Allowed

Kinetic Engineering Ltd. through Its Authorized A.G.M. (Hr and Admn) Shashikant Shivanand Gulve v. the State of Maharashtra

Bombay HC21 Mar 2018APPLN/175/2018

Case brief

AI extract

What is this about?

This writ petition challenged an order fixing municipal tax rateable value due to violation of natural justice and consideration of extraneous documents from a different appeal. The High Court allowed the petition, quashing the assessments.

What did the court decide?

Judgment of the Joint Civil Judge and the Revisional order were quashed; petitioner directed to be heard before fixation of rateable value.

Kinetic Engineering Ltd. through Its Authorized… — Municipal and Town Planning | Bombay HC (2018)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD

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CRIMINAL WRIT PETITION NO. 1675 OF 2017

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Kinetic Engineering Ltd.
A Duly Registered Public
Limited Company, Through its
Duly Authorised A.G.M.( HR & ...Petitioner.
ADMN),Shri.Shashikant Shivanand
Gulve, Age 50 years, Occ.
Service, R/o. Dund Road,
Ahmednagar.

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VERSUS.

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1The State of Maharashtra,
Through The Secretary, Urban
Development Deptt. Mantralaya
Mumbai-32.

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2 The Municipal Corporation, Ahmednagar, Through it's Commissioner. ... Respondents .

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...

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Advocate for Petitioner : Mr. R.R. Mantri.
APP for Respondent No. 1 : Mr. A.P.Basarkar.
Advocate for respondent No. 2 : Mr. N.V. Gaware.

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`CORAM`	`: K. L. WADANE, J.`
`Reserved on`	`: 16`^th`March, 2018.`
`Pronounced on`	`: 21`^st`March, 2018.`

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JUDGMENT

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1. Rule. Rule made returnable forthwith. By

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consent of the learned counsel for both parties, this
petition is taken up for final hearing.

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2. The petitioner has challenged the order passed
by the learned Additional Sessions Judge, Ahmednagar,

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in Criminal Revision Application No. 31/2011 dated
10.11.2017, by which the Criminal Revision is dismissed
and the order passed by the 3rd Jt. Civil Judge, Senior
Division and Judicial Magistrate, First Class,
Ahmednagar, in Municipal Tax Appeal No. 250/1996 dated
21.12.2010 has been confirmed. Hence, present petition.

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3. Brief facts of the case may be stated as

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follows;

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The petitioner is a duly registered company.

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It constructed required factory sheds in land Sy. No.
138 and 139, which partly on the boundary of the
respondent No.2/Corporation and village Panchayat,

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Burudgaon. In the factory premises the petitioner
started production of Luna mopeds.

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4. In the year 1979 the respondents predecessor

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Council fixed arbitrary Annual Letting Value ( in short
'ALV') of its factory premises and as such Municipal
Tax Appeal No. 13/1979 was filed, in which, Court

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quashed the ALV and fixed 'ALV' at Rs. 77,379/- and
that judgment become final. In the year 1989-90 the

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respondent Council increased the ALV to Rs.

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07,09,593/-, as new additions were made from time to
time.

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5. On 06.09.1994 the reassessment of entire town

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was done by the Town Planning. The Council passed a
resolution not to increase and continue 1989's
position. It is alleged that, the respondent Council
however arbitrarily, suddenly and illegally increased
ALV of Rs. 40,87,829/-without following any provision/
rules. The proposal was strongly objected but without
hearing/opportunity, same was confirmed inspite of the
objection of 04.11.1995.

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6.It is further alleged that on 04.02.1996 bill
with retrospective demand at above ALV rate was served
on the petitioner on 15.02.1996. After paying the
demand, the Tax Appeal No. 250/1996 was filed. That
appeal was decided by the Judicial Magistrate First
Class, Ahmednagar, and it fixed ALV for pre-Corporation
period at Rs. 21,28,689/- and for post Corporation
period from 2004-2005 onwards at Rs. 28,38,252/-.

