- (1.) Assailing the judgment and order dated 6th July, 2004 passed in W.P. 174 of 2003 this appeal has been preferred. The impugned order reads thus: 'The Court: The first petitioner is a Club being association of a large number of individuals and the rest of the petitioners are the office bearers and/or member of the first petitioner. The Club is the lessee and under a registered deed of lease dated 1st February, 1888 executed and registered by the Secretary of the State of India Council (now Government of India) in respect of a piece and parcel of land being 1, Strand Road, Calcutta - 700 001 (hereinafter referred to as the said land) at and for consideration mentioned therein. The Club has since been in possession and/or occupation of the said land comprised of the said premises by erecting pucca structure. The respondent Corporation has served notice dated 4th October 2002 along with four hearing notices dated 5th October 2002 addressing Garrison Engineer Eastern C.S.R., C.L.P. Government of India and the first petitioner as being persons responsible under Sections 184(3) and 184(4) of the Calcutta Municipal Corporation Act, 1980 (hereinafter referred to as the said Act) fixing annual valuation of the said premises at Rs. 592, 650/-.with effect from 1st quarter 1984-85, 1986-87, Rs. 677,430/- with effect from 1992-93 and Rs. 781,750/- with effect from 1988-89. In the notice and the bills the premises number has been wrongly mentioned as being 1/1 Strand Road, Calcutta. By the said notice objection was invited for hearing for fixing the annual valuation of the said premises. The petitioners filed objection however, at the time of the hearing the petitioner could not be present in view of the cease- work of the learned Lawyers. As such the matter was heard ex-parte and the valuation was made behind the back of the petitioners. Orders fixing valuation have been passed without showing any reason Whatsoever. The grievance of the petitioners is that the notices are vague without any basis to which no effective objection could be raised as such the hearing should not have been taken pursuant to these impugned notices. Moreover, no demand for payment of Tax can be made as the property belongs to the Government and the petitioners are merely occupant as such under law no property tax can be imposed in relation to the said property. The subsequent demands by raising bills are wholly without jurisdiction and ultra vires of the Act. The petitioners at no point of time were served with any notice of hearing nor any bill was raised demanding payment of property tax. As such the order of valuation and the demand for payment of property tax must be set aside and quashed. Affidavit-in-opposition has been filed stating that the owner of the property is Government but the. petitioner being the lessee, is the occupant not the Government. As such they are liable to pay property tax as a lessee. It is stated further that from day one the petitioners as occupants were and are liable to pay property tax but no bill for such payment was raised by mistake. As such now bill for payment of Tax is raised with effect from 1st Quarter 1984-85. It is stated that under the law the property belonging to Government can be valued for the valuation sake but the payment of property tax is exempted so far as Government is concerned. Since question was raised that at no point of time the property was valued and there was no mutation in the name of the petitioners as a lessee in the records of the Municipal Corporation as such the Club cannot be a person responsible for payment of property tax, with the leave of this Court the respondent filed a supplementary affidavit enclosing xerox copies of the extract of the Assessment Register. It appears from these records that Club was recorded as a lessee and the aforesaid premises with structure was valued from time to time. As such the contention that the Club was never mutated nor the property was valued at any point of time is not correct. The documents and entries made therein are of 30 years old and contemporaneous. I do not find any reason to disbelieve correctness of the entries. As such I hold that the Swimming Club was mutated and recorded as an occupier. Mr. Bhaskar Sen learned Senior Advocate appearing with Bikash Ranjan Bhattacharya learned Senior Advocate and Mr. Samit Talukdar learned Advocate submits drawing my attention to Section 193 of the Kolkata Municipal Corporation Act, 1980 (hereinafter referred to as the said Act) that the consolidated rate on lands and buildings shall be primarily leviable, in this case upon the lessor. Admittedly, the petitioners are occupying the property as a lessee pursuant to written instrument. Admittedly again the Government of India is the lessor/owner of the land. Therefore, by virtue of Section 193 of the said Act the government is the person responsible. He contends that under Section 195 of the said Act the occupier may be proceeded with for recovery of the property tax on failure of the person primarily liable under Section 193. The Government cannot be treated to be person responsible in view of provision of Section 172 of the said Act whereby and whereunder it enjoys exemption from payment of consolidated rate (property tax) on the lands and buildings belonged to it. Question of failure of the Government to pay property tax does not and cannot arise and in sequel thereto the petitioners cannot be proceeded with nor the respondent can make any demand for payment under the law. Therefore, the demand for payment of the property tax from the petitioner in relation to land and buildings with retrospective effect from 1983-84 till today