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Judgment
T. Meenakumari, J.—This is a writ of certiorari calling for the records of the first respondent relating to the impugned notice in
No.I.R.224/KMR/91, dated 22.11.1990 and the order of assessment made by the first respondent in ULC 232/1391/KMR, dated 23.7.1990
and quash the name.
Petitioners are the joint owners of the punja land measuring an extent of 1.15 acres in Survey No. 48/2 of Kuniamuthur Village, Coimbatore
Taluk and District. They filed a suit in O.S.No. 195 of 1982 on the file of the District Munsif Court, Coimbatore for declaration of title to the
property and for recovery of possession of the same from one Palaniammal and five others. Ultimately, the petitioners succeeded in the litigation
which took nearly ten years. It is submitted by the petitioners that at the time of filing of this writ petition, though title to the property has been
conferred on the petitioners, they are yet to take possession of the property from the defendants in the suit and do cultivation. It has also been
submitted that though the land in question is punja land and some portion had been cultivated, the first respondent proceeded to levy urban land tax
on the land treating the land as urban land solely on the ground that the land in question was not fully cultivated ignoring the fact that no portion of
the land in question was used for non-agricultural purposes. Learned Counsel for the petitioners has further submitted that the first respondent
levied urban land tax on the land in question amounting to Rs. 4,047 per fasli commencing from fasli year 1391 by proceedings in ULC
232/1391/KMR, dated 23.7.1990. But, the said notice was received by the petitioners on 24.11.1990. It is stated by the petitioners that the
second respondent issued the notice demanding the payment of Rs. 40,470 from the petitioners on 22.11.1990. The assessment order of the first
respondent was served on the petitioners on 24.11.1990. Even before the said order of assessment was received by the petitioners, the second
respondent proceeded to invoke the provisions of the Revenue Recovery Act for realisation of the tax. The above proceedings have been invoked
in this writ petition.
Counter has been filed on behalf of the respondents.
It has been argued on behalf of the petitioners that the second respondent has proceeded to levy urban land tax for the fasli year 1391 by his
proceedings dated 23.7.1990. The distraint notice was issued under the Revenue Recovery Act on 22.11.1990. By that time, the petitioners were
not in receipt of the assessment order from the first respondent and it was only an after thought which made the respondent to serve the order of
assessment on 24.11.1990. Learned Counsel for the petitioners argued that the authorities have no power to proceed under the Revenue
Recovery Act even before the assessment order has been served on the petitioners. He has further argued that the authorities failed in their duty to
serve the assessment order on the petitioners as on the date of the distraint notice demanding the payment under the Revenue Recovery Act. In
such a case, the action of the respondents is illegal and not sustainable in law.
In the counter, it has been stated by respondents that the maximum extent of land cultivated in a year for the fasli years between 1391 and 1395
was only 70 cents i.e., during fasli year 1393 and that therefore, there was no cultivation at all and hence it was treated as urban land and Urban
Land Tax was levied. It is also stated that after assessment, Urban Land Tax at the rate of Rs. 4,047 was levied per fasli year and for the period
between faslis 1391 and 1400 a sum of Rs. 40,470 of Urban Land Tax was due from the petitioners. It is also stated in the counter that the tax
levied for the faslis 1391 to 1395 has not been paid by the petitioners and hence, the respondents took the action to recover the dues by invoking
the provisions of Revenue Recovery Act. In the counter, the respondents have not set out the reasons for not serving the copy of the assessment
order on the petitioners in time. The fact remains that the petitioners were served with the assessment order only after the demand notice dated
22.11.1990 has been issued. The date of receipt of assessment order by the petitioners is only on 24.11.1990. That was rebutted by the
respondents in their counter.
