Full Judgment Text
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PETITIONER:
MUNICIPAL CORPORATION OF DELHI
Vs.
RESPONDENT:
M/S.TRIGON INVESTMENT ANDTRADING PRIVATE LIMITED & ANR.
DATE OF JUDGMENT: 03/04/1996
BENCH:
JEEVAN REDDY, B.P. (J)
BENCH:
JEEVAN REDDY, B.P. (J)
PARIPOORNAN, K.S.(J)
CITATION:
1996 AIR 1579 1996 SCC (3) 630
JT 1996 (4) 75 1996 SCALE (3)408
ACT:
HEADNOTE:
JUDGMENT:
J U D G M E N T
B.P. JEEVAN REDDY,J.
Leave granted. Heard counsel for both the parties.
This appeal is preferred by the Municipal Corporation
of Delhi [Corporation] against the judgment and order of the
Delhi High Court dismissing the writ petition filed by it.
The matter pertains to assessment of property tax. Ms.Madhu
Tewatia, learned counsel for the appellant-Corporation,
submits that the problem arising herein is a common one and
the decisions of the nature questioned herein are resulting
in loss of substantial revenue legitimately due to the
Corporation and, therefore, the questions arising herein
must be decided by this Court authoritatively to serve as a
guidance to the authorities under the Delhi Municipal
Corporation Act, 1957 [Act].
Saket Properties Private Limited constructed a multi-
storeyed building on Plot No.21, Yusuf Sarai Community
Center, New Delhi. Flats Nos.302, 303 and 305 on the third
floor of the said building were allotted to the respondent-
Trigon Investment and Trading Private Limited - under a
letter of allotment dated February 29, 1984 [Annexure R-1]
subject to the terms and conditions mentioned therein. The
respondent accepted the allotment and paid a sum of
Rs.2,35,000/- by way of earnest money to Saket Properties.
On February 23, 1986, says the respondent, possession of the
said flats was handed over to and accepted by them [Annexure
R-2]. Neither the Saket Properties nor the respondent
intimated the Corporation of the said allotment or delivery
of possession. This is an admitted fact. It is also the
admitted case of the parties that so far no sale deed(s) has
been executed and/or registered in respect of the said flats
as appears to be the general position and practice obtaining
in Delhi.
On July 11, 1990, the Deputy assistant Assessor and
Collectors, M.C.D. issued a "call letter for hearing of the
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objection under Section 126 of the Municipal Corporation
act, 1957" to the respondent requesting him to attend the
office in connection with the finalisation of the rental
value of the aforesaid flats. The respondent replied on July
17, 1990 stating that Sri K.K. Dwivedi, its authorised
representative, is being deputed to represent the case and
to discuss the matter and provide necessary information to
the officer. On August 10, 1990, another notice was issued
by the said officer to the respondent to attend the office
on 17 August 1990 alongwith necessary documents and
evidence. On August 30, 1990, the Deputy Assistant Assessor
and Collector made the order of assessment. The order dated
August 30, 1990 recites the following facts:
(a) Though call letters dated July 11, 1990 and August 10,
1990 were sent to the tax-payer, no one had attended the
office nor were any documents produced
b) The flats were purchased by the tax-payer from Saket
Properties Private Limited [the original owner] and the
possession of the flats was offered to the respondent on
April 1, 1985. Accordingly, the liability of payment of
property tax by the respondent is fixed from April 1, 1985
as per the terms of the agreement entered into between the
builder/promoter and the respondent.
(c) De jure title of the flats has not so far been bestowed
upon the respondent because no proper sale deed has been
executed.
(d) A notice under Section 126 of the Act with consolidated
R.V. for the entire building was given to the
builder/promoter proposing the R.V.
(e) In the above circumstances, the assessment is made ex-
parte; the rental value is determined at Rs.3,37,800/-
taking the prevailing rental value in the said complex. The
rateable value is determined at Rs.3,04,020/-. Billing shall
be done on the above basis.
On receiving the aforesaid assessment order, the
respondent addressed a letter dated September 17, 1990 to
the assessing officer asking for rectification of the said
order. Two grounds were mentioned in the letter.
