S.A. GAFFAR TRUST, REP. BY MR. S.A. GAFFAR AND ANR. Vs. THE CORPORATION OF MADRAS, REP. BY ITS COMMISSIONER AND THE ASST. REVENUE OFFICER AND ANOTHER

JUDGEMENT

(1.) The Petitioners claim to be the owner of the property situated at 29/17, 'A' Block, Ritherdon Road, Vepery, Madras-7. In the year 1990 a multi-storied construction was built in the said property. The Petitioners-Trust owns 3240 square feet and the deponent of the affidavit owns 1325 Sq. feet in respect of the third floor of the building. On 20.1.1992, the Respondents issued a notice under Rule 1A and Rule 3A of Schedule IV to the Madras City Municipal Corporation Act, 1919 (hereinafter called "the Act") proposing to assess the property for levying property tax. The annual value of the property was fixed at Rs. 2,33,142.00. Objections were called for from the Petitioners. After considering the objections the assessment was confirmed on 3.2.1992 and a demand notice was issued. On a revision petition filed by the Petitioners, a hearing date was given on 30.3.1992 and by an order dated 24.7.1992 the revision petition was partly allowed reducing the annual value to Rs. 1,39,885.00. The cause of action for the writ petition is the issuance of a property tax demand card in the form of a booklet dated 12.3.1992. The conditions of the said card are as follows:-

(2.) The book-let contains several leaves, where provision is made for entering the property tax arrears upto 31.3.1991. It starts from Second Half year 1987-88 and ends up with Second Half year 1990-91. Thereafter provision is made for entering the current property tax commencing from the first half year 1991-92. There is a provision for payment of property tax upto the second half year 1995-96. Then there are four pages for incorporating the details of enhancement/reduction of property tax. The last page is for recording any transfer of the property and incorporating the name of the purchaser. Apparently, this booklet has been thought of by the Corporation and issued, to minimise the work of the clerical staff of the Madras Corporation. But as rightly pointed out by the Learned Counsel for the. Petitioners, there does not appear to be an application of mind to certain statutory provisions before issuing such a booklet. While I do see that the book-let serves a good purpose and will also facilitate the payment of property tax, the legal aspects of the case and the statutory requirements should have also been kept in mind by the Respondents-Corporation. While issuing the booklet in this case the demand is made for payment of property tax for the second half years 1990-91 to second half year 1991-92 at the rate of Rs. 27,860.50 for each half year. The writ petition is to quash the said demand notice dated 12.3.1992 contained in the booklet for the half-years 2/90-91 to 2/91-92. The main argument of the Learned Counsel for the Petitioners is that if the notice demanding the half yearly tax is not served in the half-year in which the tax becomes due or at least in the succeeding half year, the tax for the half year first mentioned, shall not be demanded. This is the basis of Rule 20(3) of the Rules contained in Schedule IV, Part VI of the Act. It has to be remembered that Rule 20 relates to the collection of taxes and the procedure for invoking provisions of Rule 21. It is in this context that Sub-rule (3) of Rule 20 says that the tax shall not be demanded if notice is not given within the half year or at least during the next half year. Rule 21 provides for collection of taxes by the issue of distraint order and sale of immovable property of the defaulter. Therefore, it is only for the purpose of Rule 21, that the above bar contained in Rule 20(3) will apply. I have no difficulty in understanding the scope of the Rules as above.

(3.) It is, however, necessary to refer to the entire scope of the levy, assessment and collection of property tax under the Act so that it will be useful for appreciating the legal submissions. Since Rule 20(3) seems to impose a very heavy restriction and liability on the Corporation I am impelled to go into the entire scope of the levy and collection of property tax. Rule 20(3) as such is as follows:-