# SHY AM KlSHORE AND ORS v. MUNICIPAL CORPORATION OF DELHI AND ANR

- **Citation:** [1992] Supp. 1 S.C.R. 349
- **Court:** Supreme Court of India
- **Decided:** 1992
- **Case number:** Civil Writ No. 148 of 1989
- **Bench:** S. Ranganathan, V. Ramaswami, Yogeshwar Dayal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/shy-am-klshore-and-ors-v-municipal-corporation-of-delhi-and-anr-11619
- **Pages:** 34

## Headnote

Delhi Municipal Corporation Ac4 1957:
A
B
Section 170(b )-Constitutio11al validity of-Appeal against enhanceC
ment of rateable value of property-Condition of pre-deposit of tax before
filing of the appeal-Whether unreasonable and violative of Article 14 of the
Constitution-Words 'no appeal should be heard.or determined under Section
169 unless'-lnterpretation of-Clause (b) only bars the hearing of appeal and
its disposal on merits, but not entertainment of the appeal itse/f-;4.mendment
of provision-Suggested.
D
Constitution of India, 1950:
Article 14---Right of appeal granted by statute-Imposition of conditions
for exercise pf such right-Whether valid.
Articles 226 and 227-When alternative remedy available under
provisions of Statute-Recourse to Court by way of Writ Petition-Whether
proper.
E
Interpretation of Statutes-Words of a provision-Wider construction to
~~
F
The appellants filed an appeal under Section 169 of the Delhi
Municipal Corporation Act, 1957 before the Disirict Judge challenging the
enhancement of the rateable value of the property ia dispute. The District
Judge dismissed the appeal on the ground of non-deposit of the disputed G
tax. The appellants filed a writ petition before the High Court against the
District Judge's order.
The appeal was heard by a Full Bench of the High Court. All the
three Judges were agreed that the condition of deposit of tax amount
under Section 170 (b) of the Act was a condition precedent for hearing or H
349
350
SUPREME COURT REPORTS(1992] SUPP. 1 S.C.R.
A determination of the appeal and the District Judge had no discretion to
grant stay or the disputed amount or dispense with the requirement of
pre-deposit of the amount in appeal, with or without conditions, in the
office of the Corporation. They were also agreed as to the amount to be
deposited. However, while two of the Judges held that Section 170(b) was
B not ultra vires of the Constitution and that the right of appeal was a
creature of the statute and there was nothing wrong in the statute making
a provision for conditional appeal requiring that a person desirous of
filing an appeal was to comply with the condition and affirmed the District
Judge's Order, the third Judge held that the sub-section was violative of
Article 14 of the Constitution and struck it down, and directed the appel·
C late authority to entertain the appeal without deposit of the amount and
decide it on merits.
In the appeal before this Court, on behalf of the appellants-asses·
sees, it was contended that the answer to the issue of constitutional
D validity of Section 170(b) would considerably depend upon the interpreta·
lion that was placed on the scope of the powers of the appellate authority,
that If the provision was interpreted as mandating that an appeal could
not be entertained but would have to be dismissed in limine if the tax in
dispute was not paid along with the memorandum of appeal, that would
place a very onerous condition on the right of appeal, particularly in cases
E
where there was a substantial amount involved in the appeal and the
points raised were really contentions and debatable; that once the assess·
ment list was amended after hearing the assessee, it might stand adopted
for several subsequent years and demands for all these years would have
to be met until the assessment for the first year was altered in appeal, that
F
the right of appeal itself would become illusory, if subjected to such a rigid
and absolute condition, and the provision would, therefore, be invalid, as
Imposing an unreasonable restriction on the fundamental rights of the
appellant·assessee, that curbing of unlimited appeal given by Section
169(1) of the Act was arbitrary and unreasonable and hit by Article 14 of
the Constitution, that the opening part of Section 170 that 'no appeal shall
G be beard or determined under Section 169 unless' barred, merely the final
determination or hearing of the appeal and not any other stage of the
hearing of appeal including the

## Text

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SHY AM KlSHORE AND ORS.
v.
MUNICIPAL CORPORATION OF DELHI AND ANR.
SEPTEMB.ER 3, 1992
[S. RANGANATHAN, V. RAMASWAMI AND
YOGESHWAR DAYAL, JJ.]
Delhi Municipal Corporation Ac4 1957:
A
B
Section 170(b )-Constitutio11al validity of-Appeal against enhanceC
ment of rateable value of property-Condition of pre-deposit of tax before
filing of the appeal-Whether unreasonable and violative of Article 14 of the
Constitution-Words 'no appeal should be heard.or determined under Section
169 unless'-lnterpretation of-Clause (b) only bars the hearing of appeal and
its disposal on merits, but not entertainment of the appeal itse/f-;4.mendment
of provision-Suggested.