They are:
"(1) The date of possession of the
flat was 23.2.1987. 1.4.1985 which
has erroneously been mentioned in
the order and attested photo-state
copy of the possession letter is
enclosed.
(2) The flats have been given on
rent in March, 1987 @ Rs.16,800/-
per month. The annual rent of these
flats would be Rs.16,800/- x 12 =
Rs. 2,01,600 and (not?)
Rs.3,37,800/- as mentioned in the
assessment order.
Attested copy (Photo-stat) of the
rent receipt for the month of May,
1989 is enclosed."
The letter requested that the assessment order may be
rectified in the light of the above facts. It must be
mentioned that no other objection, legal or factual, was
raised in the said letter apart from the two objections
mentioned above.
Probably finding that no action was being taken on its
rectification application, the respondent filed an appeal
before the learned District Judge, Delhi against the order
of assessment dated August 30,1990. In the Memorandum of
Appeal, the respondent stated that possession of the flats
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had been handed over to it on February 23, 1987 pursuant to
the agreement of sale but that no sale deed has been
executed till then. It referred to the letting out of the
said flats and then stated that the Corporation has not
served any notice on it under Section 126 of the Act which
is a pre-condition to a valid assessment. It was also
submitted that the Corporation is barred from making any
assessment for any period prior to April 1, 1988 as no
notice was served on it [appellant before the learned
Additional District Judge] till that date. It submitted that
the rental value has been wrongly assessed at Rs.3,37,800/-
and that it ought to be Rs.2,01,600/- in the light of the
rent being received by it.
On September 9, 1992, the appeal was allowed by the
Learned Additional District Judge in toto. It is equally
relevant to notice the reasons for the said order. It
states:
(i) The assessment order itself states that though the said
flats were purchased by Trigon Investment Private Limited,
de jure title has not so far been bestowed upon it since a
proper sale deed is yet to be executed.
(ii) " A consolidated notice of the entire building was
given to the builder w.e.f. 1.4.1985. However, since the
tax-payer did not attend the office nor the required
documents were submitted, the assessing authority proceeded
ex-parte and decided the case as above. On the face of it,
the order is bad in law."
(iii) "Admittedly no notice U/s.126 of the D.M.C. Act has
been served upon the appellants (Trigon Investments). The
notice if any was served upon the Builder/promoter and no
sale deed has yet been executed among the parties.
Therefore, no title has passed on to the appellants nor the
transfer appears to have been conveyed."
(iv) "Therefore, the appellants cannot be subjected to any
tax for such a year in which no notice has been served upon
them. The order is accordingly set aside and is hereby
quashed."
The appellant-Corporation questioned the order of the
learned Additional District Judge by way of a writ petition
[C.W.P.No.411 of 1994] in the Delhi High Court. The writ
petition was dismissed at the admission stage without
issuing a notice to the respondent. The order of the High
Court posed the question arising in the matter thus: "The
short question which arises for decision is whether the
petitioner- M.C.D. is entitled to assess tax on any
individual without serving a notice as contemplated
U/s.126". The order states that the property in question was
constructed by the builder who had entered into agreements
for sale of various portions of the said property with
several parties, that in 1985 a notice under Section 126 is
stated to have been issued to the builder in respect of the
said property inviting objections and that later on, another
notice under Section 126 was issued to the builder styling
it as a consolidated notice. The order further recites that
the persons in whose favour the agreement for transfer has
been executed by the builder did not get their names mutated
in the records of the Corporation and that call letter was
issued to the respondent, who is one of the transferees from
the builder, in the year 1990 only. The call letter is not a
notice contemplated by Section 126 of the Act. The order
then notices the submission of the learned counsel for the
Corporation in the following words: "The Ld.Counsel for the
petitioner has vehemently argued that even if no mutation
had taken place in law, even then the person who had entered
into an agreement with the builder for purchase of the
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particular flat becomes liable to pay tax in view of Sec.120
of the Municipal Corporation Act and as a matter of fact
such person steps into the shoes of the Original owner and
the Notice served under Sec.126 on the Builder be deemed a
good notice served on the transferee from the Builder". The
High Court opined that the said submission is unacceptable.
