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New Delhi Municipal Council Vs. Motor Industries Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectMunicipal Tax
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 2462 of 1995
Judge
Reported in1997IIAD(Delhi)88; 65(1996)DLT257; 1997(40)DRJ738
ActsDelhi Municipal Council Act, 1994 - Sections 115; Punjab Municipal Act, 1911 - Sections 84 and 416(1)
AppellantNew Delhi Municipal Council
RespondentMotor Industries Co. Ltd.
Advocates: B.B. Gupta and; K.R. Chawla, Advs
Excerpt:
new delhi municipal council act, 1994 - sections 115, 116 and 416--provisions of ndmc act not retrspective in operation--assessment proceedings initiated under punjab act--appeal filed after commencement of ndmc act--principles to decide applicability of new or old provisions of appeal laid down--punjab municipal act, 1911--section 84.;'a levy or assessment of any tax finalised on or after 10th november, 1995 shall be deemed to have been finalised under the provisions of new act. an appeal thereagainst shall lie to the court of the district judges of delhi or new delhi as the case may be under section 115(1) though the assessment was initiated and made under chapter v of the punjab municipal act, 1911. such appeal must comply with section 116 of the ndmc act, 1994.';'the appeals pending.....r.c. lahoti, j. (1) the house property of respondent no.1 has been assessed to tax on 14.3.94 for the year 1993-94. on 31.3.94, assessment for the year 1993-94 was adopted for the assessment year 1994-95. on 16.8.94, the respondent no.1 filed an appeal under section 84 of punjab municipal act, 1911 before the additional district magistrate (n/e) (respondent no.2) an officer empowered by the state government in this behalf under section 84(2) of the act. the appeal is pending. on 25.5.94 came into force the new delhi municipal council act, 1994. an objection was taken before the respondent no.2 by the petitioner that the appeal now deserved to be dealt with under the provisions of the ndmc act, 1994. the objection has been over ruled by the respondent no.2 vide his order dated 13.2.95.....
Judgment:

R.C. Lahoti, J.

(1) The house property of respondent No.1 has been assessed to tax on 14.3.94 for the year 1993-94. On 31.3.94, assessment for the year 1993-94 was adopted for the assessment year 1994-95. On 16.8.94, the respondent No.1 filed an appeal under Section 84 of Punjab Municipal Act, 1911 before the Additional District Magistrate (N/E) (respondent No.2) an Officer empowered by the State Government in this behalf under Section 84(2) of the Act. The appeal is pending. On 25.5.94 came into force the New Delhi Municipal Council Act, 1994. An objection was taken before the respondent No.2 by the petitioner that the appeal now deserved to be dealt with under the provisions of the Ndmc Act, 1994. The objection has been over ruled by the respondent No.2 vide his order dated 13.2.95 (Annexure-E). Feeling aggrieved therewith, the petitioner has filed the present writ petition.

(2) For the sake of convenience, hereinafter the Punjab Municipal Act, 1911 and New Delhi Municipal Act, 1994 shall be referred to respectively as the `Old Act' and the `New Act'.

(3) It is not disputed that the assessment in question was made under Chapter V of the Punjab Municipal Act, 1911. The appeal was filed under Section 84 of the same Act which provides as under :-

'84.Appeals against Taxation (1) An appeal against the assessment or levy of any or against the refusal to refund any tax under this Act shall lie to the Deputy Commissioner or to such other officer as may be empowered by the [State] Government in this behalf : Provided that, when the [Deputy Commissioner] or such other officer as aforesaid is, or was when the tax was imposed, a member of the committee, the appeal shall lie to the [State] Government. (2) If on the hearing of an appeal under the section, any question as to the liability to, or the principle of assessment of, a tax arises on which the officer hearing the appeal entertains reasonable doubt, he may either of his own motion or on the application of any person interested draw up a statement of the facts of the case and the point on which doubt, is entertained, and refer the statement with his own opinion on the point for the decision of the [High Court.] (3) On a reference being made under sub-section (2), the subsequent proceedings in this case shall be, as nearly as may be, in conformity with the rules relating to references to the High Court contained in section 113 and Order XIvi of the Code of Civil Procedure. (4) In every appeal the costs shall be in the discretion of the officer, deciding the appeal. (5) Costs awarded under this section to the Committee shall be recoverable by the committee as thought they were arrears of a tax due from the appellant. (6) If the committee fail to pay any costs awarded to an appellant within ten days after the date of the order for payment thereof, the officer awarding the costs may order the person having the custody of the balance of the municipal fund to pay the amount.'