D
Constitution of India, 1950:
Article 14---Right of appeal granted by statute-Imposition of conditions
for exercise pf such right-Whether valid.
Articles 226 and 227-When alternative remedy available under
provisions of Statute-Recourse to Court by way of Writ Petition-Whether
proper.
E
Interpretation of Statutes-Words of a provision-Wider construction to
~~
F
The appellants filed an appeal under Section 169 of the Delhi
Municipal Corporation Act, 1957 before the Disirict Judge challenging the
enhancement of the rateable value of the property ia dispute. The District
Judge dismissed the appeal on the ground of non-deposit of the disputed G
tax. The appellants filed a writ petition before the High Court against the
District Judge's order.
The appeal was heard by a Full Bench of the High Court. All the
three Judges were agreed that the condition of deposit of tax amount
under Section 170 (b) of the Act was a condition precedent for hearing or H
349
350
SUPREME COURT REPORTS(1992] SUPP. 1 S.C.R.
A determination of the appeal and the District Judge had no discretion to
grant stay or the disputed amount or dispense with the requirement of
pre-deposit of the amount in appeal, with or without conditions, in the
office of the Corporation. They were also agreed as to the amount to be
deposited. However, while two of the Judges held that Section 170(b) was
B not ultra vires of the Constitution and that the right of appeal was a
creature of the statute and there was nothing wrong in the statute making
a provision for conditional appeal requiring that a person desirous of
filing an appeal was to comply with the condition and affirmed the District
Judge's Order, the third Judge held that the sub-section was violative of
Article 14 of the Constitution and struck it down, and directed the appel·
C late authority to entertain the appeal without deposit of the amount and
decide it on merits.
In the appeal before this Court, on behalf of the appellants-asses·
sees, it was contended that the answer to the issue of constitutional
D validity of Section 170(b) would considerably depend upon the interpreta·
lion that was placed on the scope of the powers of the appellate authority,
that If the provision was interpreted as mandating that an appeal could
not be entertained but would have to be dismissed in limine if the tax in
dispute was not paid along with the memorandum of appeal, that would
place a very onerous condition on the right of appeal, particularly in cases
E
where there was a substantial amount involved in the appeal and the
points raised were really contentions and debatable; that once the assess·
ment list was amended after hearing the assessee, it might stand adopted
for several subsequent years and demands for all these years would have
to be met until the assessment for the first year was altered in appeal, that
F
the right of appeal itself would become illusory, if subjected to such a rigid
and absolute condition, and the provision would, therefore, be invalid, as
Imposing an unreasonable restriction on the fundamental rights of the
appellant·assessee, that curbing of unlimited appeal given by Section
169(1) of the Act was arbitrary and unreasonable and hit by Article 14 of
the Constitution, that the opening part of Section 170 that 'no appeal shall
G be beard or determined under Section 169 unless' barred, merely the final
determination or hearing of the appeal and not any other stage of the
hearing of appeal including the prelimiary/admission stage of the appeal.
It was contended on behalf of the respondent-Corporation that the
H validity of similar provisions had been unheld earlier, that even though an
SHYAM KISHORE v. M.C.D.
351
appeal, In such cases, might have to be thrown out, the assessee was not A
without redress;. he would always have the alternative remedy of taking
recourse to proceedings under Article 226 of the Constitution before the
High Court and in appropriate cases, where a case of hardship was made
out, the High Court had the undisputed powers to grant relief, that though
the High Court would not ordinarily entertain the petition under Article B
226 of the Constitution, when the alternative remedy of appeal was avail·
able to the party but it had the jurisdiction to grant such a relief tr It
though proper to do so in the circumstances of any case, that the decision
of this Court in Municipal Council, Khurai and Anr. v. Kamal Kumar and
Anr., [1965) 2 S.C.R. 653 and the guidelines issued by the Assessment and
Collection Department of the Municipal Corporation of Delhi contained C
in a book-let entitled 'Property Taxes and Education Cess, 1985', para
18(B), provided adequate safeguards to prevent any real hardship or
harassment to the assessee and that Section 170 (b) was not ultra vires,
and that the words 'heard and determined' used in Section 170 (b) were
comprehensive enough to cover not merely the Onal hearing of an appeal D
on merits but also, its preliminary hearings to find out whether the appeal
was in time [Section 170 (a)], whether the disputed tax had been along
with the appeal, [Section 170 (b)J and whether the appeal was otherwise
defective or to dismiss the appeal straightway if it was found defective in
any of those respects.
