A.Thangammal vs The Commissioner

This Second Appeal is filed against the Judgment and Decree passed by the learned Additional Subordinate Judge, Dindigul, in A.S.No.136 of

2005, dated 28.06.2010, confirming the Judgment and Decree made in O.S.No.729 of 2003, dated 22.12.2004, on the file of the learned II

Additional District Munsif, Dindigul.

Heard the learned counsel appearing for the appellant and the learned counsel appearing for the respondent.

The plaintiff in the Suit in O.S.No.729 of 2003 on the file of the learned II Additional District Judge, Dindigul, is the appellant in this Second

Appeal.

The appellant filed the Suit in O.S.No.729 of 2003 for declaration that the assessment of the Property Tax in respect of Assessment

Nos.30293 and 30294 determining the Property Tax at the rate of Rs.6,060/- and Rs.1,819/- respectively are invalid and consequentially for

permanent injunction restraining the defendant and their men from demanding or collecting or taking action for recovering the Property Tax.

The case of the plaintiff is that she is owner of the property bearing door No.89. It is stated that in the suit property, the plaintiff had put up a Tin

shed and the Property Tax was determined by the defendant on 30.06.1977 in respect of the Assessment No.26352 at the rate of Rs.127.40/-

per half year. Therefore, it is contended that the plaintiff was paying only a sum of Rs.254/- p.a., towards Property Tax.

It is the specific case of the plaintiff that without giving any reasons for Revision of Property Tax, the property was assessed in two different

numbers, namely, Assessment Nos.30293 and 30294 and in respect of Assessment No.30293, the Property Tax was levied at the rate of

Rs.6,062/- per half year and in respect of the Assessment No.30294, the Property Tax was levied at the rate of Rs.1,819/- per half year.

It is contended by the plaintiff that in the suit property, the plaintiff has put up only a Tin shed and the total extent of the property is only 3600

Sq.ft. It is the further case of the plaintiff that in the whole of the property the plaintiff has got only a cycle stand and an S.T.D.Booth capable of

yielding only a sum of Rs.500/- towards rent. It is also the specific case of the plaintiff that the Property Tax was levied by the defendant without

indicating as to how the tax was arrived at. It is stated that the Property Tax has been levied, without following the procedures prescribed under

the provisions of Tamil Nadu District Municipalities Act and in violation of principles of natural justice. It is also contended by the plaintiff that the

defendant issued a notice on 15.12.2003, demanding tax to the tune of Rs.47,286/- and threatened to initiate distress proceedings, in case, the

plaintiff commits default. Since the assessment and demand of the Property Tax is contrary to law and in violation of principles of natural justice,

the plaintiff stated that she is entitled to seek declaration as to the invalidity of the assessment and demand of the Property Tax and consequentially

for permanent injunction restraining the defendant from demanding or collecting the amount towards Property Tax as per the assessment.

The Suit was contested by the defendant by stating that the plaintiff was given an opportunity to file a Revision after the assessment that was

made for the first time in the year 2001. It is further stated that the Property Tax was assessed, following the norms given by the Tamil Nadu

Government and following the rules prescribed under Tamil Nadu District Municipalities Act. It is also contended that as against the order of

assessment of Property Tax, the plaintiff could only prefer a Revision before the Commissioner. When the rules specifically provide specific

remedy for challenging the Revision of Property Tax, it is specifically contended by the defendant that the civil Court has no jurisdiction in view of

the specific bar under the provisions of Tamil Nadu District Municipalities Act. Since the Revision filed by the plaintiff was dismissed, it was

pointed out in the written statement that the plaintiff could file a further Appeal before the District Court. It is further contended by the defendant

that the plaintiff cannot maintain the Suit, without exhausting the alternative remedy provided under the statute.

The trial Court accepted the case of the defendant with regard to the maintainability of the Suit and dismissed the Suit. Further, the trial Court

also found that the Suit is barred by limitation, as the plaintiff has not filed an Appeal within 30 days from the date of order passed by the

Revisional Authority. Finally, the trial Court found that the order passed by the Revisional Authority, in the Revision petition filed by the plaintiff

challenging the order of assessment has been communicated to the plaintiff and the Suit is wholly misconceived without challenging the order of

Revisional Authority. After referring to Sections 81, 85, 87 and 89 of Tamil Nadu District Municipalities Act, 1920, the trial Court further held that

the civil Court has neither jurisdiction nor competency to decide the Suit. Aggrieved by the same, the plaintiff preferred the First Appeal in

A.S.No.136 of 2005 on the file of the Additional Sub Court, Dindigul.

