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Judgment
Debasish Kar Gupta, J.—These writ applications are filed assailing a common order No. 2270 dated May 08, 2012 passed by the respondent No. 3. The impugned order was passed in compliance of the orders passed in connection with writ applications filed by the writ petitioners. These writ applications are filed by different hotel establishments who have been running their businesses from their respective places of business as disclosed in these writ applications.
The respondent No. 2 issued individual demand notices to the petitioners raising demands towards property tax on the hotels and lodges run by the petitioners. The writ petitioners filed separate writ applications challenging the aforesaid demand notices.
The above writ applications were referred to a Division Bench of this Court. A Division Bench of this Court disposed of all the writ applications setting aside the demand notices under reference as also directing the respondent Municipal Council to pass reasoned orders in the matter after giving opportunity of hearing to the Writ petitioners. Liberty was given to the writ petitioners to agitate all points with regard to their grievances before the respondent-Municipal Council.
The operative portion of the above order is set out below:-
Whereas; the matter was finally placed in the Council meeting held on 20.3.2012, the Council after detailed deliberation and due consideration vide Resolution No. 34/MC/2012 dated 20.03.2012 was of the view that the method for calculating property tax in case of hotels/lodges etc. based on declared tariff and average occupancy was not only reasonable but also transparent. Since there are no circle rates for land and property in Port Blair, the method of calculation suggested by the petitioners cannot be adopted. If the property tax is calculated based on the covered area, it will not give the true rental value of the property which in case of a hotel depends on its location, facilities and branding of which room tariff is the best indicator. The earlier method of calculating property tax based on the tariff and occupancy revealed by the hotels is totally arbitrary, open to manipulation and leads to under reporting and consequent revenue loss to the Council. The method adopted by the Council Resolution dated 16.3.2010 is fair, equitable and reasonable. The contention that average occupancy factor of 0.65 is excessive can not be accepted because tourist arrivals, both domestic and foreign are increasing every year and hotels have full/high occupancy several months of the year.
However, with a view to encourage tourism and support hotel industry in the Islands, Council vide resolution No. 34/MC/2012 date 20.3.2012 to give the following concessions temporarily:
(1) Occupancy factor be taken as 0.40 instead of 0.65 and rental value calculated based on 75% of the declared tariff.
(2) The following deductions u/s 79(b)(i), (ii) and (iii) of the Andaman and Nicobar Islands (Municipal) Regulation, 1994 may also be allowed:
(i) 20% of the gross annual rental value on account of furniture let with the hotels and lodges.
(ii) 10% of the balance of the gross annual rent after allowing the deductions (if any), under sub-clause (i) for cost of repairs and for all other expenses necessary to maintain the building.
(iii) Where the land is let with a building, such deduction, not exceeding 20% of the gross annual rental value as may be considered reasonable on account of the actual expenditure (if any) annually incurred by the owner on the up keep of the land.
Now, therefore; pursuant to the direction of the Hon''ble High Court Calcutta, Circuit Bench at Port Blair in the writ petitions mentioned in the forgoing paras and the resolution dated 20.3.2012 of the Port Blair Municipal Council, the property tax on Hotels and Lodges for the year 2010-11 and onwards shall be levied in the aforesaid manner and paid by the hotels/lodges etc accordingly.
Secretary
Municipal Council
[File No. 30-304/Tax/MC/Court Matter/2010 (PF-II)]
Being aggrieved by the impugned order these writ applications are filed.
It is submitted by Mr. Hemraj Bahadur, learned advocate appearing on behalf of the writ petitioners, that the impugned order cannot be sustained in law for non-compliance of the provisions of Regulations 80, 81(3), 81(4), 81(5), 81(6), 81(7), 81(8) of the Andaman and Nicobar Islands (Municipal Council) Regulation, 1994 (hereinafter referred to as the said Regulation, 1994). According to Mr. Bahadur, the respondent-Municipal Council may impose property and land taxes subject to such general or special orders as the administrator may make. Drawing the attention of this court towards the provisions of Regulation 81 of the said Regulation, 1994, it is submitted by Mr. Bahadur that the respondent Municipal Council was under obligation to follow the procedure prescribed in the above Regulation for the purpose of imposing any tax. Mr. Bahadur further submits that Regulation 81(3) of the said Regulation, 1994 provides for publications of the proposals for imposing property and land taxes in such manner as might be prescribed by the Administrator as also to publish notices inviting objections and suggestions in writing of the persons likely to be affected by such proposals. It is further submitted by Mr. Bahadur that in accordance with the provisions of Regulation 81(10) a notification under Sub-Regulation (6) of Regulation 81 of the said Regulation in respect of a tax should be the conclusive evidence for the purpose of imposing the tax in accordance with the provisions of the said Regulation, 1994.
Drawing the attention towards the provisions of paragraph 7 of the Port Blair Municipal Council property tax Bye-laws (hereinafter referred to as the said Bye-Laws) it is submitted by Mr. Bahadur that the procedure for preparation of assessment register has not been followed for the purpose of imposing property tax in the matters under reference. According to Mr. Bahadur the property tax under reference was imposed by the respondent-Municipal Council without any authority of law since the aforesaid provisions were not complied with.
According to Mr. Bahadur though the rate of property tax was revised/amended, the provisions of Regulations 202 or 204 of the said Regulation, 1994, had not been complied with.
