Monday 18 October 2021

Will the reduction of property tax by the Appellate court affect property tax of subsequent year if the commissioner has adopted property tax of that year?

  It was further submitted that any judgment delivered by the Judge in respect of a particular official year, even though such judgment may be delivered after two years, becomes effective and operative retrospectively and would relate back to the commencement of the official years, for which the appeal is decided by the Judge. An example which was given was that if the appeal for 1981-82 was decided on 31st October, 1984, and the rateable value fixed by the Commissioner at Rs.5,000/- was reduced to Rs. 1,500/- then the judgment would have to be given effect to for the year commencing from 1-4-1981 and for all subsequent years notwithstanding that entries are made by the Commissioner, in the meantime, for the assessment years 1982-83, and 1983-84. It was contended that, by virtue of Section 413(2), the original entry of Rs. 5,000/- shall be deemed to have been made at Rs. 1,500/- on account of the effect of the judgment delivered by the Judge for the year 1981-82 and operation of law for the assessment years 1982-83 and 1983-84 the assessment must be regarded as having been reduced to Rs. 1,500/- and then, in respect of those years or future years if the rateable value is to be increased to the figure of Rs. 5,000/- a special written notice, as contemplated by R. 15(2), has to be given. {Para 76}

77. There can be no doubt that according to Rule 21, the entries of the earlier year can be adopted for the subsequent years. Furthermore every rateable value which is fixed, against which appeal is not filed or every appellate order, which becomes final, has to be given effect to. We, are however, unable to agree with the contention of the learned counsel that, in the example given above, by him, for the assessment years 1982-83 and 1983-'84 and onwards, a notice under Rule 15(2) has to be issued, because for the year 1981-'82, the appellate court had reduced the rateable value to Rs. 1,500/- after entries for 1982-'83 and 1983-'84 have been adopted. In the very example, which is given, it is contemplated that the entry for 1981-'82 was finalised after the issuance of a valid notice under Rule 15(2). As long as that entry of Rs. 5,000/- for the year 1981-'82 remains, the same could be adopted by the Commissioner in the subsequent years 1982-'83 and 1983-'84. If after such adoption for the years 1982-'83 and 1983-'84, the appellate court in respect of the assessment year 1981-'82 allows the appeal and reduces the rateable value, the decision in the said appeal can only be regarded as being given for the assessment year 1981-'82. In taxation, each year is to be regarded as distinct and separate. The Act does not postulate that the appellate decision for one year will, ipso facto, be regarded as a decision for the other years as well. As long as appeals have been filed before the Small Cause Court, or to the High Court, the assessment cannot be regarded as having become final.

Gujarat High Court
Municipal Corporation Of The City ... vs Oriental Fire & General Insurance ... on 8 September, 1994
Equivalent citations: AIR 1994 Guj 167, (1994) 2 GLR 1498
Author: B Kirpal

Bench: B Kirpal, R Abichandani
Read full Judgment here: Click here

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