the annual value of the property, except when based on the actual rent received from the property, involves various subjective factors and, not unoften, there is a wide gulf between the tax admitted to be due and the tax demanded. Sometimes, to compel the assessee to pay up the demanded tax for several years in succession might very well cripple him altogether. 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 appea....
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....ms of constitutional validity. The contention on behalf of the Corporation to read the provision rigidly and seek to soften the rigour by reference to the availability of recourse to the High Courts by way of a petition under Articles 226 and 227 in certain situations and the departmental instructions referred to earlier does not appear to be a satisfactory solution. The departmental instructions may not always be followed and the resort to Articles 226 and 227 should be discouraged when there is an alternative remedy. A more satisfactory solution is available on the terms of the statute itself. The construction of the section approved by us above vests in the appellate authority a power to deal with the appeal otherwise than by way of final disposal even if the disputed tax is not paid. It enables the authority to exercise a judicial discretion to allow the payment of the disputed tax even after the appeal is filed but, no doubt, before the appeal is taken up for actual hearing. The interpretation will greatly ameliorate the genuine grievances of, and hardships faced by, the assessee in the payment of the tax as determined. Though an assessee may not be able to acquire an absolute....
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....) illusory ? We have seen that in Anant Mills (supra), the provision in question [section 406(2)(e) of the Bombay Provincial Municipal Corporation Act, 1949] had a proviso which permitted the appellate authority to dispense with the requirement of pre-deposit of the tax claimed from the appellant in cases of hardship. In Seth Nand Lal (supra), the Supreme Court upheld such a provision, inter alia, because of the 'meagre' amount of pre-deposit that was required under the Act in question. Once again, in Vijay Prakash D. Mehta (supra), the Supreme Court upheld the validity of Section 129 E of the Customs Act, 1962 which also contained a proviso enabling the appellate authority to dispense with the pre-deposit of tax or penalty. A similar provision was considered in Gujarat Agro Industry (supra) though in that case, the power to dispense with the pre-deposit was limited to 25% of such amount. In Shyam Kishore (supra), the Supreme Court interpreted Section 170(b) of the DMC Act in such a way as to avoid the issue of constitutional validity. However, it observed that the validity of a condition, which makes the right of appeal illusory, may need careful consideration in an approp....
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....of pre-deposit at the stage of filing or institution or presentation of an appeal and held as under in paragraph 9:- "9. Suffice it to observe that, stricto sensu, the said proviso is not a provision of pre-deposit at the stage of filing, institution or presentation of the appeal as such; but is a provision stipulating payment of tax dues as a prerequisite or sine qua non for consideration of appeal on merits or otherwise and/or for condonation of delay in filing the same, as the case may be, for the first time. If we may say so, it is also to impose fetter on the Appellate Authority from admitting the appeal for consideration on merits. It is well recognized that filing, institution or presentation of appeal in the office of the Appellate Authority is an independent event than the appeal being taken up for consideration "for the first time" for being admitted on merits or otherwise and/or for condonation of delay in filing it, as the case may be. There is no reason to interpret the stated proviso in any other manner lest, inevitably, it would result in rewriting the same and entail in doing violence to the legislative intent. Presumably, this Court in M/s. Innova....
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....more dominant position financially or otherwise and the allottee being pitted against such dominants require protection of his life time savings in such investments. It is in order to protect the interest of an allottee that such stringent conditions were necessarily required after it was experienced that promoters and builders had been enriched themselves at the cost of individuals who were made to run to Courts and fight long drawn litigations to recover their priced investments. This being a laudable object to our mind is a reasonable approach because it ensures refund of the amount as well as compensate the allottee proportionately. Such a provision will also act as a deterrent to promoters and builders not to withhold the money of the investors against their wishes in the event of violation of the terms of an agreement and would substantially put on guard all promoters and builders to ensure timing precision and the expected levels of accuracy in construction. This object in no way prejudices the promoters or the builders, but only seeks to protect an allottee from any form of exploitation or hardship that may be faced by an allottee in the event he does not get his due return....
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....ely, there is no discretion left in the Appellate Authority at all to modify the terms of deposit and the statute requires a total deposit of the entire amount of compensation. The issue of safety valve being provided in a statute, as discussed in the judgment of Gagan Makkar (supra), has to be taken notice of. As observed by the Apex Court in the case of M/s.Tecnimont Pvt. Ltd. (supra), we cannot read into the hands of the Appellate Authority any discretionary power in this regard. But, at the same time, we find the observation made therein in paragraph 18 that in case of extreme hardship, a writ petition could be an appropriate remedy. To this extent, it is open to an aggrieved person, including the petitioner, to explore the possibility of raising a challenge for exercise of any such discretion in a writ petition. But, then, that is not an issue for us to finally pronounce upon, and would depend as and when such an option is exercised by the petitioner. There are no pleadings in the present writ petition to assume that any prejudice has been caused to the petitioner on account of any financial crisis being faced by him nor is there any material to assume that the petitioner is e....