http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 6  

CASE NO.: Appeal (civil) 7423 1996

PETITIONER: FOOD CORPORATION OF INDIA

       Vs.

RESPONDENT: STATE OF PUNJAB & OTHERS

DATE OF JUDGMENT:       01/12/2000

BENCH: D.P.Mohapatro, Y.K.Sabharwal

JUDGMENT:

L.....I.........T.......T.......T.......T.......T.......T..J

     J U D G M E N T

     D.P.MOHAPATRA,J.

     The  legality  and validity of the order amending  the assessment  list in respect of its property by the Municipal Committee, Sangrur in the State of Punjab is under challenge in  this  appeal  filed  by the Food  Corporation  of  India (hereinafter referred to as ’the Corporation’).

     The  assessment  in  question   relates  to  a  godown described  in the notice as "property unit No.239-Block No.1 situated  within the local limits of the Municipality".   By notice  No.110/HP dated 27.6.1991 issued under section 67 of the  Punjab  Municipal Act, 1911 ( for short ’the Act’)  the Municipal  Committee  intimated  the   Corporation  that  it intends  to  amend/revise the assessment in respect  of  its property  and  if the Corporation has any objection  it  may file  the  ‘same  along with documentary proof  in  support, within  a  month.   The relevant portion of  the  notice  is extracted here-under:

     "To  The  Distt.  Manager, Food Corporation of  India, Jakhal  Road, Sunam.  Property Unit no.239 Block No.1  Which is  situated  in the Municipal limits Sunam,  in  connection with which you are hereby informed vide this notice that the amendment  in the assessment of your this property is liable to  be done necessarily due to the following reasons and  is done as under:-

     Whereas your above mentioned property has wrongly been left  out  from  the  assessment   list  whereas  it  should be/should have been in the same.

     2.   Whereas the assessment of this property of  yours was  assessed  less  due  to  inadvertent  mistake/fraud  or

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 6  

intention, which needs amendment thereby.

     Therefore,  vide  this notice you are hereby  informed that  your  above mentioned property  i.e.   house/shop/plot alongwith  office,  godowns and quarters, the assessment  of the  same is being amended due to the aforementioned reasons w.e.f.   the year 1986-87 as per details mentioned hereunder and  the new assessment is fixed as below.  Any objection in this   behalf  may  be  given   in  writing  alongwith   the documentary  proofs in support of the same within one  month from today.

     Property  House/  Name of the Name of Annual Tax  Unit No.   Ward  Owner of tenant assessed asse- No.  the  if  any rent  ssed  property  after 15% deducting 10  %  Note:-  The differential 1.  Godown of house tax in food grains, respect of  capacity  the years will 206656 bags be recovered  @  20 paise  493972.00 69373/15 from you after per bag per  paise/ allowing  the  month.  P.A.  tax paid.  2.Pedestals  outside for  28790  bags  @  08  paise per  bag  per  month  2303.00 3.Quarters  of  class IV employees attached 3600.00  4.Weigh Bridge 4000.00 5.  Office two sets 8000.00 - - - - - - - -

     313875.00

     4% Maintenance 51387.50 - - - - - - -@@       II

     462487.50 - - - - - - -

     Earlier  given  notice  No.PMA under  Section  67  and No.654/HT  dated  2.1.91  is hereby recalled  and  this  new notice is issued accordingly.

     Sd/- Executive Officer, Municipal Committee Sunam"

     In reply to the notice the Corporation denied that any additional  tax liability should be imposed on it in respect of  the  property since the godown in question  has  already been  assessed to property tax;  that no addition/alteration has  been made in the building/godown after finalisation  of the  last  assessment, therefore, no revision of the tax  is required  to  be made.  The Corporation also questioned  the validity  of  the revision of tax with retrospective  effect from  1986-87.  The Corporation also denied the statement in the  notice that the capacity of its godown is 2,06,656 bags and  not  1,84,000 bags on the basis of which  the  previous assessment   was  finalised.   The   Corporation  drew   the attention  of  the  Municipal   Committee  that  the  notice containing  a similar proposal for revising the property tax in  respect  of the same property on same grounds  had  been issued  previously  and on receipt of the objection  of  the Corporation  the  said notice was withdrawn.  The  assessing officer,  by  order dated 5.12.1991, amended the  assessment list   enhancing  the  property  tax   of  the   godown   to Rs.4,62,487.50, rejecting the objections raised on behalf of the  Corporation.   He held, inter alia, that  the  previous assessment  list was prepared under the mistaken  impression that capacity of the godown in question was 1,84,000 bags in place  of  2,06,656 bags.  Since the Corporation  failed  to produce  any material in support of its stand that there was

