B R NANDA Vs. UNION OF INDIA

JUDGEMENT

(1.) The vires of Section 116 (1) of the Delhi Municipal Corporation Act, 1957 ( hereinafter for the sake of brevity referred to as, 'DMC Act' ) and Bye-Law No. 3(i)(a) of the Municipal Corporation (Determination of Rateable Value) Bye-Laws, 1994 ( hereinafter for the sake of brevity referred to as, 'the said Bye-Laws' ) is in question in this writ petition.

(2.) . The factual matrix leading to institution of the present writ petition in brief is under :- The petitioner herein is said to be the owner of House No. 27, Vasant Marg, Vasant Vihar, New Delhi - 110 057 ( hereinafter for the sake of brevity referred to as, 'the said property'). The petitioner received an assessment order on 20.07.1986 whereby and whereunder rateable value of the said property was fixed at Rs.18,710/- w.e.f. 31.12.1985. Allegedly in the year 1987, under the optional scheme for one-time payment of tax, the petitioner opted for payment of 10 years' tax in advance and thereby he became entitled for exemption from payment of any property tax and education cess for all times to come. However, in April, 1993, the petitioner received a notice dated 24.03.1993 thereby proposing to revise the rateable value from Rs.18,710/- to Rs.3,75,100/- w.e.f. 01.04.1992. Allegedly, the petitioner in his reply objected to the said proposal. Allegedly three years later, i.e., in March, 1996, the petitioner received another letter making an ex- parte assessment at Rs.3,75,000/- w.e.f. 01.04.1992. The said letter making ex-parte assessment was also allegedly objected to by the petitioner. On or about 20.06.2002, the petitioner yet again received a notice dated 12.06.2002 purported to be under Section 126 of the DMC Act thereby proposing the rateable value of the said property at Rs.11,80,850/- w.e.f. 01.04.1999 and asking the petitioner to appear in the office of the Joint Assessor and Collector, Special Assessment Unit II, R.K. Puram, New Delhi on 18.06.2002. Allegedly, since the said notice was received just two days before the date of hearing, i.e., 18.06.2002, he wrote to the said authority that he was planning to go abroad and expected to be back by the third week of August and on return would seek a fresh date for appearance. However, the Joint Assessor and Collector issued an ex-parte assessment order and a bill bearing No. 1291 dated 30.07.2002 was also issued for Rs.14,78,354/-. The petitioner vide letter dated 06.08.2002 requested the Joint Assessor and Collector as to how the said amount had been arrived at; to indicate the amount of tax year-wise; and also to give the basis of calculation. However, no reply thereto has been given. In the aforementioned situation, the petitioner has filed the present writ petition in the month of August, 2002.

(3.) . Mr. K.L. Rathee, the learned counsel appearing on behalf of the petitioner, would submit that property tax is a tax on income arising out of property and, thus, the same would be governed by the provisions of the Income Tax Act, 1961 ( hereinafter for the sake of brevity referred to as, 'IT Act'). It was urged that the assessment of rateable value in relation to a property for the purpose of DMC Act is beyond the legislative competence of the State. Drawing our attention to a decision of the Apex Court in M/s. Sultan Brothers Private Ltd., Bombay v. The Commissioner of Income-tax, Bombay City II, Bombay, (1964) 5 SCR 807 : AIR 1964 SC 1389 to the following effect :-