Bench – THE HON’BLE MR. JUSTICE ANU SIVARAMAN
Case Title – Mohammed Kabeer V The Secretary
Case No – WP (C) NO.41464 OF 2016
Date – 31/05/2023
Facts –
In this case, the petitioner had constructed a building in the year 2000, and it was assessed for property tax based on its annual rental value. The petitioner had been paying the property tax as demanded. However, without any prior notice of intimation, the petitioner received a demand notice (Ext.P5) in 2016, requiring them to pay an additional amount of Rs. 1,36,731 as property tax for the period starting from 2013-2014. The petitioner argued that they were not given any opportunity to object or contest the revision of the tax assessment. They contended that their building, which was more than 15 years old at the time of the notice, did not require any enhancement in terms of the rules.
The respondents, in their counter affidavit, stated that the Ext.P5 demand was raised based on a general revision of property tax authorised by the government through a notification issued in 2011. They claimed that the petitioner’s building, with a plinth area of 840 sq.m., was assessed at Rs. 35,280 based on the revised rates.
JUDGEMENT –
After considering the arguments presented, the court noted that the 2011 notification (Ext.R1(a)) was only meant to fix the minimum and maximum property tax rates for specific classes of buildings. The court emphasised that even with such a notification, a demand for tax cannot be automatically raised without following the proper procedure outlined in the law and rules, which includes assessing the tax payable based on the total plinth area of the building.
The court found that the Ext.P5 demand was raised without conducting a proper assessment, rendering it incompetent. The petitioner’s contention that the tax had been demanded at the maximum rate specified in Ext.R1(a) without considering relevant factors, such as the age of the building, was deemed valid. Consequently, the court set aside the Ext.P5 demand notice.
The court issued a direction stating that if the petitioner submits objections to the assessment of property tax, the Secretary should consider them and pass a proper order of assessment with notice to the petitioner.
Any future demands based on the new assessment should be made in accordance with the provisions of the Panchayat Raj Act and the rules. The Panchayat was given one month to notify the petitioner about the assessment, and subsequent action, considering the objections raised by the petitioner, should be taken within two months after that.
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WRITTEN BY – ANVITHA RAO
