(Prayer: This Writ Petition is filed under Article 226 of the Constitution of India, seeking for a Writ of Certiorari, to call for the records pertaining to the impugned notice in Na.Ka.No.1836/12/A1, dated 02.03.2016, on the file of the first respondent and quash the same.)
1. The petitioner challenges an order passed by the first respondent Municipality dated 02.03.2016, demanding Vacant Land Tax from the petitioner from the years I/2005-06 to II/2015-16.
2. Heard Mr.Richardson Wilson, learned counsel appearing for the petitioner, Mr.P.Srinivas, learned counsel for the respondent Municipality and perused the materials placed on record.
3. The following facts would be relevant for the purpose of deciding the controversy in this Writ Petition. The petitioner was served with a demand notice dated 03.06.2011, demanding Vacant Land Tax for the period from I/2005-06 to II/2011-12. The amount of tax demanded for the period from I/2005-06 to I/2009-10 was Rs.8,29,485/- per half year and from II/2009-10 to II/2011-12 at the rate of Rs.58,480/- per half year. The petitioner submitted his objections and thereafter filed a Writ Petition before this Court challenging the said order in W.P.No.3096 of 2012, contending that the respondent Municipality has no authority to impose vacant land tax on the subject property as it is an agricultural land as evidenced by the title deeds, revenue records, town survey records etc., and there is a clear prohibition under Section 83(1) of the Tamil Nadu District Municipalities Act,1920. It was further contended that the relevant rules, namely Tamil Nadu Town Panchayat III Grade, Municipalities, Municipalities and Municipal Corporation (Levy of Property Tax on vacant land), Rules 2009, came into force on 01.09.2009, which stipulates the procedure for fixing the Vacant Land Tax for lands which are not exclusively used for agricultural purposes and these Rules have been ignored by the respondent. Further, it was stated that the respondent has not furnished any statement to show how they have assessed the vacant land tax, no show cause notice was issued and it is in violation of principles of natural justice. In the mean time, the petitioner wanted to promote the property by constructing residential apartments for which purpose they applied for planning permission. Since this was refused to be granted, the petitioner filed another Writ Petition in W.P.No.6996 of 2012, challenging the said order of refusal. The said Writ Petition was disposed of by order dated 22.06.2012, by directing the petitioner to furnish Bank Guarantee for a sum of Rs.77,67,765/- and the application for planning permission was directed to be considered. The petitioner complied with the conditions and furnished Bank Guarantee. Thereafter, the Writ Petition which was filed by the petitioner challenging the demand of vacant land tax in W.P.No.3096 of 2012, was posted for final hearing, and disposed of by common order dated 02.12.2014 along with other connected matters. The Writ Petition was allowed and the notice of demand was quashed and the respondent Municipality was directed to issue pre-assessment notice giving full details to enable the petitioner to raise their objections and the same were directed to be considered. Though this is the direction in the penultimate paragraph of the order i.e., in paragraph 13, the Court has made certain observations in the preceding paragraphs as well. Therefore, it would be useful to refer to the relevant paragraphs of the order namely, paragraphs 10 to 13, which are as hereunder:-
10. So far as the writ petitions which have been filed challenging the notices issued under Rule 9 of Schedule IV, it has been pointed out that while assessing the property tax, the respondent/Municipality has to adopt the method contemplated under Section 82 of the Act. While issuing the notice under Section 82, it is not sufficient to quote the provision of law and call upon the petitioner to pay the tax. This is more so when the respondent/Municipality would contend that property has escaped Assessment tax and they are exercising power under Section 117-A.
11. In such circumstances, it is a pre-requisite that a pre-assessment notice should be issued to each of the petitioners clearly indicating as to the basis of the demand as to what is the extent of the property, as to how, the annual value/value of the property has been determined and what is the amount demanded by way of tax. Unless and until, the pre-assessment notice is issued giving full details, the owner of the property would not be in a position to submit an effective representation or objection. The impugned notices are classical example of non application of mind without furnishing the relevant particulars and to state that impugned notice is only a proposal to which the petitioners can object, is an empty formality. A person, who sends an objection or a person, who has called upon to give objection should be clearly informed as to what is the proposal. A vague proposal or a proposal bereft of details would not satisfy the requirements of an effective show cause notice. Therefore, the impugned notices have been issued merely as a formality and this has caused serious prejudice to the petitioner, in as much as they were kept in the dark as to what is the basis of demand and how the property has been assessed to tax and how the tax payable has been determined. As held by this Court, in several decisions the guidelines for assessing the market value as provided under the Tamil Nadu buildings (Lease and Rent Control) Act, 1960 should be applied while exercising power under Section 82 of the District Municipalities Act. It is not known as to how the vacant land tax has been calculated what is the land value adopted. Even knowing by the provisions of G.O.Ms.No.151 dated 20.08.2009, the Government Order stipulates upper and lower limits.