It observed that under Section 120, the property tax is
primarily the liability of the lessor and then posed the
question "(H)owever, the question arises whether the
persons who are liable to pay property tax by virtue of
Sec.120 of the Act can be made liable for Tax without
serving a notice U/s.126 of the Act." It answered the said
question in the following words: "Section 126 of the
Act lays down that the Commissioner may at any time amend
the Assessment list and the proviso to that section makes
it incumbent that no person shall by reason of any such
amendment become liable to pay any tax or increase of tax
in respect of any period prior to the commencement of
the Order in which the notice U/Sub-sec.2 is given. Sub-
sec.2 makes it clear that the Commissioner shall give to
any person affected by the Assessment notice of not less
than one month that he propose to make the amendment and
consider any objection which may be made by such person.
Admittedly, no notice as contemplated by these provisions
had been served on the Respondent." The High Court then
referred to the submission of the counsel for the
Corporation based upon Section 128(4), which makes it
obligatory on the part of the vendor to intimate the factum
of transfer to the Corporation and also making the failure
to give such notice punishable. The High Court observed,
"mere fact that no such notice had been given to the M.C.D.
regarding transfer of the portion of the property by the
Builder would not mean that the M.C.D. is entitled to
recover property tax from the transferee without complying
with the provisions of Sec.126 of the Act." The High Court
observed further, "in case no intimation has been given to
the M.C.D. regarding transfer of the property by the Owner
and the M.C.D. on its own has not been able to find the
names of such transferees, the interest of the M.C.D. are
well protected by provision of Sec. 128(4) where it is
clearly laid down that the liability to pay the property tax
shall in that case will continue to be of the Owner and the
Owner would also be subjected to the imposition of some
penalty."
Ms. Madhu Tewatia, learned counsel for the Corporation,
invited our attention to the relevant provisions of the Act
and submitted that the view taken by the High Court is
inconsistent therewith. Admittedly, she submitted, neither
the builder nor the purchaser-respondent had intimated the
Corporation of the said transaction between them. Prior to
1990, the Corporation was not aware that the respondent had
purchased the said flats. The Corporation had in due course
given notices to the builder in the year 1985 who failed to
respond to the same. The liability to pay taxes got fastened
to the premises in accordance with law and that liability is
not erased by the failure of the builder to respondent to
the notices. When the Corporation came to know that the
respondent has purchased the said flats, it issued notices,
"call letters", to it in the year 1990 and made the
assessment order dated August 30, 1990. The learned
Additional District Judge has allowed the appeal on a ground
which is altogether different from the grounds urged by the
respondent in the appeal. The learned Additional District
Judge states - according to the learned counsel, erroneously
-that since de jure title has not been transferred to the
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respondent, the respondent cannot be subjected to any tax in
respect of an year for which no notice has been served upon
him and that notices served upon the builder/promoter are of
no avail against the respondent. But when it came to High
Court, the view taken by the High Court is that even if
transferor and transferee have failed to comply with the
mandatory statutory requirement in Section 128, still no tax
can be levied upon the transferee until and unless a notice
under Section 126 is served upon him. Far the period prior
to the service of such notice upon the transferee, the
Corporation’s remedy is suggested to be against the
transferor. Counsel submits that this is contrary to law.
The learned counsel also pointed out that on receiving the
assessment order dated August 30, 1990, the respondent filed
an application for rectification wherein it did not dispute
or deny its liability to pay the property tax in respect of
the said flats; its only submission was that since
possession of the flats have been delivered to it on
February 23, 1987, the tax must be levied only from March
1987 and not from April 1, 1985. [It, of course, disputed
the quantum of rental value also.] Learned counsel also upon
clause (12) of the Allotment Letter, according to which the
allottees/purchasers were made liable for "their share of
ground rent, property taxes, water charges and any other
cesses which may be levied on the property". The said clause
also contemplates that the Corporation will normally be
expected to demand the property taxes directly from the
allottees/purchasers. This clause, says the learned counsel,
clearly makes the purchaser liable for the property taxes
levied on the said flats irrespective of the fact whether
the levy was prior to allotment letter and/or delivery of
possession or subsequent thereto.
