2017 (9) TMI 1809 - SC - Indian Laws

Interpretation of statute - Section 126 of Delhi Municipal Corporation Act 1957 - Amendment of assessment list - Whether notice under Section 126 of the Act which was received on April 4 1998 i.e. after March 31 1997 would be invalid as beyond the period of limitation prescribed as per Section 126(2) and (4) of the Act? - HELD THAT - The notice as contemplated under Section 126 was given only on April 4 1998. Such a notice was clearly not valid for revising the assessment list for the year 1997-98. Reason is obvious and does not need elaboration. The entire basis of an assessment and in the present case amendment to assessment list is the issuance of notice. This factor assumes considerable significance because the rateable value is sought to be made effective from commencement of the year in which the notice is given. Even if the notice is given on the last date of the concerned year it nevertheless relates back and the consequence of a higher rateable value follows. However if the notice is not so issued before the expiry of an assessment year assessment list cannot be amended for that year. Thus on the basis of such a notice there could not have been assessment for the Assessment Year 1997-98. When such a notice which received on April 4 1998 whether it was open to the Assessing Officer to revise the assessment for the Assessment Year 1998-99 and Assessment Year 2001-02? - HELD THAT - Since the notice was received when the Assessment Year 1997-98 had come to an end and Assessment Year 1998-99 had commenced we have held that assessment list could not be amended from the year 1997-98. It is to be kept in mind that for the aforesaid reason notice itself does not invalidate. Therefore if it was not permissible to amend the list w.e.f. April 1 1997 at the same time it could always be done w.e.f. April 1 1998 as the notice had been received in that Assessment Year namely on April 4 1998. In the instant case though the date given in the notice was April 1 1997 it was not permissible for the Corporation to release the tax from April 1 1997 as the notice was not received in that Assessment Year but was received only in the next Assessment Year i.e. 1998-99. Therefore the assessment carried out which was done within three years from the issuance of notice i.e. the time stipulated by sub-section (4) of Section 126 of the Act the assessment was otherwise valid and could be made applicable from April 1 1998. Merely because the notice dated March 25 1998 was received on April 4 1998 cannot be a ground to defeat the liability to pay the tax so determined as a result of revision in the assessment even for subsequent years i.e. w.e.f. April 1 1998. Appeal allowed in part.

Summary

Issues Involved:
1. Validity of notice under Section 126 of the Delhi Municipal Corporation Act, 1957, received after the prescribed period.
2. Validity of the assessment order for subsequent/future periods based on a time-barred notice.

Detailed Analysis:

Issue 1: Validity of Notice under Section 126
The primary issue addressed was whether a notice under Section 126 of the Delhi Municipal Corporation Act, 1957, received after the prescribed period, is valid. The Corporation issued a notice on March 25, 1998, proposing to enhance the rateable value of the respondent's property, which was received on April 4, 1998. The High Court held the notice to be time-barred as it was served after the specified period, thus invalid for the assessment year 1997-98. The Supreme Court agreed with the High Court's interpretation, emphasizing that the notice must be "given" within the specified period, and mere dispatch does not suffice. The Court referenced past judgments, including K. Narasimhiah v. H.C. Singri Gowda and Banarsi Debi v. Income Tax Officer, to support the interpretation that "giving" a notice implies its receipt by the concerned party.

Issue 2: Validity of Assessment Order for Subsequent/Future Periods
The second issue was whether the assessment order for subsequent periods could be based on a notice that was time-barred for the initial period. The High Court had invalidated the assessments for subsequent years based on the time-barred notice. However, the Supreme Court disagreed with this view. The Court noted that while the notice was invalid for the year 1997-98, it was still valid for the subsequent year 1998-99 as it was received within that financial year. The Court emphasized the scheme of the Act, particularly Section 126(4), which allows amendments within three years from the end of the year in which the notice is given. The Court held that the assessment could be validly amended from April 1, 1998, despite the notice being received on April 4, 1998. This interpretation was supported by the judgment in Shyam Kishore & Ors. v. Municipal Corporation of Delhi & Anr.

Conclusion:
The Supreme Court partially allowed the appeal, affirming the High Court's decision regarding the invalidity of the notice for the year 1997-98 but overturning its decision concerning the validity of the assessment for subsequent years. The notice, although received late for the year 1997-98, was deemed valid for the year 1998-99 and subsequent years, provided the assessment was completed within the stipulated three-year period. The appeal was allowed to this extent, with no order as to costs.