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 6  

no  error in the previous assessment and such assessment was made  on the correct factual position regarding capacity  of the  godown  the  objection raised by it was  liable  to  be rejected.   Regarding the withdrawal of the previous notice, the assessing officer stated that the said notice was issued proposing  a  revision  of the tax on the  ground  that  the building/godown   had   undergone   a   change   which,   on verification, was found to be incorrect;  therefore the said notice  was  withdrawn.  Regarding the rate of rent per  bag the  assessment officer held that the tax is to be  assessed on  the basis of rent @ 20 paise per bag per month which, in his  view, was the rate at which godowns were being let  out in  the  town.   On these findings the assessment  list  was amended/  revised  fixing Rs.4,62,487.50 and the  order  was given  effect from the year 1986-87.  In the appeal filed by the  Corporation the Additional Deputy Commissioner, Sangrur by order dated 22.7.92 confirmed the order of the assessment with  the modification that the amended assessment list will be  given  effect from 1.4.92 in place of the year  1986-87. From  the  orders it appears that the  appellate  authority, rejecting  the  objection raised by the Corporation  against the  rate  of  20  paise  per bag per  month  fixed  by  the assessing  officer, gave the reason:  "because in  principle it   has   been  stated   by   the   Corporation/Warehousing corporation in a number of cases that they have no objection if the assessment of godown be fixed at the rate of 20 paise per  bag per month".  The petition filed by the  Corporation before  the  State Government under section 237 of  the  Act challenging  the order of the appellate authority confirming the  amended  assessment  list   proved  futile.   Then  the Corporation  filed  a  Writ  Petition before  the  Punjab  & Haryana High Court seeking a writ of certiorari quashing the aforementioned  orders  passed by the statutory  authorities which  was  summarily dismissed by the order  dated  6.9.94. The order reads :

     "Heard.   No  ground to interfere has been  made  out. Dismissed."

     The said order is under challenge in this appeal.

     Shri  Y.Prabhakar  Rao, learned counsel appearing  for the  appellant contended that the notice seeking revision of the  assessment list is vague and lacks particulars.  It has been  issued  without  application of mind to  the  relevant factors.   The  learned counsel further contended  that  the revision  of  tax  has been made  without  ascertaining  the capacity of the godown which has not undergone any change in structure  or capacity since the last assessment and the per bag  rate  fixed  in the order is also  without  any  basis. According  to  the learned counsel the Corporation has  been paying  tax assessed on the basis of rental of 16 paise  per bag  per  month in respect of the godown taken on  hire  and there  is no reason why that rate should not be accepted  as the  basis  for  assessing the tax.  Per  contra  Shri  Ajay Majithia,  learned  counsel  for  the  respondent  Municipal Committee supported the order of amended/revised assessment. He  submitted that the Corporation proceeded to amend/revise the  tax  in  respect of the godown in  question  since  the previous  assessment as such had been prepared on  erroneous basis relating to the capacity of the godown and the rate of rent  per  bag.   The power to amend/revise  the  assessment list,  according  to  the learned counsel,  is  specifically vested  in  the Municipal Committee under section 67 of  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 6  

Act  in  exercise  of which the order has been  passed,  and therefore,  the  High  Court   rightly  dismissed  the  Writ Petition.   Before  entering into merits of the  contentions raised  it  will  be  convenient   to  notice  the  relevant statutory provisions.  Chapter IV of the Act ( Sections 51 - 68A)  contains the provisions relating to Municipal Fund and Property.  The procedure for assessing immovable property is dealt  with  in sections 63 to 68A.  Section 63  deals  with preparation  of  assessment  list.  Section  64  deals  with publication  and completion of the assessment list.  Section 65 mandates the Committee to give public notice for the time fixed  for  revising the assessment list.  Section 66  which deals  with  settlement  of lists lays down that  after  the objections  have  been inquired into and the persons  making them  have been allowed an opportunity of being heard either in  person  or by authorised agents, as they may think  fit, and  the revision of the valuation and assessments has  been completed,  the  amendments  made  in   the  list  shall  be authenticated  by the signatures of at least two members  of the  committee,  who shall at the same time certify that  no valid  objection  has  been  made   to  the  evaluation  and assessment  contained  in the list, except in the  cases  in which  amendments  have been entered therein and subject  to such amendments as may thereafter be duly made, and that the tax  so assessed shall be deemed to be the tax for the  year commencing  on  the first day of April of the year in  which notice was issued under section 64 or section 65 of the Act. In sub-section(2) of section 66 it is provided that the list when  amended  under this section shall be deposited in  the committee’s  office  and shall there be open  during  office hours  to  all  owners or occupiers  of  property  comprised therein  or  the  authorised agents of such  persons  and  a public  notice  that  it  is  so  open  shall  forthwith  be published.   In  Section  67 provision is made  for  further amendments  of  an  assessment list.  Since  the  proceeding under  challenge  was  initiated under that section,  it  is quoted  in extenso:  "67.  Further amendments of  Assessment list  (1)  The committee may at any time amend the  list  by inserting  the  name of any person whose name ought to  have been  or ought to be inserted, or by inserting any  property which  ought  to  have been or ought to be inserted,  or  by altering  the  assessment  on any property  which  has  been erroneously  valued  or assessed through fraud, accident  or mistake,  whether  on  the part of the committee or  of  the assessee, or in the case of tax payable by the occupier by a change  in  the tenancy, after giving notice to  any  person affected  by  the  amendment, of a time, not less  than  one month  from the date of service at which the amendment is to be made.