are wholly ultra vires of the aforesaid Act. Even assuming for arguments sake the valuation can be made or the property tax can be levied. The Hearing Officer has passed the impugned order without giving reasonable opportunity of being heard, as the petitioners could not be represented due to failure of the learned Lawyers to appear before him owing to cease work resorted to by the Bar Council of West Bengal. It is settled position of law that due to laches and negligence on part of the learned Lawyers the litigant cannot be made to suffer. Mr. Ashok Das Adhikari learned Advocate appearing for the Municipal Corporation contends that it is true the Government cannot be asked to make payment as it enjoys exemption but there is no bar under the law to make valuation of the property. He contends further that this property was valued from time to time and from the records it reveals that from 4th Quarter 1968-69 this property was valued. Again this property was re-valued with effect from 4th Quarter 1974-75 and 4th Quarter 1980-81 respectively. Lastly it was valued on 18th June, 1987 at a sum of Rs. 127,401/- therefore the contention of the petitioner that the property was not valued ever, is wholly incorrect. He further contends that in this case the petitioner is liable to pay property tax as the land was leased out, not the structure that has been built and has been enjoyed by the Club. He draws my attention to Section 172 of the said Act and contends that the Government is exempted from paying any property tax in respect of open spaces including parade grounds. If the structure is built by the Government or if it is leased out to the third party then the said property together with building built thereon are certainly subjected to payment of property tax. He further draws my attention to Section 177 of the said Act and submits that the building shall be separately valued and the owner of the building will not be entitled to any exemption from payment of property Tax under this Act. It is true that the Municipal Corporation did not make any revision of the valuation periodically after 1987 but the petitioner who is also the assessee, is obliged under the law to make self- assessment in respect of the building under amended provision of Section 182(A) of the said Act and to pay property Tax pursuant thereto. He also contends that it is true that no bill was raised not to speak of payment therefor, even before impugned bills being issued. The petitioner urges, cannot take advantage of omission of the Corporation in levying property Tax on them. Therefore, he contends that this Court will not interfere with the valuation already done by the hearing officer. The petitioner may resort to alternative remedy preferring appeal under the statute. Having heard the respective contention of the learned Counsels the issues raised here primarily as follows: (i) Whether the petitioners being the occupier as a lessee is liable to pay any property tax in respect of the Government land ? (ii) If so since when they are liable to pay ? (Hi) Whether the impugned order and bills are sustainable under the law as alleged by the petitioner ? It is the contention of Mr. Sen appearing for the petitioners that on 7th October, 2000 the petitioners for the first time received notices for the purpose of annual valuation of this property with effect from 1984- 85, 1986-87, 1992-93 and 1998-99. Mr. Sen also contends further that before the said notices were issued this property had never been valued nor the petitioner's name had been recorded as an assessee. I find this contention is not factually or legally correct. The Municipal Corporation has annexed contemporaneous records to the supplementary affidavit. I find, as rightly contended by Mr. Das Adhikari that in the assessment register of valuation list of lands and buildings, the name of the owner has been recorded Garrison Engineer, Eastern Circle the Government of India Fort William as an owner, and the Secretary, Calcutta Sunmming Club has been recorded as occupier, lessee in respect of this property. The annual valuation of the property was fixed upon hearing with effect from 1st Quarter 1968-69, at a sum of Rs. 115,635/-with effect from 4th Quarter 1974-75 and Rs. 127,401/- with effect from 4th Quarter 1980- 81. All these valuations were settled and finalized upon hearing as it appears from the records. Therefore, the contention of the petitioners that for the first time the valuation is sought to be made is incorrect and the same is accordingly overruled. Mr. Das Adhikari has rightly said that the Government is enjoined with privileges of the exemption under Section 172 sub-section (1) Clause (Hi) regarding open spaces, yet the property is to be assessed to annual valuation. Even the Government does not enjoy exemption from payment of consolidated rate in relation to the building. I cannot accept the contention of Mr. Sen that the petitioner club herein is exempted from paying consolidated rates, as it is the lessee/occupier in relation to the Government land. Section 177 of the said Act, which is quoted hereunder ; makes it absolutely clear about mode and method of determination of annual valuation of the building and also payment of property tax. "177. Determination of annual valuation of building where land is exempted from consolidated rate.Where any land is exempt from the consolidated rate under any law in force for the time being, the annual value bf any building, erected on such land, which is in existence for more than one year and is not entitled to any exemption from the consolidated rate under this Act or any other law in force for the time being, shall be