Disposing of the appeal, this Court,
HELD: 1. The High Court was correct in holding that Section 170(b)
E
of the Delhi Municipal Corporation Act, 1957 was intra vires of the Constitution. The District Judge has no jurisdiction to waive the condition of F
deposit or stay the Collection of tax pending disposal of the appeal before
him. However, he has the power to adjourn the hearing of the appeal or
pass interim orders enabling the assessee to pay up the taxes before the
appeal is actually heard and determined. But this is a power which he
shall have to exercise judicially on the basis of the requirements of each
case, the interest of revenue and the position of the cases on the hearing G
list before him. [382 E·F)
2. It is the settled law that the right of appeal is a creature of statute
and there is no reason why the legislature while granting the right cannot
impose conditions for the exercise of such right so long as the conditions H
352
SUPREME COURT REPORTS[1992] SUPP. 1 S.C.R.
A are not so onerous as to amount to unreasonable restrictions rendering
the right almost Illusory. [376 E·F)
Nandlalv. State of Haryana, [1980) 3 S.C.R. 1181 at 1207, relied on.
Ganga Bai v. Vijay Kumar and Ors., [1974) 3 S.C.R. 882; Anant Mills
B Co. Ltd. v. State of Gujarat and Ors., [1975) 3 S.C.R. 220; Vijay Prakash D.
Mehta/Sh. Jawanar D. Mehta v. Collector of Customs (Preventive) Bombay,
J.T. 1988 (3) S.C. 435; Collector of Customs & Excise, Cochin & Ors. v. A.S.
Bava, [1968) 1 S.C.R. 82; M/s. Ellora Construction Company v. The
Municipal Corporation of Greater Bombay and Ors., A.l.R. 1980 Bombay
C 162; Chatter Singh Baid and Ors. v. Corporation of Calcutta and Ors., A.l.R.
1984 Calcutta 283 and Municipal Council, Khurai and Anr. v. Kamal Kumar
and Anr., [1965) 2 S.C.R. 653, referred to.
The Anant Mills Co. Ltd. & Ors. v. State of Gujarat and Ors., XIV 1973
G.L.R. 826; Wire Netting Stores v. Regional Provident Fund Commissioner,
D 1987 Lab. I.C. 1015, referred to.
3.1. Prima facie, to read a power In the District Judge to grant stay of
collection of the disputed tax pending disposal ofthe appeal will run counter
to Section 170(b). Though the normal rulels thatthe Incidental and ancillary
powers of an appellate authority will include a power to grant stay or the
E order under appeal, that power cannot be read Into Section 170(b ), for such
an Interpretation would render Section 170 (b) totally unworkable. However,
the provision has to be examined carefully to see whether, short of dismissing
an appeal for default of payment of tax, whether the District Judge has any
latitude In the matter. (377 C·F.·H; 378·A)
F
G
Income Tax Officer, Cannanore v. M.K. Mohammed Kunh~ A.l.R.
1969 s.c.c. 430, referred to.
Punj Sons (P.) Ltd. v. Municipal Corporation of Delh~ 1982 R.L.R.
247, overruled.
3.2. The words of Section 170(b) that 'no appeal shall be beard or
determined under Section 169 unless' are capable of a broader lnterpreta·
tion. The Section uses three dillereut expressions 'beard or determined",
'brought' aud 'admitted' In relation to an appeal and some significance Is
to be attached to the use of the expression 'heard and determined". When
H the Delhi Municipal Corporation Act has carefully avoided the use of that
SHYAM KISHORE v. M.C.D.
353
word, 'entertained', the Court must give full effect to the differential A
wording. Also, the absence of a language in clause (b) of the proviso
similar to that In clause (a) ·which Indicates that an appeal filed beyond
the period of limitation will not stand admitted unless the delay Is condoned ·also warrants an inference that the payment of disputed laA Is not
a condition precedent to the entertainment or admission of the appeal. In B
the present statutory context, it sounds plausible to say that such an
appeal can be admitted o.r entertained but only cannot be heard or disposed of without pre-deposit of the disputed tax. Such an interpretation
will provide some much needed relief from the harshness of the provision.
[380 B·E)
Mis Lakshmiratan Engineering Works Ltd v. Assistant Commissioner
(Judicial) I, Sales Tax, Kanpur Range, KanpurandAnr., A.l.R.1968 S.C. 488
and Mis. Ellora Construction Company v. The Municipal Co1]Joration of
Greater Bombay and Ors., A.l.R. 1980 Bombay 162, refi;rred to.