(4) In exercise of the power conferred by Section 84(1) the State Government has empowered the Addl. Distt. Magistrate, (respondent No.2) to hear the appeals.

(5) The N.D.M.C. Act, 1994 came into force on 25th day of May, 1994 by virtue of sub-Section 3 of Section 1 thereof though the assent of the President was given on 14th July, 1994. Chapter Viii of this Act makes provision for taxation. In so far as tax on property is concerned substantially the provisions of the Old Act and the New Act are similar. The noteworthy provisions of the New Act relevant for the purpose of the present petition are to be found contained in Sections 115, 116, 416 which are extracted and reproduced hereunder.

'115.APPEAL Against Assessment ETC. (1) An appeal against the levy or assessment of any tax under this Act shall lie to the Court of the district judges of Delhi or New Delhi, as the case may be. (2) If, before or on the hearing of an appeal under this Section, any question of law or usage having the force of law or construction of a document arises, the Court of district Judge on his own motion may, or on the application of any party to the appeal shall, draw up a statement of the facts of the case, and the question so arising, and refer the statement with his opinion on the question for the decision of the High Court. (3) On a reference being made under sub-Section (2), the subsequent proceedings in the case shall be, as nearly as may be in conformity with the rules relating to references to the High Court contained in Order XIvi of the First Schedule to the Code of Civil Procedure, 1908. (4) In every appeal, the costs shall be in the discretion of the Court. (5) Costs awarded under this Section to the Council shall be recoverable by the Council as an arrears of tax due from the appellant. (6) If the Council fails to pay any costs awarded to an appellant within ten days after the date of the order for payment thereof, the Court may order the Chairperson to pay the amount to the appellant.

'116.CONDITIONSOF Right To Appeal No appeal shall be heard or determined under Section 115 unless-- (a)the appeal is, in the case of a property tax, brought within thirty days next after the date of authentication of the assessment list under Section 70 (exclusive of the time requisite for obtaining a copy of the relevant entries therein), or as the case may be, within thirty days of the date on which an amendment is finally made under Section 72 and, in the case of any other tax, within thirty days next after the date of the receipt of the notice of assessment or of alteration of assessment or, if no notice has been given, within thirty days after the date of the presentation of the first bill or, as the case may be, the first notice of demand in respect thereof; (b)the amount, if any, in dispute in the appeal has been deposited by the appellant in the office of the Council.'

'416.REPEAL And SAVINGS. Punjab Act 3 Of 1911. (1)As from the date of the establishment of the Council, the Punjab Municipal Act, 1911, as applicable to New Delhi, shall cease to have effect within New Delhi. (2)Notwithstanding the provisions of sub-Section (1) of this Section, (a) Any appointment, notification, order, scheme, rule, form notice or bye- law made or issued, and any license or permission granted under the Act referred to in sub-section (1) of this Section and in force immediately before the establishment of the Council, shall, in so far as it is not inconsistent with the provisions of this Act continue in force and be deemed to have been made, issued or granted, under the provisions of this Act, unless and until it is superseded by any appointment, notification, order, scheme, rule, form, notice or bye-law made or issued or any license or permission granted under the said provisions. (b) all debts, obligations and liabilities incurred, all contracts entered into and all matters and things engaged to be done by, with or for the New Delhi Municipal Committee before the establishment of the Council shall be deemed to have been incurred, entered into or engaged to be done by, within or for the Council under this Act; (c) all budget estimates, assessments, valuations, measurements or divisions made by the New Delhi Municipal Committee shall in so far as they are not inconsistent with the provisions of this Act, continue in force and be deemed to have been made under the provisions of this Act unless and until they are superseded by any budget estimate, assessment, valuation, measurement or division made by the Council under the said provisions; (d) all properties, movable and immovable and all interests of whatsoever nature and kind therein, vested in the New Delhi Municipal Committee immediately before the establishment of the Council shall with all rights of whatsoever description, use, enjoyed or possessed by New Delhi Municipal Committee vest in the Council; (e) all rates, taxes, fees, rents and other sums of money due to the New Delhi Municipal Committee immediately before the establishment of the Council shall be deemed to be due to the Council; (f) all rates, taxes, fees, rents, fares and other charges shall, until and unless they are varied by the Council continue to be levied at the same rate at which they were being levied by the New Delhi Municipal Committee immediately before the commencement of this Act; (g) all suits, prosecution and other legal proceedings instituted or which might have been instituted by or against the New Delhi Municipal Committee may be continued or instituted by or against the Council.' (underlining by us)

