Faridabad Complex Admn vs Commissioner, Ambala Division

G.S. Singhvi, J.

The petitioner has challenged the order (Annexure P5) dated 30.5.1980 passed by the Commissioner, Ambala Division, Ambala, whereby he quashed the order passed by the Administor, Faridabad Complex Administration, Faridabad, assessing the property of respondent No. 3 to a value of Rs. 3,10,111/ for the purpose of housetax for the year 197980 as well as the demand notice issued by the petitioner.

The petitioner has been established under the Faridabad Complex (Regulations and Development) Act, 1971 (for short, the 1971 Act). Under Section 22 of the 1971 Act, the petitioner submitted a proposal to the State Government for imposing tax on the land and buildings situated within the limits of the petitioner at the rate of 10 per cent of the annual value of the properties as defined in the Haryana Municipal Act, 1973 (for short, the 1973 Act). The proposal was accepted by the Government as would appear from the notification Annexure P1 dated 30.7.1975. Thereafter, a notice dated 25.6.1979 was issued to the respondent No. 3 under Section 78 of the 1973 Act calling upon it to show cause as to why its property be not assessed at Rs. 3,10,111/. Respondent No. 3 submitted its objection vide Annexure P2 and pleaded that it was not liable to be assessed for tax being a research institute established purely for scientific research and educational purpose. The Assessing Authority passed the order dated 20.8.1979 (Annexure P3) and rejected the objection of respondent No. 3 on the ground that the objection was not against the amount of assessment but against the assessment itself. This was followed by a demand notice dated 20.11.1979 calling upon the respondent No. 3 to pay Rs. 31,011.10 as housetax for the year 197980. This notice was served upon respondent No. 3 on 22.11.1979. On 19.12.1979, respondent No. 3 filed an appeal under Section 100 of the 1973 Act. After giving notice to the petitioner and hearing the parties, the respondent No. 1 accepted the appeal filed by respondent No. 3 and quashed the assessment as well as demand notice.

Principal argument of the learned counsel for the petitioner is that the appeal filed by respondent No. 3 on 19.12.1979 was barred by time in so far as the order Annexure P3 is concerned because an appeal could be filed against the order of assessment within thirty days, whereas the appeal was filed after almost four months of the passing of the order and no prayer for condonation of delay was made and that although this point was specifically raised before the Appellate Authority, the said authority has not at all decided the objection raised by the petitioner. Learned counsel argued that the order Annexure P3 was passed in the presence of the representative of the respondent No. 3 and, therefore, he must be deemed to be aware of the contents of the order passed by the Assessing Authority and therefore, there could be no justification for overlooking the period of limitation prescribed for filing of the appeal. Learned counsel argued that in the appeal (Annexure P4), the respondent No. 3 did not challenge the order of assessment and, therefore, the Appellant Authority was not justified in quashing the assessment order. Learned counsel further argued that respondent No. 3 cannot claim exemption in terms of proviso (1) of the Schedule appended to the notification (Annexure P1) because it is not a registered educational institution. According to the learned counsel, the respondent No. 3 is purely a research institute established by those engaged in the manufacture of cement and such institution cannot claim itself to be an educational institution.

Shri M.L. Sarin appearing for the respondent No. 3 argued that after the respondent No. 3 had submitted its objection to the notice issued by the petitioner, no order was communicated to the respondent No. 3 and it came to know of the order (Annexure P3) only on 22.11.1979 when it received demand notice dated 20.11.1979 and, therefore, the appeal filed on 19.12.1979 was within limitation. Learned counsel submitted that the Appellate Authority felt convinced that the objection of limitation was thoroughly misconceived and, therefore, it proceeded on assumption that the appeal was within limitation. Shri Sarin further argued that the petitioner did not comply with the mandatory requirement of Section 79(2) of the 1973 Act and, therefore, there was no justification for the petitioner to raise objection of limitation. Another argument of Shri Sarin is that the Assessing Authority has not given any cogent reason for rejecting the objection raised by the respondent No. 3 regarding nonapplicability of the first part of the notification Annexure P1 and has brushed aside its claim that being educational institution, respondent No. 3 was not liable to pay tax. Shri Sarin referred to the judgment (Annexure R2) dated 23.8.1984 as well as the judgment (Annexure R5) dated 21.2.1985 passed respectively by the Senior Sub Judge, Faridabad and the District Judge, Faridabad, in a suit for recovery filed by respondent No. 3 against the Assessing Authority, Excise and Taxation Officer and the Collector, Faridabad, on the ground that respondent No. 3 was an educational institution and was exempt from payment of taxes under the Punjab Urban Immovable Property Tax Act, 1940. According to the learned counsel, these two decisions conclusively establish that the respondent No. 3 has been judicially recognised as an educational institution and, therefore, there could be no justification for imposing tax on it on the basis of notification (Annexure P1).

Though the learned counsel for the petitioner is right in contending that the Appellate Authority has not decided the objection raised by the petitioner that the appeal filed by the respondent No. 3 was barred by limitation but it is not possible to ignore the fact that the specific plea raised by respondent No. 3 regarding noncommunication of the order (Annexure P3) has remained unrebutted, Therefore, the argument of Shri Sarin that respondent No. 3 had filed appeal within 30 days of the receipt of the notice dated 20.11.1979 and it was within limitation merits acceptance. Therefore, it is not possible to set aside the order (Annexure P5) only on the ground that the Appellate Authority did not decide the objection of the petitioner regarding the bar of limitation. While the Assessing Authority has passed an arbitrary and cryptic order rejecting the objection of the respondent No. 3 against the notice of assessment by saying that the objection is against the assessment and not against the amount of assessment, the Appellate Authority has also not given any reason for recording oneline conclusion that the respondent No. 3 is a technical institution and, therefore, in terms of the notification (Annexure P1) no housetax could be imposed on its properties. In my opinion, both the authorities have singularly failed in directing their attention to the crucial issue whether the respondent No. 3 could be treated as an educational institution within the meaning of proviso (1) of the Scheduled appended to the notification dated 30.7.1975. No doubt the Memorandum of Association of respondent No. 3 shows that one of its objects is to encourage and foster education of persons engaged in or likely to be engaged in the trade of cement and industry and to maintain schools and grant scholarships connected with the purpose of the Association and there may be some substance in the claim of respondent No. 3 that a broader meaning should be given to word ``educational'''' used in the aforesaid proviso but this is a matter which requires a deeper examination and proper decision by the Assessing Authority before any order could be passed holding the respondent No. 3 liable to pay taxes.

In view of the above discussion, the only appropriate course is to quash both the Annexure P5 as well as Annexure P3 and to remand the case to the Assessing AuthoritycumAdministrator, Faridabad Complex Administration, to give a fresh opportunity of showing cause to respondent No. 3 regarding its liability to be assessed for housetax in terms of Annexure P1 and pass fresh order after considering the objection raised by respondent No. 3 against the proposed assessment and its claim for exemption to the notification. Respondent No. 3 shall be free to submit fresh written objection/reply in response to the notice which the petitioner may issue after the remand of the case. The Assessing Authority should consider the entire material placed before it respondent No. 3 and then decided the matter in an objective manner without being influenced by the orders Annexures P3 and P5 or any observation made in this order. The respondent No. 3 is directed to appear before the Administrator, Faridabad Complex Administration, Faridabad, on 11.12.1995. Ordered accordingly.

The writ petition is decided in the manner indicated above.

The parties are left to bear their own costs.