3.3. These are not days in which the calculation of the property tax
c
D
is simple and uncomplicated; the determination of the annual value of the
property, except when based on the actual rent received from the property,
involves various subjective factors aud, not unoflen, there is wide gulf
between the tax admitted to be due and the tax demanded. Sometimes, to
compel the assessee to pay up the demanded tax for several years in E
succession might very well cripple him altogether. This apart, an assessee
may not be able to deposit the tax While filing the appeal but may be able
to pay It up within a short time, or at auy rate, before the appeal comes
on for hearing in the normal course. There is no reason to construe the
provision so rigidly as to disable him from doing this. Again, When an
F
appeal comes on for hearing, the appellat~ judge, in appropriate cases,
Where he feels there is some great hardship or injustice invovles, may be
Inclined to adjourn the appeal for some time to enable the assessee to pay
up the tax. Though it will not be expedient or proper to encourage adjournment or an appeal, Where It is ripe for hearing otherwise, only on this
ground and as a ma.tier of course, an interpretation which leaves some G
room for the exercise or a judicial discretion in this regard, Where the
equities of the case deserve it, may not be inappropriate. The appellate
judge's incidental and ancillary powers should not be curtailed except to
the extent specifically precluded by the statute. There is nothing wrong in
interpreting the provision as permitting the appellate authority to adjourn H
354
SUPREME COURT REPORTS[l992] SUPP. 1 S.C.R.
A
the hearing of the appeal thus giving time to the assessee to pay the tax or
even specifically granting time or instalments to enable the assessee to
deposit the disputed tax where the case merits it, so long as it does not
unduly Interfere with the appellate court's calendar of bearings. His
powers, however, should stop short of staying the recovery or the tax till
B the disposal or the appeal. It is one thing for the judge to adjourn the
hearing leaving it to the assessee to pay up the tax before the adjourned
date or permitting the assessee to pay up the tax, if he can, in accordance
with his directions before the appeal is heard. In doing so, he d0es not and
cannot injunct the department from recovering the tax, if they wish to do
so. He is only giving a chance to the assessee to pay up the tax if he wants
C the appeal to be heard. It is, however, a totally different thing for the judge
to stay the recovery till the disposal or the appeal; that would result in
modifying the language of the proviso to read: 'no appeal shall be dis·
posed of until the tax is paid'. Short of this, hwever, there is no reason to
restrict the powers unduly; all be bas to do is to ensure that the entin< tax
D in dispute is paid up by the time the appeal is actually heard on its merits.
Therefore, clause (b) of Section 170 should be read only as a bar to the
hearing orthe appeal and its disposal on merits, and not as a bar to the
entertainment or the appeal itself. This interpretation of the provision
could steer clear of all problems or constitutional validity.
E
F
(380 E-H; 381 A·F]
Mis Lakshmiratan Engineering Works Ltd. v. Assistant Commissioner
(Judicial) I, Sales Tax, Kanpur Range, KanpurandAnr., A.I.R.1968 S.C. 488
and M/s. E//ora Constrnction Company v. The Municipal Corporation of
Greater Bombay and Ors., A.l.R. 1980 Bombay 162, referred to.
3.4. The above construction of the Section vests in the appellate
authority a power to deal with the appeal otherwise than by way of ftnal
disposal even if the disputed tax is not paid. It enables the authority to
exercise a judicial discretion to allow the payment or the disputed tax even
G after the appeal is filed but, no doubt, before the appeal Is taken up for
act,.al bearing. The interpretation will greatly ameliorate the genuine
grievances of, and hardships faced by, the assessee in the payment of the
tax as determined. Though an assessee may not be able to acquire an
absolute stay of the recovery or the tax until the dispute is resolved, be will
certainly be able to get breathing time to pay up the same where bis case
H
deserved it. Reading the provision rigidly and seeking to soften the rigour
;
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL, J.)
355
by reference to the availability of a recourse to the High Courts by way of A
a petition under Articles 226 and 227 In certain situations and the
departmental Instructions contained In Para 18(8) of the book-let entitled
"Property Taxes and Education Cess, 1985 Is not a satisfactory solution.
The departmental Instructions may not always be followed and the resort
to Articles 226 and 227 should be discouraged when there is an alternative
B
remedy. A more satisfactory solution Is available on the terms of the
statute itself. [381 F·G·H; 382 A-BJ
The statute itself should be amended soon to make the position
clear. After all, under the Delhi Municipal Corporation Act, the appellate
authority is a high judicial officer, being the District Judge, and there is C
no reason why the Legislature should not trust such a !tigh judicial officer
to exercise bis discretion In such a way as to safeguard the interests of
both the revenue and the assessees. Until this is done, the provision
requires a liberal interpretation so as to preserve such Interests and
should not be so rigidly construed as to warrant the throwing out of an
appeal in limine merely because the tax is not paid before the appeal is D
tiled. (382 C·D)
CIVIL APPELLATE JURISDICTION: Civil Appeal No 2190 of
1991.
From the Judgment and Order dated 1.2.1991 of the Delhi High E
Court in Civil Writ No. 148 of 1989.
Y.K. Jain, B.B. Jain, Pravir K. Jain, Sudbir Nandrajog and S. Paul
for the Appellants.
H.N. Salve and Vi.;hnu Mathur for the Respondents.