Learned Counsel for the respondents has supported the orders of the respondents even though he has agreed that the order of assessment has
been served on the petitioners only on 24.11.1990. He has argued that as the petitioners did not pay the tax, the respondents took recourse to
recover the amount due from the petitioners under the provisions of Revenue Recovery Act. In this case, the fact remains that the order of
assessment passed by the first respondent levying Urban Land Tax at the rate of Rs. 4,047 per fasli year and for the period between faslis 1391
and 1400 a sum of Rs. 40,470 in his proceedings in ULC 232/1391/KMR, dated 23.7.1990 on the ground that there was no cultivation and the
maximum extent of land cultivated in a year for the fasli years between 1391 and 1395 was only 70 cents i.e., during fasli year 1393 and hence it
was treated as urban land
Section 2(13) of the Tamil Nadu Urban Land Tax Act, 1966 reads as follows:
Urban land means any land which is used or is capable of being used as a building-site and includes garden or grounds, if any, appurtenant to a
building but does not include any land which is registered as wet in the revenue accounts of the Government and used for the cultivation of wet
crops.
Commentary to Section 2(13) of the Act states that agricultural land kept vacant during the relevant fasli years cannot be created as urban land.
Even though the authorities have made an assessment order u/s 11 of the Act, the authorities have failed to comply with the provisions of Section
12 of the Act wherein it was laid down that the copy of the order passed u/s 10 or 11 shall be served on the owner in such manner as may be
prescribed. The authorities can raise the notice of demand under the provisions of Section 14 of the Act. In this case, the copy of the assessment
order was served on the petitioners only on 24.11.1990, after the issuance of the notice of demand u/s 14 of the Act which clearly indicates that
the authorities have not complied with the provisions laid down u/s 12 of the Act.
Learned Counsel for the petitioners relied upon a decision reported in the case of S. Sarangapani Iyengar v. The Assistant Commissioner,
Urban Land, Alandur and Saidapet 1989 T.L.N.J. 371. The following are the relevant portion of the abovesaid decision:
The Taxing Authority must satisfy itself that a dry land is an urban land, which means that it is either used as a building site or is capable of being
used as a building site. There is of course the inclusive part which would become applicable only if the land is appurtenant to an existing building. In
respect of vacant land, the only part of the definition which becomes material is that part which refers to the land which is capable of being used as
a building site. Every land which is vacant may not necessarily be capable of being used as a building site much less agricultural land. When we deal
with agricultural land, it must be taken into account that the presumption would be that it is going to be used for the purpose of agriculture. An
agricultural land is not normally used for a building site and in any case it is not capable of being used as a building site in the normal course unless
of course the owner sets a part of it apart by way of a lay out or intends to construct a building in some part of the property. Normally agricultural
lands must be construed as agricultural lands and since agricultural lands are not normally used for building sites, it must be assumed that they are
not capable of being used as building sites unless steps have been taken to have it used as building site. Agricultural lands will, therefore, stand
excluded from the definition of ''urban land'' unless they are intended to be converted for building purposes or house sites. In this view of the
matter, the orders of assessment in respect of the agricultural lands, in question will have to be set aside.
In the instant case, it is very clear that the taxing authority has not applied its mind to satisfy whether the agricultural land is an urban land which
mean that it is either used as a building site or is capable of being used as a building site. It such a case, as held in the above judgment, agricultural
lands must be construed as agricultural lands and since agricultural lands are not normally used as building sites, it must be assumed that they are
not capable of being used as building sites unless steps have been taken to have it used as building site. Hence, agricultural lands will therefore
stand excluded from the definition of urban land unless they are intended to be converted for building purposes or house sites.
As there is flagrant violation of the provisions as set out in the Tamil Nadu Urban Land Tax Act, 1966, the impugned orders are set aside, with
a direction to the respondents to proceed with the matter afresh to decide whether the land in dispute is an urban land after giving an opportunity to
the petitioners herein, within two months from the date of receipt of copy of the order in this writ petition.
With the above observation, this writ petition is allowed. No costs. Consequently, W.M.P.No. 28892 of 1990 is also closed.