AS/472/1993 of Food Corporation Of India, Vs Bikkavole Gram Panchayat, on 31 December 2010

JUDGMENT:-

The appeal is filed against the judgment and decree in O.S.No.11 of1988 on the file of the Court of Subordinate Judge, Ramachandrapuram challenging the dismissal of the suit filed by the plaintiff.

The plaintiff has got various godowns within the jurisdiction ofBiccavolu Gram Panchayat and it was assessed to property tax for thefirst time in 1984-85 to a sum of Rs.28,727-44 paise. The assessment isenhanced in the demand notice, that due was Rs.46,559-52 paise andalso library tax. The plaintiff contends that the defendant has no right tolevy property tax on the godowns inasmuch as the plaintiff is aGovernment corporation, since the Government has got interest no taxcan be imposed. Further during the year 1986-87 the Panchayat hasenhanced the tax without assigning any reason. The enhancement istherefore arbitrary and illegal and the plaintiff objected for the same butas the defendant has been pressing for the same, the amount was paid.Therefore, the plaintiff filed the suit for a declaration that theenhancement of the property tax from 28,727-44 paise to Rs.46,608-44is illegal and arbitrary and the suit is filed for recovery of the amountpaid.

The defendant filed a written statement contending that the suit isbad for non-issuing a notice under Section 144 of the A.P. GramPanchayat Act. For every five years there will be a general revision asper the provisions and rules of the Gram Panchayat Act. Biccavolu is aGram Panchayat and it is industrially developed and the Collector, EastGodavari District issued a notification on 05-07-1986 notifying thegeneral revision and also appointed the revision officers. Accordingly,the revision was conducted after following the due procedure under thePanchayat Raj Act. The notification was also issued about thecompletition of the revision and available of the record and calling forobjections. Taking into consideration the number of buildings owned bythe appellant and also the value of it, the tax was enhanced in therevision. The suit is therefore not maintainable and at any rate it isbarred by time.

On the basis of the above pleadings, the following issues havebeen framed for trial.

1. Whether the plaintiff is entitled for declaration of enhancement of tax of the godown at Biccavole from 28,727-44 to Rs.46,608-84?

2. Whether the plaintiff is entitled for refund of excess amount of Rs.17,881-42 paise from defendant?

3. To what relief?

On behalf of the plaintiff, PW.1 was examined and marked Exs.A-1to A-8. On behalf of the defendant, DWS.1 to 3 were examined andmarked Exs.B-1 to B-8.

The lower court after considering the material on record found thatthe plaintiff is not entitled for the declaration prayed for and the revisionwas done in accordance with the Rules and notification and at any ratethe tax is not unreasonable and dismissed the suit. Aggrieved by thesaid judgment, the present appeal is filed.

The points that arise for consideration are:-

1. Whether the plaintiff is not liable to pay the tax as demanded bythe defendant and entitled for the declaration as prayed for?the defendant and entitled for the declaration as prayed for?

2. Whether the judgment and decree passed by the learned SeniorCivil Judge is legal and sustainable?Civil Judge is legal and sustainable?

POINTS:-

Evidently, the plaintiff is owning godown within the Panchayatlimits is not in dispute. However, when earlier the tax was imposed thenon-liability to pay the tax was also not in dispute. It is only when theenhancement is said to have taken place the present claim was madestating that the buildings are exempted from tax as the Government ofIndia has got a interest and therefore there can be no tax on the buildingand there could only be a tax on the services or the amenities if anyprovided by the plaintiff. This contention of the plaintiff was not acceptedby the lower court.

In this case it is to be noted that the taxes and the revision in thisparticular cases is governed by the Gram Panchayat Act. Thecontemporaneous provisions in the Municipalities Act or Corporation Acthave no relevancy. The fact that the Gram Panchayat is authorised toenhance the tax by way of periodical revision cannot be doubted. In factin order to prove this fact, the defendant has examined DWs.1 to 3 andthe notification and the information to the public before the revision and after the revision is also established. Further in case of general revisioneither under the Panchayat Act or Municipalities Act, no individual noticeis necessary. In this connection, it is useful to refer to Section 70 ofGram Panchayat Act, which empowers the Gram Panchayat to revisethe tax from time to time. Certain procedures has been laid down and therules are also provided in Schedule II. Under Schedule II in Rule 5 theexemption for houses from tax have been provided and evidently unlikethe Railways or other buildings, there is no exemption from payment ofPanchayat tax by any government building situated within the Panchayat.Therefore the contention of the counsel for the appellant that no tax canbe levied on the structures cannot be accepted. The learned counsel forthe appellant has relied on a decision of the Supreme Court in CivilAppeal No.6706 of 2004 where with regard to imposition of tax onRailway property by the Municipal Corporation some instructions weregiven and consequently the Government of India has also given somedirections in Office Memorandum dated.15-12-2009. Evidently, thoseinstructions have no application to the structures or buildings in theGrampanchayat. Sofar as the Railway Department is concerned thePanchayat Raj Act also provides for exemption. Therefore, thecontention of the appellant that no tax can be imposed on structures isbaseless and cannot be accepted. Further more, the claim that nopersonal notice was given is also untenable since no personal notice isrequired and on the other hand it is a general revision followed by duedeclaration and notification and registers were also available forverification. In such circumstances, the revision undertaken by thedefendant is not in violation of any of the Rules. The plaintiff owningnumber of godowns and earning by way of rent cannot deny the smallbenefit for the defendant which has to sustain itself and develop thevillage by providing amenities. The learned Senior Civil Judge has rightlydiscarded all the contentions raised by the appellant and I do not find anyreasons to interfere with the judgment passed by the lower court. Thepoints are therefore answered.

The Appeal Suit is therefore dismissed with costs.

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31-12-2010

TSNR