CHENAB TEXTILE MILLS, KATHUA Vs. STATE OF J&K

JUDGEMENT

(1.) THE petitioner, Birla Cotton Spinning and Weaving Mills Ltd., a public limited company registered under the Indian Companies Act, with its head office at Calcutta, owns a factory under the name and style of Chenab Textile Mills in the Jammu and Kashmir State which is engaged in the manufacture of cotton yarn. The factory is situated within a radius of three miles from the town area limits of Kathua and so also the lands and buildings used for purposes thereof. In pursuance of Jammu and Kashmir Urban Immovable Property Act, 1962, (hereinafter called The Act) the Assessing authority, respondent No. 3, by his order dated 21 -9 -1968 (Annexure Y to the petition) assessed a sum of Rs. 36,370 -12 P. as tax for the assessment years 1965 -66, 1966 -67, 1967 -68 and 1968 -69 (up to 30 -9 -1968) in respect of lands and buildings used for purposes of the factory and raised a demand for this amount against the petitioner. During the pendency of the assessment proceedings the petitioner filed a writ petition in this Court registered as writ petition No. 10 of 1968 challenging the validity of these proceedings which it sought to avoid by the issue of an appropriate writ, direction or order. By its order dated 29 -7 -1969 the Court dismissed the writ petition. Meanwhile the petitioner -company, filed a revision petition (Annexure Z to the petition) on 10 -4 -1969 before the Taxation Commissioner, respondent No.

(2.) , against the assessment order, as aforesaid. The revision petition was not accompanied by any treasury receipt showing the payment of the tax demanded as required under rule 10 (4) of the Jammu and Kashmir Urban Immovable Property Tax Rules. The Taxation Commissioner, therefore, declined to hear the petition unless the tax was paid first. The petitioner maintained that this was not the correct position under law and pressed the Taxation Commissioner for hearing of the petition. They even exchanged some correspondence on the matter. Meanwhile the Assessing authority, respondent No. 3, by his order dated 1 -3 -1971 (Annexure ZE to the petition) assessed the lands and buildings of the factory to tax for the period 1 -10 -1968 to 31 -3 -1971 and raised demand of Rs. 26,188 -92 against the petitioner for this period. As before, the petitioner filed a revision petition before the Taxation Commissioner, respondent No. 2 against this assessment order without first depositing the tax demanded. The Taxation Commissioner, therefore, refused to hear the petition on merits as long as the tax was not paid. The petitioner has now filed this writ petition and challenged the assessment orders, as aforesaid, made by the assessing authority and so also the requisition made by the Taxation Commissioner for the payment of the tax demanded before the revision petitions could be heard by him on merits. The petition is based on the following grounds: - (1) That the Assessing authority has not followed the correct procedure laid down by the Act for levying the tax and as such the assessments are illegal; (2) That the assessment orders are void illegal and without "Jurisdiction because the lands and buildings of the factory do not fall within the rating area as defined by the Act; (3) That the action of the Taxation Commissioner, refusing to hear the petitioners revision petitions unless the tax demanded was paid first, is illegal and unjustified because rule 10 (4) of the Urban Immovable Property Tax Rules, on which it is based, is illegal and unenforceable, being ultra vires the provisions of the Act. 2. Originally the petition came up for hearing before ray Lord, the Chief Justice. In view of the importance of the questions raised and the absence of any decision of this Court governing the same he considered it desirable to refer the case to a larger bench. That is how this case has come up for hearing before us. We have heard the counsel for the parties.

(3.) THE first question that arises for consideration is whether the lands and buildings used for purposes of the factory fall within the rating area as contemplated by the Act. Section 2 (g) of the Act reads: (g) "rating area" means any area administered for the time being by a local authority which is included or which may hereafter be included in the Schedule to the Act." The Schedule to the Act provides as under: -