Allowed

The Bharatpur Central Co-Operative Bank Limited v. State of Rajasthan

Rajasthan HC20 Jan 2025CW/13902/2023

Case brief

AI extract

What is this about?

A bench of two judges decided three connected writ petitions challenging a tax demand raised by a municipality against cooperative banks regarding RIICO plots. The court held that without an order or hearing, the demand violated natural justice and Rule 5 of the Rajasthan Municipalities Rules, directing authorities to treat the notice as a show-cause notice.

What did the court decide?

Demand notices treated as show-cause notices; petitioner directed to appear for response filing; matter remanded for decision after hearing.

The Bharatpur Central Co-Operative Bank Limited Vs… — Service and Employment | Rajasthan HC (2025)

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[2025:RJ-JP:2666-DB]

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COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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D.B. Civil Writ Petition No. 18498/2023

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The Bharatpur Cooperative Bhumi Vikas Bank Limited, 248, Super Market, Near Punjab National Bank, Bharatpur 321001 Through Oicmanoj Soni S/o Kailash Chand Soni Aged About 41 Years.

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----Petitioner

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Versus

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State Of Rajasthan, Through Additional Chief Secretary, Urban Development And Housing Department, Secretariat, Jaipur.

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Nagar Nigam, Bharatpur, Through Commissioner, Bharatpur-321001

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Incharge, Revenue Section, Nagar Nigam, Bharatpur.

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----Respondents

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Connected With

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D.B. Civil Writ Petition No. 13894/2023

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The Bharatpur Central Co-Operative Bank Limited, Near Old Power House, Bharatpur Through Officer-In Charge Cum Senior Manager Harish Chandra Meena.

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----Petitioner

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Versus

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State Of Rajasthan, Through Additional Chief Secretary, Urban Development And Housing Department, Secretariat, Jaipur.

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Nagar Nigam, Bharatpur Through Commissioner, Bharatpur- 321001

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Incharge, Revenue Section, Nagar Nigam, Bharatpur.

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----Respondents

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D.B. Civil Writ Petition No. 13902/2023

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The Bharatpur Central Co-Operative Bank Limited, Near Old Power House, Bharatpur Through Officer-In Charge Cum Senior Manager Harish Chandra Meena.

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----Petitioner

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Versus

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State Of Rajasthan, Through Additional Chief Secretary,

[2025:RJ-JP:2666-DB]

[CW-18498/2023]

(2 of 6)

Urban Development And Housing Department, Secretariat, Jaipur.

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Nagar Nigam, Bharatpur Through Commissioner, Bharatpur- 321001

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Incharge, Revenue Section, Nagar Nigam, Bharatpur.

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----Respondents

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For Petitioner(s) : Mr. Rahul Kamwar For Respondent(s) : Mr. Guru Charan Singh Gill, AAG Mr. J.K.Moolchandani

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HON'BLE MR. JUSTICE INDERJEET SINGH HON'BLE MR. JUSTICE BHUWAN GOYAL

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Order

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20/01/2025

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Learned counsel for the petitioners submits that the issue involved in these writ petitions has already been considered and decided by Co-ordinate Bench of this Court in the matter of Ashok

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Arora Vs. State of Rajasthan (D.B.Civil Writ Petition No.7329/2023) and other connected matters wherein on 09.02.2024 the following order was passed:-

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1.These petitions are being decided by a common order as the issue and facts involved are similar. The facts are being considered from D.B. Civil Writ Petition No.3679/2022.

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The petitioner was allotted plot in RIICO Industrial Area Vishwakarma, Jaipur by Rajasthan State Industrial Development and Investment Corporation (for short, ‘RIICO’).

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Inter alia grievance raised in the petition is that demand for Urban Development Tax (for short ‘tax’) under Rajasthan Municipalities Act, 2009 (for short ‘Act’) has been created without passing an order.

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The petitioners claimed that the property being situated in industrial area is not exigible to tax. Learned counsel appearing for the RIICO appearing has supported the stand taken by the petitioner.

