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Judgment
Sushil Harkauli and Sudhir Agarwal, JJ.—All these writ petitions filed by M/s Krishi Utpadan Mandi Samiti, Allahabad through its Secretary relate to demand of house tax and water tax raised by Nagar Nigam, Allahabad (hereinafter referred to as "NNA") and Jal Sansthan, Allahabad (hereinafter referred to as "JSA") respectively.
Since, the questions of fact and law involved are similar and common, therefore, as requested by learned Counsel for the parties, these writ matters have been heard together and are being decided by this common judgement.
The petitioner has established a market yard at Mundera, Allahabad sometimes in the year 1985, to regulate the sale and purchase of specified agricultural produces and to discharge statutory functions under U.P. Krishi Utpadan Mandi Adhiniyam, 1964 (hereinafter referred to as the "Act 1964"). The aforesaid premises is within the municipal limit of NNA. A show cause notice dated 20.8.1985 was issued by the Tax Superintendent, NNA proposing annual rental value of the said premises as 318360/- with effect from 1.10.1985. The petitioner was required to file objection, if any. against the said determination. The petitioner did not file any objection and, therefore, the valuation attained finality. It appears that based on the aforesaid valuation, house tax and water tax as demanded by the respondents NNA and JSA was paid by the petitioner since 1.10.1985.
u/s 211 of U.P. Municipal Corporation Adhiniyam, 1959 (hereinafter referred to as "Act 1959"), the annual rental value of the houses/lands for the purpose of assessment of tax was revisable once in every five years, which was amended by U.P. Act No. 17 of 1999 for two years. However, it appears that since 1.10.1985, in respect to the properly in question, no revision of annual rental value could take place. It is only on 7.8.1998, a show cause notice u/s 174(b) of Act 1959 was issued to the petitioner by Tax Superintendent. NNA proposing the revised rental value to Rs. 3,50,07,362/-. The show cause notice also mentioned the changes on account of additional construction which had taken place at the premises in question conveying determination of higher valuation. The copy of the said show cause notice is on record as Annexure-7 to Writ Petition No. 2815 (tax) of 2002 (hereinafter referred to as "first writ petition"). Though it is claimed by the petitioner that objection was filed but none has been placed on record. The valuation was accordingly finalized vide resolution dated 6.9.1999 (Annexure-9 to first writ petition) as proposed by NNA and demand of house tax was accordingly raised from the petitioner on the revised rate with effect from 1999-2000. Consequently, the petitioner was required to pay a sum of Rs. 1,43,22,774.22 vide notice dated 4.1.2000 stating that bills of the aforesaid amount were already served to the petitioner, but payment was not made. The petitioner sent a letter dated 1.1.2000 requesting NNA to reconsider the valuation of mandi premises of the petitioner. The Mukhya Nagar Adhikari vide letter dated 20.1.2000. accepting the request, required the petitioner to furnish details with respect to the total area of mandi, details of development works, construction work etc. on the said premises. The copy of the said notice is Annexures 11 & 13 to the first writ petition. In the meantime, it appears that so far as water charges are concerned, JSA for the period prior to 1999-2000 continued to raise demand on the basis of the earlier valuation of the premises made by NNA and to that extent, there is no dispute between the parties. However, it appears that for the period of October 1994 to March 1998, against the balance amount of water charges of Rs. 1,12,687.40. the petitioner deposited only a sum of Rs. 80,676.80 and for balance of sum of Rs. 32,010.60, a recovery certificate was issued by JSA. It appears that some incomplete information could be placed by the petitioner pursuant to the NNA. Allahabad''s letter dated 20.1.2000. Thereafter, another letter dated 115.12.2000 sent by Officer In-charge (Tax). NNA required the petitioner to furnish complete information as desired vide letter dated 20.1.2000. Thereafter. NNA revised annual rental value of the premises in question to Rs. 67,49,106/- instead of Rs. 35007362/-. Hence he calculated house tax payable by the petitioner on the valuation of Rs. 318360/- upto 1999-2000 and with effect from 1.4.2000 i.e. 2000-01 on the valuation of 67,49,106/-. Since payment on old rates was already accepted by the petitioner upto 1997-98. the