The Board of Trustees for The Port of Kolkata vs Diamond Harbour Municipality and Others

Subrata Talukdar, J—In this writ application the Board of Trustees for the Port of Kolkata (hereinafter referred to for short as KPT) is the petitioner and challenges the revaluation and reassessment of the property tax in respect of one of its properties located at Holding No.-456, Ward No.-10 under the Diamond Harbour Municipality commonly being used as an Inspection Bungalow (hereinafter referred to for short as the said property). The writ petition was filed in the year 2005 and the challenge is in respect of the reassessed bill effective from the 2nd quarter of 1997-98 till the 4th quarter of 2003-04 totalling an amount of Rs. 1,42,371/- at the rate of Rs. 5181/- per quarter. KPT complains of an arbitrary revision from the earlier assessed tax of Rs. 270/- per quarter thereby resulting in an unreasonably steep hike in the tax rate. KPT also complains of breach of the principles of natural justice in the process of revaluation/reassessment of the property tax.

Affidavits to the writ petition were filed pursuant to directions of this Court on behalf of the West Bengal Valuation Board (hereinafter referred to for short as the Valuation Board) and on behalf of the Diamond Harbour Municipality (hereinafter referred to for short as the Municipality).

Sri Jaydeep Kar, learned Counsel appearing for the KPT takes the summary point that the revaluation/reassessment of tax by the Valuation Board was done pursuant to a law which has been struck down by the Hon''ble Apex Court reported in Bidhannagar (Salt Lake) Welfare Association Vs. Central Valuation Board and Others, AIR 2007 SC 2276 : (2007) 8 JT 118 : (2007) 7 SCALE 546 : (2007) 6 SCC 668 : (2007) 7 SCR 430 : (2007) AIRSCW 3962 : (2007) 4 Supreme 542 .

Learned Counsel for the petitioner further argues that the Hon''ble Apex Court was pleased to decide a pari materia issue concerning the reassessment of tax by the Valuation Board under the provisions of the West Bengal Central Valuation Board (Amendment) Act, 1994 (for short the 1994 Amendment Act) thereby amending the provisions of the West Bengal Central Valuation Board Act, 1978 (for short the 1978 Act). Relying especially on paragraphs 3, 4, 5, 10, 12, 13, 14, 26, 27 and 49 of Bidhannagar (Salt Lake) Welfare Association Vs. Central Valuation Board and Others, AIR 2007 SC 2276 : (2007) 8 JT 118 : (2007) 7 SCALE 546 : (2007) 6 SCC 668 : (2007) 7 SCR 430 : (2007) AIRSCW 3962 : (2007) 4 Supreme 542 , Sri Kar points out that by reason of the amendment of the 1978 Act by the 1994 Amendment Act a proviso was added to sub-section (1) of Section 9. Under the newly introduced proviso the Valuation Board with the previous approval of the State Government made valuer-surveyer grade-I or grade-II to conduct, subject to conditions which may be prescribed, a general valuation of lands and buildings under the direction of the Valuation Board.

Further noticing the effect of the 1994 Amendment Act to take away the right of an assessee to a pre-decisional hearing as well as noticing that the provisions of review introduced by the 1994 Amendment Act attracted the doctrine of Ceaser to Ceaser, the Hon''ble Apex Court was pleased to strike down the 1994 Amendment Act as unconstitutional being violative of Article 14 of the Constitution. The Hon''ble Apex Court was also pleased to notice that the Valuation Board could not delegate any of his powers to the Municipality for the purpose of conducting the assessment tax survey.

Sri Kar next points out that similar principles have been invoked by the Valuation Board in assessing the tax with respect to the said property and such facts will emerge from the affidavit-in-opposition of the Valuation Board. Taking this Court to the parent notification issued by the Municipality for taking up the work of general valuation under the lands within its jurisdiction which included the said property, Sri Kar points out that the notification dated 27th April, 1994 has been issued in exercise of powers conferred under sub-section (1) of Section 9 of the 1978 Act as introduced by the 1994 Amendment Act and struck down as unconstitutional.

