Srikakulam Municipality vs Baratam Ramamurthy

Motilal B. Naik, J.—This second appeal arises out of the Judgment and Decree dated 31-3-89 in A.S. No. 18/88, on the file of the Additional Subordinate Judge, Srikakulam.

The appellant-defendant is Srikakulam Municipality and is represented by its Commissioner. The respondent-plaintiff filed suit OS. No. 142 of 1984 on the file of the Principal District Munsif, Srikakulam, for declaration that the tax enhanced in respect of house bearing Asst. No. 4451 of Srikakulam Municipality bearing 8-9-27, 8-9-28/1, situated in Chittaranjan Street, from Rs. 28/- to Rs. 316/- for half year is arbitrary, unjust and consequentially for an injunction restraining the defendant-Municipality from collecting the enhanced tax, and for costs of the suit.

According to the plaintiff, the defendant-Municipal authorities while assessing and revising the property tax have failed to follow the procedure contemplated u/s 87(2) of the A.P. Municipalities Act, 1965, and therefore, the levy of property tax of Rs. 316/- per half year by enhancing the tax from Rs. 28/- is illegal and sought injunction against the defendant-Municipality. The defendant-Municipality contested the matter by filing written statement. In the written statement it was averred that the Commissioner of the Municipality personally inspected the suit house on 25-9-83 and enquired the tenants of the house regarding the rents that were being paid by them to the owner. Three portions of the house were let out to three different persons, and they reported that each of them were paying Rs. 75/- per month, and that the plaintiff was residing in a nearby thatched house measuring 5.80 X 7.00 mts. The defendant felt that the rents proposed were reasonable by taking into account the situation of the building, rents prevailing in the locality etc., and accordingly assessed the monthly rental value at Rs. 225/-. It was further averred that the plaintiff also filed revision petition against the revised property assessment by the Municipality. The revisional authority dismissed the revision filed by the plaintiff, and that though the plaintiff had the remedy of preferring an appeal against the dismissal of the revision, chose to file the suit seeking the relief as indicated above.

On the basis of the averments, the trial Court framed the following issues:

(1) Whether the plaintiff is entitled for a declaration that the special notice 15/83-84 of Asst. No. 4451 is arbitrary, as pleaded in the plaint ?

(2) Whether the plaintiff is entitled for a consequential injunction as mentioned in the plaint ?

(3) Whether the Court has no jurisdiction to try the suit ?

(4) To what relief ?

The plaintiff on his behalf examined himself as P.W. 1 and got marked Exs. A-1 to A=3. On behalf of the defendant, the Revenue Inspector was examined as D.W. 1 and documents Exs. B-1 to B-5 were marked. Basing on the oral and documentary evidence, the trial Court dismissed the suit holding that the assessment made by the defendant was in accordance with the provisions of Section 87 (2) of the A.P. Municipalities Act, 1965 (for short ''the Act''). Against the judgment and decree of the trial Court, the unsuccessful plaintiff carried the matter in appeal in A.S. No. 18 of 1988 before the Additional Subordinate Judge, Srikakulam. The lower appellate Court, however, took a different view by holding that the defendant has not followed the procedure, while revising the tax as contemplated under Section. 87 (2) of the Act in the light of the decision of this Court reported in 1988 (2) ALT 131, and reversed the judgment and decree of the trial Court, and decreed the suit as prayed for, against which the defendant-Municipality has filed this second appeal.

The substantial question of law raised before this Court in this second appeal is whether the defendant-Municipality while fixing the revised rent (sic. tax) has followed the procedure contemplated u/s 87(2) of the Act in the light of the decision of this Court reported in 1988 (2) ALT 131.

Mr. Sambasiva Pratap, the learned Counsel for the appellant contended that the requirement contemplated u/s 87 (2) of the Act is procedural in nature providing for fair inspection of the area or the building by the authorities, and the authorities shall take into consideration the place where the building is located, the potentiality of the building to fetch rent and other factors. According to him, on 25-9-83 the Commissioner of Srikakulam Municipality visited the spot accompanied by the Revenue Inspector, D.W. 1 and assessed the property tax after making necessary enquiries in that regard. He therefore, submitted that the procedure contemplated u/s 87(2) of the Act has been followed by the defendant-Appellant, and the lower appellate Court has erroneously misconsidered the entire aspect as if the entire burden was on the defendant-appellant to prove as to how the quantum of tax was determined.

The learned Counsel Mr. Subba Rao, appearing on behalf of the respondent-plaintiff on the other hand contended that the lower appellate Court has rightly discredited the version of the appellant-defendant by holding that the procedure contemplated u/s 87 (2) of the Act has not been followed properly in the light of the decision of this Court reported in 1988 (2) ALT 131. Mr. Subba Rao has made efforts to convince this Court that while assessing the quantum of property tax, the concerned authorities have to necessarily examine the potentiality, proximity, the place where the building is located and other circumstances which would lead to give a plausible reasoning for arriving at a reasonable property tax.

In the light of the above submissions and on the question of law as indicated above, the only surviving issue is whether the appellant-defendant while fixing the revised tax, has followed the procedure contemplated u/s 87(2) of the Act. It is to be borne in mind that while assessing tax liability on the property, no mathematical calculation could be made as to say that two plus two is four. These are matters where the factors such as proximity of the building and the importance of the town, its potentiality to fetch rents, its size etc., are to be taken into account while assessing the tax. In the instant case, the house or building has three portions let out to three different tenants, each portion containing two bed rooms, verandah and a kitchen. In the evidence of the Revenue Inspector, D.W. 1, he deposed that on 25-9-83 he accompanied the Commissioner of Srikakulam Municipality and visited the spot and made enquiries from the tenants as to the actual rent being paid by them. The tenants informed him that they were paying Rs. 75/- each per month, and basing on such information they assessed the property tax. The evidence of D.W. 1 goes to show that while assessing the property tax they had visited the location of the building and examined the proximity of the place and other factors.

In the background of the evidence as above, the plaintiff in my considered view has tried to contend that the burden is on the defendant to prove, but has failed to examine atleast one tenant on his behalf to show what rent the tenants were paying to him. It may be true that mere statement of a tenant on the question of payment of rent need not be a sole ground for determining the value of the property tax to be paid by the owner of the house, but it shall form part of the evidence to assess the approximate value of the property located in a particular area. As indicated above, a mathematical assessment cannot be made while determining property tax. In all circumstances, it could have been open to the plaintiff to come forward to adduce some evidence on his behalf to show that rents which were being paid to him by the tenants were lesser than what was taken by the concerned authorities. In the light of the above discussion, I do not think the submission of the learned Counsel for the respondent-plaintiff could be accepted. In the light of the findings, I am of the view that the appellant-Municipality has followed the procedure contemplated u/s 87 (2) of the Act, and therefore, the finding of the lower appellate Court cannot be sustained.

In the result, the second appeal is allowed. The judgment and decree of the lower appellate Court is set aside and consequently the suit is dismissed while confirming the judgment and decree of the trial Court. No costs.