demand of balance of house tax was raised for the period 1998-99 to 2001-02 details whereof are on record as Annexure-16 to the first writ petition. Thereafter, another show cause notice dated 13.3.2002 (Annexure l7 to the first writ petition) was issued to the petitioner by Mukhya Nagar Adhikari, NNA proposing revision of annual rental value u/s 174(b) of Act 1959 in view of Section 211, which was amended in 1999 and provided revision of the assessment once in every two years. Moreover, the petitioner had not cleared the arrears of house tax payable upto 2001-02 and. accordingly, a demand notice dated 10.5.2002 (Annexure-18 to the first writ petition) was issued requiring the petitioner to pay the balance sum of Rs. 12,28,844.40 failing which proceedings for recovery of the said amount as arrears of land revenue would be initiated. The petitioner failed to deposit the amount sought to be demanded vide notice dated 10.5.2002. Therefore, the Mukhya Nagar Adhikari. NNA passed order u/s 509 of Act 1959 attaching the bank account of the petitioner maintained at Bank of Baroda. Khuldabad Branch, Allahabad vide order dated 26.8.2002 (Annexure-19 to the first writ petition) and dated 25.10.2002 (Annexure-20 to the first writ petition). Challenging the demand notice dated 10.5.2002. and attachment orders dated 28.9.2002 and 25.10.2002, the petitioner filed first writ petition seeking following reliefs:
i) issue a writ order or direction in the nature of certiorari quashing the demand notices dated 19.1.2002 and orders dated 28.9.2002 and 25.10.2002 passed by respondents (Annexure- 17, 18, 19 & 20 respectively.
ii) Issue a writ, order or direction in the nature of mandamus directing respondent not to recover any amount in pursuance of above said orders/demand notices, from the petitioner;
iii) issue any other writ, order or direction which this Hon''ble Court may deem fit and proper in the circumstances of this case;
iv) Award the cost of the petition to the petitioner.
While admitting the aforesaid writ petition, this Court passed an interim order on 13.10.2002 to the following effect:
Upon the petitioners paying a sum of Rs. 5,00,000/- in cash and for the balance furnishing security to the satisfaction of the assessing authority in the form of other than cash or bank guarantee within two weeks from the date, there shall be stay of operation of the attachment order dated 28.92002 until further orders.
The NNA did not file any counter affidavit in the first writ petition and the same remained pending.
No action for revision pursuance to notice dated 13.3.2002 was taken and the valuation made w.e.f. 1.4.2000 continued till 31.3.2005. For the year 2005-06, the annual rental value of the premises was revised to 71,96,202/- and, accordingly, the house tax was demanded at the rate of 10% of the annual rental value i.e. Rs. 71,96,20.20/- per annum vide notice dated 20.3.2006 besides arrears of house tax not paid by the petitioner from 1998-99. Again the petitioner did not pay any amount. An order was passed on 27.3.2006 u/s 509 of Act 1959 again attaching account of the petitioner maintained at Bank of Baroda, Mundera, Allahabad. The petitioner filed civil misc. application No. 71902 of 2006 in first writ petition whereupon this Court on 5.4.2006 directed it to be listed in the next cause list. No further order was passed on the said application. For the assessment year 2006-07, the demand of house tax at the rate of Rs. 719620.20 vide bill No. 4100230/06-07 was made which is said to have been served upon the petitioner on 23.2.2007. Another letter dated 14.2.2007 was issued by Nagar Ayukta, NNA to the petitioner showing annual rental value for house tax for the year 2006-07 as 674910.60 requiring him to deposit the same. Challenging the aforesaid bills as well as letter dated 14.2.2007 being contradictory, the petitioner filed writ petition No. 350 (tax) of 2007 (hereinafter referred to as "second writ petition") seeking following reliefs:
i. issue a writ, order or direction in the nature of certiorari quashing the Demand Notice dated 14.02.2007 and 23.02.2007 passed by respondents towards service charges and House Tax;
ii. issue a writ, order or direction in the nature of mandamus commanding the respondents not to give effect the demand notices dated 14.02.2007 & 23.02.2007 passed by respondent towards service charges and House Tax;
iii. issue such other and further writ, order or direction which this Hon''ble Court may deem fit and proper in the nature and circumstances of the present case; iv. A ward cost of the petition to the petitioner.