The Judgment of the Court was delivered by
YOGESHWAR DAYAL, J. This appeal has been preferred against the
F
Full Bench decision of the Delhi High Court dated 1st February, 1991. Leila
Seth and V.B. Bansal, JJ. agreed with Nag, J. that the condition of deposit of G
tax amount under Section 170(b) of the Delhi Municipal Corporation Act,
1957 (hereinafter referred to as 'the Act') is a condition precedent for
hearing or determination of the appeal and the District Judge had no discretion to grant stay of the disputed amount or dispense with the requirement of
pre-deposit of the amount in appeal, with or without conditions, in the office H
356
SUPREME COURT REPORTS[1992] SUPP. 1 S.C.R.
A
of the Corporation. They also agreed as to the amount which was to be so
deposited. The difference of opinion was only restricted to the vires of
Section 170(b) of the Act. The majority of learned Judges took the view that
Section 170(b) of the Act is not ultra vires the Constitution but Nag. J. took the
view that sub-section (b) of Section 170 is violative of Article 14 of the
Constitution of India and he accordingly struck it down and directed the
B appellate authority to entertain the appeal of the appellant without deposit of
the amount and decide it on merits. The majority of the learned Judges, on
the other hand, dismissed the writ petition affirming the order of the District
Judge who had dismissed the appeal filed by the appellant under Section 169
of the Act challenging the enhancement of the rateable value of the property
C in dispute for non-deposit of the disputed tax.
The majority of the learned Judges took the view that the right of
appeal is a creature of statute and there is nothing wrong in the statute
making a provision for conditional appeal requiring that a person desirous
D of filing an appeal is to comply with the conditions.
Before examining the constitutional validity and meaning of Section
170 (b) of the Act it will be useful to examine .he provisions of the A.ct in
relation to the levy of property taxes, particularly the general taxes, and the
provisions for "payment and recovery" thereof as well as the provisions of
E the Delhi Municipal Corporation (Assessment List) Bye Laws 1959
(hereinafter referred to as the Assessment Bye-Laws). The relevant
provisons are:~
F
G
H
'121. ( 1) Save as otherwise provided in this Act, the
corporation shall cause an assessment list of all lands and
buildings in Delhi to be prepared in such form and manner
and containing such particulars with respect to each land
and building as may be prescribed by the bye-laws.
(2) When the assessment list has been prepared the Commissioner shall give public notice thereof and of the place
where the list or a copy thereof may be inspected, and every
person claiming to be the owner, lessee or occupier of any
land or building included in the list and any authorised
agent of such person, shall be at liberty to inspect the list
and to tako extracts therefrom free of charge.
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL,J.)
(3) The Commissioner shall, al the same time, give public
notice of a date, not less than one month !hereafter, when
he will proceed to consfder the rateable values of lands and
buildings entered in the assessment list, and in all cases in
which any land or building is for the first time assessed, or
the rateable value of any land or building is increased, he
shall also give written notice thereof to the owner or to any
lessee or occupier of the land or building.
( 4) Any objection to a reteable value or any other matter
as entered in the assessment list shall be made in writing
to the Commissioner before the date fixed in the notice
and.shall state in what respect the rateable value, or other
matter is in dispute, and all objections so made shall be
recorded in the register to be kept for the purpose.
(5) The objections shall be inquired into and investigated,
and the persons making them shall be allowed an opportunity of being heard either in person or by authorised
agent, by the Commissioner or by any officer of the Corporation authorised in this behalf by the Commissioner.
(6) When all objections have been disposed of, and the
revision of the rateable value has been completed, the
assessment list shall be authenticated by the signature of
the Commissioner or, as the case may be, the officer
authorised by him in this behalf, who shall certify that
except in the cases, if any, in which amendments have been
made as shown therein no valid objection has been made
to the rateable values or any other matters entered in the
said list.
(7) The assessment list so authenticated shall be deposited
in the office of the Corporation and shall be open, free of
charge during office hours to all owners, lessees and occupiers of lands and buildings comprised therein or the
authorised agents of such persons, and a public notice that
it is so open shall forthwith be published.
125. Subject to such alterations as may thereafter be made
357
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358
A
B
c
D
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G
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SUPREME COURT REPORTS[1992] SUPP. l S.C.R.
in the assessment list under S. 126 and to the result of any
appeal made under the provisions of this Act, the entries
in the assessment list authenticated and deposited as
provided in S.124 shall be accepted as conclusive evidence:·
(a) for the purpose of assessing any tax levied under this
Act, of the rateable value of all lands and buildings to
which such entries respectively relate.
126. (1) The Commissioner may, at any time, amend the
assessment list :·
(a) (b) (c) ........................ ..
( d) by increasing or reducing for adequate reasons the
amount of any rateable value and of the assessment there·
upon; or
(e) (f) (g) ........................ ..