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7. The petitioner assails this order by way of
filing Criminal Revision No. 31/2011. Partly aggrieved
by the ALV the respondents also filed an Appeal No.
16/2011 to the District Judge, Ahmednagar. Both
proceedings were rejected on the ground of
maintainability. The petitioner approached this Court

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by way of Criminal Revision Application No. 77/2011
which was allowed and the matter was remanded back to

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the Additional Sessions Judge to decide it on merit.
Writ Petition No. 5918/2011 filed by respondent/
Corporation was dismissed by this Court. It is further
contended that the respondent Corporation also filed
Criminal Revision with delay condonation application
bearing Criminal Misc. Application No. 26/2012 in
Sessions Court against the judgment in Municipal Tax
Appeal No. 250/1996. On 10.11.2017 learned Sessions
Judge, dismissed the revision filed by the petitioner
and after dismissal of the revision the respondent/
Council issued notice of proclamation to sale the
administrative building. Therefore, present petition.

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8. I have heard Mr. Mantri, learned counsel, for
petitioner as well as Mr. Gaware, learned counsel for
respondent No. 2 at length.

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9. During the course of arguments, Mr. Mantri,
learned counsel, has argued that when notice under
section 123 of the Maharashtra Municipal Councils Nagar
Panchayats and Industrial Townships Act, 1965
(hereinafter referred as 'the Act') was issued to the
petitioner, it objected the notice, however, no
opportunity was given to the petitioner of being heard.
Therefore, the rateable value fixed by the respondent
No. 2 was behind back of the petitioner which is

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against the principle of natural justice.

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10. Mr. Mantri, further argued that there are no
rules, provisions in the Act for fixation of the
rateable value in respect of the property in the
category of factory. Premises of the factory of the
petitioner do not fall under the category of either

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residential or commercial. Therefore, in absence of
specific rule/provision, the respondent Corporation is
not authorized to fix the ALV. Mr. Mantri, learned
counsel, further argued that the ALV was fixed in Tax
Appeal earlier therefore it cannot be reopened that too
with retrospective effect. Mr. Mantri, learned

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counsel, further argued that rateable value of the
property cannot be fixed on the basis of square feet.
He further argued that, the penalty in reference to the
notice and warrant fees is illegal, therefore, needs to
be set aside.

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11.As against this Mr. Gaware, learned counsel for
respondent No. 2 has argued that at the time of
presentation of the Tax Appeal before the Chief
Judicial Magistrate, Ahmednagar, the petitioner has not
deposited total amount of bill as contemplated under
section 170(c)(i) of the Act, therefore, the Tax Appeal
No. 250/1996 itself is not an appeal in the eyes of

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law.

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12.Mr. Gaware, learned counsel, further argued that,
in view of the provisions of Section 124 of the Act, the
Corporation is authorized to revise the rateable value from
time to time, particularly, under the old Act for every four
years and under the amended provisions for every five years.
Therefore, the contentions raised on behalf of petitioner
that the earlier rateable value fixed in the Tax Appeal
cannot be reopened is improper and without any base. Mr.
Gaware, learned counsel further argued that the present
petition is filed under the provision of Article 226 of the
Constitution of India and scope of such petition is very
limited. Therefore, disputed question of facts and
reassessment of the evidence is not permissible.

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13.Mr. Mantri, learned counsel, has relied upon
the case reported in 2003 (2) Bom.C.R. 851 (Kantilal
Dharsi Desai V/s Karmala Nagar Palika & others), in
which it is observed that “rateable value of the
properties on the basis of “profit method”, without
issuing any notice, is improper”.

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14. Mr. Mantri, learned counsel, further relied
upon the observations in case of 1976 BCI 17 (Ramkumar
Ramchandra Choudhary V/s. Hingoli Municipal Council,
Hingoli and another) and 1977 BCI 3 (Thane Municipal
Council, Thane, V/s. Thane Co-operative Housing Society

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Ltd., Thane) to contend Section 170 of the Act
prohibits entertaining of the appeal without the
deposit of the amount. The section does not say that
no appeal shall be filed. In addition to that Mr.
Mantri, learned counsel, submitted that the petitioner
had already deposited the tax amount before
presentation of the appeal and the appeal was filed by
the petitioner in view of provisions of Section 169(ii)
and it does not fall under the provision of section
169(i) of the Act.

