LexDELHI MUNICIPAL COUNCIL ETC. ETC. versus ASSOCIATION OF CONCERNED CITIZENS OF NEW DELHI AND OTHERS ETC. ETC.
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A B C D E F G H 331 NEW DELHI MUNICIPAL COUNCIL ETC. ETC. v. ASSOCIATION OF CONCERNED CITIZENS OF NEW DELHI AND OTHERS ETC. ETC. (Civil Appeal Nos.903-930 of 2019) JANUARY 22, 2019 [A. K. SIKRI AND ASHOK BHUSHAN, JJ.] NDMC (Determination of Annual Rent) Bye-Laws, 2009 – Writ petitions filed by respondents-assesses challenging the constitutional validity of the 2009 Bye-laws – Impugned Bye-laws lay down the procedure for determining the rateable value inter alia on the basis of Unit Area Method (UAM) altering the earlier system of determining the rateable value on the basis of the annual rent – Bye-laws challenged by respondents inter alia on the ground that the UAM of fixing the annual value was foreign to s.63 of the 1994 Act – NDMC contended that since s.63, 1994 Act does not prescribe any particular method for arriving at annual rent therefore, this gap was filled by the Bye-laws by prescribing the formula based on UAM – High Court declared the Bye-laws as ultra vires the 1994 Act – On appeal, held: Rateable value means value of any land or building fixed in accordance with the provisions of 1994 Act and the Bye-laws made thereunder for the purposes of assessment of property taxes – S.63, 1994 Act stipulated that the rateable value of any land or building assessable to property tax shall inter alia be the annual rent at which such land and building might reasonably be expected to let – s.63(1), 1994 Act is not silent on how to determine the annual rent of a property – This annual rent has to be the one which the land or the property ‘might reasonably be expected to let from year to year’ – Yardstick is the ‘letting’ – It is the annual letting value which can be the annual rent and not the value of the property in question – Manner in which the rateable value is fixed under the Bye-Laws is not in sink with the scheme of s.63(1) of the 1994 Act – Bye-Laws are foreign to the methodology provided in s.63 of the 1994 Act and thus, ultra vires the provisions of 1994 Act – However, in exercise of powers u/Art.142 of the Constitution, it is directed that assessees who have paid the tax as per Bye-Laws, 2009, being [2019] 2 S.C.R. 331 331 A B C D E F G H 332 SUPREME COURT REPORTS [2019] 2 S.C.R. satisfied with the assessments under the impugned Bye-laws, their assessments shall not be reopened – However, this will not apply to the respondents who were writ petitioners in the High Court – In their cases, the direction given by the High Court in the impugned judgment shall prevail – New Delhi Municipal Council Act, 1994 – ss.2(42), 60-63, 65-67, 70, 81, 388(1)(A)(9),391(1) and 416(2)(a) – Delhi Municipal Corporation Act, 1957 – NDMC House Tax Bye-Laws, 1962 – Delhi Municipal Corporation (Property Taxes) Bye-Laws, 2004 – Constitution of India – Arts.14 and 142. New Delhi Municipal Council Act, 1994 – ss.2(42), 61-63, 65-67, 70, 72, 73 and 81 – Essence of – Discussed. Words & Phrases – “annual rent” & “ annual value”– Difference between– Discussed. Disposing of the appeals, the Court HELD: 1.1 Under Section 61 (1) of the NDMC Act, 1994 property tax shall be levied on lands and buildings in New Delhi and “shall consist of not less than ten and not more than thirty per cent of the rateable value of lands and buildings.” The proviso to Section 61(1) of the NDMC Act states that the NDMC may, “when fixing the rate at which the property tax shall be levied during any year, determine the rate leviable in respect of lands and buildings or portions of lands and buildings in which any particular class of trade or business is carried on shall be higher than the rate determined in respect of other lands and buildings or portion of other lands and buildings by an amount not exceeding one-half of the rate so fixed.” The second proviso to Section 61 (1) states that “the tax may be levied on graduated scale, if the Council so determines.” The explanation to Section 61 (1) states that “where any portion of a land or building is liable to a higher rate of the tax such portion shall be deemed to be a separate property for the purpose of municipal taxation.” Under Section 61 (2) of the NDMC Act, the NDMC can exempt from tax the lands and buildings where “the rateable value does not exceed Rs.1,000.” [Para 21, 22] [355-G-H; 356-A-C] 1.2 The expression ‘rateable value’ is defined under Section 2 (42) of the NDMC Act to mean “the value of any land or building A B C D E F G H 333 fixed in accordance with the provisions of this Act and the Bye- l
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