The said writ petition came up for consideration before a Division Bench on 2.3.2002 when it granted time to learned Counsel appearing for NNA to file counter affidavit. However, no interim order was passed. Vide notice dated 1.1.2008 demand of Rs. 1583164.44 was made from the petitioner with respect to house tax for the assessment year upto 31.3.2008. Aggrieved thereagainst, the petitioner filed writ petition No. 264 (tax) of 2008 (hereinafter referred to as "third writ petition") seeking following reliefs:
i. to issue a writ, order or direction in the nature of certiorari by quashing the impugned demand notice dated 1.1.2008 passed by the respondents towards the House tax as contained Annexure No. I to this writ petition.
ii. to issue a writ, order or direction in the nature of mandamus not to give effect the impugned demand notice dated 1.1.2008 passed by respondents towards the House Tax;
iii. to issue any other writ, order or direction in favour of the petitioner as this Hon''ble Court may deem fit and proper in the present facts and circumstances of the case.
iv. to award the cost of the petition in favour of the petitioner.
When this matter came up for admission before this Court, the petitioner sought time and, thereafter, filed an amendment application which was allowed by Court''s order dated 21.2.2008 and pursuant thereto, the following reliefs are added in the third writ petition:
i. to issue a writ, order or direction in the nature of certiorari by quashing the impugned order dated 20,3.2006 and resolution dated 20.11.2006 passed by the respondents.
ii. to issue a writ, order or direction in the nature of mandamus not to give effect the impugned order dated 20.3.2006 and resolution dated 20.11.2006 passed by respondents.
Sri B.D. Madhyan. Senior Advocate, assisted by Sri Sathish Madhyan, advocate has made submissions on behalf of the petitioner and Sri Q.H. Siddiqui, Rajesh Kumar Srivastava have appeared and advanced their submissions on behalf of the respondents.
Learned Counsel for the respondent-NNA raised a preliminary objection that in none of these writ petitions, the orders making assessment/valuation passed by the competent authority have been challenged. The demand raised pursuant to such assessment/valuation orders as also recovery proceedings are consequential to such assessment orders which have only been assailed. In view of non challenge to the orders determining annual rental value, the petitioner cannot challenge the consequential orders, which have to follow the valuation orders passed by the competent authority since non payment of tax in accordance with the said orders by the petitioner is illegal. It was thus incumbent upon the respondent-NNA to initiate recovery proceeding which cannot be said to be bad. It is, thus, contended that in absence of any relief sought against any of the orders determining valuation passed by the competent authority of NNA from time to time, none of the writ petition challenging consequential proceedings is maintainable.
Sri Madhyan, however, contended that the demand notices itself constitute assessment orders of NNA and the same having been challenged in the writ petitions, therefore, it cannot be said that writ petitions are not maintainable and, therefore, the preliminary objection is liable to be rejected. He further contended that the entire assessment made by the respondent-NNA from time to time is wholly illegal since the procedure prescribed under the Act has not been followed. Even otherwise respondent-NNA has no authority to make any assessment with respect to property of the respondent, which is also a statutory authority under 1964 Act and, therefore, the demand of house tax and water tax from the petitioner is without jurisdiction. He lastly contended that enhancement of valuation of the property in question is perverse, based on no material and, therefore, the demand of higher amount of house tax from the petitioner is illegal.
We have heard learned Counsel for the parties and perused the record.