Provided that no person shall by reason of any such amend·
ment become liable to pay any !!Ill 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 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 objec·
lions which may be made by such persons.
127. It shall be in the discretion of the Commissioner to
prepare for the whole or any part of Delhi a new assessment
list every year or to adop• the rateable value contained in
the list for any year, \\ith ·such alterations as may in particular cases be deemed necessary, as the rateable values
for the year following, giving the same public notice as well
as individual notices, to persons affected by such altera·
lions, of the rateable values as if a new assessment list had
been prepared."
SHYAM KISHORE v. M.C.D. (YOOESHWAR DAYAL. J.]
Bye-Laws.
"(8) (1) The Commissioner shall keep a register in which
all objections received under the provisions of sub-section
( 4) of Section 124 as well as sub-section (2) of Section 126
shall be entered. This register will show:
(a) the name or number of the land or building in respect
of which objection is received;
(b) name of the person primarily liable for the payment
of property tll'.'es;
'
( c) name of the objector;
( d) the rateable value finally fixed after enquiry and investigation of the objection;
359
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(e) the date from which the rateable value finally fixed is
D
to come into force; and;
(f) such other details as th~ Commissioner may from time
to time think fit.
(2) ...................... ..
9. (1) When any amendment is proposed to be made under
the provisions of Section 126, such amendment will
provisionally be made in the assessment list when the. notice
as required under the provisions of sub-section (2) of Section
126 is given to the person affected by the amendment.
(2) Objections shall be inquired into and investigated by
the Commissioner or any other officer authorised by him.
E
F
(3) The assessment list shall be finally amended in accordG
ance with the decisions given by the Commissioner or by
an officer referred to in clause (2) on the investigation and
disposal of the objections, if any.
(4) Uno objection is received or if objection is not received
within the time limit, specified in this behalf in the nottce,
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SUPREME COURT REPORTS(1992) SUPP. 1 S.C.R.
the assessment list shall be finally amended by confirming
the provisional amendment made in the assessment list.
(5) Property taires on the basis of the amended Assessment
List shall be due on the day on which the Amendment is
formally made in the Assessment List.
•
Provided that payment of taxes on the basis of the Assessment List, existing before such amendment cannot be withheld on the ground that some amendment is to be made in
the List under this bye-Law.''
It will be noticed that proviso to Section 126 (1) before its amendment read as under:
"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 amendment is made."
The proviso before its amendment suggested as if the person could
become liable by reason of amendment of the assessment list only in the
E year during which the amendment was made. The amendment of the
proviso to Section 126 (1) shows that the liability to pay any tax or increase
of tax can go beyond the currency of the year in which a notice is given
under sub-section (2) of Section 126 of he Act. Therefore, even if the notice
is given during the currency of a financial year but the amenJment in fact
after investigation is completed later on after. the expiry of the financial
F year, the amended list would still have the effect retrospectively for the
financial years during which the notice of increase was given. This can be
the only reasonable view of the proviso to Section 126 (1) if one takes into
account the legislative history of the amendment and it is the duty of the
court to take notice of the legislative changes and give effect to the
G intention exhibited by the changes.
It will be noticed from the .:ipening words of Sec~ion 125 of the Act
that the assessment list prepared under Section 124 of the Act is subject
to any alteration that may be made under Section 126 of the Act and is
also subject to the result of any appeal made under the provisions of the
H
Act. It ·cannot be the scheme of the Act that though the assessment list
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL, J.)
361
prepared under Section 124 is subject to any appeal, the appeal must itself A
be decided within the year for which the amendment relates to.
Before the Amending Act 42 of 1961, in so far as it amended the
proviso to Section 126 (1) of the Act, became law, the notes on clause 12 of
the Delhi Municipal Corporation (Amendment) Bill, 1961(No.49of1961) as
introduced in the Lok Sabha on 23rd Aug. 1961 provided as under:-
B
"NOTES OF CLAUSE;
Clause 12
At present, if an amendment of the assessment list is not
completed in the year. in which the notice of the proposal
to make the amendment has been issued by the Commissioner, the liability for the property l>ll<eS according to the
amended list accrues only after the commencement of the
year in which the amendment is made. There does not
appear any reasonable justification as to why the liability
to pay the property tax in such a case should not accrue in
the year in which the notice of the proposal is issued by the
Commissioner. This is sought to be done by the amendment
porposed in the proviso to Section 126(1). The amendment
proposed will not take the assessee by surprise or in
genuine cases cause any hardship to him as he has already
been served with the notice of the proposal."