(3 of 6)

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[CW-18498/2023]

The Senior Counsel for respondent Nos.1 to 4 defends the impugned demand submits that there is a scheme of self-assessment of tax and the petitioner failed to deposit the due tax. The argument is that demand notice contains calculation of tax.

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Heard counsel for the parties and perused the record.

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Rule 5 of Rajasthan Municipalities (Urban Development Tax) Rules, 2016 (for short ‘Rule’) is reproduced herebelow:-

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(1) The Chief Municipal Officer of the Municipality shall issue a public notice in Form-II within fifteen days from the date of order issued by the State Government under Section 102 of the Act, calling upon the owners/occupiers of building or land or both, to submit self-assessment returns in FormIII. Such notice shall be also affixed on the notice board of the office of the Municipality.

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(2) The person primarily liable to pay tax shall assess the tax payable by him and deposit the tax in bank account of the Municipality or in the office of the Municipality. After depositing the tax, self-assessment return in Form-III duly and correctly filed in, along with a copy of challan or receipt of tax deposited, shall be submitted by him in the office of Municipality, in person or by post or by transmitting them through online e- governance system.

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(3) If the owner/occupier does not submit correct self-assessment return or fails to submit the selfassessment return as required under sub-rule (1) and (2) above, the Chief Municipal Officer/ Assessor or the Officer authorized in this behalf, as the case may be, may-

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(a) enter upon or into, inspect and measure any building or land or both;

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(b) make enquiries from the people living in the neighborhood and examine the previous record of the Municipality or other local authority in relation to such building or land or both, if necessary; and

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(4) Five percent cases of self assessment returns of tax shall be secrutinised/examined by the Chief Municipal Officer, Assessor or the Officer authorized by the State Government.

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As per rule 5(1), the Chief Municipal Officer has to issue a public notice within fifteen days of the issuance of order by the State Government under Section 102 of the Act for submission of self-assessment return by the owners/occupiers of the building or land or both. The assessee liable to pay tax under Rule 5(2) shall deposit it in the Bank account of the Municipality or in its office and shall submit in the office of Municipality either online or in person or through post self-assessment return along with proof of deposit of tax. Failure of the owner/occupier to file self-assessment return or submission of incorrect return is dealt under Rule 5(3). The Chief Municipal

(4 of 6)

[2025:RJ-JP:2666-DB]

[CW-18498/2023]

Officer/Assessor may inspect the building or land for measurements; make enquiries from the neighbourhood or examine the previous record of municipality or local authority or both if necessary; assess the tax and recover it. Rule 5(4), provides that five per cent cases of selfassessment shall be taken up in scrutiny for examination.

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As per the case set up the petitioner had deposited service charges with RIICO claiming that the property is not exigible to tax under the Act. As per rule 5(3), the Chief Municipal Officer/Assessor had to assess the tax and recover the same.

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From the pleadings, it is forthcoming that there is no order assessing the tax. In other words, a liability has been calculated without associating the petitioner. Whereas Rule 5(3) provides that the Assessing Officer has to assess the tax, thereby the petitioner should be granted opportunity of hearing to put forth the version as liability of tax or raising objections to quantification.

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Assuming the calculation sheet-cum-demand notice is treated to be an order, it is violative of principles of natural justice. The petitioners were not provided an opportunity to put forth the stand taken here in the petition.

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There cannot be a quibble with the proposition that opportunity of hearing before making the decision is the requirement of the principles of natural justice. The principle has been extended not only to quasi-judicial authorities but to the administrative actions where the culmination of proceeding result in civil consequences. It would be appropriate to quote the decision of the Supreme Court in the case of M/s Dharampal Satyapal Ltd. vs. Deputy Commissioner of Central Excise Gauhati And Ors. reported in (2015) 8 SCC 519 . The relevant para is quoted below:-

