C S AGARWAL Vs. ASSISTANT DIRECTOR, CIVIL LINE ZONE, LAND AND BUILDING TAX DEPARTMENT, DURGA MARG, BANI PARK, JAIPUR AND ANOTHER

JUDGEMENT

(1.) THIS writ petition has been registered on being transfer from the Rajasthan Taxation Tribunal, where it was presented as Extraordinary Application by Dr. C.S. Agarwal, petitioner herein. Challenge therein was made to order of re -assessment dated 30.08.1996 with prayer that it be declared that the subject land and building is not liable to be reassessed.

(2.) FACTS of the case are that petitioner submitted an application for allotment of a plot of land measuring 334.4 square meter, being Plot No.A -79, Shyam Nagar, Jaipur, from M/s New Pink City Housing Cooperative Society Limited. The said Society issued him letter of allotment upon payment of charges for the land being Rs.3500/ -. Petitioner constructed residential building consisting of basement, ground floor, first floor and second floor. The total built up area of the building was 575 square meter during the financial year 1993 -94. Upon having been served with notice for assessment, petitioner obtained valuation report determining the value of the said structures at Rs.12,11,527/ -, and submitted the same to the Assistant Director -cum -Assessing Officer, Land and Building Tax. The Assistant Director -cum -Assessing Officer accepted the valuation estimated and carried out valuation of the land by applying the rate at Rs.1150/ - per square meter, to arrive at a figure of Rs.3,86,232/ -, and determining value of subject land and building at Rs.15,97,800/ -, and annual tax liability of Rs.15,967/ -. The Assistant Director -cum -Assessing Officer also levied a penalty of Rs.100/ - under Section 16 -A (1a) of the Rajasthan Land and Building Tax Act, 1964 (for short, 'the Act of 1964'). The petitioner, having been allured by the exhortations made by the State Government in the Department of Tourism inviting citizens to make available paying guest accommodation to the National and International Tourists visiting Jaipur and that the accommodation must be in good locality and the owner or its family must be staying in the premises. The State Government gave assurance that use of paying guest accommodation would not be treated as commercial use of the building and acting on that allured by the proposition, the petitioner decided to make available as part of its aforesaid accommodation to the tourist as paying guest. Under the name and style of M/s Classic Hotel. Out of total constructed area of 575 square meter, the petitioner retained approximately 154.93 square meter area exclusively for his own and family use and enjoyment, and built up area approximately up to 170.40 square meter as common for both residential and paying guest accommodation nd made available approximately 278.6 square meters of the built -up area for use of the incoming tourists from 01.09.1996. Reliance is placed on the guidelines issued by the Tourist Department of the State, which has been placed on record of the writ petition. The aforesaid development was noticed by the Inspector of the Department, who submitted a report stating that the petitioner had changed the use of its land and building from residential to commercial. The assessing officer, on the basis of that, issued a notice under Rule 12 -A contending that the original assessment order dated 14.03.1995 was framed on the basis that the subject land was put to residential use but that it had come to his notice that the subject land and building were being used for the purpose of running a hotel and therefore it was proposed to carry out re -assessment of the fair market value of the land and building, as also of the annual tax liability in respect thereof treating the land and building as commercial. The assessing officer called upon the petitioner to submit documents relating to running of the hotel, by 20.01.1996, failing which the matter would proceed ex -parte. Petitioner submitted reply thereto on 22.02.1996 raising preliminary objection as to the validity of the notice, being not in the prescribed format and also as to the validity of the provisions contained in Rule 12 -A. Petitioner also pointed out that the subject land in Plot No.A -79, Shyam Nagar, Jaipur, was located in a residential colony and was converted from agricultural to residential but no proceedings for conversion of the subject land from residential to commercial or industrial have ever been undertaken by himself or even suo -motu by the Government of Rajasthan. The nature of the land continued to be residential. Out of total built -up area of approximately 575 square meters, only 278.27 square meter was being put to use for making available as paying guest facility. In response to the exhortation made by the Government of Rajasthan in its Ministry of Tourism, the petitioner pointed out that the same would not be treated as commercial. The assessing authority in the course of proceedings issued a notice dated 04.06.1996 under Section 11(1) of the Act of 1964, inviting objections to the provisionally determined market value of the land and building at Rs.45,55,500/ -. Petitioner obtained details on the basis of which valuation was arrived at, which showed that the assessing authority had not made any variation to the value of building but had only proposed to increase the value of land by applying rate of land at Rs.10,000/ - per square meter as on 01.04.1995 as compared to Rs.1150/ - per square meter previously taken as on 01.04.1994 in the original assessment order. Petitioner submitted supplementary objections vide letter dated 17.07.1996 raising various issues, inter alia, the application of a rate of Rs.10,000/ - per square meter, treatment of the entire building as commercial, application of lower/higher of the two rates prescribed by the Sub Registrar, Jaipur, for commercial land in Shyam Nagar, Jaipur, in view of the peculiar location of the land, inapplicability of commercial rate to the facts and circumstances of the present case, as the portion being used for making available the housing facility as paying guest accommodation. Petitioner also objected to the concept of commercial rate being applied to any plot of land located in a residential colony and unusual situation where the surrounding and adjacent plots are being taxed by applying the rate equivalent to one -half/one -third/one -fourth the rate as compared to the land under consideration merely by virtue of alleged change of use from residential to commercial.

(3.) THE assessing authority issued another notice on 05.08.1996 claiming to have sent the Inspector for verifying the petitioner's claim about use of subject land and building partly for residential and partly for paying guest facility. It was alleged therein that the departmental inspector had reported that the entire building was being put to use as a hotel. By the aforesaid notice, he asked the petitioner to produce requisite documentary evidence in support of his claim regarding partial use of the land and building as residence. The petitioner claims to have submitted documentary evidence with letter dated 27.08.1996 about existence of electric connection, gas connection and telephone existing separately in his name for residential purpose. The assessing authority, however, rejected his objection vide order dated 30.08.1996. Hence this writ petition.