(6) There is another set of provisions of Ndmc Act, 1994 which would also be required to be referred and hence those provisions are also extracted and reproduced hereunder. They are the provisions contained in Sections 3,4 and 418 :-

'3.ESTABLISHMENT Of The Council (1) With effect from such date as the Central Government may, by notification in the Official Gazette, appoint, there shall be a Council charged with the Municipal government of New Delhi, to be known as the New Delhi Municipal Council. (2) The Council shall be a body corporate with the name aforesaid having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property and may by the said name sue and be sued.

'4.COMPOSITION Of The Council (1) The Council shall consist of the following members, namely :- (a)a Chairperson, from amongst the officers, of the Central Government or the Government, of or above the rank of Joint Secretary to the Government of India to be appointed by the Central Government in consultation with the Chief Minister of Delhi; (b)three members of Legislative Assembly of Delhi representing constituencies which comprise wholly or partly the New Delhi area; (c)five members from amongst the officers of the Central Government or the Government or their undertakings, to be nominated by the Central Government; and (d)two members to be nominated by the Central Government in consultation with the Chief Minister of Delhi to represent from amongst lawyers, doctors, chartered accountants, engineers, business and financial consultants, intellectuals, traders, labourers, social workers including social scientists, artists, media persons, sports persons and any other class of persons as may be specified by the Central Government in this behalf. (2) The Member of Parliament, representing constituency with comprises wholly or partly the New Delhi area, shall be a special invitee for the meetings of the council but without a right to vote. (3) Out of the eleven members referred to in sub-section (1), there shall be at least three members who are women and one member belonging to the Scheduled Castes. (4) The Central Government shall nominate, in consultation with the Chief Minister of Delhi, a Vice Chairperson from amongst the members specified in clauses (b) and (d) of sub-section (1).'

'418.TRANSITORY Provisions Notwithstanding anything contained in this Act, the Central Government may, if necessary, appoint a person to be called the Special Officer, to exercise the powers and discharge the functions of the Council until the day on which the first meeting of the Council is held after the commencement of this Act.'

(7) During the hearing of this petition, the learned counsel for the parties have addressed the Court on the following questions :-

'(I)WITHeffect from the date of coming into force of the provisions of the Ndmc Act, 1994 whether the appeals would be governed by this Act or the predecessor act namely the Punjab Municipal Act, 1911? (ii)What will be the effect of coming into force of the Ndmc Act, 1994 on the pending appeals? (iii)If the provisions of the new Act would apply what will be the relevant date for its applicability so far as the appeals are concerned?'

(8) It is well settled that appeal is a vested right. It accrues to a party on the date of commencement of litigation or proceedings in which the appealable order is passed. Any change in the law relating to appeals, after institution of original proceedings, which adversely touches this vested right cannot to be retrospective. This vested right of appeal can be taken away by a subsequent enactment only if it so provides expressly or by necessary intendment and not otherwise. [Garikapati VS . N.Subbiah Chaudhary, : [1957]1SCR488 & Statutory Interpretation by Justice G.P.Singh, 6th Edition 1996, p. 340].