It is not in dispute that with effect from 1.10.1985, the valuation of the property was made at Rs. 318360/- and petitioner was required to pay house tax on the basis thereof. This valuation was accepted and acted upon by the petitioner. The said valuation continued upto 1999-2000 and the entire amount of tax was paid by the petitioner except Rs. 9550.80. For revision of the valuation, notice was issued to the petitioner on 7.3.1998 proposing revised valuation at Rs. 350,07,362/- whereagainst he filed objection. The NNA, however, vide resolution dated 8.9.1999 finalized the said valuation and directed to calculate house tax on the basis of revised valuation with effect from 1.4.1998. Subsequently, on the petitioner''s application for reconsideration of the matter, it is not in dispute that NNA reviewed the matter of revision of valuation and vide order dated 23.11.2001 revised valuation was determined to Rs. 67,49,106/-. It was made clear that it will be effective with effect from 1.4.2000 and for the earlier period, the old valuation would continue. The petitioner was informed of the said valuation vide letter dated 23.11.2001 and was directed to pay the balance amount of house tax as per the aforesaid decision, but he failed to deposit any amount whereafter reminder was issued on 19.2.2002. Neither any appeal was filed by the petitioner against the aforesaid assessment u/s 472 of Act, 1959 nor the said assessment was challenged in any of the writ petition filed before this Court. It appears, however, that the petitioner vide letter dated 3.4.2002 remitted a cheque No. 05587 dated 27.3.2002 of Rs. 160771.80 towards partial payment of house tax against the demand of Rs. 13,89,616/-. Vide letter dated 10.5.2002, Mukhya Nagar Adhikari, NNA required the petitioner to deposit the entire balance amount failing which coercive method would be adopted. The petitioner still failed to take any step for payment and in these circumstances when the attachment order was issued u/s 509 of Act, 1959, the first writ petition was filed wherein there is no challenge to the assessment order passed by the competent authority and only demand letter as well as attachment order passed u/s 509 of Act 1959 were challenged, which in fact consequential steps pursuant to assessment of property in question. In the absence of any challenge to such assessment orders, in our view, no relief can be granted in respect to consequential orders which are consistent to order of assessment.
So far as the second writ petition is concerned, there also the petitioner has not challenged any order of assessment passed by the authorities and, on the contrary, it appears that when for subsequent period, further demand was raised, only the letters raising demand were challenged. In the absence of any challenge to the assessment, the second writ petition also deserved to be dismissed.
Now coming to the third writ petition we find that initially, the demand notice dated 01.01.2008 requiring the petitioner to deposit Rs. 15,83,164.44 towards house tax was challenged. The grounds of challenge are that the petitioner is entitled for exemption from house tax u/s 175; is liable to be assessed for annual valuation u/s 174(a) and not (b) thereof; Section 205 exempt Union of India and State Government from such tax, Mandi Samiti being owned and controlled by the State Government is also exempted under the said provision and that the rate of house tax is highly excessive and confiscatory. By way of amendment the proposal and resolution dated 26.11.2006 Annexure-SA-1 has also been challenged, besides, the notice dated 20.03.2006. It appears that without understanding the things and also by giving wrong dates the aforesaid relief has been added in the third writ petition. It would be important to reproduce paragraphs No. 52-A. 52-B and 52-C of the third writ petition as under:
52-A That the above writ petition came up before their lordships Hon''ble Mr. Justice Sushil Harkauli and Hon''ble Mr. Justice Sudhir Agarwal, who have been pleased to observe that whether the demand notice dated 20-3-2006 has been challenged in the earlier writ petition bearing number 350 (T) of 2007 in re KUMS, Allahabad v. Nagar Nigam, Allahabad and Ors. and the Hon''ble Court was pleased to direct the petitioner to be put up no 20-2-2008 and on request, it has been adjourned to 21.2.2008.
52-B That the perusing the earlier writ petition i.e. 350 (T) 2007, it has been discovered that the order dated 20-3-2006 has not been challenged. However, the Demand notice dated 20-3-2006 has been annexed as Annexure No. 18 to the writ petition. The relief (a) as claimed reads as under:
52-C That the order dated 20-3-2006 has also been filed in the above writ petition, which is Annexure- XVI to the writ petition, but again the same mistake has been impugned in the relief clause. In both the writ petition, different Demand notices have been challenged.