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15.Mr. Mantri, learned counsel, further relied
upon the observations in case reported in 2015 (6) Bom.

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C.R. 362 (MIDC Industries Association V/s. State of
Maharashtra and others) in which it is observed that,
tax on the basis of square feet is not proper.

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16.Mr. Mantri, learned counsel further pointed out
that the learned Magistrate dealing with Tax Appeal No.

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250/1996 has taken into consideration the documents/
evidence placed in the appeal in Tax Appeal No. 12/2004
and the observations given in Writ Petition No.
956/2001. By referring the relevant reasons/
observations recorded by the Appellate Court, Mr.
Mantri, learned counsel, points out that no opportunity
was given to the petitioner to defend the documentary

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evidence which is placed in another appeal.

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17.Mr. Mantri, learned counsel, further relied
upon the observations in Writ Petition No. 956/2001
wherein directions were issued to form a committee and
there are no directions in reference to the fixation of
the rateable value in regards with the subject
matter/property of the petitioner.

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18. Mr. Gaware, learned counsel for respondent
No. 2 has relied upon the observations in case reported
in 1984 A.I.R. (SC) 653 (Siliguri Municipality V/s.
Amalendu Das) in which it is observed that “grant of
stay to the recovery of tax is not proper.”

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19.Mr. Gaware, learned counsel, further relied
upon the observations in case of 2011 DGLS (SC) 925
(Dewan Chand Builders & Contractors V/s. Union of India
& Ors.) in which it is observed that, the tax recovered
goes in the consolidated funds which is utilized for
the public purpose.

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20.Thus relying upon the aforesaid observations in
the cases cited (supra) Mr. Gaware, learned counsel,
has argued that the Respondent No. 2/Corporation has
authority in law to revise the rateable value of the
property for every four years. Accordingly, by passing
resolution the Corporation has increased the rateable

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value and fixed the tax upon the same.

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21.Considering the rival submissions of both the
sides it is material to mention here that it is the
contention of the petitioner that inspite of the
objection raised by it, no opportunity of being heard
is given to the petitioner, therefore, the rateable

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value/tax fixed behind back of the petitioner, is
against the principle of natural justice, therefore,
needs to be set aside.

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22. On perusal of the witness examined by the
respondent No. 2/Corporation in Tax Appeal No. 250/1996
it appears that, witness Mr. Zine is an employee of
respondent No. 2. During the course of cross-
examination he has stated that the Tax assessment was
done in the year 1994-95, after the appointment of the
Assistant Director of Town Planning and admitted that
he do not know on the basis of which the ADTP (in
short) has fixed the rateable value/tax. He further
specifically admitted that the Corporation heard
thousands of tax payers after issuing notices within
one day.

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23.Looking to the aforesaid admission it is highly
impossible for respondent No. 2/Corporation to hear

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objections of the persons in thousands. More

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particularly there is no evidence in the present matter
to show that liberty was given to the petitioner to
represent and to put his case, more particularly, on
the ground that the petitioner has already submitted
his objection to the notice of tax.

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24.Since from the aforesaid circumstances it

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appears that no opportunity of being heard was given to
the petitioner, before fixation of 'ALV' therefore
Mr. Mantri, learned counsel for petitioner has rightly
relied upon the observations in case reported in 2011

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(4) Mh.L.J., 705 (Municipal Corporation of the City of

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Pune V/s. Jayant Vyankatesh Sangole ) in which it is
observed that no hearing was given by the Corporation
to the respondent before increasing and fixing rateable

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value under the circumstances, the fixation of rateable
value was illegal and was rightly set aside in exercise
of the jurisdiction vested in the Small Causes Court.
In view of the above, this Court holds that no
opportunity was given to the petitioner to represent
his case in the matter.

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25.Next important aspect is to be considered that
in the Tax Appeal No. 250/1996 learned 3rd Jt. Civil
Judge, S.D., & J.M.F.C., Ahmednagar, has relied upon
the documents which are placed in another appeal i.e.