Sri Kar thereafter submits that from the notice regarding valuation list in respect of the lands and buildings surveyed under the Municipality, the owner or occupier or any other person primarily liable to pay property tax was directed to apply to the Review Committee of the Municipality under the 1978 Act, as amended, to review the valuation.

Reminding this Court that such power of review was found to be unreasonable, arbitrary and the Review Committee, being not independent either of the Municipality or of the Valuation Board, was also struck down as unconstitutional, Sri Kar therefore argues that the very basis of the exercise undertaken by the Valuation Board was found to be non-est in the eye of law. Since the very basis of the revaluation/reassessment having been found to be unconstitutional the Municipality cannot be allowed to proceed further in the matter.

Mrs. Pratimapratibha Chowdhuri, learned Counsel appearing for the respondent No. 4-Valuation Board reiterates the stand taken by the respondent No. 4 in its affidavit. For the purpose of better appreciation of the facts in the context of the law as decided by the Hon''ble Apex Court in Bidhannagar (Salt Lake) Welfare Association Vs. Central Valuation Board and Others, AIR 2007 SC 2276 : (2007) 8 JT 118 : (2007) 7 SCALE 546 : (2007) 6 SCC 668 : (2007) 7 SCR 430 : (2007) AIRSCW 3962 : (2007) 4 Supreme 542 , certain portions of the affidavit need to be quoted:--

"4. I categorically deny and dispute the statements and allegations made in paragraph 8 of the said application. I state that it is a matter of record that the West Bengal Valuation Board, the respondent No. 4 (hereinafter referred to as "Board") as per provisions of the West Bengal Valuation Board Act undertook the valuation work after the Govt. of West Bengal issued statutory Notification dated 27.4.1994 under Section 9(1) of the Central Valuation Board Act, 1978 wherein the Board was empowered to take up the work of general valuation of land and buildings under the whole area of Diamond Harbour Municipality and thereafter the Member Secretary of the Board published the public notice dated 16.12.94 in the two newspapers namely Telegraph and Ganashakti dated 16.12.94 under Section 16 read with rule 19 of the Central Valuation Board (Valuation of land and buildings) Rules, 1984 and invited return of holding/premises in the Form as specified in Schedule-Ill of the said Rules from all the rate-payers of Diamond Harbour Municipality within 30 days of publication of the said notice as a statutory provisions of this part.

The Xerox copy of the Notification under Section 9(1) of the Central Valuation Board Act, 1978 dated 27.4.1994 issued by the Govt. of West Bengal and the Xerox copy of the said Public Notice under Section 16 of the Central Valuation Board Act, 1978, dated 16.12.1994 published by the Member Secretary of the Board are annexed herewith and marked as Annexure "R-1" collectively.

With reference to paragraph 8 of the said application I further states that after preparation of the valuation list in respect of the Diamond Harbour Municipality under Section 11 of the West Bengal Central Valuation Board Act, 1978, as amended by the Board, the Govt. of West Bengal issued Notification under sub-section 2 of Section 9 of the West Bengal Central Valuation Board Act, 1978 dated 26.06.1997 since amended notifying that the valuation made by the Board in respect of land and buildings in Diamond Harbour Municipality as recorded in the Valuation List shall become operative with effect from the 1st day of July, 1997 and shall remain in force in respect of such area for a period of six years.

The Xerox copy of the said Notification under sub-section 2 of Section 9 of West Bengal Central Valuation Board Act, 1978 dated 26.06.1997 is annexed and marked as Annexure "R-2".

With reference to paragraph 8 of the said application I further state that after the Notification under sub-section (2) of Section 9 of the Central Valuation Board Act, 1978, issued by the Govt. of West Bengal, the Member Secretary, of the Central Valuation Board published public notice dated 30.06.1997 under Section 11 of the said Act, 1978 in two newspapers namely in the Asian Age and Aajkal dated 30.6.1997 stating therein inter alia that the annual valuation of holdings as entered in the List will become operative with effect from 1st July, 1997 as appointed by the State Government under sub-section (2) of Section 9 of the West Bengal Valuation Board Act, 1978.