We are, therefore, of the considered view that it is not necessary that
the proceedings in pursuance of a notice for increasing the rateable value
and of the assessment thereupon must be completed within the year in
which the notice is given to become effective from the year in which notice
is given.
c
D
E
F
Section 124 (1) casts a duty on the Corporation to preapare an
assessment list of all lands and buildings in Delhi. Such assessment list has G
to be in such from and manner as prescribed by the Bye-laws. When the
assessment list has been prepared under sub-section {1) of Section 124,
sub-section (2) thereof requires that a public notice about its preparation
and of the place where the list may be inspected shall be given and the
owner, occupier or lessee shall be at liberty to inspect the list and to take H
362
SUPREME COURT REPORTS[1992] SUPP. 1 s.c.R.
A extracts thereof.
Under Sub-section {3) of Section 124, the Commissioner has, also at
the same time, to give a public notice of the date when he will proceed to
consider reteable values entered in the assessment list, and in all cases in
which tLe rateable value for any land or building is being assessed for the
B first time of rateable value is sought to be _increased, the Commissioner is
required to give a written notice thereof to the owner or to the lessee or
the occupier of such laod of building. After such public notice or individual
notice, as the case may be, has been given, under sub-section ( 4) the
objection to rateable values can be filed in writing to the Commissioner
C before the date fixed in the notice and the objections have to state in what
respects the rateable value is disputed.
Under sub-section (5), the objections so filed are required to be
investigated and the person ma~. the objections is allowed an opportunity of being heard either in person or by atutborised agent, by the
D
Commissioner or by aoy officer of the Corporation authorised by the
Commissioner in this behalf.
When all the objections have been disposed of and the revision of
the rateable value is completed, the assessment list is required to be
E
authenticated by the Commissioner or by an Officer authorised by him. By
this Authentication the Commissioner or the officer authorised by him in
this behalf has to certify that "except in the cases, if any, in which amendments has been made as show therein no valid objection has been made to
the rateable values or any other matter entered in the said list."
F
Before adverting to Section 125, the relevant provisions of Section
126 along with its proviso and the Bye-laws may be noticed.
It is clear from the provisions of Section 126 ( 1) read with its proviso
and sub-section {2) thereof that its proviso and sub-section {2) thereof that
G
a notice of not less than one month is required to be given before the
Commissioner may propose to make amendment. It is also clear from
bye-law No. 9 (1) that when an amendment is proposed to be made in the
assessment list under the provisions of Section 126, such amendment will
be provisionally made in the assessment list when the notice as required
•mder sub-section {2) of Section 126 is given to the person affected by the
H
amendment. Therefore, as soon as a notice is given proposing enhance-
SHYAM KISHORE v. M.C.D. [YOOESHWAR DAYAL, J.)
363
me11t, the assessment list, if one may say so, stands "provisonally amended" A
and rateable value is as stated therein with effect from the date proposed
in the notice.
It is also clear from clause (5) of bye· law No.9 that the property taices
on the basis of amended list become due only when the amendment is
. formally made in the assessment list as a result of investigation of the notice
B
issued under Section 126 (2) of the Act and so long as the assessment list
is not formally amended, the person liable to pay property taxes bas to
continue to pay the said taxes on the basis of the unamended assessment
list.
Now the provisions of Section 125 of the Act may be examined for
their effect.
c
The effect of Section 125 is that the assessment list finalised and
authenticated and deposited under sub-sections (6) and (7) of Section 124 D
of the Act is subject to such alterations as may be made under the
provisions of Section 126 and/or the the result of any appeal under the
provisions of this Act.
Once the list so authenticated under Section 124 ( 6) is, by virtue of
Section 125, made subject to the provisions of Section 126, the assessment E
list for any year where it is subject to a notice under Section 126 is really
finalised only after the investigation to the proposed enhancement has been
completed and finalised; authentication and deposit of the list under
Section 124( 6) and (7) is subject to such finalisation.
F
The scheme of Sections 124, 125 and 126 read with the bye-laws is
that the assessment bas to be duly authenticated by the Commissioner or
an officer on his behalf bl·: this list is subject to the other provisions of the
Act including Section 126 and the bye-laws and once a notice has been
issued under Section 126(2) of the Act, the assessment list though authen- G
ticated under Section 124 (6) is subject to the result of the notice and the
assessment list as a result to the investigation under Section 126 automatically gets amended from the date of the order of assessment passed as a
result of notice under Section 126 (2) with effect from the date as found
in the order of assessment and for the amount the rateable value is finally
arrived at.
H
364
SUPREME COURT REPORTS[1992] SUPP. l S.C.R.
A
Coming to Section 127 of the Act, it gives a discretion to the
Commissioner to prepare for the whole or any part of Delhi a new
assc;ssment list. If a new assessment list is to be prepared, the procedure
for it is in relation to laods aod buildings which are being assessed for the
first time or where the rateable value of any land or building is sought to
B
be increased; apart from public notice, ao individual written notice thereof
to the owner, lessee or the occupier is required to be given. This is so if
the provisions of Section 127 are read with Section 124 (3) of the Act.