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Tax Appeal No. 12/2004 which was on the board on the
same day and documents filed in the Tax Appeal No.
12/2004 particularly resolution No. 60 dated 13.12.2001

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was considered and relying upon the contents of the
resolution No. 60 the learned Appellate Court has fixed
the rateable value as Rs. 21,28,689/- for revisional
period. Since 2004-05 onwards the rateable value is
fixed of Rs. 28,38,252/-.

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26.It is surprising to note that the petitioner
was unaware about the resolution or its copy placed in
Tax Appeal No. 12/2004. Therefore, apparently, it

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appears that the Appellate Court has taken into
consideration extraneous material which was not known

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to the petitioner and fixed the rateable value. Learned
Appellate Court has also considered the observations in
Writ Petition No. 956/2001. On perusal of the same it
appears that in the aforesaid Writ Petition this Court
has directed the State Government, through Principal
Secretary of the Department of Urban Development to
frame rules as required under the proviso to Section
114(i) of the Act, as expeditiously as possible and in

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any case before 31.12.2001. So looking to the
directions issued in the aforesaid writ petition the

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only direction was given to the State Government is to

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frame the rules. The relevant observations of the
learned Appellate Court in para No. 12 reads as
follows :

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“12.The new R.C.C. construction is 11%.
The new tin shed construction is 48%. As
already stated the law permits periodical
increase in R.V. Today Tax Appeal No. 12/2004
is on board. In that case the copy of
resolution No. 60 dated 13.12.2001 passed by
the respondent is on record. It is revealing
that one Writ Petition No. 956/01 was pending
against the respondent. In that writ petition
the Hon'ble Bombay High Court had directed the
Municipal Council to take decision by forming
Tax Appeal Committee. That resolution is also
revealing that the respondent had resolved to
increase the R.V. by three time by previous
one. That rise for the revisional year 1995-
96. Asper this resolution previous R.V. means
R.V. by the year 1989-90. Considering all
these facts and circumstances of the present
case I am of the opinion that Rs. 21,28,689/-
as the rateable value for the revisional
period 1995-96 to 2002-03 and 2003 to 2004 is
sufficient. In the year 2003-04 Municipal
Corporation has been formed. For the
revisional period since 2004-05 the rateable
value is fixed as Rs. 28,38,252/-.”

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27.Order passed by the Appellate Court was
assailed in Criminal Revision No. 31/2011. The learned

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Revisional court observing the same thing has dismissed
the revision. So apparently it appears that the
documents which are not part of the record of the Tax
Appeal No. 250/1996 was considered and the learned
Appellate Court has fixed the rateable value as
referred above. Therefore, apparently it appears that
taking into consideration the evidence in the other

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proceedings which was unknown and surprise to the
petitioner, cannot be considered unless the same
documents are placed in the proceeding before the
Appellate Court.

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28.In view of the above, following order is

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passed :

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ORDER

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1. The Writ Petition is allowed.

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2.The judgment and order passed by the 3rd Joint

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Civil Judge, Senior Division & J.M.F.C., Ahmednagar in
M.T.A. No. 250/1996 dated 21.12.2010, and the judgment

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and order passed by the Additional Sessions Judge,
Ahmednagar in Criminal Revision No. 31/2011 on
10.11.2017, are quashed and set aside.

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3.The respondent No. 2 is directed to give
opportunity of being heard to the petitioner and fix

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the rateable value in accordance with law.

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29.Rule is made absolute in the above terms. Writ
Petition is accordingly disposed of. No costs.

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30.After pronouncement of the order, Mr. Gaware,
learned counsel appearing for respondent No. 2 submits
that the order passed by this Court today be stayed for
a period of three weeks as respondent No. 2 intending
to assail the judgment and order before the Apex Court.
Mr. Mantri, the learned counsel for the petitioner has
no objection to stay the same. Hence, operation of the
above order is stayed for a period of three week from
today.

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mkd

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Kinetic Engineering Ltd. through Its Authorized A.G.M. (Hr and Admn) Shashikant Shivanand Gulve v. the State of Maharashtra

Case brief

What is this about?

What did the court decide?

Kinetic Engineering Ltd. through Its Authorized A.G.M. (Hr and Admn) Shashikant Shivanand Gulve v. the State of Maharashtra

Case brief

What is this about?

What did the court decide?

What the court decided

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