Sri B.B.Jain, learned counsel for the first respondent,
relied upon the decision of the expression "Owner" in clause
(37) of Section 2 of the Act and submitted that no
assessment of property tax can be made upon the respondent
until and unless a notice under Section 126 is served upon
it and in no event can the respondent be made liable to pay
the property tax for the period anterior to the service of
the notice under Section 126. The learned counsel relied
upon certain decisions of the Delhi High Court referred to
in the first respondent’s counter and submitted that no tax
can be levied upon a building until the completion
certificate is issued. He pointed out that possession of the
flat was handed over to the respondent only on February 23,
1987 and hence, no tax can ever be levied for the period
anterior to the said date. Counsel submitted that until and
unless an assessment is made with notice to the respondent
as contemplated by Section 126, it cannot be made liable for
the tax and certainly not for the anterior period.
It is necessary to notice the relevant provisions of
the Act for a proper appreciation of the questions arising
herein. Among the taxes which the Corporation is empowered
to levy by Section 113, "property taxes" is the first one.
Sections 114 to 135 occur under the sub-heading "property
taxes". Section 114(1) states that "save as otherwise
provided in this Act, the property taxes shall be levied on
lands and buildings in Delhi and shall consist of the
following, namely...". Section 115 specifies the premises in
respect of which property taxes are to be levied while
Section 116 prescribes the basis upon which the rateable
value of the lands and buildings has to be determined.
Section 120(1) then says that "the property taxes shall be
primarily leviable as follows: (a) if the land or building
is let, upon the lessor; (b) if the land or building is sub-
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let, upon the superior lessor; (c) if the land or building
is unlet, upon the person in whom the right to let the same
vests." Section 122 declares that on the failure to pay
taxes by the person primarily liable therefor, it shall be
open to the Commissioner to recover the same "from every
occupier of such land or building by attachment, in
accordance with section 162 of the rent payable by such
occupier, a portion of the total sum due which bears, as
nearly as may be, the same proportion to that sum as the
rent annually payable by such occupier bears to the total
amount of rent annually payable in respect of the whole of
the land or building". Sub-section (2) empowers the occupier
from whom the amount is recovered under sub-section (1) to
claim reimbursement from the person primarily liable/owner.
Section 123 declares that "property taxes due under this Act
in respect of any land or building shall, subject to the
prior payment of the land revenue, if any, due to the
Government thereon, be a first charge.... (b) in the case of
any other land or building, upon such land or building and
upon the goods and other movable properties, if any, found
within or upon such land or building and belonging to the
person liable for such taxes". Section 124 prescribes the
procedure according to which assessment list of all lands
and buildings in Delhi is to be prepared. Section 126
provides for the amendment of the assessment list. In view
of the strong reliance placed upon the said section, it
would be appropriate to set out sub-sections (1) and (2)
thereof in full. They read:
"126.-Amendment of assessment list:
(1) The Commissioner may, at any
time, amend the assessment list--
(a) by inserting therein the name
of any person whose name ought to
be inserted; or
(b) by inserting therein any land
or building previously omitted; or
(c) by striking out the name of any
person not liable for the payment
of property taxes; or
(d) by increasing or reducing for
adequate reasons the amount of any
rateable value and of the
assessment thereupon; or
(e) by making or cancelling any
entry exempting any land or
building from liability to any
property tax; or
(f) by altering the assessment on
the land or building which has been
erroneously valued or assessed
through fraud, mistake or accident;
or
(g) by inserting or altering an
entry in respect of any building
erected, re-erected, altered or
added to, after the preparation of
the assessment list;
Provided that no person shall
by reason of any such amendment
become liable to pay any tax or
increase of tax in respect of any
period prior to the commencement of
the Year (in which the notice under
sub-section (2) is given).