determined separately from the land in accordance with the provisions of this Chapter." Therefore, it is clear from the above Section that the building erected by the petitioners shall be separately valued. Mr. Sen's contention that in this case the person responsible for payment of consolidated rates is the lessor/Government, by virtue of the provision of Section 193 read with Section 195 of the said Act. If Section 193 is read carefully, it will appear that if the land or the building is let, primary liability rests upon the lessor. The word "or" mentioned in sub-section 1 clause (a) of the said Section is disjunctive. Admittedly the building is not let out or leased out, which belonged to the petitioners. The provision of Section 193 is to be applied taking the provision of Section 177 of the said Act into consideration. Intrinsic purport of Section 193 is to levy and realize tax from the person having proprietary interest and control over the land or building. Here the land is leased out to the petitioners. As I have already observed that the Government enjoys exemption from payment of property tax in relation to the land not the building. As such the building of the petitioners is liable to be assessed for annual valuation. Consequently the petitioners are liable to pay the property tax on such valuation so fixed. So issue No. 1 is answered in the affirmative. It appears as rights submitted by Mr. Sen that this valuation was made ex-parte and no reason was assigned in the order of the hearing officer. Therefore, the valuation cannot stand under the law as the same was done in violation of principle of natural justice accordingly the valuations are set aside. Therefore, the hearing officer is directed to make a fresh valuation upon hearing the petitioners and passing speaking order. I observe that the petitioners should have made valuation under the amended provision of Section 182A of the said Act and, by not doing so the petitioners have certainly render itself to make payment of the property tax on and from 1st Quarter of 1995, prior to this period the Municipal authority has not been able to establish that any demand for payment of property tax was made from the petitioners. The aforesaid valuation shall be made afresh within a period of 12 weeks from the date of communication of this order. This shall done provided the petitioners raise objection in writing pursuant to the notice given by the respondent for revision of annual valuation, if such objection has not been raised formally. The petitioners, however, shall deposit the property tax without prejudice for each and every quarter of such amount, commencing from 1st Quarter of 1995, which shall be calculated on the valuation of Rs. 2 lacs. Thus the petition is disposed of without any order as to costs."
(2.) It was the case of the writ petitioners who are the appellants before us that they had no liability to pay the property tax in respect of the land wherein the writ petitioners/appellants have constructed building and Swimming Pool, as land belongs to the Central Government which is exempted from property tax in terms of Section 171 sub-section (6) of Kolkata Municipal Corporation Act, 1980. IT is the further case that so far as the building as constructed therein since is over the land is exempted from property tax, the writ petitioner has no tax liability. Further contention raised that writ petitioners were never the assessee of the Corporation on mutatfon of their names in the Corporation relating to the leasehold property. The notice issued under Section 184 asking them to show cause with reference to the valuation made became the subject matter of challenge before the learned Trial Judge. From the impugned judgment it appears that the learned Trial Judge framed three issues. Amongst them the major issue is issue No. 1 which was addressed by the learned Trial Judge by holding inter alia that the writ petitioners being the occupier as a lessee was legally responsible to pay the property tax in respect of the government land. The other issues are co-related issue with reference to the issue No. 1. The appellants before us the writ petitioners has assailed the said issue on the ground that the learned Trial Judge failed to appreciate the legal position so far as liability of payment of property tax of the Corporation and thereby has saddled the liability upon the writ petitioners in respect of the government land which admittedly exempted from the property tax of the Corporation. The point as urged before the learned Trial Judge has been urged before us. This appeal has been opposed by the Kolkata Municipal Corporation by contending inter alia that even if the land is considered as a property exempted from the property tax of the Corporation but as the lessee, the writ petitioners-appellant, have already constructed a building therein including the swimming pool, the writ petitioners are liable to pay the property tax on account of the building and structure by determining the annual valuation of the same in terms of Section 177 of the said Act. It is further asserted that once the writ petitioners appellant became the lessee, the property practically was transferred in their name as a leasehold property and as such any construction made herein in terms of the lease agreement, the writ petitioners are liable to pay the property tax and under Section 182 they had the duty to submit the returns enabling the Municipality to fix the appropriate property tax. It is further contended that whether land is a property, exempted from property tax, is required to be ascertained, more particularly for the reasons that in terms of the lease