(9) The principles governing operation of a repealing statute have been well stated in Jose Da Costa & Anr. VS . Bascora Sadashiva Sinai Narcornin & Ors. : AIR1975SC1843 :-

'While provisions of statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of statute are not to be applied retrospectively, in the absence of express enactment or necessary intendment. The right of appeal being a substantive right, the institution of a suit carries with it the implication that all successive appeals available under the law then in force would be preserved to the parties to the suit throughout the rest of the career of the suit. There are, however, two exceptions to this rule, viz.(1) when by competent enactment such right of appeal is taken away expressly or impliedly with retrospective effect and (2) when the Court to which appeal lay at the commencement of the suit stands abolished.'

(10) Three things are to be pertinently noted :

'(I)that inspire of the Ndmc Act, 1994 having repealed the Punjab Municipal Act, 1911, there is no specific provision transferring the pending appeals to the district judges or providing for pending appeals to be dealt with according to the provisions of New Act; (ii) that the provision as to deposit of the impugned demand as contained in Section 116 of the New Act has not been expressly made applicable to the pending appeals so as to require deposit as a condition precedent to the hearing or determination of pending appeals; (iii) that the forum provided under the Old Act has not been abolished, the office of Adm continues to exist though under the New Act, the jurisdiction to hear the appeals has been vested in the district judges.'

(11) In Daji Saheb & Ors. VS . Shankar Rao Vithalrao Mane & Anr. : [1955]2SCR872 prior to the commencement of the Constitution, the Federal Court had jurisdiction to entertain and hear appeals from a decree of a High Court which reversed the lower courts decree as regards properties of the value of more than Rs.10,000.00 . No special leave was required. On the change of law brought in by the Constitution of India, it was held that Article 133 of the Constitution does not apply to a decision given by a High Court on a date prior to the date of establishment of the Supreme Court. It was held :-

'A party to a suit has, on the cause being decided by the Court and when allowed under law, a vested right of appeal to the superior Court. However, if the Court to which an appeal lies is altogether abolished without any forum substituted in its place for the disposal of pending matters, or for the lodgment of appeals, the vested right perishes. Merely because the Supreme Court came into existence in place of the Federal Court, a vested right of appeal to the Federal Court is not taken away. An interpretation or construction of the provisions of the Constitution which would lead to such a result should be avoided, unless inevitable.'

(12) In Colonial Sugar Refining Co.Ltd. v. Irving 1905 Ac 369, the right of appeal from the Supreme Court of Queensland to His Majesty in Council given by the Order in Council of June 30, 1860 was taken away by the Australian Commonwealth Judiciary Act, 1903 and the only appeal there from now lay to the High Court of Australia. The Act was not retrospective. Their Lordships held that a right of appeal to the King in Council in a suit pending when the Act was passed and decided by the Supreme Court afterwards was not taken away. Their Lordships further held :-

'To deprive a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right is a very different thing from regulating procedure. In principle, their Lordships see no difference between abolishing an appeal altogether and transferring the appeal to a new tribunal. In either case there is an interference with existing rights contrary to the well known general principle that statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested.'

(13) In M/s.Ganpat Rai Hiralal & Anr. VS . The aggarwal Chamber of Commerce Ltd., : [1953]4SCR752 , the view taken by the Privy Council in Colonial Sugar Refining Companies case (supra) has been reaffirmed.

(14) How the condition as to deposit of the amount of impugned demand introduced by the New Act has to be viewed from the point of view of its affecting the vested right of appeal? It is settled view that any change in law which interferes with or impairs or imperils or whittles down the right of appeal cannot effect pending matters or a vested right of appeal unless such intention be clearly manifested by express words or necessary implication.

(15) In M/s.Hoosein Kasam Dada (India) Ltd. VS . The State of Madhya Pradesh & Ors., : 1983(13)ELT1277(SC) it was held that the right of a sales tax assessed to appeal against an order of assessment vested in him on the date of filing of return and it was not adversely affected by a subsequent change in law which required his assessed tax to be deposited before exercising the right of appeal. Vide Para 10 their Lordships rejected the contention that the requirement as to the deposit of the amount merely introduced a new matter of procedure and held :-

'.....THEonerous condition may in a given case prevent the exercise of the right of appeal, for the assessed may not be in a position to find the necessary money in time.'

