2021 (11) TMI 1139 - HC - Indian Laws

Tax to be paid by owner at industrial rate or commercial rate? - exigibility of the petitioner to pay property tax - industrial property - property owner has leased out the property - lessee is using the property as an industrial property - Refusal to register the lease deed/s executed by the petitioner - HELD THAT - Originally the Corporation had assessed the petitioner on commercial rate, against which the petitioner had filed an appeal which was allowed by the Appellate Authority by passing a detailed order. However the impugned order which was passed on a revision filed by the respondent is extremely cryptic and the only reasons which have weighed with the Revisional authority seem to be the facts, that firstly in the opinion of the Revisional authority the Appellate authority had set aside the notification (which we find is not correct since only the notices were set aside by the appellate authority), and secondly that other similarly situated units are paying the property tax at commercial rate without any demur. Counsel for the petitioner further pray that, as an interim measure, the respondents be directed to register the lease deeds executed by the petitioner with its intending lessees because as per it, it had already paid an amount more than 13 times what it is actually liable to pay and on the other hand it is the stand of the counsel for the respondents that in case any such interim relief is granted to the petitioner it would have a cascading effect and consequently they want that the matter should be heard on merits. A better way of sorting out this dispute is that the order of the Revisional authority is set aside and the Revisional authority is directed to pass a fresh order dealing with all the contentions of both the parties in accordance with law after affording an opportunity of hearing to them - Petition disposed off.

Summary

Issues:
1. Challenge to refusal to register lease deeds
2. Challenge to Revisional order on property tax exigibility

Issue 1: Challenge to refusal to register lease deeds

In the case, the petitioner challenged the respondent's refusal to register the lease deeds, alleging it was a tactic to force undue payment. The petitioner argued that property tax should be paid at an industrial rate since the property was being used as an industry. The respondent contended that property owners who lease out their property must pay at a commercial rate, regardless of the lessee's use. Initially, the Corporation assessed the petitioner at a commercial rate, but an appeal allowed by the Appellate Authority favored the petitioner. However, the Revisional order, challenged in CWP No.22675 of 2021, was criticized for being cryptic and lacking detailed reasoning. The Revisional authority's decision was based on incorrect assumptions, such as the Appellate authority setting aside notifications instead of notices. The Revisional authority failed to address the merits of the case, relying solely on the reasons mentioned above.

Issue 2: Challenge to Revisional order on property tax exigibility

The Revisional order was found to be insufficient in addressing the merits raised by both parties. The respondents' counsel could not refute that the reasons cited by the Revisional Authority were inadequate to set aside the Appellate order. The petitioner sought interim relief to register the lease deeds, claiming to have overpaid significantly. The respondents opposed interim relief, fearing a cascading effect. The Court set aside the Revisional authority's order and directed a fresh order to be passed within 15 days, considering all contentions and affording both parties an opportunity to be heard. The petitioner was instructed to appear before the Revisional authority for the hearing. With the main cases resolved, any pending Civil Misc. Applications were also disposed of.

This judgment highlights the importance of providing detailed reasoning in legal decisions and ensuring that all contentions raised by the parties are addressed. The Court emphasized the need for a fair hearing and directed the Revisional authority to reconsider the matter comprehensively in accordance with the law.