agreement of the year 1888 the land was handed over to the writ petitioners for construction of a swimming pool which is popularly known as Calcutta Swimming Club. It is contended that having regard to the provisions of Section 171 sub-section (6), first proviso, the Corporation is required to ascertain the fact whether any tax could be levied on such land having regard to the prevalent condition before commencement of the act with reference to the liability of payment of property tax. Reference has been made also to Article 285 of the Constitution of India to contend that leviability of the property tax, is dependent upon the consideration of the fact in terms of clause 2 of Article 285 of the Constitution of India whereby and whereunder the leviability of any property tax in terms of the statutory provisions as was existing before the commencement of the constitution was sanctioned and approved under the said Article. It was further contended that writ is not maintainable as only in the initial stage whereby and whereunder notice was served under Section 184, the writ petitioners approached the Writ Court. That so far as the earlier assessment prior to such assessment year of the concerned notice, the writ petitioners accepted the property tax as assessed and paid the same. From the impugned notice under Section 184 it appears that this notice was issued with reference to the annual valuation of the years 1984-85,1986-87, 1992-93,1998-99.
(3.) Having regard to the rival contentions of the parties now the only point for our consideration as to whether the learned Trial Judge was right to pass decision fixing liability upon the writ petitioner for payments of the property tax on account of the land, which became the subject matter of the first issue as framed and whether further direction of the learned Trial Judge directing the payments of Rs. 2 lakh without prejudice to the rights and contentions of the parties and thereby consideration of the issue afresh by the Corporation on hearing the respective parties was justified. To answer the point about the liability of the writ petitioners appellants about payment of property tax at the time of hearing, we intended to know the terms of 1st lease agreement by which the Swimming Club got right to use the land as lessee for the purpose of establishing a swimming club. Despite direction, the writ petitioners appellants failed to produce the original lease agreement or any copy of such. Ultimately this Court directed the respondent No. 8, the General Officer Commanding, Headquarters, Eastern Region having its office at Fort William to produce the original lease agreement. In response to that a supplementary affidavit was filed by the said respondent No. 8 annexing the xerox copy of the original lease agreement. The original lease agreement as was entered into in between the parties namely the Secretary of the State for India in Council who was called as the lessor of the one part and Sir Henry Leland Harrison, Knight, Sir Alexander Wilson, Knight, the Hon'ble William Macphesson, c.s. George William, Frederic Buckland, Esquire Smart Keish Donglas, Esquire James Kimber Esquire c.s., Arthur Frederick Honman Esquire, Robert Young Ramfry Esquire, Edward Jenemish Kind Esquire, Edwart George Cuming Esquire and Arthur Henry Wallis Esquire who were the members composing the Committee of management of the Calcutta Swimming Club being called a lessee of the other part. It appears that lease deed was executed on 1st day of February, 1888 in between those parties by stipulating the different covenant thereon including the different do's or don'ts. From xerox copy of the original lease agreement of the year 1888, it appears that the schedule of the leasehold property was a vacant land measuring more or less 4 bighas 7 cottahs and 15 chittacks as delineated in the map annexed thereto. From the covenant it appears that the lessee was permitted to construct any structure and building on consent of the lessor and the Government of Bengal. It is further stipulated in the said lease agreement that the building as would be erected in terms of the said agreement would remain as the property of the lessee and in the event of any acquisition of the land including the building, the lessee would be entitled to get compensation for the building and structure as would be constructed. It is further stipulated that on termination of the lease and/or expiry of the tenure of the lease, as the case may be, the lessee would be responsible to hand over the vacant land by demolishing structure and building as to be raised therein and lessee would be entitled to take all the properties namely the structures as would be constructed therein including the building materials and others. This indenture of lease as was executed in the year 1888, subsequently was renewed several time by keeping the terms and conditions as usual. Hence the Swimming Club, the present writ petitioners appellants are enjoying the property as a lessee. It is the admitted position that over the vacant land which was the property schedule of the initial lease agreement already a swimming club has been constructed including the structures and buildings on the area in question and as per the lease agreement aforesaid which was renewed time to time, the writ petitioners appellants was mentioned as owner of the building and structure as raised on the land in question. As such the writ petitioners appellants cannot deny their liability so far as the property tax on the buildings and structures as raised on the concerned land in terms of the Kolkata Municipal Corporation Act, 1980. So far as the liability to pay the property