'There can be no doubt that the new requirement 'touches' the substantive right of appeal vested in the appellant. Nor can it be overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right. The right that the amended section gives is certainly less than the right which was available before. A provision which is calculated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure. Indeed the new requirement cannot be said merely to regulate the exercise of the appellant's pre-existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure.'

(16) Section 35 of the Central Excise And Salt Act, 1944 gave a right to appeal. Exercising the power conferred by Section 12 of the Act, the Central Government applied to appeals under the Excise Act the provisions of Section 129 of the Sea Customs Act, 1878 requiring an appellant to deposit pending the appeal the duty or penalty imposed. An appeal was rejected by the Collector for non-deposit within the time fixed. In Collector of Customs & Excise, Cochin v. A.S. Bava, Air 1968 Sc 18 the Supreme Court held that Section 35 of the Excise Act gives a right of appeal and Section 129 of the Sea Customs Act whittles down that substantive right and as such the later provision could not be regarded as merely procedure relating to appeals so as to adversely effect the right of appeal under the Excise Act. The view has been reiterated in Vijay Prakash Vs . Collector of Customs : [1989]175ITR540(SC) .

(17) In State of Bombay VS . M/s.Supreme General Films Exchange Ltd. : [1960]3SCR640 , their Lordships have held :-

'An impairment of the right of appeal by putting a new restriction thereon or imposing a more onerous condition is not a matter of procedure only; it impairs or imperils a substantive right and an enactment which does so is not retrospective unless it says so expressly or by necessary intendment.'

'It was held that in a suit filed before an amendment in the Court Fees Act levying enhanced court fee on memorandum of appeal, the amended provision could not be applied to an appeal arising out of a suit filed prior to the date of amendment.'

(18) In Mukund Deo (Dead) thr. LRs. & Ors. VS . Mahadu & Ors. : AIR1965SC703 an amendment limiting the right of appeal to substantial questions of law, as against the old law which permitted appeal being filed on questions of fact as well as of law, was held to be one impairing the substantive right of appeal.

(19) In Hardev Dass Jagannath v. The State of Assam & Ors. Air 1970 Sc 274 the assessments relating to the periods ending 30.9.50, 31.3.57 and 30.9.57 were completed after the amendment of Section 30 of the Assam Sales Tax Act, 1947 which came into force on 1st April, 1958. The appeals against the assessments were filed after amendment which required depositing of assessed tax and penalty before dealing with the appeals. It was held that the appeals are governed by the amended Section and it cannot be said that the amending Act has been given retrospective effect.

(20) In New India Insurance Company Ltd. VS . Shanti Mishra : [1976]2SCR266 , the change introduced by introduction of Section 110A to 110F in the Motor Vehicles Act, 1939 which constituted claims tribunals taking away jurisdiction of civil courts to try claim cases arising out of motor accidents came up for consideration. Their Lordships held (vide pr.5) :-

'On the plain language of Section 110A and 110F there should be no difficulty in taking the view that the change in law was merely a change of forum i.e. a change of adjectival or procedural law and not of substantive law. It is a well-established proposition that such a change of law operates retrospectively and the person has to go to the new forum even if his cause of action or right of action accrued prior to the change of forum. He will have a vested right of action but not a vested right of forum. If by express words the new forum is made available only to causes of action arising after the creation of the forum, then the retrospective operation of the law is taken away. Otherwise the general rule is to make it retrospective. The expressions 'arising out an accident' occurring in sub- section (1) and 'over the area in which the accident occurred' mentioned in sub- s.(2) clearly show that the change of forum was meant to be operative retrospectively irrespective of the fact as to when the accident occurred.'

'ONthe language of the provision their Lordships have inferred that the change of forum was retrospective in operation without regard to the date of accident.'

(21) Several clauses of sub-Sec.(2) of Sec. 416 of the New Act are relevant and suggestive of legislative intent. Clause (a) provides an order passed under the Old Act shall be deemed to have been passed under the New Act. Order, in our opinion, would include an order disposing off objections to the assessment list. Under Clause (b), a liability is a liability incurred under the New Act. Liability would, in our opinion, include liability to pay tax. Clause (c) provides for valuations (which will include valuations of property for purpose of tax) made under the Old Act deemed to have been made under the New Act. Under Clauses (e) and (f) all rates and taxes due or levied under the Old Act are deemed to be so under the New Act. If any proceedings for assessment or levy of tax were initiated under the Old Act they will continue under the New Act under Clause (g). These legal fictions created come into play but only on date of establishment of Council. What follows is this : if assessment of tax initiated under the Old Act has been finalised before establishment of Council, it is a proceeding finalised under the Old Act; if it is finalised after the establishment of Council, it is a tax deemed to be finalised or levied under the New Act.

