Lucky Wines (P) Limited vs Municipal Corporation of Hyderabad

Syed Shah Mohammed Quadri, J.—The petitioner seeks a writ of mandamus declaring the action of the respondent in collecting Cheque No. 024983 for Rs. 7,350/-, Cheque No. 024984 for Rs. 12,250/- Cheque No. 024985 for Rs. 12,250/- and Cheque No. 024986 for Rs. 12,250/- from the petitioner towards the municipal property tax, ignoring the judgment of the Chief Judge, City Small Causes Court, Hyderabad, dated 1st July, 1994, in M.A. No. 199/94, M.A. No. 200/94, M.A. No. 201/94, M.A. No. 202/94 and M.A. No. 203/94 in regard to the godowns bearing Municipal Nos. 4-1-1082, 4-1-1082/1, 4-1-1082/2 and 4-1-1082/3, Boggulakunta, Hyderabad, as highhanded and illegal and for a consequential direction to return the cheques.

The petitioner claims to be the lessee of the said premises. Notices of demand for the property tax for the said premises were served on the occupier, the petitioner herein, on 19-3-1994 which covered the period commencing from April 1st, 1988 to March 31st, 1994. The petitioner carried the matter in appeal before the Chief Judge, City Small Cuases Court, Hyderabad in Municipal Appeal Nos. 199/94 and 200 to 203 of 1994 questioning the validity of the demand. The learned Chief Judge allowed the appeals with certain directions. The grievance of the petitioner is that ignorning the said orders of the learned Chief Judge, City Small Causes Court, the authorities have taken coercive steps to collect the tax. Because the petitioner was under pressure, it parted with the cheques for the amounts mentioned hereunder:

"(1) Cheque No. 024983, dated 27-3-1995 for Rs. 7,350/- for premises No. 4-1-1082.

(2) Cheque No. 024984, dated 27-3-1995 for Rs. 12,250/- for premises No. 4-1-1082/1

(3) Cheque No. 024985, dated 27-3-1995 for Rs. 12,250/- for the premises No. 4-1-1082/2

(4) Cheque No. 024986, dated 27-3-1995 for Rs. 12,250/- for premises No. 4-1-10823/3.''

It is this action which gave cause to the petitioner to approach this Court for the relief indicated above.

Sri C.P. Sarathy, the learned Counsel for the petitioner, vehemently contends that so far as the current year, namely, 1994-95 is concerned, no demand was issued and consequently the petitioner was deprived of the right to file an appeal. Insofar as the demands relating to the assessment years covering the period 1-4-1988 to 31-3-1994 are concerned, they are contrary to the judgment of the Chief Judge, City Small Causes Court. He, therefore, submits that the action of the respondent in coercively collecting the amounts should be declared as illegal and arbitrary. Sri Sarathy has relied on sub-section (3) of Section 276 of the Hyderabad Municipal Corporation Act. In our opinion, it would not be appropriate to read the said provision in isolation. To understand the purport of the said provision, it becomes necessary to read the whole provision, namely, Section 276 of the Act and the sub-sections thereto which are extracted hereunder:

"276. When occupier may be held liable for payment of Property Tax:-

(1) If the sum due on account of any property tax remains unpaid after a bill for the same has been duly served on the person primarily liable for the payment thereof and the said person be not the occupier for the time being of the premises in respect of which the tax is due, the Commissioner may serve a bill for the amount on the occupier of the said premises, or, if there are two or more occupiers thereof, may serve bill on each of them for such portion of the sum due as bears to the whole amount due the same ratio which the rent paid by such occupier bears to the aggregate amount of rent paid by them both or all in respect of the said premises.

(2) If the occupier or any of the occupiers fail within thirty days from the service of any such bill to pay the amount therein claimed, the said amount may be recovered from him in accordance with the foregoing provisions.

(3) No arrear of a property-tax shall be recovered from any occupier under this section, which had remained due for more than one year, or which is due on account of any period for which the occupier was not in occupation of the premises on which the tax is assessed.

(4) If any sum is paid by, or recovered from an occupier under this section, he shall be entitled to credit there for in account with the person primarily liable for the payment of the same."

From a perusal of Section 276 of the Act, it is evident that it seeks to relieve an occupier of the premises from the burden of payment of arrears of property tax for the period for which he was not in occupation. In such a situation, only a limited liability is fastened on him and that is arrears of tax only for one year is payable by him. This is what is contained specifically in sub-section (3) of Section276of the Act. Sub-section (4) further relieves the occupier of the burden of tax paid by him by allowing him to deduct the amount paid to the Corporation as arrears of tax while paying the rent, if the occupier is a lessee, and declares that any sum paid or recovered from the occupier under the provisions would be credited therefore in the account with the person primarily liable for payment of the same. In other words, the a mount of tax thus recovered from the occupier, who is not primarily liable, would be liable to be adjusted towards the amount payable by the occupier, be it tenant or sub-tenant, to the person entitled to receive the rent from him. If that be the essence of Section 276 of the Act, in our view, the order of the learned Chief Judge, City small Causes Court, that the Corporation cannot collect the tax for more than one year from the occupier without specifying that if he was not in occupation during the period for which tax is due does not appear to be well-founded. Be that as it may, if the petitioner seeks a relief under Article 226 of the Constitution of India from this Court based on an order of a statutory authority, this Court is not bound to grant the relief if, in the opinion of the Court, that order is not in conformity with the provisions of the Act as it would amount to giving effect to an illegal order.

For the aforementioned reasons, in our view, no Writ can be issued on the basis of the order of the learned Chief Judge declaring the action of the respondent in collecting the tax for the period from 1-4-1988 to 31-3-1994 as illegal.

Insofar as the assessment year 1994-95 is concerned even on the petitioner''s own saying arrears for one year can be recovered from him, so it cannot have any valid grievance. Further even assuming that the petitioner had also approached the Chief Judge, City Small Causes Court, Hyderabad, in regard to the same and had obtained a similar order, his position would not have been better than what it is in respect of the earlier assessment year.

For the aforementioned reasons, we are not inclined to interfere in the impugned action of the respondent. We find no merit in the writ petition. It is accordingly dismissed. No costs.

Immediately after pronouncement of this judgment, Sri Sarathy has prayed for leave to appeal to the Supreme Court against the order. In our view, no substantial question of law of general public importance which needs to be decided by the Supreme Court, arises in this case. We, therefore, reject the oral application for leave to appeal to the Supreme Court.