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“From the aforesaid discussion, it becomes clear that the opportunity to provide hearing before making any decision was considered to be a basic requirement in the Court proceeding. Later on, this principle was applied to other quasi-judicial authorities and other tribunals and ultimately it is now clearly laid down that even in the administrative actions, where the decision of the authority may result in civil consequences, a hearing before taking a decision is necessary. It was, thus, observed in A.K. Kraipak’s case (supra) that if the purpose of rules of natural justice is to prevent miscarriage of justice, one fails to see how these rules should not be made available to administrative inquiries. In the case of Maneka Gandhi v. Union of India & Anr.[13] also the application of principle of natural justice was extended to the administrative action of the State and its authorities. It is, thus, clear that before

(5 of 6)

[2025:RJ-JP:2666-DB]

[CW-18498/2023]

taking an action, service of notice and giving of hearing to the noticee is required. In Maharashtra State Financial Corporation v. M/s. Suvarna Board Mills & Anr.[14], this aspect was explained in the following manner:

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“3. It has been contended before us by the learned counsel for the appellant that principles of natural justice were satisfied before taking action under Section 29, assuming that it was necessary to do so. Let it be seen whether it was so. It is well settled that natural justice cannot be placed in a straight-jacket; its rules are not embodied and they do vary from case to case and from one factsituation to another. All that has to be seen is that no adverse civil consequences are allowed to ensue before one is put on notice that the consequence would follow if he would not take care of the lapse, because of which the action as made known is contemplated. No particular form of notice is the demand of law: All will depend on facts and circumstances of the case.” In the case of East India Commercial Company Ltd., Calcutta & Anr. v. The Collector of Customs, Calcutta[15], this Court held that whether the statute provides for notice or not, it is incumbent upon the quasijudicial authority to issue a notice to the concerned persons disclosing the circumstances under which proceedings are sought to be initiated against them, failing which the conclusion would be that principle of natural justice are violated. To the same effect are the following judgments: a) U.O.I. & Ors. v. Madhumilan Syntex Pvt. Ltd. & Anr.[16]

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b) Morarji Goculdas B&W Co. Ltd. & Anr. v. U.O.I. & Ors.[17]

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c) Metal Forgings & Anr. v. U.O.I. & Ors.[18] d) U.O.I. & Ors. v. Tata Yodogawa Ltd. & Anr.[19] Therefore, we are inclined to hold that there was requirement of issuance of show-cause notice by the Deputy Commissioner before passing the order of recovery, irrespective of the fact whether Section 11A of the Act is attracted in the instant case or not.”

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In spite of alternative remedy, the writ jurisdiction is being exercised taking in account that the impugned demand is in violation of principles of natural justice and is not in complaince with procedure prescribed in Rule 5. The case falls within the exceptions carved out by Supreme Court in the case of Whirlpool Corporation Vs. Registrar of Trade Marks, (1998) SCC 1.

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The writ petitions are disposed of with the directions that the demand notice shall be considered to be showcause notice (for short ‘SCN’).

(6 of 6)

[2025:RJ-JP:2666-DB]

[CW-18498/2023]

Let petitioner appear in the office of Commissioner of the Municipal Corporation concerned on 16.02.2024 at 11:00 AM for filing response to the SCN. Thereafter, Commissioner shall decide the issue of leviability of tax in accordance with law, after providing opportunity of hearing to petitioner.

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The affected parties shall be at liberty to move an application before the Commissioner for granting an opportunity of hearing.

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The writ petitions are allowed. 18. Needless to say that petitioners shall be at liberty to avail remedy in accordance with law, if aggrieved of the decisions.”

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Learned counsel for the respondents have not disputed the legal position in these matters.

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In that view of the matter, these writ petitions are disposed of in view of the judgment passed by Co-ordinate Bench of this Court in the matter of Ashok Arora(supra).

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The petitioners are at liberty to file fresh representation before the Concerned Commissioner/respondents who are directed to decide the said representation within a period of two months after providing opportunity of hearing to the petitioners.

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(BHUWAN GOYAL),J

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(INDERJEET SINGH),J

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Anu /88-90

The Bharatpur Central Co-Operative Bank Limited v. State of Rajasthan

Case brief

What is this about?

What did the court decide?

The Bharatpur Central Co-Operative Bank Limited v. State of Rajasthan

Case brief

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What did the court decide?

What the court decided

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