(2) Before making any amendment
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under sub-section (1) the
Commissioner shall give to any
person affected by the amendment,
notice of not less than one month
that he proposes to make the
amendment and consider any
objections which may be made by
such person."
Section 128 is equally relevant. Sub-section (1) of
Section 128 provides that "whenever the title of any person
primarily liable for the payment of property taxes on any
land or building is transferred, the person whose title is
transferred and the person to whom the same is to be
transferred shall within three months after the execution
of the instrument of transfer or after its registration,
if it is registered, or after the transfer is effected, if
no instrument is executed, give notice of such transfer in
writing to the Commissioner." Sub-section (4) of crucial
relevance and it reads:
"Every person who makes a transfer
as aforesaid without giving such
notice to the Commissioner shall,
in addition to any penalty to which
he may be subjected under the
provisions of this Act, continue
liable for the payment of all
property taxes from time to time
payable in respect of the land or
building transferred until he gives
such notice or until the transfer
has been recorded in the
Commissioner’s book, but nothing in
this section shall be held to
affect he liability of the
transferee for the payment of the
said tax."
Section 131 empowers the Commissioner to call for
information and returns and also to enter on premises to
enable him to determine the rateable value of any land or
building.
Now, what do the above provisions mean and indicate?
According to us, the scheme and purport of the above
provisions is this: the property taxes are levied upon the
lands and buildings in Delhi [Section 114(1)] . Property
taxes due under the Act in respect of any land or building
constitute first charge upon such land and building subject
only to the prior payment of the land revenue if any, due to
the Government thereon [Section 123(1)]. The primary
liability to pay taxes is upon the lessor where the building
is let and upon the person entitled to let it, where the
building is not let [Section 120]. If the person primarily
liable fails to pay the tax, it can be recovered from the
occupier who in turn is entitled to be reimbursed by the
person primarily liable [Section 122]. Assessment lists
containing the specified particulars have to be prepared by
the Corporation [Section 124]. The lists prepared under
Section 124 can be amended at any time in any of the
situations mentioned in sub-section (1) of Section 126. The
situations specified in sub-section (1) of Section 126 inter
alia are insertion of the name of a person whose name ought
to be inserted, insertion of any land or building which was
omitted and insertion or alteration of any entry in respect
of any building re-erected,, altered or added after the
preparation of the assessment list. Before making any
amendment under sub-section (1), the Commissioner shall give
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to any person affected by amendment a notice of not less
than one month of his intention to make the amendment and
consider any objection received in that behalf [Section
126(2)]. No person shall become liable to pay any tax or
increase of tax in respect of any period prior to the
commencement of the year in which notice under sub-section
(2) is given [Proviso to Section 126(1)]. Where a land or
building is transferred, the transferor is bound to give
notice of such transfer to the Commissioner. If the transfer
is effected by the registered document, such notice has to
be given within three months of the registration and if the
transfer is effected under an instrument of transfer which
is not registered, within three months of the execution of
such instrument. Failure to give such notice renders the
transferor liable not only to penalty but also to payment of
all property taxes from time to time payable in respect of
such land or building until he gives such notice [Sections
128(1) and (4)]. At the same time, sub-section (4) of
Section 128 expressly provides that the continued liability
to pay the taxes case upon the transferor [in addition to
penalty] shall not affect the liability of the transferee
for the payment of the said tax. Now what do the words "but
nothing in this section shall be held to affect the
liability of the transferee for the payment of the said tax"
in sub-section (4) of Section 128 mean and signify? In our
opinion, the said words have to be understood in the light
of the preceding provisions, viz., that the levy of the
property tax is upon the lands and buildings, that the said
tax constitutes the first charge upon such lands and
buildings and that while the liability to pay tax lies upon
the transferor, the transferee is not freed from the said
liability on that account. The expression "transfer" is not
defined in the Act. If so, it has to be understood in its
normal sense, i.e., in the sense it is understood in the
Transfer of Property Act but with the rider that Section
128(1) recognizes a transfer, even where the instrument of
transfer is not registered. The fact that possession of the
flats was delivered to the respondent, that the respondent
has paid the full consideration for the said flats and the
further fact that the respondent has let out the flats and
is in exclusive receipt of the rent clearly establishes that
the is a transferee within the meaning of Section 128.