The lower Appellate Court also found that proper machinery has been provided under the provisions of Tamil Nadu District Municipalities Act

to challenge the assessment/demand of Property Tax and hence the Suit is not maintainable before the civil Court. Though the lower Appellate

Court relied upon some of the Judgments cited by the learned counsel for the appellant with regard to the jurisdiction, and the power of the civil

Court to entertain the Suit challenging the assessment of Property Tax the lower Appellate Court accepted the contention of the defendant that

Tamil Nadu District Municipalities Act being a special enactment, the plaintiff can challenge the order of assessment only in the manner provided

under the statute and not by filing a Suit. In other words, the Appellate Court has agreed with the defendant that the dispute which can be resolved

as per procedures prescribed under a special statute cannot be a subject matter of Suit before the civil Court as the jurisdiction of the civil Court is

impliedly barred. Further, the lower Appellate Court found that the plaintiff who is liable to pay tax to the Government, cannot file a Suit to prevent

the local body from collecting the tax dues. Aggrieved by the concurrent Judgment and Decree of the Courts below, the plaintiff has preferred the

above Second Appeal.

Learned counsel for the appellant pointed out the nature of assessment that is made and the special notice given by the respondent/Municipality

to the appellant. Before dealing with the questions of law, it is necessary for this Court to consider the facts of this case.

It is true that by a special notice, dated 19.07.2002, the respondent/Municipality has arrived at the annual rental value and determined the

Property Tax. In this notice, dated 19.07.2002, the basic particulars which are required to arrive at the annual value and the tax was not indicated.

Except stating that the reasons for increase is construction of A.C.Sheet(Roof), no other particulars were given. No one can understand how the

respondent determined the annual value and tax. Neither extent of land or market value for land nor the extent of building, nature of building and

cost of building taken for the purpose of determining the annual value is specified in this notice. From the special notice, no one can give his valid or

effective objections so as to determine the tax as contemplated under the rules. Pursuant to this notice, it is not in dispute that the plaintiff has made

serious objections and sought for reduction of tax. It is stated by the defendant that Notice under Ex.B.1, dated 21.03.2003, was issued to the

plaintiff calling upon the plaintiff to appear for a personal enquiry. It is also the specific case of the plaintiff that the plaintiff appeared pursuant to the

notice and that there was no enquiry at all by the respondent. It was thereafter, the respondent has confirmed the tax at Rs.6,062/- and Rs.1,819/-

respectively in respect of 2 premises without considering any of the objections raised by the plaintiff.

It can be seen that there was no Revision of tax after the objections raised by the plaintiff/appellant. Learned counsel for the appellant relied

upon the provisions contained in Schedule IV of Tamilnadu District Municipalities Act, which are known as taxation rules. The taxation and finance

rules which were framed under Section 124 of Tamil Nadu District Municipalities Act refers to specific procedure in the case of Revision and in

the case of fresh assessment. It is not in dispute in the present case that the assessment of the Property Tax is made for the first time, as the building

put up by the plaintiff was assessed only for the first time to use the property as a cycle stand. Though the building put up by the plaintiff was

temporary in nature, it cannot be disputed that this attracts Property Tax as the building is liable for assessment to levy Property Tax. The proviso

to Rule 9 is a clear indication that the executive Authority shall give an intimation regarding the Revision of Property Tax by issuing a special notice.

The requirement of issuing special notice is not a mere formality and the object behind this notice cannot be taken as satisfied by giving notice to

the person whose property is assessed without furnishing the basic details on the basis of which the annual value of the property and the proposed

tax is arrived at. It cannot be disputed that the Act contemplates procedure as to how the Property Tax should be determined. Unless the basic

facts which are required for arriving at the Property Tax is given in the special notice, the notice will not be a proper one and it will not serve the

purpose. In other words, the defective notice issued by the respondent cannot satisfy the requirements of rules. Hence, this Court has no hesitation

to hold that the special notice which was issued is a defective one, as it does not contain the relevant particulars like extent of land, extent of

building, value of building and other details. Hence, the assessment proposed is certainly in violation of principles of natural justice.

It is to be seen that Rule 12 of Schedule V contemplates a reasonable opportunity to the assessee who has filed Revision petition challenging

the assessment and demand of Property Tax. It is the specific case of the plaintiff that the plaintiff was not given a reasonably opportunity after she

raised her objections pursuant to the special notice. The specific stand taken by the plaintiff that no enquiry was conducted by the Executive

Authority cannot be ignored. This would also show that the requirement of the rules have not been satisfied in this case so as to enable the plaintiff

to avail the remedy provided under the special machinery provided under the rules.