In the second writ petition there is no challenge to the order dated 20.03.2006 and on the contrary the impugned orders therein are 14.02.2007 and 23.02.2007. As said in para 52-C that the order dated 20.03.2006 has been filed as Annexure-16 to the second writ petition though it is a letter dated 30.03.2006 sent by the petitioner itself replying to the NNA''s letter dated 03.03.2006 with respect to demand of Rs. 25,02,397.80 towards house tax balance from the petitioner. It has been requested by petitioner in the said letter that since the question of valuation is sub-judice before High Court in Writ Petition No. 2815 of 2002 and, therefore, matter may be considered in the light thereof. As stated in para 52-B of the third writ petition the order dated 20.03.2006 is Annexure-18 to the second writ petition which has been issued by the Additional Nagar Ayukt, Nagar Nigam, Allahabad informing the petitioner that the bills demanding Rs. 25.02.397.80 have already been served upon the petitioner but despite request payment has not been made and, therefore, a request was made to the petitioner to pay the said amount. We find that it is in the nature of reminder to the earlier letters sent by the NNA. Annexure-19 to the second writ petition is also another letter dated 20.03.2006 whereby petitioner was informed that proposal for revision of valuation to Rs. 71,96,202/- of the Mandi Premises in question was also conveyed to the petitioner against which an objection was filed on 28.02.2006 and after hearing the petitioner''s representative. Sri Hira Mani Pandey, Accountant, on 18.03.2006, the Nagar Nigam finalized the said proposed assessment on the basis whereof demand of Rs. 25,02,397.80 was raised and the said demand was served upon the petitioner vide letter dated 03.03.2006, but the petitioner failed to deposit the same. Endorsement of Annexure-19 to the second writ petition shows that the said letter was served upon the petitioner at least on 21.03.2006 whereupon the Secretary of the petitioner, Mandi Samiti passed an order directing the Head Clerk to contact counsel of the petitioner in the High Court and proceed according to his advise. Annexure-19 contains a chart giving breakup of the demand on Rs. 25,02,397.80 as under:
e.Mh lfefr Hkou la0 208 eq.Msjk xzke bykgckn ij ns; x`gdj dh /kujkf''k dk fooj.k
foRrh; o"kZ
EkwY;kadu
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Xk`gdj
Hkqxrku
vo''ks"k
1989&99
1999&00
2000&01
2001&02
2002&03
20003&04
2004&05
2005&06
318360&00
318360&00
6749106&00
6749106&00
6749106@&
6749106@&
6749106&00
7196202&00
19 izfr0
22 izfr0
10 izfr0
10 izfr0
10 izfr0
10 izfr0
10 izfr0
10 izfr0
60488&40
70039&20
674910&60
674910&60
674910&60
674910&60
674910&60
719620&20
30244&20
60488&40
160771&80
500000&00
181465&20
60488&80
30244&20
9550&80
6]60771&80
514138&80
174910&60
674819&60
493445&40
659131&80
4224700&80 993458&00 3231242&80 &&&&&&&&&&&&&&&&&&&&&& cSad xkjUVh 728845&00 &&&&&&&&&&&&&&&& ns; vo''ks"k 2502397&80 &&&&&&&&&&&&&&&&&&
The alleged resolution dated 20.11.2006, Annexure-SA-1 to the third writ petition is with respect to Nagar Nigam''s proposal of finalising valuation of property in question as Rs. 07,49.10b/- w.e.f. 01.04.2000 and, therefore, the date mentioned in para 52-A, 52-B and 52-C of the said resolution is clearly incorrect inasmuch as, in 2006 earlier valuation of Rs. 67,49,106/- was further revised to Rs. 7,19,620/-. In fact this resolution appears to have been passed in 2001 and not in 2006. A perusal of the letter dated 10.05.2002, Annexure-10 to the third writ petition shows that there is a reference that w.e.f. 01.04.2000 the valuation has been assessed to Rs. 67,49,106/- and for payment of house tax as per the said valuation the petitioner was required to pay Rs. 13,89,616.20 vide letter dated 23.11.2001. Therefore, when the demand on the basis of assessment to Rs. 67,49,106/- already stated on 23.11.2001, it is wholly incorrect to suggest that the alleged resolution is dated 20.11.2006 and it appears that to cover up serious laches on the part of the petitioner the aforesaid document is being challenged in third writ petition claiming that it is dated 20.11.2006 though the valuation to this effect was already finalised by the NNA in 2001 and demand was also made accordingly vide letter dated 23.11.2001. Having failed to challenge the said assessment made in 2001, in the last more than six years, we do not find any reason to permit the petitioner to challenge the same that too not in the writ petitions filed earlier, but in the third writ petition, though by this time a further revision has been made which has been made effective from 01.04.2005.
