D NARASIMHA REDDY Vs. APPELLATE COMMISSIONER MUNICIPALITIES

JUDGEMENT

(1.) The petitioner is a Company running a hotel in Nizamabad Town. The petitioner commenced doing business from 22-5-1983 onwards. It is said to be a Two-star hotel with three floors and 37 rooms including three staff and office rooms. According to the statement given by the representative of the petitioner before the Commissioner of Municipality on 27-1-1984 there are three air-conditioned double-rooms for which rent of Rs. 80/- is charged, 24 non-Airconditioned double rooms for which Rs. 30/- or Rs. 40/- is charged depending upon the single or double occupancy. He also stated that the petitioner started a Bar and non-vegetarian restaurant in August, 1983. The assessment of property tax on the petitioner-hotel had to be made for the first time for the year commencing from 1-4-1983. A special notice was issued by the Commissioner under Rule 11 of the Taxation and Finance Rules (Schedule II), (hereinafter referred to as "the Rules" of the Andhra Pradesh Municipalities Act on 5-5-1983 fixing the annual rental value at Rs. 2,52,000/- and the tax at Rs, 62,899/-. This was objected to by the .petitioner by filing a petition dated 6-6-1983, The petitioner pleaded for assessment of tax by refixing the capital value at Rs. 23.06 lakhs as against the total construction cost of Rs. 42 lakhs. Before disposing of this revisionr petition ihe petioner was called for personal hearing. Accordingly, as stated above, the petitioner's representative appeared before the Commissioner and gave a statement regarding the details of the rooms and the rents. Apart from the details mentioned, he stated that the occupancy was low in view of its location on the outskirts and in an under-developed area. The Commissioner, by an order dated 29-11-1984 reduced the annual rental value to Rs. 1,96,040/- and accordingly refixed the tax at Rs. 48,926/- for the said year. Against This order, the petitioner filed an appeal to the Appellate Commissioner the first respondent herein. In the grounds of appeal, the petitioner contended that the Commissioner did not take into account the occupancy rate and that the property tax should not have been levied on the fixtures and amenities. The petitioner had not suggested any particular rental value to be adopted. The Appellate Commissioner inspected the premises and communicated his orders confirming the commissioner's proceedings, on 4-11-1987. The proceedings of the Appellate Commissioner dated 4-11-1987 mentions that the annual rental value has been confirmed at Rs. 2,10,000/- and the tax thereon was fixed at Rs. 55;039/- whereas according to the order passed by the Commissioner on the revision petition, the annual rental value was Rs. 1,96,020/- and the tax was specified as Rs. 48,926/-. Aggrieved by these orders the petitioner filed this writ petition.

(2.) At the time of hearing the petition to vacate stay, we noticed that the Appellate Commissioner in fact passed a reasoned order on 28-10-1987 though the same was not communicated to the petitioner. Accordingly we directed the learned standing counsel for Municipalities to serve a copy of the same to the petitioner's counsel. We also expressed our desire to dispose of the main writ petition itself. Accordingly we adjourned the case and took up the main writ petition itself for hearing subsequently. The petitioner has filed a petition to amend the prayer seeking to challenge the order of the Appellate Commissioner dated 28-10-1987. We have allowed this amendment petition which has not been opposed.

(3.) Three contentions have been raised before us : (1) that the specia! notice given by the Commissioner on 5-5-1983 does riot spell out any reasons nor disclose any basis for the assessment and hence it is opposed to the principles of natural justice as also Rule 3 of the Assessment of Tax Rules 1969 read with Form'C' prescribed thereunder. (2) The Appellate Commissioner's order is based on presumptions and vitiated by non-consideration of the material grounds, and (3) The Appellate, Commissioner violated sub-rule (2) of Rule 22 of Taxation and Finance Rules read with Rule 14 (2) of the Assessment of Tax Rules, by reason of non-consultation with the Chairman of the Municipal Council and hence the order passed in appeal i invalid in law.