Municipal
Corpn. of Delhi Vs. Delhi Urban House Owners Welfare Assn [1997] INSC 763 (3 October 1997)
S.C.
AGRAWAL, G.B. PATTANAIK
ACT:
HEADNOTE:
PATTANAIK.
J.
Leave
granted This appeal by special leave is directed against the judgment dated 18th September, 1995 passed by the Division Bench of the
Delhi High Court in Civil Writ Petition No.
5102
of 1994 and Civil Writ Petition No. 555 of 1995. By the impugned judgment the
provisions of Explanation to Bye-law 3(i) (a), Bye-law 3(i)(c)(ii), Bye-law 3(i)(e)
of the Delhi Municipal Corporation (Determination of Ratable Valuation)
Bye-laws, 1994 ("R.V. Bye-laws" for short) and Bye-law 8 of the Delhi
Municipal Corporation (property Tax Return) Bye- laws, 1994 (for short
"Property Tax Return Bye-laws") have been struck down. Though the
legality of the said judgment had been challenged in appeal but in course of
hearing of this appeal the learned counsel for the appellant restricts the
challenge only to the declaration of invalidity of Explanation to Bye-law 3(i)(a)
of the R.V. Bye-Laws and Bye- law 8 of the property Tax Return Bye-Laws.
Consequently, the judgment of the High Court declaring the provisions of Bye-
laws 3(i)(c)(ii) and 3(i)(e) of R.V. Bye-Laws as invalid remain unaltered.
Coming
to the question, as to whether the High Court was justified in invalidating
Explanation to Bye-Law 3(i)(a) of the R.V. Bye-Laws, the High Court is of the
opinion that the said provision is repugnant to Section 135 of the Delhi
Municipal Corporation Act, 1957 thereinafter referred to as `the Act') inasmuch
as it encroaches upon the powers given to the Commissioner under Section 135 to
employ valuers to give him advice in connection with the valuation of any land
or building. The High Court is further of the opinion that the Explanation to
Bye-law 3(i)(a) bind the Assessing Officer to determine the prevalent rent on
the basis of a Panel which is not permissible under the Act. The learned
counsel appearing for the appellant contends that both the aforesaid reasons
indicated by the High Court for invalidating the Explanation is wholly
unsustainable in law as the same has been arrived at on a misreading of the
relevant provisions of the Act and as such the said conclusion has to be set
aside by this Court. Bye-law 3(i)(a) together with the Explanation, is
extracted hereunder in extenso for better appreciation of the point in issue:
"(3)(i)
For the purposes of sub- section (1) of Section 116 of the Act, the annual rent
shall be determined as under:
(a)
Where the premises are on rent, the rent actually realised or reasonable,
unless the same is collusive or concessional, shall be the annual rent. Where
the tenancy commences on or after the 1st day of April, 1995 and where the
Commissioner has reason to believe that the declared rent does not represent
the prevalent rent of the year of letting and the difference between declared
rent and prevalent rent is more than twenty five per cent of the declared rent,
the annual rent shall be the prevalent rent;
Explanation:-
For the purposes of this clause the prevalent rents shall be determined by a
Panel of Assessors to be appointed by the Commissioner. Such Panel shall
include a representative from the Government, a representative of any Taxation
Department (other than the Corporation) or a valuer and a representative of the
Property Owners of the zone of which the prevalent rents are to be determined.
Under
the Delhi Municipal Corporation Act power to make Bye-laws has been provided in
Section 481. Obviously, no bye-law can be framed which would be contrary to the
provisions of the Act. The R.V. Bye-Laws relate to taxation.
It may
be noticed that under Section 481 A of the Act, Bye- laws framed are required
to be laid before the Parliament and thus the Bye-laws also have the
legislative sanction of the Parliament itself. Bye-law 3 of the R.V. Bye-Laws
prescribed the procedure for determination of annual rent for the purpose of
sub-section (1) of Section 116 of the Act. Section 116 indicates the mode of
determination of rateable value of any land or building assessable to property
taxes. Section 116(1) of the Act does not provide as to how the annual rent of
the land or building which might reasonably be expected to be arrived at.
Bye-law (3), therefore, provides the mode of determination of such annual rent.
The Explanation to Bye-law 3(i)(a) provides that for the clause in question the
prevalent rent shall be determined by a Panel of Assessors to be appointed by
the Commissioner and such Panel should include a representative of the
Government, a representative of any Taxation Department or a valuer and a
representative of the Property Owner of the zone of which the prevalent rents ar
to be determined. The bye-law, therefore, is essentially a safeguard provided
for the property owners and the determination thus made by a Panel of Assessors
will be a safeguide for the Commissioner to exercise his ultimate power, so
that, the exercise of such power cannot be said to be arbitrary or excessive.
