PADMANJALI THEATRE Vs. CITY MUNICIPALITY DAVANAGERE

JUDGEMENT

(1.) THE petitioners in these cases are the owners of Cinema THEaters in Davanagere. THE assessment to property tax in respect of these theatres was revised in the year 1983. THE Respondent, the Commissioner of the City Municipality, Davanagere, discovered that the tax that had been levied on these theatres was abnormally low and wanted to revise the assessments by invoking the power conferred on him under Section 107 of the Karnataka Municipalities Act ('the Act'). A common order was made on 24-1-85 in terms of Annexure-'K' in respect of the petitioners revising the tax in respect of each theatre, as indicated in the impugned demand notices served on each of the petitioners. In the first of the cases, i.e., Padman-jali THEatre, the tax as revised in the year 1983 (Annexure-C) was, - Rs. 4,336/-. A copy of the receipt for having paid the tax as revised is produced as Annexure-C. It is seen from the said receipt that the property tax was Rs. 1,607-58 ps. for the year 1983-84. THE revised assessment is purported to have been made by the Commissioner as per Annexure-E. THE tax in respect of Padmanjali talkies is enhanced to Rs. 1,08,400/- per year on the basis of the letting-value of Rs. 4,00,000/- which is arrived at on the basis of the annual income. This demand notice and the other similar demand notices issued by the Commissioner, are challenged by the petitioners in these writ petitions. It is contended on behalf of the petitioners that the revision of tax, as made by the Commissioner in his order, (Annexure K), followed up by issue of individual demand notices, is contrary to the mandatory provisions of the Act. namely-S. 107. It is argued that after the tax was revised in respect of each theatre in the year 1983, no notice was issued by the Commissioner before proposing to revise the same in exercise of his power under Section 107 of the Act within a period of four-years. Sri Manjunath, learned Counsel appearing for the Municipality produced before me a notice purported to have been issued by the Commissioner for revising the assessment. One such notice dated 11-6-1984 is at page-25 of the records addressed to all the Cinema-theatre-owners. THE said notice reads thus :- <IMG>JUDGEMENT_164_KANTLJ1_1991Image1.jpg</IMG> Pursuant to this notice, the Commissioner appears to have convened a meeting of all the theatre-owners. In the statement of objections filed on behalf of the Municipality also, there is a reference to such . meetings having been convened by the Commissioner. In the statement it is also stated on behalf of tha Municipality that notices were served on the petitioners and Objections ware called for from them. Manjunath submits that the notice dated 11 -6-84 was the only notice issued to the petitioners and no objections Were filed by any of the petitioner, but on the other hand, they participated in the meetings convened for the purpose of determining the enhancement of tax. It is stated in the Objections on behalf of the Municipality that the Commissioner, who initiated action in these cases, discovered that fraud had been played in collusion with the officials of the Municipality and the tax in respect of each theatre had been fixed at an abnormal low rate in the revision that took place in the year 1983 and, therefore, the Commissioner took action to revise the tax in respect of each theatre. While appreciating the zeal of the Commissioner in taking steps to revise the assessments, I have to observe that he adopted a very extraordinary procedure in convening meetings of all the theatre-owners of Davanagere to revise the assessments. This method of revision is something unknown and it is contrary to the procedure laid down in Section 107 of the Act. THE primary requirement or condition precedent for revising the assessment under Section 107 of the Act is to issue a notice proposing rsvision of the assessment and furnishing reason for the same and calling for objections to the alteration in the assessment list proposed to be made. THEreafter, the other procedure referred to in Section 106 comes into play and any revised assessment will take into effect from the notified date. THE petitioners challenged the revision made by the Commissioner and the demand notices before this Court in the year 1985 Rule was issued in each case on 28-3-85 and this Court directed the petitioners to pay 1 1/2 times the original assessment made against them in the year 1983 in respect of their theatres. THE Writ Petitions have come up for hearing in the year 1990. Procedure to assessment of property tax under the Act is provided under Sections 101 to 106 of the Act. An assessment once made or revised may be revised after four-years, as contemplated under Section 109, A special power is conferred on the Commissioner to revise an assessment within a period of four-years, if he is satisfied that for any reason referred to therein, that revision is warranted within the period of four-years. THE same procedure for assessment as provided in Sections 101 to 106 is required to be observed for revision of tax as contemplated under Section 107. A show cause notice must be issued, objections must be called for and the assessment should be revised in accordance with law. Giving a go-by to these statutory requirements, the Commissioner adopted a very strange method of issuing a notice to convene a meeting as referred to at page 25 of the records and made an order, as per Annexure-E. THE Writ Petitions have to be allowed for more than one reason. Firstly, that the revision has been made without Observing the mandatory provision of Section 107, secondly, that the four-year period for the first revision from 1983 expired by the end of 1987 and the second revision also falls due in the year 1991, if it is decided to be revised. It is unfortunate that by adopting a novel method of revising the assessments, the matter is in Court for over five-years and substantial revenue to the Municipality is lost. What is more, due to the Municipalit'ys inaction even after the writ petition was admitted, no steps were taken to have the writ petitions disposed of early in the interests of the Municipality. THE Municipality has also lost the right to revise the taxes in the normal course in the year 1987 for which the respondent alone is responsible. THE Writ Petitions are, therefore, allowed and the revised assessments as per the impugned order in each of the writ petitions, is quashed. Send a copy of this order to the Director of Municipal Administration. Writ petitions allowed.