(a) That in the said public notice it was stated that the valuation list may be inspected at Diamond Harbour Municipal office on any day (except Saturday and holiday) between 11.30 A.M. and 4.00 P.M.

(b) That in the said notice the ratepayers were also informed that if dissatisfied with the valuation of any land or buildings as entered in the valuation list, apply to the Review Committee of Diamond Harbour Municipality constituted under Section 15 of the said Act as amended to review the valuation. Such review application as contemplated, under Section 14 of the aforesaid Act must reach Diamond Harbour Municipality office within three months from the date of this notice.

The Xerox copy of the valuation list as stated above and the Xerox copy of the public notice dated 30.06.1997 under Section 11 of the said Act as stated published in the two newspapers Asian Age and Aajkal dated 30.06.1997 are annexed and marked as Annexure "R-3" collectively."

Mrs. Chowdhuri further submits that the powers of the Valuation Board under Section 9(1) have not been touched by the Hon''ble Apex Court in Bidhannagar (Salt Lake) Welfare Association Vs. Central Valuation Board and Others, AIR 2007 SC 2276 : (2007) 8 JT 118 : (2007) 7 SCALE 546 : (2007) 6 SCC 668 : (2007) 7 SCR 430 : (2007) AIRSCW 3962 : (2007) 4 Supreme 542 . She also submits that under the Amendment Act of 2007, qua the savings and validation clause, all past demands have been protected. Therefore, Mrs. Chowdhuri prays for protecting the revaluation/reassessment by dismissing the writ petition.

Sri Shyama Prasad Purkait, learned Counsel for the respondent Nos. 1 to 3 - Municipality submits that the work of assessment was carried out as directed by the Valuation Board and the petitioner-KPT was given an opportunity to file objection. Sri Purkait further submits that the KPT cannot be allowed to enjoy paying tax at a ridiculously low rate. Therefore, the property tax was rightly revised.

Sri Purkait points out that the demand was in terms of the 1978 Act and not in terms of the Amendment Act, 1994. learned Counsel for the Municipality further points out that the procedure for raising a demand can be found in the West Bengal Municipality Act, 1993 (for short the 1993 Act). It is also submitted that the 1993 Act provides for an appeal which was not availed of by the petitioner.

Having heard the parties and closely considering the pleadings, documents on record as well as the law on the point this Court finds from the affidavit-in-opposition submitted on behalf of the Valuation Board that the basis of the revaluation/reassessment was the notification under Section 9(1) of the Valuation Board Act, 1978. Thereafter, the valuation, process proceeded under the parent notification under Section 9(1) of the 1978 Act and the process was directed to continue right up to the stage of application by objectors before the Review Committee.

In Bidhannagar (Salt Lake) Welfare Association Vs. Central Valuation Board and Others, AIR 2007 SC 2276 : (2007) 8 JT 118 : (2007) 7 SCALE 546 : (2007) 6 SCC 668 : (2007) 7 SCR 430 : (2007) AIRSCW 3962 : (2007) 4 Supreme 542 the above noted exercise commencing from 9(1) of the 1978 Act as introduced by the 1994 Amendment Act right up to the stage of Review was found to be unconstitutional and struck down. This Court also notices that in Biddhaman Poura Nagarik Kalyan Committee & Ors. v. Central Valuation Board & Ors. reported in (2010)2 Cal HN (Cal) 345, the law in Bidhannagar (Salt Lake) Welfare Association v. Central Valuation Board & Ors. (supra) was noticed by an Hon''ble Single Bench and the Hon''ble Single Bench found that in view of the law being declared ultra vires, the valuation rates as well as the notices containing the valuation under a law declared as unconstitutional cannot be sustained.

This Court is also of the view that a similar exercise of reassessment/revaluation conducted through the agency of the Municipality sans pre-decisional hearing and only the opportunity to file objections before the Review Committee declared unconstitutional cannot be sustained. Accordingly, the demand on reassessment/revaluation qua the said property as complained of in the writ petition stands quashed.

The Valuation Board shall be, however, entitled to proceed de novo in the matter in accordance with law. W.P. 5145 (W) of 2005 stands accordingly allowed.