LexSHREE BHAGWATI HOSIERY MILLS PVT. LTD. AND ANR. versus BHAGALPUR MUNICIPAL CORPN. AND ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A
SHREE BHAGWATI HOSIERY MILLS PVT. LTD.· AND ANR.
B
V.
BHAGALPUR MUNICIPAL CORPN. AND ANR.·
. [M. N. VENKATACHALIAH AND N. M. KASLIWAL, JJ.]
DECEMBER 19, 1991
Bihar and Orissa Municipal Act, 1922-Section 107-Letting Value-
Enhancement-Effective from 1. 7.1980.
The appellant No. 1 in C.A.No. 5036 of 1991 owned three holdings,
C which were parti lands. The Municipal Corporation fixed the annual
letting value of the holdings in the general revisional assessment of 1976-
77 at Rs. 2 per each holding. The valuations were increased from the
fourth quarter of 1979-80 by the Municipal Corporation from Rs. 2. to
Rs. 10. each. During 1980-81 the three holdings were merged into one
holding.
D
The appellant in C.A.No. 5037 of 1991 owned two holdings which
were also parti lands and the annual letting value of the two holdings was.
rixed at the general revisional assessment of 1976-77 at Rs. 158 and Rs.
203, respectively.
E
Both the appellants constructed godowns separately on their hold-
ings in the year 1978 and they were rented to the Food Corporation. Under
the agreements the rents were fixed at the rate of 50 paise per sq.feet per
month on floor measurement. The rate was inclusive of service charges
and the municipal taxes as applicable from time to time. The Food
Corporation of India occupied the godowns on 10.5.1978.
F
G
On a report submitted by an employee of the Municipality on
4.3.1980 regarding the godowns constructed by the appellants and let out
to Food Corporation of India, a notice was issued on 18.3.198!) under
Section 107(2) of the Municipal Act to the appellants as well as to the Food
Corporation of India.
The appellants did not appear nor filed any objection. The Food
Corporation oflndia sent a letter dated 9.4.1980 in which the taking of
godowns on rent was admitted. As no objection was filed by the plaintiffs,
the Municipal Corporation passed an order of assessment on 22.4.1980
calculating the annual rental value on the basis 'of the agreement between
H the Food Corporation of India and the appellaµts, so far as the order of
506
,.
-.,-.
-
HOSIERY MILLS v. MUNICIPAL CORPN.
507
assessment dated 22.4.1980 was concerned, it had become final and the ap-
A
pellants liad no right to challenge the same.
On 23.5.1980 the Municipal Corporation served demand notices on
the appellants for payment of Rs. 5,43,627 in resect of the three holdings
of the appellant in CA fl{o. 5036 ofl991 and for payment of Rs. 3,64,530.36
paise in respect of the two holdings of the appellants in CA No. 5037 or B
1991, as holding taxes for the period of second quarter 1978-79 to first
quarter of 1980-81, which was determined on the basis of monthly rents
paid by the Food Corporation oflndia to the appellants from 10.5.1978.
The appellants challenged the demand notices of the Municipal Cor-
poration by filing a suit in the Court of Subordinate Judge.
The Trial Court decreed the suit and directed that the plaintiffs
were not liable to pay the tax contained in the demand notices and also
restrained the defendants permanently from realising any municipal tax
other than that fixed i:n the general revision of assessment 1976-77.
The Municipal Corporation filed appeals challenging the Judgment
of the Trial Court before the First Additional District Judge.
c
D
Partly allowing the appeals, the Appellate Court held that the mu-
nicipality had authority to make reassessment and revaluation of the
holdings and that there was no illegality in the revisional assessment done · E
u/ss. 98(1) and 107(1)(c)(d) of the Act. But it was also held that the
municipality did not act in conformity with law in issuing the demand
notice u/s.117 and the Municipal Corporation was directed to afford rea-
sonable opportunity to the plaintiffs of being heard on the objections to the
assessment and set aside the grant of injunction.
The plaintiffs aggrieved against the judgment of the First Appellate
Court filed second appeals in the High Court. The High Court holding that
the valuation as fixed by the Municipal Corporation was neither arbitrary
F
nor excessive as the agreement between the plaintiffs and the Food
Corporation oflndia indicated that the municipal tax, the latrine tax and G
water tax were included in the rental of the holdings, dismissed the
appeals, against which these appeals were filed by special leave by the
plaintiffs.
The appellants contended that under the scheme of the MunicipalExcerpt shown. Read the full judgment & AI analysis in Lexace.