Indeed, he would be the "owner" as defined by clause (37) in
Section 2 of the Act. He would be the "owner" within the
meaning of and for the purposes of the Act - whatever may be
the position in general law. In that sense, the respondent
is equally liable to pay the said taxes. This liability of
the transferee arising from the fact of his being the
"owner" of the concerned land or building should not be
mixed up or confused with the proviso to Section 126(1).
Since the property tax constitutes first charge upon the
land/building and because the land/building is fastened with
this liability, the liability travels with the
land/building. The transferee is liable to pay the property
taxes due thereon not only for the period subsequent to
transfer in his favour but even for the period anterior to
the transfer. What Section 128 does is to keep alive and
continue the liability of the transferor to pay property
taxes even after the transfer till he gives the notice
contemplated by Section 128(1). While making him so liable,
Section 126(4) declares that this liability cast on the
transferor shall not relieve the transferee from the
obligation to pay the said tax, as explained above. This
liability of the transferee is in no way qualified,
curtailed or abridged by any provision in Section 126.
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Section 126 deals with amendment of assessment list and the
procedural aspects concerning amendment. By way of
illustration, take a case where property tax as assessed on
a building, say, with effect from April 1, 1987 but the
transferor does not give notice of transfer. Later, on April
1, 1990, the name of the transferee is inserted in the place
of the transferor by amending the assessment list. Can the
transferee say in such a case that he is not liable to pay
the taxes for the period prior to April 1, 1990? If he can
say so in law, would it not make Section 128(4) and Sections
119 and 123 [property taxes being levied upon the
lands/buildings and their constituting a first charge on
such lands/buildings] nugatory and meaningless? So far as
transferee is concerned, therefore, Section 126 does not in
any manner cut down his liability or exonerate him from the
liability resting upon him by virtue of this case, it is not
necessary to go into the scope and purport of Section 126.
It is enough to clarify that whatever its scope and purport,
it does not have the effect of relieving a transferee of a
land/building from the liability to pay property taxes duly
assessed upon such land/building and that transfer in his
favour and such taxes can be recovered from him according to
law.
Now, coming to the facts of the case, we way make it
clear that there are certain factual aspects which we
cannot decide in this appeal for the reason that they have
not been gone into or pronounced upon either by the
assessing authority or by the Learned Additional District
Judge or by the High Court. They are: what was the notice
given to the builder in 1985 and what happened pursuant
thereto? Whether any assessment of property tax upon the
building as a whole, or upon the flats in question, as the
case may be, was made pursuant to such notice or not? If an
assessment was already made pursuant to the notices issued
to the builder in the years 1985/1986, why was another
assessment made on August 30, 1990 and why does the order of
assessment say that the "liability of payment of property
tax by the flat owner is fixed from April 1, 1985 as per
agreement and terms with the builder/promoters? Or was it a
case of increase in the R.V.? It is obvious that if an
assessment of property taxes was made upon the builder, the
said property taxes constitute a first charge upon the
building irrespective of the fact whether the assessment was
made on the building treating it as one unit (as compendium
of several flats) or upon each flat of groups of flats,
separately. Such property taxes, being a first charge upon
such building/flats, can be recovered either from the
builder/promoter or flat the transferee thereof. Their
liability is joint and several subject to the rider that the
liability of the builder/promoter ceases once he gives a
notice contemplated by Section 128(1)(1) . In other words,
if the tax had been assessed pursuant to the notices served
upon the builder/promoter in the years 1985 or 1986, as the
case may be, or at any time earlier to the assessment order
dated August 30, 1990, such tax has to be paid by one or the
other among the transferor and transferee.