We required the learned Counsel for the petitioner to show as to in which writ petition, he has challenged any order of assessment, but he failed. He, however, submitted that the letter of demand as well as attachment order itself be treated to be the orders of assessment made by the competent authority under Act 1959 but we are unable to agree with the said submission. It is important to notice at this stage that after the judgment was reserved in this matter, the learned Counsel for the petitioner has also filed written arguments and therein he has appended as Annexure SA-1, copy of the proposal submitted by Mukhya Nagar Adhikari for revised valuation of Rs. 67.49.106/- effective from 1.4.2000 which was accepted by the NNA. but he failed to show that the said order, in any manner, was challenged in any of these writ petitions. An annexure to the written argument cannot improve his case since such document which is not part of the writ petition and which is not challenged in any of the writ petition cannot be looked into, if sought to be placed along with written argument. The respondents have clearly showed that upto 1999-2000, the valuation of the premises continued to be as per the old rates but with effect from 2000-01 the valuation was revised to 67,49,106/-, which has continued upto 2004-05 and with effect from 2005-06 the valuation again has been revised to 71,96.202/- and on the said valuation house tax is being demanded from the petitioner.
We do not find any reason to interfere with the consequential steps taken by NNA for recovery of the house tax based on the said determination of the valuation of the premises. If the amount of house tax is not paid by an assessee, the NNA is well within its right to take coercive measures in accordance with the procedure prescribed under Act 1959. The said consequential action cannot be said to be illegal or invalid in any manner.
Learned Counsel for the petitioner sought to argue that since the very basis of award of house tax on the petitioner is wholly without jurisdiction, therefore, no amount of laches or delay should come in his way and he should be allowed to assail the same in these writ petition.
We have considered the aforesaid submission also and we find that neither the petitioner can be exempted from the liability of tax u/s 205 of the Act nor even otherwise, the valuation of the property in question made u/s 174(a) and (b) of the Act can be said to be even otherwise illegal or contrary to law. Admittedly, the petitioner is neither the Union of India nor the State Government. It is a statutory body constituted under the Act. There is no exemption granted to such a statutory body from the liability of tax u/s 205 of the Act.
So far as the valuation determined by the NNA u/s 174(a) and (b), we have not been shown any error or illegality therein except of vague submission that the petitioner ought not to have been assessed u/s 174(b) of the Act.
Learned Counsel for the petitioner sought to rely on various judgments namely, Bidhannagar (Salt Lake) Welfare Association Vs. Central Valuation Board and Others, Dewan Daulat Rai Kapoor and Others Vs. New Delhi Municipal Committee and Others, Godraj Dhanji Shah Gandhi v. Municipal Board and Anr. 1973 ALT 476, Union of India v. Municipal Board, Lucknow 1957 ALT 531 , Municipal Board Vs. District Magistrate and Another, Nagar Palika Parishad, Sardhana v. Chandra Prakash and Anr. 2001 (1) SAC 135 and Nagar Mahapalika, Varanasi v. The Additional District and Sessions Judge, Varanasi and Ors. 1999 ALT 520.
We have considered all the aforesaid authorities but find that none of them helps the petitioner in any manner. The law that before undergoing the process of valuation of property a pre-decisional hearing should be afforded to the party concerned, in the case in hand, not only the Act provides for such opportunity but on the other hand the documents on record show that the petitioner was afforded such an opportunity and valuation has been finalised even after giving opportunity of oral hearing to the petitioner. The question as to whether the valuation of the property in question determined by the NNA is reasonable or not involves serious disputed question of fact. Moreover, having failed to challenge the same, either before the appellate authority or even in all these three writ petitions, we are not called upon to consider as to whether the valuation determined by NNA is excessive or arbitrary.
In view of the aforesaid discussion, we find that all the three writ petitions are thoroughly misconceived and are totally devoid of merits. In the result, the writ petitions are dismissed. Interim order, if any, shall stand vacated. The petitioner shall pay cost quantified to Rs. 5,000/- for each set of writ petition which shall be paid by the petitioner before the Registrar General of this Court within three months from the date of production of certified copy of this order failing which it would be open to Registrar General to recover the said amount as arrears of land revenue. After receiving the cost, the said amount shall be forwarded, 50% to the Legal Aid Society of Allahabad High Court and 50% to the Mediation Centre, Allahabad High Court.