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R. Govindarajan Vs. the Madurai Corporation - Court Judgment

LegalCrystal Citation
SubjectMunicipal Tax
CourtChennai High Court
Decided On
Case NumberS.A. No. 2348 of 1978
Judge
Reported inAIR1984Mad90; (1984)1MLJ15
ActsMadras City Municipal Corporation Act, 1913 - Sections 100; Rent Control Act
AppellantR. Govindarajan
RespondentThe Madurai Corporation
Cases ReferredGuntur Municipal Council v. Rate Payers Association
Excerpt:
- - - we are not concerned with the procedure difficulties which may be experience, we haw to declare what the law is and as appears to be well settled the assessment of valuation for the purpose of tax must be made in accordance with and in the light of the provisions of the rent act which would be in force during the period of assessment......adopted the principle or the method of fixing the annual rental value prescribed by the tamil nadu rent control act. time respondent resisted the suit an the ground that the suit is barred under s. 495 of the corporation act and that the assessment has been made after compliance with the provisions of the said act. 3. both the courts below have, relying upon the decision reported in the guntur municipal council v. guntur town rate payers association, : [1971]2scr423 , held that the provisions relating to the fixation of fair rent under tamil nadu act 18 of 1960 have been struck down by the supreme court as ultra vires, that there is no provision in the rent control act to fix the fair rent and that, therefore, the annual valuation fixed by the respondent herein cannot be said to be.....
Judgment:

1. The plaintiff is the appellant in this second appeal and the appeal has been filed against the concurrent findings of both the courts below to the effect that the enhancement of tax fixed by the Madurai Municipal Corporation who is the respondent herein from the second half -year 1979-71 is correct and is not ultra vires and illegal.

2. The plantiff filed the suit for declaration and consequential injunction alleging that the respondent had indiscriminately enhanced the property tax from Rs.27212 to Rs. 507-52 per hall Year from the second had Year 1970-71 and then to Rs. 583-16 from the second hall year 1971-72 and to Rs. 696-76 from 1973 Without any proper basis overlooking the protest made by the appellant and that the defendant had not adopted the principle or the method of fixing the annual rental value prescribed by the Tamil Nadu Rent Control Act. Time respondent resisted the suit an the ground that the suit is barred under S. 495 of the Corporation Act and that the assessment has been made after compliance With the provisions of the said Act.

3. Both the courts below have, relying upon the decision reported in the Guntur Municipal Council v. Guntur Town Rate Payers Association, : [1971]2SCR423 , held that the provisions relating to the fixation of fair rent under Tamil Nadu Act 18 of 1960 have been struck down by the supreme court as ultra vires, that there is no provision in the Rent Control Act to fix the fair rent and that, therefore, the annual valuation fixed by the respondent herein cannot be said to be indiscriminate and baseless and the civil court has no jurisdiction to go into that question under S. 495 4d the Corporation Act.

4. It appears that an behalf of the respondent an argument has been made to the effect that the decision of the Supreme Court related to a non-residential building and hence the said decision of the Supreme Court is not applicable to the suit building. While confirming the judgment of the trial court, the first appellate Court has confirmed the view expressed by the trial court relying upon the Guntur Municipal Council v. Guntur Town Rate Payers Association, : [1971]2SCR423 with the addition that Ex. B 1. the extract of the list of property pertaining to the suit building revealed that the annual rental value fixed by the respondent herein was done taking into consideration the method of fair test to be fixed under the Tamil Nadu Act It of 1960. It is the correctness of these findings that are canvassed in this second appeal.

5. On going through the decision of the Supreme Court in the Guntur Municipal Council v. Guntur Town Rate Payers Association, : [1971]2SCR423 it is found that both the Courts below have fallen into an, error as though the Supreme Court has struck down the provisions of Tamil Nadu Act 13 of 1960 for the purpose of adopting the method of fixing the fair rent in computing the annual value and the building for the purpose of assessing the property tax. 'The following observation he' been made in Para 7 at page 806 (of SCC) : (at p. 355 of AIR) by the Supreme Court-

'In the result, the decrees witch have been granted are here by modified by declaring that the general revision made by the Guntur Municipality by increasing the rental valuation of houses and buildings beyond the fair rent determinable under the Rent Act in force for the period of assess nest shall be illegal and ultra vires and a permanent injunction shall issue restraining the municipality from realizing any amount m excess of such tax which nay be found' due on the valuation fixed according to the principles laid down in our judgment' Nowhere it is observed that any provision regarding the fixation of fair rent by adopting the method prescribed by the Rent Act bas been struck down. In fact, in para. 6 the following observations have been made:- 'We are not concerned with the procedure difficulties which may be experience, we haw to declare what the law is and as appears to be well settled the assessment of valuation for the purpose of tax must be made in accordance with and in the light of the provisions of the Rent Act which would be in force during the period of assessment.'

Thus the Supreme Court has only confirmed that in fixing the annual rental value of the building. the provisions of the Rent Control Act must be followed. Because in that case the provisions of the Rent Control Act were not followed for the period after coming into force of the Rent Control Act, the Supreme Court has struck down the assessment pertaining to the period subsequent to the coming into force of the Rent Control Act.

6. The above Position ix made clear by the Head note found in Guntur Municipal Council v. Rate Payers Association, : [1971]2SCR423 pertaining to the very same case which reads as follows :

'Method of assessment of annual value of land buildings - Measure of fire rent determinable under the Rent Control Art must be taken into account.' It is fortified by the decision of a single Judge, of this court reported in Ramaswami V. Commer. Corporation of Madras, : AIR1978Mad141 following the above decision to the effect that wherever buildings are subject to rest control restrictions the rental value has to be fixed with reference to the fair rent, if any, fixed under the statutory provisions for the buildings and if no fair rent has been fixed by the Rent Controller, the municipal authorities have to apply the provisions of the Rent Control Act and determine the fair rent for the building before assessing the property to tax The above legal position has not been disputed an the side of the respondent. It is clear, therefore that both the courts below have not read into the decisions cited before them Mid they haw blindly accepted the arguments advanced which have given room for the plaintiff to undertake the ordeal of filling two appeals

7. The learned counsel for the respondent suggested that the matter may be remanded to the trial court for fixing the annual rental value on the lines prescribed by Tamil Nadu Act 18 of 1960. The relief claimed by the plaintiff is declaration that the assessment is illegal and void and for permanent injunction. Therefore, there is no question of remanding the proceedings to the trial court as the trial court has no jurisdiction to fix the annual rental value of the building we which is within the jurisdiction of the Municipal Corporation the only remedy is to decree the suit declaring that the assessment made by the respondent by enhancing the property tax indiscriminately is void,

8. In the result, therefore, the second appeal is allowed with cost and the judgments and the decrees of both the courts bellow are set aside and there will be a decree in the suit O. S. No. 205 of 1975 as prayed for with costs.

9. Appeal allowed.


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