Similarly, if instead of preparing a new assessent list, the Commissioner
seeks to adopt the rateable values stated in the assessment list of aoy year
for the following year by increasing the rateable value given thereof, the
C Commissioner is required to give a public notice aod ao individual notice
but if the old rateable value of the previous year is being adopted for aoy
following year, no indi>'idual notice need be given for the simple reason
that there has to be no chaoge but at the same time only public notice must
be given as the owner, lessee or the occupier may show that old rateable
D value need not be adopted due to change of circumstances for the year.
What do we understaod when it is said that the Commissioner may
adopt the rateable values contained in the list for aoy year for the year
following? This really refers to adopting the rateable values given in the
previous year in respect of laod or building. Once a notice under Section
E 126 proposing ao increase has already b.een given in respect of the land or
building by virtue of bye-law No. 9, the assessment list in the year in which
notice is given automatically gets amended aod under Section 127 it is that
rateable value which is adopted for the following year. When the proceedings under Section 126 (2) get finally determined, the assessment list gets
F
amended with effect from the date as found in the assessment order and
since the adoption of rateable value for aoy year was of the previous year
in which the notice was given, as soon as, the assessment order for the
previous year gets finalised, the demand is raised for the year in which the
rateable value of the previous year was adopted for any year, on the basis
of the finalisaiton of the assessment of the previous year.
G
While adopting the assessment list of aoy previous year for any year,
it was not necessary that the assessment list for the previous year must have
become final in the sense that the proceedings for increasing the rateable
value in the previous year must also come to ao end and failing which the
H
rateable value for the previous year cannot be adopted for the following
SHYAM KISHORE v. M.C.D. [YOGESHWAR DAYAL, J.]
365
year. All that Section 127 contemplates is that for any year the rateable A.
value contained in the list for the previous year may be adopted.
To summarise -
(a) An assessment list has to be prepared in respect of each land and
building which is liable to tax which list contains ill the particulars includB
ing the rateable value of the property. The procedure for preparing such
an assessment list is contained in sub-sections (3) to (7) of Section 124;
(b) Section 127 provides that every year the Commissioner should
either prepare for the whole or any part of Delhi a new assessment list
or" ..... adopt rateable values contained in the list for and year with such C
alterations as may in particular cases be deemed necessary ....... '
The procedure for exercise of either of these two options is by 'giving
the same public notice as well as individual notices to persons affected by
such alterations to the rateable values as if a new list had bee11 D
prepared ........ ';
( c) Section 126 confers power to " ........ amend the assessment list. .•... "
in respect of any property or person after the issuance of a prior notice
therefor. After the amendment of the laws by Act 42 of 1961, the only
limitation on the retroactivity of such an amendment is that it cannot relate
E
to a period prior to the commencement of the year in which the notice to
amend is given;
( d) The legal consequences of an assessment list, as per Section 125,
is that it is conclusive evidence of the rateable value of lands and buildings
for the purpose of assessing any tax. However, this is subject to ' ..•... any
F
alteration that may be made thereafter in the assessment list under Section
126 and to the result of any appeal made under the provisions of this
Act ..... ";
(e) That once the Commissioner exercises the option to 'adopt" the
assessment list of a pat dcular year for subsequent years then any amendG
ment of the original assessment list (either by virtue of powers exercised
by the Commissioner under Section 126 or as a consequence of any appeal)
constitutes ipso jure an amendment of the assessment list for the subsequent years also for which the original assessment list had been adopted
and it is not necessary to once again follow the procedure of Section 126 H
366
SUPREME COURT REPORTS[1992] SUPP. 1 S.C.R.
A
for a consequential modification of the assessment lists for the subsequent
years to bring them in accord with the amended/modified initial assessment
list.
B
c
The recovery of tax is the subject matter of the sam~ Chapter, namely
Chapter VIII of the Act relating to 'Levy of Taxes', the scheme of which
is as hereinafter:
(a) Section 152 provides that any tax levied under the Act shall be
on such dates, in such number of instalments and in such manner as may
be determined by the Bye-laws in this behalf.
(b) There are two sets of Bye-laws which relate to levy and collection
of property taxes, namely the Property Tax Bye-Law, 1953 (hereinafter
referred to as the Property Tax Bye-Laws) and the Assessment List ByeLaws, referred to above. The latter set of Bye-laws deal with the procednre
to be followed in amendment of the assessment lists. The former set of
D Bye-laws provides for the procednre and recovery of taxes.
( c) Sections 154 to 158 deal with coercive process of recovery of tax.
Section 155 deals with leavy of penalty against a person in default. The
scheme of these provisions has to be understood in the backdrop of the
scheme of the Act in regard to the assessment of tax.