     (2)  Any  person interested in any such amendment  may tender  his objection to the Committee in writing before the time,  fixed  in the notice or orally or in writing at  that time,  and shall be allowed an opportunity of being heard in support  of the same in person or by authorized agent, as he may think fit.

     (3)  Notwithstanding  anything contained in this  Act, the  Committee may with a view to give effect to the  annual value  as  modified by the Punjab Municipal (Amendment)  Act 11, 1994 amend the assessment list of the year commencing on the  first day of April of the relevant year for  increasing or  reducing  annual  value  of  any  property  and  of  the assessment  thereupon after giving notice at any time to any person  affected by the amendment of a period not less  than

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 6  

one month from the date of service at which the amendment is to  be  made and the Committee shall consider any  objection made  in  this  regard by any such person  and  the  amended assessment  list shall come into force with effect from  the first  day of April of the year in which notice was given to the person affected."

     Section  68-A vests further power in the Committee  to amend  assessment  list  on grounds of  fraud,  accident  or mistake on the part of the Committee or of the assessee.  On a  reading of the afore-quoted provisions, it is clear  that while  vesting  the  power  in the  Committee  to  amend  an assessment  list, the Legislature has taken care to  specify the circumstances in and the grounds on which such amendment may be made;  it has also laid down the manner in which such amendment  or revision of the assessment list is to be made. Care  has  also been taken to comply with the  principle  of natural justice by making the provision for giving notice to the  person  who  is likely to be affected by  the  proposed amendment  giving him not less than a month’s time to tender objection,  if  any,  to the Committee and allowing  him  an opportunity  of  being  heard in support of  the  objections raised.   Notice  to  the affected person  mandated  in  the section  is  not  an  empty formality;  it is  meant  for  a purpose.   A  vague and unspecific notice will  not  provide reasonable  opportunity  to  the noticee to  file  objection meeting  the  reasons/grounds on which the amendment of  the assessment  list  is  proposed to be made.   Such  a  notice cannot  be  taken  to  be   complying  with  the   statutory requirement.   On  perusal  of  the  notice  issued  to  the Corporation,  which  is  on record, it is evident  that  the notice  is  vague and lacks particulars.  It neither  states the  reason  for/or  the ground on which  the  amendment  is proposed to be made nor does it indicate any material on the basis  of  which  the revision as stated in  the  notice  is proposed  to be made.  It is stated in the notice:  "Whereas your above-mentioned property has wrongly been left out from the assessment list, whereas it should have/should have been in  the  same.  Whereas the assessment of this  property  of yours  was assessed less due to inadvertent mistake/fraud or intention, which needs amendment thereby".

     It is apparent that the Committee is not sure on which ground  it  proposes to proceed for amending the  assessment list.   Such  a  notice not only does not  comply  with  the statutory  requirements, it also defeats the very purpose of the  statutory  provisions.   Coming  to  the  question   of increase  of the capacity of the godown in question and  the rate  of  rent, neither the discussions in the orders  under challenge  indicate any basis for increasing the capacity of the  godown  from  1,84,000 to 2,06,656 bags,  nor  has  our attention  been drawn to any primary material in support  of the  order.  In the circumstances the contentions raised  by the learned counsel for Corporation that notice is vague and it  has been issued without due application of mind and  the grounds  stated in the order are based on no material,  have to  be  accepted.   From the discussions  in  the  foregoing paragraphs  it  is  clear  that  the  order  passed  by  the assessing  officer and confirmed by the appellate  authority and  the  State Government are clearly  unsustainable.   The High  Court  was  in error in dismissing the  writ  petition summarily by passing an unreasoned order as has been done in this  case.  Accordingly, the appeal is allowed with  costs. The  order  passed  by the High Court  dismissing  the  writ petition is set aside.  The writ petition is allowed and the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 6  

orders  passed  by  the assessing authority,  the  appellate authority and the State Government are quashed.