In this view of the matter, we fail to understand how the aforesaid Explanation
can be said to be repugnant to the independent application of mind of the
Commissioner under the Act. The High Court, therefore, was in error to hold
such Explanation binds the Assessing Officer and controls the power of such
Assessing Officer under the Act. In our considered opinion, the High Court was
not right in arriving at the aforesaid conclusion. Further on a plain reading
of Section 135 of the Act, we are not in a position to sustain the conclusion
of the High Court that the Explanation contravenes the provisions of Section
135 of the Act. Section 135 is an enabling power of the Commissioner to appoint
one or more competent persons to give advice or assistance in connection with
the valuation of any land or building. The Bye-law in question together with
Explanation merely states as to how the persons could be appointed to advice
the Commissioner in connection with the valuation of any land or building and
we see nothing in that Explanation which can be said to be in contravention of
the provisions of Section 135 of the Act. The conclusion of the High Court on
this score, therefore, is unsustainable in law. In the aforesaid premises we
are of the considered opinion that the Explanation to Bye-law 3(i)(a) of the
R.V.
Bye-Laws
does not suffer from the vice of any invalidity and we accordingly set aside
the conclusion of the High Court on this score and hold that the said provision
is a valid piece of legislation.
Coming
now to the question of validity of Bye-law (8) of the Property Tax Return
Bye-Laws, the said Bye-law is quoted hereunder in extenso:
8.
Whosoever fails to furnish a true return to the best of his knowledge and
belief, shall be:- (a) liable to penalty which may extend to five hundred
rupees. A penalty of Rs. 20/- per day may further be imposed for the period the
default continues:
(b) precluded
from objecting to any assessment made by the Commissioner in respect of land
and building of which the owner or occupier failed to file the return or true
return to the best of his knowledge and belief:
Provided
that before imposition of penalty or precluding from obtaining to any
assessment, the Commissioner shall give a reasonable opportunity of being heard
to the owner or occupier, as the case may be.
In the
impugned judgment the High Court being of the opinion that the aforesaid
Bye-law is in contravention of section 131 of the Act, struck down the said
Bye-law.
Section
131 of the Act is extracted hereunder in extenso for better appreciation of the
point in issue:
131.
Power of Commissioner to call for information and returns and to enter and
inspect premises- (i) To enable him to determine the rateable value of any land
or building and the person primarily liable for the payment of any property
taxes leviable in respect thereof, the Commissioner may require the owner or
occupier of such land or building, or of any portion thereof to furnish him
within such reasonable period as the Commissioner fixes in this behalf, with
information or with a return signed by such owner or occupier - (a) as to the
name and place of residence of the owner or occupier, or of both the owner and
occupier of such land or buildings;
(b) as
to the measurements or dimensions of such land or building or of any portion
thereof and the rent, if any, obtained for such land or building or any portion
thereof; and (c) as to the actual post or other specified details connected
with determination of the value of such land or building.
(2)
Every owner or occupier on whom any such requisition is made shall be bound to
comply with the same and to give true information or to make a true return to
the best of his knowledge or belief.
(3)
Whoever omits to comply with any such requisition or fails to give the true
information or to made a true return to the best of his knowledge or belief,
shall, in addition to any penalty to which he may be liable, be precluded from
objecting to any assessment made by the Commissioner in respect of such land or
building of which he is the owner or occupier.
Under
Section 131, the Commissioner is empowered to call for information or returns
to be filed by the owner or occupier of any land or building whenever the
Commissioner decides to determine the rateable value of any land or building
and under sub-section(2) of Section 131 every such owner or occupier who is
required by the Commissioner to give the necessary information or return is
bound to comply with the same. Sub-section (3) of the said Section indicates
that non-furnishing of such information or return by the person concerned makes
him liable to pay the penalty and also is precluded from objecting to any
assessment made by the Commissioner in respect of such land or building. Thus
under Section 131 an owner or occupier of any land or building is required to
file return or information only when the Commissioner requires the same from
him. In the Property Tax Return Bye-Laws, however, filing of an annual property
tax return by the owner or occupier of land or building is obligatory under
Bye-law (3) irrespective of whether the Commissioner requires the same or not.
The liability to file the return arises under the Bye-law, if the land or
building is assessable to the property tax. The conditions for making such
filing of return have been indicated in different paragraphs of Bye-law (3)
with which we are actually not concerned in the present appeal. Bye-law (8)
provides that if a person fails to furnish a true return to the best of his
knowledge and belief, then he shall be liable to penalty which may extend to Rs.
500/- and further a Rs. 20/- per day could be imposed for the period the
default continues. The return required to be filed under the Property Tax
Return Bye-Laws and the return required to be filed only when the Commissioner
requires the same under Section 131 operate in two different fields. The former
is in the nature of a statutory return required to be filed by every owner or
occupier annually when the conditions mentioned in the Bye- law are attracted
whereas, latter only makes it obligatory for the person concerned to file the
return when the Commissioner so requires. The two provisions operate in two
different fields and the High Court, therefore, was not justified in reaching
the conclusion that the Regulation (8) Providing for penalty of Rs. 500/- for
non-furnishing of the return as contemplated under the Bye-law is repugnant to
Section 131 of the Act. The aforesaid conclusion of the High Court, therefore,
is set aside and Regulation (8) of the Property Tax Return Bye-Laws is declared
to be a valid piece of legislation. In view of our aforesaid conclusions these
appeals are allowed in part to the extent indicated above but in the
circumstances there will be no order as to costs.
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