(22) The next question to be examined is when the Punjab Municipal Act, 1911 would cease to have effect in New Delhi. On the plain language of Section 416 (1) it would be the date of establishment of the Council.

(23) `COUNCIL' is defined by Section 2(9) of the Ndmc Act to mean the New Delhi Municipal Council established under this Act. Section 3 obliges the Central Government to appoint a Council by notification in the official gazette. The council shall be a body corporate consisting of the members enumerated in Section 4. Section 418 empowers the Central Government to appoint a Special Officer who would exercise the powers and discharge the functions of the Council until the day on which first meeting of the council is held after the commencement of Ndmc Act, 1994. These provisions clearly demonstrate the distinction among these several events :

'(I)the commencement of Ndmc Act, 1994; (ii) the Constitution of the Council; (iii) the first meeting of the Council; and (iv) the appointment of Special Officer to act in lieu of Council until the day of the first meeting of the Council (without regard to its having been constituted and notified). The object behind appointment of the Special Officer under Section 418 is to constitute a care taker functionary who would fill the gap between the commencement of the Act and the first meeting of the Council. However, the council would be deemed to have been established for the purpose of Section 416(1) only w.e.f. the date of notification by the Central Government issued under Section 3(1) of the Act.'

(24) On 26.5.94, the Central Government in exercise of the powers conferred by Section 418 appointed Shri Baleshwar Rai Ias as the Special Officer.

(25) On 10.11.95, the Central Government has in exercise of the powers conferred by Section 3(1) and 4 Of the Ndmc Act constituted the New Delhi Municipal Council consisting of 9 persons with effect from the date of publication of notification. Notification has been published in Gazette of India (Extraordinary) Pt.II, Sec. 3, sub-Sec (ii) dated 10th November, 1995. This is the date of establishment of Council and on this date the Punjab Municipal Act, 1911 ceases to have effect in New Delhi.

(26) The submission of the learned counsel for the petitioner that the Council should be deemed to have been established on 14.7.94, the date on which the New Act came into force and by notification dated 10.11.95 the Council has only been `constituted' not `established' and so the Punjab Municipal Act shall cease to have effect from 14.7.94 has to be rejected on the plain language of Sections 416(1), 3 and 4. Council cannot be said to have been established unless constituted.

(27) The date of appointment of special office under Section 418 of New Act also has no relevance for Section 416 (1).

(28) In the above said background of the facts and the legal position, we sum up our conclusions as under :-

'(1)A levy or assessment of any tax finalised on or after 10th November, 1995 shall be deemed to have been finalised under the provisions of New Act. An appeal there against shall lie to the Court of the district judges of Delhi or New Delhi as the case may be under Section 115(1) though the assessment was initiated and made under Chapter V of the Punjab Municipal Act, 1911. Such appeal must comply with Section 116 of the Ndmc Act, 1994. (2) The appeals pending since before 10th November, 1995 and filed under the PUnjab Municipal Act, 1911 shall continue to be heard by the ADM. Compliance with Section 116 Ndmc, 1994 cannot be insisted on in such appeals. The appeals need not be transferred to the district judges. (3) An appeal against levy or assessment of tax finalised before 10th November, 1995 may be filed under Section 84 of the Punjab Municipal Act, 1911 though actually filed after 10th November, 1995 as the forum of appeal under the Old Act continues to exist and to be available.'

(29) As the appeal out of which this petition arises was pending before respondent No.2 on 10th November, 1995, the respondent No.2 has not erred in refusing to transfer the appeal to the Distt Judge and to continue to retain the same with him for hearing and disposal in accordance with law.

(30) The petition is, thereforee, dismissed, though without any order as to the costs.


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