tax on land which admittedly is the government land, how to be considered by analysing whether learned Trial Judge was justified to conclude that the writ petitioners are liable to pay the property tax for the land also. On reading of the terms of lease agreement, the right, title and interest over the land in question of lessor and lessee, could be determined for the purpose of identifying the liability to pay the property tax under the said Act. The lease agreement of 1888 reads thus : This Indenture - made the first day of February, one thousand eight hundred eighty eight Between The Secretary of State for India in Council. hereinafter called the lessor of the one part and Sir Henry Leland Harrison. Knight. Sir Alexander Wilson. Knight, the Hon'ble William Macphesson. c.s. George William. Frederic Buckland. Esquire Smart Keish Donalas. Esquire James Kimber Esquire c.s.. Arthur Frederick Honman Esquire Robert Young Ramfrii Esquire. Edward Jenemish Kind Esquire. Edwart George Cuming Esquire and Arthur Henry Wallis Esquire the members comprising the present Committee of Management of the Calcutta Swimming Bath hereinafter called the lessee of the other part Witnesseth that in consideration of the covenants on the part of the lessee hereinafter contained the lessor doth hereby lease and demise unto the lessees, all that the price and parcel of land in the schedule hereto more particularly described and in the Map or Plan annexed hereto delineated and shown in red with liberty to erect thereon a building for use as a Summing Bath in accordance with plans and specifications already prepared and approved by the Government of Bengal, do have and to hold the said price and parcel of land and premises unto the lessees upon the terms and conditions next herein after mentioned and whilst and so long, only as such terms and conditions shall be duly observed and performed by the lessees and provided such land shall . not be required for any public purpose within the meaning of act x of 1870, or any other act for the time being in force relating to the acquisition of land for public purposes, such terms and conditions being as follows that is to say : (1)that the lessees shall and will cause the said building to be completed in accordance with the said plans and specifications subject to any modifications which may hereafter be sanctioned by the Government of Bengal and shall not nor will at any time make any additions to or alterations in the structure of the said building without the written sanction of the said Government of Bengal first had and obtained. (2) that the lessees shall not nor will at any time permit or allow the said building to be used for any purpose other than that of a swimming bath. (3) that the lessees shall and will at all times keep the said building in repair to the satisfaction of the Superintendent of works, Calcutta or such other officer of the Public Works Department as the Government of Bengal may from time to time depute in that behalf and shall allow such officer at all reasonable times to have access to all parts of the used building for purposes of inspection provided always and it is hereby agreed and declared that if the lessees shall make any additions to or alterations in the structure of the said building without such sanction as aforesaid and shall neglect or fail within one month after receipt of a written requisition in that behalf to remove such additions or alterations and restore the building to its original condition or if the lessees shall permit or allow the said building to be used for any purpose other than that of a---------------------------purpose of the said Swimming Bath without let or hindrance unless and until the said land shall be required for a public purpose and it shall be necessary or expedient to acquire the same under the provisions of act x of 1870 B. C. or other the act relating to the acquisition of land for public purposes for the time being in force and that in the event of the land being required for any such purpose as aforesaid the lessees shall be entitled to receive as compensation the value of the building thereon erected under the terms of this agreement, such value to be assessed by the Superintendent of works, Calcutta or such other officer of the Public Works Department as the Government of Bengal may depute in that behalf and it is hereby lastly agreed and declared that in this case the term lessor shall mean and include the said Secretary of State for India in Council, his successors in office and assigns and any duly qualified officer of Government acting in the premises on his behalf and that the term lessees shall mean and include the said parties hereto of the second part their executors and administrators and their successors in office as members of the said Committee it being hereby agreed by and between the said parties thereto that upon any change retirement or appointment of a new member or members of the said Committee the responsibility of any outgoing member or members of the said Committee in respect of any covenant agreement proviso matter or thing herein contained shall absolutely cease determined and become absolutely null and void as soon as the appointment of the member Companies line being a distance of about 19 feet and partly by a straight line drawn from the South East Comer of the said wall, to Pillar No. 1 a distance of about 1211/2 feet, and on the West partly by the Eastern edge of the aqueduct which supplies the Northern portion of the Strand Road with water and partly by a straight line drawn in prolongation northwards of this aqueduct to the said Tramway line being a distance of about 18 feet.";