It is equally necessary to clarify that the Act places
the obligation upon the transferor to intimate the
Corporation of any transfer and also provides for the
consequences flowing from failure to inform. The Act does
not contemplate the Corporation going about enquiring
whether and when a particular land/building is transferred
and to whom? Any notices required to be issued by the
Corporation can be validly issued to the transferor until he
intimates the Corporation of the transfer and it would be a
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validly and sufficient service in law; the transferee cannot
contend that since he has not been served with the relevant
notice, the assessment made or any other action taken is bad
law. If he takes a transfer from a particular person, it is
his duty to ensure that the transferor sends the intimation
contemplated by Section 128(1) and his [transfereo’s] name
is recorded as the owner in the place of the transferor.
Unless the transferee’s name is recorded as the "owner" or
as the person primarily liable, the Municipality cannot be
found fault with for not sending relevant notices to the
transferee. The substantive liability of the "owner" to pay
taxes cannot be defeated by the non-intimation under Section
128 or by the failure of the transferee to have his name
entered in the Municipal records.
It is again made clear that if a valid assessment was
made at any time prior to 1990, that assessment will
continue to be valid and no notice or fresh order was
necessary in the year 1990, unless the assessment was sought
to be increased. Merely because a proceeding by way of
affirmation of an existing levy was taken with notice to
transferee by way of abundant caution, or under a mis-
apprehension of law, the earlier assessment validly made is
not effaced. If, however, there was no assessment earlier
and the 1990 assessment is the only assessment in respect of
the flats in question, then it is obvious that no tax can be
levied for the anterior period. The respondent cannot
contend that because no notice was given to him, any
assessment made prior to 1990, with notice to
builder/promoter [whether on the building as a whole or on
each flat or group of flats separately] is illegal or
invalid. In this behalf, it is relevant to notice the
following averment made by the respondent in Para 3-F
[panultimate para] of his counter-affidavit filed in this
appeal. It is stated therein:
"It would also be relevant to place
on record that the notice under
section 126 of the DMC Act dated
21.8.86 was issued and served upon
M/S Saket Properties Private
Limited proposing to increase the
reteable value of Rs. 1,22,500/-
per annum to Rs. 12,42,000/- per
annum w.e.f. 1-4-85 for the reason
’Newly Built Property’ against
which the builder had filed
objections dated 25.4.86 (copy
annexed hereto marked as Annexure-
R-2) whereby the builder had
specifically brought out to the
notice of the respondent that the
building was incomplete and was
under construction. These
objections were never considered by
the respondent and had visited this
assessee with an assessment w.e.f.
1-4-1985 without application of
mind especially when the said
property was not liable to be
assessed as per the law laid down
by the Delhi High Court and the
substantive law contained in
section 129 of the DMC Act
reproduced herein above, against
all norms and for the reasons best
known to it."
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 11
This paragraph tends to show that a separate assessment was
made by the Corporation in respect of the flats in question
with notice to builder with effect from April 1, 1985. If
this is so and if it has become final, it is obvious that it
can be recovered both from the builder [Saket Properties
Private Limited] and the [first] respondent herein. It
should be remembered that the builder has failed to intimate
the Corporation as required by Section 128(1) and,
therefore, it continues to be liable. But so does the
transferee too because the taxes constitute the first charge
upon the flats and also by virtue of Section 128(4). While
deciding the matter pursuant to this order, the learned
Additional District Judge shall also take the above averment
into consideration.
The Act does not contemplate a situation - it is
necessary to emphasise nor should the courts create a
situation by a process of interpretation, where has been
duly assessed.
The appeal is accordingly allowed. The orders of the
High Court and the Learned Additional District Judge are set
aside and the matter is remitted to the Learned Additional
District Judge for disposal of the appeal according to law
and in the light of the position of law explained
hereinabove. Learned Additional District Judge shall be
entitled to call upon both the parties to adduce necessary
evidence to decide the questions arising herein, both
factual and legal, according to the appeal within four
months from the date of receipt of the copy of this order.
Both the parties shall present themselves before the Learned
Additional District Judge on April 16,1996 which is
specified as the date of hearing in the appeal before the
Learned Additional District Judge, It shall also be open to
the parties to file such documentary evidence as they wish
to in support of their respective cases. No oral evidence
shall, however, be permitted.
There shall be no order as to costs.