Reliance is placed by Mr. Bahadur on the decision of The Corporation of Calcutta Vs. Sm. Padma Debi and Others, ; Patel Gordhandas Hargovindas Vs. Municipal Commissioner, Ahmedabad, and New Delhi Municipal Committee Vs. M.N. Soi and Another, .
Appearing on behalf of the respondent-Municipal Council, it is submitted by Mrs. Anjili Nag that Regulation 79 of the said Regulation, 1994 prescribes the method of assessment of annual valuation of a property for the purpose of imposing property tax on the basis thereof. According to Mrs. Nag, the respondent Municipal Council was the competent authority to assess the annual valuation on the basis of the above provisions.
It is submitted by Mrs. Nag that the provisions of Regulation 80 of the said Regulation, 1994 prescribes the provision for imposing the property tax on the basis of the annual valuation as assessed under the provisions of Regulation 79 of the said Regulation, 1994. According to Mrs. Nag, the respondent Municipal Council was not under obligation to act subject to general or special orders of the Administrator for assessment of the valuation.
It is also submitted by Mrs. Nag that the said Regulation, 1994 is still in force and the said property tax bye-laws framed in exercise of the provisions of the said Regulation, 1994 has not been amended. The rate of property tax of 10% of the annual valuation has not been changed by virtue of the impugned order. According to Mrs. Nag, the impugned order was passed for assessment of the annual valuation of the properties concerned. According to Mrs. Nag, publication of assessment list under the provisions of Regulation 83 of the said Regulation, 1994 issuing of public notice under the provisions of Section 84 of the said Regulations, 1994 have not yet been arrived at. The aforesaid provisions will be followed after assessment of the annual valuation of the properties under reference in accordance with the resolution as adopted by the respondent Municipal Council in its special meeting dated March 16, 2010 (confirmed in its meeting held on June 14, 2010) read with the impugned order.
I have heard the learned counsel appearing for the respective parties and I have given my anxious consideration to the facts and circumstances of this case. After considering the impugned order, I find that initially the demand notices were issued to the petitioners on the basis of the resolution adopted in the special meeting of the respondent Municipal Council dated March 16, 2010 (confirmed in its meeting dated June 14, 2010). By virtue of the above demand notices, 0.65% of the annual rental value of each room of the hotels/lodges was decided to be taken as reasonable factor for assessment of property tax. It was an exercise of the power conferred upon the respondent Municipal Council in accordance with the provisions of Regulation 79 of the said Regulation, 1994.
After considering the provisions of Regulation 79 of the said Regulation, 1994, I find that the respondent Municipal Council was the authority to fix reasonable factor for determining annual valuation of the properties under reference for the purpose of imposing the property tax. After considering the impugned order, I further find that after considering the necessity of encouraging tourism and to support hotel industry in the Islands further concessions were given to the petitioners taking 0.40% of the rental value to be calculated on the basis of 75% of the declared tariff for considering the same as occupancy factor. The above function had no connection with the fixation of percentage of property tax to be calculated on the basis of the aforesaid occupancy factor.
After perusal of the Regulation 80 of the said Regulation, 1994, I find that the same provides for calculation of the property tax in terms of per centum of the annual value of property as determined under the provisions of Regulation 79 of the said Regulation, 1994. At the cost of repetition it is observed that the impugned order was passed for the purpose of fixation/revision of occupancy factor for assessment of annual valuation of the properties concerned in accordance with the provisions of Regulation 79 of the said Regulation, 1994 and not for fixation/revision of per centum of the annual valuation for the purpose of calculating property tax. After considering the materials on record, I find that the existing rate of 10% of the annual valuation of property remained unchanged for calculating the quantum property tax on the basis of procedure prescribed in Regulation 80 of the said Regulation, 1994 read with the provisions of paragraph 7 of the said Bye-Laws of the respondent-Municipal Council. Therefore, there was no attempt to change the rate of property taxes for the purpose of which general or special orders of the Administrator was required.
So far as the challenge with regard to the non-compliance of the provisions of Section 83 is concerned, I find that the assessment list of those buildings and lands is to be prepared containing the information as prescribed in Regulation 83(1) of the said Regulation, 1994 on which any property tax is imposed. I find substance in the submissions made by Mrs. Nag, appearing on behalf of the respondent-Municipal Council that the above stage has not yet been arrived at. The Municipal Council is under obligation to prepare the assessment list and publication of the same has also to comply with the provisions of other provisions of Regulations 83, 84, 85 and 86 of the said Regulation, 1994 after calculation of property tax at the unchanged rate of 10% on the annual valuation of the respective properties under reference to be calculated on the basis of the occupancy factor fixation/determination of which is under challenge.
So far as the allegation with regard to the non-compliance of the provisions of Rules 202 and 204 of the said Regulation, 1994, is concerned, I find that the existing per centum of property tax has not been changed by the respondent-Municipal Council. Therefore, the question of compliance of Regulations 202 or 204 of the said Regulation, 1994 does not arise at all.
The decision of the Corporation of Calcutta (supra) was delivered taking into consideration some questions of facts which were not applicable in this case. So, it has no manner of application in this case. For the same reason, the decisions of Patel Gordhandas Hargovindas (supra) and New Delhi Municipal Committee (supra) do not help the petitioners.
In view of the observations and discussions made hereinabove, I find that the impugned order does not require any interference.
These writ applications are, therefore, dismissed. There will be, however, no order as to costs.