Learned counsel for the appellant relied upon the Judgment of this Court in the case of Kottar Elankadai Musliem Samudhaya Trust V. The

Commissioner, Nagercoil, reported in 2016-5-L.W.694, wherein,the view expressed by this Court earlier that a suit to set aside the assessment of

Property Tax cannot be dismissed merely on the ground of availability of alternative remedy is approved. In the same Judgment, it has been further

held as follows:-

From the reading of the rules found in Schedule IV, it can be seen that an assessment should precede the demand for property tax. If there is

any enhancement in the tax, the Executive Authority is required to give a special notice/show cause notice. Since Rules 6 and 9 are only in

compliance of principles of natural justice, it has to be held that in any case of revision or enhancement of property tax by the Executive Authority,

it is necessary that the assessee is entitled to a show cause notice. Further, it is not possible to the assessee to submit his reply or objection unless

the basic facts which are the foundation for the revision of tax is made known to the assessee. Hence, even the notice that is contemplated under

Rule 9 should specify or contain the particulars which are the basis for the enhancement of property tax. From the reading of Rules 6 or 9, it is very

clear that a revision of tax involving enhancement of tax cannot be done without issuing a notice informing the assessee about the facts and figures

which are the basis for the proposed revision.

When we consider the facts of the present case in the light of the relevant rules found in Schedule IV of the Tamil Nadu District Municipalities

Act, 1920 and the precedents above referred to, the demand notice under Ex.A4 is illegal. The demand notice was issued under Ex.A.4 even

before an assessment and this fact is admitted. From the reading of the relevant rules, I am of the view that whenever the Municipality wants to

enhance the tax either on account of the general revision or on account of alteration of existing building, a show cause notice is required to be

issued informing the assessee without any ambiguity about the basic facts and figures which are proposed to be taken for the proposed revision or

enhancement. Only thereafter, there can be an assessment of property tax. It is only after an assessment of property tax following the principles of

natural justice, a demand notice can be issued. In the present case, the demand notice under Ex.A.4 has been issued even before an assessment or

a show cause notice to the appellant. In such circumstances, I have no hesitation to hold that the demand notice under Ex.A.4 is liable to be set

aside.

In the above Judgment, this Court held that the Revision of tax involving enhancement of tax cannot be done without issuing notice informing

the assessee about the facts and figures which are the basis for the proposed revision. Paragraph No.11 of the above Judgment of this Court is

squarely applicable to the present case where the assessment or levy of Property Tax is not done following the procedure prescribed and giving a

fair opportunity to the plaintiff in compliance of the principles of natural justice.

Learned counsel for the appellant has raised the following questions of law:-

(1) Whether the Courts below were correct and justified in non-suiting the plaintiff on the basis of Act 65 of 1997(Tamilnadu) without considering

that the same has not been notified and also ignoring the settled position of law that there is no bar to the jurisdiction of the civil Court when the

mode of assessment and the violation of procedure are challenged?

(2) Is the conclusion of the Courts below that the plaintiff is not entitled to the relief in the suit merely because he has not deposited the tax

assessed under challenge, sustainable in law, especially since there is no pre-condition for filing a civil Suit?

(3) Are the Courts below justified in dismissing the Suit without considering the preponderance of probabilities especially when the

defendant/Municipality has not let in acceptable evidence to show that the assessment was done in accordance with law?

(4) Is the Judgment of the Courts below sustainable in law in view of the law laid down in AIR 1971 SC Page 353, 2002(1) MLJ 392, 2009-5-

CTC-Page 200 and 2010-2-CTC-51?

Having regard to the scope of Section 9 of Civil Procedure Code, as it has been repeatedly held by the Hon''ble Supreme Court and the

Judgment referred to by this Court, this Court answer the questions of law 1, 3 and 4 in favour of the plaintiff/appellant as there is no bar of

jurisdiction of the civil Court to challenge the assessment and demand of Property Tax, if it is made in violation of principles of natural justice.

As a result, the Second Appeal is allowed and Judgment and Decree passed by the learned Additional Subordinate Judge, Dindigul, in

A.S.No.136 of 2005, dated 28.06.2010, confirming the Judgment and Decree passed by the learned II Additional District Munsif, Dindigul, in

O.S.No.729 of 2003, dated 22.12.2004, is set aside. The Suit in O.S.No.729 of 2003 on the file of the II Additional District Munsif Court,

Dindigul, stands decreed. It is also made clear that the respondent/Municipality is at liberty to initiate fresh proceedings for assessment and levy of

Property Tax in respect of the property of the appellant/plaintiff after following the procedures in accordance with law as indicated in this

Judgment. However, no order as to costs.