SHAJAHAN Vs. TAHSILDAR

JUDGEMENT

(1.) PETITIONER constructed a theatre which was assessed to building tax on the basis of capital value by assessment order dated 26. 6. 1987. Contending that cost of articles such as generator etc. are included for valuing petitioner filed an appeal. Finally petitioner approached this Court by filing O. P. No. 7175 of 1990. By judgment dated 24. 5. 1994 this Court held that generator and furniture in the theatre should not be valued while fixing the capital value of the building and fresh assessment was directed to be made. Accordingly, Ext. P1 assessment was made. PETITIONER paid the amount as per ext. P1 assessment. Ext. P1 assessment was on 28. 6. 1994. Thereafter, Ext. P2 notice was issued asking the petitioner to be present in office for rectifying the defects in the assessment. But, in Ext. P2 notice, it is not stated what is the defect in the original assessment and what is to be rectified. Therefore, no effective opportunity of hearing as per proviso to S. 15 was given. But Ext. P3 order was passed rectifying the assessment. There also it was not stated that what was the rectification to be made.

(2.) FROM the counter affidavit filed it can be gathered that as per S. 5 (2) of the Act if an assessment is made on capital value basis and assessment is finalised only after mode of assessment is changed, that is, after the appointed day (10. 2. 1992), assessment has to be made on the basis of plinth area. Ext. P1 assessment was made as per the direction of this Court in 1994, after the method of assessment was changed and after the appointed day as mentioned in S. 5 (2 ). That is the reason explained by the Revenue in issuing rectification order. Petitioner challenged Exts. P2andp3 before this Court. This Court by judgment dated 17. 10. 1997 in O. P. No. 11863 of 1997 set aside the notice as well as the order as neither the notice nor the order disclosed the alleged mistake said to be rectified even though reason was mentioned in the counter affidavit. In Ext. P5 judgment, dated 17. 10. 1997, it has been held as follows: ". . . It is not stated in Ext. PIO order also as to what is the mistake rectified as per Ext. P10. Since Ext. P8 notice or Ext. P10 order does not disclose the mistake said to be rectified, notwithstanding the reason stated by the respondents in their counter affidavit that there is an omission to apply the provisions of S. 5 (2) of the Act as amended by Act 13 of 1993, the same cannot be sustained. Accordingly quash Exts. P8 and P10 proceedings of the first respondent " Therefore, notice itself was quashed. Again learned judge found that: ". . . . this order will not preclude the respondents from considering the matter in accordance with law. I make it clear that I have not pronounced anything on the question as to whether the assessing authority can make any fresh assessment pursuant to Ext. P8 notice. "

(3.) NOTICE under S. 15 (1) is mandatory. It cannot be treated as a mere procedural requirement. It is a condition precedent to initiation of proceedings for enhancing tax by way of rectification. S. 15 of the Building Tax Act reads as follows: "15. Rectification of mistake: (1) The appellate authority or the revisional power authority may, at any time within three years from the date of an order passed by it on appeal or revision, as the case may be, and the assessing authority may, at any time within three years from the date of any assessment or order passed by it, of its own motion, rectifying any mistake apparent from the record of the appeal, revision, assessment or order, as the case may be, and shall, within the like period, rectify any such mistake which has been brought to its notice by an assessee: Provided that no such rectification shall be made which has the effect of enhancing an assessment or reducing a refund unless the assessee has been given a reasonable opportunity of being heard in the matter. (2) Where any such rectification has the effect of reducing the assessment, the assessing authority shall make any refund which may be due to such assessee. (3) Where any such rectification has the effect of enhancing the assessment, or reducing a refund, the assessing authority shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable; and such notice of demand shall be deemed to be issued under S. 10 and the provisions of this Act shall apply accordingly". It is fundamental to fair procedure and principles of natural justice that bodies entrusted with legal power could not validly exercise it without hearing the person who was going to suffer. This right is statutorily recognised in proviso to S. 15 (1) in the matter of rectification of assessment which may impose additional burden on the assessee.