12. Therefore, in respect of the all the properties, uniform taxation cannot be done. As the Government order provides broad parameters depending upon the grade of the municipal area, on a perusal of the G.O.Ms.No.151 dated 20.08.2009, it is clear that vacant land tax is leviable on land which was not used exclusively for agricultural purpose and are not occupied or occupied by or adjacent and appurtenant to building subject to the minimum and maximum rent power sq.ft. Even while considering such vacant tax, the location is also very relevant in terms of G.O.Ms.No.151 dated 20.08.2009. The impugned notices do not disclose as to the basis on which demands have been made. Therefore, this Court is not satisfied that the impugned notice are bad in law for not furnishing the relevant details which are required to be furnished to enable owner to effectively resist the claim.
13. Therefore, all the writ petitions are allowed and the impugned notice are quashed. However, it is left open to the respondent/Municipality to issue pre-assessment notices giving full details to enable the petitioners to raise their objections in accordance with law. It is also open to the petitioners to raise all objections in the event such pre-assessment notice are issued. Consequently, connected miscellaneous petitions are closed. No costs.
4. After the Writ Petition was disposed of, what the respondent was expected to do was to issue of pre-assessment notice. However, the respondent sent a notice dated 13.01.2015, enclosing a copy of notices dated 03.06.2011, in which certain calculations were given. It is submitted by the learned counsel for the respondent that these notices dated 03.06.2011, are infact the pre-assessment notices, which ought to have been given before the impugned demand dated 03.06.2011, was made, but were not given to the petitioner, and therefore, the respondent has enclosed the copy of the same notice and forwarded to the petitioner. The manner in which the respondent has understood the scope of the direction issued in the earlier Writ Petition cannot be appreciated. In fact, the respondent Municipality has virtually abdicated his duties in complying with the directions.
5. It is not in dispute that the so called pre-assessment notice, dated 03.06.2011, and the demand dated 03.06.2011, were passed on the same day, but the pre-assessment notices were kept in the file and not communicated to the petitioner and only a statement of demand was issued by publishing the same in the website. The correctness of the demand dated 03.06.2011, was tested in W.P.No.3096 of 2012, and it was held to be illegal. Thus, it goes without saying that if the demand was pursuant to a pre-assessment notice dated 03.06.2011, that also should be taken to have been set at naught and the matter should have to be redone afresh by the respondent Municipality. This Court is not inclined to accept the contentions raised by the petitioner that the notice dated 03.06.2011, which ought to have been communicated in 2011, is now been communicated and there is no error. The stand taken by the respondent Municipality cannot be appreciated. Likewise, this Court is not inclined to examine as to whether the details of the assessment as furnished in the notices for the periods i.e., from I/2005-06 to I/2009-10, said to be based on the purchase percentage of capital value of the land and the details of assessment from 01.10.2009 to 2nd half year 2009-10 to second half year 2011-12, which is based on a fixed levy, since the manner in which the respondent Municipality has proceeded is arbitrary and in clear violation of the direction issued in the previous Writ Petition. Therefore, this Court holds that the notice dated 13.01.2015, enclosing the copy of the notice dated 03.06.2011, is not in compliance with the directions in W.P.No.3096 of 2012. The order impunged in this Writ Petition is dated 02.03.2016, which is a demand for vacant land tax upto II/20015-16.
6. It is not in dispute that the petitioner applied for a building plan permission during 2011, so as to put the land to use by constructing apartment complexes. Therefore, it is deemed that on and from that date, the land will not be a vacant land. The construction has been completed and the houses have been assessed to property tax, since 2013. Therefore, it is not known as to how the respondent Municipality could have demanded vacant land tax till second half year 2015-16 at the same rate as fixed from the second half year 2009-10. However, this Court does not propose to under any finding in this regard at this stage.
7. The learned counsel for the respondent Municipality submitted that the petitioner has filed an appeal against the impugned order and it has been returned for non-payment of the pre-deposit. The copy of the appeal grounds has been furnished, from which it is seen the appeal has been presented as against the notice dated 13.01.2015 and not against the impugned order. After hearing the counsels for considerable length of time, it turned out that the order dated 02.03.2016, is not the order demanding vacant land tax, but the actual order based on which the impugned order has been issued, is an order dated 03.08.2015. The counter affidavit states that this order was passed after considering the petitioner's objection. The counter does not state it has been communicated to the petitioner. The petitioner states he has not received the order dated 03.08.2015. In such circumstances, the respondent Municipality committed further error in passing the impugned order without even communicating the order dated 03.08.2015. In fact, the learned counsel for the respondent Municipality volunteered to produce the copy of the order before this Court. Even it is produced, it will not in any manner improve the case of the respondent. Assuming the order has been shown to be served on the petitioner, that, by itself will not cure the inherent defects which has crept in while the respondent took a decision in the matter. Therefore, since the impugned proceedings commencing from issuance of the notice dated 13.01.2015, is vitiated by serious procedural errors, infirmities and non-compliance of the order and direction issued in the earlier Writ Petition, the entire proceedings commencing from 13.01.2015, culminating in the orders dated 03.08.2015 and 02.03.2016 (impugned order), are required to be set aside.
8. Accordingly the writ Petition is allowed and the proceedings initiated by the respondent commencing from the notice 13.01.2015 culminating in the orders dated 03.08.2015 and 02.03.2016 are set aside and the matter is remanded to the first respondent for fresh consideration to scrupulously follow the order and direction in W.P.No.3096 of 2012, dated 02.12.2014. No costs. Consequently, connected Miscellaneous Petition is closed.